Clariant AG

Operator: Ladies and gentlemen, welcome to the Clariant Fourth Quarter Full Year Results 2025 Conference Call and Live Webcast. I am Valentina, the Chorus Call operator. [Operator Instructions] The conference is being recorded. [Operator Instructions] The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Andreas Schwarzwaelder, Head of Investor Relations. Please go ahead, sir. Andreas Schwarzwaelder: Thank you, Valentina, and ladies and gentlemen, good afternoon. My name is Andreas Schwarzwaelder, and it's my pleasure to welcome you to this call. Joining me today are Conrad Keijzer, Clariant's CEO; and Oliver Rittgen, Clariant's CFO. Conrad will start today's call by providing an update on the progress we have made on our purpose-led growth strategy and a summary of the full year 2025 financial highlights and savings programs; followed by Oliver, who will guide us through the Q4 and business unit results; Conrad will then conclude with the outlook for the full year 2026. There will be a Q&A session following our presentation. At this time, all participants are in listen-only mode. I would like to remind all participants that the presentation includes forward-looking statements, which are subject to risks and uncertainties. Listeners and readers are therefore encouraged to refer to the disclaimer on Slide 2 of today's presentation. As a reminder, this conference call is being recorded. A replay and transcript of the call will be made available on the Investor Relations section of the Clariant website. Let me now hand over to Conrad to begin the presentation. Conrad Keijzer: Thank you, Andreas. 2025 was a year that demonstrated the success of our transformation journey. The progress we've made over recent years is bearing fruit, with our purpose-led growth strategy proving its strength through effective execution. Built on 4 strategic pillars: customer focus, innovative chemistry, leading in sustainability and people engagement, the strategy reflects our integrated approach to creating value for all stakeholders. On our first pillar, customer focus. The execution of our commercial excellence programs delivered further improvement in customer satisfaction as indicated by the Net customer Promoter Score, cNPS. In 2025, this cNPS increased to 50 versus 45 in 2024, with the company receiving outstanding scores for product quality, technical support and customer service. Overall, this score placed Clariant in the top quartile amongst peers. Our local-for-local strategy has continued to help us to weather geopolitical challenges and tariffs. We serve our customers to a very high degree based on local manufacturing and local raw material sourcing. We successfully accelerated the rollout of CLARITY, a cloud-based service platform designed to optimize catalyst management and performance monitoring. It offers 24/7 real-time operations data so that customers can manage their plants more efficiently. By the end of 2025, CLARITY utilization has almost doubled to over 220 customer plants and over 800 users in 38 countries. And finally, differentiated steering, which ensures that we allocate resources strategically. Each business segment has its own strategic mandate to optimize value creation. The restructuring and capacity expansion actions taken in our Additives segment resulted in successful turnaround with improved sales growth and better margins. In our second pillar, innovative chemistry, we demonstrated a strong improvement in innovation sales, reaching 18.8%, marking a significant step-up from the 16.9% recorded in 2024. This trajectory reflects the strength of Clariant's innovation portfolio and execution. We maintain our commitment to research and development with sustained investment at 3% of revenue in 2025. The products from our innovation pipeline are growing faster than the rest of our portfolio. We will continue to intensify supplier partnerships to co-develop innovations meeting the highest environmental standards. This dedication to innovation resulted in over 30 awards and recognitions received throughout the year from customers like L'Oreal, Unilever and Schneider Electric and various industry associations. 2025 marked another year of great progress in sustainability leadership. Clariant's greenhouse gas emissions reduction targets that were originally announced at our Investor Day in November 2024 were reviewed and approved by The Science Based Targets initiative in 2025. By 2030, Clariant is committed to reducing absolute Scope 1 and 2 greenhouse gas emissions by 47% and absolute Scope 3 greenhouse gas emissions by 28% from the 2019 base year. In 2025, Scope 1 and 2 total greenhouse gas emissions fell to 0.43 million metric tons in 2025, a decline of 11%. The main driver for the greenhouse gas reduction in 2025 was a further switch to green electricity. The share of renewable electricity increased from 69% to 76%. The total indirect greenhouse gas emissions for purchased goods and services, Scope 3.1, were 6% lower to 2.4 million metric tons in the last 12 months. As a result of consistent progress over time, credible targets, verified data and clear accountability, we achieved top leadership level scores across all environmental categories of the Carbon Disclosure Project, CDP, the most widely used environmental disclosure platform globally. Ranking in the top 1% of all companies evaluated worldwide, Clariant was awarded A in climate change and forests and A- in water security. We are convinced that the transformation towards more sustainable business models will not reverse. Companies that stay on the course will shape the future and gain enduring competitive advantage. And finally, people engagement, where we increased our employee Net Promoter Score, eNPS, to 37 in 2025, up from 34 in the prior year. I'm particularly pleased that participation rate of our employees further increased to 88% and our employee