Ladies and gentlemen,
as Chairman of the Supervisory Board, are here with open this year's annual shareholder meeting of Evonik Industries AG and take the chairperson to Section 19 of the Article Association of this company. On behalf of the members of the supervisory board and the executive board, I would like to welcome our shareholders the shareholder representatives and the ladies and gentlemen of the press as well as our guests. Unfortunately, you, our shareholders and shareholder representatives cannot be here. With us on-site in Essent due to the COVID-nineteen pandemic due to this very special circumstances, the executive board with the approval of the supervisory board decided that the ASM be held in accordance with the regulations of the German act. On measures to combat the effect of the COVID-nineteen pandemic as virtual ASM.
I would
like to ask for your understanding for this measure, which in line with the stipulations of the authorities have been taken to protect the health and safety of you and all participants of this and your shareholders meeting? Thank you very much for following this audio and video transmission. My greetings also go to notary public to Bighemann, who is taking the minutes of today's annual shareholders meeting. Doctor. Bighemann is seated in the row behind me
is the
2 year, right?
On the flower, dietary impact.
I believe you can see him well in picture. The members of the executive board are here in 4. According to the German Exxon measures to combat the effects of the COVID-nineteen pandemic, it is possible for the Supervisory Board members. To not directly be present at the venue of the ASM, but participate just like you, shareholders and shareholder representatives by the audio and video live stream. We've made use of this to minimize the risks for all participants.
All other supervisory board members apart from Peter Spuller who cannot be here today due to a conflicting schedules are following the ASM via the audio and video transmission? The proxy holders of the companies are here in person. Ladies and gentlemen, let me take you through the formalities I've ascertained that this ASM was duly called and fulfilled or related publication and reporting obligation Records relating to the publication of the convening on July 16, 2020, in the German federal Gazette with Notary Public Doctor. Biegeman and will be attached to the minutes. There are no requests for an addition to the agenda to be announced and no counter motions or election proposals to be published.
This virtual ASM is broadcast for all shareholders and shareholder representatives in full and life via the online service. The first part of this and your hold this meeting up to the end of the report of Mr. Coleman on the financial statement and the consolidated management report will be broadcast live on the internet. And will be available for download later. And I would like to ask you to refrain from making audio and video recordings of this ASM too.
Please be aware that there are further proceedings of this ASM, particularly including Q And A were not to be broadcast or publicly available on the internet? I would like to remind all shareholders and shareholder representative who are following this AS on the internet
to log
into the online service. To be able to follow Ladies and gentlemen, all important disclosures and notes on the further proceedings, including the voting options and the option to object against resolutions of this virtual ASM can be found in the convening page of the company and in the online service. If you have cast your vote prior to this virtual ASM yourself, or via proxy by postal vote in the traditional way or via the online service for issued a proxy and instructions for the proxy holders and intermediary for a shareholders association. You don't have to do anything extensions electronically by postal vote by the password protected online service during this virtual ASM up to the official closing of the voting by me as a chair at the latest. To do so, please enter your votes in the online form of the online service and submit them electronically.
If you want to exercise the voting rights of several shareholder numbers, please make sure to log into the online service for each shareholder numbers and exercise the voting rights for each separate The same goes for those who during this ASM want to issue or change proxy and instructions to the proxy holders of the company and intermediary or a shareholders association. The shareholder representative of this company, the shareholders of this company will exercise your voting rights only insofar as they've been within given clear instruction. It's only possible to give instructions on the resolutions proposed by management and made public by the company prior to this ASM. The proxy holders do not take instructions on other shareholder rights including asking questions or filing motions. In due time before the closing of the voting, I will once again inform you about the possibility of sizing your voting rights.
However, I would like to ask you to make good use of the option available if need be in good time. Since the live stream might be subject to time length of spite or precautions. To the end of the ASM, you can also declare your objection against the resolution of this ASM by the online service. To be taken to the minute if you have exercised your right to vote or exercising your right to vote? Let me point out again to make use of this option in good time if need be as the live stream might be subject to time lag.
