Earnings Call: Q1 2021

Apr 30, 2021

Welcome to the conference call of Akashimi AG. At a customer's request, this conference will be recorded. As a reminder, all participants will be in a listen only mode. After the presentation, there will be an opportunity to ask a question. May I now hand you over to Jorg Hoffmann, Head of Investor Relations, who will introduce the conference. Please go ahead. Thank you, operator. Welcome to the RAKER KIMI AG conference call on our Q1 2021 results. Doctor. Olar Staudigl, our CEO and Doctor. Tobias Ola, our CFO, will take you through our prepared slides in a minute. The presentation is available on our web page under the caption Investor Relations. Before we begin, please allow me to point you to our Safe Harbor statement, which you will find at the slide deck beginning. Doctor. Staudigl, welcome to our call on the Q1 of 2021. This quarter continued to see a strong performance. It was the 3rd consecutive quarter of growing sales And earnings since the pandemic induced a slowdown last year. At almost or at €1,360,000,000 sales are up 14% year over year. This is the highest Ever first quarter sales figure in our company's history. Earnings followed a similar trajectory with EBITDA up 42% over last year and 26% ahead of the 4th quarter. Solid demand Across all of our businesses drove reported EBITDA to EUR 246,000,000 The strong result also benefited from strict cost controls and an increasing share of specialized products. Let me now provide you with a quick overview of our segment's performance and ongoing sustainability initiatives. Silicones sees very strong demand. Many sectors are ordering volumes well above Prior levels. This is putting a our capacities under strain. We are increasing CapEx in silicones this year to about €150,000,000 This CapEx will support downstream growth With targeted investments to alleviate the most severe bottlenecks. We focus on enabling our customers' specialty applications. Our strategy of being the preferred innovation partner of our customers is working. We have grown our specialty volumes by more than 10% compared to last year. At Polymers, We run on all cylinders. We were able to fill up last year's capacity extensions in Korea In a very short period, the global smart construction trends continue to drive polymers. The EU Green Deal will be a catalyst for new investments in renovation and construction. In China, We support the ongoing transformation to higher building standards. We recently announced a doubling of our capacities in Nanjing to support our customers' growth. Unfortunately, massive upstream outages have put the acetyl supply chain Under severe strain. Another factor is logistics issues. Prices for acetyls Have climbed to unprecedented levels. We responded fast with price hikes, but we need to do even more. We need to share this burden with our customers to ensure the high level of deliveries and service they have come to expect From Wacker. Biosolutions is preparing to start production of the mRNA based COVID-nineteen vaccine for CureVac. With this step, we expand our manufacturing capacity to produce 100,000,000 doses per year. In In our view, mRNA represents a promising new technology that sees its first large scale deployment In COVID-nineteen vaccines, vaccines are just one potential application. There are other promising applications for mRNA or PD and A such as cancer treatment. At Biosolutions, we have a unique CDMO toolbox Set up for growth. We look forward to providing you with more insights into our fast growing biopharma and bioingredients business At the next installment of our Capital Market Day series in June. Polysilicon continues to see a run on our High quality materials. Demand for high quality polysilicon remains strong. Both Semiconductors and PV solar see strong growth this year. Undisputed Wacker is the benchmark for quality in the industry. We expect the demand profile for our solar grade materials to improve. At the same time, The PV market continues to raise towards the highest efficiency systems. Across all our businesses, so far this year, the global rebound in demand has supported the strong volume growth. On the other hand, it also triggered shortages and a strong rise in raw Outages at the U. S. Gulf Coast drove up the prices of many raw materials to levels not seen before. This effect is still in full force, lasting much longer than we initially anticipated. We see inflation in ethylene and silicon metal and extreme and unnaturally high price levels in VAM, Vinyl Acetate Monomer and acetic acid. Combined with currency headwinds, this will hold Full year EBITDA back. Our assumption is over €200,000,000 That's more than twice as much as we expected when we spoke in Yet, our overall business performance keeps improving. We feel confident to raise our guidance while keeping an eye on the Let us just take a step back. Let's look at the most recent surge of the coronavirus in India. We should be aware that such negative surprises might cause setbacks in the global recovery. The virus is not defeated yet. With a look at these risks, we continue to guide cautiously. Yes, we tend to approach such uncertain situations with a strong degree of conservatism. I believe, however, That such a conservative approach to guidance has suited us well so far. Nevertheless, We now see full year sales growth in the low double digits. We expect EBITDA to grow by 15% to 25%, focusing on the top end of the range. Before I hand over to Tobias, I would like to give you a short update on our sustainability Our so called the Rhine project for generating green hydrogen and renewable methanol Has reached the next selection stage for EU funding. Our goal is to reduce the proportion of fossil raw materials Unfortunately, electricity costs are such