Lanxess AG (LNXSY) CEO Matthias Zachert on Q2 2018 Results - Earnings Call Transcript

Lanxess AG (OTCPK:LNXSY) Q2 2018 Results Earnings Conference Call August 2, 2018 4:00 AM ET

Executives

Andre Simon - Head, IR

Matthias Zachert - CEO

Michael Pontzen - CFO

Analysts

Tom Wrigglesworth - Citi

Christian Faitz - Kepler Cheuvreux

Patrick Rafaisz - UBS

Georgia Harris - Bank of America

Martin Evans - HSBC

Markus Mayer - Baader-Helvea

Thomas Swoboda - Societe Generale

Andre Simon

Thank you very much, and a warm welcome to everybody on the phone to our Q2 2018 conference call from my end as well. I'm very happy to have our CEO, Matthias Zachert; and our CFO, Michael Pontzen, with me. And before I hand over, please take notice of our safe harbor statement.

And with that, I'm happy to hand over to Matthias Zachert for a brief presentation and afterwards, as always, the Q&A. Matthias, please go ahead.

Matthias Zachert

Welcome to LANXESS. Welcome to second quarter. All good on our side. Despite quite heavy headwinds on currencies and raw materials, we were successful in passing all of that on to the market as far as raws are concerned and we mitigated currencies respectfully. As far as divisions are concerned, we had some modest volume developments in Advanced Intermediates, basically driven by still weak agro industry. But as far as Advanced Industrial Intermediates is concerned, volumes were rock-solid, and we rolled over raw materials already within this quarter.

As far as Specialty Additives are concerned, we are very happy to report the strongest quarter so far. And volumes were modest because, in the meantime, we have or are in the process of closing 3 production sites: Ankerweg is offline; the same holds true for our South American plant, which we announced last year for closure; and we are currently in the process of taking off a very small site in Mexico, which already has stopped production. So volumes were, because of this, not really picking up, but we are cleaning up, as indicated, our production network and that, of course, is going to rock the P&L in the years to come. As far as Performance Chemicals is concerned, here definitely on the segment side, modest development. The trends of Q1 and Q2, has continued in Q2. But in Q2, you saw the steepest profitability contraction. This should not be the same going forwards, also due to measures we have taken in the meantime. As far as our Engineering Materials are concerned, volumes strong, pricing strong. And of course, once the MDIs and TDIs get a little longer, we will definitely start to rejoice also in the urethanes.

All in all, we advanced very, very nicely with the synergies that we execute as promised, sometimes even faster, and we feel very comfortable with the announcements we've made in this regard. Low lights, persisting weak agro markets, but I think we sailed nicely through these difficult times, and as indicated, we have no reason to believe that we shouldn't start seeing an improvement also in Saltigo business in Q4 onwards. Currency remains a burden, but this should, of course, especially on the U.S. ballast sites, be less of an issue. We consider that Q3, Q4 will be more on the level versus 2017 second half of the year.

With this I go to Page number 5. EBITDA for New LANXESS increased nicely to €290 million. EBITDA margin at around 16%, you will now see going forward that due to the disconsolation of ARLANXEO, margin level and resilience of our profitability will be different than in the years before. New LANXESS will shine through.

Seasonal increase in net financial indebtedness due to working capital, dividends, bonus payments, I think this is something that people are aware of. And this, of course, should be definitely a better element in the second half when cash flow is then due to increase again.

Michael and Oliver did a successful liability management, which would basically relieve the P&L of €15 million of interest, and of course, this is something we have managed in the meantime.

Michael, get into the next level.

Michael Pontzen

Thank you, Matthias. Good morning as well from my side.

Before we jump into page number 6 to run you through the financial KPIs, just a technical remark. As you know and we told you in the past quarters that since this quarter we will report ARLANXEO as so-called discontinued operations. You will find some more information on it on page number 30 in the presentation and obviously in our half-year report. But in a nutshell, basically, you will find in the P&L where the past is restated and the same is true for the cash flow statement, so you can compare previous year numbers with this year numbers. That is not true for the balance sheet. So the December 31 numbers are not stated. So therefore, it's really hard to compare year-end numbers with the June 30 numbers because of June 30 do not include ARLANXEO, December 31 do include ARLANXEO.

