Ladies and gentlemen, as chairman of the supervisory board, I am chairing this year's annual general meeting of Evonik Industries AG in accordance with Section 19 of our company's articles of association, and I hereby declare the meeting open. On behalf of the other members of the supervisory board and the executive board, I would like to welcome our shareholders, shareholder representatives, members of the press, and our guests. Dear shareholders, dear shareholder representatives. In accordance with Section 18, Clause 6 of Evonik's Articles of Association, this year's annual general meeting is held as a virtual meeting pursuant to Section 118A of the German Stock Corporation Act. I would also like to extend my greetings to our notary public, Dr. Galla, who is sitting to my right, from your perspective, and is keeping the minutes of today's annual general meeting.
With two exceptions, the members of the Executive Board and the Supervisory Board are present here in Essen. Mr. Fuhrmann and Mr. Cedrik Neike are joining us virtually. The company's proxy holders are also present here on site. Ladies and gentlemen, first of all, we come to the formalities. I've checked that the annual general meeting has been duly convened and that all applicable publication and notification requirements have been met. The proof of publication of the notice of meeting on April 16, 2026, in the Federal Gazette is held by Dr. Galla, our notary public, and will be recorded in the notarial minutes. No requests for additions to the agenda, countermotions, or nominations for election requiring disclosure have been received. You are, of course, entitled to exercise your right to speak and your right to information at this annual general meeting.
You may exercise these rights virtually via video and audio through the online service. This means that contributions will be made via video communication. This also applies to the right to information, including the right to ask questions. It is not possible to submit any questions outside of the video communication system. For the past half hour, you have been able to register to speak via the online service. There, you can also specify the topic on which you wish to speak. Please note that you must be logged into the online service using the shareholder number with which you wish to register to speak. As a proxy for a shareholder, you have received your own login details, which you should use to log in and which also enable you to exercise your rights. One more note regarding the technical test of your video and audio connection.
If your video and audio connection is working perfectly, I will call on you and give you the floor. If the video connection ceases to function adequately during your speech, I will bring your contribution to an end. In this event, I would like to ask you already now to resolve the issue and, if you wish, to request the floor again. The information sheet on video communication, which is available on our website, contains valuable tips to ensure that your video connection works optimally during your contribution. If you wish to submit a motion or a nomination, I would ask you to do so via the online service using the video communication system, following the procedure described above and under the conditions set out. You may only submit your motion as part of a speech contribution.
You may also register your motion via the motion and Section 131, Clause 4 of the German Stock Corporation Act function in the online service and specify the subject of your motion. In this way, I can then decide whether, as an exception, you should be given priority or even be allowed to speak after I have closed the list of speakers. All speakers, speeches, and questions must be in German. Should you speak in any other language, I will end your contribution. The debate on all items of the agenda will take place, as usual, in a general debate. In this form of debate, every speaker has the opportunity to speak on all items of the agenda and to ask questions on these items.
A discussion of any procedural motion by shareholders may also take place within the framework of the general debate, unless, in exceptional cases, an earlier discussion is required. To ensure that the annual general meeting proceeds in an orderly and timely manner, I ask all speakers to focus on the items of the agenda and to keep their remarks brief. Should you wish to withdraw your request to speak or your motion, I would like to ask you to make use of the relevant function in the online service. If necessary, I will, in the best interest of all shareholders impose appropriate time limits on speaking and questioning. The annual general meeting will be broadcast live in full via our online service.
The first part of the annual general meeting, up to the end of Mr. Kullmann's report on the annual financial statements and the situation of the company, will also be broadcast live on the internet and will remain available even after the meeting. This annual general meeting will not be recorded by the administration in neither video nor audio format. I would therefore like to draw your attention to the fact that you must log into the online service in order to follow the entire meeting, which also includes the general debate. The executive board is assisted by stenographers in recording questions that have been raised. For this purpose, the stenographers use short audio recordings as a working aid, which they then delete afterwards. I would like to ask you to refrain from making video or audio recordings of the annual general meeting.
Ladies and gentlemen, all important information and instructions regarding further proceedings, including the option for voting in favor of or objecting to resolutions at this virtual annual general meeting, can be found in the invitation to this AGM. If you have already cast your votes in advance of the AGM, or if you use a proxy via postal vote, or have issued a proxy and instructions to the company's voting representatives, an intermediary, or a shareholders association, you need to take no further action. You may still cast, change, or revoke your yes and no votes, as well as abstentions by postal vote electronically via the online service, even during this AGM. Only up to the time limit set by me. I will give timely notice of the end of this period.
