Earnings Call: Q4 2020

Mar 11, 2021

Ladies and gentlemen, hello, and welcome to this year's analyst conference. We are delighted about the great interest. This is the first time we hold this event via Teams, so we look forward to the new format. I would like to take this opportunity to welcome our Chairman of the Board, Doctor. Burkhard Loewer, who is sitting on my right at a sufficient distance from me in line with the COVID-nineteen distancing rules. As usual, Doctor. Lohr will present the highlights of our 2020 financial year and give an outlook for the current year. And on his right It's Thorsten Boekker, CFO of K Plus S, who will then give a deeper insight into our Q4 figures. Before we start, A few technical notes from my side. This conference is webcasted live, and a replay of the webcast will be available on our website afterwards. After the presentation of Doctor. Loehr and Mr. Bookels, You will, of course, have the opportunity to ask questions. Listeners of the webcast will have the opportunity to submit questions in writing, which will be read to the audience and answers at the end of the team's Q and A. Please note that we will consider which questions have already been answered when treating the written If you would like to ask questions via Teams, please use the hand signal and write your name and the name of your research house in the Teams chat function. We will then call you individually, and you can address your questions to us live. Please switch on your camera then. With that, We'll get started. I will hand over to our CEO, Doctor. Burkhard Lohr. Thank you, Dirk. Ladies and gentlemen, A warm welcome from me as well, and we appreciate your great interest and hope to reach out to you in good health. Let me start by emphasizing one important point. Today's publication Our figures for the 2020 financial year according to schedule also implies that our auditor has issued an unqualified audit Opinion on the 2020 financial statements. Normally, this is not worth mentioning. Against the back Ground of the ongoing audit by the German Financial Reporting Enforcement Panel, however, this is an important fact for us. After all, it confirms our conviction that the impairment loss on assets in the Q3 2020 was properly recorded and both in terms of its amount and timing as well as in compliance with all relevant regulations. Ladies and gentlemen, certainly 2020 was a year none of us will ever forget. The corona pandemic deeply impacted society, politics and the economy. It It was also an exceptional year for us. From one moment to the other, we had to implement many changes. Making a mine corona safe is not easy at all. Therefore, we have reduced the number of miners when going underground, The shift system was more flexible, and we even produced our own disinfectant in our analytics and research center. Within record time, we developed solutions and made pragmatic decisions to keep our business running. Production at our plants has not only been maintained, but even increased. Nevertheless, this affected the efficiency of our processes, And we lost around €40,000,000 in EBITDA for the year as a whole. Still, I would like to say at this point, Our employees have done a great job. As Chairman of the Board of Executive Directors, I feel very proud of this, And of course, my colleagues on the board share this opinion. We mastered all tasks we to handle ourselves in 2020. We consistently implemented our package of measures and achieved important milestones for the promised reduction in debt. Most importantly, we signed an agreement for the sale of our Americas operating unit to Stone Canyon With our new joint venture in the waste management business, Rex, we have taken a major step in the strategic realignment and implementation of future oriented solutions in the environmental sector. Within record time, we completed the restructuring of our administration. We are saving now €60,000,000 per year or 30 percent of our previous SG and A costs. As promised, We realized more than €150,000,000 of synergies in procurement, logistics, production, sales and marketing. Last but not least, we further optimized production at our sites, increased efficiency and production volumes, while reducing costs at the same time. Ladies and gentlemen, at the beginning of October, we signed the agreement for the sale of The North and South American salt business with Stone Canyon for a very attractive price of $3,200,000,000 Many observers did not expect us to achieve this during the pandemic. When the transaction closes in the summer at the latest, We will generate net proceeds of around €2,500,000,000 This represents a giant step towards reducing our high level of debt. Shortly before Christmas, We introduced our new joint venture with the Remondis subsidiary, REMAX. We thereby want to create a real champion in the waste management business. With Rex, we are establishing a powerful company to which K plus S will contribute its operation and unique infrastructure of highly modern waste management facilities combining it with REMIC's intensive distribution network. REX is highly significant for our strategic realignment and is