But looking at the numbers, you recognize that they improved nicely. Top line grew by some 7%, driven primarily by price and portfolio effects still. Volume were slightly up, and we had some headwinds from currency because the U.S. dollar was weaker by€ 0.09, which did weigh on the sales and on EBITDA. Nevertheless, we were able to further increase EBITDA and same is true for EPS.

Net financial debt is at around €2.6 billion at this point in time. As said, it's hard to compare versus December 31, but you will recognize in the cash flow statement that we have the typical seasonal effect, which leads to an increase of net financial debt in the middle of the year.

Net working capital for New LANXESS today is at €1.5 billion. It was, December 31, €1.9 billion. But don't forget in the €1.9 billion you will find ARLANXEO. If you deduct ARLANXEO, you will recognize and you will obviously find that in the cash flow statement that in the first half of the year, we increased our working capital, which is again usual seasonal pattern.

Looking into the segments, starting with Advanced Intermediates. Advanced Intermediates had a very good quarter. Prices were up strongly. We were able to pass on increasing raw material prices. Volumes at AII were good. We saw declining volumes in Saltigo because the ag cycle is still not very favorable. We managed to keep EBITDA stable on Q2 '17 high level beside the ag weakness and the headwinds from currency. So all in all, a very good quarter for Advanced Intermediates.

Specialty Additives posted the strongest quarter ever. We recorded a very good business momentum. We drove prices further up. Volume were on the previous year high level beside the site consolidation Matthias was referring and besides the strong headwind from currency because obviously in the former Chemtura business, we do have a relatively large exposure to the U.S. dollar. Nevertheless, EBITDA was up given the good momentum which we saw in the segment and obviously the synergies we were able to achieve throughout the quarter. Margin as well nicely, further improving year-over-year and sequentially.

Turning to Page number 8, Performance Chemicals. Performance Chemicals was weaker than expected. Prices were only up slightly. Volume was good in 2 business units, LPT and in MPP. In business unit Leather, volumes were down given the fact that we closed our Zárate site in Argentina end of last year. EBITDA was down as well, driven by some different elements, be it on the one hand side a very high second quarter '17 we were comparing ourselves with, but also effects from raw material, effects from currency. We still saw a very weak comp pricing environment. We saw some uptick in trade and energy costs. So all in all, we saw a decline in EBITDA, but as Matthias mentioned earlier, that decline should not accelerate over the next quarters to come.

Engineering Materials posted a great quarter. Strong price increases. We were able to fully pass on increasing raw material prices. We had strong volume, and not only volume, but as well mix effect. That all helped to mitigate the burden from currency to further right EBITDA and margin up to a very, very good level of above 20% at that point in time.

So all in all, you see that 3 of our segments did have a very good quarter; 1 segment, Performance Chemicals, because of the reasons I mentioned to you. But what's going on in the next half year to come, Matthias will guide you through.

Matthias Zachert

Thank you, Michael. With this I move to Page 9, to the outlook of our company. And here let's comment on the macroeconomic trends, first of all.

I think all of us read newspapers. We have a lot of volatility on political statements whilst we consider that the industry trends are intact, potentially a little softer in the second half, but overall intact and positive for the chemical industry.

Agro, we continue to allude to a weak 2018 year due to self-help. Of course, Saltigo should improve from Q4 onwards. But the agro industry, from our point of view, should then be modestly better in 2019, volume-wise, compared to 2018.

As far as LANXESS is concerned, we upped our guidance because we feel strong on our underlying performance. What we have done in the last few quarters should come through in second half, but also in 2019. So on the basis of this, we are clearly expecting our performance to be rather in the upper end of our guidance compared to the statements we've made in the previous quarter.

So with this ladies and gentlemen, we open our Q&A session, and we expect, hopefully, a very interesting interaction also on the road when we meet all of you. Please go ahead.

Question-and-Answer Session

Operator

[Operator Instructions] First question comes from the line of Tom Wrigglesworth with Citi. Please go ahead.

Tom Wrigglesworth

Two questions. Firstly, on Specialty Additives, could you break out the portfolio effects? Appreciate that Chemtura is still in there for the price and volume dynamic because I'm interested to know what the exit rate for margins would have been for this business given that 2Q is normally the seasonally weak period for bromine, and where you think the margin can go from here given that we're in an uncharted territory? And the second question on Advanced Intermediates, could you just confirm what the growth, the volume growth, was ex Saltigo so we can get a better sense of what the underlying growth rate is for that business?