that we need EU support to roll this out. However, the awareness in German politics for the need of low electricity prices grows fast. Without that, an electrification of energy consumption and thus low emissions would not be possible. Also, we just published our progress in the UN Global Compact, where we again confirm our commitment to sustainability. The document provides an overview of our efforts. Now let me hand over to Tobias. Tobias, please. Thank you, Rudi. Welcome, everybody. Let me begin on Page 3 with our P and L. Gross profit at €300,000,000 was substantially higher than last year. The 35% increase results From a combination of factors, higher volumes, price and mix improvements and strict cost controls. The SG and A and R and D line was about 5% lower than last year, adding to the savings already achieved last year. We benefit from the ongoing effect of our Shape the Future restructuring program. We are on track with this Following the improvements in gross margin, SG and A and other operating items, our operating result at €162,000,000 is €100,000,000 better year over year. As we now hold our share in Siltronic as an asset for sale, its business performance is no longer reflected in our P and L. As a reminder, the Citronic contribution amounted to €8,000,000 in the Q1 of last year. Q1 net income was €107,000,000 or €2.06 per share. Our balance sheet on Page 4 saw total assets increase to EUR 7,200,000,000 From €7,000,000,000 at the end of last year. Our cash and securities balance now amounts to about €1,500,000,000 underlining our strong liquidity position. The benchmark interest rates for the investment grade Corporates increased from 0.7% to 1.1% during the quarter. As a result, our pension liability contracted by EUR 428,000,000 to EUR 2,300,000,000 When factoring in the pension related deferred tax asset, our net pension liability now stands at about €1,800,000,000 This is still very high as a level. As interest rates stay low for longer, We need to add. As I mentioned the last time we spoke, we are looking into a pension system reform. Talks are underway. Nothing new to report today. We will keep you posted as we progress. As Rudi said, demand for silicones On Page 5 remains very strong. We are operating at capacity limits. Sales came in at €613,000,000 with an EBITDA of €122,000,000 We saw strong volume growth in specialties And the market for standards is currently much better balanced. The strongest demand drivers today are the construction, automotive And Industrial Sectors. During the quarter, we were held back by feedstock availability and logistics issues. Our Dow joint venture had a turnaround limiting our access to xyloxane in China. Also, The quarter saw headwinds from raw material inflation and currencies. We have increased our forecast for silicones. Looking to the full year, we now expect a high single digit percentage sales growth, supported by continued growth in specialties. This is also the focus of our CapEx. We invest in supporting the growth of our customers. Today, we see our full year EBITDA increasing by a low double digit percentage over last year. Looking at Polymers on Page 6. Sales came in at €350,000,000 6% higher than last year. EBITDA in the Q1 came in at €50,000,000 This is down €12,000,000 year over year. Key to this development is a more than €30,000,000 headwind from raw materials and currency Alone in this quarter, volume growth in powder and adhesives was strong. Orders were substantially higher than last year, and the order book continues strong. The raw material cost inflation continues beyond the Q1. The disruptions caused by many force majeure declarations Global logistics constraints carry into the Q2 and potentially beyond. Given the massive surge in raw material costs, we have installed surcharges to all our sales contracts. We have updated our forecast for polymers for the full year. We now see a high single digit percentage sales growth driven by volumes and prices. The raw material impact should peak in the second quarter severely hitting our margins. As a result, we now expect the full year EBITDA margin to be below our targeted range of 15% to 18%. On Page 7, BIOSOLUTIONS reported sales of €68,000,000 driven by increases in biopharma sales. EBITDA came in at €6,000,000 Raw material inflation that Flix Polymers also hits our gum business. In addition, integration costs of the acquisition in the U. S. And ramp costs in Amsterdam for the vaccines wait on earnings. For the full year, our expectations for BioSolutions are We expect a low double digit percentage sales growth. EBITDA should come in slightly above last year. Our performance of this year will largely be dependent on how quickly we can ramp the vaccine production. Polysilicon on Page 8 reports strong volumes and Increasing prices. Sales in the Q1 were €298,000,000 up 62% versus last year. EBITDA increased to €51,000,000 in the 1st quarter Despite negative effects from inventory reductions still weighing. Against the preceding quarter, The average sales price for solar grade material was only slightly up due to mix effect and time lag Demand is so strong that our inventories in our Chinese hubs are by now depleted. At the request of our customers, we have started shipping directly from Germany again. We have increased our expectations for polysilicon. We now see sales growing over 25% With EBITDA margins of over 20% for the full year, we expect pricing for solar grades to remain firm Looking at our net financial debt bridge on Page 9, we ended the quarter with a net cash position of €45,000,000 Our operating cash flow was €216,000,000 This is more than twice the amount we generated in the Q1 last year. Our group full year guidance summary is on Page 10. All our segments continue to report A combination of