Earnings Call: Q4 2019

Mar 17, 2020

Day, ladies and gentlemen. Welcome to the conference call of Vakashimi. At our customer's request, this conference will be recorded. After the presentation, there will be an opportunity to ask May I now hand you over to your Kaufman who will lead you through the conference. Please go ahead, sir. Thank you, operator. Welcome to the Bakken Kimi AG conference call on our full year 2019 results. Vedula 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 webpage and on the Investor Relations. Before we begin, allow me to point you to our Safe Harbor statement, which you'll find at the beginning of the slide deck. Doctor. Staudigl. Ladies and gentlemen, welcome to our conference call and the full year 2019 results. As expected, 2019 was a challenging year for our company. The main factors dampening our operating performance were substantially lower average prices for solar grade polysilicon and price declines for standard silicones. These trends noticeably slowed group sales and EBITDA. On balance, price effect reduced group sales by 1,000,000. Sales came in at 1,000,000,000, down 1% versus the previous year. EBITDA was 16% lower at 1000000. It included insurance compensation of EUR 112,000,000 for the damage related to the 2017 incident at our U. S. Sites in Tennessee contrary to our assumption at the beginning of 2019, solar grade polysilicon prices did not recover in the second half year. After adjusting our price outlook accordingly, we recognized an impairment charge of EUR760 1,000,000 on other assets. The impairment not only impacted EBIT. It also weighed on the group's net result where we posted a loss of 1,000,000. Despite this, the supervisory and executive ports will propose a moderate dividend of points per share. This is also a sign of confidence about the years to come. Looking forward, 2020 will be another, again, very challenging year. On top of the slowing economies comes additional uncertainty due to the coronavirus. As present, it is unclear how seriously the coronavirus's impact will affect economic growth and our business. The situation is changing rapidly and continuously. At this time, we cannot reliably predict the impact of the pandemic on our business and our results. The current situation is that our production plants are running. In China, we have seen sales in chemicals down by some 20% over prior year. We faced certain restrictions for shipping of our products to customers but lack of supplies have not been much of an issue. So far, these issues in China were all manageable. The virus continues to spread globally as we have seen in recent weeks and containment measures will certainly add completely new challenges which are impossible chains, operations, and global demand. We highlighted this in our risk management systems as a risk of highest category with a potential impact of more than 1,000,000. Excluding any potential impact of the coronavirus operations are likely to benefit from slightly lower raw material and energy costs. Overall, we expect full year sales on a group level to rise by a low single digit percentage for EBITDA, though we anticipate a decline. Earnings will be supported by lower costs as mentioned, but be negatively affected again by lower average prices for polysilicon and price declines for standard silicone products. While EBITDA is expected to be lower, we expect to generate significantly higher net cash presentation and then cover segment guidance for 2020. Starting with Page 3, our chemicals continue to grow faster than GDP. But group results have contracted over the past few years being held back primarily by polysilicon. With an 18% margin in chemicals, we are clearly above our 16% target. This shows that our specialty strategy is paying off. On Page 4, Please note that our gross profit includes insurance payments for the 2017 Tennessee incident compensating for lost income in prior periods. A significant impact on gross margin was also the decline in prices year over year mostly concentrated on polysilicon and less on silicones We were able to partially offset these with lower raw materials cost reductions and efficiency measures. Other operating expense includes the impairment of polysilicon assets as communicated in December. We wrote off 1,000,000 in Est values following the subdued price expectations for solar grade polysilicon. The impairment reduces our ongoing annual depreciation by about 1000000. The result from investments declined mostly following a decrease in Siltronic earnings. On page 5, our balance sheet shows the effect on equity of both the impairment and the pension fund in late 2019. Improved net cash flow increased liquidity to 1,000,000, This is about million more than at the start of last year. Combined with unused credit lines, 1,000,000, we are solidly financed. As we move on to the segment, and segment guidance for 2020 now, please note that my comments on outlook will not cover coronavirus effects as Rudi already claimed. Silicants on Page 6 saw sales decline by only 2% as the effect of the 2018 market tightness rolled off. This led to sharply declining prices and lower volume growth a more normalized operating environment over the course of the year. 2019 EBITDA margin came in at 19 point Overall, the last year was strong but soft in industrial applications. For example, in automotive and plastics. At silicones, we expect sales for 2020 to climb again by a