OMV Aktiengesellschaft (OMV) Earnings Call Transcript & Summary

Good afternoon, and welcome to OMV's Capital Markets Day 2024 here in London. I would also like to welcome our online participants. Thanks for joining us today. My name is Florian Greger, and I'm Senior Vice President, Investor Relations and Sustainability. On behalf of the entire management team, we are very much looking forward to spending today updating you on our Strategy 2030. Before I run through the agenda for today, just a few housekeeping items. First, please note our disclaimer language that you can see here on the slide. I would also like to point out, for those in the room, the emergency exits that you can find to your left and to your right. In case of an alarm, please stay calm. Staff and fire marshals will assist with evacuation. Finally, for those in the room, we would appreciate if you could register using the QR code you can find on your tables. This would facilitate the Q&A sessions. Let us now take a look at the agenda. We will start today with a presentation from our CEO, Alfred Stern, who will give you an update on our Strategy 2030, where we are in our transformation and what comes next. Our CFO, Reinhard Florey, will then go into more detail on our financials and our 2030 expectations. Following these presentations, we will have approximately 60 minutes for Q&A with the executive -- with the entire Executive Board here in attendance. Following the Q&A session, those of you here in the room with us will have smaller breakout sessions with our 3 segment EVPs, providing you with more insights into each of our businesses and giving you the opportunity to ask your questions. We will conclude the day with some refreshments with the entire management team in the foyer just out of the breakout rooms. We hope you will be able to join us for this. With this, I will hand it over to Alfred.

Good afternoon, and welcome to OMV's Capital Markets Day here in London. It is a pleasure to see you all here. Thank you for joining us this afternoon. I also extend a warm welcome to all participants who are following us online. We are delighted to present an overview of the progress we have made since unveiling our Strategy 2030 in March 2022 as well as provide you with an update on our future direction. Before we delve into the details of our strategic targets, I would like to take a moment to introduce our new corporate identity and share a few insights. While OMV is taking the next step in its transformation, we want our corporate identity to fully reflect our strategy. The core element of the new brand design is a loop that moves forward. It symbolizes our progress, moving towards circularity and our strength as an integrated business. Let me now show you a short video that brings our new identity to life. [Presentation]

