Dear, ladies and gentlemen, welcome to today's Q4 Full Year 2020 Earnings Conference Call of Evonik Industries AG. At our customers' request, this conference will be recorded. As a reminder, all participants will be in a listen only mode. After the presentation, there will be an opportunity to ask questions. May I now hand you over to Tim Lange, Head of Investor Relations.
Thank you.
Ladies and gentlemen, good afternoon this time to our Q4 earnings conference call on a rainy day in Essen. We'll try to bring some sun into this call at least, and Ute
One thing is for sure, I will try my very best. And thanks a lot, Tim, and also very warm welcome from my Thanks for taking the time to be with us today. First of all, I hope you and your families are in good health and managing well, both personally and professionally in these persisting difficult Today, we are reporting a solid performance in, to say the least, a very unusual 20 20. And I will share with you the strategic progress we've made. And Ute will guide and provide you with our financial achievements.
And we will give you our perspective on 20 21. In other words, a year in which we are set for growth. Ladies and gentlemen, when I look back at the last year, Three headlines come to my mind: delivery, quality and progress. 1st, It was another year in which we managed to extend our track record of promise and deliver, and this It's a very difficult environment. This second is not a coincidence, but Harvesting the fruits of the improved portfolio quality we have built over the recent years.
3rd, I'm proud. I'm proud to see the progress we have achieved on our strategic And at the same time, we have set ourselves ambitious targets. And We will not stop here. We'll continue to work on our strategic agenda with similar speed Three headlines I've provided you with a minute before. I really think I do not To elaborate on the macro environment, we have to cope within 2020.
Global GDP at minus 4% says it all. Thanks to immediate and strict actions taken, we were able to We guided as one of the very few an EBITDA at the midpoint of EUR 1,900,000,000 Already back in May, kept track all year and finally delivered spot on. On free cash Hello. We have increased our guidance twice and finally significantly overachieved our targets, for example, like cutting CO2 emissions by half until 2025. We're fully on track and have already reached a reduction of 44% at year end 2020.
This delivery on our targets was only possible thanks to the increased resilience of our portfolio. 95% of our Total earnings are generated by the current heart of our portfolio, our 3 high quality growth Their growth is supported by 2 elements. On the one hand, the high share of sustainable solutions and on the other hand, Our new products and solutions from our innovation growth fields, both elements clearly differentiate us in the market and in the offering to our customers. This portfolio quality is reflected in our numbers. Our growth divisions finished the year only, and it is worth to repeat it, only 3% below the On the contrary, we made good progress across all our mentions.
We implemented a new RD and A organization And on the cultural side, we stood together as one Evonik to navigate the company through the crisis. You could even say that the crisis was, to a certain extent, a kind of a booster for our efforts on the cost Last but not least, I would like to highlight an area of progress which often does not get Necessary attention, although it has been part of our DNA for long, I'd have saying since ever. Our advancements on sustainability. Sustainability It's deeply embedded into the reason why Evonik exists, for example, into our purpose, leading beyond chemistry. Thus, we take responsibility for our environmental footprint, like reducing But for us, sustainability is not only a responsibility.
Even more so, It is an important element of our business model and a growth driver for our businesses. These two responsibility on the one side and profitable growth on the other side are two sides of the same When we talk about sustainability as a growth driver, we talk about our next Generation Solutions. They are, in other words, our handprint. The environmental and social benefits in the use of our products and solutions and they outweigh by far our footprint. In 2020, we were able to conclude the sustainability analysis of our entire product And the results are quite remarkable.
90% of Evonik's products have a positive sustainability benefit that is at or above the market reference. 35% of our portfolio are even clearly superior, Clearly superior to the products of our respected competitors. These applications Above average growth of a above average growth potential. Our aim is therefore to further increase the sales Share generated by these sustainability winners. Therefore, We have defined 4 sustainability focus areas, which we'll target with our next generation solutions: Health and well-being.
On Slide 8, you will find one product example for each sustainability focus area materials for electric batteries products from our strong biotechnology platform like our biosurfactants or drug delivery systems. Messenger RNA is the latest and most Over the next month, we will integrate sustainability even deeper into our management Across all elements of our strategy, that means sustainability will become an even more important factor in portfolio management, capital allocation and innovation management. With that, I hand over to Ute for the financial perspectives.