Matthias Zachert

Well, Tom, on Advanced Intermediates, we don't break our business units by business unit, so what we report at divisional level is what we report. The only indication that we have provided so far is that on the Intermediates side, AII did well pricing, volume-wise, whilst Saltigo on the volume side was not positive. I think this is a trend, which we will see in the course of 2018. But then, in 2019, we expect that Saltigo will start to show volume picking up again. Now on Specialty Additives, here, again, we don't break out product lines. We don't break out the Specialty Additives into respective business units.

The only point I would like to highlight, you're totally right, normally pricing in second quarter and third quarter on bromine in China is seasonally weaker. This we see also in course of 2018 whilst, however, the level of the bromine price compared to last year is clearly higher. This has to do with environmental closures of competitors. This has to do with more scarcity on bromine in China, which automatically should structurally upgrade pricing. All in all, however, you see that in Specialty Additives, not only did brominated flame retardants are doing well, we did very nicely push pricing on the lube adds, an element that we didn't do last year, so this is something we are addressing this year as raw materials have escalated in Q1 and Q2 2018. So different like 2018, we are addressing raws and push it onto customers.

And of course, what also is nicely coming through are the cost-cutting initiatives we initiated last year also for plant closures and this is, of course, is something that we will continue executing because we still need to unlock some of the synergies we have promised on the cost of goods sold, so further activity will happen. And of course, once implemented, we will communicate on this, but all of that should be pretty healthy for the P&L. I think with this, we have addressed all questions.

Operator

Next question comes from the line of Christian Faitz with Kepler Cheuvreux. Please go ahead.

Christian Faitz

Thanks for taking my two questions. First of all, can you please talk about current trends on the demand side for your overall business into Q3. Which trends we see originally in an important customer industry such as automotive or building construction. Do you see any pronounced summer lull this year? And then second of all, can you please elucidate the performance of agro within Advanced Intermediates a bit. Would you believe that the negative trend continues into Q3, as particularly in Europe, the drought situation might have led to some more -- or limited spraying actually and hence channel inventory problems, and as such, demand for your additive ingredients? Thanks.

Matthias Zachert

Well, Mr. Faitz, your first question, I think, is addressing 10 question in 1, so this is interesting approach. I would start with the second, which will be easier to answer. On agro trends, the answer, I think, provided in the presentation. We assume that Q3, Q4 would be soft in the industry and our assumption is that 2019 will be better volume-wise. As far as Saltigo is concerned, we've taken our measures, A, on the cost side; B, on the contractual setup. And here, our assumption is that both will contribute to an improvement from Q4 onwards this year. It's not going to be gigantic, but we, from internal assessments and from everything that we are seeing, we assume that Saltigo will start to show financial improvement from Q4 onwards. Now as far as your first question, which is...

Christian Faitz

Can I, Mr. Zachert, just please on your answer, would you have had the same view 6, 7 weeks ago? Or has the demand situation from agrochemicals worsened due to the drought situation. That was actually my question.

Matthias Zachert

Well, the drought situation is not going to improve the situation on the agro industry. But at the end of the day, it's not going to make this huge difference compared to our assessment that I have just provided to you. Europe is not the only market for agro. There are quite more significant markets elsewhere in the world, as you well know. So the European drought or heat season is definitely not improving the agro situation as we see it, but it's not going to fundamentally change the outlook we've given. And by the way, our outlook is the outlook for the entire company factoring in everything that we see as of today. Now on the first question, a summer lull as this point in time, all feedback we are getting from the business, there is no sudden summer contraction. So the summer, June to August, is always more modest, more mild, but this is a seasonal pattern that we have seen versus last year or in the years before. And therefore, as far as industry trends are concerned, on dates, I think, in our guidance that we see industry trends intact. We see very good momentum in North America. We see an ongoing good momentum also in Asia. We see modest growth as before in Europe. The auto industry might be slightly softer in the second half compared to first half. But all in all, what we see in terms of second half industry performance, we are confident for the chemical industry and we are even more confident for our company due to the measures we have internally taken.

Christian Faitz

Okay, great.

Matthias Zachert

Next question, please.

Operator

The next question comes from the line of Patrick Rafaisz with UBS. Please go ahead.