Our strategy, as set out in 2022, has proven resilient at a time of substantial macroeconomic and geopolitical change. Our integrated business model is paying off. This is reflected in our good results, solid balance sheet and strong cash flow, supporting the substantial increase in distributions to our shareholders. As part of our commitment to combating climate change, decarbonizing our business remains a cornerstone of our beliefs and vision. We are committed to becoming an integrated, sustainable company and achieving net-zero emissions by 2050. The purpose reinventing essentials for sustainable living is a testament to our ambition. While our strategic direction remains unchanged, the global context and regulatory landscape have evolved. Therefore, we have updated some of our strategic targets and extended the time line for their achievement beyond 2030. These adjustments reaffirm our direction but also reflect our adaptation to the new geopolitical and market realities. In addition, we are increasing our 2030 targets for clean CCS operating results and operating cash flow by around EUR 0.5 billion, reflecting the potential upside from the more favorable market environment, while we are counteracting the negative impact of inflation on costs. Our approach to the energy transition is centered around running an integrated company with 3 robust pillars: Chemicals, Fuels & Feedstock and Energy, delivering returns of at least 12% in the mid- to long term. Within these pillars, we maintain a strong foundation in our traditional business while actively pursuing growth opportunity in sustainable sectors. The strong cash flows generated by our current operations support our growth in sustainable businesses. We aim to create long-term value and establish financial resilience throughout the economic cycle. To do this, we will carefully balance investments in new areas while optimizing our traditional business operations. Our primary objective is to be responsive to changing market dynamics and align with customer expectations. This approach recognizes the need for economic sustainability in our actions and our responsibility to be a reliable supplier. Our integrated model has performed strongly over recent years despite the very volatile macro environment. The average cash flow from operating activities, excluding net working capital effects, between 2021 and 2023 amounted to EUR 6.8 billion. The Energy segment accounted for approximately half of the cash flow, while the Chemicals segment contributed around 30% and Fuels & Feedstock around 20%. These cash flows supported the strong dividend payout to our shareholders. Between 2019 and 2023, the compound annual growth rate of our total dividend, including regular and special, was 30%. This is in line with our aim to reward our shareholders through attractive distributions while investing in the growth and transformation of our company. Let me touch on our strategic progress to date. With Baystar, we have expanded our capacities in the U.S. by leveraging our advanced Borstar technology. With this, we enter an additional low-cost feedstock market and diversify our regional presence. We continued to advance the construction of the megaproject, Borouge 4. In circular economy solutions, we have doubled mechanical recycling capacities. Considerable progress has been made in securing reliable recycling feedstock, ensuring supply for our circular economy solutions. We have finalized the construction of our ReOil plant, marking a significant milestone in our pursuit of advanced recycling technologies. At the same time, we are exploring licensing our ReOil technology for use in other regions. With the divestment of the fertilizer business, we have streamlined our Chemicals portfolio, enabling us to focus on core activities where we have a competitive advantage. In Fuels & Feedstock, we have made progress in the premarketing of sustainable aviation fuels. We started up the coprocessing plant in Austria, and we reached final investment decision for the Petrobrazi SAF/HVO plant. We have initiated the development of green hydrogen capacities, and the first electrolyzer will start up in 2024. Through selective divestments and targeted acquisitions in retail, we have strengthened our refinery integration and further enhanced our position in the market. In the Energy segment, we reached final investment decision for Neptun Deep in Romania, which represents a major milestone in our growth strategy. We announced the divestment of our Malaysia and New Zealand E&P businesses. We initiated 2 major geothermal partnerships with Wien Energie and Eavor and signed a strategic CCS partnership with Aker BP in the North Sea. In Romania, we acquired a strong portfolio of renewable power projects, expanding our pipeline, and we successfully diversified our gas supply to non-Russian sources, ensuring a more secure and resilient supply chain. The progress in strategy implementation is clearly visible in our emission reduction performance. In terms of greenhouse gas emissions, we achieved a 25% reduction compared to the 2019 baseline in Scope 1 and 2 and a 10% reduction in Scope 3. In methane intensity as well as flaring and venting, we have already achieved a reduction of over 70% compared to 2019. These developments are driven by overall improved energy and operational efficiency and a significant decrease in routine flaring and venting. The improvement in Scope 3 was led primarily by higher petrochemicals production and lower fossil fuel sales. While there is much still to be done, I'm encouraged by this progress, and we remain on track to meet our 2030 emissions targets. I would now like to turn to the macro environment and the changes since 2022 and provide an update on our market assumptions going forward. Since we last met, there have been a number of significant developments that present both opportunities and challenges for OMV. Over the past year, we have witnessed a series of geopolitical conflicts that have contributed to significant cost increases in basic needs. These conflicts, coupled with high inflation rates, have created pressure on the required capital expenditure for our transformation efforts. We are currently in the midst of an upcycle in the energy sector, which represents its own unique challenges and opportunities. Conversely, the chemical market is currently experiencing a downcycle. However, our integrated model has remained resilient and effective in navigating these market conditions. In recent years, there has been a notable shift towards green energy as evidenced by the implementation of comprehensive regulatory frameworks in the EU and the U.S.A. However, there are still areas such as green hydrogen and CCS, which require further agreement and development in terms of regulatory guidelines to facilitate their growth and integration into the energy sector. As a result of these developments, we have updated our market assumptions for the period between 2024 and 2030. We now see Brent at around $80 per barrel for the period and assume that oil demand is not going to fall as early as expected. Gas will remain an important transition fuel and key for security of energy supply in Europe. We see European hub prices for gas at around EUR 25 per megawatt hour by 2030, similar to our previous assumptions. In refining, the missing Russian volumes in the European market have created a more attractive environment, and we expect the margin to be around $6 per barrel by 2030. In Chemicals, we expect the market to recover, with indicator margins increasing over the period. Let me be clear. Overall, these developments support our commitment to our strategy, and our vision remains unchanged. We strive to become an integrated, sustainable chemicals, fuels and energy company. Key aspects of our strategy include generating high cash flows, adhering to clear investment criteria and rewarding our shareholders through attractive distributions via our progressive dividend policy and special dividends. Our first 3 strategic pillars remain unchanged as published in 2022. We are strengthening, expanding and diversifying our Chemicals portfolio while establishing our position in renewable and circular economy solutions. We also aspire to become a leading producer of renewable fuels in Europe. We have now updated the fourth strategic pillar to be more precise on our Energy segment. We aim to maintain our 2030 production target of 350,000 boe per day. Simultaneously, we will prioritize the development of low-carbon solutions as we navigate the energy transition. Let me now focus on 2 key drivers for our Strategy 2030: Borealis and OMV Petrom. Borealis is a global integrated olefin and polyolefin producer with leading research and development capabilities. Our expertise in developing proprietary technologies sets us apart in the production of specialty products and the recycling of plastic waste. This gives us a competitive edge and allows us to offer innovative and sustainable solutions to our customers. Two essential competitive advantages are our refinery backward integration and feedstock flexibility. The demand for polyolefins is projected to increase by more than 3% per annum until 2030 while the demand for recycled polyolefins is expected to grow even faster at more than 12% per annum. Borealis is in a very favorable position to capture this growth with 3 organic megaprojects already active. OMV Petrom has held a prominent position as a leader in the Romanian energy market for over 2 decades. Romania presents significant growth opportunities that are further strengthened by substantial funding from the EU. We expect gas demand to grow by 25% until 2030 and power to increase by 15% until 2030. As demand for electricity rises, so will the need for sustainable and efficient power solutions. One of our most exciting endeavors is the development of the largest offshore gas project in the EU. Neptun Deep demonstrates our commitment to meeting the energy needs of the region, which holds significant potential for energy development. OMV Petrom has substantial investments in renewable power, fuels, alternative mobility and new technologies. You can hear more details on their strategic plans at the upcoming Capital Markets Day scheduled for June 19. While we have updated some of our targets, we are reaffirming our long-term emissions targets and commitment to reducing our absolute emissions. This is valid as well for our target to reach 0 flaring and venting by 2030 and lowering our methane emissions to below 0.1% by 2030. We have recently joined the OGMP 2.0 as part of our commitment to methane emissions reduction. The shift in some of our project time lines has resulted in revised expectations for carbon intensity reduction. We now anticipate a reduction of 15% to 20% in carbon intensity by 2030 versus the 20% we set out in 2022. Our financials clearly show that our Strategy 2030 uses sustainability as a growth and innovation driver. We increased our clean CCS operating result to at least EUR 6.5 billion while we estimate the cash flow from operating activities to be at least EUR 7.5 billion by 2030. We expect a higher contribution from Energy, accounting for around 45%, while Chemicals will comprise around 35% to 40% of the overall portfolio and Fuels & Feedstock around 15% to 20%. As we strive to increase our profitability, sustainability is a core part of our strategy, driving growth and innovation. By 2030, we anticipate that approximately 20% of our overall cash flow from operations will already come from sustainable business. Now let's shift our focus to the segments. For those of you present in the room today, I encourage you to make the most of the opportunity to meet with the Executive Vice Presidents of the segments in the breakout sessions. They will provide you with more insights and a deeper understanding of our operations. Let us start with Chemicals. Here, our strategic direction remains the same. We are leveraging the expertise and technological advancements of Borealis to strengthen our position in the field of innovation. We will focus on expansion of our specialty volumes. These high-value products will not only enhance our portfolio but also help us to differentiate ourselves in the market and seize new opportunities for growth. We prioritize the successful execution of our growth projects: Baystar, Kallo and Borouge 4. This will position our Chemicals business closer to the competitively priced feedstocks in the U.S. and the Middle East and to major consumer markets in Asia. With these projects, we will increase our polyolefin capacity by 30%. Our goal is to become a front-runner in renewable and circular economy solutions. In Europe, our plants are cost competitive and offer high flexibility. We also have a significant share of specialty products, which provide a more stable contribution to our earnings compared to standard products. We are actively committed to further improving our position in Europe. We will implement further efficiency measures. Finally, we are considering options for portfolio diversification and expanding our downstream integration. Specifically, we are exploring opportunities for geographic expansion in North America and Asia, where we see significant growth potential: increasing the volumes of specialty products, expanding our circular solutions and considering and entering adjacent markets as potential avenues for expansion. Regarding the potential combination between Borealis and Borouge, we continue to pursue negotiations with ADNOC. If materialized, this would be a significant transaction for both companies, and negotiations naturally take time. There would be a strong strategic logic behind such a potential merger that would build on the technological leadership of Borealis and the preferred feedstock advantage of Borouge. Our primary focus is to ensure that any future transaction is beneficial for all our shareholders. Simultaneously, we continue to deliver on our strategic objectives and invest organically across our Chemicals portfolio with attractive returns. Additionally, we are actively exploring potential inorganic opportunities that align with our strategic goals. We will update the market as appropriate regarding developments. OMV has a global position in olefins and polyolefins. We have a robust footprint in Europe and 2 strong partnerships in the United States and the Middle East, with significant direct sales volumes in Europe and Asia. Approximately 40% of our sales are outside Europe. This enables us to leverage our innovation capabilities developed in Europe into international markets with benefit from competitively priced feedstock. Looking at our European position, 75% of our assets are in the top 2 quartiles of the cost curve. Our Nordic crackers have a very high feedstock flexibility, capitalizing on their strategic proximity to the sea and ownership of storage caverns. Our naphtha crackers in Austria and Germany benefit from deep backward integration into our refineries. And at Kallo, we have an integrated propane to propylene site. Our cracker average utilization rate surpasses, on a consistent basis, the European average. Our European assets play a crucial role in the technology development of specialties, catalysts and core reactor design for recycling. Technologies and patented new products are initially developed in Europe and then licensed to our JV partners in other regions. Our specialty grades, which account for approximately 45% of our polyolefin volumes, are a real differentiator. If we look back at the last 10 years, the specialty business has provided a stable and growing earnings base over the years. The margin for specialty products is, on average, double that of standard products. The energy, mobility and infrastructure sectors contribute the largest share of specialty product volumes, but we are well placed in other end-user industries as well. For example, in the health care sector, it typically takes several years for a polyolefin company to requalify as a supplier, creating a high barrier to entry. While our standard polyolefins business is influenced by imports from various global regions, the specialty grades are afforded greater protection due to their advanced technological integration and close relationships with customers. We have delivered substantial growth in our production of specialty products in recent years, and we aim to increase it to more than 2 million tonnes. This is an additional 500,000 tonnes compared to 2023 and will be primarily driven by our strong market position in industries such as energy, mobility and infrastructure, all of which show growth prospects. In energy, we hold the leading position globally with dedicated innovation and development centers tailored to this segment. The demand in energy is primarily fueled by the renewable energy market. We strive for sustainable mobility by innovating to reduce vehicle weight and enhance its energy efficiency. We produce solutions for a broad range of exterior and interior applications, e-powertrain and under the bonnet. We collaborate with OEMs, peers and value chain partners to deliver tangible benefits to the industry, drivers, passengers and the environment. Our great portfolios, both low densities in combination with excellent surface aesthetics and high purity. These key features help optimize the material mix in interior applications and increase circularity in the industry. In the infrastructure sector, we are an industry leader in cross-linked polyethylene pipes, which are known for their exceptional durability and temperature resistance. I want to take a moment to reflect on the progress we have made with our major growth projects since they were presented in 2022. First, Baystar is now operational and ramping up. We have an integrated 1-million-tonne ethane-to-polyethylene complex that benefits from cost-efficient ethane feedstock. For the entire project, we anticipate a midterm annual EBITDA contribution of $500 million to $600 million. This is the contribution for the entire project, of which Borealis holds 50%. Secondly, Kallo is nearing completion, with around 90% of the project already finished. We expect to commence operations next year and anticipate a midterm EBITDA contribution of approximately EUR 200 million. Lastly, the Borouge 4 project is progressing well, with project completion at around 65%. We are on track to start up at the end of 2025. The project is estimated to add revenues of $1.5 billion to $1.9 billion per annum. For reference, in the period from 2023 to the first quarter of 2024, the EBITDA margin of Borouge plc was around 40%. Overall, we have achieved significant progress in the past few years with these 3 projects. They are all well positioned to contribute to our earnings in the midterm. In April of this year, the EU implemented an updated packaging regulation that expands the requirement for a minimum percentage of recycled material to be applied to all forms of packaging. However, there has been a delay in the adoption and clarification of regulations concerning chemically recycled and bio-based content in plastics. Nonetheless, brand owners in the packaging and automotive sectors have set ambitious targets for incorporating recycled and bio-based materials by 2030, which supports the increasing demand for these types of materials. In addition, starting in 2021, each EU member state is required to pay a levy of EUR 800 per tonne of nonrecyclable plastic packaging waste. Additionally, some non-EU European countries have also begun to target the use of plastic products in a bid to cut plastic waste and move towards a circular economy model. We remain committed to our sustainability goals and to supporting the transition to more sustainability in the markets that we operate in. However, for the circular chemicals market, we have seen a later-than-expected adoption of the required regulations in several jurisdictions. As a consequence, we have also adjusted our pace of growth to ensure that we maintain our position as a profitable market leader in the circular chemicals space. Growth in sustainability -- growth in sustainable products is a key element of our Chemicals business. Since 2021, we have been steadily increasing our production capacities of sustainable products, achieving a capacity of 200,000 tonnes. Based on our current expectations, we anticipate reaching a sales volume of around 1.4 million tonnes by 2030 and 2 million tonnes thereafter. 