engagement came in at 87%, which positions us in the top quartile compared to industry peers. Our safety performance also was top quartile of the chemical industry globally. Clariant recorded a Days Away, Restricted, or Transferred rate of 0.13, down from 0.17 in 2024. This reflects our high awareness and continued commitment to safety, training and accountability. These achievements are thanks to the hard work of over 10,000 Clariant colleagues across the globe who are committed to our purpose-led growth strategy and who delivered strong results in 2025. We delivered sales of CHF 3.9 billion, representing a flat performance in a challenging macroeconomic environment. We improved our EBITDA margin before exceptional items by 180 basis points to 17.8%, driven by the successful execution of our performance improvement programs. This is the third year in a row where we have delivered strong EBITDA improvement, both in absolute and in margins. I'm particularly pleased with the 42% cash conversion rate we achieved in 2025. This represents a 10 percentage point improvement compared to 2024, already exceeding our medium-term target of 40%. Our performance in 2025 enables us to propose a stable distribution to shareholders of CHF 0.42 per share. Now, moving on to more details relating to our financial performance for the full year 2025. We delivered sales of CHF 3.9 billion. This represents a flat performance in local currency, with the reported figure impacted by a 6% negative currency translation effect. We maintained pricing discipline across our portfolio in a slightly deflationary raw material environment with a year-on-year increase in Adsorbents & Additives and flat pricing in Care Chemicals and Catalysts. Organic volumes decreased by 1% across the business units. The acquisition of Lucas Meyer Cosmetics had a positive scope impact of 1%. Turning to profitability. We had a strong overall performance with 180 basis point improvement in EBITDA margin before exceptional items versus the full year 2024, driven by our performance improvement programs and cost productivity across all business units and the corporate functions. In absolute terms, EBITDA before exceptional items increased by 5% to CHF 679 million. As I mentioned earlier, we recorded a free cash flow conversion rate of 42% in 2025. This represents a 10 percentage point increase versus 2024 and delivers on our medium-term target of 40% ahead of schedule. We were able to achieve this through effective cost and margin management, which drove an increase in operating cash flow. Higher net working capital and phasing effects were offset by disciplined CapEx management. In absolute terms, free cash flow increased by 31% to CHF 273 million. Now turning to our Investor Day savings program. As a reminder, we expect full run rate savings of CHF 80 million from business units and corporate actions to be delivered by the end of 2027. In Q4, we achieved savings of CHF 19 million, which brings the total to CHF 50 million for 2025. This represents 63% of the total savings target with the remainder largely expected in 2026. The key measures include a headcount reduction of approximately 470 full-time equivalents across the business and corporate functions and the closure of 2 production lines and 2 sites as part of our footprint optimization. Procurement added another CHF 22 million savings related to structural changes in qualifying alternative suppliers and implementing best practice contract management. Cost-efficient execution of the programs and phasing led to restructuring charges of CHF 63 million. This was below the CHF 75 million restructuring charges originally expected for the year. With that, I now hand over to Oliver for further details on our business performance in the fourth quarter. Oliver Rittgen: Thank you, Conrad, and good afternoon, everyone. In the fourth quarter, we delivered sales of CHF 1 billion, representing an increase of 1% in local currency versus the prior year period. Pricing was overall flat as formula-based price adjustments linked to raw material costs in Care Chemicals were offset by a 1% increase in Adsorbents & Additives and flat pricing in Catalysts. Volume increased by 1% as growth in Catalysts and Care Chemicals offset a decline in Adsorbents & Additives. The reported figure was affected by a 7% currency headwind. Turning to profitability. Our Q4 EBITDA, before exceptional items, increased by 10%, corresponding to a margin of 17.1%. This represents a 240 basis point improvement versus the fourth quarter of 2024. Key contributions came from continued strong execution of the performance improvement program in all business units, effective cost management, a positive mix due to strong growth in Catalysts and operating leverage. Let us now dive into the fourth quarter development by business unit, starting with Care Chemicals. Sales increased by 1% in local currency as 2% volume growth recorded in the quarter more than offset the 1% decline in pricing due to formula-based price adjustments linked to raw material costs. The reported figure was negatively affected by a 7% currency headwind. We recorded low double-digit organic growth in Mining Solutions, driven entirely by volumes; and in Oil Services, where higher volumes were supported by slightly positive pricing. Sales in Personal & Home Care increased at a low single-digit rate, also driven by volume growth and including a continued positive contribution from Lucas Meyer Cosmetics. Base Chemicals declined slightly despite volume growth in the seasonal aviation business as pricing declined due to formula-based price adjustments. Sales in Industrial Applications declined due to lower pricing and volumes. Crop Solutions declined, driven by lower volumes versus the prior year period when a restocking effect led to strong growth. We recorded an EBITDA before exceptional items of CHF 96 million, representing