BASF SE (BAS) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen. I hope you enjoyed the first day of our Capital Markets Day and are looking forward to learning more about the segments. And before we continue, please allow me one organizational remark you are already familiar with. And today's presentations also contain forward-looking statements that may not prove to be accurate. We do not assume any obligation to these forward-looking statements above and beyond the legal requirements. Now on to today's agenda. We will begin with the Surface Technologies segment, and we'll then have the presentations on Chemicals and Materials. After a short lunch break, the Industrial Solutions and the Nutrition & Care segments will be presented today. With me on stage is now Anup Kothari, member of the Board of Executive Directors since March 2024. Anup began his career in North America and held various positions in North America, Germany and China. Anup is responsible for the Surface Technologies segment as well as the Industrial Solutions segment, and he will now present the three stand-alone businesses of the Surface Technologies segment. With that, the floor is yours.

Thank you, Stefanie. Good morning. And welcome also from my side. Hopefully, you had a good day yesterday. And I will now cover Surface Technologies segment. And as you know, it has three businesses: Coatings, Battery Materials and ECMS. And Markus mentioned the direction of travel for these three businesses, which gives us the most strategic and operational flexibility. What I will focus is how we will unlock value in these businesses while being in BASF. So I will start with Coatings and then I will go to Battery Materials and then to ECMS. I think the upside for you is you are able to get a little bit more visibility and transparency on some of the numbers also for these businesses, which we generally don't provide. But you will also have to wait through the three presentations, and then we will go through the Q&A. So let me start with Coatings. Coatings is, for us, a very focused business on automotive, roughly EUR 4.4 billion in sales. almost EUR 2 billion in automotive, OEM coatings. So this is our main business here. Then we have a surface treatment business, which was what we acquired some time back, Chemetall, this is close to EUR 1 billion in sales. It's also a fantastic business. A big part of this also goes to automotive, but also goes to aerospace and other industrial applications. Then of course, roughly EUR 750 million in refinished coatings. And then we have the deco business, which is what we also talked about is #1 in Brazil, a fantastic brand. Here, the direction is very clear, we will go for a structured divestment process here. I think some of you went to our agro stations yesterday, and you got a feel of what is behind in terms of agro. What I can share with you also is if you think about the paint on your car. The color on the car. What's behind this is, first of all, the surface treatment layer, it's a pretreatment layer. This is what we do. There are typically the four coatings they're for protection and also creating this color and this effect. The thickness of this combined 4, 5 layers is thickness of our hair. So when I first saw it in Münster in our application lab, this is also pretty cool, lot of technology. It's just a lot of know-how application expertise and the people that we have are also very passionate about this business. This is how we create value with our customers also because this lifts our teams, our expertise, which is going to customers, solving their problems. They're calling us if they need a special color. This is why -- I would say this is what is common about all the stand-alone businesses. The people in these businesses are very passionate about their business. It's not just about being pure play. For them, this is the business they are in. This is sometimes they stay lifelong also. The role of this business is strong earnings and cash, and you can see it. It is also showing up in the P&L. Just last 5 years, if you look at it, the gray line, which is the sales line, you see good growth. So the market has grown roughly maybe 2 points, and we have grown above market, 4% sales growth. The blue bars are the EBITDA. And here, you see that 2023 was a record year for us. It was not just 1 year, it was a result of the work that we did over the past years in terms of gaining share, also doing many things on our cost efficiencies and operational work and strong margin management. This momentum has stayed also in the first half results, you see it, our margin continues to be strong. So lot of, let's say, good performance in the last years. Our ambition is to now looking forward, next 4 years, how do we sustain these margins, continue to outgrow the market. We have visibility, and I will share why we have confidence that we can continue these growth rates. You also see our cash conversion goes up much higher because we also invested in the last years and now we can benefit from it, and we can have much more cash conversion going forward. You see this EBITDA increase, and this increase is from the average of the last 2019 to '23 from that basis, that from 2023, but the average of the last 4 years. Even from 2023, it's an increase. But since it was a peak. We're giving you a little bit what is the base for the last few years and then how it goes. So what's underpinning this value creation. We have four strategic priorities that we will focus on to unlock this value. Number one is outgrowing the market. With our leading positions in all the three segments, the auto OEM, the surface treatment and also the refinish. Roughly 70% of this value creation is, to indicate you, it's not an exact number, but just to indicate you, this is the biggest lever where we will drive value. Then, of course, we will drive operational cost efficiencies, roughly 15% and then also structural optimization of our asset base, and this is another 15%. So that's our focus. And of course, finally, for the deco business, we will talk about also later. This is around now unlocking the implied multiple. So maybe I'll start with a little bit what's our right to win and then give you a feeling of what are we doing now in the market, which gives us confidence and visibility that we can deliver on this. Our right to win really starts from our strong brands, our strong positions where we play. Here, you see the brands that we have. They are very well-established, long brands, premium brands, #1, #2 position in auto and surface treatment, #3 in refinish and #1 in Brazil. And these markets, automotive markets, they are not growing as fast, but they are still very attractive markets because of their size. They're big in size, high entry barriers to come in. There's only a small group of peers that actually are there that we compete with. So it's a market we like. It's a market we know. It's a market we like. It's something that also gives us a good position to play in. And the trends that are driving these markets other than the automotive build rates and what's happening in the automotive market are also very much driven by sustainability trends. So for example, in surface treatment, you're always looking at how to use chemistry, which is maybe less -- or maybe more environmentally friendly, more sustainable, maybe free of certain metals and so on. So there's always innovation needed how we can improve our chemistry. For the refinish side, we are also always looking at more sustainable solutions and also more digital solutions because this is much more closer to retail in terms of body shops, how we can help our customers to drive efficiencies and also provide good customer service. This fits quite well with our business model. Our business model is the big brands that we have, which are very trusted in the market. If people have problems, they are looking to come to us. We have this deep expertise of customers' processes. Maybe I'll give you an example here maybe from the surface treatment side. So just imagine maybe a big turbine in our airplane, and now this has to come to a repair shop. There are so many parts in this turbine which had to be taken out. They have to be cleaned, they have to be treated, they have to be tested without any destructive possibilities. And to do that, you really need to not understand just the chemistry, but the processes that our customers are using. That's happening in many industries, steel industry, coil industry. So we go in, our people understand the processes and then they are able to provide the right product and also the right way to use it. So it's also a game of being local, local application, local assets, people sitting also in the region and supply chain is, of course, very important. The one part that we are building on and where we are also having success is on digital offerings, especially in refinish. So you can imagine now a body shop and they have to match colors. People come in, a car is damaged, maybe and they have to match colors. We have this Refinity software, digital offering, where more than 1 million formulations are available on this platform. This allows to quickly match this color. At the same time, we are getting data regarding the trends what's happening, who's using, how much material is being used, where it's not being used. So it's a fantastic way also for us to get access to information, which continuously then improves the offering. We launched it a few years ago, and we are having a good ramp-up in terms of conversion here. So that's our right to win. The right to win doesn't mean that we will win. So what's important is now how we are playing on the field and here, maybe I give you a few of the growth levers and the visibility we have in terms of how we are playing in the market. For our automotive OEM business, we are well positioned with all the global OEMs. We have a long history. We are with all of them, but I want to highlight one in a group of customers, especially in China, all the new EV OEMs who are emerging, who are launching many cars. Here, we are #1 with them. We have been with them now with a few years. And for these companies, color is very important. For them, this is a differentiator, how they brand and how they sell. I mean there are some OEMs who actually, if you buy a car and if it is white or black in color, they charge you more, because they want you to buy a color or a car with a color because it's fitting their brand. They come to us because they know we have the knowledge, the application know-how, we can support them. We can be fast. We are locally present in China with production, with labs, with people, with assets. Here, we are having fantastic success, and this is one of the reasons also why we are gaining share. Here, this is what gives us confidence also that we will continue this momentum in this market. Maybe I go to surface treatment, which is a different kind of game, but here, maybe use an example of aerospace because that's a market which is growing much more than automotive. And here, we have also been there for many years. And you see an example from Airbus here, this is an award that we've got multiple times as a supplier. We've been with them for 30 years. So this also shows you the stickiness of this business, of how much qualification, trust everything you have to build. Then once you are in, you are able to benefit and this market is growing as these customers grow, you can see the growth rate here, we also grow. We not only provide different cleaners and different coatings, but we also provide the sealants So if you can imagine a plane and how much, let's say, stress, environmental stress, temperature stress, everything is happening in a plane that requires sealants everywhere, outside, inside and this is our sealants that you will find there. So it's also a fantastic business and gives us growth rates, which is above the normal growth rates that we have. So this is another lever we are pushing, and we are, of course, expanding our customer base and qualifications and other things in here also. For refinish, here, I have to say, we have done our homework in the last 3 years. And now we will benefit going forward. And this is where also we will see higher growth rates. The main homework that we have done here is that first, what's happening in this market is you have this what we call multi-shop operators. These are consolidators. They buy small body shops and we have an example here of Crash Champions, who's one of our customers in the U.S. 6 years ago, they own maybe 10 to 11 body shops. Now they own close to 600. We have been with them, investing with them, helping them, setting up their business, and this is how we grow. As they consolidate, we grow. This is why I feel very good going forward, we have the visibility of where they are going. We have a very strong premium brand historically. And now we have also established this value for money brands. You see the two brands baslac and NORBIN. NORBIN is in China, baslac is in our Western regions, and this positions us also to play, of course, in a bigger volume segment. And also the work has been done. The brands are getting recognized, we see also good growth there. So our refinish business is also now well positioned from where we were to benefit now as we go forward. And one other common lever that we have for all of these businesses and I have a really, I would say, cool example here, on terms of sustainability. We introduced in 2020 this line, Glasurit 100 line. What it does is, first of all, it has 40% below EU solvent limit. So it's really benchmark in terms of what is possible in terms of emissions. At the same time, you see it's using less material. It's using less process time. So the total cost of ownership for customers is lower. This allows us to price it for performance to also substitute our portfolio with this product because it's a win-win. You get a better -- lower cost of ownership, better for sustainability. Our portfolio, you can see already 18% we have switched and we plan to switch it even stronger. This is an example from Refinish, but these are the kind of things we are working also in our labs for the entire portfolio. This gives us also confidence that this will continue to help us win with technology also in the different segments. So hopefully, you can see this is why this growth level, we are very confident. We are going above market. We've already shown it, and now we can continue this momentum and outgrow the market, with the right customers, right segments, right technologies and our teams. Now at the same time, we need to work on cost efficiencies. This business is fantastic. It is also very complex. We have close to 50,000 customers in Coatings. So just to give you a feeling, this is half the customer -- number of customers of entire BASF. If you think of our articles that we produce here, it's also roughly half of all articles in BASF. But it's a perfect place for automation, for digitalization and driving efficiencies. And that is the center of what we use in all our different steps here in procurement, in production, in supply chain, in labs and also in sales. We have had a lot of successes, and we continuously work on this because this allows us to continuously unlock more efficiencies, operational efficiencies as we go forward. We're also looking at structural efficiencies and some of this we have already announced. For example, there are assets and plants where we were not as profitable or we thought we can consolidate so we have announced also some exits in Brazil and Argentina. So these markets we have exited. Also in Europe, we have consolidated some of our assets from some of our sites into one place in Münster, where actually we can have a much more efficient setup, this allows us again to drive structural efficiencies and this is what we have done, this is why