70% of these volumes will be derived from mechanical and chemical recycling. Our flagship technology in this area is ReOil, where we have already completed the mechanical construction of the 16,000-tonne plant. Our aim is to scale it up to 200,000 tonnes by 2029. This would be the first industrial plant of this size globally. The remaining 30% would be generated by bio-based chemicals and polyolefin volumes. The integration with fuels and feedstock and the upcoming HVO plants will be essential in achieving this and supports the optimization of profit margins. Additionally, we are investing in feedstock projects that offer double-digit returns. We are constructing the largest sorting facility in Europe, which will ensure cost-competitive feedstock for our operations. Turning now to our Fuels & Feedstock segment. We reconfirm our aim to become a leading innovative producer of renewable fuels and chemical feedstocks in Europe. As we presented in 2022, in our refineries, we are deepening the integration with Chemicals to underpin our growth in sustainable chemicals, and we will reduce the crude oil throughput. Our goal is to maintain our position as the preferred choice for retail customers in our region by expanding our convenience business and electric vehicle charging network. Lastly, we are committed to maximizing the integrated margin of our traditional fuels throughout the entire value chain. At the same time, we will adapt to changing market demand and reduce our fossil throughput in refining. Global renewable fuels demand is projected to grow significantly until 2030. Renewable diesel demand is forecast to reach 30 million tonnes while SAF is expected to grow to 1.5 million tonnes. Currently, the market for renewable fuels is experiencing oversupply due to factors such as changes in biofuels requirements in Sweden and the increased number of HVO plants coming online. The oversupply is expected to persist for the next 2 to 3 years because significant HVO production is scheduled to come online in this period. We believe that the market will gradually rebalance as demand for HVO rises in the European Union due to legislation, which stipulates that greenhouse gas reduction targets will increase. For example, in Austria, it will increase from 7% to at least 13% by 2030. To keep up with the above 7% threshold, producers are mainly able to use HVO or e-mobility offsets for their road fuel-based greenhouse gas reduction target fulfillment. As a result, we anticipate a short HVO market after 2027. We see that this HVO production will contribute only limited volumes of sustainable aviation fuels as these projects were initiated several years ago and have mostly limited yield flexibility. In Europe, growth in SAF is driven by mandates that require a certain percentage of aviation fuel to come from SAF. By 2030, the mandate calls for 6% of aviation fuel to be SAF. And by 2035, it increases to 20%. However, there's also significant potential for additional demand from the voluntary and corporate markets. The long-term fundamentals for sustainable fuels remain highly compelling beyond 2030, and OMV is well positioned to capture a significant share of the market in these rapidly growing sectors. To capitalize on this strong growth, we are focusing on advancing our projects for renewable fuels and chemical feedstock. Our target is to have a production capacity of 1.5 million tonnes for renewable fuels and chemical feedstocks, with a significant portion dedicated to SAF and the remainder allocated to biodiesel and chemical feedstock. It is important to highlight that our SAF/HVO plants will have a high flexibility in terms of yield, allowing us to adapt to market demands and switch between these 3 categories, thereby maximizing our margins. We recently took a final investment decision in Romania for our first SAF/HVO plant with a production capacity of 250,000 tonnes per year. In Austria, we successfully started up the coprocessing plant, with a yearly production capacity of 135,000 tonnes. We are assessing potential locations for additional SAF/HVO capacities in Europe and internationally in markets such as the United States and the Middle East and Asia. This will allow us to better partner with international customers and take advantage of access to global feedstocks. Based on our current plans, the majority of these projects are expected to commence production from 2028 onwards when there is an anticipated demand growth for SAF and HVO. We have been a reliable supplier to the aviation industry for many years with strong integration into major airports in Germany, Austria and Romania. Building on our strong customer relationships, we have been premarketing our future SAF capacities and signed MOUs with airlines to deliver 1.5 million tonnes of SAF in total by 2030. As a long-standing partner to the aviation industry, our commitment to supporting the industry extends to the emerging SAF market. To assist organizations in lowering their Scope 3 emissions, we have established SAF business solutions. Through this initiative, we can offer SAF certificates to our customers, and we have recently completed a deal with Microsoft. Moving now to the critical topic of feedstocks. We have wide range of initiatives to ensure adequate feedstock for our projects at a time of growing competition. Prior to taking FID for our renewable fuels projects, we ensure the availability of long-term supply contracts for feedstock. As an example, we have already secured feedstock for more than 80% for the Petrobrazi HVO/SAF plant. Moreover, we are very active in looking for opportunities of backward integration. For example, OMV Petrom acquired a 50% share in Respira Verde, a leading company in the collection of used cooking oil in Romania. We have also established an international origination team in Singapore, and we are strengthening our renewable materials trading activities in London. In synthetic fuels, our focus is on e-methanol produced from bio and waste CO2 and green hydrogen. We are currently building our own electrolyzers in Austria and in Romania. The retail business is a very important contributor to our earnings, delivering, on average, an annual clean operating result of EUR 500 million in the last 5 years. With a robust retail business in the Central and Eastern European region with a significant presence in Austria and Romania, where we are the market leader. We have successfully implemented a multibrand strategy that caters to a diverse range of customer needs. Our retail sites have sales above the peer average. And we focus on offering high-margin premium fuels. Fuel demand in Southern Eastern Europe is still expected to grow while Central European markets will see a faster increase in electric vehicle charging. We have already established 640 charging points, and we are committed to expanding the network to 5,000 with a specific focus on fast and ultra-fast charging points. Our attention is primarily directed towards Austria, Hungary, Slovakia, Romania and the Czech Republic. In the entire region, we see growth opportunities in our nonfuel business, targeting a substantial 70% increase by 2030 compared to 2021. We aim to achieve this through strategic partnerships with convenience retailers and the development of our own brand. While renewable fuels play a major role in our future growth, the traditional fuels business continues to be very important for us, serving as a solid foundation for our growth, innovation initiatives and our customer access. We focus on integration along the entire fuel value chain, aiming for a high utilization rate for the refineries. We have several advantages which enable us to achieve this. Firstly, approximately 60% to 70% of our refinery production is sold to customers in the retail, chemicals and aviation sectors. These sectors exhibit relatively stable demand, and we have strong presence within that. Additionally, our refineries are integrated with chemical production, allowing for significant flexibility in the use of feedstocks for both fuels and chemicals. Let us now move to strategic directions and 2030 targets in Energy. I would like to highlight that we invest in both traditional and sustainable businesses, recognizing the importance of balancing these 2 aspects in our overall strategy. In terms of our exploration and production portfolio, our strategic focus is on repositioning ourselves as a Europe-centric player with a resilient portfolio. This will offer us a solid foundation to effectively navigate the market dynamics in a cyclical business environment. The Neptun Deep project, which is the biggest offshore gas project in the European Union, plays a crucial role in our portfolio. Our goal is to develop the project within budget and begin production in 2027. In Gas and Power, we aim to further strengthen and diversify our portfolio in Western Europe and leverage the Gas and Power business in Romania. We are committed to building a profitable Low Carbon Business that focuses on 3 core areas: geothermal energy, renewable power and carbon capture and storage. Furthermore, we are committed to continuously reducing emissions, including methane. By implementing rigorous monitoring and mitigation measures, we aim to minimize our environmental impact and contribute to global efforts to combat climate change. In terms of portfolio management, we are refocusing our production portfolio on 3 core regions: Northern Europe, Central Eastern Europe and South. In North, we will focus on gas in Norway and manage the portfolio. This will include potential inorganic opportunities and leveraging tax synergies in the country. In the Central and Eastern European region, we possess strong capabilities as operators of mature fields. We will utilize these strengths to effectively manage the decline in production and ensure the longevity of our operations. Additionally, we are committed to delivering the Neptun Deep gas development project, which will add a production of 70,000 boe per day to our portfolio. Furthermore, through strategic partnerships and investments, we aim to leverage the growth opportunities presented by the Black Sea region and our strong position there. In the Southern region, we are committed to build on our strong position in North Africa and the Mediterranean alongside our position in the UAE. This strategic position will allow us to diversify our portfolio and enhance our overall resilience. We maintain the target of 350,000 boe per day production by 2030 despite the divestments of assets in Malaysia and New Zealand. We will continue to high-grade our portfolio through both organic and inorganic projects, ensuring that our investments align with our strategic objectives. 60% of our total production by 2030 will be gas. By focusing on gas as a transition fuel, we can contribute to a more sustainable and low-carbon energy mix. Our exploration activities will be focused primarily on near-field developments close to existing fields and export infrastructure. On the cost side, we aim for a production cost of less than USD 9 per boe by 2030, ensuring that our operations remain competitive in the evolving energy landscape. Additionally, we will target a cash breakeven price below $30 per boe to ensure resilient cash flows. When assessing investment opportunities, we follow key investment criteria. Firstly, we consider the payback time, aiming for a payback period of less than 10 years. Secondly, we prioritize investments that are cash flow accretive before 2030. And finally, we target an IRR of 12% to 15% or individually higher. The Neptun Deep project has a low development CapEx per unit as well as low production costs. Furthermore, it has remarkably low CO2 emissions, aligning with our commitment to sustainability. With more than 90% of the CapEx already contracted, the project is significantly derisked. The project team is working diligently to meet the target of delivering first gas by 2027, and we are on schedule. The permitting process is progressing in line with planning, and the construction of the top sites is currently underway. We anticipate commencing drilling for the first development wells in 2025. Now I would like to present an overview of our Gas and Power portfolio. Our portfolio encompasses storage, gas sales, LNG optimization and trading as well as power generation in Romania. Storage is a crucial component of our business and offers predictability. We fully hedge the stored volumes, and profitability is influenced by the spreads between summer and winter prices. Alongside our LNG capacities, these assets play a vital role in supporting energy security. In terms of gas sales, we have successfully diversified our supply sources and are no longer dependent on Russian gas. We have established a strong supply portfolio in Romania and anticipate a significant increase in equity gas volumes by 2027 through the Neptun Deep project. On power generation, we benefit from the integration of gas and electricity in Romania. Profitability in this sector is driven by power margins and spark spreads with additional opportunities arising from balancing services and integration with renewable power capacities. We have a robust portfolio of renewable power projects alongside our existing CCGT plant. In a normal market environment, we estimate the portfolio's contribution midterm, clean operating result to be approximately EUR 300 million per year. We talked about the Low Carbon Business at our 2022 Capital Markets Day and our focus areas within that business. While the overall focus areas in our Low Carbon Business have remained consistent over the past 2 years, we have observed a shift in the mix of opportunities until 2030. We are now witnessing an increased potential in renewable energy, in particular, in Romania, while we see a lower target in geothermal energy and CCS up to 2030. Nevertheless, we see further potential for growth and expansion in these areas beyond 2030. Our updated targets for 2030 include around 4 terawatt hours of geothermal energy, 3 to 4 terawatt hours of renewable power and 3 million tonnes of CCS. Of the approximately EUR 13 billion in CapEx planned for our Energy segment, around 35% will be allocated to the Low Carbon Business while 15% will be dedicated to the Neptun Deep project. The remaining 50% will be invested in the rest of our portfolio. These investments in the Low Carbon Business are projected to generate a cash flow contribution of around EUR 400 million by 2030, which is expected to grow to EUR 600 million by 2035. Let's take a quick look at what we have accomplished in the field of geothermal energy and why we are well positioned to develop into this area. I would like to emphasize that in harnessing geothermal energy, we will be utilizing our expertise gained over decades in handling molecules and understanding geology, which enables us to excel in this domain. In order to achieve our targets, we are taking a multipronged approach. Firstly, we are leveraging an existing technology through our joint venture with Wien Energie. We've already identified potential in the Vienna basin, and we are scheduled to commence drilling the first well this year. The first geothermal power plant is estimated to be operational by 2027. Our long-term plan is to scale up the capacity to 200 megawatts, which could provide energy to approximately half of Vienna's households that use district heating today. In addition to the joint venture with Wien Energie, we became a minority shareholder in Eavor, a Canadian company specializing in innovative closed-loop geothermal technology. At present, we are conducting tests to assess the commercial viability of this technology in Germany. The German market holds a potential of up to 10 terawatt hours by 2030. We are excited about the potential of geothermal energy and its role in our Low Carbon Business strategy. Let's now take a closer look at our renewable power ambition. By 2030, our objective is to develop a portfolio consisting of 3 to 4 terawatt hours, all while achieving a double-digit return on investments. Our focus is primarily in Southeastern Europe, using the attractive market conditions in that region. We have a robust pipeline of renewable energy projects next to our existing 860-megawatt CCGT power plant in Romania. This integrated portfolio allows us to leverage our existing infrastructure while expanding our renewable energy capacity. Furthermore, with the availability of European Union funding in Romania, we aim for OMV Petrom to become a market leader in renewables in Southeastern Europe. We are also seeking opportunities to strengthen our renewables presence in neighboring countries such as Romania -- such as Serbia, Bulgaria and Hungary. By expanding our reach, we can tap into additional growth markets and contribute to the region's renewable energy transition. In parallel, we are actively building a portfolio of power purchase agreements in Western Europe and selectively investing in equity positions in renewable power projects to reduce our Scope 2 emissions. By integrating our renewable energy operations with our Fuels & Feedstock segment, we can achieve synergies and enhance returns. Let me summarize what I see as the key takeaways in our Strategy 2030 implementation. First and foremost, maximizing cash flow from our core business is crucial. Our integrated business model has proven to be successful thus far and has shown its ability to generate cash flow consistently. This has enabled OMV to enhance our dividend policy and return significant value to shareholders. We aim to maintain this positive trajectory. Therefore, we are focused on optimizing our E&P business, improving margins in our refineries and retail operations and driving operational excellence in the Chemicals segment. Looking ahead, we have identified 3 key areas for future growth. Our first focus is on Chemicals, where we see growth opportunities in specialty products, and we explore opportunities for diversification. Secondly, we are committed to establishing a strong presence in attractive, sustainable business opportunities through investments in geothermal energy, sustainable aviation fuels and circular chemicals. Thirdly, we are dedicated to supporting the energy transition in Romania and Southeastern Europe, with the Neptun Deep project playing a pivotal role in an integrated power business as a growth opportunity. Our long-term goal remains to achieve net-zero emissions by 2050. These strategic priorities underscore our steadfast commitment to driving sustainable growth and delivering an attractive remuneration to our shareholders. Now thank you for your attention. And Reinhard will now provide you with more details about our financial targets and our capital allocation priorities. Thank you.