a 7% increase compared to the prior year. This translated into an EBITDA margin of 18.3%, a 220 basis points improvement, driven by increased operating leverage and a strong contribution from the performance improvement program. In Catalysts, sales increased by 5% in local currency, a result of materially higher volumes in Ethylene versus the prior year period. The reported figure was negatively affected by a 7% currency headwind. Sales in ethylene catalysts recorded the strongest growth at a high double-digit percentage rate with some first fill business coming on top of the regular refill cycle, followed by Syngas & Fuels. This more than offset lower sales in Specialties and Propylene, which both declined at a double-digit percentage rate against a strong comparison base in the prior year. EBITDA before exceptional items increased by 22% to CHF 62 million, representing an EBITDA margin of 23.4% versus 18.8% in the prior year. This was driven by effective price and cost management and the contribution from our performance improvement program. Moving to Adsorbents & Additives. Sales decreased by 3% in local currency and by 8% in Swiss francs as slightly higher pricing was more than offset by lower volumes. In the Adsorbents segment, sales decreased at a low single-digit percentage rate as stable volumes in APAC and EMEA were more than offset by a decline in the Americas, which were impacted by delayed U.S. renewable fuel regulation. In the Additives segment, sales decreased at a mid-single-digit percentage rate as growth in Polymer Solutions was more than offset by lower volumes in Coating & Adhesives, mainly attributable to the construction market. EBITDA before exceptional items decreased by 9% to CHF 30 million with an EBITDA margin of 12.6% at a similar level to the prior year. The positive contributions from the performance improvement programs partly offset the impact of low volumes. And with this, I close my remarks and hand it back to Conrad. Conrad Keijzer: Thank you, Oliver. Let me conclude with our outlook for 2026. For 2026, we expect macroeconomic challenges, uncertainties and risks to remain. According to the latest assessment of Oxford's economics, the global GDP growth projection for 2026 has increased slightly to 2.8%, driven by AI investments. The chemicals industry forecasts predict a reduction of chemical output growth from 2.9% in '25 to 1.9% in '26, driven by slower growth in China from 7.4% to 2.7% and the U.S. turning negative to minus 0.6% compared to a positive 0.6% in 2025, while Europe expects some improvement to positive 0.5% after negative 0.4% in 2025. Looking at our addressable market, we expect 2026 market growth for Clariant of around 1%, considering our geographic footprint. We remain focused on delivering profitable growth and executing our self-help actions. That said, there are some positive signals in certain end markets. Growth in mining and electric vehicles is expected to continue. We also see continued growth in data centers, a recovery in consumer electronics supporting our Additives business and an improvement in renewable fuels demand supporting our Adsorbents products. We, therefore, expect sales in local currency to be around flat as we look to offset a negative top line impact for the group of 1% from portfolio pruning in the prior year. We expect slight growth in Care Chemicals on an underlying basis. And in Adsorbents & Additives, while sales in Catalysts are expected to be at levels similar to those in 2025, we expect to further improve our EBITDA margin before exceptional items to around 18% in 2026 with the CHF 80 million performance improvement program expected to deliver most of the remaining cost savings during the year. Clariant expects to continue to achieve a free cash flow conversion of around 40% in 2026. We remain committed to delivering our medium-term targets, assuming a recovery to normalized trading conditions in 2027. With that, I turn the call back over to Andreas. Andreas Schwarzwaelder: Thank you. Thank you, Conrad and Oliver. Ladies and gentlemen, we are now opening the floor for questions. To ensure everyone has a chance to participate, please ask no more than 2 question per person. Thank you for your cooperation. And Valentina, please go ahead. Operator: [Operator Instructions] The first question comes from Thea Badaro from BNP Paribas. Thea Badaro: Two from me, please. We are seeing positive data points in both chemical specific and industrial surveys. So, I'm curious to know if that optimism is also being reflected in your conversations with customers? And if so, are there any end market in particular? And then my second question is on Care Chemicals. You're guiding for slight growth for the division in 2026, while many peers are expecting actually a flattish year overall due to tough comps. Can you elaborate on where exactly you're getting more positive? Conrad Keijzer: Okay, sure. Yes. So, your second question was on Care Chemicals, where you say that many peers are guiding flat growth is what you say, right? Thea Badaro: Yes. Conrad Keijzer: Yes. Okay. Clear. Yes. So, first on the overall market outlook. So, what you actually see overall is less growth in chemical production rates globally than last year. I mentioned them in our speech, where actually markets are expected to slow down, particularly in China, where we had strong growth last year that really will be significantly slower this year. And in the U.S., where we had positive growth -- slightly positive growth this year, markets will turn negative next year, amongst others, also due to trade actions. In Europe, we were slightly negative this year. We may turn slightly positive. But overall, I wouldn't characterize this as an optimistic outlook in chemicals. So, if you look, what we have in the industry is operating rates typically between 70% and 80%. That's still historically low. And a