low single digit percentage. EBITDA should come with lower prices in standards. Polymers recovered profitability last year as sales increased by 3%. Higher volumes and favorable exchange rate effect drove this improvement. Segment EBITDA improved by over 30% to 1,000,000. Following higher sales and lower raw material costs. To grow by a low single digit percentage. This With raw material prices slightly lower and thanks to productivity increases, EBITDA should rise slightly. Bio Solutions on Page 8 reported an increase in sales by 7% while EBITDA in by over 30%. The improvements here reflect higher sales, driven by our biopharma business, and better utilization at their facilities in Amsterdam and the two sites in Germany. In 2020, we expect BioSolutions to increase sales by a high single digit percentage Again, the main impetus is potentially higher than last strong volume growth was overcompensated by significantly lower prices for solar grade polysilicon. As a result, sales declined by 5% year over Germany's high electricity costs in heated earnings. Despite all these headwinds, we made good progress on cost reductions volume and mix improvements. EBITDA totaled 1,000,000, down 21% year over year. Adjusted for the insurance effect, EBITDA was -1000000. Through the year, inventory valuation adjustments weighed additionally on EBITDA. In polysilicon, we expect 2020 sales to rise slightly, up by a low single digit percentage. It improves product mix, will drive growth as we shift towards high value products. Cost savings should offset lower average polysilicon prices. Adjusting for the 2019 insurance compensation, EBITDA of this year should be on par with last year. EBITDA and others amounted to 1,000,000, down from 1,000,000 in 2018. The decrease was mainly due to lower equity income from Siltronic. Now some words on cash flow and net financial debt, please see Page 10 for this. Gross cash flow in 2019 was positive at 1,000,000. Sidronic dividend payment of 1,000,000 lifted gross cash flow. Working capital increased by 3% as trade payables declined following reversals from year end effects in 2018, and lower investment spending and payments falling due at the year end of 2019. Trade receivables and inventories declined by a total of about 1,000,000. Net of tax, the inflow of the insurance compensation was largely offset by the payment of 1,000,000 to the pension fund. Nevertheless, net cash flow increased by nearly 1000000 to 1000000. We ended last year with a net financial debt position of 1,000,000 without The million change from IFRS 16, the lease accounting net financial debt would have stayed at last year's level. Let's move on to the outlook on page 11. For 2020, we expect a low single digit increase in sales at group level. We currently see full year EBITDA when adjusted for the insurance compensation received last year at mid single digits below 2019. This group guidance takes into account some of the economic uncertainty, which was already discussed at the very beginning of the year. We also expect equity income from Siltronic to be lower than last year. Both effects have been considered in the line others. On further guidance elements From the lower depreciation level, group net income should rise substantially. Net cash flow is expected significantly higher than last year net debt should come in substantially lower than last year. As I already mentioned, our guidance explicitly excludes the coronavirus's potential effects on economic growth and on our business. In our risk management system, we consider the risk of the pandemic to be high. The impact on Please bear in mind, this is not a calculated number. This is not guidance. This is a risk management category in a situation of high economic uncertainty. In case this risk materializes in such a category, It is possible that adjusted EBITDA could decline by a double digit percentage versus last year. Now just looking into Q1 2020, we expect 1st quarter group sales of around 1,000,000,000, down somewhat year over year. 1st quarter EBITDA should be substantially higher than for the same period last year. Lower inventory valuation effects and operational cost improvements support our earnings in Q1 2020. Let me hand you back to Rudy. Ladies and gentlemen, we have spoken now a lot about the coronavirus, but we are also concerned about general trade risk and other negative macro effects. While 2020 looks to become challenging, our company is well positioned to weather these challenges. We have a sound balance sheet leading market positions and industry leading technologies. I'm convinced that we are on the right path. As we move forward, I see Rocket Kimi becoming more specialized, more stable with lower overall capital intensity, and growing market shares. Let me highlight our strategies to explain my level of confidence. As a global producer of silicones, we will continue increasing our share of high margin specialties to generate profitable growth. For standard products, the division's focus is on being a full range supplier with global reach and achieving cost leadership. Polymers is pursuing growth by concentrating on the trend toward value added construction materials and actively promoting related industry standards. Using the advantages offered by VIE Dispersions and disposable powders we aim to replace conventional technologies and tap new application areas. At BIOSolution, we are focused on expanding biotech