a great example for intelligently leveraging our unique Infrastructure. Rex provides our customers with wide range solutions for the safe recovery and disposal of waste. We therefore perform important waste management services for society. Moreover, it grants us the best possible access for the supply of the materials we will need for the future covering of the tailing piles at our German potash sites. As you can see, this cooperation is of great importance to us for many reasons. We expect the transaction to be completed in summer. At the time of closing, we will generate a cash inflow of around €90,000,000 as part of the package of measures to reduce debt. Moreover, we will generate a one off book gain of around €200,000,000 I briefly mentioned at the beginning, we have not only managed to maintain our production during the corona pandemic, but even increased our production volumes compared to the previous year. This is very much due to our efforts to continuously optimize Production at all sites. Apart from production increases at our domestic sites, our latest potash plant, Bethune, in Canada also We made very good progress. For the first time, almost 2,000,000 tonnes of potash were produced. This was achieved at best product quality. At the same time, we have fortunately reduced average cost across all plants to below €200 per tonne. Due to higher production volumes, we succeeded in meeting the stronger demand of our customers and increased sales volumes in the agriculture customer segment by a total of 1,000,000 tonnes to more than 7,000,000 tonnes. We have also achieved further important milestones in the environmental issues. At the end of last year, the state parliaments of Hesi and Thuringia approved the amendment of the state Treaty of the cross border mining of potash soles sold by an overwhelming majority. This is an important step for our waste Water concept at the Werra plant. As you know, we intend to finally discontinue injection of the waters at the end of this year and beginning with the storage of sailing solutions in the Springen Mining Field at the beginning of next year. Other important milestones last year were the permits granted for the tailing pile expansions at the Wintershall and Silitz site. This provides us with the necessary long term planning security for our potash production. Our conference will be focusing on the financial figures now, and I would like to hand over to my colleague and CFO, Torsten Bjerkers, who will provide you with deeper insights into the 2020 financial year. Thorsten, please. Thank you, Burkhard, and good afternoon, everybody. During our Q3 call, we already talked about our impairment loss. It was necessary due to adjusted long term assumptions for potash prices and cost of capital. And you saw that we published on February 17 that this impairment is being reviewed by the German Financial Reporting Enforcement Panel called DBR. During the preparation of the 2020 financial statements, more specific assumptions for individual calculation components had a positive effect on the final amount. Therefore, as of year end 2020, the final impairment loss amounted to around €1,900,000,000 As Burkhard already mentioned, this was intensively reviewed by our auditor and the accounts were finally approved by Deloitte. On Slide 11, you will find our financial performance still including the Continued operations of the operating unit Americas. In a year on year comparison, lower potash prices cost us almost EUR 30,000,000 Our potash production showed a strong operating performance at all plants. We were able to sell roughly 2,000,000 tonnes in Q4 compared with only 1,500,000 a year ago. And with €188, our cost per tonne Achieved a decent level in the final quarter. The positive volume effect in agriculture, however, was offset by a weak deicing salt business. In total, we saw a negative volume effect of €13,000,000 The biggest driver in Q4 was an amalgamation of unfavorable one First of all, Q4 'nineteen was positively impacted by proceeds from the sale and leaseback of our office building with about €20,000,000 In Q4 'twenty, we booked the one off provision for our SG and A restructuring program as we guided for, And the discontinued operations were faced with the project costs relating to the sale of the Oyu Americas. In total, EBITDA decreased €60,000,000 due to that. In the full year, we achieved €445,000,000 again, including the discontinued operations after €640,000,000 last year. Full year free cash flow was at minus €42,000,000 A higher year on year CapEx and the weak de icing salt business could partly be compensated by an active working capital management. Adjusted net profit was burdened by the impairment as discussed and amounted to minus €1,800,000,000 Due to this, We will not propose a dividend to the AGM for the financial year 2020. Let's look at Slide 12 to have a closer look at the reconciliation after the sale. The former Americas operating unit is now reported as discontinued operations. Slide 12 presents the reconciliation of revenues and EBITDA to continuing operations. And on this basis, our revenues in 2020 were at €2,400,000,000 and the EBITDA of