this CapEx has been spent, now we will see the benefits going forward. At the same time, we continue to invest in our growth markets, which is Asia. We have investments now shifting, as you see on the right-hand side also among the three segments, much more on the surface treatment side, the refinish side. These are also businesses with higher quality margins. This is why you also see this boost in the margins that we are aiming for. The capital allocation also goes in this direction. Now maybe I take a minute to also make a pitch for our fantastic Deco business because this is actually -- the Suvinil brand is really well-known brand. It's a very retail brand in Brazil. It's a B2C business. We are #1 in the premium segment. We also have a very strong brand, Glasu, #2 in Brazil. This business is also a good-sized business. It's roughly EUR 500 million net sales, 1,000 employees. It's a fairly stand-alone business even today because it has limited synergies with the rest of the automotive segment and industrial segment. So we are very confident that this business now in the right ownership can even grow more or extract more value and can also be value creative for us. And this is the process now we will kick off. Maybe I come to my last slide to wrap it up. Our focus truly is with this business now to focus on unlocking the value while we run within BASF. We have a direction of travel, which can take us in a different place, but no matter what, it's a no regret move for us to focus on improving our absolute EBITDA, EBITDA margin, cash conversion, and that's what the team is focused on. We actually communicated to the team this direction of travel only in the last days. I can only tell you, we have a fantastic team, many of them love Coatings. For them, it is about how can we win in the market, how can we grow. We are very proud of the know-how we have, the brands we have and the team is staying focused on this. So that's the value creation playbook, I would say, for Coatings. And now I will switch to battery materials, which is a different story and a different playbook, but also a very exciting business. So maybe I go there. I have to switch my mind a little bit here. So battery materials. I think for battery materials, there has been a lot of also media coverage in the whole market. What's happening with the EV cars, the penetration, so much in the news about OEMs and everything that's happening. We have also did some announcements in the last -- in quarter 2, also, we had some other announcements. So today, there will be no real news because you have already seen what we have planned to do. But my plan is to a little bit give you more context on how we see the market, how we see the opportunity, how we are playing this option. And hopefully, you'll get a better sense of how does it look forward also in terms of capital allocation there going forward. So I summarize this here. There is no suspense for you of where I'm going here on batteries. We will focus on, and Markus also mentioned it in his keynote in terms of direction of travel. We have fantastic assets. We have invested recently. We will focus on maintaining this capacity and growing with them. We will not invest now in producing PCAM or in metals, we can strategically source it because now supply options are available, and we will derisk our growth path with all of these measures, including looking at collaborations along the value chain. We still like the business. I think it's still a fantastic long-term growth opportunity if it's played well. Many things that are happening, even plays to our strength right now because we have the assets we need and we can see when the market materializes what is the right time to think about the next steps. We are also confident on this EBITDA margin, and I will maybe address this a little bit later. This is a 30% EBITDA margin, excluding metals. This business is very -- can be very profitable, is very profitable. And this is why we are also in this -- playing this option, yes. Maybe I'll step back now and talk about the market. Because it's good to have this context on what's happening in the market. So I will go through a few slides which show you the market which informs us of how we are also approaching it. It's good to step back and take a look, just the last 5 years. I mean right now, we're in this turmoil as if there is no EV cars being sold. But in the last 5 years, it has gone almost 6x where we were in 2019 in terms of number of EV cars. Of course, the biggest change has happened in China. So it's a very regional story. You can see from the right-hand side, in 2023, almost 1 in every 3 car was an EV car in China. And the last 2 months actually they are selling almost 50% of the calls that are being sold are electric. So there is a very rapid electrification happening in China. Not so in Europe, in U.S., in Canada, there, the penetration rate you can see is 9%, 17%. So that's where we were in 2023. So big growth. I think this is what has been driving all the announcements, all the capacity increases and so on. And now just in the last months, you see this stable in the top. What was the forecast by S&P Global Mobility in January in terms of expected growth rates this year? And then now China, more or less still there, but everything else is really at a very different place. You see on the right-hand side, all the announcements of years, sale not happening or the delay in productions or stoppage, both on the OEM side, the cell producer side, and also the CAM producer side. So this is an industry-wide phenomenon that everybody is adapting, adjusting and recalibrating. And we did the same. In June, we announced that we have been looking at investing in our joint project on our nickel-cobalt refining in Indonesia. We decided that we will not proceed. We don't need to also now given the supply options that are available now for the metals. So this was something that we announced. We were also looking at investing in a large-scale refinery project in Spain. And now as the demand is going to be pushed out, we have paused it. We have some time to think about it when we will go there. So this is another investment that we will -- do not plan to spend any CapEx here in the next 4 years. So both of these projects are not planned now for any CapEx allocation in the next years. Now also, it's good to look long term now, because it's a long-term growth option for us. And you see still what is the outlook looking for 2030. Of course, this is also a forecast from S&P. And there's a lot of uncertainty. I mean nobody really knows. I think we can draw the curves as we want a little bit, but the direction is clear because the regulations are there. OEMs have made their bets. The technology will move there. And this will still be a very substantial market. It will not be a straight line like it's shown here. It will be a little bit bumpy but direction is very clear. You see also it still will be very strong in China but also Europe and North America and the penetration rate that goes there. Maybe it's a few years later but the direction is there. For us, this is what it means also fundamentally for our cathode active material opportunity. Because that is still the chemistry that drives the performance in the battery. And you see this is the reason why we got into this business. It's a once in a lifetime, a fantastic growth opportunity for us. Now you see also that there is a regional picture in terms of technology. So the biggest, let's say, debate that is happening on technology is LFP versus NCM. Now which is going to go win and what is happening. You see that actually both will have a position in the market. In China, it is strongly LFP. This gray bar is LFP, but in Europe and North America, it's projected also long term to have a substantial NCM even though there will be also a position for LFP. We are very strong in NCM. We have the full range of portfolio in NCM from low nickel to high nickel. We continue to work on this, and this is where the high performance is needed, especially on the high nickel side, and this is where our strength is. Maybe just one word also on recycling. So recycling, as you can imagine now, it's a matter of time. When you have all these cars on the road, then eventually these cars will come back for recycling. And this will be a fantastic source for metals, for raw materials. It will also be driven by regulations. It will also have benefits of low CO2. So all the attributes actually that you need and fit very well with our purpose, with sustainability is around recycling. This will come. And now again, this is the outlook here you can see maybe the timing might be here and there, but it's a huge growth that will come, and we need to start in a smart way without too much CapEx, but in a smart way to position ourselves there, and we can also -- I'll show you how we are planning to play this. So maybe now I switch to -- from this context of the market or what's happening that, yes, we have a short-term disruption or short-term slowdown. It allows us also to play it differently, derisk our path. The long-term part is still valid and we will focus on these three things that I mentioned in order to have this build stronger our positions with customers going forward. And maybe I start with the first one, this is a map where you see our positions. And maybe I start with on the left, so we started almost 10 years ago with a position, a small position in North America. So we built a plant there. And actually, it has a personal connection with me also because that time I was in the U.S., and we had a Argonne National's license, ANL IP license for NCM, and that's all we had. And then we started this journey of how can BASF play on this. So that is how we started. But then we actually had fantastic collaborations in terms of expanding. We did a JV with TODA in Japan, which got us access to a lot of technology, know-how in how to make it. The trick here is how to make things. So this is a fantastic acquisition or joint venture partnership that we started with, which gave us assets and also customers in Japan. Then we expanded that model also in China. We did a JV with Shanshan, where we are also a majority, and this has given us, again a fantastic set of capabilities. I was there a few weeks ago, and the people there are in batteries for 20-plus years. They're not like now showing up or what do we do for batteries. So it's -- this location is actually the center of a lot of EV technologies, battery technologies where we are located. So it's a fantastic, I would say, labs, application know-how, people running assets. They have created assets from Generation 1 to 2 and 3. So we have state-of-the-art assets now. And now we have built also a plant in Schwarzheide, and this is coming online this year, also state-of-the-art. So we feel we have 190 kilotons of capacity. We are well positioned in all regions. We have R&D centers, application labs also in all regions. You see roughly EUR 1 billion in sales, 2,300 employees. We have, in the last year, spent EUR 1.1 billion on CapEx to build some of these assets. So we are well invested for now. Now we can really fill these assets. Our customers are working with us on qualifications in all regions. This is our number one mission now, is to leverage these assets and meet demand for the next years, for the next 4 years. On recycling, what we have also done is, in Schwarzheide where we have built our CAM plant, we also have our black mass production. So black mass is basically taking all the production waste that's coming right now from different production areas, and we are able to make it into this black mass, which can then be refined to extract metals. So we have a reasonably -- it's a small plant, but it's a plant that we have now tested, it works. We work with customers. It allows us to work with recyclers, with collectors, with partners, also in a closed loop system, and you see some of the names there. So this is allowing us to set up the ecosystem as this market will develop and we will position ourselves. When the time comes of how we can scale on a bigger recycling facility, this will likely be beyond 2028. So that's our mission, CAM and recycling. For PCAM and metals, this PCAM is a precursor for the CAM step. And here, now we actually have, I would say, also benefits with all this downturn there are a lot of options available for us to strategically produce it because we have some capacities to produce it also, but to source it also from the market. Same thing on the metals. We have relationships now and we have enough supply available. So we have a unit which is dedicated to sourcing this in a strategic way from the market, build relationships, source metals, also source it responsibly. And you see all the NGOs and associations we work with so that we are also sourcing metals in an audited way, in a sustainable way with the right partnerships. And of course, these are criteria that we also use for our own investments. So that's our focus here for this part. And of course, the benefit of this is that we now avoid any CapEx in these steps, which is not our core, core mission right now, and we are able to do it via strategic sourcing. Now finally, I would say if you put all of this together, this is our approach to derisking something that we have spent the money on. We have the option to grow, but we know it in a very de-risked way. We don't spend -- we have not -- we are not planning any significant CapEx now for the next 4 years in the plan because all of this has been invested. We will now grow and fill the assets. We will also be open for collaboration along the value chain. And Markus also mentioned it, we have done this throughout the whole buildup of this business. It's happening in the industry. So we will continue to look at maybe there are also opportunities to do things there. Of course, our biggest mission for the team is finishing the qualifications, we have a very good strong pipeline in all regions with different kind of customers. This is what we believe will start showing up as we go towards the next years. I think, I have also spoken with the team on the battery materials because it's -- you can imagine, for them also, it is a big change where they were sitting just like everybody in the industry, a year back. I can only tell you, all of them tell me, if they got a chance again to work in a business like this, they will do it every time because it's a once in a lifetime chance to participate in this kind of transformational journey that they are going through. They're very agile. They're again in love what they are doing. We have gained a lot of experience in building plans. They're all waiting for how to build maybe other things, do things in a more efficient way, a better way. There is lot of innovation possible still here. This is what gives us confidence also of why we can reach this EBITDA margins once we also have good utilization. So this is my last slide, also on the battery materials. Here, our focus remains how to derisk our path forward. We have fantastic assets. Now our path is to see where this goes, and then we will look at options along the way. Yes. Good. I will now switch to another fantastic business, which is benefiting from the slowdown in EV and which is our ECMS business. I have to say this business is performing really well. It's performing well versus even what we expected when we did the carve-out. This business has been actually a source of inspiration also for us, also in the Board -- of what can happen in terms of strong focus, strong entrepreneurship and the teams being fully aligned with one mission with the right incentives. Maybe I will share a little bit why I feel so good about also this business, yes. This business is, of course, broadly in our automotive catalyst side, so light duty, heavy duty. This is the one big pillar that we are