For postal voting, you must record these votes in the online service and subsequently submit the votes or your revocation to us electronically. If you wish to exercise voting rights for multiple shareholder numbers, please note that you must log in to the online service for each individual shareholder number and exercise the voting rights for each one separately. Please proceed in the same manner if you wish to grant, amend, or revoke instructions to a proxy, an intermediary, or a shareholders association while the annual general meeting is still in progress. The voting proxies will only exercise voting rights on your behalf if you have issued them with specific instructions. Instructions may only be given regarding management proposals, counter proposals, or nominations. The proxies do not accept instructions regarding the exercise of other shareholder rights, such as asking questions, submitting motions, or raising objections.
I would ask you to make use of the options mentioned in good time if necessary, as delays may occur in the live stream despite all precautions. You may also, until the end of the AGM, use the online service to lodge an objection to AGM resolutions for the record. You may also use the online service to raise complaints in the context of your right to information. If you do not wish to follow the AGM live until the end, please log out of our online service. This allows us to update the attendance figures constantly. We shall now proceed with the agenda. Agenda item one. I shall first call item one of the agenda. Documents submitted to the annual general meeting in accordance with Section 176, Clause one, first sentence of the German Stock Corporation Act.
These are the approved annual financial statements of Evonik Industries AG as of 31st of December 2025, the approved consolidated financial statements as of 31st of December 2025. The combined management report and group management report for the Evonik Group and Evonik Industries AG, including the explanatory report by the Executive Board on the provisions of Sections 289A and 315A 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 regarding the distribution of net profit. All the aforementioned documents have been available on our website since the convening of the annual general meeting.
The Supervisory Board has examined the annual financial statements and the combined management report of Evonik Industries AG and of the group, as well as the consolidated financial statements, and approved them on its meeting on March 3rd, 2026, thereby adopting the annual financial statements. At the same meeting, the Supervisory Board also reviewed the Executive Board's proposal for the appropriation of retained earnings and endorsed it. The Supervisory Board considered the report prepared by the Executive Board on relations with affiliated companies in the 2025 financial year, which the statutory auditor has audited and issued with an unqualified audit opinion. The Supervisory Board raised no objections to the report or the results of the auditor's examination. The Supervisory Board's report provides a detailed account of the board's activities. I shall therefore confine myself to the following observations.
In the past financial year, the Supervisory Board again performed all the duties incumbent upon it under the law and the articles of association with great care. In particular, it monitored the Management Board conscientiously and continuously, and advised it and supported it in the management and strategic development of the company. The Executive Board has always informed us promptly and in detail about all material matters concerning the group. As Chairman of the Supervisory Board, I was also kept informed by the Executive Board in between meetings, and have always maintained an intensive dialogue with the Chief Executive Officer. The Supervisory Board's committees held detailed topic-specific discussions with the Executive Board, resolved factual issues within the scope of the committee's remit, and prepared decisions for the Supervisory Board.
The committee chairs reported regularly to the entire supervisory board on the work of the committees, so that there's always been a close cooperation and an adequate flow of information between the bodies. In the past financial year, the supervisory board and its committees focused in particular on the conduct of business and the company's position and development, including corporate planning. In this context, the supervisory board dealt intensively, amongst other things, with ongoing investment projects in the U.S., the consolidation of infrastructure services in Germany within SYNEQT, the strategic development of the Group, and measures to ensure its competitiveness. The financial year was also characterized by global geopolitical and economic challenges. The supervisory board therefore dealt intensively with their impact on Evonik and measures to counteract them.
In addition, the Supervisory Board dealt with corporate governance issues, in particular, the further development of the remuneration system for the Executive Board. Since the last Annual General Meeting, there have been two changes in the composition of the Supervisory Board on the employee side. Mr. Gerd Schlengermann stepped down from the Supervisory Board by resigning his mandate with effect from 31st of December 2025. He was succeeded by Mr. Frank Münch. In addition, Mr. Martin Albers resigned his mandate with effect from 31st of March 2026, and Ms. Melanie Knappe has taken his place as a replacement member. I would now like to take this opportunity to thank Mr. Schlengermann and Mr. Albers for their commitment and dedication in the best interest of the company and the workforce.