activities and acquiring new customers. To this end, The division is leveraging its extensive expertise in its facilities from making biotech products on an industrial scale. At polysilicon, despite the difficult market conditions, we remain firmly convinced that this business has a very good future. First, the market will continue expanding strongly combating climate change will make a huge global increase in Total Thai installations indispensable. We expect newly installed photovoltaic capacity to amount to between 135.55 gigawatts globally in 2020. This assumption, of course, does not contain any 2nd, there is a clear trend towards highly efficient monocrystalline solar modules, which in turn require high quality polysilicon. That is exactly what we make. Hence, we already lead the market for cutting edge semiconductor poly. 3rd, we have a concrete plan to further reduce our production costs We already lowered them by 1 third between 20142017 and are again targeting more than 30% by 2021. Yet with all these strategies playing out, Unfortunately, operational excellence alone is not enough. We also need to take a hard look at our indirect cost and administrative setups to make Vaca more competitive for the future. Our so called shape the future project focuses on cutting costs significantly and on making our business structures and processes leaner and more flexible. We have set ourselves ambitious targets through to the end of 2022. Overall, we want to save around 1000000 in annual costs. To achieve this, we are concentrating on both lowering non personnel costs and on cutting more than 1000 shops, mainly in the non operational areas of the company. Most job losses will occur in Germany, which will account for around 80% of the total. We are currently examining, reviewing and refining the options we have identified for optimizing our organizational structure. In parallel, we are creating a blueprint for our company's future structure and define the measures needed to realize We want to complete this step by the middle of the year. After that, the implementation phase will begin. In 2020, we do not expect major benefits from this program yet. At this point in time, nonrecurring costs for the program cannot be quantified so far as they will be determined by the precise measures we will take. We expect to be able to The overall economic environment currently poses major challenges to look ahead to the future, thinking and acting for the long term. That is reflected in our capital expenditures. At around 1,000,000, they will be lower than last year. The spending focus is on expanding our plans for intermediate and downstream products at our chemicaling divisions particularly for our specialties business. Here, we focus CapEx and lower capital intensity projects with higher profitability. We have many advantages and attractive portfolio a strong presence in the world's key markets, divisions with leading market positions and our innovative new products and technologies. We will use these strengths to drive Our presentation ends here. We will now commence the Q And A session. Operator? You. The first question is from Patrick Rafaisz, UBS. And first, a couple of questions around cash flow with working capital actually slightly up in 2019. What should we assume here for 2020? Any relief on the cash flow here? And secondly, the pension liability as you described increased as a result of lower discount rates. Do you planning any top ups here as well in 2020? And then third question on the Q1 guidance. And does that also exclude any effects from Corona or is the Q1 guidance, is that built into the Q1 guidance as early in the middle of March now? Patrick, Tobias speaking on the cash flow question. I think we assumes some slight improvement in working capital, especially on the liability side in 2020. As we have a specific program ongoing extending our payment terms. On the pension question, I mean, as you know, the low interest rate environment most likely will continue for long. So we will see some effects on the balance sheet, again, end of Q1 size, I have the latest numbers on discount rates. But we do not plan a top up for the pension scheme in 2020. So that was an extraordinary top up in last year. Can I exclude that for the future? No, but do I have planned for that in 2020? Definitely not. And the 3rd question on the Q1 guidance, I think we are almost through, I think 1st 2 months we have in the books. And so we have some visibility at least on the top line. We will end the EBITDA we guided for higher. This was mostly also a reflection of the 1st 2 months that we have in the books. What will happen the next few days, we don't know. And for that reason, I I mean, in the middle of March, in this situation, I cannot exclude any, coronavirus impact that we, can't see today. So, but for the time being, it was not meaningful. We are just percent below in China in revenue, which I think is decent. We ran throughout the 1st 2 months fully in China also. So there's a minimal impact so far, but I don't know what will happen the next 2 weeks. Okay. Thanks for the clarifications. The next question is from Tom Wrigglesworth of Citi. First question is on polysilicon. With the continuing internal focus on self help and an improvement. When do you think based on current prices, you think you might get to EBITDA breakeven for that business? Is that something that could be exit rates 2020 something