in. There's also a very big pillar, which is PGM recycling. So I will talk a little bit more about this because this is also something that has more elements now as we go towards sustainability and circularity. So that's the PGM recycling business. It's the same thing if you -- I was in this business also, I can tell you, they are also people identify themselves with PGMs. For them, the first thing is about metal and then about chemistry. So it is a very strong, again, identification, not only with the peers, but also with the business they have, strong PGM expertise, technology leadership. It remains a technology game even now. People are thinking this is low growth, but actually, it will be a technology game, also how we adapt going forward, and I will show you this. Strong customer relationships, production set up. So this is where, how we create value. And the role is very clear. It's about earnings and cash. This is a hugely cash accretive business for us. I show you how this business has performed in the last years. You see this EBITDA uplift. Part of it is linked to the PGM basket price below, but you really see that even when the PGM basket price dropped, we have been able to maintain this high, strong EBITDA. This is because we have grown above market also in this business. Maybe 1%, around 1% above market. This 28% EBITDA margin, excluding PGM. So it's a very profitable business for us, and close to EUR 1.7 billion cash flow in the last years. It's driven by efficiencies, optimization, strong margin management, strong growing share. We also started the journey to carve out. This was started 18 months ago -- sorry, it was an 18-month process. It started in '22, and then we finished -- started in '22, finished in 2023 then. And this was process of the first time we did this kind of carve out, but it allowed us to also look at how can we now make fit-for-purpose structures for this business, which is quite different than our core businesses. We have dedicated IT systems, dedicated legal entities. We have set up a different kind of business processes. So this is what makes me, I would say, very proud of the team because while this was going on, this can be very distracting. They also came up with their mission and vision and identity and culture and that's what has allowed them to really deliver this performance in this time frame. You see also very ambitious targets that we have which we have good visibility to give these targets of growing 3 to 4 points above market. This is a fantastic growth that can happen even in a declining market. Keeping the EBITDA margin still at a very good mid-20 levels. And the cash flow, if you saw the last slide was EUR 1.7 billion, so there's now another EUR 1 billion on top of that. So very strong cash generation possibility for us for the next years, which is how we unlock value in this business. So how do we do this? What's underpinning this target that we have given ourselves and we feel confident about. The first part is, of course, this gaining share, and I will talk a little bit about this. What you also see, you see this a little bit shaded area also because I wanted to highlight it's not just about growth. In this market, which is low growing, it's a lot around what we can do on our own. So there's a lot of cash optimization, which is the lighter blue that is built in, in terms of how we grow, how we become efficient. This is roughly 60% is all optimized and then we have the growth part. Then we have some optionality you see towards the end, which is something for you to take a look also because we are not spending significant CapEx there, but because what's happening in the hydrogen production or fuel cells, which also requires precious metals. With our precious metals capability, we can also play this smartly in terms of low CapEx but with technology, and this can be an optionality for us and upside for us beyond 2028. So maybe now a little bit going to the market and how we are winning or how do we see our growth. But maybe this one slide because it shows you -- I think Markus mentioned it that this can be a long sunset. Here you see it, just this change in EV penetration in the last years, the light blue line is what the outlook was for catalyst market just a year ago. And what you see, the dark blue line is what now is the projection. So 100 million more units are now being projected in terms of catalyst units over 2030 just because of the slowdown. And we will go through these phases of how the volatility will go. If you look at 2030, I mean, we're still talking about a number of catalysts, which are very close to 2020. The world is not going to fall off the cliff here. This is what gives us and the team -- we have a long path here and we want to take benefit. Now if we can grow above market, I think we are in a good position. That's what it's about, how do we gain share in this market, which is also something that we are focused on. This is where the confidence and why the team has performed well because in this business, it's not actually the P&L or the EBITDA that you see this year, which really, really matters. What matters is you are winning competitions. They show up maybe 2 years later, 3 years later. So you have a transparency on when -- what your almost market share will look like. The P&L is just showing maybe what was done a few years ago. Here, based on the competitions we have already won, we will move from our #2 position in heavy-duty diesel to #1, #2 in light-duty diesel to #1. And we are a very strong #2 in light-duty gasoline, we will be able to sustain it and maintain it. So that's a fantastic outcome, which is why I was saying this business has performed really well, not just from the P&L, but what is coming ahead of us. The reason has been, why is it? It's all around technology. We also have, as you know, fantastic joint ventures in Japan and Korea, which gives us very good positions with these OEMs, the production startup, the customer proximity, all of this coming together, and this focus less win, and optimize is what's driving the team. So maybe I talk about technology a little bit because that is what we believe is still going to be a very big lever for us going forward. You see we have a fantastic track record as Engelhard first and then as BSF. Engelhard even invented the catalytic converter. This is why we're so proud of this, also the team. Then we had copper zeolite technology, a 4-way catalyst. This Tri-Metal Catalyst, this was the time, as you saw in the slides, when we had high PGM prices. You can then, of course, substitute metals and then bring prices down. That's what we are constantly doing in technology. The real benefit for the customer is if you can create PGM savings. If you can create PGM savings, they're willing to pay a higher premium on the catalyst itself. That's what we're always trying to do. We got big award for Tri-Metal Catalyst from Ford. I think they were the first ones to use it. Now as you know, the PGM prices have shifted, which is, again, good for us, for our technology teams to now work on something else, and they are working on rhodium. Now if you can have a catalyst where you can reduce the rhodium content, then again, you create these savings for customers, and then we are able to price it. This is our model, how can we continuously decrease the total cost of ownership for customers. Then we are able to, even in this declining market, with price pressure, which is sometimes there, of course, but able to extract value. The other thing which is giving us reasons to use more technology is because the fuel and the regulations are also getting more complex. You have fuel diversification, biofuels, other things coming up, more hybrid cars. I think this trend actually is also helping us in many of the Western markets. People are moving to hybrid cars, and hybrid cars have batteries and ICE engine. This also gives us a longer runway, but requires, again, a different offering, a different product, different catalyst. Again, technology comes. Technology is still a very strong element for us, and we do it in a very, very focused way. Maybe one other lever that we are using is also to be in the markets which are growing. The entire ICE market is also very regional, what's happening. You have to play a regional game, not a global game. And India is one good example. You see the number of let's say, catalyst market units in India and also projected forward. This market is still underpenetrated just in automotive, and it's continuously growing. New regulations are coming. This is a very steep growth rate. This is not a declining market. We are, by far, by far, #1 in this market. You can see on the right-hand side, our track record, how the market grew and what has been our growth rate. We have won so much platforms there. This is why you see the smiling faces on the photo there. We are relocating, repurposing assets from other regions into India, which is also a smart way to consolidate, to not put more capital but repurpose, build very targeted local R&D and application labs. This will be our growth engine for next years. We're also seeing it this year. Last year, this continues to be a very strong market for us. Now of course, we are also not saying, okay, the EV is not coming. We know electrification will come. We need to position ourselves of how we will play the long game. This is how the team has also crafted this value creation plan that let's not wait. We are right now already shifting our steering levels. We are shifting from investing, building assets to how do we repurpose. Our CapEx is already significantly or will be significantly below depreciation, 35% below what we had even spent last 5 years. That's one shift we will make. The second one, I just mentioned and gave you an example is to repurpose our assets. This allows us to improve our utilization rate. So rather than shutting down assets, we are repurposing them, improving our utilization and strong margin management, of course, through commercial but also technology benefits that I explained. That's our direction of travel, if I can call it this for this business in terms of how we steer ourselves for this declining phase, which will position us going forward. Now I switch to our -- another part of the business, which is a little bit in the background and not in the forefront but is a fantastic business also. You see on the left-hand side, this is the market growth rate for Spent Automotive Catalyst. So this is catalyst when the cars are going to a junkyard, this catalyst still have a lot of value. They come back to the market for recycling. This is growing at a really good growth rate. This is 6% growth rate. And we are #1. We are #1 when it comes to automotive catalysts. If you think of a large urban mine, how much metal is coming from this large urban mine -- or sorry, let's say, midsized mine, we are equaling to that much amount of metal that we are creating just from recycling. So 70% of our own demand, we can actually meet through recycling, which is a fantastic position to have because it reduces all kind of supply risk, low CO2 and also gives us more flexibility in how we also play with the market. And it's not only about getting access to the metal. There is a lot of way now to maximize profit with this physical metal you have. You can do it in trading, you can do it in liquidity, you can do it in risk management, you can offer services to customers. So there's -- this is what we have been doing for many, many years. We have a fantastic unit, which is just focused on not only getting the recycling metal, but how to benefit from it on all the steps in the value chain. And on the right-hand side, I think this is something interesting that we have now launched in the market, this new brand, I would say, the first time we have a brand for a metal, which is Verdium, which is this circular metal, completely recycled, low CO2, and we are offering this to customers and customers are curious. And I think this is a -- like a process that we have created, which we can give a certificate. So it's fully assured. This is circular, and that is a brand that we have introduced in the market. Now in order to also take care of this growth because we see this growth and also the value in future of the circularity in the last years, we have also made some investments in refining. This is Seneca. This is one of our key sites for refining where we have also invested to bring maybe some of the recycling or refining that we were doing outside. So we can insource it now. It gives us also more profit, more flexibility and builds the infrastructure for a future. And we did a very small acquisition for some assets in Sweden. And these assets are -- I think when you do recycling, what you have to do is sometimes you also get substrates, so you have to process them, and you need different capabilities. So we have, for example, silicon carbide substrates, and we can now process them in Sweden and then feed it to our refinery. So here also, we are well invested. We don't need to do any investments in these assets or expansions here for the next years, but now we will benefit going forward because these are in-house and now we can have better margins, better leverage going forward. I come to our third lever and which is what I talked about also, how we are optimizing our stand-alone structures. And maybe I give you a little bit of a feel of what is -- what are we working on in terms of driving cost efficiencies. And there are always things -- I think this was a question yesterday also. There are always things, let's say, you can do better on procurement and other things. Of course, we will do this. But now we are also able to look at the business processes that are in a stand-alone structure, are they fit for purpose for this kind of business. And here, we have now done a lot of the homework in the carve-out in the carve-out, actually, the cost might even go up first because you're trying to create something. But this work is behind us now. And now we will benefit and we'll optimize forward going forward. So the carve-out cycle is this way, and now we are working on, let's now optimize, optimize and optimize. And that's where we go in terms of optimization, you see that 10% to 15% across the board. This is our high PGM business. It also has a load on balance sheet. So also our focus here is how we can further reduce our receivables, our working capital or inventories. And there are also many different ways on -- from a financing standpoint also that you can do. So this is where also we are working on. And this is what gives us confidence of the EUR 2 billion plus cash that we are targeting in this next 4 years. Maybe one word. This is purely an upside. We think of, okay, well, we have something which is very -- which is very valuable, this core competency around dealing with precious metals. And there's all the work that is happening in production of PEM electrolysis of membranes. So these membranes are coated with catalyst. And here, we can see if we can partner with other players who are making these membranes, provide this know-how. We have some partnerships, which we recently also announced. But you see here, the CapEx allocation is the whole -- business, we have reduced CapEx and did it -- that small number is only less than 5% that's needed to play in this. So it gives us a good optionality going forward. But this is something that can also be a value for someone also later as this business is shifting long term into different direction. So maybe now that's my last slide. Hopefully, you can see why our focus is to unlock value in ECMS, and we are doing it already in the last years. We have the visibility to drive it going forward, create the cash flow and we remain open if there are other options. But otherwise, we are with a great team and good hands to drive this forward. Thank you.