strong demand and high order intake, we have upgraded our sales expectation. Raw material costs With this, I hand you back to Rudi. Thank you, Tobias. Ladies and gentlemen, as Tobias showed, all our segments performed again very well in the Q1. This performance is a result of a consistent Strategy for all segments. Let me quickly review these strategies before we move to the Q and A. At silicones, we are focused On being a full portfolio supplier with a special emphasis on specialties. Upstream, our capacity additions Come mostly today from debottlenecking, something that we excel at. An increasing share of specialty products, Productivity gains and a strong focus on innovation at the customer are key drivers for our success. Polymers remain the undisputed global leader in VAE technology. With a combined offer of Dispressions and powders, we provide customers in all regions with leading water based binders. At BIOSOLUTIONS, our dedication to innovation is beginning to reap the rewards. We aspire to become a leading microbial CDMO, Driving mRNA and pdna opportunities. Also, we have identified promising additional options in nutrition. At polysilicon, we continue to both lower costs while maintaining an industry leading high quality. We focus on mix improvements by increasing shipments into semi- and high end solar. And with the quest for higher and higher efficiencies in solar, The quality demands migrate towards semiconductor specifications, which plays into our hands. Siltronic was our largest business measured in sales when I took office. Now we have successfully reconsolidated Siltronic and supported the acquisition by Global Wafers. The merger of Sultronic and Global Wafers, once finally approved, will create an industry leader that offers an extensive portfolio And can supply all semiconductor customers with leading edge products. From the financial crisis in 2008, 2009 and all the way to the pandemic, we have seen ups and downs. Through these times, we actively supported the strong and steady chemical growth with targeted investments around our global footprint. Our 3 chemical divisions grew strongly at about 6% per year over the last 15 to 20 years. Some of you may recall that I once said at the height of the polysilicon rush that we are not Wacker Solar, but Wacker Chemie. And that you should look at us this way. Over the last years, I got the impression that most of you follow the growth in chemicals and have come to see us similarly. I reconfirm my belief that I'm also convinced that the strong growth in chemicals will continue based on our innovative portfolio, will be the growing biopharma business in BioSolutions. We have promising opportunities there. MRNA based COVID-nineteen vaccines It's a great illustration. Sales over the next years should balance our group portfolio even better. Please allow me to close this call with a personal note. Today is my 52nd And last earnings conference call. At the Annual General Meeting in May, I will step down And hand over the reins to the company to my successor, Christian Hartler. Christian is a Wacker board member since 2015 It has been a sound pillar of our leadership team for many years. Please provide him with the same open and challenging attitude That made my time with you so interesting. I have enjoyed the sometimes challenging and always engaging interactions With you all, and I will certainly miss the rewarding intellectual exchange and the many smart Questions? Thank you very much. Our presentation ends here. We will now begin with the Q and A session. Operator? Thank you. We will now begin our question and answer session. First question is by Thomas Rohde of Societe Generale. Yes. Good afternoon, everybody. I would try three questions, if I may. Firstly, just a quick clarification. The My second question is on polymers, where you sound very cautious, especially on Q2 Because of raw materials, which is understandable, I think. But if I'm not mistaken, there will be also A bigger maintenance shutdown, could you help us to assess the headwinds from the shutdown, please? And thirdly, on polysilicon, it's a little bit more philosophical one. But if I look at The polysilicon space in China, there is a lot of moving parts, and it seems like there is much more pressure, Especially from the West on the polysilicon manufactured in China. The market is booming at the same time. So my question is, have you noticed interest again from buyers To sign long term contracts, looking for partnerships or even if Chinese polysilicon producers Thomas, this is Tobias speaking, and I take the easy ones and not Number 1 and 2, your first question goes to the raw materials and The exchange rate impact, we said at the last conference call, it would be more than €100,000,000 of Negative impact, now we see this is more than €200,000,000 So it's a combination of both. But I can tell you the majority is from raw materials. Exchange rate is at 120. It's not too far away from prior year. The second question is on polymers, the outlook for the Q2. I think you really spotted This will be a tough quarter. We see raw material prices Still up in April, so we assume a peak in raw material prices. We have announced price increases, and we are implementing those. But in addition to that, you also mentioned the plant maintenance shut This is in the situation where we could truly need that facility. So in total, The second quarter will be tough, as I said, and margin could be even single digit. Yes, Thomas. The polysilicon scenario is always interesting On a global basis, we certainly have seen many announcements of new capacities over the last year. However, as much as we can say, there will probably not be Any significant additional capacity coming on stream this year. We certainly see interest From some