recovery is typically not expected for this year yet, but more 2027. So, in '27, there is actually a general consensus that there should be a recovery. So, if you look at recent years, consumer spending has not been sufficiently on durable goods or semi-durable goods. There was more spending on services and recently on AI. So, this switch back to durable goods spending and semi-durable goods spending that is really expected at some point in time. There's a natural replacement cycle to products. But for this to happen, we first need better consumer confidence levels, which still are generally low considering geopolitical and trade tensions. More specifically to Care Chemicals, what we say here is actually that in our outlook overall around flat, there's underlying growth because last year, we had a fair amount of pruning in Care Chemicals, which had an effect of roughly 2% of revenue in Care Chemicals. As you are aware, we closed a site in Argentina. We also shut down a plant in Europe for EO derivatives. And with that, when we're giving an outlook of around flat for Care Chemicals, underlying, that means actually that there's growth also in our outlook. Operator: The next question comes from Christian Faitz from Kepler Cheuvreux. Christian Faitz: Congrats on the results. Two questions, please. First of all, if I look at weather conditions, both in Europe as well as in North America in Q1 so far, I would figure your de-icing business must have been rather robust. Can you confirm this? And if so, possibly put a number on this? And my second question is on Catalysts. You seem to be a bit less optimistic on your Catalysts performance for '26 after a rather robust Q4, particularly on the ethylene side. Why is this the case? Would you see a sequential slowdown again? Conrad Keijzer: Yes. Thank you very much, Christian, for the question. So, on Care Chemicals and de-icing, we had a strong start. You saw that also, I think, in the press, also one of the airports in Europe almost running out of de-icing material. But it is too early to call it. It really also depends on how March will come in. So we can't really give numbers yet. As far as Catalysts and our outlook for this year, yes, we basically signal that we are bottoming out. I think the recovery in Catalysts really requires a recovery in new build. So, if you look right now at our order book and also what we basically saw last year is still of the orders, it's by and large, a refill business. So, the new build has dropped to roughly 10% of our orders. For us to really see a big recovery in Catalysts, we should see the new build coming back in. That is visible in the order book, not this year. But if you look at '27, '28, '29, we are seeing actually a pickup in new builds, particularly in China. There is, let's say, a small wave of new build coming in there ahead of their peak carbon year in 2030. So, we're not seeing a recovery yet this year, Christian, we are bottoming out, but we are actually quite optimistic for the years after that, then we should see a recovery in Catalysts. Operator: The next question comes from Christian Bell from UBS. Christian Bell: I've got 2 questions, please. My first one is, how should we think about the earnings phasing in 2026? Are you sort of expecting a softer first quarter, then a stronger second half as savings and volumes build? If you could provide a loose guide for first quarter '26, that would be really useful. And then the second question, if you could just help me, I'm a little bit confused on your 2026 guidance. So, you're basically guiding to top line down 3% to 5% on currency, which is similar to the outcome in 2025. But last year, you still expanded EBITDA margins by 180 basis points with CHF 50 million of cost out with another CHF 30 million planned for 2026 and a similar top line result. What's preventing any margin improvement this time around? Like what's the difference from 2026 versus 2025 that stops you repeating that same margin progression? Conrad Keijzer: Okay. Christian, I'll take the first question on phasing, and Oliver will provide some more granularity on your second question. As far as the phasing throughout the year, I think we should keep in mind that we had last year actually a strong first quarter. Other than that, if you sort of ignore the year-on-year comp, we are seeing a fairly normal pattern throughout the year. It's not that we see a significant recovery in H2 versus H1, like we sometimes have in other years in the outlook. What is important, maybe some specific comments in Care Chemicals, we see at the moment, nothing unusual. De-icing is obviously playing a role there in how Q1 will come in. In Catalysts, we are comparing against a strong quarter last year. But normally, we always see a weak Q1 as we also saw last year after a strong Q4. So, there is that sequential effect. In Adsorbents & Additives, we are seeing a somewhat weaker start in Adsorbents where we still are waiting for the regulation for renewables to kick in. The EPA has set ambitious targets for renewable diesel and SAF, but these need to be still endorsed by Congress. And because of the government shutdowns, there's a delay in that. You see that the market expects these increased targets to kick in because RINs prices are going up, but we're not seeing that in our numbers yet. Other than that, I think there's nothing here to comment. Yes, Oliver, to you. Oliver Rittgen: Christian, yes, let me comment on your second question on margin progression year-over-year. I mean, first of all, as you have seen, there's a strong progression from '24 to '25 with 180 basis points of improvement, which brought us now to 17.8%. And that was driven by the performance improvement programs, the cost productivity and effective price management, as we said. So of course, when you -- and we had a flat top line at this. For '26, we are guiding for now a second year of