We're now proceeding with the agenda item 1 of the agenda. Submission to the ASM person to 170 6 Paragraph 1 sentence 1 of the Stock Corporation Act. Those are the adopted annual financial statement of Evonik in REIT AG at December 31, 2019. The approved consolidated annual financial statement at that December 31, 2019. This summarized management and consolidated management report of Evonik Group and Evonik Industries AG including the explanatory report of the Executive Board on disclosures person to section 289A paragraph 1 and 315A paragraph 1 of the German commercial code.
The report of the Supervisory Board of Evonik Industries AG and the proposal of the Executive Board of Evonik Industries AG on the allocation of the net profit. The consolidated annual financial statement with the unqualified audit opinion by the auditor is published in the financial report 2019 from page 97. The summarized management report from page 11 and the report of the supervisory board from page 67. All of our mentioned documents have been available since the convening of this AGM on the Internet page of Evonik Industry AG and are available in the offices of the company for inspection. The supervisory board examined the annual financial statement in the summarized management report of Evonik Industries AG and the group.
And the consolidated annual financial statement and approved it in its meeting on March 3, 2020 as a result the annual financial statements were adopted. In the same meeting, the supervisory board examined the original proposal of the 2nd board on the allocation of the net profits and approved it. In the same meeting, the supervisory board reviewed the Executive Board's report on the relations with the affiliated companies in fiscal 2019. Which were audited and given the unqualified audit opinion by the auditor. The supervisory board have no objections to the report and the results of the audit by the auditor.
As previously mentioned, the report of the supervisory board can be found in the financial report from page 67. Since the activities of the bodies are described there in detail, I would only like to say the following: The Office Group Board in the past fiscal year performed all its task in line with the law and the articles of association with great diligence. It continuously and conscientiously supervised the executive board and advised and support that did the executive board in managing and strategically developing the company. The executive board always immediately informed the supervisory board about essential matters of the company, a supervisory board chair. I was regularly informed in between meetings by the executive board and I was in continuous dialogue with the Executive Board Chairman.
An essential part of the activities of the Supervisory Board are performed in the committees of the supervisory board. These bodies hold intense subject related discussions with the executive board. They decide on subject matters relating to their responsibilities and prepare decisions for the Supervisory Board the chairs of the committee's report about the work of the committees to the overall supervisory board. To guarantee close collaboration and an adequate flow of information. The supervisory board, together with the executive board issued a corporate governance report, the report, which you can find in the financial report from page 74.
Corporate governance of Evonik Industries AG, which the Executive Board and the Supervisory Board plays, huge importance on described in detail.
Appointing the Turkish guidance also.
In the past fiscal year, the activities of the Supervisory Board and its committees focused on the business the status quo and the development of the company, including company plan, in particular, on the strategic further development of Evonik. The supervisory board focused, in particular, on the divestment of the Methacrylates business and dealt in detail with the merger control clearance in connection with the acquisition of PeroxyChem, a global producer of hydrogen peroxide and parasitic acid? On the agenda also, the call for tender for an auditor from 2021, which the audit committee intensely worked on. In the past fiscal year, we also had personnel changes on the supervisory board. Mr.
Michelle Hoffman left the supervisory board as at April 30, 2019, and Ms. Carmen Fuchs, as at December 11, 2019 from the employee side of the supervisory board. I would like to thank Mr. Hoffman and Ms. Folks for the trustworthy and collegial collaboration and wish both all the best for the future.
And continued success.
Let's now follow the
name from here.
Hoffman is from Mr Hoffman is exceeded by Ms. Vaish? Effective May 13, 2019. And Ms. Fox is succeeded by Mr.
Hussain and Musawi effective December 11, 2019. Both were appointed by order of BS And Local Court, person to section 1 on 4, Stock Corporation Act as a member of the supervisory board. This fiscal year, too, we have personnel changes on the employee side of the supervisory board. Ms. Edith Harte Glenset is resigning her seat on the supervisory board with the end of today's annual shareholder meeting as successor and you as a local court appointed Birgit Biman effective September 1, 2020, pursuant to Section 104 of the Stock Corporation Act, as a member to the Supervisory Board.
With the resignation of Ms. Itt Harte Glencer, the Supervisory Board elected Carvin Earhard effective September 1, 2020 for the rest of this ASM rest of this term of the supervisory board to fill the position of Deputy Chair? Ms. Glen, sir. I believe you can see me by the live stream.