customers on entering long term or longer term agreements. And this is something that's certainly a very good development. And It's always the case when demand exceeds supply. And this is another confirmation of the situation where we are right now. We also see interest of Chinese producers to diversify into different regions for all kinds of different reasons. And one additional reason certainly is the, let's say, More extensive use of hydroelectric power rather than coal power. And certainly, we are aware Some political discussions, but we do not want to participate in these discussions. May I follow-up on that? I mean, being very straightforward, have you, as Wacker, been contacted by one of your competitors in for JV or for whatever reason. No, there is no reason for us to enter into HEV at this point in time. The answer is no. Thank you so much. And on a personal note, I just want to say thank you for all your time, Mr. Staudigl, and congratulate On your very successful career at Wacker, I'm very happy that the strategy in all the segments Have come to a very good end on time. All the best for your teaching career. Thank you. Thank you very much. I really appreciate your words. It feels good. Thank you. The next question is by Andreas Heine of Stifel. Yes. Thanks for taking my question. But actually, I would also like to spend some moments on you, Mr. Staudiglitz, Following Wacker as a sales side analyst since the IPO in 2006, I feel also compelled to stay very well. I looked up that you have been working for Wacker for 4 decades and 25 years of that in the And that was really critical to shape the company to what Wacker is today. I've seen that you started your career at Siltronic in 1983, 10 years later, you were already in the Executive Board. And with the IPO in 2015 and the announcement of Selling it off to completely in 2020, it was basically at the beginning and at the end of your career. I've looked on silicones and I've obviously seen that the investment in downstream activities were very successful. Looking on the market share you have provided, and I have seen that you were the only one Keeping the market share against rising competition, whereas all your main peers were losing something. And obviously, the mix has improved the margin structurally, which was also a And looking into Polymers, yes, your CFO, Tobias always expressed He is liking this business quite a lot because of the low capital intensity and high ROCE of the business. However, you created the luxury problem by turning it into a capital intensive business, investing €100,000,000 every other year in new state of the art plans To keep pace with the growth, and I'm sure Tobias is not really disappointed about this capital requirement. You mentioned already Bayer Solutions. Well, I've looked up, you started the research in this biopharma in 2003. So that really means But you had to have the lung, breast to get where this business is now, and it was a big surprise when you came up with this 100,000,000 doses MRNR For the COVID vaccine, you delivered to CureVac. On polysilicon, what tough years, 2018 to 2020, but Wacker stayed strong. And you're basically the only Western player left to serve the solar market. Well, you came from the semiconductor side, which means that the quality It was core, and that means purity. And in the solar market, you kept this and quality made no compromise. What basically meant that for a decade long, you oversupplied the solar market with over engineered products. But also here, you were right. There's a change from multi to mono technology and from P type to N type, The highest quality is required. And finally, it is a competitive edge. So it was really right to stay on this quality. You never commented on this, but some say that the market share you have in polysilicon to the semiconductor industry is close to 50%. Well, that means that half of all the servers of Amazon, Microsoft, Google, half of all smartphones, half of all Hardware used for artificial intelligence, 5 gs, mobile, bitcoin mining starts with the silicon and Burkhausen in Tennessee. So Burkhausen in Tennessee might not be the largest polysilicon sites anymore, but sure, they are the most essential ones globally. And I'm aware about the discussions in polysilicon, whether it's good for the investment case to have it or not, but I personally like to see these essential assets in good hands. And I really have to say, to finish your career at Wacker, there's a major rebound in earnings at Polysilicon It's what we say in German, which loosely translates to lack of the hard working. So Tarik, I'm sure that your successor will appreciate the good shape of the business you are handing over, mentioning also that the net cash position and the balance sheet. So it was really impressive what you achieved in your leadership, and I really wish you all the best for your future endeavors. Well, finally, I have still three questions I'd like to add. The first one is on polysilicon. While we have seen prices going up a lot in polysilicon, in aluminum and glass as well, so that means that the module producers have to increase Bear prices substantially and that obviously harms the return of solar power plants. Do you see any risk that the horizon module prices Might impact the demand in solar in the second half. Second question is on biosolutions. Well, CureVac said that they expect the registration in May, and you said that you are already in the ramp up of producing this vaccine. If the registration is there in And then lastly, on silicones, well, taking Q1 EBITDA as a run rate would clearly deliver A higher 2021 EBITDA then is reflected in your segment guidance. So what have you baked in the guidance, which basically assumes sequentially falling earnings in an environment