Wacker Chemie Stock

Thank you, Chris. Hello, everyone. I will present to you the actions we are taking on structure and bases. Our priority here is straightforward, make Wacker leaner, faster and more efficient. Obviously, over time, as time goes, complexity has increased with growth, new businesses and expanding global operations, refocus addresses this by streamlining structures, reorganizing processes and improving accountability.

A key element is our past cost and efficiency program. The program is on track with Q4 last year. And in Q1 this year, we already started with the implementation of FirstMerit, especially nonpersonnel measures, and for the organizational restructuring, we moved here step by step, and we started in Q3 2026 and expect to have all the restructuring done completed by the end of 2027. The teams spread over 8 distinct work streams are working really hard and with great help implementing all the fine items and all measures are to be completed in '28.

PACE targets, both nonpersonnel and personnel costs. As things move faster on the nonpersonnel side, the first visible savings are already being delivered. We reduced expenditures through lower technical spending, structural savings and procurement and tighter budgets, and we are controlling and monitoring that will be very tightly on a monthly basis. For personnel costs, benefits will begin to materialize from '27 onwards. In the second quarter of this year, we reached an agreement with the works council in Germany to reduce around 1,600 positions. This is truly a milestone achievement and that's the time line for a stringent implementation going forward. Paste makes Wacker, leaner, faster and more efficient.

Therefore, a [indiscernible] of pace is simplifying how we operate and just an example. We are merging operating into larger functional units and centralizing support teams to improve efficiency and accountability. Another example, we are reorganizing our entire engineering processes to align around 44 departments with clear roles and responsibilities and integrated functions. The goal is not just to have fewer organizational boxes. The goal is faster execution, better performance and stronger accountability. And PACE is on track.

In 2026, we will achieve around EUR 200 million in savings and gross savings, of which EUR 85 million were already saved in the first half. That means for the second half, there are EUR 115 million to save. Annual gross savings will expand to more than EUR 300 million in 2028, and as we stated before, more than 50% will remain EBITDA relevant as net savings after accounting for inflation. The structural impact of PACE is important. It lowers our breakeven point and increases again resilience of the company. This creates an additional leeway to invest in innovation, technology and attractive markets.

PACE is not just about cost cutting. It's making Wacker leaner, faster and more efficient and such laser foundation for focused growth. And be on pace, there is obviously much more. Our advanced digital foundation enables AI scaling for greater impact. Over the past couple of years, we have built a strong digital foundation. Just as a highlight, Wacker has just 1 single ERP, and we are running on [indiscernible] our digital organization has been established and is up and operating. Gen AI tools and data layers have been implemented.

And all this was a big effort and now we can scale up for greater impact by implementing AI capabilities across Wacker. This is a fascinating do to me per and definitely for the company as a whole. And with this, back to Chris.

Thanks, Tobias. While actions taken on structure and processes help us to become leaner and faster and more efficient, they are only 1 part of refocus. But they are integral and important part of the process and also worth to mention, they are real. The PACE savings are real and they work. Another priority is to elevate our business model and value proposition. So now let's talk about another important ingredient of success talk about growth. We are coming from an environment defined by broad-based growth, especially when I look back at our 2022 CMD here at TATE.

Today, the environment is clearly different, and not all the opportunities offer the same potential. That is why we are implementing a new work for portfolio management with differentiated steering. We will become more selective, much more selective about where we invest, where we innovate and also where we allocate our resources. Now how does the playbook look like? We have implemented 4 different portfolio roads to steer each business. Now let me briefly go through these categories, accelerate growth businesses, they have substantial upside with high innovation potential and value-based pricing for very attractive margins.

[indiscernible] we are focused on leveraging our established market positions to generate resilient cash flow. And turnaround is about 5% of sales. Here, targeted actions are required to unlock the future potential. If transformation is successful, they will move to accelerate growth and would receive additional resources.

Now let's have a look at -- closer look at Accelerate growth, and you can see here some of these fast-growing end markets on the slide. Our portfolio approach means more focused innovation. We had direct resources towards markets with strong structural demand growth that aligns with our strength. You see a lot of good examples here, and we let me focus on the hypersonics AI and high-end chips are driving demand for powerful and densely packaged semiconductor devices. So they run hot. They require advanced thermal management and we partner with customers to solve these critical challenges.

Our thermal interface material is improve the heat transfer, the long-term reliability and the energy efficiency. And with the massive investments in data centers, we expect to see continued structural demand growth in these applications. As you can see, there are many examples of backer solution, which we introduced recently. Now let's have a look at the optimized return category. Again, not at good exact here. But let's focus on the ultra-ultrahigh pure polysilicon.

We are the leader in our material is critical for the highest-performing semiconductor. The market is for strong long-term growth, and we have just expanded our hedging capacity for the highest quality Therefore, our focus is on operational excellence, on yield improvement and on cost. This strengthened profitability while reinforcing our technology and market leadership. As you can see, optimized return has very attractive businesses where we can undervalue without major new investments. The VAE powder of power sales [indiscernible].

Our segment's strategies reflect individual portfolio growth. Now starting with Silicon. We provide a right range of products from upstream standards to bespoke high-end specialty solutions. In Silicon, 17 out of these 25 units, you can find -- some of the most attractive growth opportunities also allocated in this segment. We are well positioned with our expanded debt base, which I mentioned before with the recent additions in downstream capabilities. So we will drive selective asset light, downstream expansion to capture opportunities in fast-growing markets. Polymers, on the other hand, are less complex.

As you know, we serve the adhesion and coatings market from a shorter value chain, dispersion powder [indiscernible] so just 3 portfolio units. The latter 2, powders and resins, higher differentiation potential, stronger profitability and returns by our cost by capital discipline. BioSolutions has 3 portfolio units. Biopharma, bioingredients and Life Science Chemicals. Today, we are focused on commercial excellence to exploit the full potential of cutting-edge biocide. At Polysilicon, last but not least, have 2 portfolio units.

Our focus is on semi, and we will expand our same leadership while maintaining the U.S. solar option for the time being. And in each segment, we are pursuing specific priorities. So different actions, but 1 common objectives are not the full potential. The next 3 focused priorities excelling with our people and our culture. And that's often a miss, I would say, but it's integral part if you want to proceed in our executing the strategy. The success of implementing our portfolio roles ultimately depends on our teams.

So it's about having the right capabilities, leadership and culture throughout the organization. And as our business models evolve, the skills required to also evolve. That's why we're investing in our people and make sure that we have a long-term winning teams. So different portfolio roles, obviously also train capabilities. Now for the accelerated growth, we need teams with proactive business hunting mindset, coupled with disciplined execution to drive faster commercialization. For optimize return, we need rigorous performance and efficiency management skills to improve margins and return on capital.

For maximize cash, you again need a different mindset. We need to embed cash and cost culture as a daily management position. So you don't talk so much about growth in that category. But you talk about how can you increase the cash generation. And for turnaround, finally, we need range relationships with key customers and follow strict milestones to process to real growth. So my responsibility instead of the entire board to ensure that each team has what it needs to succeed in their specific mission. We've already launched a program to build long-term winning teams. The one [indiscernible] promotes collaboration across functions, businesses and geographies and essentially fibers teams.

Leading at Wacker has strengthened the leadership capabilities throughout the organization and at the same time, we are investing in AI and digital skills to prepare our workforce for the future. Together, all these initiatives help build the culture and capabilities needed to deliver refocus successfully. So let me briefly summarize before I hand over to Tobias.

We have taken bold steps to a more and much more challenging market environment. We have a comprehensive program running. We have defined a holistic approach where the strategic priorities for structure and processes, business and value position and people and culture. And we have implemented and we are running, the cost and efficiency program pace, and we are on track to save EUR 300 million annually. Building on our success in pace, now Ignite if you want the next level of selective growth with a new playbook for port management and differentiated steering.

Importantly, we see distinct value creation potential across all 4 segments. With clear portfolio roles anchored in the organization, we will drive the spirit and the commercial success. Together, these actions are creating a leaner a more efficient organization, which will strengthen our long-term competitiveness. We are absolutely confident that we focus will unlock our full potential within our 3 strategic priorities. It's the foundation of new financial entity year. Tobias?

Thanks, Chris. Let me briefly outline what I will cover over the next few slides. First, I will review our performance and how we maintain solid financials and improve resilience side all the headwinds. I would then show how we focus drives our ambitions for growth, profitability and ROCE and obviously also touch on current trading and order with probably government where we intend to go. The last several years have been defined by excess market volatility. Post-COVID gave way the headwinds across many customer end markets. And despite this, our chemical specialties businesses continued to grow and expanded our global leadership positions.

In Polysilicon, we have seen strong semi demand growth, and we grew double digit from peer, which was above market. Unfortunately, this development is not visible at first look, as these wins are being offset by solar beer volumes have contracted due to overcapacities in China. BioSolutions, our new [indiscernible] Competence Center, which is part of the German [indiscernible] preparedness program strengthened our position in advanced [indiscernible] back to Chris' comment about products that we had shown at the last CMD in Wacker in the [indiscernible]. We talked about our new hedging line.

We talked about the silicon hybrid polymers plant our new mRNA competence center as well as about our electronics and health care silicon specialties. These businesses taken together now generates more than EUR 500 million more sales than a few years ago. So we have achieved strong growth in some focus areas and our recent investments are the foundations for future growth. Despite the headwinds and the high investment period, we maintained solid financials around for key balance sheet items. First, we increased our already strong liquidity position that was clearly reported by cash flow generation and disciplined working capital agents.

Second, we kept financial debt low. This year, it comes in around EUR 100 million at the end of the year, which equates to a comfortable leverage level of below 1x EBITDA. Third, and almost forgotten, we reduced the pension deficit, a big topic a few years ago by modernizing our [indiscernible] system. We also into use the capital option. But we also did voluntary top-up and we funded through a CPA, the unfunded portion of the liabilities with more than EUR 250 million -- EUR 250 million PTA, which likely over the last for with the Stockholm. Higher in count rates were also supportive.

We increased overall shareholder [indiscernible] EUR 4.2 billion despite returning EUR 1.5 billion dividends to shareholders during that period. Our solid foundation is a basis for everything we do and it allows us to invest in selective growth while navigating also under the market. So now looking forward, our ambition is clear. structural EBITDA margin of 15%, plus/minus 2 percentage points. We have delivered this performance before. However, our performance has fallen short of this over the past couple of years. That is why we are taking decisive both actions through refocus.

We will achieve our margin ambition by calling never first, drive growth. We will focus our resources to drive selective specialties growth. And we will leverage our existing assets and expertise into commercial success. Second, as cost, we will deliver annual paid cost savings of more than EUR 300 million in 2028 of which more than 50% will be retained in EBITDA. And as we talked about, we will invest in cash and cost culture as part of some portfolio units to maximize cash. Third, improved resilience. We will protect margins with our focused pricing playbook to optimize returns. This is so important to can take volatile and dynamic market environment.

And taken together, these actions will allow to consistently deliver on our structural margin and et side -- for the more we that our ambition is that regardless of which scenario plays out which system. Refocus changes how we prioritize capital allocation. Over the recent years, we have invested our global footprint, and we have invested in capabilities. That investment phase is now behind us. Those assets provide a strong foundation for future growth. Going forward, our priority is to leverage existing assets and expertise to drive commercial success.

We will keep our CapEx below depreciation and in edge EUR 300 million to EUR 400 million, of which maintenance is some EUR 200 million. Despite lower investments, we will accelerate growth by focal resources on the most effective opportunity. Our ambition is to gain ROC back to more than 10% as net cost growth, get it back to more than 10%. That means above our cost of capital. We have shown this in the past but recent performance has been well below that. The combination of progressive and margin decline led to insufficient capital returns.

And there are 3 main levers to get us back on track. First, raise EBITDA through growth and cost cutting, obviously; second, strict capital discipline with a focus on leveraging our existing efforts and third, optimize and continue to optimize working capital management. Together, these actions will drive the nominator and the denominator down to achieve a rose to changes lead at last and time.

Going forward location priorities are clear. Growth and maintenance of business, #1. #2, to maintain the financials. #3, will make, as we said, selective growth investments while maintaining assets to insurance sales and reliable operations. At the same time, we will leverage our already existing assets and expertise to drive commercial success. Our driven policy is unchanged. We aim to distribute roughly 50% of net income. That's number three, maintain solid financials with a financial leverage target of 1x EBITDA, also allowing for some flexibility.

Putting it all together, our capital allocation part to reflect our well-balanced approach to selected growth, shareholder return and financial results. Sustainability remains in several part of our strategy. Going forward, we will realize selective growth opportunities, and we will remain on our pathway to net row by 2014. Our target is to reduce our footprint and strengthen partnerships with the customers. Our pathway to Net Zero, there are 3 principles to it. Number 1 is green silicon, number 2 is process transformation, and number three, a switch to renewable energy.

For us, sustainable sustainability is an investment and it should also be a good bits. In our last earnings call, we highlighted that Baker recently received L'Oreal's Energy Award in the raw materials category. By reducing CO2 emissions from silicon metal production in Norway, we reduced our financial risk and create opportunities to grow with strategic customers. So that part shows how sustainability and innovation go and Refocus is a holistic approach to go, how we operate, how we compete and how we create value.

We have defined clear strategic priorities to be. And these 3 priorities we complement each other. Together, they will unlock our full potential are the foundation for our financial position. on this slide, we also drive GDP plus growth by making selective growth investments and improving mix. We aim to raise our structural EBITDA margin to 15% plus/minus 2 percentage points by delivering on our growth on our cost and efficiency program. And number three, we aim to get ROCE back as soon as possible is up 10% in terms of our cost of capital.

So these 3 targets, ambitions drives all that we have in our refocus setup basically on self-help by the company.

Before I hand you back to Chris, let me address trading. Our strong performance continued in the third quarter. Group EBITDA will likely be at the same level as in the second quarter. Chemicals see stable to slightly better EBITDA performance. Biosolutions roughly similar to the prior quarter. Polysilicon will be approximately EBITDA in the quarter, including a special income of approximately EUR 3 billion from the solar contract resolution. But operational and polysilicon performance is held back by a disappointing 2-3-2 decision.

Despite this, if you look at the 3 quarters, the group earnings are up driven by execution pace, pricing actions and strong operational performance have delivered tangible results year-over-year and with this, I will pass to Chris.

Thank you, Tobias. Next step for Wacker is refocus. Refocus, as you said, it's a holistic approach to improve how we operate, how we compete and how we create value. Refocus is built on our 3 strategic priorities that reinforce one another. Our business priorities are clear. It's about profitability. It's our ROCE and it's for selected growth in the tract market, and we have a clear plan for refocus. The new playbook for portfolio management as defeating has been defined and in and is now ready for execution. Past cost savings are full swing in execution.

For the next 3 years, our agenda is set. In Polysilicon, we will lead the way in the next generation of semiconductors and optimize our performance by focusing on automation, technology and yield improvement. In BioSolutions, we will leverage our cutting-edge technologies and focus on commercial excellence and customer partnerships to fill our assets. For polymers, we will leverage our unmatched footprint and leading application expertise and optimize to improve margins and return on capital. And it will leverage our own excellence centers close to customers to our selective growth.

Before we discuss [indiscernible] leave you with one key message. Wacker enters this next phase from a position of strength. We have leading technologies, we have strong market positions, and we have high-quality assets, built 3 years of targeted investment. The focus is now on execution. -- through refocus, we are concentrating on the opportunities that are within our control to improve profitability, increase returns and accelerate value creation. And we are confident that it will unlock upside in earnings and strengthen buckets competitiveness for the long term. So thank you for the attention. And Tobias and I are happy now to take your questions and comments. Thank you.

Technical issues with the Internet [indiscernible] land line solution. So we want to do, we have the question. I'll give you my mobile for the question, and then I'll run back and forth. You probably didn't notice it. So who would like to have the first question. [Operator Instructions].

-I'm Katie [indiscernible] from Barclays and asking on behalf of the covering analyst, Anil Shenoy. You talked to your Wacker polysilicon. We'd just be interested to get your talking through the upside in both of those areas. What do you think the EBITDA potential could be in a successful Section 232 environment? And you also spoke about closing down the U.S. sites, what kind of savings do you think we've achieved from this?

Okay. Yes, as I mentioned before, if actually we do what the aim to revitalize the U.S. market for solar and on silicon and in its current reading, it does not provide the support which is which is a deposit Yes, we keep engaged in very constructive to with the U.S. government, and we found on the ongoing commitment the government to support domestic poly production in the U.S. So therefore, it is too early to speculate what will be the outcome of this you say more at the moment.

But I may be testament on the either scenario is that none, which would be presented 1 or the semi-only scenarios we see better than the situation of uncertainty that we have today. The same you mentioned, yes, there will be structural gross in trading the early to us because it's still open.

Tristan Lamotte from Deutsche Bank. I just wanted to go a little bit further on that question around Section 232. But what specifically is it in Section 232 that is not incentivizing the behavior that you expected. Is it specifically the lack of protection around U.S. Polysilicon? Or what are the kind of clauses that you look at and you think maybe that could be tweaked to make it a little bit more beneficial and had the effect that it was intended to have?

At the current reading definitely incentivize the use of domestic U.S.-made Polysilicon, just leaves something for import pricing. But as you also know, there's not a big import of Polysilicon actually going into the U.S. right now. Therefore, this concept with the minimum input price itself is not incentivized in the use of U.S. made Polysilicon silicon. And therefore, we keep on talks with the U.S. government.

Two questions, please. First of all, on [indiscernible] [Technical Difficulty] your rating phase for seasonally 1 of your biggest properties that action. So we have and will the last month for the year. Next, on your solution segment. It's a very broad portfolio for a very small technique to segment contracts. Can you give us are product lines for condoning business.

[indiscernible] give you an update for Q3 and you're asking for Q4. You're very good. So let me start with some details on Q3. So as I said, chemicals have performed nicely. We have seen summer dip in August, but September, there is a good order pattern that might also be a dedication on how to look at Q4 by solution move sideways, then they can obviously had the disappointing to effect we talked about, and I think we can't talk much more about it. I mean there's no good solar demand from the ruling, obviously.