Q - Patrick Rafaisz

Thank you. And three questions for me, please. The first would be on cash flow and can you talk a bit more about the change in other assets and liabilities and what exactly happened there? Then secondly, staying with Specialty Additives, you mentioned the closures and the site network optimization impacting volumes. Can you give us a bit more color here, how much that impact was? How long you think that will continue? And how you see organic growth underlying excluding these closures? And the last question, a more general one on -- in a portfolio context. You've owned Chemtura for a year now, more or less. And you acquired Organometallics and the urethane business. How do you think about this business currently from a portfolio context? Are you happy with where you stand for the time being? Or would you consider launching strategic reviews here anytime soon? Thanks.

Matthias Zachert

Well, Patrick, I will take number 2, number 3 and Michael will address the cash flow statement immediately. As cash is dear to our heart, it should be priority number one, shouldn't it?

Michael Pontzen

Absolutely, in all means, Matthias. So yes, Patrick, the changes in other assets and liability are primarily driven by the exceptional booking, which we did in the last year. Therefore, you have a huge deviation. You recall in Q2 2017, we booked some EUR 160 million, give and take, on total exceptional. That was obviously not cash related and therefore you find a relatively low number in the second quarter of '17. The relative high number in the second quarter in principle is basically driven by the fact that we pay out our bonus in the second quarter and that is driving that number. In general, there are basically always 3 elements who drive that line: one is bonus payments, one is effect from restructuring bookings or exceptional bookings; and the third is swings, which comes from hedging activities. Matthias?

Matthias Zachert

So then I address the Specialty Additives. You raised the question on volumes and production network, how long is this going to continue impacting the volume. For this, a short wrap-up on what we've done so far. So we announced in the second half of last year that we will stop the production in Ankerweg, which basically is producing for lube adds. In the fourth quarter, I think we announced the restructuring and closure of our plant in Rio Claro. And today, I've indicated and with this, to some extent, announced that we stopped our plant in Mexico, Reynosa, which is basically producing for also the additives division. So all of these plants are basically, from Q2 onwards, stopping production. With this, stopping sales by and large. And of course now this is going to impact volumes, but favorably P&L. We don't close production sites that are adding to profitability, we are closing production sites that are negatively impacting our profitability. And for that very reason, volumes from Q2 onwards will be softer. Of course, once this has eaten through the P&L for the next few quarters and has entered into the comparable base, then from '19 onwards, volume will be stronger. But P&L, net-net, will rejoice through the plant closures that we've done. And I stress again, when we did the due diligence on Chemtura, we saw major upside potential through reorganizing the production network and we are now just executing on it.

As far as M&A is concerned, I think you see now that the, that business where we had a clear overlay, overlap with the Chemtura portfolio in the flame retardants and lube adds is doing exactly what we had expected the business to do. So Specialty Additives is getting stronger and stronger quarter-on-quarter. Now as far as the 2 other businesses are concerned, Organometallics, we see value here and we want to unlock it ourselves. We see that Organometallics is a leadership business, one of the top 3 players worldwide, structurally in a position where it should earn a good amount of money, and for that very reason, we would like to bring it to a profitability level that we feel confident with or happy with and then we see what we are going to do.

The same holds true with the urethanes business. The urethanes business is a leadership business in a niche, especially in the hot casts where basically has a wonderful market shares. The only issue we see right now is MDI and TDI, the raw materials that we need were scarce or short due to a lot of force majeures and we see that this is going to be even more difficult in Q3 this year. We then see that more availability of volumes should be in the market from Q4 onwards and hopefully then further improving in '19 because here we have difficulties in our business to always pass raw materials on to our customers or even get raw materials to produce our specialties. I think with these, all your questions have been answered.

Operator

Next question comes from the line of Georgia Harris with Bank of America. Please go ahead.

Georgia Harris

Just firstly, on Specialty Additives, are you able to break out at all the level of synergies you achieved in Q2? And maybe a bit of color on how these compared to Q1 and what your expectations are for synergies for the rest of the year? And secondly, on Engineering Materials, you mentioned raw material tightness is going to worsen in Q3. Is there something you plan to counter price increases? Or should we expect some margin squeeze from that?