where prices are going up. These are my questions. Thanks. Andreas, I would start with number 3. Yes. If you take the run rate, you come to a higher number. And we I are cautious for the second half. I think that the overall approach of our guidance that is reflected there. There's nothing that we know about the second half That this would really come. But yes, as a matter of principle, also Highlighted in the speech, we see still the risk of potential setbacks also from the coronavirus, as And raw materials are increasing sequentially. To Add to this, there's not so much effect in the Q1, a little sequentially also from the Q4 into the Q1. But the second half, There could be a more significant effect, and I think that's it. Let me just make a few comments on your questions. As I said, we are ready to produce the mRNA for the vaccine. And of course, we are in close contact With CureVac on this. And as soon as The yes, the vaccine is approved from the regulatory agencies. We are ready to produce. And but on the detailed timing, I would propose to ask Kjerbeck, but Wacker is ready. Then on yes, we are aware that, of course, poly prices have And aluminum and glass has gone up, although the shortage of the glass is not there anymore. It's alleviated because more capacity is available. And I think it will be a supply and demand game. Yes. I mean, if prices would for modules would significantly go up, demand certainly would be reduced A little bit. But on the other hand, I think we have to see the global developments. And the global developments just call for more and more installation Of renewable energy, so we are not worried on the long mid- or long term effect. Even on the short term effect, I'm really not worried. So we said all along, we are in the right business There because of the sustainability efforts in the world. And Yes. I mean, there will be demand fluctuations over the next few years, definitely. But I would I don't see severe fluctuations at this point in time. And then Andreas, I really would like to thank you very much for All your words, it feels almost too much, and I definitely can stress that it's not me. Of course, a company needs somebody at the leading position, and I was happy to do that. But I really want to emphasize That the company has lots of talents in the top leadership as well as everywhere in the organization. And as always, people do it. So I think putting the right people in the right place It's the most important task of management, and I think we were very successful doing that. And yes, we stayed our course. Sometimes it was very difficult and frustrating. But on the other hand, I think Ultimately, the company and the customers and the suppliers and the markets benefit from that. So I'm happy to end my career at Wacker with this positive note, Definitely. On the other hand, yes, it has been part of my life. But there are just great people Taking over and leading the company into certainly a bright future. So I'm very optimistic About the future of the company, and I'm always optimistic about my own future. I will miss Wacker, but I will have, I think, a good life without Wacker, too. So again, Andreas, thank you very much. I really appreciate your words. All the best you have. All right. The next question is by Jaydeepan Anir of On Field Research. Thank you. And I'll start with the questions first and then Thank you. Sorry for that. It seems like you just hung up. The next question is by Geoff Haire of UBS. Good afternoon and thank you. I just a couple of questions. First of all, on the other line in EBITDA, you've got a €19,000,000 inflow. I just wonder if you could sort of give some details of what that is. And I think you're also guiding to minus 40 for the rest of the year on other sorry, to minus 20. So does that mean we have minus 40 in the next three quarters, effectively to get to that number? And also just In terms of the in polysilicon, obviously, you had an inventory correction in Q1. But I was wondering given your comments about the fact that inventories are now at very low levels in China, does that mean that we're now through that and that we can expect to see Average selling prices in polysilicon going up towards spot levels that we're seeing in the market at the moment? Jeff, Tobias, on the others, I think it's a great observation. But you look at only a quarterly figure. So yes, it was positive, but we always have fluctuations in the other line. This time, we had an external credit received in our infrastructure, and this is an operational item. So it will get reallocated to the segments, to the divisions over the course of the year. So and that is the reason why the overall guidance for the full year has not changed at all. So it's a Negative double digit €1,000,000 number, I'll say €20,000,000 as you just mentioned. And then in addition to that, we have the equity Result, but in this year, it would be mostly the dividend paid by Citronic. The second question on Polysilicon and inventory moves, it's a tricky one. There's 2 that have an impact on inventory. It's the valuation change, number 1, and the volume change. So the valuation change that was sequentially positive because we had seen a sequential slight price increase. But the volume change was sequentially negative because we had a significant inventory drawdown. And I don't want to give Effect on those magnitudes, but it was a double digit €1,000,000 number, it was not low, not mid, but it was significant between the quarters Q1 and Q1. But as inventory is now down, I mean, these effects get smaller. That's obvious. Inventory is down. These effects get smaller. And I think the third question was on prices. I already mentioned that we had a price increase sequentially. If you come from the outside and challenge us with