But I mean, looking for the -- I mean, to the full year, obviously, after 3 quarters, -- and on third quarter left, we see us more in the upper half of the guidance range. So we expect typical seasonality in chemicals and see that there's no, yes, positive effect on solar. So from that perspective, that should give you a little bit of a of an idea how we see Q4. I can only agree to that. We don't see a positive spend from the market.

Our performance, especially in the Polymers division is managing the volatility. As we described, we have a pricing playbook in place, but we have ups and downs in the raw materials just on a weekly basis depending on what happens in the Middle East. And our teams are really managing moving through that in a very bad way. But there's no end market demand uptick growth in the polymers division.

You add to this in the bottom was portion area. What we see now is that in many areas, the aspect of supply security becomes more important for customers. And I would say also traditionally more conservative reasons like let Europe versus Asia. So -- and that's another lever which we now see and can do also in respect to the pricing pay. You have a question on the Solutions business. So they have 3 business units. I wouldn't rather call them too complex because all of them -- I mean, the bioflur very much faced on hydro CDMO activities and RNA ingredients selective ingredients by fermentation.

So we see it as a very clear portfolio unit here. All of these units also the Lifescience Chemicals contribute today -- and the 2 of them are, let's call it, turnarounds, which means we believe in the underlying growth that is reachable in these segments. And therefore, we have a very clear milestone plan to turn it around and to move into accelerated now. So from today's perspective, there's no more point in questioning that, but the teams have to deliver on undivided goals for the next 2 years.

[indiscernible] JPMorgan. I have a few questions. I'll ask with the top ones. You mentioned this refocused ambition, what is the time frame to it. [indiscernible] that time frame. Second, just coming back to the policy question, please that we see the back -- it seems like the whole strategy...

Strategy on solar is just based on hope. And I mean at what point do we go from that pace to just taking action because when your Q3, you're actually losing customers because that's why you got that special income, when we thought you should be gaining customers. So how do anybody get us concur that a turnaround in this business is even possible. And in your scenario of setting or taking cost actions -- and I asked this question so I don't know if you have a bit in terms of what impact does it have on your [indiscernible]. All of this at a rate typically in 1 time. So how even related to the switch off for the solar without [indiscernible].

I'll start with a question on the time frame in the repo women we have it on website at is 268 the refocus above action. And our ambition, obviously, is to get these at the end of the year time frame to the corridor. And -- but we're not giving guidance now for '26, '27 and 2028 for the fiscal year. Refocus is about satellite growth, and we mentioned that we can pursue tractive markets work with innovation even in a changing environment. So we have delivered also as we assume the growth session last year on those projects, we really can grow.

As we deliver on the pain of savings and power. And that should bring us into that port. And obviously, we do a if you reach 15% and if you take depreciation at the employee and their capital on slow over time because of the lower investment depreciation will have added some working capital. But in terms of the denomination go down. So if we reach the 15%. We will also rapidly start of that term that in the speech, we want to get there as quickly as possible but there is no guidance [indiscernible].

But I would not say that our strategy for our ports at all. It's based on opportunities. It is a rise from [indiscernible] so is the greatest thing that -- so we need to look for opportunities for the company and shutting something down on an excel opportunity this production plan. So therefore, we thought then yes, I would open have a better outcome already. So I would have lost out already a year ago. But we talked about polite world. It is more specifically than. So we are in the situation we are now because we still see that opportunity. And we keep on tracking for our opportunities.

I think it would not divide now a decision before a private ruling is now say, I'm set up and we get out of everything. And it is old. So we keep that opportunity and we work on it. And if there is here clarity and certainty at what there's clear uncertainty, you can be sure that you will take the action. And so it's not so we don't want to be division. It is more about because they're still in the morat which we could pursue.

Second part of your question was on the integrated site scenario as a public scenario that would not need to set up that we have today. Today, we can introduce at all our sites semiconductor of silicon. And Again, it has to rely decide what to do because it is far ruling on 2, but because essentially all the sites for semiconductor [indiscernible] a lot of positive outcome for the incentive for protection of volatile than to a position now. And yes, on the integrated side, it is our [indiscernible].

Three questions from my side. I think you mentioned that the maximizing cash activity or accounting roughly 4 and we said it currently. I wonder whether you can shed a bit more light on the other part of it looks like these days? Second question is on your -- one of the ports was about focus pricing achievement which you want to use the can you give us a bit more color on where you think you are payable in the environmental focus achieved.

And the third one is to the tax to precede December basically the implementation date. We reached that by December, there is no basically entrance in play, which is union that we may hear more about the topic on the I think the last question. As much as I would love to say yes I don't know what [indiscernible] it won't be on a I think that's helpful -- your question on the port units, the accelerate growth is around 10% to 15%.

The optimized return is also similar to the maximized cash around 40% and 50% will be the remaining. Question on the pricing actions, I think, the key success [indiscernible] action is that you have a table, which is based on different customer segments and regional. Of course, we see a very extent difference in talking to customers in the construction forces in Europe. And therefore, the either needs also their needs regarding supply security. We also have to make a kind of ipackage which helps on the past. And also in China, the speed of reaction much faster for the customer lotion and the raw material goes up today for the crude oil.

And they call you today because tomorrow prices will be higher. [indiscernible] actual group for longer term more on a weekly basis. And I think the best thing we can react to what the customer was its needs are better but also integrated that's 3 questions.

First, on price books. You talked about focusing on the mono accident, I could explain a little bit what the impact -- and then also I hope you think about salmon were contributed to the other parents going forward and a little bit of overtime that we -- and second is for the selling business in foil all many of the competitors lean China development. And then [indiscernible]?

Okay. So we also the [indiscernible]. I think it's a very good pricing level. And part of our strategy we want to reduce our stake in dustproof time. We have no Russia and we wait for the right 1 retrospective, I would say maybe global look at on to set down and we compare to further steps in the future. We see that the market is attractive for us. On the and let Well, let me put it this way.

I think when we did also the acquisition in the field of Biopharma, especially they've got very strong focus coming in by on technology for the new applications. And are we prepared -- do we have the right technologies in place. And maybe there were not so much focus on the how to gain new projects, be more aggressive biting for projects maybe a little bit too negative [indiscernible], I would call it. And that's what [indiscernible] change or people in the team. We hired external people with a lot of expertise and obviously, as I said, the market also more challenging.

I still believe very much in the opportunities in announcement. So there's a lot of opportunities coming up, it is slower than expected as many times. So therefore, I think it's all important in our focus the 100% loss on commercial execution and commercial [indiscernible] all of our segments will contribute to our financial ambitions and thanks for [indiscernible] growth. So I think when you look back in the last 2 years, we had double-digit growth in semi.

And I think pro also think as the market was for growing the high single digit signal. And having share about 5% and then Ingoing the market for, so I think was rather accomplishment. So going forward, I would still say there is growth in the Semiconductors factors into high single-digit number, which would also be the target about a you go to market [indiscernible] but we will go with a single mid-single to high single-digit number for the next year. But also, don't forget that every year will be the same. It's always a straight line. But overall, the next years, we. I don't expect every year to be up the last.

Well, I think the actually that is bad [indiscernible] in the market with a big with it and log -- we're working on their all the urea pretty much, I would say, on what's going on to them. I think we have a good position also here. So a big question about both [indiscernible] and we see that, which I need that [indiscernible] is branding shares in China, which is also part of the 5-year plan. and part of the political agenda. That's probably the biggest going forward. Another question -- they will have -- I have a share in China, question how much we need outside in China. And so far come from customers or dependent on Chinese material saving something [indiscernible] follow-up as again questions.

Let's not be remind us because now we are going to see a sound reduction per the to cash flow for it. Can you mind as how much of the cash cost to implement all the pro reductions? And just pricing part, -- on power price, in fact, that we see gas and power prices in Germany but Florida. Remind us your hedging and how you're thinking about the potential impact much more than [indiscernible].

So on hedging, is super qualified as we see out of [indiscernible] crude and gas prices have followed. Our hedging model is rolling, and we have secured a large more than 80% for -- also for the winter season, then the remaining [indiscernible] but we also need to see whether those prices are daily for the winter season was prepaid or whether, yes, we could have a release in the windy winter and then I mean at price are completely different to what you could buy today. But our hedging in policy going forward is always to smoothen out the peak, and we are roughly 85% net for Q4 and Q1.

Your first question was on PACE. So that we are well on track. So the run rate for savings for the second half is higher on the personnel measures are now kicking in, but the majority or more will up over time, 2016 and 2018 forward. But assume with the agreement with the west council, there were no force for the voluntary program. So we've moved out and never the attrition plus extradition yes, people leaving with severance pay.

So we had accrued EUR 100 million in last year for all the measures. And if you think about the cash out part of that cash out will be also need to support early retirement so that we having that cash out that we have funded with the accrual and for those leaving immediately is still in 2026. I mean the cash out would be relevant. But not a precise number, I would assume it to be less than EUR 60 trillion been cash relevant.

[indiscernible] from Deutsche Bank again. Just a few more. First 1 is, I'm just wondering a little bit about chemicals demand and your views? Like if you kind of take a step back, why do you think the demand has held up so well this year in a tough environment? And then maybe second, because of the exceptional that you alluded to in Q3 in polysilicon, you're kind of implying a EUR 10 million run rate. Is that kind of a real run rate? Or is it a run rate that isn't a real run rate that we should extrapolate?

I appreciate that might be difficult to answer. And then maybe to kind of high level, do you think you can grow in polymers and silicones next year?

I would say, I mean, if there is no catastrophe and codes coming, which nobody has on his line today, could start I see potential for growth in the chemical [indiscernible] and then question the first question was on an this year. Well, I say it is that strong. So it is kind of solid because there is any demand, but it's not huge. I mean there's no big impact, I would say, in many of these segments. I mean you only in part you see semiconductor but it is mainly driven by AI and also not so much on volume.

Yes, more on the pricing side for polysilicon, maybe you picked we had a EUR 30 million one-off in the fourth quarter into make the run rate very cool that taking an for EUR 50 million from year from that on -- we said the scenarios, either risk solar for with our solar and improve our operations would improve from there. And what are the main drivers or drive is continue growth [indiscernible] believe that we can grow with the market not every year is the same, but we will grow over time with the market.

The second is starting from follow-up operational dictionaries to a continue today, but and improve on fixed costs, which is so be better and the other thing we and foot test, I mean, we owe have to vest and we would not do on stream side that make an impressive I think that sort of gives you a well I mean yes, derive the confidence that we -- let's not be even this year -- but interesting and going forward, we can be better than today. And polysilicon as a segment with the consequence of to our ovation and into billing and then recently in this year, why we have -- I mean we have paid progress, and our chemicals are performing year. So -- if you look at the margins erode we want to have all the segments of the cargo, but we are going to talk about specific targets, but oil segment contribute to help margin a custom overall new part of and reach to 15% as mine point for I think some of you talked beforehand on the 15%, but minus 2% that it includes dollar doesn't include any -- it does include volatility either scenario.

[indiscernible] from Bank of America. I have 2 questions. One is, can you give more detail on the underlying assumptions on your margin target, so are to the lower end? What's the upper end? And then where is the biggest step-up coming from? Is it from nation leverage or poles or some mix? And then the second question side of solution. Is there any other areas where you invest in customer-facing roles or bringing in external people, for example, in silicons on growing the downstream part of that business. Do you have the right sales cars in place? Or is this also something where you bring in external people?

My thought was the first on the delivery segments Yes. But I mean all segments should contribute. And we should get into that corridor, our ambition with self-help. That's important with pace cost efficiency plus selective growth. And obviously, the larger segments contribute more because, I mean, if you look at the ad the group numbers, I mean their wages was tremendously important also the performance of silicones and polymers while I mean Bisolutions, obviously, we want to also bring into that corridor, but as total revenues are just shy of [indiscernible] sales. I mean their wage is not that big. Yes, your first question on the we have the right people and the mindset nothing we work both internally with programs like Leading and Wacker, which is a leadership program to train people, to get them better to have the right mindset and culture -- but yes, there is also an external addition of people.

And that it depends a little bit on the different portfolio units, as I pointed out, I mean, for the accelerated growth, I mean you need to be a business hunter and at the moment, we are also in people internally and then thinking about who is the best use capabilities on which portfolio is it -- so you will see some shifts internally, but we will also go into the outside market, and that's what we also currently do to hire people that can act as a kind of as an initiator for changing also the culture because at the end of the day, people are the right way may it's about the people, but it's also about how we feel the business I think half of those portfolios, and we mentioned that we have -- in the last we have there. We have 4. We have some in time 4. So fundamentally, our complete steering model has been changed and become much more granular because in all 17 business units mentioned unit.

And then you might pursue growth with actions. And those actions can monitor in a playbook that is put on a milestone plan -- so we are cascading throughout the organization, completely new steering where we match it's a bit of a measure tracking on the pump side with our KPIs that are for that portfolio business. So I mean, for the Acceleron obviously, it's about growth and margin. But for the Yes, maximizing returns. It's the ROCE. And for the other, it's a cash.

So we have both help we feel the organization and the other, yes, and drives -- and I think that is a great labor. So the playbook that we have on pace, the label that we have on pricing. Also now the play house we run the portfolio unit. And it's -- yes, it is about people. I your question is absolutely valid. It's also about how we drive the organization. And it's a -- I mean, we -- I mean, it's a cultural change. because I would say in the past, there was more a broad-based look on growth opportunities kind everywhere, and everybody was kind of happy to see growth whereas now with these different portfolio units.

If you are in maximize cash, you won't get a credit for growth itself. You get a credit for cash. If growth helps you to create more cash, fine. -- if growth dilutes your cash, you're on the wrong track. And that will be measured and communicated and it's [indiscernible] customers.

[indiscernible]So I want to talk about headwinds and tailwinds, a minute and compare silicons now to the good old days before COVID. I mean what changed? You have a lot more people have a lot more assets. Your revenues are up, but they're not up that much, but why your margins down so much? And how does that tie into what you're talking about today in terms of refocus on the culture and the things that you're looking for the way that you want to manage the people and the KPIs?

First of all, I had payer headwinds that the order -- we lost the same. I mean we still have a small portion of it, but we also have here 2017 and '18 where the markets were tight where we have earned a strong margin on that. And -- the same was true in '21 and '22 when markets were tight, and we earned the margin on that. We don't see that to come back, but you can only use the margin 1. We have lost that, and we don't think that overcapacity to change meaningful. We don't -- to be honest, we also don't focus much on the tension internally on that anymore. The silicon specialties, where we duplicated the specialties and even more tailored solutions, where really the growth driver going forward.

And then we have invested as we have made out so we have soticapacities. And we have -- as I've talked about, we have had 17 portfolio units with a clear milestone plan. We have now a measure tracking for each unit where they should accelerate and where they should focus on return on cash. So our resource allocation will become no more granular. So we're not looking at certainly we have 4 business units and our business unit enter cloud to grow and they were fighting for resources and timing for CapEx. They don't get that in that sense anymore. That's why we have lower CapEx below depreciation, and we are much more selective.

And now we are scaling the business and also the base, in particular, very much on is there an attractive market and do we have the ability to win here in that market. And only a strong pitch for that, we would accelerate as we would the focus and also lower and low sources on return -- can we still grow but improve the return by lowering resources or in the more extreme even yes, just focus on cash.

And I would add that to your comment of the good over time, our clear statement to everybody in the company, they won't come back. They won't come back to good a time. So he needs to adapt and refocus was the answer to saying that in good old times, they go for everywhere in the market be get everywhere. It's just over. And we need to be much more selective -- and also, I would say that global competition also increased in recent years. You need. You need to be better, and we need to be more selective in order to achieve margins of the past. And the headcount increase is partly over addressed by PACE.

So a big lever to lower the breakeven point in silicones, especially from the high fixed manufacturing cost is the PACE program. And I need to add that obviously, also for the downstream product or specialties, I mean, fixed costs are important. So if you are running on low utilization, you don't get the absorption. So growth is vital and we haven't seen much growth, I mean, on total over the last years, we had seen growth in focus areas, but we also lost business in some style market environments like construction.

And we focus is now about self-help. We are focusing the growth being very improving the leverage from our -- and utilization from our assets and lower the cost to improve the breakeven point.

from Barclays. I just had a few questions on buying solutions. You've mentioned sort of filling the capacity Page has taken longer than expected. I wanted to ask if that's around the contract you had with the German government for EUR 80 million as I think the fit for EUR 200 million. Just is that the source of the issue and going forward, are you sensing that governments are still open to contracting going forward? And what is the sort of long-term intentionality with that business? And sort of also speaking currently with the modern date, have you seen any sort of immediate client uptick for appetite in the market?

On the biopharma business. And so part of that business is what we call the prep, the pandemic preparedness, tell the [indiscernible] government, the invested also in the brain facility is kind of on standby as of pandemic. There's ongoing contract and there are ongoing discussions also for longating of this contract [indiscernible] favor in this facility, and it's because the facility was built as 1 part is for the German government reserve. And the other part is kind of flexible for our use. [indiscernible] capacity, which could be utilized.

We have 2 other sites out in Germany where we have the microbial fermentation for proteins. There we have a high utilization, we taste in Amsterdam and in the U.S., where there is still room for more projects. So we are ready for gaining more projects. But I think we have to say that in the RNA world, post COVID, part of the enthusiasm was gone especially regarding timing, I would not say regarding the opportunities because it's still huge, and I absolutely believe that takes longer time to be filled.

And also keep in mind, I mean, biotech for example, significantly reduced capacities and closed sites after the pandemic because kind of they had too much of facilities. So we remain confident in that marketing. We take more efforts [indiscernible].

[indiscernible] from Citi again. And 2 follow-ups on Silicones, please. First 1 is to have this 20% plus margin target ambition. I just wondered whether that post all your pace measures and an improved mix, whether this is still a plausible scenario? Or would they really need the standard business to come back to get to those type of levels? And then second, also just a more difficult competitive landscape in silicones and in the 5% non-commodity business. How far down do you see that increased competition? In other words, how much of your business is genuinely protected by high entry barriers?