I would like to give Ms. Knappe and Mr. Münch the opportunity to introduce themselves in person today, and I would now like to ask them to come to the lectern. First, you, Ms. Knappe, you have the floor.
Thank you very much, Chairman, Mr. Tönjes, ladies and gentlemen. Very pleased to be here and introduce myself as a new member of the Supervisory Board. My name is Melanie Knappe. I am 47 years old. My birthday is today, and since my graduation from school, I have been trained by Goldschmidt here as a technical lab person. I then worked for coating additives, and as a parallel activity, I've always been working for the Works Council. In 2006, at the age of 26 years, I was elected as a Works Council member at Goldschmidtstrasse to be exempt from regular world. I was in charge of various topics.
I am mother of two sons, 17 and 15 years old, and parallel to my job, I have studied at the University of Hamburg. Since 2018, I've been member of the General Works Council and a member of different cross-company committees. Since 2020, I have been the chairman of the local works council. Since the beginning of my professional career, I've always felt responsible for co-determination. It's very important to show attitude and not simply accept changes, but to co-shape them in the best interest of our workforce. Looking at what unites us, we need to bring together different interests and find viable solutions. Those who assume responsibility and ownership for the workforce should also be present where strategic decisions are made, and that's why I'm here. I want to assume this responsibility as a member of the supervisory board for our entire workforce.
Thank you very much for your attention.
[Non-English content] Dear Mr. Tönjes, ladies, gentlemen, I am pleased to be given the opportunity to introduce myself as a new representative of the employees, as a member of the Supervisory Board of Evonik Industries AG. My name is Frank Münch. I'm 56 years old. I started at Degussa AG in Wesseling in 1986 with a technical training. After retraining to be an industrial manager, I graduated in 2006. In 21 years of career, I've been working in different technical jobs at former Evonik Industries. In 2007, I was exempt from my regular work and was elected into the Works Councils in Wesseling. Between 2010 and 2025, I was the deputy chairman of the Works Council of the jointly operated Wesseling site and a member of the general Works Council in different functions. Since October last year, I chair the Works Council at Wesseling.
I'm fully convinced and full of optimism when it comes to co-determination, because I'm fully convinced that shaping the future together is the strength of our company, especially in times of profound changes, where Evonik finds itself in the midst of a transformation process. To fill the partnership between the social partners with life is important. It means to co-determine, but also to discuss critically, but always in a constructive manner with the common objective to find the best possible solutions for the company and for the workforce. It means that we need to have a trustful dialogue at eye level and share responsibility for the future of Evonik. This is the approach that I would like to contribute to my work here in the supervisory board. I want to co-shape decisions responsibly and represent the interest of the workforce in a reliable way. Thank you for your attention.
Thank you very much, Mrs. Knappe and Mr. Münch. Maybe it's not very clear, but well, Mrs. Knappe, it's her birthday today, so our congratulations to you. Well, I'm looking forward to working with you in our supervisory board. As for the executive board, there were some changes as well. As of May 1st, Mr. Michael Rauch has been appointed a member of the board, and he's succeeding Mrs. Maike Schuh, who stepped down last September. In Michael Rauch, we found a CFO who brings a wealth of experience in times of change. He knows the chemicals industry from his 16 years at Henkel, when he held very strategic and financial positions in Germany, Sweden and China.
At the same time, this business professional has many years of experience in the capital markets, the supervisory board was convinced of his skills and management experience during an intensive selection process. I would like to give Mr. Rauch the opportunity to introduce himself personally today and now ask him to take the floor. Mr. Rauch, you have the floor, please.
Thank you very much, Mr. Chair. Ladies and gentlemen, dear shareholders, my name is Michael Rauch. I hold a degree in business administration. I'm 54 years old and the father of three adult sons, and I live with my wife in Düsseldorf. I was born in East Westphalia. People say that we, the East Westphalians, are stubborn, have a dry sense of humor at best, and are thrifty. I shall leave it to you to judge whether this applies to me as well. One thing is certain.