Thank you, Christian, And a warm welcome from my side as well. Indeed, the consistent execution of our strategic agenda is very prudent also the financial side. And our progress on free cash flow is probably the best example. In 2020, we have increased our free cash And the cash conversion rate quite substantially, and that despite lower EBIT and higher CapEx. The higher CapEx was partly related as we had to cope with some disruptions in material supply chains and implement additional hygienic standards at our construction sites.
Also bear in mind that 2020 was the key year for our Polyamide 12 investment project with a total CapEx of well above €400,000,000 Over the next years, we will manage our CapEx volume to a sustainable level of €850,000,000 which will result in further free cash flow potential for the next years. Also for the longer term, we have Made significant progress on the free cash flow side. Within only 3 years, we managed to double our cash conversion rate. This is Structural improvements behind this. Firstly, a strict working capital management.
We are holding the from above €1,000,000,000 some years ago to around €900,000,000 currently. And we have further potential to go We have started 2 years ago. This gives us a sustainable relief of more than €100,000,000 per year. These structural Improvements will underpin the strong cash conversion level of 40% also for the next years, and I am optimistic that we will even achieve some Another very visible result of our progress on the financial efficiency side are our You will find very visible and tangible savings of CHF 200,000,000 and this is even a net number. We have completed more 1,000 individual measures across all SG and A functions.
Strict project management and regular monitoring on board level were Therefore, we have just completed an SG and A benchmarking with an external consultant to measure the success of our SG and A program. Overall, we are broadly in line with peers in those functions, but have also identified some areas for further savings potential. We have made good experience with our continuous improvement program OpEx on the operational side. We will now transfer That mechanism to the SG and A side. The target is to fully neutralize sector cost increases on the SG and For the proven resilience in 2020 is the division Specialty Additives, with more or less stable earnings and sustained high margin level of 27%.
Across virtually all applications, our additives are back to or even above prior Crosslinkers had a strong year, also supported by government subsidies in the wind energy sector in China and favorable supply Overall, I have no doubt that our leading editors portfolio and our strong market and technology position will continue to be an important pillar for strong demand, especially for active ingredients in care or for our pharma polymers. On the efficiency side as well, all have structurally lowered their cost base. Examples are the Adjust 2020 project in Animal Nutrition or the Oleo 2020 project in Care Solutions. And there is more to come on the cost side. In Animal Nutrition, we observe A growing contribution from solutions for sustainable healthy nutrition, like the latest probiotic in tablet For hygiene, personal care and environmental applications are already exceeding prior year levels.
Our Innovations in 3 d printing and membranes for energy efficient gas separation are nearly unaffected by the pandemic and show This silica for tires shows a clear sequential recovery and the same applies For the start in 2021. However, MTBE remains under pressure and the recovery in butadiene seems to be
Ladies and gentlemen, let's dive into our full year outlook. The direction is clear, maybe After having proven our resilience in the last year, we are set for growth in 20 21. Visibility has improved, but with the pandemic, anything than behind us Still remains lower than usual. The underlying assumption for our 2021 guidance is Macro indications and our good start into the year. This is a realistic, although We have set ourselves a clear growth aspiration for the year.
We aim to achieve earnings well above 2020, in the range of EUR 2,000,000,000 to EUR 2,300,000,000. This is not I would say it is a more realistic one. It is a sign of confidence to the external world and an ambitious aspiration level for the internal organization. And as of today, I can say that we're at a pretty good start into the year. That is what gives us confidence, Confidence to deliver clear year on year growth already in the Q1.
The driving force behind that our 3 growth divisions, the specialty core parts of our portfolio. So this is not only a macro driven We expect an adjusted EBITDA of at least EUR 550,000,000 for the first Despite and already including negative effects from the adverse weather conditions mid February, especially in Germany and In Germany and in the United States. As Ute indicated, the high cash conversion rate achieved in 2020 is not definitely not a one hit wonder, but a level we want to sustain going forward. Accordingly, we guide for a stable cash conversion on the high prior year level of around 40 Based on the guided higher EBITDA level, this translates into a higher absolute Last year has shown very drastically how dynamic and uncertain the environment around us can Thus, it is of utmost importance to have a clear strategy and to stick to its consistent We will continue to work on our strategic agenda going forward and will continuously involve and to the changing environment. Therefore, we thought it is a good idea to give you an update on our strategy.