[indiscernible] not in specific segments and is but we don't rule it out. Of course, we know that depending on the portfolio and more than 20% of the silicon, but in a rich portfolio and there must not be a drag somewhere in your overall number. And that's why we are not specific on the segment ambition. But for sure, there is highly valuable effective segment any target. We have to standards, we make the best out of it. And as I mentioned, having a fully integrated supply chain has benefited, if it's relespecially on the midstream side. And over the time, we transfer more and more of these 15% remaining into downstream products. So with our targets.

Now talking about the 85% downstream Solutions & Specialties you use a highly protected markets would be nice. But I would say, like in many other industries, today, very tough to talk about highly protected markets. You could argue maybe polysilicon for semi is one, but also in silicon, I mean, there is competition, obviously, and they are good competitors. So you just need to be faster and better and work on it every day. But these segments and products, which give you a very attractive market.

And as we pointed out here in SL growth, if you talk about the Electronics segment, if you talk about the Automotive segment also, especially on vehicles. These are attractive segments also for us. But yes, they attract other [indiscernible]. And so therefore, -- also again, part of refocus put the resources where you see the biggest opportunities. So you put the biggest effort on innovation where you see the great potential for the company.

Overall, I would say there's still a lot of opportunity silicones. I'm super convinced that is the best class or most versatile from the efficacy standpoint, and there will be also new applications coming up and you need to be faster in concert market. Well, maybe just 1 last question, and then we'll be here after the event. So if you have any additional questions, we can speak about over pain 1 last question.

Yes. Okay. And yes, thank you very much can pass over here.

Yes. Well, thank you, everybody, for joining our Ceradyne great pleasure presenting our new way forward with refocus for the next years with our financial ambitions. We appreciated the exchange on the Q&A slide and hopefully, we could enter most of it. And yes, it's keep in touch with Scott and Ger on the IR team, obviously, and we are looking forward for the next end calendar, which is later to the next call. Speak all on 29th, I think any problem. All right. Thank you very much for coming. Thank you.

Ladies and gentlemen, welcome to the Wacker Chemie Conference Call Q2 2026. My name is Youssef, the Chorus Call operator. this conference is being recorded. [Operator Instructions]

At this time, it's my pleasure to hand over to Joerg Hoffmann, Head of Investor Relations. Please go ahead.

Thank you, operator. Welcome to the Wacker Chemie AG conference call on our second quarter 2026 results. Christian Hartel, our CEO; and Tobias Ohler, our CFO, will take you through the presentation. The press release, our IR presentation and the detailed financial tables are available on our website under Investor Relations. Management comments during this call include forward-looking statements involving risks and uncertainties. Please review the safe harbor statement in today's presentation and the 2025 annual report for information on the relevant risk factors. Chris?

Good afternoon, everyone. Thank you for joining us today. The market environment remained challenging in the second quarter. Demand was still subdued in many end markets, while geopolitical tensions added volatility to energy, raw materials and logistics costs. Against this backdrop, our focus was clear: strengthen competitiveness, improve operating performance and maintain financial discipline. That focus delivered results. Group sales increased to EUR 1.52 billion, up from EUR 1.41 billion a year ago. EBITDA before the pension accounting effect rose by 53% to EUR 175 million compared with the EUR 114 million in last year's result.

PACE, our project on cost was the main driver of this improvement, supported by pricing, higher volumes and better operating performance in the chemicals sector. This was not the result of a broad market recovery. It was a result of actions within our control. Despite the uneven demand, volatile input costs and currency headwinds, we protected margins by driving cost savings and we adjusted prices when necessary to pass on higher cost.

Reported EBITDA was EUR 211 million and includes a EUR 37 million noncash effect from introduction of a capital option in existing pension plans. So EBITDA before specials amounted to EUR 175 million. Included in the net income figure of EUR 350 million are significant nonoperating Siltronic-related effects totaling some EUR 243 million.

Now looking at our operating performance in the second quarter and first half of this year, PACE remains central to our progress. We reduced expenditure through tighter budgets, procurement efficiencies, lower technical spending and structural measures.

We also reached an important agreement with the workers' council on the reduction of 1,600 positions in Germany. The related personnel savings will become visible mainly from 2027 onwards, and we remain committed to achieve savings of more than EUR 300 million by 2028. Savings in the first half amounted to EUR 85 million with a EUR 45 million contribution from PACE in the second quarter. At the same time, we are streamlining our structures and processes and sharpening our business model.

In our chemical divisions, we focus on specialty products in the Polysilicon division on the semiconductor market and in our life science division Biosolutions on innovative biotech applications. This will enable us to form the basis for future growth.

Progress is visible across the businesses, and we are improving today's performance while focusing the portfolio on profitable growth. In chemicals, PACE-related savings, disciplined pricing and an improved mix strengthened the profitability. In Biosolutions, our priority is to convert the project pipeline, fill our capacity and improve cost performance.

In Polysilicon, semiconductor-grade volumes continue to grow, while solar remained weak. We are managing that contrast with strict cost, inventory and capital discipline. We had expected greater clarity on U.S. trade policies for Polysilicon by now, but the process is taking longer than anticipated. This continued uncertainty is affecting customer purchasing decisions and is holding back volumes. It also limits our ability to take long-term strategic decisions.

Before turning to the outlook, let me briefly mention some important customer recognition of our sustainability work. Wacker received L'Oreal's Energy Award in the raw materials category. By reducing the CO2 emissions from silicon metal production in Norway through renewable energy, biogenic carbon and potentially also carbon capture in the future, Wacker reduces financial risks and creates opportunities to grow with strategic customers. It also strengthens our value proposition for customers seeking differentiated lower carbon solutions. The award shows our sustainability and innovation go hand in hand.

Now turning to the guidance. We updated our full year EBITDA range now to EUR 625 million to EUR 750 million. This improvement is driven by the good operating performance in the second quarter and the special effect from pensions. Our confidence is supported by visible operating improvements. PACE is delivering. Chemicals is performing well and semiconductor-grade polysilicon continues to grow. These are meaningful strengths as we enter the second half of this year.

Nevertheless, we are realistic about the external environment. GDP and relevant end market dynamics still don't show a true recovery. Competition remains intense. Demand visibility is short and U.S. trade proceedings concerning Polysilicon remain unresolved. We will, therefore, continue to focus on cost control and self-help.

Overall, our strategy is gaining traction. We are improving profitability, strengthening cash generation and positioning Wacker for sustainable profitable growth. On September 17, we will hold a Capital Markets Day in London. Since our last Capital Market Day, the environment has changed and Wacker has changed with it. We have reviewed the roles of our businesses, the way we allocate capital and the financial framework against which we manage the group. In London, we will introduce new group level targets.

We have made substantial progress in strengthening our competitiveness, improving performance and sharpening our strategic priorities. It's therefore the right time to explain where Wacker is heading and how we intend to create value.

With that, let me hand over to Tobias.

Thank you, Chris. Good afternoon, everyone. Second quarter sales increased 7% year-over-year to EUR 1.52 billion, driven by higher prices and volumes. EBITDA before special pension effects rose 53% to EUR 175 million. The strong improvement reflects both savings achieved in our PACE program and higher volumes. PACE contributed about EUR 45 million in the second quarter.

Importantly, the quality of our earnings improved significantly. Cost of goods sold remained flat year-over-year despite higher volumes. SG&A expenses declined, demonstrating strong cost management across the organization. Reported EBITDA was EUR 211 million, including a EUR 37 million positive pension accounting effect recorded in the Others segment. This is due to a newly introduced capital option at payout mode, which lowers our required pension obligation. As a result, Others reported an EBITDA of just minus EUR 1 million.

For the full year, we now expect the Others EBITDA to be minus EUR 15 million. This is an improvement from our previous guidance of minus EUR 50 million. After depreciation of EUR 115 million, EBIT reached EUR 96 million. Below EBIT, the sale of Siltronic shares and the revaluation of our remaining stake following Siltronic capital increase contributed EUR 243 million to the financial result. We have a slide on this in the appendix. And if you'd like a deep dive, please speak to Investor Relations.

All told, net income reached EUR 350 million, equivalent to earnings per share of EUR 6.86. The second quarter demonstrates that we are structurally strengthening the resilience of the business, creating a stronger foundation for sustainable value creation. Our balance sheet remains very strong. At the end of June, shareholders' equity stood at EUR 4.18 billion, while liquidity remained robust at EUR 1.57 billion. Working capital increased by EUR 166 million versus year-end, primarily reflecting the seasonal build-up in trade receivables.

At the same time, inventories decreased by EUR 26 million despite higher raw material costs, underscoring our continued discipline in inventory management. Pension provisions declined by EUR 58 million year-to-date to EUR 569 million. This reduction was driven by the new capital payout option and higher discount rates. Overall, our financial position remains solid with 48% equity ratio and a strong liquidity base.

Now let's turn to the operating segments. At Silicones, second quarter sales reached EUR 757 million, an increase of 6% year-over-year. Stronger volumes and higher pricing more than offset currency effects. EBITDA increased to EUR 123 million. The strong performance was driven by PACE as well as higher volumes, mix effects and better pricing. The conflict in the Middle East prompted some customers to pull forward orders into the first quarter. This resulted in a significant moderation of order entry starting into the second quarter, and yet May and June came in above prior year. While orders remain very volatile, the order book is higher than a year ago. This supports our expectations for the second half of the year.

Supported by ongoing PACE savings and strong operational performance in the first half, we are increasing our outlook for Silicones. For 2026, we now expect mid-single-digit percentage sales growth and an EBITDA margin above the prior year level. At the same time, we remain measured in our assessment of market environment. End markets continue to face headwinds, and we have not yet seen a broad-based improvement in underlying demand conditions.

At Polymers, second quarter sales reached approximately EUR 406 million, an increase of 12% year-over-year. The growth was primarily driven by prices, while volumes grew slightly and the regional mix improved. EBITDA increased to EUR 69 million. The improvement was supported by PACE and a positive inventory effect. Polymers performance demonstrates the execution strength of our teams. Faced with a rapid increase in raw material costs, they successfully applied our proven playbook, enabling us to recover cost inflation quickly and effectively. This disciplined approach protected margins and allowed us to service our customers.

As with Silicones, the conflict in the Middle East prompted customers, particularly in Asia, to push orders forward into the first quarter. As a result, order intake declined sequentially in the second quarter. However, our order book continues to be higher than a year ago, but it is short-term in nature.

At the same time, market conditions remain volatile. Raw material prices in Asia had largely retreated from the highs reached earlier this year, and we had begun to adjust accordingly. Against this backdrop, we have updated our outlook for Polymers. The situation in the Middle East is again more uncertain and energy and raws move up again. For the full year, we now expect polymer sales to increase by a mid-single-digit percentage. EBITDA margin is expected to be above the prior year level due to PACE-related savings and the strong operational performance during the first half of this year. That said, we remain cautious on demand. Construction markets continue to be weak, particularly in Europe and China, and customer order patterns remain short-term in nature.

At Biosolutions, second quarter sales reached EUR 99 million, an increase of 13% year-over-year. Growth was driven by pricing measures to offset raw material inflation as well as higher biopharma project-related business. EBITDA came in at EUR 7 million, supported by disciplined cost management. Our full year outlook remains unchanged. We continue to expect high single-digit percentage sales growth and an EBITDA of around EUR 30 million. While market conditions remain competitive, we relentlessly work on converting the opportunity management pipeline into revenue, increasing utilization of available capacity and hence further improving our cost base.

At Polysilicon, second quarter sales were approximately EUR 226 million, up 3% year-over-year. Growth was driven by higher semiconductor-grade sales volumes, which offset lower solar-grade polysilicon prices. EBITDA came in at EUR 11 million. Strong semiconductor demand and cost savings supported the result, but profitability remained impacted by lower solar pricing, higher energy costs and solar inventory destocking. The solar market remains challenging, characterized by weak demand and low capacity utilization across the value chain.

In addition, ongoing regulatory uncertainty continues to limit visibility. Against this backdrop, we have updated our outlook for Polysilicon. For 2026, we now expect sales to increase by a high single-digit percentage year-over-year with an EBITDA close to the prior year level. Earnings will be clearly supported by double-digit percentage volume growth in semi and PACE-related savings. Both helped to offset the substantially higher energy costs this year.

Now let me turn to the net financial debt and cash flow. In the first half, gross cash flow increased to EUR 193 million, reflecting the significant improvement in earnings. Working capital reduced gross cash flow by EUR 88 million, primarily due to the seasonal increase in trade receivables. At the same time, lower inventory levels released EUR 47 million in cash despite higher raw material costs. This highlights our continued focus on inventory management.

Cash flow from investing activities before securities amounted to EUR 19 million. Proceeds from the sale of Siltronic shares contributed EUR 185 million of cash, offsetting capital expenditures of EUR 172 million during the period.

Looking ahead, we continue to expect capital expenditures of approximately EUR 300 million for the full year 2026. With our major expansion projects now completed, our focus has shifted to filling capacities and operational efficiency. This allows us to run CapEx clearly below depreciation.

At the end of June, net financial debt stood at EUR 722 million, supported by earnings, disciplined capital spending and continued cash generation in the second half of the year, we expect net financial debt to decline to around EUR 500 million by year-end.

Before we begin with the Q&A, let me close with a few key messages. Our priorities remain clear: achieve PACE-related cost savings, improve capital efficiency and only allocate resources to differentiated businesses where Wacker can create sustainable value and profitable growth. The improvement in earnings this year has been driven by our execution as well as the pension effect. As we move into the second half of this year, we have the confidence in our ability to execute, but remain cautious on geopolitical developments.

PACE, pricing actions and stronger operational performance have delivered tangible results. Reflecting on this progress, usual year-end seasonality and the special effect from the pensions, we raised our full year EBITDA guidance to a range of EUR 625 million to EUR 750 million.

That concludes my part. We look forward to your questions.

Operator, we are now ready for the Q&A.

[Operator Instructions] Our first question is from Christian Faitz, Kepler Cheuvreux.

I understand you are doing a great job controlling the controllables, yet there are quite a few noncontrollable factors in the world these days. Hence, my 2 questions, please. First, your forecast of high double-digit percentage growth for Polysilicon for fiscal 2026, what kind of growth levels do you have to make this happen with a run rate growth of minus 2.6% at H1 and at least Q4 '25 having a relatively high base. The same would, by the way, be true for your EBITDA forecast for this division. What will make the segment significantly more profitable in H2 versus H1?

And then my second, more broader question, what kind of demand trends are you currently seeing in your key customer industries, i.e., construction and electronics aside from solar?

Christian, Tobias here. I would start with the second question, then maybe start also with answering the first question.

Demand trends in construction remain weak. If you look at our Silicones division and if you look for the stronger part, it's definitely around the electronics that we see growing strongly. It's health care, it's energy, it's coatings. But in general, construction, industrial applications, consumer applications are still muted. So no big momentum from there. I think it's mirrored in the polymers performance where construction is sort of okay in Europe, but we have seen still a very weak market in China, for example. So there's no turnaround from our perspective on the construction side. And I think that's for the chemicals.

And I start with Polysilicon, the bridge into the second half. I mean, obviously, we have lowered our guidance given that there is still so much uncertainty around solar. I mean there's no tiny impulse to improvement, and that's why we get more cautious on that. And we have been doing everything now to work down our inventory running at low utilization, and that is definitely a drag to profitability. But I'm happy that our inventory is now, I mean, 20% lower than it was a year ago despite that very weak environment.

What is growing nicely is our semiconductor business. We had seen roughly, I mean, a 10% increase in the first half of this year. And given our contract structures, we also see a sequential improvement into the second half, and that will support us also, yes, coming to that growth for the overall segment. We would need some solar sales.

I mean, to be frank and clear on this, also in the fourth quarter, we would need to have some impact from 232. But as we are just working down our inventory, we wouldn't turn up the production run rate for any solar change unless there is a fundamental change in demand. I think majority of profitability and drive comes from our semiconductor business and the cost savings. And that's why we get a bit more cautious on the full year given that the first half has not seen any positive impact on the solar side.

The next question comes from Chetan Udeshi, JPMorgan.

The first one was on polymers. You mentioned in your presentation some inventory effect, which I suppose is the inventory revaluation of the existing stock. I mean, how are you thinking about -- firstly, can you quantify that? And second, can that become a possible headwind into Q3 that you don't see that repeating in terms of contribution?

The second question is on Silicones. Just looking into Q3, if you probably can just help us how you see sequentially trends in terms of sales, EBITDA by division because we've seen quite a sharp pullback in silicone prices in China, for instance, in the last 1, 1.5 months. So do you think Silicones can see stable profitability? Or should we model something lower? Just general comment around how you see the third quarter dynamics?

Well, Chetan, it's Christian. Let me start with your last question. I mean we don't give specific guidance on the segments for the quarter. But as Tobias pointed out, we have this peak in order entry in March for both chemical divisions and since then, it's slowing down. And yet for Silicones, it's still above last year. But what you have to take into account is there's a typical kind of summer seasonality, especially in Europe, which might drag a little bit on the sales. So that will be definitely an effect for the third quarter.

And -- but your comment on the pricing in China is correct. But keep in mind, this is only for standard products. So the DMC prices are falling. But standard products, majority of our portfolio today is very much in the specialties, which is not one-to-one affected by these effects.

Chetan, to the inventory question for polymers, you spotted it absolutely correctly from the raw material increase. There's a revaluation that has taken place in the second quarter. And I don't see that repeating. So I would take it out definitely and not triangulate now based on the second quarter for the rest of the year. And it will all depend on how raw materials develop further through the remainder of the year. But given that strong volatility, I mean, something like that can happen and the magnitude is low double-digit. So it is a portion that is, yes, sizable. It takes 2 to 3 percentage points of the margin that comes from the inventory valuation.

And if I can squeeze one more, which is a hypothetical question, but something that you have alluded, Chris, previously, which is if the Section 232 is not favorable, you may end up with a solar plant, which is probably one more than what you need. So in other words, you may have to shut some of your solar capacity. And I'm just curious from memory at least, except in the U.S., but both of your German plants for solar polysilicon are integrated with silicone production in the same site, does that limit your ability to shut a polysilicon plant permanently? Because I suppose there is some sort of a -- again, from my history, I remember there is a closed loop between polysilicon and silicones in terms of raw materials for -- or byproducts from polysilicon going into silicones or vice versa. So I'm just curious how easy is it for Wacker to shut one of the polysilicon plants, whether in Germany or U.S.?