Matthias Zachert

Two valid questions. We don't break up synergies by quarter. So we've given guidance that €30 million of synergies are due for 2018 for its entirety, i.e., for overall LANXESS. Of course, over proportional amount is being taken or being delivered by Specialty Additives, but we don't break it down by segments or, sorry, by, yes, by segment or by business unit. But you could assume that, of course, here in Specialty Additives, in the first 2 quarters, each quarter contributed to profitability and synergies was one reason that was driving it. As far as Engineering Materials is concerned, I think you see rock-solid performance in Q1, Q2. You will see overall, I think, a very nice performance for the entire year 2018. Both businesses are doing well. The only alert I would like to provide, '18 is a year where the urethanes specialties are doing great volume-wise, but we could even do better if we could have some ease on the pricing of MDI and TDI. In Q3, we might even have some lower volumes because we cannot get enough products, especially on the monomer TDI, but this should improve due to additional capacities coming onstream in Q4. And therefore, we simply would like to lose to some softer profitability on the urethane solutions while, overall, the year would be another very strong year for the entire division.

Georgia Harris

Okay thank you.

Matthias Zachert

Most welcome. Next question please.

Operator

Next question comes from the line of Martin Evans with HSBC. Please go ahead.

Martin Evans

Yeah thanks. Good morning. Just a quick one, back on the sort of portfolio as it stands at the moment. We've referenced, I guess, to Saltigo where you appear to be a little bit more optimistic about next year's agrochemical outlook. I guess the question is, from your perspective, you're still -- or what do you think is so special with Saltigo such that you remain committed to keeping it in the portfolio given what else has happened in terms of the additional businesses you've acquired because it does seem to be a hugely competitive marketplace in which you deal, the ag industry, and you are relatively sort of a modest player. Is it an area that you think at some point, if these pressures in the end market continue, you would consider as to whether or not you should keep it in the group? Thanks.

Matthias Zachert

Valid question, Martin. But let me give a little bit more transparency on Saltigo. I think the business, Saltigo, did pretty well over the last 3 years. Whilst the market was in the trough, we performed reasonably well. Of course, we had no peak earnings, we had trough earnings. But the trough earnings were at, I would say, overall, decent levels. Now there are 2 things that I would like to shed light on: A, if the market, volume-wise, improves, we should get more financial contribution on our end as well. The consolidation in the marketplace does not necessarily have to be negative for us. The consolidation has led to quite an increase in indebtedness by all players that are out there. We still have 4 to 5 players after the consolidation of our end industry, and 2 to 3 of these 4 to 5 players have such a substantial increase in indebtedness that the likelihood that they are going to -- for outsourcing, i.e., to us is higher than building own plants on their own. So that's another positive trend that we are seeing next to potential volume increase. Third, the ag industry is currently working on new innovation, new -- better pipeline. And as far as Saltigo is concerned, we are the leader in Europe on custom manufacturing for the agro industry. So we are only going for the simplest of steps, which are more sophisticated, normally starting with synthesis step number 6 or 7, going up to synthesis step number 12 and 13. We are not competing in the territories of the first few levels, which are less sophisticated. This is normally done in India or China. The interesting thing, however, is that due to supply issues that some of the agro players have in India and in notably China, some of the European agro companies are starting to ask us if we could enter into this synthesis step as well. So far we have not taken the decision to do this because we clearly want to use our capacities for the high-technology upgrades. But trend-wise, it gives you the indication that trends is not against us. It's rather benign for us or it's slick, if this is the right word used in the U.S. I hope with this, we have answered all your questions.

Martin Evans

Yes. Thanks very much.

Operator

The next question comes from the line of Markus Mayer with Baader-Helvea.

Markus Mayer

Good morning gentlemen. Three questions, again coming to Saltigo. What is your more long-term view on the effect of digital farming costs? Large companies like Bayer, they expect significant negative volume impact. And what is the effect you're expecting for your business there? Then secondly, on this article that you are playing higher investments in this, could you specify in what business areas these investments might be? Is it in particular in the acquired Chemtura assets or broad on overall plants that you have there? And then, lastly, on the higher inventories on the cash flow, can this basically from higher product prices compared -- combined with these volumes? Or has it also to do with the demand going into Q3 and this is also high inventories? ?

Matthias Zachert

So Michael, you are addressing the cash flow, I will take the other two?