the RemainCo was €267,000,000 Looking at Q4 based on continuing operations on Slide team. Year on year EBITDA was impacted by the price effect in the amount of €30,000,000 However, positive potash volumes partially offset Negatives one offs are a bit smaller because the transaction costs for the sale of the OU belong to the discontinued operations. EBITDA achieved €39,000,000 after €76,000,000 in last year's Q4. The full year EBITDA amounted to CHF 267,000,000 and provides the basis for our 2021 forecast, which will be presented in a bit. Full year adjusted free cash flow came in at minus €110,000,000 Also here, the higher CapEx and the weak deicing salt business could only partly be compensated by working capital. This was my part, Burkhard. Thank you, Thorsten. Ladies and gentlemen, let's move on to our outlook for the current year. The general conditions for our business improved at the beginning of the year. Crop prices, for example, have risen sharply. This has also improved and will continue to do so. The yield situation of farmers, which will lead to an increased demand for the required inputs. This is also reflected in the continuing strong demand for our potash fertilizers in all regions. Since the conclusion of the contracts In India and China, at the beginning of this year, potash prices have recently risen again more sharply. We also see potential for further price increases in the course of the year due to the spring fertilizing season that is now beginning in our regions and the start of the season in Brazil. We are therefore optimistic of achieving slightly higher average prices for the for our fertilizers in the current year. Sales of the agriculture Customer segment should also continue to rise. The favorable winter conditions in Europe in January February have already resulted in a strong de icing salt business, so that we also spend expect significantly range between €440,000,000 €540,000,000 in the current year. This includes The one off book gain of around €200,000,000 generated at the closing of the REX joint venture. Our adjusted free cash flow, including the cash in from the sale of the operating Unit Americas will be well over €2,000,000,000 But excluding this, Entirex cash in, Our free cash flow for 2021 is still expected significantly negative. And finally, I would like To announce that we are further developing our corporate strategy, we will present the key principles of that strategy at our AGM in May. Thank you very much for your attention, and now we are looking forward to answer your questions. Thank you very much, Doctor. Luo, ladies and gentlemen, you now have the opportunity to ask questions to our board members. If you would like to ask a question via Teams, please use the hand signal and write your name and the name of the research house in that chat function of Teams. We will then call you individually, and you can ask the question live. Please switch on your camera. One more request, as usual, We would like to answer your questions 1 by 1. So if you have multiple questions, please ask one question at a time, and we will answer it at First. After that, you will have the opportunity to ask further questions. So this brings us To our first question. And just one second. So The first question came from Michael Feffer, Cobaltzberg. You have to unmute your mic at the computer. So can you hear me better? Sorry for this one. Two questions from my side. To start with is your outlook statement. Maybe you can help us understand how we should bridge from the adjusted for 1 off €250,000,000 base Into your midpoint, €290,000,000 if I recall this correctly, we are talking about €30,000,000 cost savings contribution from your Headquarter savings, you announced your €60,000,000 already, so half of this one, so which basically would leave nothing for ag recovery, nothing for European deicing salt recovery, so just giving a better understanding what you have baked into as underlying assumptions there. Thank you. Yes, Michael. We are early in the year. So we certainly do positive pricing trends. On the other hand, we have headwinds from in the weaker U. S. Dollar. And we also have compared to last here. When you look at the logistics situation right now, looking at containers stuck in LA Harbor and Vessels, bike freighters being not unloaded in Asia, so we have strongly increasing Freight rates, especially on the relations out of Vancouver. And this leads to, I would say compared to last year alone, €40,000,000 cost inflation just for freight. Energy was also relatively low last And we see prices coming back. And I think also here, one can say that about €30,000,000 headwind Holds growth on other sides like the slight increase in potash prices back. Okay. Maybe I have So basically, what you're saying is that the turnaround from de icing doesn't play a major role and your ASP you are Generating the uptick there is not basically exceeding the increase in logistics costs. Is this basically what you're saying? Yes. I would like to come back to something that Thorsten has already said. We are early in the year, And we are this is only the bit of March. And we are seeing very positive trends