achievable or possible in 2021? Your thoughts there would be helpful. And just a little more on the color on the cost saving program that you have for head office. Could you give us a split of what might be the, you know, of how I got 250 €1,000,000, which is in all labor. Could you help break down what the components are in that saving program? And will that be you expect a linear progression in the savings through to 2022 or is it going to be more 'twenty two heavy than 'twenty one? On the polysilicon, we are making progress on the improvements The good thing is that prices seem to stabilize at this point, at least for monozilicon, fit material. And, so it's a good development altogether. To make a precise forecast at this point in time is really really very difficult. But, the trends are okay. And to the question of the efficiency program, the million target is roughly split fifty-fifty between personnel and indirect costs of procurement. And regarding the progression, I would assume, yes, on the personnel side, most likely, it would be more tail loaded in with respect to the savings towards the 3 year timeframe that we have for the indirect spend, I would definitely assume a much faster progression. But I think we will have more details in June when we target to have our Capital Markets Day. Thank you. Just as a quick follow-up on the polysilicon, I guess my question is, are there any more cost savings to come through yet in polysilicon or further levers that you could pull to help improve profitability? Yes, of course. I mean, continuously, we are making progress on cost savings. And there is still, something to come. I mean, this is what we even forecasted, up until 2021. I mean, of course, assuming that we can run our plans fully or can continue to run our plants fully. That means that the necessary installations have to take place. So far, it looks good, but again, unfortunately, this year, things are open for various assumptions right now, especially since it looks like right now, China has difficulties really delivering the materials, the solar modules to the respective markets, just from a logistics point of view. Understood. Thank you very much. It looks good. So far it looks good. If everything goes as as normal as it can be, I think we are making significant progress. Clear. Thank you very much. Good afternoon. Thank you for taking my questions. Firstly, on the 100,000,000 from coronavirus how have you tested for this? Can you give us just a little bit more detail on some of the underlying assumptions on whether you consider this figure to be cautious or, let's say, a realistic figure. Secondly, on the Tennessee plant, Just wondering, what is the outlook for effectively switching to more semi grade unless solar sales here, how far advanced is this thought process? And ultimately, how important is this to your polysilicon Division, EBITDA returning, positive. And thirdly, just if you could specify whether you have seen to date any disruption to production to date as a result of coronavirus, both on supply and on the demand side? Thank you. On the polysilicon question maybe first. Of course, it's important to us that we that Tennessee is also qualified for semiconductor materials. And it is. It's with by far the most customers, it's It has been approved. And I mean, it's the latest technology newest, polysilicon production facility plant in the world. And I mean, fit for a semiconductor application So, yes, one or the other qualification is missing, but, but the trend is very clear that, and by the way, it's not missing because of lack of quality. It's missing simply because these things have to really work through at, at the customers. Just a question of time. So far, we have not seen any production interruptions. There were some logistical difficulties and difficulties in available raw materials, but we could all work through these issues And, yeah, no significant impact at this point, but we cannot guarantee that this will stay as it is. Because, as you can see, I mean, Volkswagen is announcing closure of productions, etcetera, etcetera. And so the whole corona issue will have an impact on the global economy and, we are part of the global economy. I mean, we are trying to do our best But we cannot guarantee anything at this point in time. Maybe that is also a good hand over to €100 million question on the risk assessment for the coronavirus. I mean, as we said, we cannot reliably reliably predict the impact of the pandemic. And I think nobody can today. And for such, you have to Bear in mind that this is part of our risk management system that we have categorized the corona risk as likely, which is the highest category and the possible financial impact as high, which is also the highest category, and that is more than 1,000,000. So, this is not a calculated number in any sense. It's not guidance. It's just a risk category. And it reflects the high level of economic uncertainty that is arising from the virus and the shutdowns of of public life in many countries, which is happening right now. And it also reflects potential challenges in the supply chain and in operations, which we don't see yet but which would come if we run short of a raw material or if we are hindered to run our operation as normal or some of our customers are in that to run operations as normal. And, that's why it's it's a risk category, but it's not a number where we have a spreadsheet for. The