So on October please forgive me. So on We will give a strategic update, but please do not expect a revolution rather an evolution, an evolution of the successful 1st, sustainability and second, innovation. I understand that this is still a long And to go, and you probably can't wait to get this update from us. So to shorten the waiting time, over the first half This year, we will be hosting a division spotlight series. The
heads
With that, we thank you for your interest and for your time so far. And now we are happy to take your questions. Thanks a lot.
And the first question we received is from Charlie Webb of Morgan Stanley. Your line is now open, sir. Please go ahead.
Thank you. Hi, Christian, Ute and Tim. Thank you for the time. Three questions from me, if I can. So first off, could you perhaps provide a little bit more detail on some of the key building blocks for the guidance range?
Just So we can get a better understanding where we sit within that, what gets us to the top end of the range, what gets us to the bottom end of the range and perhaps Some additional color by division. I know you gave some kind of qualitative comments, but any kind of further thoughts there would be And second question just on your Healthcare business. Recently, you put out some, I guess, ad hoc news around your BioLipids business and the opportunity you have with BioNTech on the vaccine. Could you provide us perhaps with any kind of details in terms of what that business should contribute in 2021 and what we should expect in the years ahead, how significant Could that become given the investment you're making? And then finally, just I guess tying back in a little bit to the guidance, but what methionine price assumption Are you making for 2021 in your guidance range?
And how is that shaping up? It looks like it's been quite a strong Start to the year. So just any kind of comments or thoughts on that market as we look through 2021 would be very helpful.
Thanks a lot for Maybe I would try to give you something like an overview about our expectations for 2021. And then Ute Would give you some more color and would go into some more details. Let's start, Alexis. Last quarter of the last year, most of our businesses have already been back, back prior year's level. And it is worthwhile to mention that several of them have done even better.
So This trend, that is what I could really provide you with is that this trend is still ongoing. This trend is continuing. So in other words, and let's keep it very simple, it is fair to say that we had a pretty good start This year, a pretty good start into this year. And despite the fact that the uncertainty around is somewhat Still high. We are committed For growth and therefore, we have set our sales to gain a higher level of growth in 2020 And having said this, Ute will now provide you with some more details about our divisions.
Ute?
Yes, Absolutely. Thank you very much, Christian, for the introduction. Yes, I will discuss a little bit the divisions and then give you an idea What drives or what would drive the EBITDA towards the higher end of the corridor? So maybe that is something you can then We said it several times, the visibility is still really limited And the macro environment remains really difficult to predict. But again, I think there are a lot of positive indicators for growth, and this is how we If we look at Specialty Additives to start with, they had a strong and resilient year in 2020, stable pricing, EBITDA, Really very, very close to pre crisis levels.
Going forward, we see good growth potential across the division for all Last year for crosslinkers, for instance, they had a very strong year, 2020, with the specific Stimulus will be lower this year, but of course, depending on how strongly Chinese players will then build it's renewable energy, wind parks and so on, of course, there is also an upside. We were here on the more realistic side. But of course, if the renewable energy in China remains a strong Momentum, of course, there is also upside for this business. So that's to give you one example, Comfort Insulation, very good I think very good prospects. So that is overall why we say we expect earnings around Strong prior level, I think the upside here is clearly very much in the renewable energy Market in China, we'll see how that materializes.
I think the rest of the businesses are Nutrition and Care. The structural trend shows The resilience here in the end markets, Healthcare, Personal Care, even Animal Nutrition, this will continue in Of course, the division will continue its work on the cost efficiency side. So we will close Our German methionine plant by end of March, so that is yet to come in our overall P and L, just to give you one example. The Healthcare and RNA business is one example for further growth. So I think this year, that will be a smaller Impact, as you know, the production of vaccines is just starting, and I think there's more to come in the next years.
And I would like to point out that mRNA is used in many, many other medications as well. So we started for the long time in that field, where vaccine was not on the horizon yet. So overall, Nutrition and Care It's expected to deliver slightly higher earnings. As I said, a lot of these businesses Very resilient, so not so much fluctuation with the economy with the economic development. Smart Materials, Also here, many of our products have shown a resilient performance throughout the year, if you think of our active oxygen The catalyst business, on the other side, we had in our automotive exports business, like high performance polymer or silica, Really some decrease last year.