You have been part the supervisory board of Evonix since May 2016. As Deputy Chair of this body, you have been a member of the Executive Committee and the Mediation Committee? You have also held responsibility on the Finance And Investment Committee. Your name stands for Active Social Partnership. You vouch for it successfully, be it as works council member, Deputy Chair of the IGB the trade union or as deputy chair of the supervisory board of Evonik.
You're one of those people who persistently and consistently work to find solutions, to find compromises that in the interest of the employee and the company. This is not always easy, but it benefits both sides. You have a major part in shaping the strategic further development of Evonik as shown by many important investment projects. Evonik is the strong, creative and profitable company that it is today, also thanks to your valuable contributions. Once again, thank you very much for your outstanding and trustworthy collaboration, Ms.
Grenzer and all the best. Ladies and gentlemen, Ms. Raiish presented herself at last year's ASM as new member to the supervisory board in person. Under these changed circumstances of a virtual ASM, we would like to keep up this tradition that newly appointed and elected members of the supervisory board present themselves in person. So shortly before this ASM, we made video messages by Mr.
El Musawi and Ms. Biaman. We will now see them both. I'm delighted to be here today. The new member to the Supervisory Board of Evonik Industries AG on the employee side.
My name is Jose Elmo Salvia. I'm fifty three years old. I'm married and have 2 children. In 1985, I started my apprenticeship as a former Decus Air AG as shop mechanic in Hano, which I completed successfully in 1988. From 1988 to 2005, I worked for the technical service in Hano.
In 1990, I was elected on the Moerks Council. In 2005, I was released from my normal duties to serve on the Works Council. And in 2015, I was elected deputy chair in the Work cancel Hannah Worifka. In 2017, I became a member of the overall works council where I served have been serving as a deputy chair since 2019. I'm delighted to be able to use my professional experience and look forward to constructive collaboration on the supervisory board.
Thank you very much for giving me the opportunity to company Evonik on its path into a good new future. Shareholder. Ladies and gentlemen. I'm delighted to be here today as new employee representative on the Supervisory Board of Evonik Industries AG. My name is Birgit Biederman.
Since 2017, I've been the Tektra District Manager of Dartmouth Target District of IGBTE Trade Union. Before that, I read law at Huya University Bohm. In 2004, I joined the German trade union configuration and legal protection to advocate the member's interest in labor and social law in different sites and regions. In 2006, I joined IGBTE. In 2013, I became the Deputy District manager of Geising Kitchen District, where I supported the overall work counselor of Evonik Industries AG And As Encompass Works Council.
And since 2015, to mid-twenty 20. I was a member of the supervisory Board of Technology And Infrastructure. As you can see, I know Evonik, have a passion for Evonik, and I'm looking forward to the challenge, to the task, to cooperative talks on the supervisory board. I, not only bring in my professional commitment, but also a personal commitment and look forward to good cooperation.
Yes.
So far on the presentation of the news that the advisory board members passion for Evonik. We like to hear that a lot. We look forward to good corporations. So in the invitation to today's ASH you will find item 78, the remuneration system of the executive board and the supervisory board that we put forward for approval.
Statements EBITDA.
Allow me to explain the following on the remuneration system of the executive board first. The remuneration system of the executive board is designed to ensure that the members of the Executive Board receive appropriate remuneration for their tasks and responsibilities and to take direct account of the performance of each executive board member and the success remuneration is regularly reviewed by the supervisory board, which is uses a remuneration service from independent consultants if need to be. In the framework of this review, the remuneration structure and the amount of the executive remuneration are examined particularly in comparison to the external market and to the remuneration of other positions in the company. The overall remuneration of the members of the executive board comprise a fixed monthly base salary, a variable short term component, comprising an annual bonus? A long term component and the customer fringe benefits.
The variable short term component in form of a performance related annual bonus depends on the attainment of business targets measured indicators, the bonus factor and the attainment of qualitative personal objectives, the performance factor. The level of the bonus factor depends on the level of achievement of the agreed business targets. And may vary between 0% 200%. The performance factor rewards the attainment of the personal objectives and may vary between 81 The business targets that apply to all executive board members equally as the basis for the bonus factor and the individual targets for each executive board member as the basis for the performance sector are agreed annually in writing between the supervisory board and the executive board member. The level of attainment is finally determined by the supervisory board.