on the potash market, but that has In accelerating, I think this sharp increase has only been for a couple of weeks. I think we needed a little bit more time to finally evaluate the situation. And on the other hand, if you talk about the icing business, Please don't forget that we are now only talking about Europe, which has not such a big lever as in the Past with the huge volumes from Americas. And yes, that is more or less the reason for our current outlook. My second question goes to the adjusted free cash flow outlook, Not about 2021, but rather at your press conference, you were quoted basically that you are looking into a positive free cash flow From 2023 onwards, even at depressed potash prices. So I wonder whether you can shed some more light on the bridge, I. E, into 2022 And what you would call the potash prices in relation to where we are right now? Yes. Thanks for that question. First of all, I said latest in 2023. And that gives us the opportunity to point out that the biggest Impact on our free cash flow this year still is CapEx. We have 3 heap extensions at the same time, Silitz, Atorf Wintershall, with more than €100,000,000 each, that is Historic situation negative historic situation, but we also know when this is done, for example, silic, we don't have to touch it anymore until the 50s of this century. That is one reason for 2021 being still under pressure. Secondly, We are still carrying the high interest rates. We will only be able to pay back debt and reduce our interest Burden after we have received the cash, so after closing. And we have to pay the redundancy costs That have been provisioned last year, but the cash flow, the negative cash flow will be 2021. I'm I'm not seeing you anymore. I hope you can hear me, Mr. Schafer. Yes, I can hear you. That's for sure. Yes. Very good. Yes. And when we talk about the Polish Price, as we all know, it has been very volatile in the past. And we want to prepare the company for being able to be Free cash flow positive even on the lower end. And if we look into the 2 cycles we have behind us, The range was I'm not talking about the deep situation or negative which only lasted a couple of days or weeks, but one can say that the range is mid term. Long term, we are more optimistic. Midterm between $2.50 $3.50 for MOP Grann in Brazil. And this is the range where we want to prepare the company for to be able to be free cash flow positive at the lower end. Okay. Thank you very much. Next question from Andreas Heine. Can you hear and see me? Yes, that's fine. So the first question is actually On the situation of Belarus Kali, Yara and how that might impact the European environment. After Yara has announced that they are not really happy how employees are treated in the Belarus economy, they might switch from that Supplier to another one. Are you in discussions with them about this? And how do you think this situation with Belarus Carly might Change the European competitive environment. It was Balagroskali having And the contracts with India and China first, so it probably is also a sign that they are keen to find a channel for selling their products. How is it you this situation? Yes. Good question, but difficult to answer from me. But I will try to do the best Because we are, of course, not informed about all discussions between Belarus, Kalia and Yara. But it looks From a distance to me that they have more or less settled the situation and that they are we are not expecting huge additional volumes delivering to Iara. But that is not necessary because the market is really bullish and not only in terms Pricing, the volumes are going up significantly as well. And we believe that Belarus will be bound in supplying into India With high volumes, for this price, nobody is willing to ship into India, And that could relax the situation in other areas. And we read it like that, that they wanted to speed up the process To be able to deliver early and generate cash early, we are not seeing that pressure from Belarus on in the spot markets. Thanks. Then maybe on this REX joint venture, how does that impact the accounting and moving parts in 2021? Yes. REX is an important part of our continuous operations going forward. And the waste market is a huge market. It's a growing market with high growth rates, and we have Already a very good infrastructure, and we have integrated that into our operations in a very good way. But Remondis and REMAX are delivering huge sales power, which will help us to, 1st of all, improve the profitability of the waste management business by itself. And secondly, and that is a very important lever for us, To get all materials, we need to cover the HEAPS. And in the past, we thought we need to buy the materials, And that would have meant in CapEx program over many years, but nevertheless, of more than €1,000,000,000 Now with this clever joint venture, we believe that we can even make money with taking Residues and using them to cover the HEAP. So that's a big game changer for us. But It is nothing which affects the accounts in 2021. I'm not really understand What is the business you will consolidate and what will be at Equity? So parts of