Yes. Ladies and gentlemen, good afternoon. A very warm welcome also from my side. Alfred has given you an overview of our integrated portfolio and how it is developed over the past years. He is also focused on where we are in our transformation journey, the path ahead and how this is delivering value to shareholders and all stakeholders. I would now like to dive deeper into the financials and give you some more specific details on what we have achieved and the significant potential we see ahead. Let me start by highlighting our strong financial position and the financial framework. We had a strong year 2023 and first quarter of 2024, both in terms of earnings and cash generation. And our leverage ratio is at a very low level. We have a clear financial steering framework which helped us through difficult times and positions us for growth. Our framework is focused on value creation and shareholder returns through earnings growth and a target clean CCS ROCE (sic) [ ROACE ] of at least 12% into the mid- to long term. Another area of focus is on our resilience and ability to transform with targets to achieve positive organic free cash flow after dividends, a leverage ratio below 30% and a strong investment-grade rating. This is all in addition to our sustainability commitment to achieve net zero by 2050. Now moving to our financial track record. While we have seen volatility in our numbers as a result of market disruptions, we have also delivered record results over the past years. This has been partly supported by unique market conditions but also reflects the resilience of our business and the benefits of our integrated portfolio. To give you a better sense of this, if we look at 2023, it was a year characterized by a challenging external environment. We had multiple geopolitical conflicts, weak economic growth and persistent inflation. Our integrated business model helped us navigate this volatile environment and to achieve very strong financial results. With an adjusted CCS operating profit before special items of EUR 6 billion, OMV achieved its second best results in the company's history in 2023. Operating cash flow also remains strong, further proof of the strength of the model. All in all, we are in good shape and growing compared to precrisis level despite a challenging macro environment. We have been able to continue to perform well into 2024. Despite a persistently difficult and volatile economic environment, we achieved a strong CCS operating result before special items of around EUR 1.5 billion in the first quarter of 2024. Now turning to OMV's financial strength and healthy balance sheet. We are proud of our low leverage ratio of 4% at the end of Q1 2024, which underscores our solid financial foundation and readiness for transformation and growth. Despite operating in a higher interest rate environment, this excellent starting position has enabled us to keep our financing costs low. Our strong financial position, combined with consistently strong organic cash flow, enables us to provide substantial financing headroom for growth investments and realigning our business model. We remain committed to strict adherence to our well-defined investment criteria and proven cost discipline in all our segments. Furthermore, if we were to lever up, our business has the ability to deleverage quickly. Our impressive cash generation track record reinforces our confidence in this approach. In the chart, you can see our Q1 2024 headroom at maximum leverage ratio of 30%. Our firepower extends to around EUR 7 billion, already considering our announced dividend and financing payouts in 2024 and the Malaysia divestment supported by our consistent free cash flow generation. However, this does not mean that we will fully use this headroom. This strong capital structure provides the foundation for further growth transformation and returns to our valued shareholders. As well as looking to -- at ourselves, it is important for you to see how we compare with our peers. Our ability to grow our operating cash flow yields and consistently outperform our competitors in both the chemicals and oil and gas industries is a testament to our unwavering resilience and commitment to excellence. This resilience also gives us the ability to implement a competitive distribution policy. As shown by our 2023 shareholder distribution, we have surpassed our peers in terms of shareholder remuneration. Please note that the shareholder distribution in this chart includes both dividends and buybacks for our peers. Our cash flow generation allows us to be in the top quartile for shareholder distribution. We will continue our focus on creating value for our stakeholders while investing in future growth. Moving forward, we will remain focused on sustaining this competitive advantage and further enhancing our position within the market. Based on our macroeconomic assumptions, we are targeting an increased clean CCS operating result compared to our view in 2022 of at least EUR 6.5 billion and an operating cash flow of at least EUR 7.5 billion by 2030. We acknowledge the potential upside from the favorable market environment for Brent gas and refining margins, but we cannot underestimate the significant challenges posed by cost inflation and low economic growth in Europe over the past 2 years. To address these challenges effectively, we have intensified our focus on operational effectiveness and introduced a comprehensive efficiency program. While we commit to our capital allocation priorities, we estimate an average of EUR 3.8 billion a year in organic investment between 2024 and 2030, of which 40% to 50% are for sustainable projects. Maintaining a solid balance sheet structure remains at the core of our activities, along with the clear objective of maintaining our strong investment-grade rating. And we reaffirm our commitment to our progressive dividend policy and the special dividend framework. It is worth noting that we place great importance on the nonfinancial and transformational aspects of our business. We have set ambitious nonfinancial goals and are fully committed to making a positive contribution to climate and sustainability issues. Now let's take a look -- closer look at our overall targets. The pace of scaling up of our sustainable capacities will take more time than initially expected due to a number of factors. In addition, we have taken into account the impact of inflation, which will have an influence of our cost position. However, we expect those costs to be offset by our efficiency efforts and a more favorable market environment. In terms of the breakdown of our expected operating results, we anticipate between 35% and 40% to come from chemicals, between 15% and 20% from Fuels & Feedstock and around 45% from Energy. Despite the challenges faced by the chemical industry last year, we remain optimistic about the recovery and strength of our Chemicals business. In Fuels & Feedstock, we see a lower margin compared to 2023. However, the estimated operating result contribution in 2030 is in line with our 2022 expectations. The contribution from Energy is expected to be higher than what we have communicated in 2022, primarily due to a better market environment. When analyzing the composition of our operating cash flow, it is crucial to consider the different tax regimes in the different segments of our business. We operate in energy countries where higher taxation is reflected in our cash flow and earnings after tax. Therefore, while we are increasing our operating results and cash flow targets compared to what we have previously communicated, we are slightly more conservative on earnings per share, targeting an increase in earning per shares to around EUR 10 by 2030. And we expected already 20% of our cash flow from operations to come from sustainable projects by 2030. While we feel well positioned to support and deliver future growth, we recognize that the market challenges remain volatile. We regularly review opportunities to improve efficiency and reduce costs. Those efforts will make us even more resilient and better placed to capture attractive opportunities in the future. To fight the economic downturn and to address significant inflationary cost increases between 2022 and 2024 as well as a trough in the chemical market and to realize synergies between businesses in our integrated model, we have launched an efficiency program. The program consists of a number of initiatives across the group, specific to each segment and is expected to generate at least EUR 0.5 billion of annual sustainable additional operating cash flow by the end of 2027. Half of this will be generated in the Energy segment, 30% in the Chemical segment and 20% in Fuels & Feedstock. Certainly, this also includes optimizing our corporate and overhead costs. This is in addition to all the optimization and savings measures implemented already in 2023 necessary to maintain high performance levels and to help us achieve our targets. We will already see a contribution in 2024. The benefits will come equally from costs and margins or sales improvements. We expect, for the entire period, implementation expenditures of around EUR 50 million. To be clear, operational efficiency is in our DNA. We will not stop in 2027 but instead continue the measures going forward. Allow me now to highlight the tremendous potential within our portfolio. We are well positioned to generate value in a future-oriented portfolio. At present, our integrated business covers 3 sectors: chemicals, refining and marketing and oil and gas, which serve our cash providers, ensuring a steady stream of revenue. In addition to our established businesses, we have ventured into new emerging businesses, which we announced in 2022. And we now already have an attractive pipeline of concrete, high-return projects across renewable energy, carbon capture and storage, geothermal, circular economy and, of course, in renewable fuels and green hydrogen, all projects with double-digit returns. These new businesses serve as our value drivers and future cash providers, positioning us for long-term success. Furthermore, we have several growth projects in the pipeline that are expected to contribute to our success in the midterm. These include Neptun Deep, Baystar, Kallo and Borouge 4. Finally, we have significant value in our stock-listed participations. Our stakes in Petrom, where OMV owns 51%, and Borouge, where Borealis owns 36%, alone have significant market capitalizations. Additionally, we hold a 15% at-equity participation in ADNOC Refining and Trading, further boosting our portfolio's value. And we can say that our recent divestments, including the nitrogen business, Germany and Slovenia retail stations and Malaysia, have highlighted our agility in realizing hidden value and securing strong valuations for our assets. Let me now turn to our capital allocation priorities, which have not changed. Organic CapEx remains our priority in terms of cash utilization. Second is our focus on our progressive dividend policy, providing shareholders with a consistent and growing return profile. Third is inorganic investment. We have clearly defined investment criteria and regularly seek attractive opportunities to accelerate our transformation. Let me be clear, we will be careful, evaluate all options, and the conditions must be right for us to pursue them. Fourth is our commitment to maintaining a solid balance sheet structure and debt levels that preserve our investment-grade rating. And finally, we will continue paying special dividends when the leverage ratio is below 30%. Remember, we are at 4% today. We are confident that we can maintain a leverage ratio below 30% in the future and that we will be able to continue to pay a special dividend according to our framework. When talking about our first priority, organic CapEx, there is one consideration that stands out among all others: the development of critical sustainability projects as value drivers for our business. We do this not just in a particular business or segment but across all 3 segments. This is another example of the power of our integrated model. Average CapEx in the coming years is expected to be at the same level as in 2024, which is slightly higher than previous guidance. Organic CapEx includes, on average, EUR 200 million of noncash leasing payments per year according to IFRS 16 and excludes inorganic and M&A CapEx. This small increase compared to previous guidance is mainly due to inflationary effects and increased investments in sustainable projects. At the 2022 CMD, we were at the beginning of the ramp-up of the sustainable businesses. The increase is also influenced by the fact that the average doesn't include the years 2022 and 2023 and the investment profile over the full period is not directly linear. Between 2024 and 2030, around 30% of CapEx on average will be spent in the traditional Energy business, 15% in the traditional Chemicals business and around 10% in the traditional Fuels & Feedstock. The remaining 40% to 50% is planned for sustainable projects in all 3 businesses. Just to note, Neptun Deep is a large part of the traditional E&P organic CapEx in the next 3 years. After 2027, we expect a significant decrease in traditional Energy organic CapEx. The main sustainable projects will be in geothermal, in carbon capture and storage, renewable power, mechanical and chemical recycling and in renewable fuels. Also to note that around 70% of the organic CapEx is in growth projects while the remaining 1/3 is in maintenance. The key to all our investments is our evaluation of expected returns and the time frame to those returns. We have developed clear criteria to assess various options, and I would like to emphasize that all our projects, including the sustainability ones, must earn a minimum double-digit return. Moreover, we have updated our minimum IRRs to reflect the latest market developments and are now also disclosing them for noninvestment-grade countries. The minimum IRR depends on the individual countries' weighted average cost of capital and is, therefore, higher for noninvestment-grade countries in the traditional Energy business. What remains unchanged is the group's overall minimum clean CCS return of 12% on capital employed. This brings me now to one of the most important parts of my presentation: our shareholder distribution policy. We have a progressive policy for our regular dividend and a clear framework for special dividends. I'm pleased to confirm that OMV aims to increase the dividend each year or at least maintain it at the previous year's level. This is a strong commitment to delivering sustained and growing value to our shareholders and reflects the resilience of our business and confidence in our future. In addition, we will pay special dividends when our leverage ratio is below 30%. Together with the progressive ordinary dividend, the total dividend payout will amount to approximately 20% to 30% of operating cash flow. We believe this is a highly attractive proposition. And you can see this long-term commitment has paid off. If you look at our dividend history over recent years, you can see that we have consistently grown our shareholder payout. In line with our progressive dividend policy, we have paid out the highest regular dividend in the company's history of EUR 2.95 per share for the full year 2023. The average annual increase in regular dividend payments since 2015 is more than 14% per annum. Furthermore, we have paid a special dividend of EUR 2.10 per share, bringing the total dividend to EUR 5.05 per share. This puts us at the upper end of the target range of 20% to 30% of cash flow from operating activities. This consistent increase in shareholder distributions is further evidence of our successful and resilient business model and the long-term value it creates. It is important to reiterate that we remain confident in our ability to pay special dividends in the future. And this brings me to the last slide of my presentation today. Let me briefly summarize the key takeaways. As a management team, we will continue to focus on increasing the value of our business, generating sustainable cash flows and delivering consistently high returns to our shareholders. Over recent years, our integrated business model has proven its resilience as well as the significant operational and financial benefits. Together, with our technology leadership, this integrated model is delivering strong margins that support our investments in new growth areas. You have seen today the substantial progress we have made in executing on our Strategy 2030. You will also hopefully take away that significant opportunity we have in front of us as we transform our company into a sustainable business. We will continue to pursue the attractive projects in our portfolio to deliver near-term value. At the same time, we remain disciplined in our approach to implement future growth options, ensuring we deliver value, both financially and strategically. With that, I would like to thank you for your attention, and I hand the floor back to Florian.