Michael Pontzen

Yes. With regards to inventories, it was basically volume and prices as we have higher pricing level than we used to have. Don't forget Q2 2017, because always comparing with previous year, we had as well some effects coming from the inventory step-up. We did have as well an organic increase in volumes and prices as well in the second quarter of '17. So on a like-for-like basis, there is no huge deviation. It's a usual pattern that in Q2 there is a volume impact, but we have as well a price impact as we were referring on top line as well on price effect. Matthias?

Matthias Zachert

So on digitalization, which we also like, I'm not aware that Bayer is guiding for volume decrease for its own business. I think I've heard the opposite going further -- going forward due to the fact that simply more agro ingredients or agro products are needed due to the increase in overall world population.

Digitalization in the agro industry will lead to further productivity gains as far as usage of products are concerned and we are striving for the same thing, i.e., increasing the productivity through the ingredients we are producing and making sure that we are in the innovative products that the agro industry is developing and potentially bringing after 2019 to the markets.

As far as the investments in United States are concerned, we've guided from the outset of the acquisition that we have $50 million of investments, which we will use to upgrade our production network in the U.S. and this is something we are executing as we speak. Of course, we have our own asset base that we would like to upgrade further and reflects also investments in some areas of our business like HPM where we would like to further increase our capacities in North America. And speaking about HPM, the 2 lines in Gastonia, for instance, for the lightweight trends in the automotive industry in North America, the 2 lines where the second one was brought on to stream 1.5 years ago starts to be fully utilized already.

So we have here penetrated the market nicely. Our compounds, our custom-made polyamide compounds, are taken very well also in North America and therefore these are playing into the direction of increasing the capacities in the United States. Another element I would like to stress is, for instance, our El Dorado sites. With the fact that China is more scarce on brom, brom reserves, I have recently announced that here, in North America, we will open up further wells to extract brom from the ground. We've indicated that Emerald 3000, our innovative brom flame retardant product also likes to have further volumes. And therefore, we have announced also in this regard capacity increases. So all in all, you see that these are investments that are done in different product areas, but where the trends seem to be quite healthy. That's the reason why we invest.

Operator

Next question comes from the line of Thomas Swoboda with Societe Generale. Please go ahead.

Thomas Swoboda

Two questions for me, please. Firstly, on Performance Chemicals and chrome, in particular. On the last calls, we were discussing the potential opportunity to find the strategic solution for chrome. I'm just interested whether the renewed price weakness in the chrome products and chrome itself changes your approach here? Is a strategic solution for this business in the short to midterm still a possibility? So that was the first one. The second one on, a follow-up on high performance materials. Business is developing extremely well. I'm just interested, in terms of the mix transition, which you are targeting to 2020, is it fair to assume that this transition is towards the composite materials, that this is progressing faster than you initially thought? Or you're just in line with your previous thinking?

Matthias Zachert

Mr. Swoboda, 2 valid questions. Let me take them one by one. Chrome, I am not aware that we have stated in any conference call that we are seeking a strategic solution. We've always stated that Leather business unit, in its entirety, is a business that is being restructured and here we clearly alluded to chrome and took first step, i.e., Zárate closure, and that midterm, we might go for partnership. We never were specific on one or the other business line. We are definitely in our tonality more positive on organic leather chemicals, which is low-CapEx, high-margin business, and we were less positive on the chrome value chain, but that is basically the communication coming from the company. Of course, I will talk to my IR guys if they are telling anything different. And if they do so, I would be very surprised. On the mix in Engineering Materials, I wouldn't say we are accelerating here. We are executing our strategy every day pretty well. But for those of you that attended the Capital Markets Day last year when one of our customers was making presentations on our products, we see that our products are simply pretty liked by the markets. On top of that, we see that the polyamide industry configuration is changing to the better and that is giving us even a better position within an industry whilst we also have quite nice products that we offer to our customers. So in essence, it's a good business. We like it and I think we are, here, positioned exactly in the right time.

Thomas Swoboda

This is very clear. Thank you very much.

Matthias Zachert

Your most welcome. Next question, please?

Operator

There are no questions on the line.

Matthias Zachert

It's not that hot by 9 o'clock, so we are so energized, we would like to take further questions. But if there are none, we will take all of your questions on the road and we are looking forward. I hope all of you get a summer break. We will still be very, very active. And we are excited already to see you on the road and to speak to you soon because we are working hard in order to make you and us happy going forward. All the best from LANXESS, all the best from sunny Cologne. Take good care, and bye, bye.