Here, we see really an improved environment since late Q3. And of course, they are set for Strong growth in this year, so there is a very clear upside potential for Smart Materials in 2021. I think they can also So really go to pre crisis level. So that I think is, from the momentum here, a very In 2020, due to the oil price drop, lower volumes and spreads. Now with higher oil prices, of course, this helps them, and they are also very That is also something which can or which will influence the overall level and can bring us to the upper End of the range, so that is really the upper end of the range.
It also would be fueled also by businesses that benefit From economic upswing, so are a little bit more Volatile, yes, now in a positive sense. So this is what we see for 1, I hope I have given you some color how the positioning can be in the range.
I'll take the next question. It is about the mRNA. For me, for us, mRNA is something like a revolution, a revolution in the pharmaceutical industry. And that translates in Business terms into tremendous growth options and opportunities. And we do have a very strong position in this value Jane, with our for example, with our lipid nanoparticle technology, I would Say, this mRNA technology can't work, can't heal, Without our lipid nanoparticle technology because we are something like the ferryman or maybe more Business wise formulated, we are producing the excipients for this vaccine.
So having said this, we do See, the sales potential of clear triple digit €1,000,000 in the midterm. And so it Won't be any kind of surprise to you that having said this, we have re extended our Strategic partnership with BioNTech, for example, and we have started to extend and expand our health care facilities down here in Germany. For this year, we do expect an attractive Growth, but already not or maybe we will not yet be able to reach This triple digit level, but there is a very attractive opportunity for us, and we are keen on Making use of it by extending our position by deepening the partnerships, for example, with BioNTech. And here it is a promising situation for us. The next question was and for sure, That is what will be true, what holds true at any time and for any time.
What is a good talk? What is a good talk could it be a good talk a good conference call not talking about the methionine expectations? So I really appreciate this question. What do we see in Methionine? The sentiment, The market sentiment has changed, started in the last weeks of last year From a somewhat long market towards a higher supply security approach of our customers, so from long to becoming more short.
This momentum, Let's call it positive momentum, has extended into the first Weekly months of this year. So bringing it straight to the point, for 2021, We do really expect another solid and successful year for methionine. This Positive momentum, I have tried to describe and to provide you with, that is what we do see for Sure. For the first half of this year, with good demand and a gradually, gradually increasing Global contract price. Why do I underpin contract price?
It is worth to mention. It is worth to mention, ladies and gentlemen, That if I look to Feedinfo and they provide you with information that the volatility is high, That holds true for spot prices. And no doubt, that is right. But in here, we talked about a range of €0.70 But it is totally wrong talking about global contract prices. Here, we do talk about a range of, give or take, roughly around $0.30 So in other words, here we talk Half of the spot price range.
So I guess this was your methionine question. Thanks a lot for your
Brilliant. Thanks a lot guys.
The next question received is from Gunther Seysmann of Bernstein. Your line is now open. Please go ahead.
Hi, good morning good afternoon rather, Christian Hutt and Tim. On your cash flow guidance, at the midpoint of your earnings outlook, that implies a further 10% increase Year over year, which sounds impressive, especially if I assume the reacceleration in volume growth as well as the rising raw material costs that you guide for. Can you talk about what you assume for working capital this year? I think, Ute, you mentioned Earlier, 16% of sales being a good number to look at. And if there are any other drivers other than the CapEx that you've already guided for, please?
Yes, absolutely. What are the main moving parts for Of course, we will continue with our TRIC, sorry, networking capital Management, higher sales, of course, on one hand side and higher raw material prices Some challenges here. So if you look at our cash flow statement the last years, we had a positive contribution contribution from working capital, I think that will not be the case this year. So it will be a slight outflow. But also on the other side, higher raw material prices bring Higher payables and that helped on the other side a little bit as well.
CapEx will be lower year on year. So we said around 900,000,000 Maybe even a little bit below that, we'll see. But that gives another €50,000,000 And we have introduced Prepayments to really support our CapEx, that is something you do Not seen in the CapEx line that is in other assets. So there you see it is included. The CTA reimbursement will keep the cash pension cap out pension cash out low, of course.