Welcome back. We now come to our core businesses. With me on stage is Stephan Kothrade, a member of the Board of Executive Directors since March 2023. Stephan has worked at Verbund sites in Europe as well as in Asia for many years and is now responsible, among other things, for the Chemicals and the Materials segments, which we -- he will present to you now. And with that, the stage is yours.

Thank you, Stefie. Yes, good morning, ladies and gentlemen. Indeed, let's move back to the core businesses, and let's move upstream. I have now the pleasure to present the Chemicals segment and Materials segment to you. And let's start with Chemicals because Chemicals, as you know, is the starting point of our value chains. So we are a leading global player in both in petrochemicals and in intermediates. In '23, we reported sales of EUR 10.4 billion, 72% of that was generated by Petrochemicals, 28% by the intermediates. We have a very broad portfolio of roughly 900 products that we sell to 6,000 customers in various industries. We have a nice split between commodities and also specialties. And you see here the most relevant customer segments, Chemicals and Plastics, Consumer Goods, Construction, Nutrition, Health, Energy and Resources. Now what are the key differentiating factors? What makes our business different from our peers. First of all, it's, of course, the deeper bond integration. In all regions, we are backwards integrated and that gives us superior cost positions and advantages for decarbonization, as Markus has explained, already yesterday. And towards the end of my presentation, I will give you more details how this works actually and how it gives us a competitive edge. We are uniquely positioned as a partner for our customer when it comes to a value based to a green transformation, we can earn money with. Now what is the role of the segment Chemicals in BASF Group based on the very strong financial performance over the cycle that we have seen in the past. We want to maintain this contribution, strong earnings and cash contributions over the cycle. And of course, we are the starting points of the value chain. So we have to ensure a very reliable and cost-competitive supply for our downstream businesses. There is one additional element that is important in chemicals. If you take the Scope 1 and Scope 2 emissions of BASF Group globally, half of that is emitted in the Chemicals segment. So here, we have the biggest lever also to decarbonize and to make sure that our product portfolio becomes more sustainable and greener. What is important to notice is that in the Chemicals segment, we hold leading market positions in all the key value chains and also leading cost position. Let's start with the petrochemicals here in ethylene oxide in styrene and XPS. We are #1 in Europe, globally #1 in acrylic acid also in the acrylates in butyl acrylate 2-EHA. We are #2 in Europe in MEG in the superabsorbent polymer business, we rank among the top 3 globally. And when it comes to intermediates, in amines we have with more than 300 molecules, the most diverse portfolio of this type of intermediates. This is key because we have here applications in industries such as pharmaceuticals, crop protection, cosmetics, detergents, textiles, so basically all kind of customer industries. We're also #1 in PolyTHF or the non-spandex for the engineering applications, #1 globally in neopentyl glycol for powder coatings and propionic acid with applications in the food and feed sector. Now let's recap a little bit of the financial performance of the past years. You see here the period 2019 to 2023 that was characterized by a very high volatility. And in the first years, during the pandemic, we saw very high demand for durable goods. That was, of course, a lot of tailwind. We also enjoyed a very high asset effectiveness in the segment, so we could benefit from this high demand. And we also scored with excellent margin management. In '23, you see here the impact of destocking in our customers' value chains and, let's say, our supply normalization. Over the cycle, I would say this is really remarkably strong contribution to group -- to the BASF Group. EBITDA, PSI on average during this period, EUR 2.2 billion that is a 1/4 of the group number and a very healthy margin of 19%. If you do not consider this onetime effort, this big investment project, our Zhanjiang Verbund site, that will be a fantastic growth platform going forward. We also had an average cash conversion of 65%. So it really emphasizes and underpins the role that we have for the group ROCE amounted to 13% on average. Now what are the main factors and what have we been doing in terms of key measures to position the Chemical segment for further profitable growth? You see here that we launched in December 2019, our Zhanjiang Verbund site project. I will later go further into the details, but that's really exciting because it will add 25% additional sales to our segment. So it's a really fantastic growth driver in the largest and fastest-growing chemical market worldwide. We have also done a good job in broadening our product offering when it comes to sustainable feature, sustainability attributes that we add to our product such as bio-based recycled or biomass balanced or low or 0 PCF, already 30% of our sales in this segment come from products that actively support sustainability. And then I would say the core, our DNA, what really makes us extremely strong upstream is our cost leadership. And this is not only because we have best-in-class technologies. Now we also further develop these technologies. We have operational excellence. I will give you some details how much we benefit from this in a continuous improvement kind of approach. And we also adapt swiftly the assets in Europe, in particular in Ludwigshafen that are not competitive to restore here competitiveness. Now we have 4 key strategic levers, 4 priorities that will drive value creation in the segment. The first one, I mentioned already, it's our Zhanjiang Verbund site in China, it will balance our regional footprint and make us much stronger in Asia, in particular in China. Then we maintain our leading cost position. That's a key element. We have to ensure high asset effectiveness that we have demonstrated in the past, and we will further optimize best-in-class technologies. Now the third one is really exciting because, as I said, if we decarbonize our Chemical segment, this has also a positive impact on all the downstream segments. So we lay here the foundation. And with the Verbund system, we have a clear advantage over our peers because we can do this transfer from upstream to downstream in-house. We have it in our own hands, how we can steer this and if Verbund offers drop in solutions. Yesterday, Markus explained to you, we are not going to invest now billions and billions into new plants at our Verbund sites. We simply will get more access to renewable feedstocks to recycled feedstocks, feed them into our steam crackers into our syngas plants into other elements of our value chains and then allocated by the mass balance approach, as sustainability attributes to the products, and this helps us with very low CapEx to ramp up the volumes that our customers request and the transformation that really requires a massive CapEx, this will come at a later stage beyond 2030. We are flexible. We can do this any time. We are currently pioneering, testing, assessing technologies to be ready for this step once willingness to pay and readiness in the market is a given. And this enables us also to do the fourth point here, focus on CapEx discipline. Once we have started up the Zhanjiang Verbund site, we will bring CapEx down below the level of depreciation already in '26. Now let me start with the first lever. And you see here that we have an extremely strong global production footprint. 90% of our production assets are fully integrated into Verbund structures, which gives us a fantastic cost advantage over our peers. And you see here an overview of the intermediates and petrochemicals plants around the globe. So basically, all the material that we sell in a certain region, we produce in the region. There are some opportunistic businesses. Sometimes we export some petrochemicals from one region to the other. But basically, we talk here about close to 100% production in the region for the region. The sales split of the Chemicals segment by region is also very interesting to have a look at because we are now in Europe at 51%, Asia is 18%. With the Zhanjiang Verbund site, we will bring Asia to 1/3 of our sales. So we will really participate much more in this attractive growth market. And we will reduce the exposure to -- in Europe to 45%. It's important to note that these numbers do not include our Nanjing Verbund site, the joint venture with Sinopec. If you include that, our sales share in Asia and in China would be higher, of course. Now because this element is so important, let's have a closer look. Here you see the details. You see the split of sales of the Chemicals segment by region compared to the chemical production in every region. Asia Pacific accounts today already for 66%, 2/3 of chemical production worldwide by '28, this will be close to 70% and from 18% to 32%, that's what we can now change the share of our sales in Asia Pacific to bring it more in line. So we can capture growth in the largest and fastest growth market for our industry. And this brings me to the Zhanjiang Verbund site, and it's really I would say a fantastic project. I'm very excited about it. I'm there basically every quarter to have a look myself. What you see here on this picture is just roughly 60% of the site. It's a 4 square kilometer construction site with more than 20,000 workers every day on site. And we have reserved another roughly 5 square kilometers. So this is a very long-term thing. We have all the space to grow over the next decades as we have been doing at our Verbund sites in Antwerp and in Nanjing. Now here, what is exciting about the Zhanjiang site. It will be the most advanced Verbund site. All the know-how, all the expertise we have gained over time, building 6 Verbund sites so far flows into the design of the new Verbund. We will use cutting-edge technologies. We will power the site with 100% green power. We have equity shares in local wind farms, just around 60 kilometers away from the site. We have a diverse portfolio. It's not only wind, it's also solar. We also apply AI and all kinds of digitalization. Later, I will give an example what we actually do here. We will have automated guided vehicles. And all this is on time and in budget. And I can confirm here our expectation for the year 2030 with sales of between EUR 4 billion and EUR 5 billion and an EBITDA of between EUR 1 billion and EUR 1.2 billion. Now what will also give us a competitive edge is that we will or we are building already a flex feed steam cracker with a very high share of butane, which is quite unusual. So we can really play arbitrage between different feedstocks and adjust it also to the needs of our value chains, influencing the so-called severity. So that is the portion of propylene, the portion of C4 olefins that you can get out of the cracker at the expense of C2. And as we are C3 and C4 driven, this is of high value to us. The CapEx share of the Petrochemicals division at the whole site is roughly 80%. And as I mentioned already, we will boost sales by 25% in '28 compared to '23. Pre-marketing activities are ongoing. And now I would like to show you a short video to give you a little bit of a glance of what is happening there every day. [Presentation]