your business underground probably is not part of this German venture and others ask, how is that baked into guidance? It's not too big, but this A complementary business in former days, if I remember right, was which was €30,000,000 €35,000,000 a year. And where does that end up now with the joint venture and you're having a 2% stake? The target Organization looks the following. All our waste management activities will end in this Joint venture X. And that means that all these activities will be recognized at Equity because we are holding a 50% take. Okay. Thanks. Andreas, the base impact you would see in 2021 is the book gain, right? We mentioned that there is a €200,000,000 approximately in the guidance. Can you also elaborate how much of that is cash? €90,000,000 €90,000,000 €90,000,000 Okay. Thanks. These were my questions. Thank you. Thanks. The next question coming from Markus Mayer, please. Yes. Hello. Hello. Again, Ef, the first question is On the ForEx impact and also if you could update us on your hedging strategy and at what kind of currency levels You would what can get what kind of effect for 2021? That would be my first question, please. Yes, Markus, we have and this is always our goal towards the year end that we have hedged 70% to 80% of the next year's net dollar position, and this is where we are. So we have hedged About 3 quarters of the net dollar position we expect for 2021. And I would say, so when we take €120,000,000 as a basis, a €0.10 movement could move in the one or the other direction, the EBITDA by about €15,000,000 Okay. And then my second question would be On further noncore assets, are there further assets like the wastewater management, which Could be sold or to ventured. So yes, that would be my great question. There's nothing Significant that you could expect to follow the sale of the OE Americas. Next Task for us to positively impact our cash flows is a project I mentioned earlier to prepare for being free cash flow positive on all sides, even on a potash price on the lower end. But that is for further optimize operations, and that is not selling non core activities. Okay. And then my last question would be on your expectations for the Chinese contract. Yes, that would be the center. Yes, I'm grateful for that question because The price is the same with $2.47 in India and China, but the quality is different because this $2.47 is $17 only in India, but almost $30 $27 for China, and that was pretty close in line with our Previous expectations after we have seen all the other markets running so well, of course, there was a bit of disappointment for this price as well, but We should not forget, this is almost $30 more than the year before. Next question from Lisa Deneve, please. Hi. Can you hear me? I don't seem to be able to put on my video. But anyways, let me just ask my question. So first and foremost, would you be able to express your EU ETS Those carbon credit position for 2021, what is your position in terms of are you shorting credits at the moment? And if yes or if no, What will be the cost we need to take into the P and L for 2021? Any guidance on that would be great. Thank you so much. Yes. I can start and maybe for the impact on 2021, I hope that the CFO has numbers available or Can Google something? You can Google it. So we are more or less fine with what we have Board or where we have options on for our production into the year 2027, 2028. And what the impact is on this year, Thorsten? Yes. On the P and L, Lisa, we expect that there will be a small double digit amount versus last year coming on top. Okay. And just to follow-up on that, how much of your energy cost inflation, which is your €30,000,000 is related to that Carbon credits costs, please. Can you provide some detail on that? Or is that just on top of the €30,000,000 energy price inflation? That's on top of the €30,000,000 because the €30,000,000 was only price related, and this is not the volume we have to spend for the CO2 certificates is not included in the €30,000,000 Okay. Thank you so much. And then on the potash contract. I mean, you said you don't expect parties to agree to sell potash at $2.47 a tonne in India or China, or at least it to be mostly BPC. Now one question I have is how do you think as it relates to standard versus granular products, because the strongest demand we're seeing right now is really Europe, U. S. And Brazil, which are granular markets, and ultimately, one will need to have need to find an outlet for their standard products. So How do you think or what will be the outlets for Standard Products if it won't be you or Campitex or your alkali shipping to India or China at the currently prevailing price. Can you provide some detail on that, on your thoughts around it? Good question. But I did not say that nobody will ship into China. I only said, I'm not seeing anybody besides Belarus From today's perspective, at least I know what we are doing. We are not shipping into India. China, I already told you earlier that the price has another quality than the Indian price. And that is not the first time that we are seeing a gap between standard and granular, And that will normalize