Well, Chetan, very valid question. And it shows the complexity that we have to take into consideration. It's a very far-reaching decision to be taken. But of course, it all depends on what comes out of that regulatory discussion in the U.S. There could be different scenarios. And my former statement, which you correctly repeated was -- if there is no option for solar for us anymore, we would have kind of one plant too many. But it would depend on how the distinct ruling of this policy would be on 232 to make a final decision. And yes, in principle, what you say is correct.

There is what we call the Verbundstruktur, which we have on the German side, which you don't have so much on the U.S. side. But again, we need all the facts on the table to take a decisive decision because it's far-reaching decision. And so far, we don't have all the necessary information. But also, I would like to say there's no predecision at this moment in time.

The next question comes from Anil Shenoy, Barclays.

Just the two, please. Just following up on the question before. The first question is, if you -- I mean, in a pessimistic scenario that the Section 232 outcome does not go your way and you have to shut down one of your plants, then if you could give us some color on what kind of cost savings could you make because of that? So that's the first question.

And the second question is on semi-grade polysilicon. So with AI CapEx expected to increase by like, 25% or 30%, that's the kind of number we hear. And your direct customers, the wafer manufacturers are saying that they're seeing increased demand for 300-millimeter wafers for which Wacker is a supplier of semi-grade polysilicon. So I'm just trying to understand, could we expect that 25% to 30% kind of a growth number for semi-grade polysilicon somewhere in the future, maybe in 2027 or perhaps 2028? And if not, what stops the segment from growing that much?

Okay. I mean, maybe starting on your last question. I mean, yes, I mean, AI is obviously driving semiconductor growth and is also driving ultimately the area growth, the growth in wafers. Please keep in mind, there's always a time lag and inventory, which you can also hear when you talk to the wafer guys. So it's not one-to-one from the AI to the wafer, and there might be a delay of up to 1 or 2 years in some cases, what we heard from customers. Therefore, it takes some longer time.

And second part, AI is, of course, only one part of AI and the data centers are just one part of the semiconductor growth. It's probably at the moment, the highest, but there are still segments which are growing not as strong. I think recently, the mobile phone sector was not growing strongly. But in essence, yes, we see growth in data centers. We see that the amount of polysilicon, which you need for data centers is also increasing. We did some analysis on this, and some numbers indicate that from a data center today to a new data center in 10 years ago, the amount of polysilicon might be 4x of that. And so we see a significant growth opportunity, and that's why we focus on semiconductor strategy going forward. But it's still -- I mean, I cannot really tell you by quarter when the volumes will come because it depends on our customers and the customers of our customers.

So the first question was on...

232. I think the first question was on 232. I'll step in on that. Tobias here. I think you were trying to figure what -- I mean, measures we would take and how much would that impact and lift profitability in case of negative scenario and actions on our asset structure. I think it's too early. We don't have -- I mean, a decision on the outcome of that proceeding on the table, and we don't have a customer reaction to that. That also needs to be seen. And for that reason, we cannot give you a number on that today.

The next question comes from Sebastian Bray, Berenberg.

I have two, please. The first is on the Silicones segment. As far as I'm aware, Dow has started the final shutdown of the Barry production in the U.K. It's quite a big plant. I think over 200 people were working there. Is there any uplift or benefit that was visible in that in Q2? I'm a bit surprised that the mix was positive in silicones. But is there anything happening or to get excited about in European market in terms of the impact of capacity exits and Wacker being one of the last man standing in the siloxane industry in Europe?

And my second question was on Polymers. I haven't quite understood why this segment did so well in Q2. I don't think there were huge issues with competitive raw material supply, maybe to a certain extent. But can you give some color on whether this was just take some cost out and people weren't anticipating it or there was a genuine expansion in price/cost spreads in the segment?

Sebastian, Tobias here for your first question. As Christian already mentioned, upstream standard silicones is not core of our business. We are focusing on specialty products, and that's why that closure has no -- I mean, from what we see, no significant impact on the business. I mean, yes, we also sell some standard products. Prices have been moving up. And I could also say that in Q3, there are slightly moving up, but no really big change and definitely not to our strategy and not to our overall profitability. It also needs to be added that in China, for example, standard product prices have been on the decline again. And that also will -- as regions are communicating, this will also have some impact on Europe and U.S. most likely.

On Polymers, as I mentioned to Chetan, the performance was, yes, supported by an inventory valuation effect that is low double digit. If you take that out, it's still a solid performance in the second quarter, but it's closer to the performance of the first quarter. And yes, I would say it's a result of great teamwork. We have been very fast in reacting to the raw material hikes, taking our playbook of increasing our own prices in the various regions with different mechanisms, and that worked out successfully. So we kept and protected our business despite the raw material inflation.

And then in addition, we are successful in the PACE cost savings, and that gives that improved performance against prior year despite still very slow end markets overall, as we discussed, construction is not yet strong in most regions.

The next question comes from Tristan Lamotte, Deutsche Bank.

First question is, in this scenario, I understand that you said that there could be a bit of a delay, but say, the semiconductor polysilicon market tightens, I think most of your contracts are on relatively fixed pricing or some kind of pricing contracts. But how much ability do you have to sell at spot if that opportunity arises?

And then secondly, I know you've kind of alluded to this, but I'm just wondering kind of high level how you would think about over-earning risks in polymers and silicones and what proportion of the growth that you've seen is kind of structural versus a little bit of temporary fly-up due to things like the Middle East conflict. So on the end of the Middle East conflict, how much do you think could stay in there? And why shouldn't these businesses be down in 2027?

Tristan, maybe I'll start with your first question on the semiconductor polysilicon. I mean, as you know, we typically have long-term contracts, and there's quite an interest in continued long-term contracts for our semiconductor polysilicon. We do have, of course, for some customers, which don't want to have so much long-term contracts, availability of spot material. But typically, when you look at our market share, most of these volumes are in long-term contracts fixed. And also typically, the experience we have with our customers is it's not like a spot business compared to other commodity type of chemicals. So there is a longer supply chain also for the semiconductor customers. So from that perspective, I would say I don't see the risk that we kind of miss opportunities because of a stronger demand in the market. Maybe that was the -- what you implied with your question.

And Tobias here, Tristan, for the chemical segment and the performance of the first half versus the full year and yes, potential fly up through the situation of the Middle East. I would love to remind what I said in the first quarter conference call that from the Middle East situation, we might have had a tailwind of some EUR 20 million in EBITDA. Is there still a tailwind in the second quarter? Or has it -- I mean, we have seen the order volatility. I would say it's more or less operational performance with the one-off effects with the valuation in Polymers, but in Silicones, it's rather the result of hard work, PACE savings and good operational performance with volumes and price/cost spread.

Nevertheless, for the second half of the year, I mean, we definitely face the summer season, as Christian said. And typically, sales are a bit slower in August. And then we have year-end seasonality. So I would pinpoint to our guidance for the 2 segments and repeat, we see mid-single-digit sales growth for both silicones and polymers. And we see that margins are above prior year. Before we said they are slightly above prior year, but now we say they're above prior year.

And as you have seen in the first half, we had a performance in both segments of roughly 16% EBITDA margin. Both segments had a prior year margin of roughly 12%. So if we would end at around 15% or I mean 2 to 3 percentage points higher than the 12% of last year, you see that the second half is a bit weaker for the seasonality for raw materials and so forth, but we would still perform in the second half above prior year. And going forward, as you were trying to pick what's in those segments for next year, I think it's far too early. But structurally, we save cost, PACE is effective. And we would also talk at the CMD in September about what we are focusing on with priorities, yes, on market segments where we really can differentiate and steer the business also for growth -- for value creation and growth. But it's too early to talk about any number for 2027, obviously.

The next question comes from David Simmons, BNP Paribas.

A couple for me, please. So firstly, just to come back on the Polysilicon business. I'm still struggling to understand a little bit the guidance and the Q2 results. So sales were 3% higher, but EBITDA fell materially, which either tells me that the semi-grade polysilicon is lower mix than the U.S. priced solar or that the energy price change was quite material. And you did call out energy. But if it's energy, I'm just struggling to see why that would get better into the second half because currently, the German electricity price is 40% higher than it was on average in Q2. So just struggling to sort of square the guidance there.

And then the second one, I thought the pricing component in the sales bridge would be higher, to be honest, than EUR 33 million. It looks like it was actually more of a volume-driven quarter from a sales perspective. You obviously still talk about demand being weak. I'm just wondering if there was any offset to some of the early price announcements that you made quite publicly, whether they reversed quite quickly or whether there were other parts of the portfolio that dragged on the polymers price benefit. So maybe just some comments on how pricing evolved through the quarter would be helpful, too.

David, Tobias, here. On your 2 questions, second quarter performance of Polysilicon definitely disappointing. And as I mentioned, we had a significant drawdown in inventories. And in the second quarter, our mix for semi-grade was not that strong as in first quarter, but it doesn't mean that for the first half of the year, we haven't grown 10%. So we have a very strong performance overall on semiconductor, and we see that to continue and also sequentially to improve into the second half of the year. And as I said before, solar remains uncertain. So that's why we lowered our guidance for the second half to coming close to the prior year number.

For Polymers, I think you are about to understand the price announcement and how effective they are. I think it's a bit of a roller coaster that we see in polymers raw materials. And this is the division that is linked to the olefin chain. We have seen a spike in ethylene and VAM prices in May, and they now retreated in June, July. And our pricing is as responsive as possible in each respective region. So we had cleared daily pricing in China. But as prices or as raw material costs now go lower, also, we need to adjust prices again, and the same mechanism is different or the mechanism is different in Europe where we work with surcharges, but they then also depend on the raw material inflation, and that's why we also lowered our guidance for the full year because we need to pass on less raw material inflation than we anticipated in May when we had seen the peaks.

I think to add to this, I think the secret really is in that sort of business to be flexible, to have flexible teams on the ground on the sales side, as Tobias pointed out, the volatility in the raws, which we see on the conflict in Iran, which changes kind of biweekly, speed is everything that counts and especially our Polymers teams proved to be very, very good on this and also what Tobias mentioned, different dynamics in different regions, much faster movements on the pricing side in Asia and in China versus the U.S. or Europe where it's much, much slower.

If I could squeeze one more in on Polysilicon and the energy stuff. Obviously, the 232 outcome is very unknown. Could you talk about how you're hedged for 2Q -- or sorry, 2H energy consumption, whether you've got any hedges on at all or whether it will be kind of a scramble to get some hedges on if you get a positive 232 outcome?

We are hedged now with, I mean, large portions for the remainder of the year, obviously, and with roughly 75% for next year. And the headwind that we are seeing in energy cost this year is mainly from the lower CO2 compensation. I think we have discussed that, yes, in the -- one of the first calls. It's EUR 90 million headwind from lower CO2 compensation compared to prior year.

The next question comes from Jaideep Pandya, from ON Field Research.

And apologies there for asking the 232 topic again. But I'm just trying to conceptually understand this, like if 232 goes in sort of your favor and U.S. basically becomes a protected market, that, to me, at least conceptually opens door for new investments potentially from your large Chinese competitors, which eventually means more competition in the U.S. And if it doesn't go in your favor, then anyway, it doesn't go in your favor. So I'm struggling to see what's the logic of hanging on beyond maybe what is, if I may use the language, short-term benefit maybe for a year or so. So just trying to understand the thinking behind because I guess strategic clarity on this topic would really help a lot of your investors in this regard. That's my first question.

My second question is around the inventories that you have currently in Polysilicon on the solar side linked to some of the longer-term contracts you have on the solar side. So when do you expect both these elements to sort of go hand-in-hand so that we actually see the real performance of your semi business? So i.e., how much inventories have you already reduced this year in the first half? And when do you expect the full benefit of that to happen?

And then the last question really is around your Polymer/Silicones, but more importantly, your Silicones business. Again, this is a very oversupplied market upstream. So in the context of the PACE program, do you expect that we could think of Wacker becoming really asset-light and actually getting out of the upstream side of because there is just so much available and focusing really on the customized value-added stuff.

Okay. Jaideep, maybe to start on the last one on the upstream silicone, if I understand correctly, you said there is enough capacity available, we want to go asset light. Yes, we want to go asset light, but going asset-light doesn't mean idling existing capacities with a good cost position. And please also keep in mind that on the siloxane production, it's not only siloxane, which comes out of that chemical process, but many different silanes, which are an integral part of silicone specialties. And I think having an integrated Verbund on the silicones upstream is definitely an asset. You have to work on it to get the cost out to be really competitive. That's what we are doing and what we will continue doing.

What we won't do, and I think we have been quite explicit on this as well, we will not invest in further upstream on the silicones side. But I think having world-class sites in Europe is definitely an advantage.

On your first question on the U.S. regulation. Well, obviously, there are different scenarios which you can think of. I don't believe that there will be a scenario where large Chinese companies will invest in the U.S. because it's all about this competition with China. And therefore, I don't see that really as a real option. And from that perspective, I think there could be outcomes which are favorable for us, where we can load our plants with both semi and solar. And there might be scenarios where solar might be not as attractive. And then again, we come into the situation to discuss how to have a future competitive footprint on the semi side. Was there -- did we cover all?

Yes, just a question on the inventories in solar in poly. When do you expect the full sort of drawdown of your inventories?

I mean, as I said, Jaideep, we have reduced it by 20%, which is significant given the slow demand environment. And we are running, I mean, sub-efficient utilization at all 3 plants. So it depends on the demand environment. We can sell it quickly. It's not huge numbers in stock. And if there's any uptick, I mean, we have seen historically much higher volumes going quickly in a quarter.

Ladies and gentlemen, that was the last question. I would now like to turn the conference back over to Joerg Hoffmann for any closing remarks.

Thank you, operator. Thank you for attending and showing interest in Wacker Chemie. The next conference call for Q3 2026 results is scheduled for October 29, 2026. An invitation to our upcoming CMD on September 17 will be sent out soon. As always, please contact the Investor Relations team if you have any further questions. Thank you.

Ladies and gentlemen, the conference is now over. Thank you for choosing Chorus Call, and thank you for participating.

Ladies and gentlemen, welcome to the Wacker Chemie AG Q1 2026 Conference Call. I am Sandra, 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 is my pleasure to hand over to Joerg Hoffmann, Head of Investor Relations. Please go ahead, sir.

Thank you, operator. Welcome to the Wacker Chemie AG conference call on our first quarter 2026 results. Dr. Christian Hartel, our CEO, and Dr. Tobias Ohler, our CFO, will walk you through the presentation. The press release, our IR presentation, and detailed financial tables are available on our web page under the Investor Relations section.

Please note that management comments during this call include forward-looking statements involving risks and uncertainties. We encourage you to review the safe harbor statement in today's presentation and look into our 2025 annual report for information on risk factors. All documents mentioned are available on our website. Chris?

Good afternoon, everyone. Thank you for joining our earnings call for the first quarter of 2026. Despite the ongoing weak demand in many of our customer industries, Wacker had a solid start to the year. Group sales came in at EUR 1.41 billion, 5% below last year. This was primarily due to FX headwinds. On the other hand, EBITDA climbed by 45% year-over-year to EUR 173 million. The primary driver of the higher EBITDA was our PACE cost program, followed by pull-forward effects from customers.  We have made good progress with our PACE program so far, and we have benefited from lower spending and costs already in the first quarter.

The aim of the program is to achieve annual savings of more than EUR 300 million in 2028. PACE is designed to sustainably enhance Wacker's competitiveness. Our efforts are focused on reducing our fixed manufacturing and administration costs. We are lowering technical spend and addressing over-scoping. We are optimizing structures in operations by merging units, tightening budgets, and cutting discretionary spending.  We implement, for example, in procurement, new bidding systems to foster greater competition among suppliers. Yet our efforts go beyond pace and pure cost savings.

We are simultaneously streamlining our structures and processes and sharpening our business model. All of this makes Wacker fit for purpose and enhances our long-term competitive position.  While the cost savings were the primary driver of the strong growth in EBITDA, pull-forward effects from advanced customer orders supported the better-than-expected first quarter results. In mid-March, markets responded quickly to the conflict in the Middle East. Supply disruptions drove up raw material and energy prices. Our procurement teams pivoted quickly to secure critical materials.

We quickly announced price increases to counter rising costs. Applying lessons learned from the unprecedented raw material inflation during the COVID period, we have a playbook at hand. We can draw upon that, and it helps us navigate through current challenges.  Both silicones and polymers saw customers' advanced orders pulling them forward into the first quarter. This was likely triggered by security of supply concerns and longer shipping times from Asia.

The other 2 segments did not see any meaningful pull-forward effects. Polysilicon continued with its strong growth in semi with the new edging line strengthening our leading position. BioSolutions benefited in the first quarter from the timing of contracts. Here, the overall market remains challenging, and we remain focused on filling existing capacities.  

Now, before I move on to the guidance on the next page, let me highlight a new investment that enables sustainable solutions. In Japan, we have just commissioned a new production line for thermally conductive silicones. This will allow us to meet growing demand for specialty silicones in applications such as batteries for the e-mobility sector.

The performance of batteries is affected by heat, and our thermal interface material, known as Tennessee are essential high-performance materials and battery packs. EVs show strong growth, and this new asset positions us well.  

Now moving on to the guidance on Page 4. We confirm our full-year 2026 EBITDA guidance while adjusting our sales expectations upwards.

We now anticipate sales to increase by a high single-digit percentage as we raise prices in chemicals to effectively counter high raw materials.

Our absolute EBITDA expectation is unchanged, and we expect EBITDA to be in the range of EUR 550 million to EUR 700 million.  With a solid start to the year, we are on track to reach our full-year expectations. That said, our outlook continues to be subject to a high degree of uncertainty. This is clearly due to the unprecedented developments in the Middle East and the still unresolved U.S. trade proceedings on imports of polysilicon and its derivatives. 

In summary, we remain confident and alert. We have confidence due to the steps we've taken. We are addressing raw material inflation with price increases and cutting costs on the PACE. However, we are cautious about the development of end markets. We know that conditions can change unexpectedly. Our responsibility is to navigate whatever challenges arise with agility and discipline. With that, let me hand over to Tobias, who will discuss the group and segment performance in more detail.