So what I would like to emphasize is, first of all, you have seen, the team is fully motivated. I mean, it's exciting. We get people from all parts of China who want to work in this lighthouse project in the chemical industry. At the beginning, we were a little bit concerned when we had this idea of building a site in the southern part of China. If we would get enough qualified people, I can tell you, we have more than 50 engineers and chemists and technicians that come from our Nanjing Verbund site that are now working and building this new site. So all the know-how flows into it. And there is no lack of talent that volunteers. You also have seen, we have a very good relationship with the residents around with the community. We transfer the practices of community advisory panels also to Zhanjiang. We are very transparent about what we are doing and how we are making sure the site operates in a safe way. And then there is 2 key competitive advantages that I also want to bring to your attention. First of all, you have seen the jetties. So we have our own deep sea port that gives us the full autonomy to import the feedstocks that we need. Of course, we can source locally, we will do. But at any point in time, we can also source from the Middle East, from the United States, from Canada, and we will leverage this. Secondly, it's a 100% BASF site, yes, but it's not isolated. You have seen the pipe connections to a Sinopec refinery and cracker site and to Bauer steels one of the world's largest steel plants, and this gives us also fantastic synergies in terms of, for instance, technical gases plant air, oxygen, nitrogen, we have bridging opportunities when we do turnarounds at Sinopec or at BASF. So somehow it's the best of both worlds. Now you may ask, okay, this guy on stage is getting very passionate. He spent 10 years in China. Of course, he tells us now a nice story about China and Verbund sites. But yes, I will. Because actually, I'm very confident I'm very confident this big Zhanjiang site will be a profit-making machine. And that's because it's our second Verbund, it's not our first one. And this is our first one. I stood at the helm for 4 years between 2012 and 2015. And this is really a prime example of our success in China, and it's our most profitable Verbund site and one of the top sites globally, and we have many, many sites in terms of profitability. As you know, it's a 50-50 joint venture with Sinopec. We commenced operations back in 2005. We had several expansion waves. And now we have a very diversified product portfolio. It's the third largest site of BASF so far, 38 production plants, 3 million tons of products, also steam cracker based. So in the core, very much comparable to what we do in Zhanjiang. Only the Zhanjiang now is latest technology, even more top notch, more digital, and it has demonstrated to be best-in-class in terms of operational excellence, and EHS performance. And if you ask Sinopec, they will confirm it's their best joint venture, and they are very happy about it. Now I'm totally convinced that we can replicate this success now in Zhanjiang, and you see the figures here, 22% EBITDA margin, on average, since start-up, 19% ROCE, very consistently in every single year, we had a higher EBITDA margin than the group average. And there's also returns. So up-to-date, BYC has paid EUR 4.4 billion of dividends to both parent companies, EUR 2.2 billion then, of course, to BASF. So I think we have good reasons to be confident about the success of Zhanjiang. Now the second lever. What do we do to ensure that we keep our leading cost positions. Here, you see what we do in terms of operational excellence measures every year to reduce fixed costs, variable costs and also to squeeze out more capacity out of existing assets. Many of our plants are 20, 30, 40 years old, but we are still improving them. We keep them in a good shape, and you can still improve by reducing input factors for steam, raw materials, other kind of energies or you take out certain elements and make them leaner because you improve the process. And over this period here, we achieved accumulated total savings of EUR 550 million on average every year, EUR 80 million. So you can really say this is part of our DNA. Markus yesterday rightly said, it's not about the Board telling every year now a new program and you have to do. This is what our teams are doing every day in the plant. You don't have to tell them. They love that they are doing it and they know how to do it, and we will never run short of creative ideas. Now what is also exciting about operational excellence is that typically you have a very short payback time, typically less than 1 year, and the investment cost is also typically lower than the sustainable savings that you achieved. Now I come to the AI example. Here, you see that we expect by 2027 that we will apply AI in 20% of our plants in this segment -- by the way we are doing it in other segments as well. And what do we do, for instance, with AI. We have a plant GPT that's a BASF-owned large language model that we set now with in the first pilot case 800 documents. It's the acetylene plant in Geismar, it's training materials, it's engineering handbooks, It's, let's say, input from the shifts. And then whenever there's an undesired state of the plant or the operator does not exactly know what to do, there's immediately an answer and advise suggestions how to optimize energy consumption, how to avoid an unplanned shutdown and so forth. Now the next level that is in the make is that we give the model live access to live data to the advanced process control system. So an advanced process control system is on top of the conventional distributed control system you have in all the plants. It's already learning, giving advice, optimizing and now this optimizing system with all the expertise that has been created is feeding artificial intelligence. We are pretty sure this will be a breakthrough. Now of course, the leading cost position can also be based on leading technology position. And here, you see one example, we are the world's largest producer of acrylic acid. And in all significant regions, you see here a benchmark. We compare the cash costs, '23 of all competitors. And you see we are always here on the positive end at the cost leading position. Now why is that? Now you might ask, okay, that's nice. But how can you keep such an advantage? Will it fade away over time? Or can you keep the competitive edge? And we have demonstrated over many years now that we can keep it. First of all, we have proprietary technology that we are constantly further improving. Secondly, part of the performance is due to the catalyst. We have the expertise in-house, so we can constantly bring in the latest catalyst generations to also squeeze out higher yields, higher selectivity, less waste. We continuously optimize energy consumption with the advanced process control systems that I mentioned and the devil is in the details. From time to time, you have the exchange catalysts, you have to do the so-called caustic wash because there's undesired polymerization in distillation columns and you further optimize how you do this and competitors might need 4 days, and we do it in 3 days, and all these things add up and keep the cost position leading. Now some examples for the big advantage the Verbund offers over our peers when it comes to developing sustainable products at scale. So we have developed already a portfolio of roughly 130 products in the Chemicals segment that are either 0 PCF, low PCF, biomass balanced, chemically recycled or bio-based. And the advantage of a Verbund, I tried to summarize it here. First of all, inherently the Verbund needs less energy and resources and creates less waste than conventional production. Then we use always byproducts as the feedstock for the next neighboring plant. We have less emission, we also have less transportation that automatically reduces then emissions as well. We use combined heat power plants, natural gas based, which gives us an advantage compared to coal-fired power plants, for instance. And then we have on top of the drop-in solutions that I described, and you can really create a broad portfolio, and this portfolio is scalable, because you are not investing into a dedicated plant with a new technology, taking then into consideration technology risks but you can do it in existing assets. And you can gradually replace fossil-based production with renewable or circular-based production. Let me zoom in on one example that you might not know. BASF offers one of the most efficient carbon capture technologies under the brand name OASE. The advantage is a very high selectivity, so you can remove up to 99% of CO2 from gas streams such as flue gas. We do this with the help of amines formulations. We call them gas treatment agents. And our business model is a combination of license -- licenses that we sell, engineering services, we do conceptual studies with the customers. We offer troubleshooting. We sell the first fill when a new plant is started up and the refill. And you see on the right-hand side here that now this business is really taking off because there is applications in power plants, in hydrogen production, in LNG, in biogas, in cement. And we are even taking this technology now to the seas and CPGC, company in China that operates LNG carriers will apply the technology now on their ships. In Lengfurt in Bavaria, we are having a pilot plant together with Heidelberg Materials and Linde where we have, for the first time, a large-scale application of our technology in the cement industry that offers a huge potential. So we will double contribution margin of this business over the next years. And this is just one really remarkable example that I wanted to share with you before I come to the last lever. You don't have to be concerned in case something would really be threatening, we will get via loudspeaker the request to leave the room so you can stay here and you are totally safe, believe me. Otherwise, I will let you know. Okay. So the fourth lever is that we have a very strict focus on CapEx discipline. And here you see how CapEx will drop below the depreciation level starting in 2026. Once the CapEx peak in '24 and '25 will have been swallowed. And this CapEx is well spent money because it will create the growth driver and earnings and cash contributor in Zhanjiang. And with that, I would like to summarize. I truly believe we are well positioned to accelerate value creation in the Chemical segment. We have the Zhanjiang Verbund site as a growth driver. We build on leading cost positions that we keep and safeguard. We are leading when it comes to a green transformation with low CapEx and no technology risk basically, and we focus on a very strict CapEx discipline. And with that, you see that we target an EBITDA BSI increase of EUR 1.5 billion to EUR 2.1 billion by '28. So at midpoint, this is mind boggling 150% and a CAGR of around 20%, mostly driven, of course, by Zhanjiang, but also all the other measures that I have explained to you. And with that, I would now immediately switch to the Materials segment before we start the Q&A because some of the elements in Materials are very similar. You have in Materials basically, 2 business models. You have the Commodity business where we need excellence in commodities, lean and mean cost-driven, efficient structures that's exactly the same as in petrochemicals and intermediates and you have the performance materials. And here, a new element comes into play and that is innovation. Innovation makes a difference here. And most of the innovation we are doing together with our customers, and I will show you impressive examples is innovation in the area of sustainability. So -- but let's first have a look at the key differentiators in Materials. In Materials, we are a global leader in high-performance materials and precursors. Sales in '23 amounted to EUR 14.1 billion, equally distributed between both divisions. And you see here the 5 key customer industries, chemicals and plastics, transportation, construction, consumer goods and industrial. Here, we have 12,000 customers. So you see already a very, very broad-based customer base, and we have 13,000 products, more products than customers. It shows already that we offer customized solutions in the performance Materials division to our customers. Also here, we benefit from fully integrated plants in the polyamides and polyurethane value chains that account for 90% of our business in the segment. We have world-scale plants in all parts of the world. That ensures cost advantages. And we have an extremely strong global R&D footprint that enables us to develop new sustainable high-performance materials and applications. So here you see now our leading cost and market positions. We hold actually one of the top 3 market positions in 80% of our strategic business areas. You see here where we are #1 in polyamide 6 for extrusion. For instance, for food packaging, #1 in glues and resins in Europe. We are #1 in thermoplastic polyurethanes in polyurethane systems in all kinds of engineering plastics in Cellasto for the automotive industry. And these areas, business segments where we rank #1, account for 60% of our portfolio. Now a recap of our performance, financial performance, 2019 to 2023. I think you can see here really how our innovation capabilities and excellence in commodities ensure resilience over the cycle. The -- of course, it's a cyclical business, but the amplitude is rather small. And during the highly volatile period of time, we showed a strong performance again during the pandemic years. Same reasons that I have explained for the Chemical segment. So we had high durable goods demand. We had a very strong margin management. Also, we had balanced supply. And this changed in 2023 because of destocking and supply normalization. EUR 2.2 billion EBITDA BSI on average during this period of time. Also, again, 25% of the total group, 16% EBITDA BSI margin, 63% cash conversion and 10% ROCE. So clearly, the role of the segment is to provide cash and earnings to BASF Group. And we delivered this in the past, and we will also deliver this in the future. Now what are our key drivers that enabled us to perform that well in recent years? And here, the #1 now is customer-driven innovation. And the key is the word customer-driven. Most of the innovation we are creating is not so much basic research, its application driven research that we are doing together with our customers. At the 12 R&D centers that we have globally and in 4 creation centers where we also do design studies and go even beyond conventional application development. I will give you the later concrete examples of that. Also here, sustainability is a key differentiator, and we have developed a very broad portfolio of sustainable products already that account for roughly 40% of the segment's sales. And we are continuously going deeper into this with the same approach that I have explained to you for Chemicals. And here, we benefit, for instance, by -- because -- our Performance Materials Division gets 50% in Europe even more than that of the raw materials from the Verbund. And everything that has been decarbonized helps to make our product portfolio even greener and more attractive. Now important is also here the best-in-class technologies, cost