As a Westphalian, I've had a soft spot for the rural region practically since my birth. As CFO, I have nothing to give away. Since May 1st, I've been a member of the Executive Board of Evonik and responsible for the Finance Division. Following an intensive selection process, I received an offer to join Evonik, and I regard it as an opportunity and an honor to be able to contribute my experience and skills here in your company. A brief overview of my career. After studying business administration, I've continuously pursued extensive further training, for example, in areas like financial management, law, mergers, and acquisitions. For me, lifelong learning is a fundamental prerequisite for successful work. I bring three decades of professional experience to Evonik in management consultancy, in the IT sector, in retail, and in the consumer goods sector.
In addition to my roles in Germany, I worked in Scandinavia, China, in Switzerland as well. For the majority of my professional career to date, I worked in the finance sector and within our industry in the chemical sector at Henkel in Düsseldorf. I've worked in listed companies. I've worked in companies with strong family ownership and in companies owned by financial investors. What did I learn there? The focus is slightly different everywhere, but some things are the same everywhere. It's about making successful business decisions. It's about taking responsibility, and it's about acting thoughtfully but also swiftly, and all of this with a healthy dose of confidence and optimism for the future. As I feel it, we face major challenges, and I made a conscious decision to join Evonik because I believe that great challenges go hand in hand with great opportunities.
In Evonik's case, it's the opportunity to lead this magnificent company into a successful future together with my colleagues on the Executive Board. I'm delighted to be a part of your Evonik. Thank you very much.
Thank you very much, Mr. Rauch. I'm looking forward to our future cooperation. Along with Mr. Rauch, along the appointment of Mr. Rauch, the Supervisory Board has also considered the extension of Mr. Kullmann's contract as Chairman of the Executive Board, and this has been decided formally this morning to extend his contract this morning until the year 2030. The Supervisory Board is sending a strong signal of reliability and stability at the Group's helm in challenging times, and endorses the Executive Board's strategy. The Supervisory Board is confident that the Executive Board will stay the course, and continue to position Evonik for a secure future.
On behalf of the Supervisory Board, I congratulate you both gentlemen, for your appointment. We are looking forward to working along with you, with this very strong team of our Executive Board. Ladies and gentlemen, we now turn to the Executive Board's Report on the annual financial statements presented, as well as on the situation of the company and the Group. The Executive Board's Report, including its key content, is available via the online service. For the sake of good order, I would like to point out that, of course, the spoken word takes precedence. Now I would like to ask the Chairman of the Executive Board, Mr. Christian Kullmann, to present the Report, please. Mr. Kullmann.
Dear shareholders, ladies and gentlemen, dear guests, good morning. We are delighted to have you all here, and I warmly welcome you here to this year's annual shareholders meeting of Evonik Industries. Bernd Tönjes already has drawn your attention to one change on the Executive Board. Ladies and gentlemen, Maike Schuh left Evonik last fall. Since May 1st, our new CFO is Michael Rauch. He just introduced himself here in this room, and he as well as the Executive Board, we are really delighted to work together with you, dear Michael, and we're looking forward to the things to come, and our ambition is clear. We all together will improve our group of companies. I would like to thank specifically to Dr. Claus Rettig, who took on the operational duties of this post on an interim basis without any hesitation.
He did this excellently, and we owe him our thanks. Thank you very much, Claus. The way you did it is great. Thank you very much, Claus. He did this in very challenging times. Fortunately, Mr. Claus Rettig is staying with us, because now he will fully focus on his role as a president of the important growth region, Asia-Pacific. He will work on our growth opportunities in this region. Ladies and gentlemen, our industry, the chemical industry, has been under pressure in the year 2025. Under pressure, and we are still under pressure. Nonetheless, let us review the fiscal year 2025. At this moment of time, we're at a really strong start to the year. Right up to our Capital Markets Day in May 2025, we were optimistic because we thought that last year would become a good year for us.
The subsequent downswing, this downswing hit us particularly hard. On the one hand, we had this combination of an erratic U.S. tariff policy and, on the other hand, the resulting massive uncertainty among our customers on the global market. Evonik is a globally acting group of company, and that's why this hit us strongly. The lowest point was in the third quarter of the year, because our forecast from the end of September, we were unable to maintain our forecast, our profit guidance for the full year, and we have been defending ourselves and tried to protect whatever we could. In these times, we managed Evonik with the focus on liquidity. Our priority was discipline when it came to costs, as well as working capital. That was our priority. We managed to achieve our revised outlook, and we generated an adjusted EBITDA of almost EUR 1.9 billion adjusted EBITDA.