flat top line with the effects that we alluded to before, the pruning that needs to be compensated and the soft market environment. And again, we are executing now on the performance program and delivering further savings in '26. At the same time, of course, in '26, like in '25, we need to compensate for the inflation that is happening in the cost structures that we do have. And we guided for '26 that we have 3% to 4% inflation in the cost structure. We have the savings from the savings programs plus other productivity measures that we're taking. And hence, we guided for around 18%. So -- of course, the ambition here is to make further progress also towards our medium-term targets. But as we alluded to, for '27 that it requires also a bit of a rebound of growth that we then bring it really in. Christian Bell: Okay. It just seemed like a similar setup in 2026 with a similar level of cost out. So, you're basically saying that your underlying inflation -- your underlying cost inflation this year is much stronger than it was -- or you're expecting it to be much stronger this year than it was in 2025? Oliver Rittgen: No. I mean, there is another year of inflation. I think, Christian, the point is more -- we did 180 basis points last year where we set the organization on a leaner base. And obviously, the savings were also a bit higher in '25 versus '26, and that's partially driving that effect. Operator: The next question comes from Katie Richards from Barclays. Katie Richards: I had a question on the use of capital and the balance sheet. You were on Bloomberg this morning, Conrad, and mentioned that Clariant would be open for bolt-on acquisitions potentially on the scale of Lucas Meyer. But you're also, at the same time, targeting CapEx potentially as low as CHF 150 million. So, a few questions on this then. With leverage coming down and proceeds also coming from Stahl, which end markets would you be interested in exploring further? Could you also remind us how much you're spending annually for maintenance purposes, please? And finally, how are you looking to balance organic growth versus paying a premium to grow these? Conrad Keijzer: Yes. Katie, maybe first to clarify on comments made this morning on the calls. Yes, there's nothing new. So, we're always open for bolt-on acquisitions. But we also said this morning that our first priority is always organic growth and margin improvement. And then if we can complement that with the right bolt-on acquisitions, we're very open to that. And we defined as the right ones, acquisitions that really fit to our core segments and that provide real synergy. And then I mentioned Lucas Meyer as a great example of an acquisition that basically fits those criteria in the past. But that's not to say that there is right now a target of that size available. So just to be clear about that. But overall, people do expect with limited growth perspectives right now in the chemical industry that there should be an increased level of potential consolidation ahead of us. And what I said this morning is it's important that we obviously participate in industry consolidation if and when that happens. As far as CapEx, maintenance, that's fairly steady at roughly a level of CHF 100 million a year. You see the big reduction in CapEx for us from the fact that we haven't actually added to our footprint, particularly in China in recent years. And now actually, we're very well set up there. So, keep in mind, in recent years, we invested CHF 80 million in a new catalyst plant that came up on stream. We invested CHF 80 million last year in a new surfactant plant in Daya Bay that came up on stream we invested last year. We completed actually the investment of 2 lines for flame retardants. That was another CHF 100 million. So, if you look at those items alone, that explains why the CapEx envelope is structurally lower than it was in the past. So, we haven't cut any corners on maintenance CapEx. So, no worries there. That's at a fairly steady level around roughly CHF 100 million per year. Operator: The next question comes from Michael Schaefer from ODDO BHF. Michael Schaefer: On one hand -- first one, I want to come back to your Catalysts outlook for '26. So, as you said, you guide for flat local currency sales into '26. So, nevertheless, you also reported on some greenfield projects helping you to record what we haven't seen for quite some time, this kind of EBITDA level in the fourth quarter. And I think also on the full year, the 20.8% margin was rather unique over the past 4, 5 years, so to say. So, I wonder how should we think about mix effect into '26 and how margin is progressing in the Catalysts segment? This would be my first question. And the second one is on the cash flow in '26. You built up some working capital, quite sizable, in 2025, maybe a bit as a surprise here, talking also about phasing effects. So how should we think about the measures you are implementing and what you expect in '26 in terms of working capital? Conrad Keijzer: Yes. I will answer the question on margins and mix outlook for Catalysts and Oliver will provide some clarity on working capital movements. If you look at Catalysts and the performance that we saw, we're very pleased that indeed, new build that is out there that we're getting it. So that is, I think, very positive. So particularly on ethylene, there is actually a large project in Europe that is starting up actually early next year. And we see actually the first fill order for that coming in. So that's very positive. We also saw -- if you look at Syngas & Ethylene, we saw actually that both of these segments are performing well on refill. So, we have a full share on new builds. And if it's about refill, we think that on -- particularly on Syngas, we've gained some share. So, if you look at our margins, they are reflecting that as well. So, there is the very positive effects from the