things that you observe externally, It's sometimes difficult because, I mean, we sell differently. The dynamics are important. That is an important point. Q4 was slightly down month by month, if you look into the details. Q1 was And especially towards the end, it was strongly up. And that is the reason why we do see lag effects in pricing. And in addition, as I mentioned, we had a strong inventory drawdown, so we had significant mix effects. And to be honest, I personally am not disappointed with pricing in the Q1. Indices are relevant to us. Also at the very high end, those indices, but we couldn't show it in the last quarter. And you should never take just the latest quarterly price point and then try to estimate from that the average That we should have achieved. I think that's so much for pricing. Does it I mean, if you Look into the Q2, that will be definitely better, much better. Okay. Now we again have Mr. Bandier of On Field Research. Sorry about that. Yes. The first question really is on the acquisition you've done in BioSolutions, Stigenehoppe. So the peak DNA Portfolio that you've acquired or the product that you acquired, do you have any sales in the U. S. Currently with this? And can you actually develop this product for vaccines outside of the mRNA platform? That's all my first question. My second question really is around the semi grade poly. Could you just give us some color On your exposure to global wafers today and also when we think about 2, 3 year view in semi CapEx, what is happening right now within wafers and also within fabs, when will You actually grow hand in hand with what we are seeing in the wafer and the fabs market. That's sort of my second question. And then finally, Doctor. Sautigal, I want to wish you also good luck. You will have now the pleasure of sharing the frustration of all the Wacker shareholders of The conservative attitude of Barker's outlook, which sometimes is frustrating, sometimes is very prudent. And just as a philosophical question, On that note, as you sign off, do you think that BIOSOLUTIONS deserves to be in Wacker? Or is it the next Siltronic And you should spin it off if you were still the CEO for the next sort of 3, 4 years. Thanks a lot and good luck. Thank you very much. Okay. Let me go sequentially through your questions and remarks. Currently, there is not a lot of PD and A business at all at this point in time. But we acquired the Genopis for the technology and the growing potential in the future. And in addition to that, it also has capacity that we can use for other CDMO Products, not only for PD and A. But you never know what's coming. So we are we will be ready very soon to produce PD and A also for vaccines if customers require that. On the semi grade poly, of course, we supply to all Major semiconductor or wafer makers and also To Global Wafers, of course, historically, we did that. And We expect to do that in the future as well. In this segment, we certainly Grow at least with the market. Actually, we want to still gain market share In these products, so we will do the necessary investments. They will not be very big on the volume side. But On the quality side, we certainly will stay the leading supplier for that. And the biosolutions business, if I would stay in charge, Wacker would not spin it off within the next, as you said, 3 or 4 years. I think it has a long term very good Potential. And this in my opinion, it really has a home is a very good home in Wacker. Thanks a lot. I don't think I will share frustrations. I mean, I am a shareholder of Wacker Already. It was a joke. I wanted to I know. Sorry, but no, please continue. No, no. That's fine. Thank you. Thank you very much. Sometimes I share the frustrations how our stock is seen Rather than the value of our stock. But that's a joke, Chris. Thank you. Thank you. The next question is by Sebastian Bray of Berenberg. Your line is open also. Hello. I thank you. I was on mute. Thank you for taking my questions and good afternoon. I would have a few on BIOSOLUTIONS, please. Could Could you explain, firstly, the reason for the increased sales guidance? I assume this is primarily because the Is it because of Genoxys, but you knew the RNA contract was coming. So what is the reason for the increase from high single digit to double digit percentage? And is there any RNA in the Q1 results? And then a more strategic question on this segment. If it's a core part of Wacker And if there are assets in the market, let's say, with a few $100,000,000 of sales, which Vaca could feasibly afford With Siltronic proceeds, would you potentially look at these? Now I appreciate there's always a question of valuation, but what in principle I'm asking is, Would you have anything against making step change acquisitions in this area at the right price? Thank you. Sebastian, to be answered quickly on your first question, there's no change in BIOSOLUTIONS guidance from our side. So we confirmed and definitely the acquisition, as already mentioned doesn't come with large sales in the 1st year. So there's no change from that. We have some Headwind from integration costs that we flagged also, which will hold us back, especially in the first half of the year, but no increase In sales, no change to overall guidance from the acquisition. And on the strategic part, I mean, we We have a very sound financial position, so we certainly could move on opportunities. But as we stressed several times, we certainly do not participate, let me call it, an irrational exuberance That is understood. A quick follow-up on the other segment. Does the EUR 20,000,000 Negative result expected in EBITDA include the expected contribution from the Siltronic dividend, which So Citronic, so the €20,000,000 is negative €20,000,000 is a good assumption for our investments