leadership excellence in supply chain. And as you know, we also transform our assets in Europe, and I will show you how we reacted to the challenges in Ludwigshafen by taking out capacities in a very determined way. Now what we believe, what we strongly believe we can achieve going forward is that we can accelerate value creation, plus 50% here. So we target an EBITDA BSI increase of EUR 750 million to EUR 850 million by '28. And now I tell you how we want to get there. These are our strategic priorities. We continue driving our successful business models, very differentiated in the commodities and in the specialty businesses, and we drive growth through innovations, mostly innovations in the area of sustainability with our customers. Lever #2 is not so different from what I have been explaining for the Chemicals segment. So I don't have to go into the details. It's operational excellence, best-in-class technologies, continuous improvement mindset and fixing assets that are not profitable, restoring profitability in Europe. Then #3, leading value-based green transformation in line, and that's what I always would like to highlight, in line with market readiness and willingness to pay. We have, again, here this very flexible approach. And also, we want to grow with low intensity. And here, we have a big advantage compared to the Chemicals segment. In the Chemical segment, we are now in full swing in this major investment wave because of our new Zhanjiang Verbund site. Here, we are already one step further. We have been investing in the past. Some of these investment projects are coming to an end. And now we have the capacities in place to grow, to grow without massive need for capital. We do smart debottleneckings and will fill the select investments that we have been doing. I will show this to you in one slide. And here, we will reduce CapEx below depreciation then by 2027. Now here, you see also the world map and our major sites. You see how close we are to all our customers in the respective regions. And here, it's also important in the upstream plant. So the monomers plants, we also have a share of integrated plants integrated into Verbund structures of 90%. And Already today, we have in Asia Pacific, a sales share of 1/3, 33%, very strong. Europe, 39%; North America, 23%. So I would say absolutely well balanced and in line with the global markets. Now second lever, competitiveness. Here, I just picked one slide for Ludwigshafen because already in '23 -- February '23, we announced that we will shut down some of our plants at the Ludwigshafen site. Most of the plants here in the Material segment, in the polyamide value and chains and ammonia value chains and in TDI, I don't have to repeat. In August this year, we added CDon CPon and we said we would fully shut down adipic acid after a partial closure. All this has been discussed yesterday. I think important is now the last line here already, up-to-date, we took out EUR 150 million in fixed cost and that helps, of course. Now the really exciting part in materials innovation. And here you see our approach. And what makes a difference for BASF compared to many peers is that typically what you can offer to a customer is product development and process development. That's what you do. Now where we are really leading, where we are superb in many application areas is application development. Our engineers, our technicians and chemists sometimes know more about certain applications than our customers. And we also help them, for instance, to simulate if they do injection molding, how they have to design their machines, how they have to do the molding, what temperature profile they have to apply, how they have to run the extruders. And this is a unique kind of service that we are applying with our ultra-SIM application support. And we also go one step further. We have the creation centers where, for instance, we do not only provide new materials to make a car seat, but we do design studies, how can we make a car seat let's say, thinner, easier to design, saving space without compromising on safety and comfort. And that's the know-how that is really appreciated by our customers. In particular, in China, I can tell you this is a key differentiating factor when it comes to driving innovation with local champions in all kind of industries, be it automotive, be it appliances or other technical applications. Now what do we spend to achieve this? Roughly EUR 190 million per year for the entire segment. The lion's share is, of course, for Performance Materials, almost 600 projects. So you see it's really customized. It's customer by customer, region by region, application by application. You have to do this. And that's how you secure a higher margin, you get a premium, you secure market share and you can grow, you can gain market share. And you see how all this effort is translated now into the vitality of innovation, as we call it, the innovation sales. That is sales with products that we have introduced, launched into the market within the last 5 years. So they came out of the lab, out of the design center, and now they are creating sales and this pipeline has increased from EUR 1.7 billion in 2019 to EUR 2.3 billion last year, and we expect EUR 2.8 billion by 2028. I'll give you some examples. Because, of course, you also have to be smart when you make your choices. If you run 600 projects in parallel, this is a lot. You cannot go to 2,000. So we pick the application fields where we see the best growth opportunities and opportunities for healthy margins. And here you see, for instance, that in climate protection, new energy and electronics e-mobility, partially, we have sales growth in the application segment that significantly outgrows the sales of the underlying demand in the industry. For instance, engineering plastics in electronics and new energy, 15% growth rates. If you go to e-mobility, yes, there's ups and downs with electric vehicles. We have discussed this comprehensively. But now with polyurethane systems, we see a 70% CAGR possible. Why is that? There's -- the reason that in the battery, we have a lot of challenges with the heat management. The battery gets very hot. You have to make sure that all this heat gets out of the battery. So you need thermal conductivity adhesives to bring the cells together and you need potting, insulating the individual cells, and these are polyurethane applications that we are developing with various OEMs. And this is really where we are leading at this point. And all these application areas that you see here on the chart account for roughly 1/3 of the Performance Materials sales. So it's sizable. It's not niche as we are talking here. This is significant. Two examples of co-creation, where we really do innovation, not in our lab, but we need the input from the customer, we need their know-how and they open up their books and it's a very trustful kind of collaboration that yields them in better products. And I'm proud to say that we are as successful in doing this kind of co-creation with global key accounts as with local champions in emerging markets. And that's why I've picked 2 examples. The left one is with Siemens. So in June this year, we published the first example of an electric component that contains biomass balanced engineering plastics. So the circuit breaker here is needed for all kind of cabinets, electric cabinets in industrial plants and in infrastructure. And the beauty of it is that it's based on biomass from residues from the food industry or agricultural waste. This is converted into biomethane via a mass balance approach. We feed this into our Verbund and allocate it to the engineering plastics. And in terms of quality, in terms of durability, it's exactly the same material as a conventional plastic. There is no downcycling. There is no risk, no need to recertificate the products, and that's why it's a very nice example. Now on the right-hand side, you see Haptex, that's a new material invented by BASF. That's a PU system that is now substituting synthetic leather in certain applications. Synthetic leather that is mostly PVC, that is then processed with high volumes of solvents, such as DMF. DMF is very problematic in terms of its toxicological properties, it's damaging the liver and so on. So the first challenge is when you do the processing in the plant of the customer, you have to ensure that the workers are protected. And then you have odor in the final product and you have VOC emissions. And you don't want to have this, for instance, in the interior of a car. And now with our Haptex, you can get to the same product quality, you have even more design freedom. You get a very sophisticated and more luxurious look and feel compared to conventional synthetic leather, and you do not have to apply any kind of solvent. So this is a sustainability advantage. It's a quality advantage, and it really helps our customers to meet very stringent requirements now in China for this kind of manufacturing. So that's two examples where we help our customers, where we enable them to meet their very strict standards. They are facing in production or to achieve their transformation goal in the green transformation. Now I could continue hours and hours, sorry, I will not. But I just wanted to make sure you believe me, this is not just two examples, and there's [ maximum three ]. I mean there's 50. There's hundreds. In installation, packaging, consumer goods, textiles, automotive. Let me pick one, furniture and wood. Why? Because this is a nice example. It's a large volume business with a customer in Austria, the company EGGER, family based. They are one of the leaders in wood products for the furniture and construction industry, and they buy wood binder from us 100,000 tonnes a year. And why do they buy from us? Because we offer this material with a lower product carbon footprint. Competitors from China, from Eastern Europe have a PCF of around 2, 2.1. So for each ton of wood binder there is 2.1 tons of CO2 emissions when you buy it, and we are offering at 0.7. And we sell this stuff with a price premium. And EGGER pays a price premium because they can then offer a product with a reduced scope 3. They get a reduced scope 3 and the PCF of their own product also gets lower. And the next level would be then as I demonstrated in the Verbund, to not only do it, for instance, via the allocation of green power, but you also use them a biomass approach or you use recycled material or you apply heat pumps. And there is a toolbox that we have now ready in the Verbund system that is very versatile that translates into a big advantage. Now this is the reason why we can reduce CapEx and go well beyond -- well below the depreciation level in the years to grow. I'll show you some examples in Geismar. We have very low specific investment costs for our MDI expansion because it's a brownfield. We benefit from the existing Verbund structures at the site. So here we are ramping up our MDI capacity in steps until Q2 '26. We have in Guaratinguetá, a plant for sodium methylate that we expanded. Sodium methylate is use for first-generation biodiesel. We are the market leader in sodium methylate, having more than 50% of the market. And this is a very attractive business. So we seize this growth opportunity. And then you also see some examples in Asia. In India, we are expanding engineering plastics, step-wise, not so big CapEx, but a lot of additional volume. And we also started up a technical development center in Navi Mumbai very recently. In Chongqing, the initial phase of our new Verbund site, as you know, is already on stream. Two plants, one for engineering plastics, one for thermoplastic. Polyurethanes, ramping up according to business plan going very smooth. And we have debottlenecking opportunities for MDI in Shanghai and the Chongqing side that you can see here on the picture. So what is this all about? You have basically two types of MDI. You have polymeric MDI, that's the conventional form that you get when you run a big MDI plant. And this is used in applications, for instance, in appliances and in construction, so insulation. If you want to go into TPU, into footwear, into technical applications, you need to split the polymeric MDI into monomeric MDI and polymeric MDI because you need this MMDI. And this is the higher value product. You get typically a price premium of up to 25% over longer periods of time over the cycle. And now we use our existing capacities to add splitting facilities and improve the average margin of our MDI business. So that's a very smart and simple approach. And that brings me to the end of my presentation where I want to summarize now our priorities again and what is -- what are the key levers for our future success. It's the innovation together with customers, customer intimacy and R&D power are here key. We maintain leading cost positions. We drive a value-based profitable green transformation, and we grow in attractive markets with low capital intensity. And this will give us at midpoint plus 50% EBITDA bsi or in absolute numbers, EUR 750 million to EUR 850 million. And with that, we start the Q&A.

We will now continue with the core businesses. And with me on stage again, is Anup Kothari. He will now present the Industrial Solutions segment. It is worth mentioning that you also led one of these two divisions, the Performance Chemicals divisions before. But now he will present both of them. So the whole segment. And please go ahead. The floor is yours now.