Yes. Thank you both. I would like now go to the Q&A session and introduce the 3 segment EVPs, who will join Alfred and Reinhard for the Q&A session: Daniela Vlad, Executive Vice President, Chemicals; Martijn van Koten, Executive Vice President, Fuels & Feedstock; and Beri Gaso, Executive Vice President, Energy. I would ask now all of our Executive Board members to join me on the stage. We will begin by taking questions from participants in the room, and I will call on you and would ask you to limit yourself to 2 questions initially so that as many participants as possible can ask questions. Should you have additional questions, you can always queue again. We will also look to take some questions from online participants. And now please raise your hand if you have any questions. Let's start maybe with Matt Lofting and then Sasi, and then we'll come to the other side.

It's Matt Lofting at JPMorgan. I'll just start with 2. First on Chemicals growth. Could you talk a bit more about the ambitions on circular chems growth and then specifically the confidence that OMV has in the regulatory environment and progression over the medium term? Because it did strike me to some degree, you're shifting from unregulated towards more regulated markets as you move more into circularity and low carbon. And then clearly, in Europe as a whole, the industry is -- not just OMV, has seen volatility and variability in the adoption of regulations. So how are you thinking about that? And then secondly, from a fiscal perspective, could you talk more about on the distributions, how you plan to use the 20% to 30% range on the total dividend, special component included in the context? The -- clearly, that range, that does imply, at the extremes, quite a wide variance in the yield that you're proposing to shareholders.

Okay. Thank you, Matt, for the question. I propose that I start a little bit with the C&M with a high-level thing. I'm sure Daniela has some more details about this. And on your 20% to 30% operating cash flow distribution, I think Reinhard will answer that question. So I would just like to highlight that what we have seen over the last -- actually, since our Capital Market Day in 2022 that the regulatory environment has stepped up quite significantly, not just in circular economy but also in fuels, in energy, in power and so on, not just in Europe, but across the globe. I think in 2022, when we made our presentation, nobody could have imagined that the U.S. will launch an Inflation Reduction Act that actually uses sustainability as an innovation and growth driver. And here, we are seeing that this is also starting to be a race to get to more sustainable technologies. And I'm glad that with OMV with our strategy to become an integrated sustainable chemicals, fuels and energy company that we are in the midst of that race. As to the circular economy regulatory targets, I will maybe let Daniela comment on those.

Thank you for your question, Matt. I appreciate it. In many ways, society is looking to decarbonize, yet in Europe, we have to define further measures, and we're looking at the policymakers and engaging actively with them towards particularly clarifying regulatory framework, particularly for chemical recycling and for renewable-based feedstock. At the same time, what we put forward today and what you heard today in terms of our sustainable sales ambitions between now and 2030 takes into account the fact that we will have a range of feedstock options, range of mechanical, chemical recycling and renewable-based, sustainable-based chemicals and polyolefins, so technologies and engagements with our customers in the value chain to actually create this demand together. Many of the brand owners, and that's companies such as Unilever, Procter & Gamble, Nestlé, Henkel, we are actually engaging with them, also with the automotive makers to create such demand, and they have announced pledges. For instance, Unilever, seeing from 2025 onwards, will switch their packaging to contain at least 25% recycled content. This is massive. This is huge. It represents a significant opportunity. And hence, our investment assumes that we will be there to actually meet this demand and actually make this secular economy ecosystem an attractive proposition for ourselves, for our investors but also for our customers going forward.

Yes. Matt, to your second question. If we look at the past 2 years, the use of the range between 20 and 30 years has shown -- 30% has shown a little bit the both extremes. When we have seen 2022, that was a year of record results in a quite uncertain environment where it was clear that this record pricing and record margins, specifically in Energy business, wouldn't be sustainable. So therefore, while we were at the lower range of the 20% to 30%, this was still a major jump in the increase of the dividend and made it a record dividend. While in 2023, that still was a volatile environment. However, we saw that the company was very lowly leveraged, and we had the confidence that even in this volatile environment, we would strive, and we would be able to continue delivering strong cash flows. So therefore, we took it to the upper end of the 30%. So what you can see from that is we are not shy of also leaning towards higher of the mid than the mid of this range if the environment is good and that we trust in our ability to continue in distributing the special dividends.

Thanks, Matt, for your questions. We now go to Sasi. Over here.

It's Sasikanth from Morgan Stanley. Two questions, please. The first one was related to your guidance for 2030 cash flow and operating income related to the Chemicals & Materials segment. I was just wondering how much of that kind of comes from plants or projects that are already in place and under construction. Wanted to understand how any potential acquisition would alter that guidance. The second one was related to the competitive advantage of the European polyolefin plants. So you've increased your assumptions for oil prices. You've increased your assumptions for cash prices. I was just wondering, in such an environment, how competitive would these plants be? You've mentioned efficiency programs. I was just wondering if you could elaborate on that as well.