The long term, rather remuneration, the long term incentive or LCI is generally based on a sustained rise in the value of the company. Since 2013, the performance has been measured by the absolute performance of Evonik's share price. And its performance relative to the MSCI World Chemicals Index. In addition, all members of the executive board have a company pension plan. The standard pension plan is a defined contribution system.
This is a capital based system funded by provisions. The company credits a fixed annual amount of 15% of the target remuneration that is a fixed annual salary ended the target bonus to the pension account. Let me now proceed with the remuneration system of the supervisory board. It takes account of the responsibilities and the scope of the activities of the supervisory board members. And in addition to the reimbursement of bences and the value added tax payable on their remuneration, the supervisory board members receive annual payment.
The remuneration does not include a variable remuneration component. For each meeting of the supervisory board and its committees that the supervisory board members attend they receive daily allowance. For further information on the remuneration systems, please see the details from pages 21 following in the invitation to today's and your shareholders meeting. Ladies and gentlemen, due to the minimum quota Evonik Industries AG is required by law to have a minimum of 30% men and 30% women on the supervisory board. In current composition of the supervisory board and taking into account the changes on the supervisory board with the resignation of Ms.
Glenset as of today. The Bionic Industry is complying the legal requirements. You can find further information on the minimum quota in the corporate governance report on page 81 of the financial report. Ladies and gentlemen, I would now like to ask the Chair of the Executive Board, Mr. Christian Coleman, to report on the presented and your financial statement and the management report of the company and the group on behalf of the Executive Board.
Good morning, ladies and gentlemen. Shareholders? Dear guest. Together with my colleagues on the executive board, I would like to welcome you all first warmly to this year's annual shareholders meeting in an unusual format. Exceptional circumstances require us to take exceptional measures.
The coronavirus pandemic, which we have all been battling with since the start of this year, has not simply had an impact on how we work together at Evonic. It is also affecting how we hold today's shareholders meeting. This is why I'm speaking to you today via a camera and, unfortunately, not as usual in person. We did not make this decision lightly. Our clear preference for to hold our shareholders' meeting in the normal manner in the established format.
That was the reason why we had decided early on to postpone it until this late date at the end of August. Eventually, however, we had to accept that even now it is not possible to hold a large event such as the shareholders' meeting. During the crisis, Health is top priority for us, especially, of course, the health of our employees and naturally also the health of our shareholders. However, we did not want to wait until now for the payment of the dividend. At the beginning of June, we therefore made use of possibility of making advance payment of per share out of the distributable profit for 2019.
Your rights as shareholders and our dialogue with you are very important to us, even in this very special format. We will do our best to answer your questions, albeit remotely in a virtual format. I can also see a number of advantages in using this virtual format for For example, online transmission opens the meeting up to a wider group of participants, not everyone, is able to attend annual shareholders meetings in person for all the shares they hold.
Out and bleak in the 2Q.
Consequently, we are also looking ahead to the future
via Bandi and Vikram on Charlene.
We will keep an eye on developments and the opportunities offered by the digital world. And take part in the debate on whether the previous format for shareholders meetings can be moved future without infringing any of your rights as Now let us turn our attention to the present, to the here and now. In particular, our employees deserve our praise and our special We are proud, proud of our team and how we jointly have mastered this crisis to date. Evonik is a strong team That is especially evident in these difficult times. Allow me to use the next few minutes to outline this in somewhat greater detail.
I would like to start by looking at how we at Evonik are successfully dealing with the coronavirus. The health of our employees has top priority at all times. Our sites have very high standards of hygiene and our extensive pandemic plan and enabled us to put protective measures in place quickly.
And on to Neil's
White's team? Since March, a company wide team has been deployed 1st and foremost to secure our ability to deliver to our customers and at the same time to coordinate our response to the reduction in demand. We are monitoring our supply chains very closely so we can take timely action to counter raw material and supplier bottlenecks user Einsat? As a result, we have constantly ensured our ability to deliver at all times in the past months. Of course, we are also aware of our social responsibility in this period of crisis have early on, we noticed increased demand for disinfectants, especially ready to use hand sanitizes and surface disinfectants.