Thank you, Chris. Welcome, everybody. Looking at the profit and loss statement. Sales during the first quarter of 2026 were EUR 1.41 billion. Group sales were down 5% year-over-year, mainly due to the negative FX effects. EBITDA came in at EUR 173 million versus EUR 119 million a year ago. Chemicals grew earnings by 18% year-over-year. EBITDA reached EUR 166 million, up from EUR 140 million a year ago. The improvement was driven primarily by pace.

Cost savings supported the higher gross profit and lower SG&A expenses. Higher sales and utilization rates in March due to the pull-forward effects also supported the positive earnings development. 

Others held back the reported EBITDA by minus EUR 30 million versus the minus EUR 51 million last year. This year's lower charge in others resulted from the lower CO2 compensation offset, or, in other words, the credit to the divisions.

In the first quarter, this offset was around EUR 18 million versus EUR 40 million a year ago. After depreciation of EUR 120 million, EBIT came in at EUR 52 million. All told, net income was a positive EUR 15 million, equating to an earnings per share of EUR 0.21. We are pleased with the initial successes achieved in our PACE cost program. However, we remain at the beginning of this program, and we need to continue to work hard to reach our interim goal of achieving EUR 200 million in savings in 2026.

Looking at Page 6, our balance sheet continues to show a solid financial structure with EUR 3.82 billion in equity and a high level of liquidity of EUR 1.44 billion. Our liquidity position was clearly supported by our targeted efforts to reduce investments in working capital last year.

In the first quarter of 2026, net working capital increased by EUR 119 million over year-end 2025, reflecting seasonality in our accounts receivable. Inventories were largely flat.

Now, looking at the operating segments, starting on Page 7. At Silicones, sales in the first quarter of 2026 were EUR 708 million, down 5% year-over-year. This was primarily due to the negative FX effects. 

On the other hand, the first quarter sales were 17% higher quarter-over-quarter due to seasonality. At EUR 117 million, EBITDA was up 13% versus the prior year. This increase was primarily due to the pace as well as higher volumes. The emerging Middle East conflict led to significant pull-forward effects towards the end of the quarter. Due to the recent raw material inflation, we announced price increases in the quarter.

We have updated our 2026 Silicones outlook. Despite negative FX effects, we now see sales being a low single-digit percentage higher due to higher volumes and prices. Our expectation for the EBITDA margin is essentially unchanged, and we continue to see a slight dip slightly above prior year. From today's perspective, end market demand in many customer segments remains weak, and our announced price increases will primarily offset raw material inflation without altering our overall absolute earnings expectations significantly. 

At Polymers, sales were EUR 333 million, 8% lower than last year and up 7% on the previous quarter. Sales in the first quarter of 2026 were held back year-over-year by FX effects, softer prices and overall lower volumes. EBITDA, on the other hand, increased by 33% year-over-year on cost control and lower raw material costs. As seen in silicones, pull-forward effects led to improving order intake at the end of the quarter, and we announced price increases to address raw material inflation.

We have updated our 2026 polymers outlook. Sales are now expected to be a low double-digit percentage higher than prior year. Higher prices due to raw material pass-through will be partially offset by negative FX effects.

Our EBITDA margin expectation is essentially unchanged and is forecasted to be slightly higher than prior year. As in silicones, the higher sales are not forecasted to have a significant impact on full year EBITDA due to the raw material inflation from today's perspective. At BioSolutions, sales were EUR 100 million, up 9% year-over-year due to project timing. EBITDA in the first quarter of 2026 came in at EUR 13 million, benefiting from higher sales and cost management. The timing of project completions also supports the quarterly result. Some projects in the fourth quarter of 2025 were pushed into Q1. And at the same time, some projects scheduled for the second quarter were completed ahead of time.

Our outlook for the full year 2026 for BioSolutions is unchanged. We see sales up by a high single-digit percentage with an EBITDA at around EUR 30 million. The market environment remains challenging, and we remain focused on strengthening our commercial activities, filling capacities and on cost management. At polysilicon, sales in the first quarter of 2026 came in at EUR 226 million, 8% lower year-over-year due to lower prices for solar and continued low demand for solar.

Semi, on the other hand, continues strong. Our semi volumes are growing nicely and the new etching line is performing very well. This asset clearly supports our business' overall resilience and strengthens our leading market position.

EBITDA was EUR 23 million in the first quarter. This level of earnings is comparable to the past few quarters. The better mix and good cost performance were able to offset the higher energy costs this year. For 2026, our outlook in polysilicon is unchanged. We expect sales to be a low double-digit percentage higher than prior year. EBITDA is forecasted to be at the prior year level despite higher energy costs in the year. Earnings are supported to be significantly higher in semi sales and from efficiency gains. On the other hand, solar remains challenging. As Chris said, our outlook does not include any significant effects from trade policies.

Now let's look at the development of our net financial debt on Page 11. In the first quarter of 2026, we generated a gross cash flow of EUR 77 million, driven by typical seasonal pattern in chemicals, higher trade receivables held back the gross cash flow by EUR 108 million. Inventories were largely flat. Cash flow from investing activities came in at EUR 109 million, significantly down from EUR 197 million a year ago. Our major investments were concluded last year. CapEx will be around EUR 300 million in 2026 versus EUR 466 million last year. Our focus is now on filling the new capacities, and this should allow us to keep CapEx well below depreciation levels for years to come.

At the end of the quarter, we ended with net debt of EUR 964 million.

Before we start with the Q&A, let me summarize. We had a solid start to the year and even surpassed our own expectations due to push-forward effects from advanced customer orders. The first quarter EBITDA shows clear progress towards our full year forecast and the cost savings under PACE by delivering tangible savings. We are at the beginning of this cost program, and we need to remain focused and work hard to achieve our ambitious goals. I am confident that our efforts here will sustainably enhance Wacker's competitiveness.

Against this backdrop, demand in many of our customer industries remains weak overall, and the crisis in the Middle East increases macroeconomic uncertainty. Raw material and energy prices have climbed meaningfully. Although order intake has improved, visibility remains short, volatility is high, and unseen risks may arise from the Middle East conflict. Therefore, our full-year outlook is subject to a high degree of uncertainty from geopolitics, supply chain risks, demand stability, and trade policies. Now we are happy to address your questions.

[Operator Instructions] Our first question comes from Anil Shenoy from Barclays.

The first question is on pre-buying, which you said was mainly in silicones and polymers. I was wondering if you could just give us some color on which products in these segments have seen the most pre-buying, like in silicones, whether it was the standard silicones or more downstream silicones. Similarly, in polymers, if you saw any advantage from the backward integration into VAM in Europe. So any color on that would be very helpful.

Secondly, I was just wondering about Q2 and the impact of price increases, the raw material inflation, and the timing difference between them. You increased the prices of silicones and polymers at the end of Q1. So I'm assuming that, that will impact in Q2. In that case, when would you see the raw material inflation? Would it be sometime in Q2? Or have you already started seeing it? So in effect, I'm trying to understand, is there a possibility of a windfall gain in Q2 and possibly Q3 as well?

Anil, a very good question, Tobias here. Starting also with the first question on the pre-buying of silicones and polymers. I mean, it was when we had the call for the full-year results, just mid-March, and the real surge in order intake came around that period. And that's why our sales were running EUR 50 million higher than expected in March, and that is both covering silicones and polymers. To be frank, it's broad-based. I would rather say it's focused on the region Asia, where we have seen the strongest impetus also for silicones and polymers, but you can't pick a segment. And it's been both for specialty silicones and standard silicones.

I mean there was not so much change in the portfolio and the mix.

With respect to the price increases, we reacted really immediately after that, yes, inflation on the cost side was appearing and coming towards us. But you can be sure that, yes, it rolls through the supply chain with a time lag. So it has not been affecting us cost-wise in the first quarter. But also, the price increases, I mean, which we announced in the first quarter, were not effective in the first quarter. I mean, maybe in Asia or in China, where you have monthly or weekly or even biweekly pricing. But beyond that, no meaningful raw material and energy impact yet on the cost side, and no meaningful pricing effect yet on the sales side. There will be, yes, over the course of the second quarter and then in the latter half of the year, a much more significant impact from that.

And maybe, Anil, let me add on that on the pricing side. As we said in the speech, I mean, I think we have a good playbook in place for bringing in these price increases. Many peers did the same thing, which I think creates, overall, a constructive pricing environment, yet it's not something that is super simple. Of course, you have to convince your customers. It's day-to-day hard work, and our teams are working on it. So our aim is really to be successful here.

The next question comes from Christian Faitz from Kepler.

Two questions, please, on 2 segments. First of all, in Polymers, you're now forecasting a sales increase in the low double-digit amount. I'm just trying to get my head around this with a minus 8% performance in Q1. Has business since then so dramatically improved that this is now a possibility? I mean, in mid-March, you still saw a pretty much flat development, if I remember correctly. So we would have to count on significant improvements throughout the entire year. 

And second, in BioSolutions, can you give us any idea about the timing effects you flagged in Q1, i.e., the project delays from Q4 feeding into Q1 and the pull-forward projects that were originally planned for Q2'26? On your EBITDA forecast of just about EUR 30 million for this year, isn't this a bit conservative considering the robust performance of Q1, where you also mentioned cost management as a key factor? And would that not hold for the remainder of the year and thus lead to higher profitability in BioSolutions?

Christian, Tobias here, starting with your first question on the dynamics in Polymers. As I mentioned before, the cost increases start to kick in in the second quarter and then for the remainder of the year. And the same goes for the price increase. From the order of magnitude, guided by sales around the prior year level to up low double digit in Polymers, you can calculate that we are talking about a 3-digit million number that we need to increase our sales prices. And as Christian mentioned, we have the playbook in place that is different by region. While we work with surcharges in Europe, we have super dynamic pricing in Asia and formula pricing in the U.S. So we will see that impact that we are significantly above the prior year, starting in the second quarter in Polymers.

BioSolutions?

Yes, on your BioSolutions question. So BioSolutions delivered the EUR 30 million EBITDA in Q1 and the EUR 100 million in sales. And yes, you're right. This benefited from the project timing in both directions, as you pointed out, some Q4 projects were completed in Q1, and some Q2 projects finished ahead of schedule and went into the Q1 numbers. I would say it is the nature of the CDMO and pharma project business. Therefore, for Q2, we would expect a step down from Q1 because the projects scheduled originally for Q2 have already been completed.

The pipeline continues to develop, and we have project activity throughout the year. The full year target of around EUR 30 million, we believe, remains appropriate.

And if you make the math then and the EUR 17 million, which is remaining, that would be roughly EUR 5 million to EUR 6 million per quarter. That would actually be consistent with the run rate we saw in Q2 and Q3 of last year. And don't forget, we still see the CMO market remains challenging. Also, don't forget, because you asked for the cost-effectiveness. The BioSolutions division already started cost measures 2 years ago. So the PACE savings are not one-to-one related to BioSolutions for this year, and in the following years, some of these effects have already been achieved. Therefore, we still believe that the target guidance is the right one.

The next question comes from Peter Spengler from DZ Bank.

I have 2. First on polysilicon and Asian PV demand. So could you elaborate on what you are seeing in the Asian market outside of China, specifically, is the recent increase in energy pricing leading to an acceleration in demand for PV installation in Southeast Asia? The second question is on your U.S. polysilicon import situation. Could you provide us with an update on the situation there? And I'm particularly interested in your perspective on current inventory levels and any shifts in customer purchasing behavior?

Peter, thank you for your questions. Let me start with the PV demand. You mentioned Southeast Asia. I think in general, I would say that the world at the moment is recalibrating its view on renewables in general and especially on solar. And I think we will probably see an uptick in overall PV demand. That would be my personal view on this. And of course, this is a positive at the end of the day for our business. I guess that a lot of the PV demand in Southeast Asia will be supplied from China. That would be my estimate.

On the solar side in the U.S. in 2032, I mean, there's actually not so much more update. You know that the DOC filed the report to the President that was at the end of March, and the President now has 90 days to give a final solution, a final answer on this. We don't know in which direction it goes. I think we just have to wait until this is the outcome. And this also impacts customer behavior. So I would say it's fair to say that everybody now is in a wait-and-see mood, as to what comes out of that 32 decision.

Peter, with respect to your questions on the inventory levels in polysilicon, I had mentioned in my speech that the overall inventory was largely flat, and that is to be divided into the chemicals being slightly up because of seasonality and preproduction, also ahead of some turnarounds, and polysilicon inventory levels down. So the solar demand is soft, as we mentioned, but we are running all plants at minimum utilization that is possible. And from that, we were in the position to at least slightly reduce our polysilicon inventories in the quarter.

The next question comes from Matthew Yates from Bank of America.

A couple of questions, please. The first is around the cost base. I was just looking at the headcount numbers you disclosed in the release. 

I think you're down about 300 positions since the start of the year. And correct me if I'm wrong, I think we talked about 1,500 targeted in totality. Just wondering how to think about the lag in people leaving and coming off the payroll? Or put another way, of the EUR 200 million or so cost savings targeted for this year, can you give us a number of how much you realized already in the first quarter, and then we can think about what's still to come?

The second question was specifically on polymers, and I guess, the concept of net pricing. It's a little bit confusing to me, at least, that if I take something like VAM, there are some regions where you're long, and there are some that you're short. In the past, you've seen significant squeezes when raw mats have gone up, but I understand you have sort of changed some of your contracts to have higher frequency repricing. The guidance today hasn't changed in terms of still expecting margins to be a bit higher this year. Is that because you're still waiting to see how much raw mats move? Or are you confident that you can pass through whatever is necessary as far as you're aware today?

Matthew, Tobias here for the first question on pace. As we said, the overall target is to achieve savings of more than EUR 300 million starting or being fully effective in the year 2028, gross savings. And for this year, 2026, we are targeting EUR 200 million. So we had a good start in pace, and we have some good progress, but the savings profile is not linear, definitely. So we already began implementing some pace measures in late 2025. And the more effective ones are the non-personnel measures on budgets, on technical spend, and on some structural procurement savings. So these are already effective. There's also exactly the effect that you were seeing in the numbers, that we have reduced headcount. We have reduced headcount abroad. We have also slightly reduced headcount in Germany, but that is still a minor part of the savings.

So if I put it together, for the first quarter, we could say we have roughly EUR 40 million. And then we have to increase the run rate, and we are confident that we can achieve EUR 200 million for the full year because the personnel measures will kick in mostly in the next year.

As you know, we are still in discussions with the workers' council. It's not concluded yet, but headcount reduction in Germany will have a major impact starting in 2027. But we had a good start in Pace as an efficiency program, and that's a lot of self-help that is supporting our overall guidance also for this year. We are on a good trajectory and confident of reaching the EUR 200 million for the year.

Matthew, on your question on polymers, yes, I mean the answer is we expect that we can pass through the raw material price increases, which we see. I think, as we said in the beginning, I think there's a playbook on how we can do this. I don't know if your question alludes to can we get more on that? I think it is too early to say because, as a reminder, I mean, that's what we said also at the beginning of the year, there is still, in the end, a weak demand pattern globally. So if that shifts or not, it is not foreseeable right now. Therefore, our assumption is that we are able to pass through the raw material price increases, which would then lead to an increase in the absolute EBITDA, but changes in sales and the margin.

The next question comes from Sebastian Bray from Berenberg.

My first one is on the polysilicon business and the semiconductor grade here. So Wacker looks like it has just over 50% market share in this area. And yet its market cap is dwarfed by most other significant players in the semiconductor industry, including players like Shin-Etsu.

Can I discuss if there are any plans to increase the degree of market capture of value capture here, either by pricing up on new customer contracts?

My guess is that some of the new volumes from the semi line came in at higher incremental pricing or to partner with the assets. So there are a few players in the U.S., amongst some Tesla, that seem to be interested in the polysilicon value chain. My second question is on the silicone standards. Back in the 2018, 2019 period, when there was a last big shortage of these products, from memory, Wacker had about EUR 100 million of EBITDA, which was a temporary fly-up margin. I appreciate that the European methanol prices on the input side have moved somewhat, but why wouldn't this also be the case in 2026?

Okay, Sebastian. Let me start with your first question on the semi side. Yes, I mean, as you know, I mean, Semigrad is a very successful business, and it continues to develop very positively. Volumes are up year-over-year, and we expect the same thing this year. The hedging line is progressing very well. Long-term contracts are in place. And of course, you can be sure that on the new pricing on the new contracts, we try to improve our position.

Your question on the market cap, I would say that is not, in my view, so much driven by the pricing or potential pricing increase on semi, but more on the overall strategy regarding the solar. I mean, at the moment, we are in a phase where solar has a big question mark. We wait for the 232 decision, which could give a very clear decision on where to go. And we have a very clear strategy on the semiconductor side on poly that this is the future business for us.

You also mentioned the question on other opportunities. And yes, I mean, there are obviously lots of big news around, and we have to see how these visions at the end of the day actually materialize. We are definitely happy to speak to anyone about new opportunities and what we can bring to the table. On the silicones, Sebastian, I can take over. You mentioned the last shortage in silicon standards in 2018 and '19.

I think the last shortage was '21, '22. So there was one more reason. But the shortage was a shortage. And there, I see the difference. What we are talking about today is that the methanol price goes up by, I think, not even 50%, but methanol in the cost structure, it's the second largest raw material after silicon metal, it's methanol. So it's below 20% of production cost. And that doesn't drive -- if it has an impact, it would also lead to pass-through, first of all, because methanol is a global commodity.

Also, considering the specific situation that China imports methanol from the Middle East, I would also consider that China produces a lot of methanol from coal. So we haven't seen it so much on the silicon standards side so far. There is a bit of an uptick in prices stemming from price movements in China at the end of last year, and that now also comes to Europe. So there is a firming up of prices in standard products. I wouldn't call it a shortage yet. And as a general remark, again, our portfolio strategy is to focus on specialty products. So the exposure to silicon standards is also not that big.

The next question comes from David Symonds from BNP.

I think I'm only left with one rather short-term question, which is, could you just talk about how April trading compared to the second half of March? And I know it's not customary to guide on the second quarter, but could you potentially give some indication of whether you would expect it to be higher or lower than Q1?