cost-outs also in Catalysts, but there's also underlying a structural improvement in mix. And what you see is in Catalysts with rising prices for metals, it is not an easy environment. You may have seen the profitability reports of some of our competitors that show EBITDA margins significantly down. So, we're actually very pleased with the results in Catalysts with a 21% EBITDA margin for the year. But to further step up the margin in a significant way in the year ahead of us, that is still requires a pickup -- that still would require a pickup in new builds. And that is not yet what we see for this year. We see that more for '27. Oliver Rittgen: Michael, on working capital and cash, let me first start from the broader picture, cash. I mean, we are very satisfied with the cash performance overall that we had in '25, 10 percentage points of cash conversion, up versus previous year. CHF 80 million better operational cash flow performance. And then indeed, we had a bit of a buildup in net working capital that we then also compensated with very disciplined CapEx management. So, that buildup in net working capital in the fourth quarter is also a bit related to the phasing of the sales pattern that we have seen in the fourth quarter. We had a very, very strong December in Catalysts, but also in Care with the aviation business. And I mean, obviously, with the payment terms that you have then on these sales, you have a bit of a buildup of accounts receivables. We also have slowed down on inventory buildup in A&A, which had an impact on accounts payable. So, we had a couple of effects at the end of Q4. What we have done independent of that particular quarter is that we initiated a cash program in Clariant, where we structurally will look into the different net working capital levers. It's an integrated approach across the business units. It's ingrained in the target setting that we have on a segment level. So, it's a clear focus area. You have seen it also with our triangle and to say growth, margin, cash. That's what we focus on. That is what drives our differentiated steering. So, there's a focus on net working capital and to drive that down in '26. Operator: The next question comes from Julia Winkelmann from Bank of America. Unknown Analyst: I was wondering, you finished the year ahead of schedule on your cost savings target and also achieved your cash conversion target already. Given this progress, do you plan to update your mid-term targets and perhaps also give an update on how to think about your capital allocation going forward given the stronger cash generation? Conrad Keijzer: Yes, Julia, that's a great question. And we are obviously very happy with and pleased with how we finished the year in terms of our EBITDA margin being up 180 basis points and our cash conversion being up 10 points to slightly over 40% conversion now. So, where we are versus the midterm targets is that indeed, for cash conversion, we have achieved these targets already. But it's fair to say that we still have a bridge from 17.8% to the bottom range, which was 19% to 21% EBITDA margin. I will say, we look at 3 years in a row now of improvements, annual improvement in EBITDA margins as well as absolute EBITDA. We came from 14.6%. We're now at 17.8%. That was certainly in a challenging market environment for us now to revisit the midterm targets, that's not on the agenda. We're very much focused on delivering them. So, we are very much focused to have all the levers in place to bridge towards the 19% to 21% EBITDA margin, and that is the differentiated growth strategy. It's repositioning the businesses to more profitable segments. It is finishing the cost-out program, as Oliver has alluded to. It is -- maintain pricing discipline. And with that, we think we have the levers in place in addition to a pickup in markets that we do anticipate for '27. So, we have all the levers in place to deliver the 19% to 21%. But yes, that is -- those are actually quite ambitious targets in the current environment. Operator: The next question comes from Tristan Lamotte from Deutsche Bank. Tristan Lamotte: Two questions, please. The first is, could you maybe just run through your end markets and the trends and outlook that you see in those, so in agriculture, autos, construction, electronics, et cetera? And then, can I ask a general question about your views on the threat to European specialty chemicals companies from China? Do you still think that European chemical companies have sustainable moats in specialty chemicals? And to what extent are you seeing Chinese competition moving into specialties so far? And to what extent do you expect that to accelerate over the next 10 years? Conrad Keijzer: Yes, sure. These are important questions. So, first on end markets, what we are seeing. Well, first of all, let me start with Care Chemicals. We see, in general, the consumer-facing segments with a robust demand. So, if you look at Personal Care, Home Care, that is basically low to mid-single-digit growth with a bit more growth in Personal Care in the premium segments like skin care, hair care, but then really the premium, premium products, the level just under that, there is actually some downtrading, the so-called aspirational buyers. Home Care, very, very solid and robust; laundry, things like that. Crop Protection, we've had interesting years behind us. Last year, we had a strong year in Crop Protection, but that was really very much because the year before, we had still the destocking. So, it was also, let's say, some of the year-on-year comparisons. I think now we have a much cleaner comparison, and we should more trade in line with historic levels where we sort of slightly outperform GDP levels. Oil and gas, it's basically a relatively modest outlook right now. And oil prices, now they're up to $70 because of the geopolitical turmoil in the Middle East. But in reality, there's plenty