We also had some contributions in the last within some local schemes like the U. S. Or UK, so that will not reappear. Cash taxes, they are maybe a little bit higher bonus payments on similar low levels, so 2020, so from that point of view, I think with higher EBITDA, so then that should help the cash free cash flow and the Conversion rate, I think if you put this together, you will also come to that conclusion.
Thank you, Jen. Can I just follow-up on the cash in from the customer finance investments? You mentioned $50,000,000 in the press release. Can you describe in a bit more detail what's behind that? It seems new to me.
And what's your outlook for that number as well, please?
It's not really new. We started with that in Healthcare Some years ago, where we really had quite high investments for longer term supply contract, And then we were able to negotiate with our customer to say, well, give us some upfront payment To make it better and workable for us. We also applied that principle in our PA-twelve This is really a big project, a lot of CapEx for us. And of course, there are some customers that we Also sell intermediates too, so that there is where we also applied that. I think it's hard to project a number going forward because It depends really on the nature of the project.
So as we are still above our €850,000,000 normalized level, I think it's very necessary to have those, prepayments or participations. Once We are in a more normal state that might be lower. So from that point of view, I think let's focus on the net number,
The next question we received is from Matthew Yates of Bank of America. Your line is now open. Please go ahead.
Hey, good afternoon, Evon. A few hopefully short simple questions. Firstly, on Smart Materials, How are you factoring in any startup costs for the big PA12 plant in the second half Is that something we need to be conscious of for margins in the back half? The second question really just across the group. Obviously, there's a lot of raw material inflation at the moment.
Are there any particular business areas where you have to work quite hard to pass that through? And in particular, I'd be curious to get an update about how the profitability of Baby Care is evolving. And then if I can ask a third one around Cash flow. The pension deficit is now close to where it was prior to the old top up payments. Does that mean at some point we have to think about putting new top up payments into the pension to keep the deficit under control?
Thanks.
So I hope we wrote all the questions down here. So if we forget something, please give us a hint. Maybe I start with the pensions. The pension deficit is Balance sheet representation numbers. So that is really an an actual value of cash out in a very, very far future.
So from that point of view, of course, if interest rates That goes up. That is in the balance sheet. It is a liability for us, but it does not influence payments in the near Yes. So the payments stay the same regardless what the pension discount rate is. From that point of view, Our reimbursement works fully fine because those cash flows are known for a long, long time.
To have further voluntary funding, I think that is also one part of your question. I think at This time would not be very efficient for us as, of course, the interest rates are so low. We try to really mirror in our Asset Management Strategy, the liability profile of our pension liabilities, we are around twothree, Which is a good funding ratio. So and we are really very well set for the reimbursement scheme. So Nothing has really changed there.
So from that point of view, I think we are in a good position and can keep it like this. Then you asked For the start up costs, the A12, they are, of course, already in our guidance. And they have already started Last year because we had to inform people. We have already parts of the overall facility are already finished and are running. So there are some part Yes, raw material prices were down last year quite dramatically.
But in our case, it was mainly driven by The raw materials that are used in Performance Materials, so everything which is oil and oil derivatives In Specialty Additives and Smart Materials, the raw materials only decreased by a couple of percent. So from that point of view, I think it's really a For 'twenty one, we expect a rebound in raw material prices, and we have incorporated something between 10% 15% here on group level. However, that will all mainly materialize and performance materials where we have, of To our guidance from raw material prices or even further, we have incorporated that, and we see in Many markets that prices pick up. So that even if there should be some smaller price increases, We are ready to cope with them and we'll even compensate them.
Thanks, Italia. The only one sorry, I know The only one we didn't touch on was the Baby Care performance at the moment.
Yes. I think Baby Care is in a difficult market environment, so the market is still oversupplied. So from that of view, I would say stable on relatively low levels.
Thanks very much.
The next question is from Andreas Heine of Stifel Europe. Your line is now open. Please go ahead.
I received my first two questions. The first is the pension outflows you have. They were pretty low in 2020. Can you elaborate whether they can sustainably that low? I think they were only $14,000,000 $15,000,000 the year before, slight Yes, dollars 60,000,000 to $70,000,000 Is that the range we should look for the coming years or something special here?