Remarkably, during this period of time, these times of uncertainty, these political conflicts and turbulences. Nonetheless, all this, we succeeded to generate a free cash flow of almost EUR 700 million. That's why, as for the previous year, we are able to pay an attractive dividend. I say an attractive dividend. It's a nice word and that's why it is worth to repeat the word. We are able to pay an attractive dividend. I would explicitly like to thank all our employees for their disciplined team effort, their work, their tremendous work, their performance during last year. Thank you very much to our employees. Dear shareholders, ladies and gentlemen. Given all these crises, our industry is still suffering from structural difficulties and sluggish demand.
Plans announced by Berlin and Brussels to reduce the homegrown disadvantages affecting the chemical industry in Europe are reason of a bit of optimism. This is not enough, and that's why we think it is necessary to see greater determination and more momentum in Brussels as well as in Berlin. There is some hope. We are optimistic because here we have a permanent exchange and dialogue with the policymakers of the European Union as well as of the German government. Ladies and gentlemen, let me say it in the words of Goethe, "Enough words have been exchanged. Let me finally see deeds." Nevertheless, Evonik is in a relatively strong position. You may say relative, it's a relative strength, but nonetheless, there is a certain advantage in the competition due to our capacity of innovation, and we are able to generate cash.
That's why our debt is moderate. All this, nonetheless, our extensive investments aimed at securing our future. Nonetheless, an attractive dividend proposed today to you. Ladies and gentlemen, given the position of our Group, we have the future of our Group of companies in our own hands. We have plenty of potential. That's what I announced today, ladies and gentlemen. That's what I promise to you. We will even use this better in order to improve the economic situation of our company. For example, we have promising applications in attractive growth niches. We ferment active ingredients for the pharmaceutical industry. We produce lightweight metal compounds for batteries, and we are building a pilot production plant for a high-performance anion exchange membrane that we developed ourselves. It's coming from our laboratories.
All this has the potential to finally enable cost-effective production of green hydrogen. Our aim here is that green hydrogen, if you want me to say so, becomes the champagne of the German industry's energy provision. That's what we want to secure in our site of Marl here in Germany. We are doing this here in Germany. Ladies and gentlemen, we are divesting businesses. We hand them over to others because they do not longer fit in with us. We continue today and in the futures to focus on becoming an even more and stronger company. This year, we'll be cutting off further 1,000 jobs to strengthen our competitiveness. These decisions are not easy decisions.
Nonetheless, we made these decisions along with our social partners and these decisions, me as the head of the Executive Board, I can defend these decisions, because they correspond to the interest of the Evonik Group. It's not easy for me because social integrity when managing a group of companies like ours is still important and will always be important. These decisions have been made, and we will acting according to these decisions. By the way, as for the allocation of our capitals, we ensure an even more balanced allocation of our capital. All this means that irrespective of the operating environment, Evonik will become a better company in the coming years. We'll have it in our own hands, and what we have in our own hands as well.
The measures I described and mentioned right before, the projects I mentioned right before, the measures I explained, all these things will enable us to earn a ROCE of 11% in the future. Dear shareholders, this strategy, our strategy, we'll implement our strategy continuously. This means growth on the one hand and cost discipline on the other hand. Those are two sides of the same coin. We call it the future strength. How can we secure our growth? First, through innovations and by restructuring our portfolio. We intend to find a new owner for Oxeno, our C4 chemicals business. We've bundled our German sites in Marl and Wesseling in our new company, SYNEQT. It can now serve a larger customer base more effectively and in a more competitive way.
We are open to investors taking different stakes in this company or even open to a complete sale. We focus on the future, on a future-oriented business such as our next-generation solutions. These are solutions with superior sustainability benefits for our customers. For example, our rhamnolipids or, for instance, our gas separation membranes. By means of these next-generation solutions, we now generate almost the half or, being precise, 48% of the group sales. This is our future. This is the strength of our future. Last year, we improved this by three percentage points. This is a strong contribution to the future and securing the future of this group. We have a clear focus on innovation. As the drivers of the necessary transformation, this green transformation. The driver is an efficient use of resources.