of supply and more so than demand. So, it's not an environment with high oil prices or a lot of investments that we are seeing there. Mining continues to be positive, especially for items like copper and still lithium. Catalysts, yes, we still globally run 70% to 80% util rates. And for us, really to see new builds kicking in, we need to go first to higher utilization levels. I did mention China as one where '27, '28, '29, we are seeing new builds coming back in. But for this year, it is really a bottoming out year in Catalysts in our forecast. And finally, Additives and Adsorbents, what we see actually is relatively weak demand if you look at electronics and particularly smartphones, but that was already the case last year. So, actually, there's a certain level of maturity here with very low single-digit rates for growth for smartphones. PC production was actually quite nicely up last year. And we think that will continue to be relatively okay. And finally, if you look at our Additives business, end markets like furniture, we had expected a big recovery there last year already as consumers at some point should spend on durable goods again or semi-durables, but it hasn't happened yet. And for this year, so far, we are not seeing that either. And to finish it all off with Adsorbents, this is very much for us driven by renewable diesel now, sustainable aviation fuel. In Europe, there are the mandates in place. But in the U.S., we're still waiting for the endorsement by Congress for the new increased EPA targets, but that should come at some point in the year. So, overall, if you summarize it, it's a very modest sort of growth environment overall and with some differences by region. Maybe specifically on your second question on China and how is this impacting Specialty Chemicals. I think there is a big difference between commodity and petrochemicals on the one hand and specialty chemicals on the other side. In China, there is significant capacity being built up in local -- in recent years for commodity chemicals for petrochemicals. In specialty chemicals, we are not seeing that level of competition in China. I mean, this is based on IP that took decades to develop. And actually, what we see is that for our business, we make good margins in China, but there is a shift where we increasingly supply to local Chinese companies. And I think high level, the other big impact that China has is historically, Europe was exporting a significant part of its production into China, the same with the U.S. That has come down significantly, and China has become an exporter for some items, but not so much in specialty chemicals again. It's much more on the commodity side. Operator: The next question comes from Chetan Udeshi from JPMorgan. Chetan Udeshi: I just wanted to follow up, Conrad, on your comment on industry consolidation. And I'm a bit puzzled and also curious that we've not seen much happen already. For Clariant, and you've signaled openness to participate in any consolidation, but you have a very different business structure in the sense like you've got Catalysts business, you've got Care Chemicals, which is comprised of industrial plus consumer. And then, of course, you have Adsorbents & Additives. It just feels like the structure of the business is probably too complicated to see Clariant as an obvious candidate or initiator of any consolidation? I'm just curious how you think about that. Conrad Keijzer: Was it a question or an opinion that you were voicing, Chetan? Chetan Udeshi: It's a both. I mean, a bit of both. I think it's not just for Clariant. I'm just curious, is this a problem for the industry overall that there is no like pure-play company that is easy to buy or easy to sell, and that makes it quite complex for industry to consolidate. Conrad Keijzer: Yes. No, it's an important question that you're raising. So, if you look big picture where we came from is we were a hybrid. So, Clariant was both active in commodity businesses and in specialty businesses. And if you look at the recent years, we've really repositioned the business to become fully specialty. So, if you look at the recent, let's say, 5 years, what we did is in '22, we divested our pigment business, which we clearly saw that was commoditizing. By the way, it has indeed even further commoditized. So, I'm glad that we divested that in 2022. Actually, a year later, we divested our North America Land Oil business, which also was very much a commodity business. And if you look now, what we also did was we divested a part of our Care Chemical business, the commodity surfactants to Wilmar, and we put it in a joint venture there. So, we've done actually quite a bit in recent years to, first of all, get out of our commodity business, but at the same time, to strengthen our specialty chemical business. So, we did a number of smaller bolt-on acquisitions. We bought the cosmetic ingredients business in Brazil with Actives. We bought the green surfactant business in India. We did the purification business from BASF for renewable diesel, Attapulgite in the United States. And last but not least, the Lucas Meyer business, which really strengthens our position in Personal Care. So, what you see now is that we have leading positions in specialty chemicals in the segments where we compete. At the same token, what you also see, Chetan, is that we have year-on-year improved the profitability of these businesses. So, we rarely get the question asked, are you the right owner for this business as long as we just continue to improve the profitability and in fact, achieve leading profitability, both in terms of growth, in terms of margins, we have very sustainable positions in each of these segments because we are having significant market shares in the individual businesses. So, yes, that's, I think, sort of the summary from a sort of an M&A perspective where we are, and we remain interested