We took timely action and and stepped up production capacity at many sites in Germany. That enabled us to support and supply institutions such as hospitals, Care Homes and the fire services close to our sites. Together with our customers, we made donations of our high performance polymer PA 12 for the production of with the Federal Ministry of Health, we initiated and participated in an emergency disinfectant platform operated by the German Chemical Industry ASSociation VCI. In the present situation, it is particularly important to work in partnership with other companies on such relief measures in order to ensure rapid and successful crisis management with a clear message, ladies and gentlemen, and dear shareholders. Which is the chemical industry is helping.
Ladies and gentlemen, the strategy that we have pursued systematically over the past 20 months is now paying off, especially in the present crisis. Thank not least to our steady portfolio transformation, our company has become more robust, and that is visible in our figures We sold the cyclical methacrylates business. At the same proven. The divestment of the methacrylates business that has proven to be very good timing. Because active oxygen are used as a disinfectant and there is particularly high demand for disinfectants in the present crisis.
And just last week, we made another acquisition in order to further strengthened the quality of our portfolio. For $210,000,000, we will acquire the U. S. Company, Porcel, which is active in the catalyst business. Porcel as
among other things,
a technology for the highly efficient reach of a nation and recycling of used catalysts. CO2 emissions can be reduced by more than 50% compared to the production of new catalysts with this technology. This is a good example. A good example of the fact that sustainability is playing an increasingly important role in our company and in our investment decisions forest sales global positions strengthens the worldwide presence of Evonix catalyst activities. In 2019, the company generated sales of approximately US100 million dollars with an attractive EBITDA margin of around 23%.
The complementary fit to Evonix's existing catalyst portfolio and especially the available production capacities of Porcel offer considerable growth opportunities to Evonik. This acquisition is therefore the next logical, consistent step in the strategic development of our portfolio. Another step in this direction Another step along these lines is our new divisional structure, which we announced in March of this year. This was introduced as planned on July 1, despite the challenging situation. Damage.
Personally, we are only concerned with this. We have aligned our corporate structure to the growth engines defined 2 years ago. Our previous chemical operating segments have now been transferred to 4 divisions, which are well balanced they are actually more balanced in size and type of business and are easier to manage because of their clear strategic roles. Shared end markets and clear alignment of technology platforms. The 4 divisions, specialty add Nutritional Care, Smart Materials And Performance Materials have a lean and efficient set up.
Also with regard to costs, ladies and gentlemen, we've made good progress with our SG and A program to reduce selling and administrative expenses. In 2019, implementation was actually 1,000,000 ahead of schedule. This cost discipline is currently helping us to stabilize earnings
Manita, I'm going to have it.
Ladies and gentlemen, although it feels a very long time ago, Let us take a
right? And that's why.
In the second half of twenty nineteen, we already noticed a considerable deterioration in the economic environment. Our promise to you, our shareholders, to hold earnings stable at 1,000,000,000 despite this did not make things easier. However, we
are in a fruit sighting and a concern.
Thanks to our timely and systematic response with costs we were ultimately able to deliver on our guidance. In addition, we improved our margins slightly to 16.4%, which actually is quite an achievement in such an environment In particular, the tougher conditions showed the increased resilience of our portfolio. Nutrition And Care Segments Consumer Driven Businesses serving the Pharmaceuticals And Cosmetics Industry and most businesses in the Resource Efficiency segment showed a stable and reliable development that says quite a lot about the specialty nature of our products. And ladies and gentlemen, dear shareholders. This is what we intend to build on in 2020.
This enabled us to report adjusted net income of just over 1,000,000. Giving adjusted earnings per share of on an unadjusted basis. In other words, including the proceeds from the divestment of the methacrylates business, net income was well over billion. To your shareholders based on the earnings in 2019, the executive board the supervisory board are once again proposing a total dividend of per share including the advance payment, which has already been made. The reliability of our dividend not least in difficult times is one of our top priorities with a dividend yield of over 4 percent.
This is further confirmation that Evonik is a very attractive dividend paying stock. Let us focus attention on the present fiscal year. Here too, we set ourselves the goal Excuse me. Here at Grukah Hollow, the Congress Center is better. Here, it's a little dry.