next question is from Thomas Voboda, Societe Generale. Your line is now open. Yes. Good afternoon, everybody. I have two questions, please. Firstly, on the guidance, I'm still trying to get my head around it. And I'm wondering if you could help us with some few more details. So on Q1, you're saying a substantially higher EBITDA. There were obviously some one offs which were not disclosed in full last year. So my question here is, is the increase just because of those one offs you mentioned? And if you could share with us, if without saying the numbers, obviously, I don't want to push you too far, but if you would consider those one offs you had in Q1, which is the inventory revaluation and the force majeure costs you had in silicones. Would Q1 be down year over year on your guidance? Or flat or up possibly. So that's the first question. And the second question, hopefully a little bit easier on polysilicon. What visibility do you have for polysilicon in 2020? Obviously, assuming that you can run your plants normally, no, no huge disruptions from Corona. Do you need pricing to get there to turn breakeven or slightly profitable towards the end of the year? Or is there a lot things you cannot control to make your guidance in polysilicon? I'll start with your very difficult Q1 question. I would say I mean, I give you a little bit color on the segments. If you take the chemicals, silicones, is a bit down again prior year and that it comes from the price decline over the course of 2019. Certainly now for the year over year comparison, especially at the beginning of the year is a burden in standard prices, I mean. The polymers division is up. So if you put the 2 together, maybe you come to a similar result as last year. And guiding for a higher Q1 overall comes from polysilicon. We were burdened in last year by inventory valuation effects. And as Rudy said, we made progress on the cost roadmap So that gives us an improvement year over year in Polysilicon. That's why overall we see us, for the time being significantly up against last year. For polysilicon in the overall guidance, 2020 means that we still expect some lower average prices and to be try to balance that with our cost improvements. So I would not say, I mean, from the guidance that we calculated, we said, exclude the insurance from last year. And then we are on par with last year. So we are not at break even get for the full year. On the pricing? Prices stay flat And as we continue with our cost reductions, we have a very good chance to have a positive development. Perfect. And if I could follow-up on Q1, So you're basically saying that without the inventory revaluation and despite some headwinds from Corona, in Q1 so far, your base business is more or less flat. Yes. In a tougher standard and tougher environment. Yes. And that's perfectly understandable. Yes. And that's an operational achievement. Because bear in mind, I mean, prices in silicones have decreased throughout 2019. So we are comparing really in a much more challenging environment and still come in with a decent operational performance. Yes, obviously the price burden will decrease, will decrease over the quarters. Perfectly understandable and extremely helpful. Thank you very much. The next question is from Andreas Heidel, MainFirst. To ask question. I start with polymers. The oil price is at 30, and raw materials being that low. Had caused record high earnings when we have seen the oil price coming down last time. So what is different this time as you have only guided for a slight increase. And on polysilicon, maybe you can shed some light on how the pricing and same is. I know it's more robust, of course, but everyone who wants to earn money in the polysilicon business has probably an interest to increase the market share. Has that caused any price pressure or really here prices come completely flat? And then on the coronavirus impact, of course, you nobody knows exactly what comes out, but your businesses are probably affected in a much different way. I would not expect that solar is very much dependent on the global GDP. I also expect biosolutions not dependent on this. Maybe a little bit different with semi polymer and silicon. Maybe you can highlight a little bit for the various businesses where you see lower and where you see higher risks. Okay. Andreas, I'll start with the polymers and oil price question. We have put together a raw materials forecast before the sharp decline of the oil price in, yes, it think it was last week, Monday. I mean, you start to forget how close that was. It was Monday last week. So we haven't baked that into our raw material forecast as part of our standard in process and procurement. But you should bear in mind that ethylene prices and costs have been pretty low already. So there is a connect between, oil and ethylene, but it needs to be seen how that, yeah, calculates through into our own raw materials. In polymers. We have baked in some slight decline in polymers, but as we all know, yes, there's also some formula prices that will then lead to our lower sales prices. But, yes, it could be a situation where we benefit from lower raw material in that division. On polysilicon, all the new polysilicon plants except for, for our Tennessee plant, are definitely not able to produce semiconductor grade polysilicon. So, and if competition and a new competition wants to, be qualified for Semiconductor Polysilicon they have to upgrade