for sure. But currently, we have the price tax, and nobody has Signed a contract in China after Belarus. It remains to be seen, and we are very interested To see when and who and to what price the next one will have a contract. But at the end of the day, Nobody can swap 100% into granular, and there will be volumes flowing into into China, for sure. Okay. Well, thank you so much, guys, for your answers. Thank you so much. Next question from Alex Jones, Bank of America. Thank you. Good morning. If I can start on the agriculture cost guidance that you have for the year, if you could provide a kind of euro per tonne figure taking into account the freight, The energy, but also the fuel ramping up and hopefully reducing cost a little bit there. Sorry, cost per ton 2021, right? Yes. Thank you. So we ended the year with a bit less than €200 per tonne. And with all this inflation going on and then expecting a slight Price increase on an average level. I would say we will end up a bit above 200 at the end of 'twenty one, so for the full year, of course. Okay. That's clear. Thank you. And maybe my second question on the Industry plus segment. You've talked about volumes increasing and de icing a little bit. Could you just talk about your Overall assessment of that division into 2021 in terms of volumes and also profitability. Thank you. Yes, I mean, it's a much Smaller unit in future, yes, because the biggest part was in North America. And but still, we expect To end up with a volume of above 2,500,000 tonnes in 2021, that's the European share of the communities part, so the ATS business. And for the whole Industry Plus segment, And in terms of volumes and profitability this year? We don't have that number available, Alex. Can we come back to you with that? Yes, absolutely. Thanks very much. That's all for me. Okay. Next question coming from Joel Jackson. Joel, please. Sorry for the close-up. I'm doing it on my phone this morning. Good early Canadian morning. I had a couple of questions. I'll do them 1 by 1. Going back to the question about potash and standard, Burkhard, you have a lot of tons at Bethune, obviously, And it seems like you're going to be committing a lot of those tons to China in one of the lower priced markets. What optionality do you have to granulate more potash from Bethune, Either at Bethune or elsewhere and take advantage of the higher granular prices in the United States. Yes, good question. We have already used all options that we have on-site to increase our granular production compared to the standard production. We have thought about using 3rd parties, but that will more or less not be possible to the logistics required for that. So, yes, end of optimization for the time being. And why several years later is Bethune still not putting tons into the United States? Like, It seems like an obvious market. Are you having issues with granular quality to go into the U. S. Specs? Or this seems like a no brainer. Can you help us out? Joe, we are doing that. We have shipped 100,000 tonnes into the U. S. In 2020, And we will increase that to 150,000 tonnes, and our customers are more than happy with the granular quality. Again, the limiting factor is logistics, but we will ramp up these volumes year by year. Okay. Because definitely, I think that's 150 is a good number, but you've got 2,000,000 plus now from Bethune, And that's the high market. It would just seem like now is the time to really put the fur on the gas in the U. S. From that mine, right? That's what we are doing. Next Next question from Christian Faitz. Christian, please. Yes. Good morning, good afternoon, everybody. Two questions, please. First one would be, I noticed that your mining provisions don't go down in your 2020 balance sheet ex Americas. I would have figured that Americas takes over at least some provisions. Can you please explain? About €25,000,000 €30,000,000 relating to the OE Americas because We have the highest provision here in Europe. And given that we are using a long term average In terms of applying interest rates, you do not see a significant movement there. Okay. Thanks. Second question, if I may. Can you please update us on the timing of the regulatory approval process for the sale of Americas? Where are we on at this point in time. Yes, we are very happy with the process. And maybe you have seen we have changed a single word, That's an important word to the guidance for the timing. Previously, we said summer. Now we are saying summer at latest. So it could even be before June. So Everything on track. Okay, perfect. And if I might sneak in the third question, very quick one. Any scheduled maintenance work for this year in any of your mines? Any bigger? All normal business, all normal maintenance business, nothing which is extraordinary. Okay. Great. Thank you, Burkhard. So I think we switch now to the chat from the webcast. So some written questions? Yes. So we have one question from Andrew Stott, And he is asking how is the outlook for Bison this year in terms of production growth? And related to that, from Riken, what will be the regional split? Yes. Thanks for the question. We are expecting another roughly 200,000 