And looking on your order book, can you give already a flavor how you expect the start in the Q2? So we learned Q1 was very strong. Do you have already any flavor from your order book and how this will
Continue. Okay, Andreas. Thanks for the question. So the pension payout will stay on low levels. That was exactly what we were targeting with the change of the strategy in our Pension payout scheme, so the reimbursement is designed for many, many And as I said, even with the low interest rate, that it's all very robust and stable.
So yes, it will stay on And now it's a question on the Q2.
Hi, Andreas. I appreciate your question, but it is not my intention to skip the conference For the Q2, we do appreciate inviting you and having you on the Press conference and the analyst conference for the Q1. Having said this, yes, start of the year is a pretty good one, and we do see good, for example, ongoing good momentum from the The cosmetics industry, the demand for specialty additives, think about coatings, think about our consumer goods It's really good. And we do see and we do have a very strong push here in these areas in these business areas In China and from China and also our lubricant additives, they suffered a little bit in the last year from the market environment. They do have a pretty nice recovery, pretty nice recovery, Active Oxygen, think about active oxygens and our specialty applications here in this area, They continue to grow.
They continue to grow. And I dare say, they're really blossoming up here. So it's great to see. High performance polymers, high performance polymers, they are already back to the 3 crisis level. Level, think about 3 d printing, think about the ongoing recovery in the automotive area.
So here we are Good on track, pretty good on track, I'd say. Silica, silica, if you think about silica, You have to think about the situation that they are already as of today Above prior year's level, pretty nice, bolstered by the strong growth in China. And so having said this, these trends we do see, we do like, or you enjoy, Might be. In the Q1, these trends we could observe and that is what I could provide you with, these trends are Going to continue into the Q2. I hope you are a little bit satisfied About the quality of the answer.
Yes, helpful. Thank you.
The next one is from Sebastian Bray of Berenberg, your line is now open. Please go ahead.
Good afternoon and thank you for taking my questions. Maury, I would have 2, please. The first one is on the margin within Nutrition and Care. I think Evonik has in the past It's been on the record as saying that it makes an over 20% EBITDA margin within methionine, within animal nutrition. I'm just wondering, is this the case?
And if that is so, is Health and Care EBITDA somewhere in the mid teens at the moment? The reason I ask this is because it's quite clear that the company is doing fairly sophisticated chemistry in health and care. And I'm wondering why the margin isn't higher. Is it just that you're being generous to your customers? Is there a prepayment You take into account here in the Healthcare business, to what extent could this change?
My second question is on CapEx. What are the big growth projects at Evonik post polyamide facility? And related to that, could we have an update on Veramaris? Am I right in saying that there are about €60,000,000 to €70,000,000 of annualized sales from this project? Thank you.
I'll start with the margin question on the If you look at Healthcare, it's a very diverse portfolio. We have, on one hand, our For pharma polymers, which is really a very specific drug delivery product, and we talked about the nanotechnology, which of course is even more sophisticated. And on the other hand, we have more like exclusive synthesis So this is really active ingredients on one side and base products on the other side. We are Product, but there is still some portion more in the base product space. So from that point of view, then The overall margin is not so high as you would expect it if you were only producing active ingredients.
But very Did some technology acquisitions in the last years exactly in those fields of active ingredients and drug delivery.
Okay. And I take the Veromaris one. The JV, we do have with DSM is a pretty good and fruitful one. That is for sure and before and worth to mention. Talking about the specific project, it is that sales and utilization is, as of today, Further ramping up.
And we do expect 100 and €50,000,000 as mentioned to €200,000,000 sales from this JV facility with an above average margin. That is for Sure. And that is what is also true for today and in the perspective. You know, those biotech processes, they do not ramp up very linear. That means in other words, you have to consider to this, but nevertheless, everything is here well on track.
We've In the meanwhile, to become more diversified here in this business. So we have adjusted our focus and building up presence, for example, The pet food area and expanding our footprint into, for example, warm water efficient shrimp areas, and that is what is developing pretty Nice. Let's keep it like this. But you have to be aware. You have to be aware of the fact that Because of the COVID-nineteen and the impact COVID-nineteen has, for example, for hotels, restaurants, Catering businesses, the major selling markets is here also touched Have also been touched by this in the last year.