their plans very significantly. So they need lots of new investments. And this will certainly have a very stabilizing effect on the semiconductor polysilicon prices, at least for the years to come, I would say. Of course, if somebody wants to dump material in that segment, that could have an impact, but those who, you know, want to make money, you know, we'll we'll have, or we'll certainly support the price level we have there. For the coronavirus impact on the chemical divisions, I mean, you already said poly and bio solutions, that's not your question. It's about silicones and polymers. Silicones is a broad diversified business, which serves a lot of different applications. It's a global business and as we always said, it's GDP driven. So there will be an impact, but it would not be just a single segment that can have a a tremendous impact. So I think it is to be considered as a rather defensive division in such an environment. Polymers, as we know, a good portion of it is is construction industry. And we are in, in modern construction in high quality materials. So it's not only newbuilds, it's also renovation. It's difficult to assess today, but it might be that coronavirus has less of an impact on construction activity. And as such, it could be that we continue, yeah, our path that we have shown historically. But it's Yeah. Of course, it's early. I fully understand your categorization. But looking into what you described that, again, the semi part has put always some volatility if you have GDP changes But on what you said, the $100,000,000 number looks very high. As you described, the silicones being very diversified, very global and growing above GDP. Volumes going into construction, not dependent on short term decisions, probably not affected. And solar also not driven really by economic swings. But, as we said, we have all risk in there. We have the demand risk. We have the supply risk and we have the operational risk. I mean, we definitely need to keep our large production sites up and running. I mean, these are integrated sites. You are hindered in any kind in, it will have a huge impact. That's understood. So basically, as long as your science operation, I mean, the risk might be much less than this percent now? We hope so. In 2020 forecast will continue to change over the next couple of days. And, somebody was mentioned as conservative taking down some digit points in percentage growth for GDP. I mean, some halved it 2 weeks ago. I mean, we are more or less in a standstill mode for many countries right now. I mean, nobody really knows and we need it. The next question is from Oliver Schwarz, Warburg Research. Thank you for taking my questions. I've got 2 that might be easier to answer than predictions on corona. Regarding your dividend policy, I guess the 50 percent of net profit targets or politic has been shelved, judging from the per share dividend connected to a loss on the net income line. Going forward, could you elaborate a bit on your dividend policy. Is that more tax to EBITDA generation, which is expected to be down year on year in 2020? Or is that more back to your free cash flow generation? Which might be might be up in 2020. If we, let's say, if just negate the corona impact. But also might that be affected by the one off burden of cost through air resulting from your efficiency program? Or is that also a one off that's not going to affect the dividend payout? And secondly, could you please expand on the bridge tween the result of Sertronic and your at equity results, could you please put some more flesh to the bone in regards to how the equity result was basically compounded. Thank you. Well, first on the dividend policy, it's not shelved. I mean, according to the policy, we and by the way, we said roughly 50% of net income, yes, our net income was negative last year that we could have said that there is no dividend this year, but on the other hand, it makes a lot of sense to continue to pay a dividend even on a small scale, which we did in the past as well. But, for the future, there's no reason to change the dividend policy at this point in time. So if we if you should generate a negative result in 2020 on the net income line as well. Might we expect a dividend similar what we've seen for plans to be paid out for 2019? This will be decided then in probably January, February, 2021. It's not a major concern at this point in time. To your question on the equity either I got it right. We haven't 31% share in Siltronic as you know. And it's not that easy that you just take the equity result or the net result of Sertronic times 0.31 because you need to take into account that Cytronic also has result attributed to minorities. So, you can only take number from Siltronic attributed to Siltronic shareholders. And from that, you need to deduct something that we guided for very beginning of after we deconsolidated, we need to deduct some 15000000 to 20000000 a year with at the time you said roughly $5,000,000 a quarter for the depreciation on the different stemming from the purchase price allocation at that time. So then you come to the equity result that we show in our books. Okay. And if there, because there seems to be a bit of a swing, from what was recorded in 2018 to 2019. If my calculations are correct, the impact of this 5,000,000 per quarter or 50,000,000 here, was quite diverse when looking at 2000 192018 report results from the equity line. That's