to continue to do bolt-on acquisitions in these businesses, but only if they bring real synergy. Operator: The next question comes from Jaideep Pandya from On Field Research. Jaideep Pandya: First question is on Catalysts actually. What do you think is the longer-term outlook like when you look at the next 3 years, considering so many capacity shutdowns that have been announced in Europe and also sort of asset rationalization in China as well. So, what do you see as a longer-term outlook in Catalysts? That's my first question. And then the second question sort of is on the legal -- I apologize if you have answered this before or if you cannot go in details, but if you can give us some color at least on the legal situation around the ethylene cartel case. What sort of provision have you booked already? And any time line in terms of result that we could hear around this? And then, finally, just on the consolidation point, Conrad, I mean, from -- on paper, if I just sort of ask the question differently, what Chetan was, I guess, trying to ask, the obvious candidate for increasing your size would be in Care Chemicals. So, if there is a case to be presented, are you saying you could be aggressive enough to further pursue divestments of some of the other areas to pursue increasing size in Care Chemicals? Conrad Keijzer: Yes. Thank you, Jaideep. Yes. First, on your question on Catalysts and the long-term outlook, I think what is important to realize is that there has been a shift in production. So, Europe is -- has actually significantly come down in chemical production. CEFIC issued an interesting recent study that since 2022, a total of 37 million tons of capacity has been taken out of the market in Europe. That's roughly 10% of the overall capacity. Now at the same token, you have seen a buildup of capacity in China and to a lesser extent, in the Middle East. So yes, so there is a shift. If you look at the global outlook for Catalysts, it is actually a fairly robust business, even regardless of these shifts, these regional shifts. And if you look at the long-term outlook, petrochemicals historically, globally, has always performed at or above GDP. So that is still intact. The change is actually that there are some regional shifts. And therefore, it was for us extremely important to invest in China in Catalysts in our footprint, and we're very happy with that footprint now that we also have in China to support the local growth. So, in terms of long-term outlooks, the fundamentals are still intact at a global level. But yes, there have been regional shifts for sure. In terms of your second question on legal, yes, in terms of ethylene claims, at this stage, we cannot publicly comment any further than what we've already said. Clariant firmly rejects the allegations and will adamantly defend its position in the proceedings. And we do have substantiated economic evidence that the conduct of the parties did not produce any effect on the market. And yes, we are in litigation, so we cannot comment further on that other than your question on the provisions, we haven't taken any. And this obviously has been reviewed with our auditor, KPMG, and they are obviously of the same opinion, and you will see that in our integrated report also explained. Operator: The last question for today is a follow-up coming from the line of Thea Badaro, BNP Paribas. Thea Badaro: Just a quick follow-up for me. Specifically on the flame retardant business, can you quantify the size of the data center market opportunity for your flame retardant business? Conrad Keijzer: Yes. This is a very interesting question, and we just made a deep dive actually on data centers and to make sure that we capture all of the share that is out there when it's about our products. And what we are seeing is indeed that our flame retardants are benefiting from this. This is about the -- yes, our flame retardants for connectors, for switchgears, cable jackets. That is a part of it. There's also a part of it which sits in fire-resistant coatings actually, that are applied to the infrastructure of these buildings. But finally, and this is also quite important, our Catalysts business, we are really targeting data centers here as well. And this is first from a development perspective, but we're very happy that we also commercialized now the first application where we basically have a fuel cell technology. So, we have methane. We have basically gas, then we convert it to hydrogen. And then the hydrogen basically gets converted into water and electricity. And this is a climate-neutral, if it's biomethane, a climate-neutral solution actually, for decentralized and distributed electricity generation in the right -- high quantities that are necessary. So, there's other solutions. Nuclear is also mentioned. But particularly with the limited grid capacity, the solution will be power plants, small power plants in the United States and Europe has the same challenge. And with Catalysts, we're talking about a very interesting opportunity here, which already the first -- what we now commercialize is a few tens of millions already in revenue in the outlook that we have. The size for flame retardants combined right now globally is also in that order of magnitude. So, it is not moving the goalpost for the company as a whole, but we are seeing a nice upside from data centers. Andreas Schwarzwaelder: So, thank you very much. This is Andreas speaking. This concludes today's conference call. A transcript of the call will be available on the Clariant website in due course. The Investor Relations team is available for any further questions you may have. Once again, thank you for joining the call today, and have a good afternoon. Operator: Ladies and gentlemen, the conference is now over. Thank you for choosing Chorus Call, and thank you for participating in the conference. You may now disconnect your lines. Goodbye.