also In infrastructure and digitization, that is something that is not rolled into the division, so EUR 20,000,000 and then plus The equity result. Just to clarify, if Citronic if you receive a dividend this year from Citronic of CHF 10,000,000, let's say, Then the fact of the guidance would be for minus 10 arrivals and minus 20 for 2021. Is that fair? So I think I would like to take it back later. I don't really understand what your question is? Okay. That's understood. Thank you for taking them. The next question is by Chetan Udeshi of JPMorgan. Yes. Hi, thank you. A couple of questions. First question was, historically, solar industry in general has been pretty Price elastic, so in other words, when prices go up, you always see some sort of a moderation in demand and when prices are low, typically that has Incentivize more solar growth. Today, we hear from time to time some module companies cutting production Because polysilicon has become too expensive, do you see that risk at the moment that just given how High polysilicon prices have run up that you might have some knock on effect from that in terms of weaker And demand for solar in second quarter or second half? And second question was just a clarification. I just saw The sales bridge on I think it was the 2nd or 3rd slide in the presentation and it shows the pricing element is just 1% Year on year, which seems too low given how much the polysilicon prices Have gone up. So are you does that mean the prices in other divisions haven't gone up at all? Chetan, let me address your first question. I think, Again, there is a very high demand for renewable energy in the world. And with Supplying the solar modules, I think it will be it will certainly entail Fluctuations over time? I don't think that Polysilicon prices will go through the roof and sort of kill the profitability of the whole Value chain, I think it will be just a normal business that will grow fast Because of the worldwide demand, because of the investments in sustainability, Yes. And then sort of accompanied by fluctuations here and there. So yes, there might be a Slightly reduced demand in some periods of time, but then it will accelerate again. I think that's how we should view it. It's certainly a high growth business for a substantial future, I would say. Chetan, to your question on pricing and presentation, I mean, you're really an expert And spotting details, congratulations. I think I would love to go into more details with you After the call, if you don't mind, it has something to do with SAP and product changes. So the true price increase is a little higher. But in That type of analysis that was moved for this quarter more into product and mix changes. But If you are really interested in more details, I'm happy to have a call with you later. No, that's fine. I understand. Maybe a follow-up to first question In just the solar industry, do you guys see any move in terms of whether it's in U. S. Or in Europe To start considering, not from yourself, but from other supply chain companies build the solar infrastructure again In Europe or in the U. S, with wafer companies or module companies, have you seen any activity in terms of building the local Supply chain for solar in Europe or U. S? Yes, yes. There are investments In several European companies, including Germany, there just was announced was an announcement From Meyer Burger, for example, they focus on high end products. And by the way, they said They would only use Wacker Polysilicon because it guarantees the quality that is needed. There are investments in Turkey, for example. And in Norway. Yes, yes, in Norway. That's what I meant with several European companies. Also in other, I mean, there are Yes. Producers or potential producers interested like out of France. So yes, I mean, there is certainly growing interest because it will be such an important business That some people talk about not only being dependent or they want not only be dependent on I mean, China is a very reliable supplier of solar modules. But It's a global business, so there are other people interested as well. Understood. Thank you. The next question is by Markus Mayer of Baader Bank. Good afternoon. I have two questions remaining. The first one is on the Polymed addition. You said that you broke up The content structure, as you have basically installed surcharges for products in the polymers, questions here. Have you broken up the content Structure or was this an official exit clause? That would be my first question. And then the second question is How do you see the announcement of this U. S. Solar industry? TrackCube yesterday issued voluntary guidelines For solar panel manufacturers not to buy components from Build abroad from by forced labor. Is this something you think will positively affect you in the U. S. From your German plants, already short term or is this now something that just filed? And then lastly, Markus, on Your question on polymers and pricing, since we last spoke, raw materials kept increasing. I think we talked about that. And spot prices are more than double of last year. And things won't stay like this. It's unclear how quickly tightness will moderate, but at some point, it will moderate. You can rest assured that we don't sit on the sidelines when Such things happen, and we actively raise prices, and this is the daily talk in our business teams. And we need to do more. We announced what we call surcharges starting in April, And we do more starting in May. But as we have existing contracts, this is Not easy, but so far so good. We have a good level of acceptance by our customers because It can't stay like this. We need to have some burden sharing with our customers, and our customers do understand us in that respect because they also want to get our supply. So