Green transformation does not mean developing technologies, and then you cannot earn money with it. The aim must be to increase efficiency. Those who consume less raw materials, providing better products, producing better products, they will be competitive in the world by competition. That's what we focus on. That's the way green transformation works. That's the way you can generate value.
Our growth areas have been defined in an even better way, so that our money and your money, dear shareholders, goes exactly where opportunities are most promising. I have just explained to you how we see that. In order to speed up the entire process, to make progress in a more specific way, we have set up the Evonik Innovation Factory, which is a development unit with an entrepreneurial spirit that combines this spirit with green transformation to make money sustainably and to stimulate growth of the company. In that mindset, we work to be faster in breakthroughs on the technological level and transfer that into industrial applications. Innovation at a fast pace and with a focus on specific markets, with a focus on specific application. This is what we want to focus on in the future, even more than in the past.
On the executive board, it is Lauren Kjeldsen who is in charge of that topic. She takes ownership, and she does so in an excellent way. We're investing heavily into the future, and by doing so, we concentrate on these fast-growing businesses. Let's take, for example, our polyamide 12 production in Marl, which was extended. This is an attractive material which now is used for new areas of application, which is now used for new business areas, for example, for drones or, for instance, for data centers. In Germany and in Europe, we will need more of both in the future in order to improve our defense capabilities on one hand, and to be able to participate in the AI development and not only to participate in it, but to improve infrastructure via these data centers and thus make progress going forward.
In Japan, new capacities have been built for aluminum oxide, which makes batteries better and for Alkylate biodiesel in Singapore, we have also set up capacities. The world's top three markets, ladies and gentlemen, for biodiesel are the U.S., Brazil, and Indonesia. Indonesia is right opposite our facility that was set up by us in Singapore. All three countries that I've just mentioned have recently announced a regulation to increase the use of biodiesel, or they have already introduced it and implemented it, and that's remarkable. In Brazil, the price of biodiesel recently dropped below the price of petroleum-based diesel for the first time in nearly three years. Dear ladies and gentlemen, dear shareholders, it is not our intention to be a raw profiteer.
It is also correct that we benefit from the current development, and we can benefit from current developments because in the past, we have strategically positioned ourselves in a way that we are now able to provide what is needed. Ladies, gentlemen, how can we now improve our cost position? The most important efficiency project is already known to you. We make our administration leaner. Our administration is made leaner with the program which is entitled Evonik Tailor Made. This program brings about clear accountabilities, fast decisions, and flatter hierarchies. Most importantly, it is a program that supports the operational chemical businesses because it's in those businesses that we make money and where we want to become stronger. Some of these chemical businesses have their own cost-saving programs on top of the general one. For instance, since 2023, we have been reorganizing our methionine business.
That's the business with animal nutrition. Since 2024, we have been in a process of reorganizing the jewel of our future, which is the healthcare business, and make it look even better. Last year in 2025, we added additional programs. For instance, when it comes to high-performance polymers such as PA 12, Silica, and Crosslinkers. All these programs are coordinated and managed by Claudine Mollenkopf, who on the Executive Board is in charge of advanced technologies, and I can assure you that she is best suited to manage these programs. You can see it from the fact that these programs show already now an impact. Ladies, gentlemen, I mentioned that we will be reducing our workforce. You can see that from our numbers, data, and facts. You can see what it means. In 2025, we have reduced our headcount by more than 850 individuals.
As I've already briefly mentioned, this year, we will be reducing our workforce by an additional around 1,000 employees. We do that in a socially responsible way and in close cooperation with our social partners, and we do it feeling responsible towards this group to prepare it for a better future. Last year, we've been able to offset the strong increase in fixed costs nearly entirely. For 2026, this year, we assume that we will be able to overcompensate the rise in our fixed costs by using these programs. Not the least, because since the beginning of the year, we've introduced additional short-term cross-cutting measures. For example, by more strictly selecting training activities, business travel, and trade show presence. In total, these measures will reduce costs. Above all, they will make Evonik leaner, faster, and more effective. Ladies, gentlemen, dear shareholders, we are also adjusting our dividend.