Tobias, you saved this one for luck. As we said, Q1 was positively influenced by pull-forward effects from customers ordering for their own supply safety. As I said before, the impact was significant in March. So we had the spike in order entry in March, and that has, yes, come down now again in April. So April is back at the level of January and February.  So from that perspective, we are not giving any guidance for the second quarter. But if you take out roughly EUR 20 million of pre-buying effects, which supported our EBITDA in the first quarter, you definitely need to consider that amongst all the moving parts that we discussed. 

So the first quarter was not yet affected by cost inflation, nor by our own price measures. And then you have a little bit of seasonality in the second quarter, but you typically have some maintenance ongoing in the second quarter. So I would summarize that overall, the pull-forward effects are one-off. They are borrowed from the second quarter. So I expect the second quarter to be lower than the first quarter.

[Operator Instructions] The next question comes from Chetan Udeshi from JPMorgan.

My first question was just going back to the previous question of David, and you kindly gave us some indication on the order books. I was just curious, would you say the orders going down is just a reflection of pre-buying going away? Or do you actually see some customers just basically, there is the first sign of maybe demand destruction coming through at these elevated price levels.  

And the second question, there has been this view that this may not be applicable as much to your silicones business, perhaps or maybe to your polymers, but the shortages of NAFTA oil will be much more pronounced in Asia versus Europe, and hence, you have more supply reductions in Asia, which will be good for European producers. And Wacker is probably one of the more European-exposed in that respect. Do you see evidence of that? Do you see more evidence that your competitors are having to shut production much more in Asia than what you've seen so far?

Of course, you've not seen many production cuts in Europe. But do you see signs that some of your competitors in Asia are seeing bigger production cuts at this point?

I can start with the second, which is specific to Asia. And I would argue, yes, there is -- in the polymer segment, there are some competitors more impacted than we are. So that's the opportunity for us in a weak overall market environment to capture some share. But I see that as temporary, and you need to see how that develops over time.

I think it's more complex to answer that question for Europe. I mean, there's not so much coming on the polymer side, I mean, you don't ship dispersions, which are liquid and heavy from Asia to Europe, and powder also, there's a very limited impact on the European market. 

But on the silicon side, what I have heard is it's less of a reduced production from Asia, but because of longer logistics from Asia to Europe, the ships still arrived so far, but there might be a gap because there's just chips missing because they are stuck in the Middle East.

That's to be seen in the second quarter, but so far, not material.

If I follow up, you source acetic acid, and you source ethylene in Europe for your VAM production. I mean, with the big surge we've seen in the cost of VAM and acetic acid, what is your strategy? Are you still buying them? Are you buying the VAM itself from the market? How are you dealing with the very, very high raw material inventory in your polymer business in Europe, especially?

As you said, Chetan, we are a VAM producer, and we are buying acetic, but we are also a net buyer in Europe of VAM. So we have more demand than we can cover with our captive production. And yes, for sure, we tried to price at market prices because the VAM asset also needs to return on its capital that is employed. But as I said before, it's still early in the first quarter. We announced price increases. It needs to be seen how they materialize in the second quarter.

Yes. Chetan, that brings me to your first question, as Tobias just pointed out, we have to see how these passes actually materialize in the second quarter. I mean, from today's perspective, as we said, I mean, the less order intake we see for Q2, especially for April, at the moment, we would say has a lot to do with the preordering, just moving the orders from April into March.  So far, I would not see demand destruction. But it's definitely an excellent point you brought up, and there are a lot of experts talking to economists on this.

Where is the triggering point for demand destruction, especially in a weak market environment, which we see today? I cannot give you a great answer on that. We don't see it at the moment. And I think Q2 and Q3 will be crucial in seeing how the order intake will develop, and also with respect to how the raw material prices will develop. But yes, overall, I would say risks are today clearly higher than they were yesterday, and yes, to see.

Ladies and gentlemen, that was the last question. I would now like to turn the conference back over to Joerg Hoffmann for any closing remarks.

Thank you all for joining us today and for your interest in Wacker Chemie. Our next conference call for the second quarter 2026 results will take place on July 30, 2026. As always, don't hesitate to contact the IR department if you have further questions.

Ladies and gentlemen, the conference is now over. Thank you for choosing Chorus Call and thank you for participating.

Ladies and gentlemen, welcome to the Wacker Full Year 2025 Results Conference Call. I'm Robert, your 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 Joerg Hoffmann, Head of Investor Relations. Please go ahead.

Thank you, operator. Welcome to the Wacker Chemie AG conference call on the full year 2025 results. Dr. Christian Hartel, CEO; and Dr. Tobias Ohler, our CFO, will walk you through the presentation. The press release, annual report, our IR presentation and detailed financial tables are available on our web page under the Investor Relations section. Please note that management comments during this call include forward-looking statements involving risks and uncertainties. We encourage you to review the safe harbor statement in today's presentation and our 2025 annual report for information on risk factors. All documents mentioned are available on our website. Chris?

Hello, everyone, and thank you for joining us for our full year 2025 results call. In 2025, we reported sales of EUR 5.5 billion and EBITDA before special items of around EUR 529 million. This result was in line with our guidance, which we revised in October. Although we ended up in line with our guidance and the market expectations, let me be clear, this is not where we want to be. This also clearly applies to our annual result at minus EUR 805 million. The profit and loss was impacted by approximately EUR 705 million of restructuring provisions and impairments.

Owing to the negative result and in line with our dividend policy, we will propose to the AGM on May 6 that no dividend will be distributed. In this environment, we did not try to get back on course with incremental adjustments. We took bold steps to get Wacker firmly back on a path to success. Before I address our cost reduction efforts and guidance, let me quickly highlight our sustainability initiatives on the right side of the page. Wacker achieved top scores in the latest annual ESG assessments. By achieving an A rating in the CDP climate assessment, Wacker now has risen to the top of more than 21,000 companies worldwide.

External ratings are important for us, and our leading sustainability profile is a differentiating factor in the market. Now on to Page 4. As you know, chemicals remain under pressure worldwide. This is especially true in Europe. Demand stayed weak across many industries. Uncertainty was particularly high. Trade and geopolitical tensions led many customers to delay orders and postpone investments. At the same time, we faced structural challenges on top of the cyclical downturn. New competitors are entering the market. There is overcapacity in many standard chemical products. In Europe, we have excessive regulations and high energy prices that are not internationally competitive. Both reduces Europe's competitiveness versus the U.S. and Asia.

In this market environment, we must transform ourselves. We need to set Wacker firmly back on a path to success by significantly lowering our costs and strengthening our competitiveness for the long term. To strengthen Wacker's competitiveness, we launched the largest cost-cutting project in our history under the name PACE in October last year. The goal is to reduce production and administrative costs by more than EUR 300 million annually with a focus on labor productivity, maintenance and engineering, production-related services and procurement. We are making good progress and already expect to achieve EUR 200 million of savings already in 2026.

By now, all measures are clearly defined, and we have already begun with the implementation phase. By the end of 2027, all measures should be implemented. Headcount reductions are unavoidable. More than 1,500 positions will be produced -- reduced worldwide. Most of them are at our sites in Germany. The ambitious program will put us back on path and will secure Wacker's place among the leading -- world's leading specialty chemical companies. Now let's move on to the guidance on Page 5. For 2026, we forecast modest growth with group sales up by a low single-digit percentage. EBITDA is expected to be in the range of EUR 550 million to EUR 700 million. Our forecast assumes that markets remain challenging, while we deliver tangible savings from our PACE Cost program.

Please note that the outlook does not include potential impacts from the recent developments in the Middle East, which cannot be reliably determined today. CapEx is expected to be around EUR 300 million and well below last year. Now that many of our larger investments are completed, we have shifted our focus to filling capacities. Net cash flow is expected to be positive and significantly higher than last year. This will lead to clearly lower net financial debt by year-end. We are acting with discipline. We are tightening our cost base. We are improving our capital efficiency. And we are sharpening our focus on areas where we can win, especially in specialties and technology-led applications. Yet cost cutting alone cannot secure our future.

We will continue to invest, accelerate innovation and build the foundation for sustained profitable growth. Looking to Page 6, you can see that we have invested to expand our global leadership positions. We advanced our specialty strategy by bringing new silicon production facilities online across our global setup. In polymers, we invested in new VAE capacities in the U.S. In BioSolutions, we have sharpened our innovation edge with our new biotech center in Munich. In polysilicon, our new etching line strengthens our standing as the undisputed global market and quality leader for ultra-pure semi-grade polysilicon.

We are particularly excited about this new facility. We are positioned very well here to support semiconductor growth driven by strong demand for high-performance chips used in AI applications and many others. Before I hand over to Tobias, let me highlight on Page 7, our focus areas going forward. In order to develop our potential even better, we formulated 3 overarching strategic priorities in spring 2025 that show us the way forward. These set our course and reinforce our ambition to lead, to innovate and to grow in the years to come. First, we elevate our business model and value proposition. In Chemicals, we are intensifying our focus on specialties. Here, we can clearly differentiate ourselves and create superior value for our customers.

Polysilicon, our focus is firmly on the semiconductor market. In Biosolutions, we are focused on advanced biotech solutions for health and nutrition applications. In all these areas, we can provide customers with high-performance solutions addressing the megatrends of today. Second, we unleash the potential of our structure and processes. We are committed to becoming faster, more efficient and more agile. To achieve this, we are harnessing the full potential of digitalization, automation and AI across our operations. These technologies are not optional. We see them as essential drivers of our future competitiveness. Third, we excel with our people and culture. We foster a performance mindset with active entrepreneurship and accountability. We build global player capabilities through energized and empowered teams. We will succeed as One Wacker through strong collaboration across diverse teams.

Our strategy is clear. The measures we are taking today will have a lasting impact. I have full confidence in our ability to shape the transformation ahead. We not only have the right technologies and solutions, but above all, we have the right team. And now to our employees around the world, on behalf of the entire Executive Board, I would like to thank you sincerely for your commitment, your resilience and professionalism making the difference. Looking ahead, 2026 will remain challenging. It is critical that we stay on course. Markets will not wait. Speed is essential. 2026 will be the year of execution driven by spirit, speed and confidence. Now let me hand over to Tobias.

Thank you, Chris. Good afternoon, everyone. Looking at the profit and loss statement. Sales in 2025 were EUR 5.5 billion with a reported EBITDA of EUR 427 million. EBITDA before restructuring expenses was down 29% year-over-year to EUR 529 million. Both sales and earnings were impacted by lower volumes and prices in some cases as well as by negative currency effects. In 2025, we booked approximately EUR 700 million in impairments, write-offs and restructuring expenses. These charges are reported throughout the profit and loss. Let me walk you through the main elements of those items now.

EBIT came in at minus EUR 180 million, and this includes in addition to the restructuring expenses of EUR 103 million, also asset impairments totaling EUR 102 million. Among other items, EUR 89 million goodwill impairment in our Biosolutions business was booked. Below the EBIT line, there were 2 significant effects. First, we recognized an impairment of our stake in Siltronic, resulting in a charge of EUR 308 million. Second, we recorded a write-off of deferred tax assets in Germany totaling EUR 194 million. In the appendix, you can find detailed notes outlining the specific amounts. It is important to point out that from the roughly EUR 700 million in total charges, some EUR 600 million are noncash.

The remaining EUR 103 million is the PACE restructuring provision. This amount should cover the expected costs here, and we do not expect further provisions for this program in this year. With the valuation adjustments taken at the end of 2025, we have significantly derisked our balance sheet. After all those special items, net income came in at minus EUR 805 million. Clearly, this result is a call to action. As Chris spoke about, we have initiated a comprehensive cost program pace. We are making good progress here and expect significant savings already in 2026. Looking at Page 9, we ended 2025 with strong financials with a high level of liquidity at EUR 1.48 billion and with EUR 3.76 billion in equity.

Our liquidity position was clearly supported by our targeted efforts to reduce investments in working capital. Total investments in working capital were 11% lower year-over-year with both inventories and receivables being markedly lower. Inventories were EUR 268 million lower and accounts receivables were EUR 76 million lower. This was a great effort which clearly paid off, but this also clearly weighed on fourth quarter margins, particularly in the 2 chemical divisions. Liquidity was further strengthened by our successful placement of the EUR 435 million Schuldschein with 3-, 5- and 7-year tranches. This is part of our established strategy of having well-balanced debt maturities.

Compared to the end of 2024, the balance sheet total is 11% lower. The largest changes stem from the same measures that impacted the profit and loss and consequently, also our shareholder equity position. Despite last year's negative net income, we maintained a solid financial structure with a healthy equity ratio of 45%. Now looking at the operating segments, starting on Page 10. At Silicones, sales in 2025 were approximately EUR 2.73 billion, down 3%. At EUR 336 million, the full year EBITDA was 1% below 2024. Last year, we saw weak order intake and uncertainty weighing on key end markets such as automotive construction and consumer-related industries such as textiles. At the same time, imports from Asia into European commodity markets intensified.

For 2026, we expect sales in silicones to be at the prior year level with higher prices and volumes being offset by negative FX effects. The EBITDA margin should come in slightly above the prior year level from cost savings. On Page 11, full year sales in Polymers were EUR 1.38 billion, 6% below the prior year. EBITDA declined by 19% year-over-year to EUR 158 million. Performance was defined by lower volumes, negative FX effects and lower ASPs. Over the course of 2025, end markets remained largely unchanged. Construction-related powders showed small growth year-over-year, while Western Europe and China remained weak here.

Consumer-related dispersions faced lower demand. For 2026, we expect sales in polymers to be at the prior year level with higher volumes and partially higher prices being offset by negative exchange rate effects. We expect the EBITDA margin to be slightly higher than the prior year from cost savings. On Page 12, sales in BioSolutions were EUR 360 million, down 4% year-over-year. EBITDA decreased to EUR 21 million from EUR 35 million a year. Earnings over the course of 2025 were impacted by soft demand in established products and reductions in biopharma. Low utilization rates weighed on our performance. The fourth quarter EBITDA also saw negative effects from our inventory management. For 2026 in BioSolutions, we expect sales to be high single-digit percentage higher than prior year with an EBITDA at around EUR 30 million.

The market environment remains challenging. We will stay focused on strengthening our commercial activities, filling capacities and cost management. On Page 13, full year sales in polysilicon came in at EUR 883 million, 7% lower year-over-year. EBITDA decreased to EUR 96 million. This was due to low solar demand and very low plant utilization rates. We stayed focused on tight inventory controls. We actively took steps to adjust production with the goal of reducing inventory in stock while maintaining minimum production volumes. On the positive side, semi developed very strongly. Volumes were up by a double-digit percentage higher than prior year. With our new etching line, we are positioned very well to support semiconductor growth driven by strong demand from data centers and AI.

For 2026, we expect sales in polysilicon to be a low double-digit percentage higher than the prior year. EBITDA is forecasted to be at the prior year level, and this despite higher energy costs this year due to lower CO2 compensation. Earnings are clearly supported by significantly higher semi sales and efficiency gains. On the other hand, solar remains challenging with no significant effects from trade policies included in our outlook. Let's move on to Others on Page 14. For 2025, the Others EBITDA came in at minus EUR 185 million. This figure includes the restructuring provision of EUR 103 million for PACE, which was booked in the fourth quarter. Excluding this, the other EBITDA would have come in at minus EUR 82 million, and this is lower than last year, driven by the lower absorption of group infrastructure costs and low hydroelectricity output.

As you can see here, the CO2 compensation scheme held back the others EBITDA during the first 3 quarters of last year. And then in the fourth quarter, when the payment for CO2 compensation arrived, we saw a reversal of the debits to others of the first 3 quarters. This dynamic in the fourth quarter of 2025 is not as evident as in 2024 due to the masking effects of the paid provision. This year, the effects of the CO2 compensation on our quarterly results will be more muted. We calculate with about EUR 70 million compensation for the full year, about EUR 90 million less than last year. For the full year 2026, Others EBITDA, there's anyhow no effect from the CO2 compensation. So we forecasted for 2026 Others EBITDA minus EUR 50 million as we see a continued underutilization of infrastructure.

Now let's look at our net financial position on Page 15. In 2025, we generated a gross cash flow of EUR 543 million. Gross cash flow was supported by targeted initiatives to reduce the investment in working capital. The cash flow from investing activities was EUR 546 million, including the dividend payment of EUR 124 million, we ended the year with a net debt of EUR 886 million. Looking at Page 16. For the first quarter of 2026, we see sales at about EUR 1.35 billion with an EBITDA between EUR 140 million and EUR 160 million as compared to the EUR 119 million last year. Days are expected to be lower due to the significant exchange rate headwinds, while EBITDA comes in higher year-over-year with cost savings coming through.

As Chris stated, recent events in the Middle East and volatile energy markets clearly increased uncertainty. Energy and raw material prices have climbed in the past week, creating new headwinds. To reliably service our customers, we will look to pass on the higher cost as we have done in the past. Forecasting the impact of these effects reliably is not possible at this time. Before we start with the Q&A, let me summarize. Our strategy and the measures we have taken will prove effective and put Wacker back on the road to success. Wacker has repeatedly demonstrated its ability to adapt successfully to new circumstances time and again. I'm therefore convinced that we will successfully navigate the challenges that lie ahead. Thank you, and we look forward to your questions.

[Operator Instructions] And the first question comes from Christian Faitz from Kepler Cheuvreux.

Two questions, please. First of all, in polysilicon, what is the current split roughly between semi grade and solar grade? And the second question is actually pertaining to current conditions in the light of the Iran conflict. Would you see demand for your construction geared products being impacted by the heightened conflict? If I look, for example, at basic things like cement, which has been considerably up recently on back of this conflict, higher overall construction costs might hamper construction activity worldwide. What is your take on this? And actually, what do your salespeople see in the very recent weeks in terms of demand momentum?

Okay. Christian here on your first question, I mean, we don't disclose on detail the split between semiconductor and solar. But what I can tell you is, I mean, we had double-digit growth in semi last year. And also, we will expect double-digit growth in semi into -- going into this year. I mean, if you look at the numbers and make an estimated calculation or guess, I think you can see that today, we are already selling more semiconductor, not only in sales, but also in volume. But that's all I can say on this matter.