So please bear with me for this short interruption. Here too, when I look at the present fiscal year, we set ourselves the goal of doing our best to overcome the challenging environment. However, due to the effects of the coronavirus crisis, which even we have not been able to avoid, we had to revise our original guidance for adjusted EBITDA of between 2 1,000,002,300,000,000 in May. Despite the considerable uncertainty and very low visibility. It was important to us to show you possible scenarios for the crisis and give you the most detailed possible guidance.
We did this in May setting a target range of between 1.7 and 1,000,000,000. As of now, I can fully confirm this outlook
Ophthalmic cycle.
This again shows that we are clearly benefiting from the steps taken to implement our strategy. The improved quality and stability of our portfolio gives us a more reliable basis for planning even in periods of uncertainty, and that is doubtless in your interest as well. In the 1st 6 months of 2020, sales dropped 8% to 1000000000. Adjusted EBITDA was 1,000,000, a decline of 12% and adjusted earnings per share were 0.73.
On the Vaxdung segment, Nutrition And Care,
our Nutrition And Care And Resource Efficiency Growth Segments were largely stable in the first half of the year. Examples of this include the robust non cyclical business with pharmaceutical active ingredients and personal care products in the Nutrition And Care segment and many of the innovative materials from the Resource Efficiency segment. That enable resource saving solutions. This stable trend should continue in the second half of the By contrast, we noticed weaker demand from the automotive industry. This has affected, for example, our polyurethane films for car seats, silica for the tire industry and our high performance polymers.
We expect to see a slow step by step recovery here in the second half of the year
In the segment performance materials
segment was held back significantly by the sharp drop in the oil price, the situation here will remain
Manita Munhein. Ladies and gentlemen, good morning, sir. Good morning, sir.
2019 was a volatile year, both for Evonik Shares and for the market as a whole. In the first quarter, our shares benefited from the successful divestment of the methacrylates business and the solid first quarter results. As a result of geopolitical uncertainty, the share price proved extremely volatile in the following uncertainty was only overcome in early November when we confirmed our outlook in our third quarter report And this then supported the share price until the end of the year. In December, our shares then rose to a high for the
The dollar to D overall,
that was a gain of around 25% since the beginning of the year.
Like
Evonik. Therefore, slightly underperformed the Emtax, which rose by a good 28%. Since the start of this year, the entire market has been affected massively by the effects of the coronavirus. Evonics shares were not immune to investors' enormous uncertainty. Although our share price is not yet quite back where it was at the start of the year, It has not lost as much ground as shares in many other companies in the European Chemicals industry.
To enable
our employees to share in the increase in Evonix value, we launched a further tranche of our employee share program in Germany the United States, Belgium and Singapore this spring. Worldwide around 10,000 employees acquired shares in Evonik. That was a participation rate of nearly 40%. This year, we purchased altogether 841,030 shares for the employee share program at an average price of EUR18.72 per share, each of which accounts for a proportionate share of of the capital stock. This is equivalent to 0.2 percent of our capital stock of 1,000,000.
We used for this, the authorization of the annual shareholders meeting in 2016 to purchase these shares.
The Vale involved in
acting of all the shares have now been transferred, meanwhile, to the eligible employees and the surplus has been sold on shareholders. I trust that you our esteemed shareholders will continue to support Evonik in the future and would like to thank you on behalf of my colleagues on these for your trust, your interest in our company and your attention. Take care. I wish you good health. I would like to thank you again for your attention.
Stay safe. Thank you. Mr. Coleman, I would like to thank you for your talk and would like to congratulate you and the entire executive board on yet another impressive performance in 2019. I would like to point out that talk of Mr.
Coleman is also available for download on the Internet. Ladies and gentlemen, I would not only like to thank the executive board, but expressly all the employees of our company for their excellent work done in the past fiscal year. And for what they have achieved together. I think that I can safely also do this on behalf of all the shareholders. I would ask the Executive Board to convey these words of gratitude to the employees of the company.
Ladies and gentlemen, the viewers, should be aware, the viewers on the Internet should be aware that at this point, as announced before, the public part of the livestream of this general meeting will end. I would like to thank you very much for your interest and would like to say goodbye to you. The rest of the general meeting can now be followed only by the shareholders of the company and the proxies have joined us through