You will most likely call it a dividend cut. For 2025, ladies and gentlemen, this is actually true. We are reducing the dividend from EUR 1.17 to only EUR 1. This is our proposal to you. EUR 1 per share, and we ask for your approval for our proposed dividend. The background is nothing less, and that's actually quite a lot, than the consistent implementation of our strategy. In order to be able to guarantee this, we adopt this adjustment.
The priorities of our capital allocation remain unchanged. First of all, we want to invest into attractive growth businesses and attractive growth markets. We want to strengthen our operating business. Secondly, we still have the objective to be able to offer you an attractive dividend, and we believe that EUR 1 per share in these difficult times is an attractive dividend. The third priority is to reduce our debt level.
We want to reduce our debt a bit more where it's relevant, and we think it's a good safety buffer, especially in these uncertain times. Although we need to say that for the chemical industry, our debt level is already at a very moderate level right now. Our dividend, ladies and gentlemen, has always been robust. Ladies and gentlemen, our dividend has been very high. Well, you've all benefited from that, and we have benefited from it as well on the Executive Board because we all have shares of our company as well. This also means that we believe in the power for the future of this company and the strength of this company.
However, a rigid payout sum total is inappropriate in an environment that changes so quickly and sometimes so aggressively, where when you get up in the morning are surprised that things that had been declared the night before are no longer valid, or even worse, that the opposite is happening and we all see what impact political decisions have when it comes to the global economy. We assume that this won't change going forward. That means that a static, rigid payout policy does not fit a highly dynamic, a radically and fast changing environment. Which means that here we need to find a new balance. We need to align things for the future power and strength of our company. Here I refer to you as our shareholders, as for us, the Executive Board and the employees of this group, but also for an attractive dividend.
For a company like Evonik that undergoes fundamental transformation, the facts that I have just depicted is an obstacle rather than favorable. Therefore, as of 2026, we want to switch to a new dividend policy where the payout is more closely linked to the business performance of the group. This decision, ladies and gentlemen, and I'm very grateful for that, this decision is supported in particular by our majority shareholder, the RAG Foundation. With the chairman of the board, Mr. Tönjes, we're very lucky because this Chairman of the Supervisory Board, while chairing the body, very clearly assumes the role of this body and thinks clearly of the interest of the RAG Foundation. He also keeps in mind the future of the group going forward. Dear Chairman of the Supervisory Board, dear Bernd, is a fantastic choice. Thank you very much for your efforts.
Which means that we can now continue to offer you a long-term attractive dividend. With this new payout policy, we will create more financial leeway for the systematic realization of our strategy. Ladies and gentlemen, you as shareholders of this group will benefit from this as well, because it means that you will benefit more strongly from Evonik that develops better. We intend to implement this new model in two phases. The business year 2025, here the proposal is dividend of EUR 1 per share as a transition year, which currently corresponds to a yield of a good 6%. As of the fiscal year 2026, the payout ratio will then be between 40%-60% of the adjusted net income. This range, ladies and gentlemen, allows us to show continuity and reliability within a clearly defined framework. Why?
Well, because in better years, we get closer to 40%, and in weaker years, to the upper end of the range that has been defined for our payout policy. Here again, the RAG Foundation supports this approach. They are interested, as hopefully all of you that are listening and present here today, they are particularly interested in Evonik's success. Ladies, gentlemen. For our new remuneration system, we also ask for your approval today. The new remuneration system supports our strategy. It pursues the aim of aligning the remuneration of the Executive Board even more strongly with the company's long-term strategy and success. The new system complies with the legal requirements set out in the German Stock Corporation Act and follows the recommendations of the German Corporate Governance Code.
It sets incentives for growth, it sets incentives for high earnings, for capital efficiency, and for the attainment of the ESG targets, which is targets in ecological sustainability, socially binding fairness, and ethic corporate governance. In this way, we consistently apply also the principle of pay for performance and implement it consistently. The main challenges relate in particular to the variable remuneration component. In the future, the short-term variable remuneration will focus on two KPIs: adjusted EBITDA and free cash flow. Each of the elements will be weighted with 50%. On top of that, ladies and gentlemen, on top, a minimum ROCE is being introduced. The minimum ROCE is more or less a hurdle that might limit the target attainment.