Well, on the -- maybe let me start with a general comment on the conflict in the Middle East. I mean, this is certainly not adding more certainty, but adding another layer of macroeconomic uncertainty. And it's on energy pricing, it's on raw material availability, logistics and also, I think, on end consumer demand. And for us, it's still too early to have a kind of a clear picture and to have numbers on that. I mean we are obviously diligently working on it. And as we said in the speech, have not included into our full year guidance. But I can tell you, I mean, at the moment, I would say it's not really adding optimism for 2026, especially not in the short term.

Maybe Tobias can give a little bit more flavor on the effects. But I think in general, I would say the conflict is more weighing on the overall demand situation. And we have to see how long it goes and maybe then it could reverse an additional demand, as you said, on the construction, but it's too early to conclude.

I think in general -- Tobias here, in general, we have seen the typical seasonal pattern with quarter-on-quarter development and also with order intake. And yes, you could argue that order intake from some very smart buyers is a little bit pulled into the system right now, trying to avoid potential price increases, but I wouldn't count too much on that very short-term movement. So I think we are not in a position to have a good scenario on what does that mean for end market demand.

So I mean, the days are really super volatile as we all experienced them. And I think the more pronounced effect will be on energy and on raw materials. And as I said in the speech, we have our mechanisms in place to pass it on to our customers. And we also believe that our competitors will be largely in the same position as we are. So it's nothing specific to Wacker. It's specific to the entire landscape of competitors.

And the next question comes from Thomas Wrigglesworth from Morgan Stanley. Two questions, if I may.

The first question, if we can just talk a little bit about the cost savings and what you've baked in of the EUR 200 million gross savings for 2026? And how -- do we start small and then that -- and we finish on a much stronger exit rate. So your thoughts and forecast there would be very helpful. Secondly, just on the polysilicon moving parts. Specifically, we understand semi grade is doing well. But could you share with us on the solar side, is the business steady now and set to be steady for 2026? Do you have visibility on those volumes? Or will you have to flex with the market as things progress?

Okay. Thomas, thank you for your questions on the -- I will start with the cost savings on PACE and Tobias will continue. So first of all, I think what needs to be clear, we started the PACE project in Q4 of last year. Yet we also worked on cost savings throughout the year, of course. I mean we have the WOS program. And also, we started measures last year like a hiring freeze in Germany and in the U.S., which is also something which we already see today in the numbers.

I think that's important to keep in mind that we are already worked since last year on cost measures seeing effects already now in Q1. And yes, I mean, in general, you can say on the PACE, I mean, it's progressing. We implemented measures in China. You can say in China is already finished. In the U.S., we did a lot already. And in Germany, we are also in the negotiation with the workers' council. And once we have a clear solution here, we can implement even more measures. So yes, it will be increasing throughout the year.

And EUR 200 million -- I mean, we also worked on nonpersonnel measures, and these are typically effective more quickly, structural savings, lower budgets for various items from technical spend to -- it's not a game changer to travel. But these effects we already see at the start of the year, but through more personnel measures coming effective throughout the year, there should be a slight progression in this year, reaching the EUR 200 million in total savings.

And on your question on the poly side, as we said, I mean, growth is largely coming in 2027 from the semi side, which is progressing very well. Solar will remain challenging, and we have no significant effects from trade policies, i.e., the Section 232 included. And as we also said last year in the call, we had long-term contracts in 2025. We do have long-term contracts in 2026 on the solar side. So yes, I mean, it will remain a challenging business, but we see it more on a steady side.

Just as a follow-up to that, is there a need for a strategic review of the solar business? Or is it -- or is the growth in the semiconductor side strong enough now that you feel that you'll just grow into your semi business and the solar business doesn't need strategic review, it will just shrink proportionally to a point where it's not meaning -- where it's less material?

Well, I don't think it needs a strategic review because the strategic review is already done and the strategic review has a very clear answer. If there is a positive Section 232 announcement that could open for the next year is an opportunity for us in solar, which we will obviously continue. If the Section 232 is not in a positive way, then it is very clear that solar will not be a continued business for us. And we also said, in this case, we probably have one plant too many on the poly side.

Okay. And do you have a hard stop as to when Section 232 arrives or not because it's rolling...

Sorry, but we are obviously not deciding the 232. It's the Department of Commerce and the President of the United States. So if you want to have an exact timing on that, better to ask them than us, if I may say so.

And the next question comes from Matthew Yates from Bank of America.

A couple of questions, please. The first one on the Silicones division. Can you give me the capital employed of that business? I don't think you've disclosed at the divisional level what the capital employed is in the past. But I'm particularly curious in the context of you've spent EUR 1 billion in CapEx since 2021 in that business. So I'm trying to understand the current return on capital and maybe thinking about where that could get to over the midterm.

The second question, just to follow up a little bit on the earlier discussion around Energy & feedstock, specifically as it relates to methanol, which if my chemical knowledge is right, I think you use that as an input, both directly and indirectly in the Silicones and Polymers business. Can you just shed some light on how you go about sourcing that as a feedstock? I take your point on this as an industry-wide issue, but do you have any reason to believe that Wacker sort of logistics and relationships would be any sort of competitive advantage or disadvantage in the sort of degree of methanol cost inflation you might see over the coming weeks and months if this crisis goes on?

Matthew, on the second part, I can give you an answer on the -- I'll try to give you an answer on the methanol side. But first of all, none of our competitors in the silicone space is kind of backward integrated into methanol. So all of these guys like us are procuring methanol. Methanol is a super commodity globally available from many, many sites. We also have a sourcing strategy, obviously, which is multisource, multi-region.

So from that perspective, I do not expect major advantages or disadvantages, although I cannot argue for our competitors. But I would say methanol is a rather liquid commodity, which is easily valuable. There might be impact on the pricing side, which we see from the conflict in the Middle East. Typically, our raws are linked to index prices, and that's typically also what I would expect from our customers. And as we probably also competitors are trying to put the higher cost or pass the higher costs on to the customers. That's at least what we will try to do.

Matthew, Tobias here, on the capital employed, as you already said, we are not publishing that on the segment level. But your observation is completely correct. So we invest substantial amounts in silicones for good reasons. We see growth opportunities. But in this environment, we haven't been filling those sufficiently. And that's why our performance is sub cycle for both EBITDA margin and for EBIT margin. And going forward, the focus will be to increase utilization and as part of the PACE program to work on the fixed cost structure, also specifically in silicones to improve performance because historically, with the segment, and we -- I think as part of the Capital Markets Day in 2022, we had some numbers on the 2 segments, silicones and polymers combined.

We do have the potential of earning twice cost of capital in this. And our strategy going forward go more for specialties is also asset lighter. And this means that we are truly, I mean, targeting this. And the upstream for us is just a feeder, and this is not core strategy. And for that reason, we will also not put any further money in that beyond maintenance CapEx. So that's how I can describe it with respect to our ambition also to bring Silicones ROCE back to historic performance.

Okay. And if I can just follow up because today, you have taken various impairments across the business, most notably Biosolutions, which was also an area you invested money into. Why have you not taken impairments in the silicones business? Where does the degree of confidence come from that ultimately the investments you've been making in recent years will provide a reasonable return?

Because if you look at the cash-generating units, Matthew, you have a decent coverage. There's no need to, yes, take impairments on that, completely different in those segments where we took action. So we are very confident that our asset values are, yes, really justified also by future cash flows.

And the next question comes from Sebastian Bray from Berenberg.

My first one is on polysilicon. The decision about whether to close a plant seems to be tied to when Section 232 comes to an end. What is a bad outcome for Wacker that could trigger the closure of the plant? My understanding is that the investigation is pretty likely to introduce some quite hefty barriers to entry in U.S. solar. Perhaps there are some concerns around the ramp-up of United Solar projects, domestic U.S. capacity additions. I think Tesla has been looking at the polysilicon market more recently. My second question is on silicones. How has this business been going in the first 2 months of the year? And have the price increases announced by Wacker largely been implemented successfully?

Sebastian, Christian, on your first question on the Section 232, what would be a bad outcome? Well, a bad outcome, I can tell you, would be that there's essentially no restriction or very limited restriction on material coming into the U.S. You can argue how likely that is, but I think it is -- I don't want to speculate on it. Obviously, you have some information, which you referred to. That will be a bad outcome. And then we have to take a decision to step out of the solar space and to close one of our sites.

Sebastian, on silicones, the first 2 months of the year, they are below prior year in sales, mainly from that huge change in exchange rate. I mean we had a USD 105 in last year. In the first 2 months, now we were at close to USD 120 now at USD 116. So that makes a huge difference and standard prices are still low, also lower than prior year. So there's also a headwind from there. But as I said before, we are -- against all this headwind from sales, we're expecting EBITDA for the first quarter to be at a similar level than last year from the cost savings coming through.

And as Christian explained, we started the PACE program in Q4 officially, but we started to work on some measures even before. And especially with respect to external spend, also, we are starting very cautiously on technical spend on travel and so forth. And this helps. And that's why, yes, results will be better. Also, we -- with the destocking in the second half of last year, we can also run production now at a higher level to serve the demand. And that also, as you know, gives you a bit of an uplift in profitability. So I think it's a decent start in challenging environment, mainly from self-help from our side.

And the next question comes from Chetan Udeshi from JPMorgan.

I'm a bit confused on your silicon guidance because you're saying standard prices are down year-on-year, volumes are down. So how is the EBITDA flat? I mean, I don't know if the self-help is so substantial. And if it is so substantial, can you quantify it? I mean you said EUR 200 million of gross savings. How much of these do we think stick in terms of net savings? I think your inflation should be something like EUR 70 million, EUR 80 million a year, I suppose. So I'm just curious, are we talking about EUR 120 million, EUR 130 million of net savings? And is that more front-end loaded, which is helping your numbers?

The second question I had was on polysilicon. So you said Q1 sales again, high single digit down year-on-year, but EBITDA close to last year. So what's going on, especially with the energy cost also increasing because of lower CO2 compensation. It just doesn't -- the math doesn't add up somehow. And I was just curious, I was going through your annual report. And it seems your advanced payment from customers have shrunk by half last year. It is a bit counterintuitive given that you started up this new facility for semi grade in Burghausen since I was expecting maybe that number should be going up rather than halving. So what sort of confidence should we have in terms of the filling up of this capacity going forward based on this lower advanced payments?

Okay. Maybe I'll start with silicones. I meant that in the first quarter, I mean, exchange rate is the core headwind. Prices in standard products are still low, but I didn't say that volumes are down. So the stabilization in profitability really comes also from solid seasonal volume recovery plus a lower run rate also of the plant, which gives the according fixed cost dilution and all the cost measures that we mentioned.

And with respect to the savings from PACE, we are trying to understand the net savings. It's obvious that the net savings are pretty close to 100% when you start the program, the net savings get a bit eroded by inflation when you go to the -- yes, to the last years of the program. So we have a very good recovery rate in this year and maybe in 2028, if you account for inflation with personnel and also nonpersonnel costs, yes, there will be an erosion, but net savings would still be above 50% from the program that is effective.

Yes. Maybe on the poly side, so for the Q1 -- well, obviously, what we said, there is double-digit growth we see in the highly profitable semiconductor space. And then, yes, there is a much better cost base despite less CO2 compensation. And where is it coming from? Well, it's coming from measures we took already last year. For example, at our site in Charleston, we reduced headcount already that is taking effect now in Q1. And also keep in mind, last year, we had preoperating costs for our etching line in Burghausen, which we don't have, obviously, this year as the plant is running very well, and we are also getting higher volumes out of this plant.

And with the advanced payments, well, I can't tell you all on the specific details. But I mean, we have contracts, long-term contracts with our customers. And some of these contracts fade out are replaced by new ones. And therefore, I think just looking at advanced payments does not give you a better picture on the quality of the contracts. We have increasing volumes. And what you see actually in the growth of the semi poly business last year and today is based on long-term contracts. And we elaborated on this that we already have contracts that go well into the 30s. And therefore, we are -- we keep very positive on the development on semi.

And the next question comes from Jaideep Pandya from On Field Research.

First question is really around the capacity landscape you see in China, mainly talking about silicones and polymers. I mean, given the increase in cost that we have seen post war, how much of this you think is going to have a structural impact on some of the right-hand side of the cost curve capacity in the extension of the VAM value chain and DMC value chain, if at all, any? And then on the second part of the question, relating to sort of Matt's question around sourcing of methanol.

I mean, if this continues well into next 3, 4 months, how much of this sort of is going to be an issue for you? And then the last question is just around your raw material costs and energy costs. that you've baked in for the year. Could you give us some guidance of what was the current -- or what is rather the current assumption on a year-on-year basis? And any sensitivity around how things have changed post the 28th of February?

So Jaideep, Tobias here, maybe I'll start with the last one, although it's one of the most difficult ones. For sure, I mean, things change quickly. And we also have done some sensitivity, but I don't want to give you a quantification of that. Nevertheless, what I can tell you on the energy side, we are hedged by 3 quarters for this year. So there -- I mean, even when electricity prices and gas prices were going up, I think there's limited impact for this year. And I mean, who knows what's going to happen next year.

On the raw material side, you mentioned that the petchems, also the impact on the Asian -- yes, suppliers, and that links to your first question. I think there will be a general movement of raws up, but we are playing in fields as silicones and polymers where all our competitors do have to buy or to produce at those elevated costs. And for that reason, I think there is a good mechanism and there's a good chance of, yes, of passing that on to customers. Will that be 100% effective? Most likely not. But I think in times of strong raw material costs, typically, chemicals can still perform.

And I think especially with the increase of the raw material prices and costs in Asia, these markets typically move much more quickly also on the sales prices. We have either only spot prices also with our customers or we have monthly price adjustments. So that can be very effective. On the sourcing of methanol, as Christian said, I mean, we as all the others, we are not backward integrated. Everyone has to bear the cost of methanol, and that's part of the DMC cost next to silicon metal. So I think it would move up DMC prices, and it would need to be passed on to customers. I think it's -- from today's perspective, we don't have an availability issue. We are just talking about pricing trends and cost trends.

Just one follow-up. I mean we have seen this in the polypropylene or polyethylene market in terms of a bit of a mad scramble for material in the last 10 days or so. Are you seeing that in any of your markets where customers are trying to order as much as they can before prices sort of settle at an elevated level?

I mean, as I said before, in China, I've heard from our division that some smart buyers try to now place orders, but they get rejected. I mean you can't outsmart the industry by placing an order for the entire year on today's cost or today's prices, I think that doesn't work. So yes.

I guess my question was more from an availability. I guess what we are seeing in some of the other chemicals is people are really concerned about the availability and want to reserve volume, which sort of shows there is some demand strength in the underlying markets. So that was sort of my question is, are your customers saying to you, we want the material because we have demand like from our customers. So it was more of the question of volume security rather than price locking.

I think, Jaideep, I would say it's probably still a little too early, at least for the products we have because it's still a weak demand pattern. I think that's -- if you compare it to 2022, I mean, in 2022, we had really strong end markets. And I think people got more nervous more quickly. So far, we don't see it on a broader scale.

Ladies and gentlemen, this was the last question. I would now like to turn the conference back over to Joerg Hoffmann for any closing remarks.

Thank you, operator. Thank you all for joining us today and for your interest in Wacker Chemie. Our next conference call for the first quarter 2026 results will take place on April 29, 2026. As always, don't hesitate to contact the IR department if you have further questions. Thank you.

Ladies and gentlemen, the conference is now over. Thank you for joining, and have a pleasant day. Goodbye.

Ladies and gentlemen, welcome to the Wacker Chemie AG Conference Call Q3 2025. I am Mathilda, the Chorus Call operator. [Operator Instructions] The conference is being recorded. The conference must not be recorded for publication or broadcast.

At this time, it's my pleasure to hand over to Joerg Hoffmann, Head of Investor Relations. Please go ahead.

Thank you, operator. Welcome to the Wacker Chemie AG conference call on the third quarter 2025 results. Dr. Christian Hartel, our CEO; and Dr. Tobias Ohler, our CFO, will walk you through the presentation. The press release, our IR presentation and detailed financial tables are available on our web page under the Investor Relations section.

Please note that management comments during this call include forward-looking statements involving risks and uncertainties. We encourage you to review the safe harbor statement in today's presentation and our 2024 annual report for information on risk factors. All documents mentioned are available on our website.

Chris?

Hello, everyone, and thank you for joining us on our third quarter 2025 results call. Chemical industry is under pressure worldwide, but especially in Europe. The economic situation is tense and demand is weak. At the same time, the market environment is challenging and competitive pressure is high, especially from China. In addition, the stronger euro creates headwinds.

Like many other chemical companies, we had to revise our full year forecast downward in the middle of the year. All our divisions are affected. Despite these challenges, Wacker remains focused on executing its strategy and safeguarding profitability. Our third quarter performance and our refined full year outlook on the next page reflect the ongoing headwinds.

Sales in the third quarter came in at EUR 1.34 billion with an EBITDA of EUR 112 million. The sum of the 4 operating segments EBITDA amounted to EUR 159 million. This is 18% lower than a year ago and 13% lower sequentially. Despite the lower EBITDA, net cash flow at plus EUR 19 million was markedly better than a year ago. The result was supported by targeted actions to reduce working capital. Utilization rates remain unsatisfactory, and our operations continue to be held back by ongoing macroeconomic and geopolitical headwinds.

Our chemicals segments, Silicones and Polymers saw low demand in all major markets. Polysilicon was held back by weak demand and lower prices for solar products due to still ongoing regulatory investigations. On the other hand, semi continued to see strong demand year-over-year and our new etching line proceeds on schedule.

Before we move on to the next page, let me say that the Chem-X initiative under sustainability marks an important step towards standardizing data for product carbon footprint calculations. Robust PCF data enables us to reliably speak about the sustainability of our products and strengthen our competitiveness.

Now to our refined guidance. Considering the ongoing headwinds and soft order intake, we have updated our guidance. We now see full year sales at the lower end of the EUR 5.5 billion to EUR 5.9 billion range. We expect EBITDA in the lower half of the EUR 500 million to EUR 700 million range. These changes also affect our expectations about net cash flow. Net cash flow will be negative but significantly higher than the prior year.