So for 2021, for this Here message 1 is we'll further increase our sales, and that is definitely in line with increasing capacity utilization. And message 2 is that we are confident and convinced that this business is an attractive one and that we're Overcoming the pandemic that we will see here very attractive margins
Did we miss out a question Sebastian? Was there a third one or was there
a Nadeer, I Perhaps it is I'm outstaying my welcome, but I had a question on if there are any substantial growth projects of note, As in of €100,000,000 plus scale post the completion of the polyamide Facility on the CapEx side.
Yes. I think on CapEx, we invested well into growth in the last year. So I think it's Also time to make use of the new capacities. Also, the setback of the pandemic now gives a new view A different view on our capacities. I think one work stream is to really use existing capacities important task that is now carried out.
If we look at what might come in new products, I think we talked a About our biospectants, that will not be a €100,000,000 project, so maybe it's not the size that you have in mind. But of In sustainability, it's very well received by the customer. So I think that is definitely a growth project, which is more or less In front of our doors.
Thank you for taking my questions and congratulations on the results.
And the last question for today is from Sebastian Zett of Barclays Capital. Your line is
Yes. Thanks very much and good afternoon, everyone. Three quick ones, please. First one is just coming back to methionine again. Just wondering what effect do you think the import duties in the U.
S. Will have on your prices and then potentially the competitive intensity in other regions? And second one, quickly coming back to your guidance in Specialty Additives. We don't expect any growth Even though volumes were down quite a lot, particularly in the second and third quarters, so you should have relatively easy comparables. That's really only due to cross linkers.
And if it's only cross linkers, is that just the China renewable energy demand that you've pointed towards, are there also some issues on the supply side and potentially raw materials? And just lastly, could you give us some quick update on the Baby Care disposal,
Yes. I'll start with the second question, guidance on Specialty Additives. You really have to see that Specialty Additives had a very good year in 2019 and in 2020 as Relative to the background. So from that point of view, I think it is also not very realistic to see that they will Produced a very strong growth from that very strong basis. So what we See, really in Prostlinger, there are 2 things.
One is that the subsidy schemes in China Our wind parks are a little bit adjusted, a little bit changed. And in last year, there was A very tight market situation in Asia as we were more or less one of the very few who could deliver. Now we will have Wanhua We're entering the market so that this supply demand situation will normalize further, and that However, of course, we see a fair chance for slightly higher earnings for the division, but I have to admit, they were already last year little bit affected from the COVID crisis in Q1. They were a little bit early movers in our portfolio. So this is more Let's what we can say to that.
I'll take the second one. It was about Baby Care. Doing M and A means it's all about timing. And having said so, It is first to say that the market growth in this business area is definitely Intact, we do see year on year market growth about, give or take, 4%. And what we do see too is that The recent expansions in this area have been very limited.
So the We do expect having said this, we do expect only very limited capacity expansions until 20 and 2022. 1st. 2nd is, yes, our work streams are pretty well on track, And so it is that we stick definitely to our time line. And that means, in other words, that The operation, as we do have announced it, will be finalized, as mentioned, mid of this year. And thereafter and it is prudent thereafter to evaluate any and Any kind of options and all options, like, for example, selling or, for example, finding a partnership for this business, That is what we will see if we come to this bridge, if we come to this point.
And then there was a third question. I guess it was about methionine and it was about the The dumping investigations, the American authorities have started. What does it mean for Let's keep it like this. First of all, it is to say that those companies We do have sites and plans in every growth region all over the world like Evonik. We do have one in the United States of America, we do have one in Europe and we do have one in Asia.
They are, from this geo A strategic point of view in a preferred position. And that is for Evonik now paying off because we are in the American market and therefore We're not touched by these anti dumping investigation So for us and for our market position in the U. S, it is To be very honest, it is helpful. And if you look to our Cost leading world scale side we do have in mobile, we are confident. We are confident that We could in future expand and extend our cost position and therefore our market position in the U.
S. So far. Thanks very much.
Ladies and gentlemen, we will now close the Q and A session, and I hand back to Mr. Kullmann. Yes.
Ladies and gentlemen, it was a pleasure having had you, for Ute, for me and for the Investor Relations team. That is thanks a lot for your attention today. And there's One thing we do wish you from the bottom of our heart, and that is stay healthy and take care. And having said this, goodbye.
Ladies and gentlemen, thank you for your attendance. This call has been concluded. You may disconnect.