The long-term variable remuneration is also being revised. In the future, it will be based on the relative total shareholder return, weighted with 40%, ROCE also weighted with 40%, and ESG targets with a weighting of 20%. In particular, ROCE that has been newly integrated into the system, especially this ensures a high level of discipline when it comes to capital allocation. Dear shareholders, Evonik shares had a good start into the year 2025. In March of last year, we reached the high at more than EUR 22. Ladies, gentlemen, this is where we want to get, at least. The subsequent phase of global uncertainty was not good for our share price. There were doubts about the competitiveness of the European chemical industry against the backdrop of dramatic or socialist-like overregulation did all the rest. In early December, our share price dropped to a low of less than EUR 13.
At the end of the year, we had a loss of 20% in our share price. Since the beginning of 2026, the situation has completely changed. Thanks to decisions such as altering our dividend policy, the share price has risen by around 30% since the beginning of the year. The fact that under the given circumstances, a solid performance was reached in 2025 has also helped. As a result of our geostrategic position and the war in the Near Middle East, we find ourselves even here in a position that we benefit from it. Of course, the rotation in the financial markets, the move out of supposedly high-risk tech shares into shares from the industrials or chemicals sectors, this is also a clear signal. Then, ladies and gentlemen, at the end of February, the next war broke out.
It is a simple fact that everyday life and war has become everyday life of our times. Time and time again, we are faced with crises, conflicts, wars. The share market, the financial markets see things sometimes differently. Therefore in May, we registered our highest share price so far, more than EUR 18. Please be convinced that further upside potential is there. That's what we make an effort for us, for our shareholders, for the Group.
Ladies and gentlemen, the results. You see the results, the beginning of the year was better than expected. We have an adjusted EBITDA in the first quarter of the year of EUR 475 million. That was the start. Many in the capital market did not expect this. I have to admit that, on the other hand, that the result is better than the low expectations. As for the second quarter, the second quarter should be better than Q2 2025, because there we expected an EBITDA, that's what we expected, of EUR 550 million. This is a solid starting position for the second quarter of the year. We can see that if we consider Q1 and Q2 of the year, that the current economic situation, the war in the Middle East, but not only this conflict, not only this war.
It's in a certain way, helpful for us. Some customers are stocking up, other competitors are under pressure in Asia because all of a sudden they are in a situation where we, the European chemicals industry, we are in this situation since a long time. This situation shows the strength and the opportunities of the European chemicals industry, if we get free and rid of the over-regulation here in Europe. Ladies and gentlemen. Summarizing it all, we can say that first, the savings measures, as outlined regarding the last year, and this still has an impact on this year. They work and we are confident that we'll achieve an adjusted EBITDA of between EUR 1.7 billion and EUR 2 billion. Well, it's true.
Right before, I explained the opportunities due to the war in Iran. On the other hand, we have to admit that there are risks as well. Supply chains are under strong pressure. Raw materials, there is a lack of raw materials. Some raw materials are not available. Purchasing energy belongs to this. I think it is appropriate to say that as for the second quarter, we should not expect a recovery of the global economic situation. We should rather expect that it will be even more difficult and complicated. Well, we are prepared for this future. We can see that our long-term strategy. I mentioned the different crises and conflicts of our times. We can see that our strategy is the right one and is an appropriate one.
By means of this strategy, I refer to our new remuneration scheme for the executive board, by means of a new dividend policy. We want to address the future and be prepared for the future and we are sure that we'll be even better prepared for the future. Ladies and gentlemen, dear shareholders. I propose to the employees, to the members of the supervisory board. I want to thank you, to the employees, to the supervisory board, to the executive board, for your commitment, for your trust as well. Your trust is very important in these times. We have to make difficult decisions in order to improve the company. I'm optimistic that we are heading to a better future, that our future will be better than our present.
I'm grateful to you for accompanying and supporting us on this way and in this sense, I thank you very much for your attention, and we are looking forward to exchange with you. Thank you very much.
Yeah. Thank you very much to the Chairman of the Executive Board for your explanations. Well, under difficult conditions in the year 2025, the Executive Board did a great work. However, I would like to thank not only the board of the management, the Executive Board, but also expressly all the employees of our companies for the work they've done. I think I can do this on behalf of the shareholders as well. I ask the management to transmit this message to the employees. Ladies and gentlemen, I would like to inform those following our annual general meetings online, that the public part of the broadcast ends here.
I thank you for your interest and must now take my leave. Only our shareholders connected via the online service and their proxies may follow the general debate.