basically what I'm looking There's one more point, Oliver. In 2018, we had recorded, other equity results in the Silicones division from revaluations in some international joint ventures. And so it's not only the impact from Siltronic. Okay, okay. So can you confirm that 2019 basically is more or less solely the impact of Siltronomic? If you go from 'nineteen to 'twenty, yes, but from 'eighteen to 19, it's the 2 effects, it's the joint ventures, which we had only in 2018 and plus the effect from Siltronic. Okay, okay. Understood. Thank you very much. Welcome. The next question is from Laura Lopez Berenberg Your line is now open. Hi, good afternoon. Can you hear me? Yes, very well. Okay, very good. So I have a question on the monopolitical supply demand. It will be interesting to get from from your side, how do you see that developing? So you already mentioned a significant increase in photovoltaic installations in 20 as possible or what is targeted to come during the year. So OCI is now out of the market? And how do you see this developing? So you have all of some of your other competitors also. Stepping up a supply, but nevertheless if the market grows around 20% and then the shift continues to improve the amount of monopoly committed is going to be a rather high. So maybe from your side, how do you see the supply demand developing there? And then I have a question on inventory levels. How do you see your inventory level for Vaca can mean maybe in silicones and polymers? Will be very interesting to know and also on polysilicon maybe in the first quarter did inventories significantly also went up as maybe caused by these more, logistic disruptions that you saw. And last but not least, maybe on the other line, your guidance suggests that the other lines will be around minus 30,000,000 in 2020 or significantly negative in 2020. If we take into account that for all of the other businesses, you expect a flat to slightly better EBITDA. So can you maybe because I know you just explained the Syntronic contribution, but nevertheless, my 30,000,000 seems rather high. Maybe how can we come more or less to that number? Thanks. Of the silicon supply and demand, it certainly helps, quite a bit, that there is some, Reconciliation, how do you say it? Yeah, a reduction of of supply. And on the other hand, some Chinese competitors continue to expand capacity. The question really is how fast they really do it and how well they are equipped to supply the, the demand for monosilicon, or monocrystal in fit, polysilicon. I think, the problem is that, the Chinese competitors are so much state supported in terms of subsidies as well as the energy supply. And, but on the other hand, I hope that they are more reasonable with the, you know, the time, progressing. So, but on the other hand, there is still lots of demand for very high quality polysilicon, which we are able to supply. So I think these categories sort of shape the demand supply scenario. And, there is simply a very good fit in very good place for our polysilicon in this scenario. A question on the inventory levels, we came out pretty low in inventory. Both in the big chemical division silicones and polymers, but you're right. We will see in Q1 some increase from that very low levels. Would attribute that to, at least some effect of that is that in China, we could run production full throughout the 2 months. But as we said, sales in chemicals were some 20% below prior year. So that apparently would be a challenge to get also product to the customers and still slow demand that leads to some higher inventory. And for polysilicon, that the start of the year is also hindered a little bit by the logistics challenge as we discussed. So also inventory will be up. The question on the other line, you're perfectly right. If you add up our segments and then come to the group, you see that other is, is negative as we said, yes, this has the effect of a lower equity income from Sertronic. But it also has, the reason that we baked into that guidance some level of economic uncertainty, which was already visible at the beginning of the year, just take the trade risk, take Brexit, take the slowing economy, And this is part of the others line as we have put together our guidance. Okay. Thank you. That's very clear. And maybe very, very shortly on your fine chemical business, are you seeing like these disruptions in the pharmaceutical supply chain globally could benefit that part of your business, so not the biotech more business, but the actual fine chemicals business where you supply some agrochems and also some products for the pharmaceutical to expect maybe to start seeing there again a shift into more production in Western plans or are you seeing any positive effects from that? That could well be we don't see that, at the moment. But on the other hand, we have high expectations for our Viosolutions business in basically every segment, maybe the true income business is a bit slow, but all the others are doing very well. And I think the age of biotechnology is just getting started. Great. Thank you very much. Thank you all for joining us today and for your interest in Vaca kidney. We are looking forward to further discussions with you as the quarter progresses. We will be back again with the conference call on the first quarter results on April 30. Goodbye. Ladies and gentlemen, thank you for your attendance. This call has been concluded. You may disconnect.