Yes. Maybe let me start with the guidance question. And I'll see if I don't answer it completely, Daniela will help me out. So I think you're referring to the 3 major growth projects that we were showing up there. And the first one was actually the Baystar project. The Baystar project is now completed since last year, and it's ramping up. This 1 million ton integrated complex. So it takes a while to have that fully ramped up. It takes a while to commercially optimize and so on. So the range that we have given there is based on the plants that we have built. But when it's fully ramped up, mid-cycle kind of guidance that we have there. For the PDH plant, the EBITDA range that we gave there was a range for the new PDH plant because remember, we are already running a PDH plant in Kallo. And this is for this new PDH plant that is there once it's completed and started up since propylene is more of a commodity that is probably going to take a bit less commercial optimization. And the last one was the Borouge 4. In the year, we are about 65% complete in the construction and still on track to start up -- end of 2025. And that is about ethane cracker for about 1.5 million tons and then polyethylene plants with about 1.4 million tons. And the range, EUR 1.5 billion to EUR 1.9 billion revenue was also for that complex. So for the 1.4 million tons polyolefins. On the competitiveness in Europe, I really think you should consider the -- it's actually quite interesting to look at the picture because there's a difference between the Northern European operations that we have and the Central European operations that we have. Let me start with Austria. In Germany, the Central European crackers they are crackers that are fully integrated into our refineries. And in those refineries, they help us not only to be able to optimize or to produce the chemical feedstock but also to optimize the refinery by itself. They are extremely cost competitive. We have worked hard to keep the cost low there. And that's how we create the competitiveness. The Nordic cracker on the other side, they are benefiting from a high feedstock flexibility and that we have invested over the last 10, 15 years, a lot into building the right supply chains. So the cracker in Sweden, for example, is also fed with ethane from the U.S. So we have a different cost basis there. We have the storage capabilities to put this in. we can also store LPGs and so on. Similar situation in Finland, where we have also invested into Caverns to store LPGs to also store naphtha, high flexibility what we can do. The optimization then is not just feedstock cost, but it is product to feedstock where do we make the best margins. And you can see that this is really factual. If you look at last year or the last couple of years, we always run our crackers with higher utilization rates than the European market. last year, that was about 10% more.

Okay. Thanks. We go now to this side. We start with Michele then Ram from Barclays and then Thomas and then I come back to the other side.

Michele Della Vigna from Goldman Sachs. There are 2 areas I wanted to ask you about. The first one is on biofuels, where you are making a tremendous progress towards higher volume, building a really scalable business in Europe. There were 2 things I wanted to ask you. The first one is whether you think that the implementation of the Red III directive country by country, which we should see at least by beginning of next year, could have a meaningful positive impact on renewable diesel demand in Europe and on the margins, which have been, I would say, on the disappointing side, at least in the last few months. And then secondly, when we think about SAF, there will be tremendous demand starting from next year with the mandatory blending. I was wondering, is your understanding that co-processing is allowed as SAF for the 2% mandatory blending in Europe or not. It wasn't very clear to me when I looked at some of the countries implementation. And then the second area we need to ask you about is this sustainable base chemicals supply, 1.4 million tons per annum is a very exciting, very ambitious target. I was wondering if you could also talk about what margins you expect that to generate and what could be the contribution to EBITDA?

Sure. Thank you for the questions, Michele. I would propose that maybe Martijn starts with on the biofuels and the SAF and then Daniela continues with sustainable base chemicals.

Yes. Thank you for the question. So Red III does have a positive impact on the renewable diesel demand. Yes. So our understanding is that this Red III local implementation will go ahead and it will provide a ramp of demand for renewable diesel components like HVO. And at the same time, and that's maybe important also to stress, you see a number of countries locally, closing other avenues to meet the greenhouse gas efficiency right? So UVRs are phased out and so on. So it's all focused on actually blending components. And given that already, we've reached about 7%, which you can reach with fame and other [indiscernible] blending components, the only real way to meet the greenhouse gas efficiencies with HVO. So the short-term weakness we now see, we feel is really a short-term topic. Some countries have lowered their mandates to the European average. And some plants are coming on stream, but we expect it to balance back to what Alfred said in 2027. And after that, a healthy demand for HVO components. For SAF, of course, it also really starts with the mandates next year, 2%. What's important to stress that in our strategy, all the plans we're looking at all the production capacity will be dedicated plans, so not coprocessing plans. What we coprocessing in Schwechat is HVO components and renewable chemical feedstock. And that is completely compliant with the Red mandates. But for softwood, we're aiming for our dedicated facility. So the Petrobrazi plant is also dedicated HVO SAF facility, not the co-processing.

If I may continue. Thank you for the question on sustainable base chemicals. This is truly an exciting opportunity emerging as well because we see customer demand down the chain. And just to give a couple of examples. The way these sustainable base chemicals or sustainable polyolefins, in general sustainable chemicals, we generate through mechanical recycling, chemical recycling and renewable based feedstock. And let me elaborate in each one of these. In the field of mechanical recycling and I talk about proprietary technology, advanced mechanical recycling, we did 2 acquisitions last year through Borealis. And this is really good, healthy business with customers buying it, profitable business. We're really proud of our ability to scale up advanced mechanical recycling, and this was through inorganic path through M&A. On the ReOil side, we are actually now -- we constructed the factory, which is the plant, which is in our Schwechat refinery, which is going to produce 16,000 tons facility with continuous operations. This is a continuous operation activity, which actually we started working on since 2018. It takes plastic waste and process it through synthetic oil and then from that to molecule building blocks, which then go further down the chain. And the third element is the renewable base feedstock where in the way we integrate with the Fuel & Feedstock business, we have that flexibility in assets to produce both. This flexibility, these alternatives actually will generate really a healthy business. This 1.4 million -- up to 1.4 million metric tons. We count on double-digit returns. This is our hurdle rates, we are going to work with, and we count also on healthy premium from customers because there is healthy demand.

Good. Thank you. We would now go to row 4, Ram first, and then Thomas and then we come to the other side again.

This is Ram coming from Barclays. My first question is related to a low carbon business, where you have amended or the ambition of low carbon capacity has deferred since last CMD. It looks like geothermal capacity addition has come down and renewal has gone up so as CCS, which has come down. Could you just give us some color what has influenced you to change this ambitious target to 2030. Has it been canceled or pushed into the next decade? And the second question is related to upstream production. You have maintained production of 350,000 barrels of oil equivalent per day, which is higher end of this year target. I understand that Neptun would contribute a part of it. But how do you manage to manage at the current level? How do you see the decline rate would be? And have you plan to manage or maintain the same production level?

Good. Thank you very much. Maybe I'll just start, and then I think Beri is really the guy to answer both of those questions. But maybe also to connect to the last question. What we are trying to do here is to use sustainability as an innovation and growth driver. And that means we must be able to extract the right margins. when we start with lower quantities that is usually less difficult, right? You can own the small quantities. We are already selling today -- we have this pilot plant for ReOil of 1,000 tons per year about. We are selling these quantities in the market. We are selling HVO-based, cracked based chemicals also to customers. You have maybe seen some announcements from us with Synthos, were from Borealis with Covestro, for example, on phenols and things like this. And there, we do achieve attractive margins to actually do that. And that is part of our way forward to adjust the volumes in such a way that we can actually extract. Regulatory environment helps to speed this up. But there is no question there is a number of customers that want to lead this and that are forced in driving some progress in this as well. Sustainable aviation fuels is no different. The European mandate will be 6%. And Ryanair has been publicly out. For example, one of our customers that they want to do 12% by 2030 voluntary demand. But back to the LCB capacities and the [ 350,000 ], Beri.

Yes. Thank you for the question. I think both important observations. On the low carbon business, what we did is we investigated numbers that we put out in 2020 and really looked into everything that we see in terms of customers, markets, supply chains, et cetera, opportunities, margins, you name it. And I think there is 2 conclusions that we derived. Number one is -- and you rightfully spotted that, we upgraded basically the target on the renewables. That is now 3 to 4 terawatt hours, I think it used to be around 1 terawatt hour in 2022 when we communicated. We did that because we see more opportunity in that space. And specifically in Southeastern Europe, we see more opportunities to move forward on the renewables. You might have followed a major building block in our strategy execution also last year was basically the acquisition of renewable projects in Romania, both in wind and in solar, they complement very nicely our CCGT position there and they allow us basically to really have decent double-digit integrated returns. Now on the other 2 areas, it's less that we downgraded we simply did a reality check over time. For instance, if you take the carbon capture storage target, you see now in 2030, 3 million tons, but very quickly after that, very quickly after that, we're at the 5 million tons. What we see from today's market perspective is simply that 5 million tons, not realistic in 2030, but very soon after that, we'll get to the 5 million tons. And in a similar way, we've actually repaced also the geothermal target. So we have not downgraded. We have adjusted in time, and they pushed and moved a little bit out. That's your first question. I think to your second question on the 350,000 barrel per day, what the decline rates are -- you have seen and you've all read about the divestments in Malaysia and New Zealand, Malaysia basically closed or signed and we're still waiting for closure and New Zealand still ongoing. In the meantime, there is a decline. On the other hand, 70,000 barrels per day are coming in from the Neptun project. If you put all of that, basically, if you plot all of that over a time frame to 2030, you will simply see that there is a volumetric gap that needs to be closed. But closed in a mindful way, closed in a smart way. So in other words, we will need to both high-grade the portfolio. We might sell further elements of the portfolio, but we will also acquire in order to close that gap.

Good. Thank you. In the third row, Tamas, then we go quickly to the other side, and then we come back later.

Yes. Thank you very much. Tamas Pletser, Erste Bank. Basically, a follow-up to the colleagues, what they said. I mean, you probably watched that on the weekend, the Parliament elections, the Greens, the support for the Green parties reversed or weakened. Are you flexible with this strategy enough if the European mandates are going to be different? I mean, if they cut, for example, the requirement for the renewable energy content of the future energy. So because what I saw today that you basically very much -- your storage is based on that these things are going to tighten in the future significantly.