Thank you, Stefie. So welcome back after lunch. So I'm going to cover Industrial Solutions. And as Stefie mentioned, this has our Dispersions & Resins, and Performance Chemicals. So both of these divisions. And they go into various different markets. You see it here, but they way -- also to think about this business is it's -- I would say it's like an additives platform. So what we have on products, which are mostly small amount that you need for -- in a product but boost the performance of that entire product. So that's essentially what this is, and we have done different product lines that go into it. And they go into various different markets. And so you can shift also depending on the markets where you want to go, but they are providing similar functionality and fit-for-purpose products. So we like to think the way we create value is we are providing these products and products with application know-how, application expertise so we can make fit-for-purpose [ for the ] products. Many of the products that we have actually are tying it back to our value chains. So it's highly connected to the value chain, and this is why it belongs firmly in the core, and I will show you a little bit some of the examples also. The main role of this business in the portfolio is it is a low CapEx, high ROCE business. And I'll show you this. It's been consistent across the time that it's a -- it's very good in terms of ROCE and that's how we look at it. This has been the performance over the last 5 years. And this business was actually, let's say, the demand supply was quite impacted by the pandemic. So let me a little bit describe a little bit what happened in 2020, '21, '22. If you can imagine in the pandemic, everybody was sitting at home, painting their houses, buying a lot of goods. So this was driving a lot of demand also for us in this period. At the same time, supply chains were very constrained. So it was a high demand in terms of volume, also good margin possibilities there, but our teams really delivered during this time because what you needed to do was to make sure you can run the assets in this very difficult environment of the pandemic in a good way. You can have resilient supply chain. And then, of course, you can do the strong margin management. So it was not that it just came as a tailwind. Our teams were able to run the assets, get the supply chain, and you see the results, the blue bar that you have on the EBITDA during this time. And 2023 was also where in the second half, we suffered from destocking. So there was a very significant destocking that we also saw in 2023 and already in 2024 for this business, we are seeing good improvement in the first half, and the demand is beginning to normalize, I would say close to pre-pandemic levels. So that has been the dynamics of this business. And you can see the ROCE 14% that I mentioned on average is typically this business has been above 10%. And that is the main role of this portfolio with high cash conversion. Now if you zoom this out a little bit, the whole segment, we have been working on it for some time. And I would say the biggest part that we have done is we have made it a very focused coherent portfolio now where we have very strong positions. And you probably can see it on the slide, some of the portfolio moves we have made over the last years. And as Stefie mentioned, I was in the Performance Chemicals division when we did the paper and water divestment, but we also did pigments. These were the two big ones and then also smaller ones along the way. So some of these businesses were just not fitting the business model that I just described of products plus application know-how. Some were having structural cost issues, some -- but just they were better owners out there. So we have done this now. And now we have a very focused core and portfolio. And going forward, you see the EBITDA target that we have for 2028 from our 2023 baseline. It's a big number. You see 40%. Part of it is driven by this normalization of the demand because this is a -- 2023 was a lower basis. And then the other things that are underpinning it are really these four. First, again, ability to grow with our leading market positions. These markets are growing GDP plus. So here also, our ambition is to capture the growth there while also gain some share. And you see almost half of the value creation is coming from this growth with leading market positions, and I will go a little bit deeper into this. Then there's the second piece, which we have not highlighted as much before, which is actually becoming a good business for us. It's a good boost, which is about this focus play we have in electronic materials. This has done -- this has actually grown really well in the last years, and I will talk a little bit about this. So this is right now roughly 10% of the total sales, but it's a good growth, good EBITDA margin, and this is a business that we see also giving us a boost in growth. And a big part of the business model of this business is constantly doing productivity and fighting against inflation, and this is built into how we also do things. And you can see that our CapEx here is 80% of depreciation because, again, we have invested and over the last years in certain growth areas and growth regions. I will show you that also, and it provides us with good leverage also going forward. So what is our, let's say, market positions. And we have a very broad product portfolio here, and I'm showing you here only our key product lines. So these are big product lines that you can see. And this was something that Markus has also had mentioned in his keynote. For all of these product lines, we are #1, #2 in these different product lines. This gives us a very strong position. You can see in dispersions and in our also coating additives. In electronic materials, we have these focused positions. There also we are #2, and you can see down the line. They're all very different products. And I would still characterize them as additives, and this is what they can go into each of these applications. You see our peers. And it gets difficult for -- to have, I would say, a pure-play peer or who you can compare us with. So it depends a little bit on which product lines you are talking. Internally, what we do is we try to create what we call a synthetic peer. So we try to figure out, okay, given our portfolio, if a company like this Industrial Solutions existed outside, what would they look like? That is how we benchmark ourselves and gives ourselves also insight into how we are doing. So what are the key trends which are driving these markets because they look -- they are very GDP plus-ish growth. But you see down in all of these markets, it's mostly sustainability-driven resource efficiency-driven trends. And the most important part is that all of these markets are looking for products which fit for their use for their application. For example, you see the picture there on plastic additives. So we were in the Limburgerhof in our ag group, you can see the greenhouses. So if you have these plastic films. What farmers are looking for is these [ plastic ] films can last longer. So that's the first part, durability. And they want something which has good optical features, so you can get UV-light and protection the right way. And that's what we do. We have an additive, which increases durability and giving also better UV protection, the light stabilizers, and that's what we provide. Or in coatings. These are all decorative coatings. We have the customers there, which we are looking for lower VOC, for example, or volatile organic compounds. So this is what we provide. And I will go through more of these examples. So that is what we do, and this fits very well with our business model, which I alluded to before. Maybe I start with know-how part. We have 800-plus technical experts with many years of experiences in these different markets. We have front-end sales and they typically are working with customers trying to understand their applications. And then they connect with our regional R&D labs. So we have R&D labs in all our regions, applications, which are more focused on their markets. We have local production sites. And then if we see some trends, we can tap into the BASF chemistry toolbox for all the additives library we have, the formulation expertise we have, the understanding we have of the different, let's say, applications. And then, of course, we can scale it because it's connected to our Verbund. So we can figure out which ones we can scale, which we can provide a solution and that's our business model, which allows us to play with the trends that I just showed you here. So that is how we play this. So it's a very nice business for us. It fits very well with our strength and also our, let's say, expertise. Maybe I share a few archetypes, I would say because such a diverse group of different markets and products, a few archetypes of how we actually do this. And one of them, which I think is a really interesting one. So on the left-hand side, you see this is like -- just imagine a construction site, and you have a mortar bag. And that has this all the inorganic things inside in terms of sand and fill and then the additives on the top is a small part of it. So from a weight perspective, this is very small, what is sitting there. From a value perspective, the first bar that you see is the orange part, which is our BASF additives, and the rest is all in organic binders. Now we have just launched, and you see this Hycon construction additive, where -- if in the formulation, this additive is used, you can reduce many of the other inorganic binder, some of them also very expensive. Overall, there is a total lower cost of the whole formulation, while we have gained 20% of the value share. So that's how we try when we do innovation that we can reduce the total cost, reduce the formulation cost, but maybe our value share in the formulation goes up. And this one has also a fantastic benefit because you also reduce CO2 content by doing this. So it has lower CO2 emissions, and this is a big driver also in the construction industry. So this is one example because it's so tangible I used it here, but this is being replicated again in different applications, how we bring the formulation know-how, the application know-how, bring our additive, bring maybe the total cost down and then you can value price in these situations. Another archetype that we use is driven by these megatrends. And I use again maybe the automotive example. I think there was also a question how the automotive industry will look at us. So here, you see that electric cars also have a need for coolants. We have coolant right now for the ICE cars, and we are able to provide the coolants right away. But electric car requires 2x the coolant than a normalized ICE car. So first of all, it's just a boost in terms of demand for these products. But what these coolants do in the ICE car is they prevent corrosion. That is their main function also. And if preventing corrosion, it actually -- from a chemistry standpoint, is increasing conductivity, which is not a good thing when you want it for electric car. So we are working on new coolants, and we have launched also, and you see it below, where we call it safety optimized. So it is actually bringing the connectivity lower. So it's more safer and then also bring this functionality. And we believe this is where also the regulations are going and many agencies are looking at making it a standard in terms of moving towards more safer coolant. So this is, again, an example of where we can use the trends, bring maybe the products that we even had for some other applications, modify it for this new expertise. And there are other examples on the right-hand side. I can also mention, for example, anode binders. This is where also our dispersion business is working with where you can increase the capacity of anode, again through this. So there's a lot of playground for additives and formulations, chemistry in all of these new applications also. Maybe A different example, again, to show you a different kind of archetype. This is coming from our Catalysts business. So here is an example of just imagine nitric acid production. So it's a bulk chemical and it has NOx emissions, 700,000 tons of NOx emissions coming from this nitric asset production. And the global warming potential of NOx is 265 x CO2. So it's a very strong, let's say, impact on NOx. So there is a strong urgency to reduce these NOx emissions. And with our partner, Uhde, they have EnviNOx technology where they can actually reduce these emissions by 99%. And they're using our catalyst. And the way they work with us is we have been working with them, they trust our capabilities in creating this high-efficiency catalyst. We have a pilot plant inside of BASF. So we can actually mimic and we test there. We even have our own nitric acid plant, so we can even create a reference plant inside of BASF. So that's the business model for our chemical catalyst many times. We have the capabilities. We have the know-how, sometimes BSF can be even a customer, create a reference plant. And now since the last 5 years, we have been with them and in more than 20 plants, this technology has been deployed. And it's an interesting statistic that you see there in 2023. As a result of this, we have through this technology, through our catalyst also have reduced 7 million tonnes of CO2. And if you remember, I think, Markus, you mentioned it in your keynote, BASF's entire emissions are roughly 17 million. So 7 million is almost 40% of this emission. So this is a perfect example, I would say, on enabling green transformation. The lever we have, if we can go from 20 to 40 plants, this is what we plan to do as we go forward. The impact on CO2 reduction that we're having through this catalyst technology is fantastic. And this is, again, another example of how we can use the sustainability trends and the new applications that are coming, which also drives our Catalyst business. Now I want to move a little bit from this, I would say, different archetypes for Additives business to Electronic Materials because this is actually a market, which you see on the left-hand side is a proxy, I would say, of a semiconductor market in terms of growth rates, which are being projected. This is basically a chip production. So it's lot of investments coming online. People have announced hundreds of billions of investments that need to come to going forward. And in this market, where we play. So there are 2 -- a few steps in the chip production. One is what is called a photo step, photolithography. So in this step, essentially, the circuit is being set. And here, you need ultra--pure chemicals in order to do it. This is one place where we play. Then there is etching, cleaning, wet deposition. These are the steps happening where, again, you need formulation additives. So we have a very focused play on this ultra-pure chemicals and this formulation additives in the chip production. And on the right-hand side, you see what we have actually done in the last years. You see all these symbols and this R&D QC lab, production, sales. But I would maybe bring your attention to Production and QC lab because they go together. And we are sitting in Taiwan, in Korea, in China, in Singapore, in Malaysia, in Europe and U.S. So this is all because there are customer locations there. So we have a really good footprint now with customers, with production, with QC labs and R&D applications also you see in many places. And now we can continue to leverage this as these customers also expand and grow. And the business model here that you can imagine is that once you are with a chip maker, they're always working on the next generation, a faster chip, smaller and smaller. And we start working with them already on the next generation. So then you are already in. You are essentially supplying the current generation. You're working on the next generation. We are able to tap into the BASF's additive library, do very fast-cycle R&D development because you need feedback very fast. And so you are constantly in this fast speed innovation cycle. And our customers now have a very high confidence in us in terms of executing on our investments. I just showed you our footprint. So now we have gained expertise. We have a dedicated teams who are able to build these plants, bring them on time, bring them reliably. And this is what is also a core strength that you need, you can imagine, the reliability that is needed, the quality that is needed here. And this is what we have now a really good track record working with our customers, and it's showing up in our P&L. You can see the 15% sales growth and the EBITDA increase that we have seen very nicely in this period of time. It still is a small business in the whole, I would say, size of the segment, but we are talking EBITDA here still in triple-digit million. So it's a good growing business, and we can further take it forward. And this will be, I would say, one of the boost for growth for this segment going forward. Now I also mentioned that we are constantly also looking at as part of our business model for this business to drive cost efficiencies to have productivity on inflation because the markets are growing GDP plus. So we are always mindful for -- we have to drive productivity all the time. And you see here many different levers. There are a lot of small, small measures, and this is also something what Stephan mentioned, the OpEx is a big lever that we have in our assets. But digitalization in labs and testing in quality is also something that we do and lean organization is also something that we constantly look at. In certain things we need to further delayer or get closer to the market. So all the levers, I would say, that we can use. We use it because it's all these small, small things that finally add up to fight this inflation. One final point, on the final lever that I wanted to mention, and you can see it from the map, where have we invested in the last years. This is just -- and this is from the fact book. So you have all the locations and capacities and where they are. And they are all, as you can see, sitting in growth markets. They're sitting in China, in Malaysia, in Indonesia, in India, Turkey and also in certain assets in Ludwigshafen where we can debottleneck. So it's a very smart way to debottleneck and release capacity. And we can now leverage these capacities as the growth comes, we are there, we can fill it. And you also see how is our CapEx allocation below depreciation. And most of it is on optimization, business continuity. So it's really at a good level, and this is why this business is able to deliver this high ROCE. So this is a business we like. It's a very focused core-end portfolio that we have. It has good pieces that we can boost in terms of trends and also electronic materials. And our aim is to now normalize our 2023 earnings and then go for this EBITDA improvement through 2028. With this, thanks, and I will join again for Q&A.