I don't think it Won't stay like this. We have a strong margin focus. We have a strong pricing focus. We have a strong demand environment. Over time, it will normalize, and we are in that business for long. And so surcharges in such a Yes, almost crazy situation is a very good means in order to come to a good solution also for our customers. Very clear. It was just a question, as I read from other companies, that there are discussions that contract structures are really broken up, Which, of course, then later on a big risk. But now I understand that this was not the case, okay? Yes, exactly. We keep contracts. On the other comment or question, we are aware Of these discussions that are going on, presently, of course, we are sold out in So it does not have any impact on us. And yes, in general, I Think it's better not to participate in political discussions. Poly is coming from polycrystalline and not politics. The next question is by Sebastian Zaps of Barclays. Hi, good afternoon. Thank you very much for taking the Sorry, I was late for the call, so apologies if the question has already been asked. But just wondering how much of the €200,000,000 raw material What you have seen for the year, you expect to happen in polymers? And how much of that do you think you can pass on to your customers this year? And then secondly, on silicones, can you just define what low double digit means in terms of the outlook? Is it low teens or could it be in the 20s as well? Apologies if it's already been asked. Thank you. Sebastian, to your question on the raw material headwind and the €200,000,000 it's mostly polymers. I don't want to go into more details. We are as just said, we are trying to pass on as much As possible to our customers, I just explained our approach to this. So it's about burden sharing, But we will have some hit in this year, as we also expressed in our guidance that we lowered and We said that for the Q2, which will be the toughest, we expect a single digit margin. And for the full year, we will not be able to reach our previously guided target margin between 15% 18%. And the second question was on silicones. Could Can you repeat it? You're guiding for low double digit EBITDA growth. Whether if you could Narrow that a little bit, whether you mean low teens or whether that could also be in the 20s? I would Between 10 and 20, most likely. Understood. Thank you very much. Okay. The last question is by Thomas Wrigglesworth of Citigroup. Sorry, sorry, I'm struggling to unmute myself. Yes, firstly, Doctor. Let me echo the sentiments from Andreas on your successful tenure at Wacker. I've just heard a square earlier question with your comments around wanting to keep up with customers. Now what are the conditions that you would need to see to invest in new polysilicon capacity, be it in the U. S. Or in Europe, given the demand I mean, prices are high, margins are good. Do you need signed off to Yes. Kind of your thinking on what you need before you start to reinvest in that chain It will be much appreciated. Second question, I'm just I think we saw peak silicone margins at around 7% in 2018. Do you think we're on trajectory for that? And is that something that is encompassed within Your guidance growth that we would get to kind of 25% around that type of level margin? Thank you. Thomas Tobias here. On your second question, if you compare silicones to 2018, please bear in mind that 2018 was a tight market for standard products. Right now, we have a very good momentum for specialties, and we have a balanced market for standard products. So we do not have that very high and solid pricing, and I think that makes a big difference. Yes. On polysilicon, when would we invest? Well, we certainly do defodlenecking steps All the time, which does not give us a lot of additional capacity. But nevertheless, I think these are very, Very positive steps in terms of cost reduction and some additional quality. In semiconductor polysilicon, as I said before, we certainly grow at least with the market, if not more. I mean, our ambition is to grow more than the market. I mean, what do you need on reinvestment conditions In solar, I think you need assurance that it's a profitable investment. And I mean, in the past, we always said polysilicon will become a normal business. And What does a normal business mean? It's supply and demand based and Not politically based. As you know, within the past 10 years, there was a lot of, Let's say, trade conflicts that also entailed polysilicon, this is These are certainly not reinvestment conditions. So now we are certainly observing what's going In this market, we have a great position, top quality supplier, and we will certainly keep This position, this is our ambition. And when time will come at a certain Some way in the future, I mean, we are not opposed to adding capacity, But just under normal economic conditions, that's what's necessary. You don't feel that that's quite there yet? I mean, we have a situation right now where we have a shortage. And there are Competitors that announced incredible capacities, whether they will build them or not, I don't know. But under these conditions, we are certainly not interested to build also incredible new capacities. So we stay our course, supplying the highest quality material And doing debottlenecking steps to keep up with the demand for the very high quality material. Thank you both. Don't let me keep you from refreshments now. Well, thank you very much also for your comments in the beginning. Appreciate it. Thank you all for joining us today and for your interest in Wacker Chemie. We're looking forward to further discussions with you as our quarter progress Goodbye. Dear ladies and gentlemen, thank you for your attendance. This call has been concluded. You may disconnect.