Yes. I'm happy to take that question. I think -- like I said, if you look back to 2022, I think we are seeing now that this has moved beyond Europe. There's a globalization in -- stepping up efforts in renewable energy, right? We shouldn't think that we are alone here in Europe and only driving this, the biggest investments in renewable power in China, right? You will see, in the meantime, in the Middle East, tremendous investments into green hydrogen into renewable things. So it's also a global competition that is going on. And last but not least, in the U.S. with the Inflation Reduction Act, there's massive investments that have moved also there because of the attractive conditions. So that being said, I think the point that I want to make is we will see changes in moving forward because some of the areas that we see there's just more efficient technologies that are in development. There's new things coming about, right. And therefore, it will be important to -- rather than becoming a victim to this -- to use that opportunity and drive the growth forward. But a smart strategy is built in a way that we need to be flexible enough to adjust for potential changes in speed that happen. That could be acceleration, but it could also be that things may take a little bit longer than this. I think that's the beauty in the OMV strategy that it is a strategy of a responsible transformation over time. We say the customers that we have today will also be customers that we want to serve with our sustainable businesses. If we sell cash today, tomorrow, we want to sell to the same ones geothermal energy where we sell plastics today. We want to sell circular chemicals tomorrow where we sell Kerosene today. We want to sell Soft tomorrow. And we have our feet into those markets. And this strategy is actually built in such a way that we maximize that was trying to make the point on my last chart there, maximize the cash flows, be a reliable supplier of the product today while using the time to build businesses of the future. Yes, we can adjust some of this, but in particular, in some of the areas, I think the time is also now to claim a space. And this is what we are trying to do here. I do think, as Beri pointed out, right, renewable power, OMV Petrom today is already a significant power provider in Romania. So they have a market position. And the subsidy landscape in Romania is attractive. They have a lot of sun hours. They have good wind. So why not use this position and build on this, which we are doing. We are integrated into the airports with SAF. And you do see not just regulated, but also voluntary demand as opposed to 2022. We now have a lot of interest in people wanting to discuss with us how to get access to some of these things. So yes, we have a possibility to adjust but we want to make sure that we also claim our space in the markets where we are present today.

Thank you. Tamas. We come now here to the second row. Peter?

It's Peter Low from Redburn Atlantic. I wanted to ask just another question on the dividend. How do you think about growth in the ordinary component? I think it's notable you've been able to afford such a large special in what has been a challenging chemical margin environment and you do have a number of growth projects set to ramp up. Obviously, it feels like there could be scope for that rebate higher, but it'd be interesting to know how you think about that. And the second was just on the Gas and Power guidance for EUR 300 million per annum of EBIT. How ratable is that? Or is there a degree of commodity risk? It's a harder part of the business to model and I'm trying to gauge how volatile that could be.

Sure. Maybe Reinhard can start with the dividend, and then Beri can take the Gas and Power, please?

Yes. I think regarding our regular dividend and our promise to make that a progressive experience for all our shareholders. This is what we have proven in the past, and that is our will to continue. So this means that the increments are always there, and maybe they will vary a little bit, but ultimately, this will also depend on our ability to pay special dividends. So there will always be a certain context. So what you have seen between 2022 and 2023 is ultimately, we had decided to keep this total dividend at exactly the same level while we were still growing the regular dividend. And this was exactly what I described before that there is, of course, plenty of considerations into that. That's the economic environment, that's the growth opportunities that we have that is about the stability of the boundary conditions that we have. And I think this is a huge promise that we give to say the regular dividend will grow. And this is what we stick to, and this is what we will look forward to delivering.

Yes. Thank you. Thank you for the question on Gas and Power. And I would agree that gas is, of course, in particular, given the last 2 years with all the volatility that we have seen, quite a different area to predict from a normalized basis. And therefore, probably 2, 3 things on my side. Number one, the EUR 300 million that you have seen here on the Capital Markets Day really assumes a normalized period over a longer period -- longer period of time. That's probably number one. Number two is if you deep that into the main 4 components behind the gas and power business, if you could think about what makes up at the end, the EUR 300 million, you have a storage business, mainly in Austria, which is quite a stable business actually. It depends on your summer winter spreads on gas -- on the amount of gas that you store the amount of the stored gas, you will hedge and you will realize basically the summer in the difference at the end of the time. So I think that, to some extent, is a predictable thing assuming, of course, you have a view on some winter spreads. Then the second component would probably be the LNG business. There's re-gasification capacity. We have long-term contracts. Those contracts need to lead you to a contribution above the cost of that re-gasification terminal. If that's the case and it is the case, you have a positive contribution that you can model from that. Then the third component would again be sales and the sales business that we have. And that will depend primarily not on the volumes. It will, of course, depend on your sales margin that you achieve on each of the molecules that you sell there, including basically what type of asset-backed trading you apply and how you optimize supply. And then on the power, we assume the 4 terawatt hour is roughly of the Brazi power plant. And that's, to some extent, the gas power linkage. So please follow them for that also most recent regulation in Romania to have a better view on both spark spreads and CO2 costs on them. I hope that helps a little bit to answer that question. But EUR 300 million is a good number to think about in a normalized way.

Thanks, Peter, for your questions. We now go to Josh and then Bertrand here in the second row.

It's Josh Stone here from UBS. And thank you for the in-person event. Two questions, please. Firstly, you've given your 2030 outlook. It just feels -- it's quite a long time away. And there's -- as you mentioned, there's an element of dynamism in different components that might be going into that number. You also have a very large outstanding transaction with ADNOC that may or may not be happening that could potentially change some of these numbers. So with that in mind, could you maybe just talk about what the profile looks like to 2030, maybe talk a bit shorter term or at least like you used to have 2025 targets, I presume those are still valid. And maybe talk about how we get to that 2030 number, maybe is it more back-end loaded? Or how do we get there? And then second question on the acquisition point, particularly down the chemicals value chain. You've expressed an interest to spend more in chemicals using acquisitions. I don't want to press you too much on the ADNOC deal, but what are you seeing outside of ADNOC? And what regions are you looking at? And what sort of assets are you looking at how those potential deals are looking?

Yes. Let me maybe start with on the back end and then try and start with 2030 far away, maybe Reinhard can help me out a bit on this. So on acquisitions in general and chemicals and materials, in particular, would we have put inorganic options as a priority #3 for a good reason. And as Reinhard pointed out in his presentation, for us, it's important that this does not only fit into our strategy and accelerate our strategy, but they also need to be value accretive for us. So we are always looking in particular in chemicals, but also to a degree in some of the other areas, how we can do that. I mentioned in my presentation, for example, a small acquisition that we did with Eavor in this technology for geothermal because we think that will allow us to accelerate this. And if it works out, it can be accretive as well. In the chemicals and materials space, of course, it can always be in the area of polyolefins. Hence, for example, on discussions with ADNOC about the potential Borouge/Borealis combination with an open-ended kind of negotiation going on there. the goals that we have always said in our chemical strategy is we want to use our polyolefin base, our strength to grow in specialties and so on. So those are areas that we can do organic but also inorganic secondly, geographic expansion, both possible again. And last but not least, circular economy solutions where Daniela has just mentioned before, some bolt-on acquisitions that we have done in order to accelerate the recycled product. And last, we said we would also be interested in diversifying beyond polyolefins. But again, the key focus for us is always needs to be accretive in the end when we look -- when we do it and that's a commitment from our side to continue to be disciplined with M&A. On the 2030 targets, I like the way you said it's very far away, right? When I talk to some of these guys, they say it's around the corner because to build the plant takes almost this time to actually make it happen. So look, we decided in 2022, we had the 25 intermediate target because we did think 2030 was actually too far away for this now 2025 is next year. And in that sense, since we are in an industry that's always moving around. We thought it's more useful to stick with the 2030 target and upgrade this. I think what you can see in the areas we are committed in our direction in implementing what we do we continue to implement the CO2 reductions. As we said, we upped our operating results and cash flow targets in what we have there. But of course, we do recognize that there is a cyclicity in our industry.

Yes. Maybe just to add to that, that we were not commenting on 2025 is not a signal that we are not committed to what we actually have predicted as performance. It is in the context that we have as a principle that we do not give a guidance for the year after the one that we are operating in 2025 happens to be the next year now. Of course, we are looking very much into what has changed in the assumptions between 2022 and now, but that is not too much of an effect. So that means that we stay committed more or less to the kind of performance level that we have anticipated. Now for the time in between, as Alfred said, the first milestone actually will be Neptun coming into operation. That is not in 2025 or 2026 but 2027, we should look at that. So therefore, there will be already a positive influence from that. On the sustainable side, it may be a little bit later in this period. And on the other hand, we have operational projects that are more or less coming in 2024 and 2025 into operation. So therefore, while 2025, we will not see the full impact of a Kallo yet or of a Borouge 4 in 2026. We can already anticipate that there is a contribution. So there will be always some steps in the different parts of our portfolio that will be there and that can be added. So it's not really a linear curve, but it's always more or less going up.

Good. Thank you. We now come here to the third row, Bertrand. And then Lydia, over to you.

Bertrand Hodee, Kepler Cheuvreux. I have a question around your 2030 operating target compared to what you previously said in 2022. So when I'm looking at your implicit chemicals operating results, it's roughly EUR 2.4 billion by 2030, and it was EUR 3 billion in 2022 outlook. So can you make the bridge between those 2 numbers on what are, I would say, lower potentially chemical margin assumption? And if you can get a bit of detail around that. and also project probably shifting to the right, probably in circular chemicals. And then the second question is -- is a bit of an opposite. I was looking at the energy implicit operating result. In 2022, you were implicitly guiding for EUR 1.8 billion by 2030, and now you are guiding around EUR 2.9 billion. I understand there is some oil price assumption, gas price assumption the gap is not -- there's still a big gap between the 2 if I apply the sensitivity. So I guess, probably there is M&A volumes or accretive, I would say, production that you would bring into the portfolio by 2030. So sorry for the complicated question, but I think it's useful to understand what has changed over the last 2 years.

Thank you, Bertrand. Maybe Reinhard can start, and then we'll see if Daniela or Beri need to add something?

Yes, Bertrand, your observations are, of course. absolutely precise. And the content of that is that, yes, on the one hand side, of course, in the longer-term plan, if one of our priorities is also inorganic growth. We have taken into account that there could be some add-on acquisitions that we would have both in the chemical side, but also on the energy side, as Beri has explained before. But just to make sure that is by far not an amount that amounts to the headroom I have shown in my chart. So therefore, the clear overweight of the investments are coming from the organic investment. Now what makes the difference. One is in 2022, the depth of the chemicals downturn was not visible in full. And we are, of course, taking into account the recovery but we are also looking a little bit more cautious in how the specific margins will develop and how we can see the international portfolio. And this is very important to see how much do you allocate in fully consolidated parts and parts that are not fully consolidated. And that makes, of course, a difference whether you see [indiscernible] or Borouge. This is only consolidated at a net profit, whereas you have Borealis that is fully consolidated at the EBIT or operating profit level. And if you have some switches in there, then you take, of course, into account that could be changes. Other than that, from the basics, nothing has changed, and we are fully committed to the project and to the portfolio that we have. And on the energy side, to be honest, our perspective on the oil and gas price development has a little bit lightened up. Also, our long-term perspective on the oil price is roughly $10 higher than what we had anticipated in 2022. And that, of course, makes a quite significant change there. whereas the gas price is maybe a little bit more favorable, but that's not a lot in that. But of course, invite Beri and Daniela also to comment.