Okay. So with the presentation of the Nutrition & Care segment, we will conclude today's presentations and also our Capital Markets Day. With me on stage again, Mike Heinz. And yes, I suggest I hand over to you, and you'll go ahead with the final presentation.

Thank you very much, Stefie. I'm sure that you're relieved. Two days, last presentation, and you're glad that BASF doesn't have more divisions or segments. So let's dive right into Nutrition & Care, which really provides a lot of ingredients and also innovative products, which are dedicated to improving the quality of life. The segment itself has around about EUR 7 billion in sales. It's the Care Chemicals division is over twice as large as the Nutrition & Health division. This used to be one division. It was called Fine Chemicals and after Ciba and the Cognis acquisition, we give -- decided to split them up into separate division where Nutrition & Health is serving the animal nutrition and human nutrition market, the aroma chemicals market and also Pharmaceuticals segment and then the Care Chemicals market is dedicated to personal care, home care and I&I and also industrial formulations. If you were to sum it up in a nutshell, what this segment is all about. It's really world-scale assets, which are deeply embedded in our Verbund. Its cost leadership and cutting-edge technology as well as innovation. And it's providing us also with great opportunities when it comes to fulfilling the sustainability claims of our end-use customers. Here, we provide you actually, for the first time, a little bit more deeper insight into the sales of this particular segment or each business because we normally don't provide the sales numbers here. On the nutrition side, as I mentioned, animal and human nutrition, where we are really a market leader in vitamin A, and we are also well positioned in vitamin E. We have around about EUR 1 billion in sales. In aroma chemicals, we are clearly market leader with our citral value chain and our menthol business. And in the Pharmaceutical business, we are #1 in omega-3 fatty acids, which you hopefully use for cardiovascular health, and we are #2 in polyvinylpyrrolidone, which is an excipient tablet binder, which you need to actually deliver the active ingredient to -- in your human body. Then we have the division personal care, which is -- where we are a market leader in the personal care industry. In Care Chemicals, personal care industry. And you probably know a lot of our products through UV absorbers, sunscreens that you buy in the summer, then we are #1 also in home care and I&I, and we use the expertise in these two businesses to also be a strong player in industrial formulators where we provide, for example, surfactants to the ag industry, which is used in their formulations to bring some of the active ingredients onto the fields. So I mentioned before, this is a business which is really embedded into the Verbund. And for the chemists amongst you, we brought even a Verbund chart with us. It shows here in green, the Nutrition & Health products and in blue, the Care Chemical products. And this embedding into the Verbund provides us with really this energy integration, logistical cost advantages, in general, cost advantages, but it also provides us with something that you heard in the keynote, which -- and you heard it also from Stephan that at various points, at various points in this value chain, you could also substitute, for example, in the steam cracker, you could, for example, substitute naphtha with bionaphtha, or where it says your C1 natural gas, you could also use biogas. And with that, you can come up with totally different product properties in some of the industries where it counts and where our customers and the end-consumer is most likely to pay a premium when we talk about a premium for lower carbon footprint products. So let me show you a cost curve here of why we think we are best in class when it comes to our costs and our assets and being highly competitive. On the left-hand side, you see the citral cash cost curve, and again, highly competitive because deeply embedded in the Verbund and backward integrated into world-scale assets and us also having a lot of experience over many, many decades in improving this process. And on the right, if you remember on the charge for the chemists, after citral, you have vitamin A acetate. And there, this cost advantage becomes even more pronounced along that value chain. And we are clearly the cost leader when it comes to market vitamin A acetate. And that is also one of the reasons why we believe that we have a really good position going forward in this marketplace. This is kind of an interesting chart, and it provides a little bit the story of Nutrition & Care and why the profitability, let's say, also over the last couple of years hasn't been where it should have been because we have always been a solid EBITDA generator, it was always above our CapEx requirements, except after the Cognis acquisition, but that has something to do with the financial crisis when actually performance went down the hill. And then we had a tougher business actually right after COVID, then also with our asset footprint in Europe, particular for the Nutrition & Health business, high gas prices, which had an impact. But at the same time, which you see on the upper part of the chart, the big key investments that we wanted to do in order to participate at the growth of this business because obviously, when you start coming close to your capacity, you have a couple of options, either you don't participate in market growth or you start to [ bottom skim ]. So you're taking out some of the lower value, lower margin type of products. But eventually, you're not participating in market growth. So we decided to invest heavily in vitamin -- first a vitamin A acetate plant and then also in the formulation plant in non-ionic surfactant plants in Antwerp and APG investment in Asia and North America. And we are also part of our Zhanjiang investment with a citral plant and a non-ionic surfactant plant. This is -- these are the financials in a nutshell and on one chart. So on average between 2019 and 2023, we generated roughly EUR 7 billion in sales and a 15% EBITDA margin. And in absolute EUR 1 billion in EBITDA and our target for 2028 is 2% uplift on the EBITDA margin side, increasing sales by EUR 2 billion and then also in absolute terms, increasing our EBITDA by EUR 400 to EUR 500 million. And at the bottom, you see one more time the impact that we had between, let's say, '21 and '23. Once again, this high energy cost primarily in Ludwigshafen, destocking and price decline. And in particular, on the vitamin side, which also had a demand component because of the avian flu and the Americans -- and the African swine disease. So at least temporarily also together with COVID, some of the meat demand came down. And then we had this heavy investment side, which is putting a burden also on the business. So going forward, we believe that we have three levers for success. One is embedded in our portfolio where we're -- we will have some new assets, world-class assets, which come on stream, and we will go also for some market share. And then we are also taking a look at our portfolio overall, which you will see in a second. Then on the innovation side, we continue to be the extended work bench of a lot of our customers. We have a lot of new innovation that we bring to the marketplace. And we also have innovation as this investment cycle is coming to an end in order to continue to work on improving our processes. And then on the sustainability side, that is highly linked to what I said earlier. There are a lot of opportunities, particularly with this business in going for a low product carbon footprint products. Portfolio. So actually, we made a decision 2 years ago in the nutrition and Health division to say we will focus much more on where our strength lies, and that is really to become a pure ingredient provider, whereas in the past, our dream in order to get away from this vitamin cyclicality was always to become a solution provider. But this was not successful, and that's also why you see here in gray that we are in the process of divesting our Food Health performance ingredients business, which is in Illertissen in Germany. And we also earlier already announced that we stepped up our Bioenergy enzymes business because we really did not have a right to play in here. I mean we were just not the best owner for this particular business. And there are a few other products on there, which we want to optimize going forward. That is our omega-3 fatty acid. You can say franchise because we have medium concentrate type of fatty acid. We also have highly concentrated omega-3 fatty acid, but also our ibuprofen business, and we also still carry a few other vitamins than vitamin A and vitamin E, which are not so important, let's say, to the overall business. So we are investing where the market is going to grow also heavily. So we are part, as I mentioned before, of our Zhanjiang Verbund site. The important thing on that chart is not just a capacity increase or the start-up number, but that a very, very high percentage rate, so over 70% of is really for the growth of the Asian market. So coming back to what we said before, that we invest where the market is, and that's what we are also doing in Asia. And then with citral investment is also very important -- a very important point for our customers because they want to make sure that we have several type of locations of this citral value chain. So as I mentioned before, we are coming to an end with our large investments, which does not mean that there is no opportunity to improve the output variable costs or asset availability of your plants anymore. And we have done that successfully, for example, with our UV filter Tinosorb S plant in Korea, where through debottlenecking measures, but also through smart software tracking processes, we were able to increase the capacity over a span of 6 years by 26%. Innovation. I said that we are the extended benchmark -- we extended benchmark of our customers. We frequently win innovation awards from all the large end consumer companies in this field in the field, for example, of personal care. Here, you know that in the industry, one of the problems is that you have microplastic, particularly when you have rinse off of shampoos or conditioners, some of that microplastic is caused by the synthetic polymers, which are in the formulations. So our team developed a substitute, which are natural-based biodegradable wax dispersions which have the same sensory type of effect as polymers and which are also helping you with your comparability. And that resulted, for example -- in that product, you can buy off the shelf. That has our wax dispersions as well as all the other products that are coming from NIVEA, and that has a double-digit million -- midsized million sales number but also quite interesting CAGR going forward. And you have to remember that, in particular, in personal care, a lot of these innovations, they are not like what we spoke about yesterday, a blockbuster in Agricultural Solutions, which is EUR 200 million and above. I mean the rate of innovation in this industry is always in the, let's say, EUR 20 million, EUR 30 million type of range. Sustainability. So on the left-hand side, there is an interesting thing because ideally, you want to have better product properties than the product that you can replace. That is then an easy sell. That is an easy sell. Then we go to the large end consumer companies, and they say we are willing to pay a premium. So in this case, if you look at the right performance test against limescale prevention or an automatic dishwashing, Trilon M, which is bio-based, biodegradable is -- has a better performance. And then on the left-hand side, you also see the product carbon footprint, which is 50% better than the sodium side citrate, which you could also use in a dish washing formulation to prevent scaling. And on the right-hand side is also kind of an interesting example because we always say natural products have a much better product carbon footprint than synthetic products. And here, we have the example of natural menthol, which is mainly produced in India in comparison to our synthetic menthol. So if you just compare the standard product carbon footprint of our synthetic menthol, it's already 50% lower. Why is that? It has something to do with agricultural practice, and it also has something to do in order to get some of the crystals actually from natural menthol, you need to freeze the compound and you use a lot of energy. We then have if we assign, for example, green energy to the standard PCF, the chance to reduce this PCF even further. And if we then even allocate some of the biomass properties, you could bring this down even further. It gives us the opportunity in a market that values some of those lower product carbon footprint also to set the pricing according to what the customer is willing to pay. So what are our strategic priorities over the next 4 years. We will and we want and we need to drive volume from these existing assets that we are coming on stream. And we believe that we have a right to win and that right win is actually a result of where we are in the cost curve for these products. We want to continue to sharpen our portfolio and sharpening our portfolio does not necessarily mean that we will have to sell some of the compounds that are the optimized range, it might mean that we run them much leaner, that we run them for cash or yes. If we were to find someone who is a better owner of these type of products, we would also consider that. We will continue in our operational excellence, in particular, when this stream of new CapEx buildup is coming to an end. And I think this also hopefully gives you a little bit of comfort in what we would like to achieve. It is not just driven to the left by volume growth, but it's also 40 -- almost 50% driven by cost efficiency. These cost efficiencies, they range from restructuring the organizational setup, whether it was in Nutrition & Health or in Care Chemicals, where we basically went to global business units on both sides, and we are taking out layers of the hierarchy, all the way also to cost improvement products that we have through sourcing strategy and production optimization. So when you add that all up, then we are confident that we can increase our EBITDA before special items by EUR 800 million to EUR 900 million when you compare this to what we had achieved in 2023. And with that, I'm at the end.

All right. Thank you, Mike.