tonnes to add to what we have achieved this year, And the split will not significantly change from what we are having now. Of course, I announced that we are not shipping into India. That means the impact on, of course, Bethune as well. So most probably, What we can produce in terms of granular, we do that and ship it into the U. S. And Brazil. And of course, a significant amount of standards will be shipped into China And some other Southeast Asian countries. Thank you. So then we have Three questions from Michael Bohm from Sona Asset Management. First question is, what will be the CapEx in 2021 for continuing operations? In 2020, we had a CapEx from continuing operations of $428,000,000 and we expect the CapEx for the 2021 be on that level approximately. So let's say about 400,000,000 to 430,000,000. And also from Michael Buham, what will be the absolute level of tax in the continuing business on a cash basis? So the company, we apply a tax rate of 30%, which makes it for me a bit difficult to elaborate on the Absolute level, I would leave it there. So 30% tax rate. 3rd question. So 2021 EBITDA guidance includes a €200,000,000 book gain. That was regarding the underlying operations that we have already done that. Sorry, that was the wrong one. What do you mean by significantly negative cash flow in 20 21, that's the right one. When you take the midpoint And deduct the CHF 200,000,000 book gain, I would assume Cash interest result of about CHF 120,000,000. I said earlier CHF 400,000,000 CapEx ish. With the increasing production, I would also expect a €50,000,000 negative on working capital, So higher working capital. And what we shouldn't forget is that we pay out the severance We have provisioned for in 2020 for the SG and A restructuring, and this is an amount close to CHF 40,000,000 So summing all of this up, You will end up with a number of about minus €350,000,000 about. Thank you. Then we have a question from Stephanie Winston from JPMorgan. Can you please refresh the market on your priorities for the debt repayment once the The sale of the America business has been completed. Yes. I think we have a clearly communicated and clear Strategy there, the proceeds will be used to pay down gross debt. This means the credit line, this Means we are paying back the Schulzhein, which are maturing in May August. We are paying back the bond maturing in December. So we will use the full proceeds for paying back gross debt. Okay. Kaffir? Yes. And the KfW line, it's undrawn. That's why I didn't mention it. Sorry. We will also, of course, then that we give back the KfW line, which is virtually undrawn now. Thank you. One further question of Can management provide some insight on whether they think the Indian potash contracts will be renegotiated upwards? Yes. I've elaborated on that already. It's pure speculation. Again, I don't expect anybody else to ship into India. Will Belarus be the only source for India? Risky undertaking. And if they want to have a second source, they need to shift to lift the price. Then we have a question from Christian Auss from UniCredit. You mentioned lower interest costs once the Americas disposal proceeds are received. Are you planning to redeem that prematurely? I think that you were elaborating on. And what cash interest costs are you planning for? Yes. I think I mentioned when I gave the thoughts about the free cash development in 2021, we expect For 2021, still cash taxes sorry, cash interest payments in the amount of about 120,000,000. Don't forget the we are seeing maturing, should shine in the amount of 330,000,000, 2 third of this in May and the remainder in August and then the big chunk only in December with the €500,000,000 bond. So 2020 will be certainly slight reduction versus last year, but the biggest savings when we pay down gross debt come in the outer years. Okay. Last question from the webcast system, then I will hand over to Dirk again. Will we see more restructuring costs in 2021 2022, especially with regards To your new group strategy, which you will announce at your ATM and your aim to get all plants free cash flow positive. That is from Roland Kuehnen from Value Holdings. I'm not seeing significant restructuring costs. Some amounts, but small amounts. But I want to use the opportunity with this question to remind to transaction costs Still running into that year, but we have taken that into account already with our guidance for both REX and OU Americas. That will be more significant than potential restructuring costs. So I've got Here still hands on or hands off from Christian Faitz, Joel Jackson, Lisa and Andreas Heine. I don't know if They have no questions because I cannot see that here in the system or if you have got answered already your questions. Someone disappeared? Yes, I'm sorry. I just forgot. Okay. So then the questions are answered. Yes, we'll hand over to Doctor. Burkhard Lohr For some closing words. Yes. Thank you very much for this kind of artificial conference. Thorsten and I would have rather seen you live, but I'm sure that will be possible next year again. And yes, and we are looking very forward to that. And yes, thank you for joining us, and