Our priorities are clear: sharpen focus on specialty chemicals, align polysilicon with semiconductor growth, accelerate efficiency and speed across the entire organization. Immediate measures addressing cash and costs are already underway. In the next step, we have launched a comprehensive project with the aim of significant cost savings. It will primarily target fixed production costs.

We expect to achieve significant cost cuts in production and production-related areas as well as administration. We're also taking a close look at asset optimization across all regions. Measures are currently being developed. We intend to start implementation in the first quarter of 2026. Our goal is clear: restore competitiveness, protect profitability and position Wacker for sustainable value creation.

Let me now hand over to Tobias for a look at the group financials and segments.

Thank you, Chris. Welcome, everybody. Let's now take a closer look at the financials for the third quarter of 2025. Sales in the third quarter were EUR 1.34 billion, down 6% year-over-year, and EBITDA declined to EUR 112 million from EUR 145 million a year ago. This development was primarily driven by lower pricing, foreign exchange and volume mix. Excluding others, which held back the reported EBITDA by EUR 47 million, the cumulative EBITDA of the 4 operating segments came in at EUR 159 million. This is down from EUR 195 million in the third quarter of 2024.

As previously discussed, the main component of the others EBITDA is the CO2 compensation offset. In the third quarter, this was approximately EUR 40 million. As explained before, we expect a refund of these offsets in the fourth quarter of this year. The lower EBITDA and higher depreciation drove EBIT to minus EUR 20 million versus the plus EUR 30 million a year ago. Depreciation has increased in line with investments made over the past couple of years. Many of our major growth projects are by now completed, and our focus is on growth and filling the new capacities.

As already flagged in the H1 report, the German government will gradually lower the corporate income tax from 15% to 10% during the period of 2028 through 2032. This is a welcome development, but it triggers a remeasurement of our deferred tax assets. The lower tax rates led to a deferred tax expense of EUR 30 million in the third quarter of 2025. After this expense, net income was a negative EUR 82 million, equating to a loss of EUR 1.73 per share.

Our balance sheet shows EUR 4.42 billion in shareholder equity and strong liquidity of about EUR 781 million. Since the start of the year, inventories are EUR 173 million lower with efforts to reduce stock levels gaining traction. Looking at our financial liabilities, they are largely unchanged since the start of the year at EUR 1.94 billion. The shareholder equity ratio is 52% and remains at a high level.

After the end of the reporting period, we successfully closed the order book for a new Schuldschein issue with 3-, 5- and 7-year tranches. Settlement is set for November 6. This is part of our established strategy of having well-balanced debt maturities.

At Silicones, sales in the third quarter were EUR 673 million, down 7% year-over-year and 6% below the previous quarter. Following a weak order intake, volumes were largely flat year-over-year. A combination of price, foreign exchange and a weaker mix held back both sales and earnings. EBITDA was EUR 86 million, down 19% versus the prior year. For the full year 2025, we have updated the Silicones outlook. We now expect sales and EBITDA to be a low single-digit percent below the prior year level. In the fourth quarter, we typically see a year-end slowdown. This is nothing unusual, but this time around, we expect a pronounced year-end seasonality due to the ongoing weak order intake.

At Polymers, third quarter performance was defined by ongoing slow markets. Sales came in at EUR 344 million, 6% below last year and 5% below the previous quarter. Sales were held back by a combination of foreign exchange and price as well as lower volumes in consumer-related binders. Volumes in construction-related binders, on the other hand, showed some improvement year-over-year, but remained at a low level. EBITDA came in at EUR 47 million at the same level as last year and ahead of the preceding quarter.

As a reminder, our second quarter performance was held back by a turnaround. For the full year 2025, we have updated our Polymers outlook. We now expect sales to decline by a mid-single-digit percent with a margin below the prior year level. Overall, end market dynamics have not changed and remain challenging. For the fourth quarter, we expect to see the typical year-end slowdown.

At Biosolutions, our performance was marked by a soft demand environment. Sales during the third quarter were EUR 93 million, down 7% year-over-year and 6% higher than in the previous quarter. EBITDA came in at EUR 8 million, down year-over-year and a bit ahead of the previous 2 quarters. The sales and EBITDA performance was primarily driven by the timing of customer project recognition. For the full year 2025, we have updated our Biosolutions outlook. We now expect sales to be similar with the prior year level with an EBITDA of around EUR 25 million. Our focus is on filling our capacities, but we see some customers delaying projects due to market uncertainty.

At Polysilicon, sales in the third quarter totaled EUR 197 million, 6% lower year-over-year and 10% lower than the preceding quarter. EBITDA came in at EUR 18 million. Our performance over the past 5 quarters primarily reflected the low volumes of solar-grade polysilicon sold. Headwinds in solar over this period masked our successes in semi. Here, we continue to show strong growth with volumes being significantly higher year-over-year. For the full year 2025, we have updated our outlook for Polysilicon. Sales are now expected to be a high single-digit percent lower than the prior year with an EBITDA of approximately EUR 100 million.

In Polysilicon, our semi volumes continue to grow strongly and the new etching line is on schedule. Semi is our primary focus and the new facility Burghausen will support strong semi growth. This supports the segment's overall performance, but we still have significant exposure to solar. As we highlighted on the last call, there might be opportunities ahead due to ongoing regulatory changes in the U.S. solar market. We need to wait for the outcome of these investigations only then we will be able to get a reliable view on how our solar demand may develop going forward.

Now let's look at our net financial position. During the first 9 months of 2025, we generated a gross cash flow of EUR 128 million. After cash flow from investing activities before securities of EUR 411 million, the dividend payment of EUR 124 million and some other effects, we ended the third quarter with a net debt of EUR 1.16 billion.

Before we get to the Q&A part of this call, let me make this clear. We are acting decisively. We will reduce CapEx meaningfully going forward. I expect 2026 CapEx to come in well below EUR 400 million. We implement targeted measures to improve our capital efficiency. While we have seen some progress already, we see further room to free up cash tied up in working capital. And we have initiated an ambitious holistic cost project aimed at all our production sites to structurally reduce production costs and administrative expenses.

As Chris already mentioned, we will keep you informed as our plans become more developed. We face a demanding environment, but our actions are clear and focused. By improving cash flow and reducing costs, we will free resources to invest in innovation and specialty growth, strengthening Wacker's resilience and profitability.

Thank you for your attention, and we are now ready for your questions.

[Operator Instructions] The first question comes from the line of Christian Faitz from Kepler Cheuvreux.

Yes. Two questions, please. First of all, can you remind us where at this point, which of your product groups are impacted by tariffs, even only via precursor products? I'm aware that now also Silicones are hit and what else? And is there any estimated financial impact you could provide us for the remainder of the year from tariffs?

And the second question is in Polysilicon. What is the current split roughly between semi grade and solar grade?

Okay, Christian. This is also Christian answering your questions. Now first question on the tariffs. In essence said, not much more development on the tariff side. And I mean, we communicated already that we expect an impact -- a direct impact of EUR 20 million to EUR 30 million for the full year. And which is, I think, more important, we also expect that we can pass this on to our customers, most of it.

And I think it's also fair to say that probably the bigger financial impact goes from the indirect effect, meaning that there is less demand because of uncertainty of these tariffs. But of course, that is much harder to get a grip on. Yes. And so nothing really kind of new.

On the mix between semi and solar, I mean, we don't disclose these numbers. But as Tobias also mentioned, we see quite good growth this year. And although we don't speak about next year, I can assure you we will also see growth in the semi side next year. And of course, solar depends on the regulatory decisions.

The next question comes from the line of Chetan Udeshi from JPMorgan.

I was just looking at your Q3 numbers, and I was surprised at the comment of solar polysilicon ASP down Q-on-Q. Why is it down? Because you're really not selling to the Chinese customers. So why is the ASP falling in that business?

The second question I had was, you're talking about pronounced seasonality in Silicones in Q4. I mean you've not really seen any seasonal pickup through this year. So why would you see a pronounced seasonality in terms of decline? I mean, I'm just curious, are the orders getting worse in October so far compared to what you would normally expect for this time of the year? And is that mainly a function of weaker volumes? Or is it more that you see incremental pressure on pricing in Q4, which is driving that pressure?

Chetan, Tobias here, trying to answer your 2 questions. The first is on the ASP trend for solar, as we have referenced a sequentially lower price. I think you can find that also in the international price index, if you look at that, there's a little bit of a downtick. And as we have that also in mind when setting the price with our customers, we are also impacted by that.

The second question is a bit broader, Chetan, on the overall seasonality, I would say all regions and industries see volumes that are lower than last year and the market dynamics haven't changed. So overall, in all industries and regions, customers are very cautious. And I think that sluggish macroeconomic behavior leads to a sluggish macroeconomic environment. And with respect to the current trading that we see, we had the weakest orders in August. So September and October were above that, but they were flat. And if I compare that to the order pattern of last year, we had an uptick in October. And then we had an uptick in November, and we haven't seen that in 2025 so far.

And that's the reason why we are cautious to assume a year-end slowdown. So it wouldn't be surprising to see customers working on their inventories. And I mentioned we are working on our inventories. So don't be surprised if that is the broad picture that we feel in the market. So that's why assuming a slowdown and inventory management is our key assumption for the fourth quarter.

Maybe can I ask one more on your Polysilicon business. Again, what I'm seeing as a dynamic is some of the Western polysilicon companies, Hemlock, OCI, they seem to be going down the chain, doing their own wafers, using their own polysilicon and trying to sell the wafers in the U.S. and maybe other Western world. Is this something you will consider as part of your strategy to use your solar polysilicon? Or you would rather just shut it down if there's not enough demand for solar polysilicon, especially one of your plants in Germany, which is focused solely on the solar part?

Well, Chetan, we have a clear strategy focusing on semiconductor polysilicon. And I think that has been proven to be quite successful with the market share of about 50% globally. And now with the very successful ramp of our new etching line, leading into further volume growth also next year and quite some long-term agreements we have with our global customers. So from that perspective, that is the clear focus we have, the clear strategy we have on Polysilicon.

The solar side, we see as an opportunistic opportunity and the Section 232 investigations, once there is a final ruling, this might be an attractive opportunity to continue. But I think it very much depends on the 232 ruling. And before that, I think it doesn't make sense to talk about further downstream integration.

But even if it would come, if it would be attractive, then we would follow this opportunity. And then I would say there's also no need for an additional downstream investment. So from that perspective, we stick with semi. That's our strategy. We follow up on the opportunity which might arise from 232 solar in the U.S., but no downstream investments into the solar chain.

We now have a question from the line of David Symonds from BNP Paribas.

Yes, a couple for me, please. So just following up slightly on Chetan's question. Struggling to follow the development of the Polysilicon division a little bit. EBITDA virtually halved quarter-on-quarter despite the semi line running quite well. Could you maybe say whether -- I mean I think some of these contracts in the solar business are probably starting to roll off. So was there a material step down in the solar volumes that you did quarter-on-quarter? That's question one.

And then question two, bear with me because it's a little bit of a long one, so apologies. But if I look at Silicones, EBITDA was down 20% year-on-year in the third quarter. It set to be down 40% year-on-year in the fourth quarter based on your updated divisional guidance. And coming into the first half of 2026, the comp from this year is very tough. So EBITDA was up 40% in Silicones in Q1. Q2 in Silicones, there was a EUR 20 million one-off.

So if I sort of follow that math through, I think you have a EUR 50 million to EUR 60 million headwind in Silicones alone just from sort of mechanical comps next year, which is around sort of a 10% EBITDA drag at group level. And I'm just thinking, is there a chance that EBITDA could actually be down in 2026 overall for the group? Maybe you could comment on that and on any sort of mitigating factors that might benefit you next year.

Okay. David, on the -- on your first question on the solar side. So we do have solar LTAs for this year, and we also have solar LTAs for next year to come. And that's the good part of it. And I think as we said before, the 232 decision, hopefully soon, will give us some more clearance and guidance on this segment. Yes.

David, Tobias here for the Silicones question. I mean you are trying to move towards '26. I think that's far too early. As you know, we typically give guidance in March next year. But nevertheless, your observations for Silicones, I'm happy to comment on these. I mean, you see a significant slowdown in the second half. Why is that? Because we have a drag on, as we described on the top line. I talked about adverse effects from volume mix and exchange rate and some -- also some price, I mean, all 3 together.

But on the other hand, also in the second half, we see the impact of our efforts to reduce working capital. And if you run at lower utilization, just to get that under control, you get a lower absorption on fixed costs. And that definitely makes it not a good way to think about the run rate for next year. So it's far too early. We have many moving parts. As Chris mentioned at the introduction, I mean, we have embarked on a comprehensive cost program, exactly focusing also on the fixed manufacturing costs. So I would be not in the position now today to talk about any '26 hint on how the profitability might move.

Understood. And then maybe just on that working capital point, I mean I noticed that payables as a percentage of sales is actually down quite a lot last year -- versus last year. Is there anything that's changed there? Or what's meaning that payables seems to be running at a much lower level this year?

Payables are running lower also from our reduced investment levels. I mean that is a huge swing factor. As I mentioned, going forward, we are targeting '26. And that type of guidance I can't give because we are just right in the midst of the planning discussions. We will be far below EUR 400 million in next year. And I mean that -- I mean decline in investment also plays a major role why payables are running lower.

The next question comes from the line of Sebastian Bray from Berenberg.

I have 2, please. The first is on the pricing in specialty silicones more broadly. I've played with this data in different ways, but it looks as if at the margins, the specialties pricing may have started to slip a little. Is this fair? And what can be inferred about behavior moving into 2026?

My second question is on the cost savings measures that have been announced and in particular, as they relate to Biosolutions because we're focused on Polysilicon and if Wacker can maybe shut a production line or what goes on there? But if I take the amount of capital invested in Biosolutions over the last decade, the company could have bought back as a rough guess, 1/4 of its stock at the current stock price with it. What is going on in that segment? And what are your thinking in terms of what is on and off the table when it comes to making potential savings? Could you shut a Polysilicon line? Could it involve divesting parts of Biosolutions? What are your preliminary thoughts?

Sebastian, Tobias here to start with your first question on Silicones and pricing in specialties. I think there is not big movement in pricing. I think if you look at the overall development throughout the year, we had a very strong start in the year with a strong mix. But if you look at the overall margin progression in specialties, I think it's rather flat.

So from that perspective, it is flat and unsatisfying today because of the low utilization. And that is the topic also of that comprehensive cost program that we are trying to address our fixed cost base. And for that reason, no view into '26 again, as I said before, guidance will be disclosed in March, as always.

Sebastian, let me answer your second question and maybe for clarification. So this ambitious and holistic cost project, which both I and Tobias talked about is for all the divisions. So it's not specific only for Polysilicon or only for Biosolutions. It's also for -- it's for the whole group. Therefore, it's kind of really comprehensive and ambitious.

And it is on the -- especially on the cost -- sorry, on the production cost side. Now your question was more specific on what could we do on Biosolutions and on Poly. And I think that's a totally different topic because on the solar side, I think on the Poly side, it is very clear, as we mentioned before, strategy on semi. If there would be a very clear decision that there is no attractive solar market left for the Western players like us, then yes, you are right. We would have probably one plant too many for our semi strategy. And hopefully, we get an answer from a 232 decision.

On the Biosolutions, I think we have a totally different situation. Although the utilization is also not satisfactory at the moment, we do see potential for growing this business. And I think at the moment, it is more by a very soft market environment, which we and others face. But we work very diligently on acquiring new projects in the pharma space, sometimes it takes more time. We have a pipeline working on it. And so that's what makes me confident about this and optimistic about this segment, but it might take more time than we have originally anticipated.

That's helpful. Just as a quick follow-up. Can you give any guidance on energy cost relief year-on-year expected for '26 for at current hedging, prevailing spot rates and so on?

Again, Sebastian, it's rather early. But I mean for energy, we do have our hedges. We see market prices trending down a bit. So there should be some relief on that. On the other hand, energy costs will be higher next year due to the lower CO2 compensation because that is always coming with a time lag from lower production as a reference. But on the other, there might be some positive changes from regulation. So again, as I said before, it's too early to give you a precise guidance for this cost next year. And the same goes for raw materials, slightly trending lower, but too early for guidance.

[Operator Instructions] We now have a question from the line of Tristan Lamotte from Deutsche Bank.

I was just wondering if we could see material upside to EBITDA from demand for Polysilicon for semis in 2026? Or is it more kind of the case that most of these capacities are already filled and therefore, it's not really going to move the dial and the pricing is fairly stable and on multiyear contracts? So I'm just kind of wondering about the materiality of potential upside.

Okay, Christian (sic) [ Tristan ]. Again, Christian, I'm happy to answer Christan's (sic) [ Tristan's ] questions. And the answer is yes. We do -- although we don't want to talk about guidance for 2026, I think this is the exception we can really make. We do see an upside to EBITDA from the semi side because of increasing volumes to be sold next year, coming also from our hedging line.

And maybe second, I was wondering if you could just talk a little bit more about where you're seeing pressure from China? And is there any reason that you're seeing why that additional pressure should go away at some point? Or is this kind of the new normal?

Yes, it's a very, very good question, especially the second part of the question. For the first part, where do we see pressure from China? Yes, it's in some chemical segments. And I would say more also on construction-related and standard product-related stuff. And the main reason is an underutilization of assets in China and a weaker-than-expected market development in China. So we see volumes from China pressing into Europe. Obviously, not so much into the U.S. because of the tariffs.

The question is, will it go away? I'm cautious on that. At least we prepare with our cost program to be -- to stay competitive and not to hope for that everything will come back. I think that's the right and cautious approach you should take in such a situation. And of course, we fight on the market for the volumes. And I think here also our very clear strategy on more specialties, on more elaborated products working together with customers is the answer in reducing the share of -- which can be taken by the Chinese or other competitors.

[Operator Instructions] Ladies and gentlemen, there are no more questions at this time. I would now like to turn the conference back over to Joerg Hoffmann, Head of Investor Relations, for any closing remarks.

Thank you, operator. Thank you all for joining us today and for your interest in Wacker Chemie. Our next conference call on the full year 2025 results will take place on March 11, 2026. As usual, we intend to publish our preliminary numbers at the end of January or the beginning of February. As always, please don't hesitate to contact the IR department if you have further questions. Thank you for your interest.

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.