So maybe on the chemical side, I think one difference compared to the last CMD Capital markets is the fact that, obviously, we've seen the -- we're navigating the chemical down cycle right now. We will see gradual recovery towards 2030, build up towards that. So we have taken pragmatic, realistic and ambitious numbers into account. And actually, we plan to -- between 2023 and 2030 tripled the operating cash flow, which is significant and in the current context. Secondly, on the sustainable sales for base chemicals and polyolefins in the last update, we have taken an assumption of 2 million metric tons which we now believe it will be achieved, but later beyond 2030 because we are really committed on the up to 1.4 million metric ton to really make this a sustainable business also financially.

Yes. There's maybe -- I mean, a lot has been said, but I would probably like to add 2 things. I think what it does show and Alfred mentioned that in his speech is the strength of us being integrated. So if the macro moves a little bit into one side or another side, of course, big numbers are adjusting. In this case, we have a slightly more positive outlook now on oil prices. that immediately hits to actually not only into the bottom line, but also, of course, into operating result. I think that's one remark to make. The second remark that I would like to make is -- please do not also forget the relevance of the mentioned efficiency program that we have started our improvement program, and we have announced EUR 500 million, EUR 250 million to come in energy. The more profitably we managed to produce those volumes by 2030, of course, the higher also the impact on operating results probably these 2 remarks on my side. And the third and the last one is that volumetrically, we have not upped the target. We had [ 350,000 ] in 2022, and we have [ 350,000 ] today as we speak to you. So the difference is then really macro and efficiency.

Good. Thank you. Now we come to this side. Last row, Lydia, please?

It's Lydia Rainforth from Barclays here. I get there's 2 of us today because it's obviously important event. Two questions, if I could. And just coming back to Borouge and Borouge 4. Obviously, the ownership is slightly different for Borouge 4, so wider bridge. I'm just wondering, is there any intention to change that? And is that linked to any transaction? And then -- so that's just flourish to even more than anything else. The second one was on -- if I come back to the cash flow numbers and we've got EUR 7.5 billion of cash flow in 2030; CapEx, EUR 3.8 billion. So free cash flow with EUR 3.7 billion. Obviously, plenty of room for the dividends. But that's also implying a prolonged period of quite high free cash flow. So just culturally, how do you keep the discipline that you've had over the recent years? How do you ensure that, that doesn't just clearly put up that CapEx number that you continue to keep that discipline for Daniela, for Berislav, or [ Matan ].

Okay. Maybe I start with the CapEx, with a disciplined kind of across the group. Maybe Reinhard can then comment on this a little bit and Borouge 4, Daniela can probably explain the ownership structure there. So yes, you're absolutely correct, right? We are trying to manage quite a complex transformation of a company here. We are trying to run our existing business as efficient, cost efficient to get out the maximum cash and at the same time, we are needing to take some risk into some very potential interesting growth opportunities, right? All 3 of these, the geothermal, the SAF, the circular chemicals could position OMV into an international global champion in those areas, right? And how do you make sure we keep that discipline in an inflationary environment like we have it today. And this is exactly the reason why we started our efficiency program. And we want to make sure that we keep a high attention on those things, right, just because you're investing into new businesses. doesn't mean you should spur, right? We should still keep our stuff together. This -- quite honestly, this is not a very difficult thing with OMV. OMV is cost-efficient performance-oriented company. People understand this. They know how to do it. But of course, the environment that we are in is a little bit different, right, with inflation going on like this. So efficiency program is one and continuing to drive and use the strength of the company culture with the performance orientation. Anything to add on?

Maybe just to add. In general, there is also a little bit of a regulatory element in that. If we look back and see, okay, our CapEx numbers were lower in between is IFRS 16. And we have to account for something that is not really cash relevant also on the CapEx side. We are steering this company in cash. So it is the liquidity, it is the cash flow is our ability to bring from that cash flow back to the shareholders. And then the other thing, and Alfred has mentioned that it is about risk management. And the risk management is that we cannot rely on a straightforward development of our economic environment. And that also makes sure that we have to curb a little bit the cash out that we give for investments if we are not entirely sure how that works. So this balance between enabling transformation and being able to push where we see opportunities and on the other hand, holding the horses in order to also survive downturns or survive this volatility of the commodity prices. This is what we have practiced, I think, successfully in the past. And this is what we will keep on going.

Let me clarify now the Borouge ownership structure. The Borealis joint venture with ADNOC, which is the company Borouge, in that entity, we have 36% ownership. And then the Borouge 4 project, which is a project which is to complete that towards the end of 2025. We have 40% ownership -- Borealis has 40% ownership in that project.

And the idea is to finish the project. And then it's supposed to be...

Contribute that.

Contribute to Borouge plc.

But maybe to explain that a little bit. Borealis used to have 40% in Borouge. But then Borouge choose to do an IPO and go to the stock market. And with that, there was an equal dilution of both parts in order to have a 10% free float. So therefore, it was 10% diluted from 40% to 36%. While Borouge 4 is not part of that listed company yet because it's not operative and will be contributed as soon as the project is being finalized and can go operational.

Good. Thanks, Lydia. I think we may have time for 2 or 3 more questions here and then plenty of time in the breakout. Maybe first, Matt, in the last one, then I think it's done.

Matt Smith of Bank of America. Just perhaps one very high-level one, really. You've presented a sort of a new view of the world here to 2030 in the form of higher oil and gas prices, higher refining margins slightly lower European chemicals at least perhaps let's say, focus on Europe there, but very much an unchanged sort of strategic direction into 2030. So a risk of asking 2 big high-level question I'm making you repeat the CMT. But how do you reconcile that view? And how does your view of the world and the Mac change macro assumptions influence back into the strategy that you've laid out today? And perhaps you could also illuminate some of the more subtle changes versus 2 years ago because I'm sure there are some in there.

Yes. Very good. Of course, a fantastic question that kept us busy in preparing not just for this Capital Market Day, but also the timing between. And you haven't even mentioned 2022 and so on, we had this European energy crisis where we occupied ourselves with many things that weren't in the original strategy, right? I think -- so you're correct. What we have seen, and this is just an adjustment of the market view looking at what we think, what may other people think in trying to consolidate it that big oil is probably moving out a little bit further, right? If you look at the latest IEA forecast again what other people say, right, not so. But this is a little bit the indication that it does take, but it doesn't really change anything in the general trend, right? If you see some of these things, some of the drivers are a little bit different to what is maybe relevant for us in our market space. The higher oil prices and potentially driven more by developing countries growth and we should still understand that in Europe, for example, we do see registrations of electric vehicles and things like this going up. So it is an opportunity that we can actually use that time in our running businesses to extract more money, right, and to keep those running longer. And I really think that's the beauty of the OMV strategy that with the idea to transform into an integrated sustainable chemicals, fuels and energy company, we can adjust our speed in which we do that. And what our aim or how we will go through this is we will look at the development of the demand that we see out there. And we will, of course, sell into an existing demand. And this is why, for example, you saw a recent addition in our retail network to make sure we can run our refineries as long as possible by integrating further down to our customers. So this is what we are planning. However, I think it's not possible to argue that we won't see a transformation of how the energy landscape will look like. And hence, our idea to take chemicals as a growth engine and to have the transformation drivers in all 3 of our segments as potential future cash contributors is absolutely the right thing to do. If it so happens that the demand of our classic business stays even longer, then we have some profitable business additional ones on top. Nothing wrong with that. I still think -- or we actually can observe that -- for example, the registrations or the amount of diesel cars is reducing already in Europe, creating some lower demand in this area, right? And these are the kind of things that we need to manage through that time and make sure that we are putting our foot down now where we believe we can take market positions in Romania with OMV Petrom in the power market, there's growth, the gas development as a transition fuel great growth. In the chemical space with Borealis, with our strength in innovation and specialties, we can grow that. We can grow internationally where there's low feedstock and then the 3 big areas of geothermal, sustainable aviation fuels and circular chemicals, future growth drivers that we can leverage. So that was really the big idea how we can do that and some of the adjustments that later delivery, as Daniela explained, 1.4 million tons of circular chemicals by 2030. The 2 million tons we had previously a little bit later because we see that this is moving a little bit slower. These are adjustments that we can make. Direction still the same.

Good. Thanks. We come now close to the end and [indiscernible] I promise you that I call you up on a question. If you can maybe limit it to just one, that would be appreciate.

I sat changed the CO2 intensity target. Could you comment on what the main drivers were?

Yes. That's -- so let me start like this. We always had a focus, and that's a bit due to our transformation strategy, right, that we have that absolute CO2 emissions are our first focus area because for us, the approach was to be a net zero company in 2050. It doesn't help if only your energy intensity is low. You can only get to net zero if your absolute emissions are zero, right? So that was one of the drivers. And I'm glad to see that we are on track with those absolute emissions. On the CO2 intensity, it's quite clear, right? You look at CO2 emissions divided by the amount of energy that you produce. And if some of our 0 emission energy capacities are delayed beyond 2030, this is creating some of slower of this reduction from 20 to now 15 to [ 20 ].

Good. Thank you for your questions and active participation. This concludes the webcast portion of the Capital Markets Day, and I would like to thank you all that also joined virtually. For those in the room, we will now move on to the breakout sessions on our segments. In order to facilitate more in-depth discussions, we have broken you down into 3 smaller groups. You will find the color of your group on your name badge. Each participants will, therefore, have the opportunity to meet with all 3 segment heads for 30 minutes each. Following the breakout sessions, as I have mentioned, we will have some informal refreshments just outside of the breakout rooms. We hope you will be able to join us for this, and I would now I ask you to follow the directions to our first session. Thank you very much.