Clariant AG

Anja Pomrehn - Head of Investor Relations Hariolf Kottmann - Chief Executive Officer Patrick Jany - Chief Financial Officer

Thomas Wrigglesworth - Citigroup Peter Clark - Societe Generale Christian Faitz - Kepler Cheuvreux Patrick Rafaisz - UBS Nicola Tang - Evercore Partners Patrick Lambert - Raymond James Financial Theodora Lee Joseph - Goldman Sachs Daniel Buchta - MainFirst Bank Paul Walsh - Morgan Stanley Gunther Zechmann - Bernstein Chetan Udeshi - JP Morgan

Thank you. Ladies and gentlemen, good afternoon or good morning.

My name is Anja Pomrehn. And I welcome you to Clariant's full year 2017 results conference call and live webcast.

Joining me are Hariolf Kottmann, CEO of Clariant; and Patrick Jany, CFO of Clariant. The slide for today's presentation, they can be found on our webpage, along with our media release, the financial review as well as a separate presentation on the Clariant sunliquid technology within the newly established business lines Biofuels & Derivatives.

I would like to remind the participants that the presentation does include forward-looking statements, which are subject to risks and uncertainties. Listeners and readers are therefore strongly encouraged to refer to the disclaimer which is part of today's presentation.

The replay of this call will be available on the Clariant website for 30 days. And with that, I would like to hand over to Hariolf to begin the presentations on Slide #4.

Thank you, Anja. Ladies and gentlemen, 2017 has been an eventful year for Clariant in many respects.

Therefore, I'm delighted to say that despite several special situations, which we were exposed to in 2017, we continued to focus on our businesses. And such Clariant delivered an excellent sales growth and profitability improvement in comparison to previous year, and made another step towards our profitability target.

The results are particularly encouraging as all business areas contributed to this expansion. Though our operating cash flow was below last year's figure, our income did accelerate by a fantastic 15% year-on-year.

Let us go through the highlights of 2017. For the full year, Clariant continued to grow sales at 9% year on year.

The sales growth was delivered by all business areas, driven by higher volume contributions across the businesses. The absolute EBITDA before exceptionals increased by 10% in Swiss francs to CHF 974 driven by Catalysis, Care Chemicals and Plastics & Coatings.

The responding EBITDA margin before exceptional advanced for the eighth consecutive year now, reaching 15.3%. The net income climb began in double digits, namely by 15% to CHF 302 million, while the operating cash flow declined to CHF 428 million.

Based on these solid results, the Board of Directors decided to propose an increased dividend of CHF 0.50 per share, which is 11% above the previous year. The distribution is proposed to be made from the capital contribution reserve.

Clariant's - Slide 5 reflects that Clariant's 9% sales growth in local currency was driven mainly by higher volumes, which were reported by all business areas. Acquisitions attributed 3% to the growth.

All regions showed positive sales growth. Asia and the Middle East & Africa delivered double-digit growth rates in local currency.

Europe reported strong organic growth at 7%. The Americas were mixed with double-digit growth in North America, lifted by the acquisitions, while Latin America was up 1%, though impacted by the weak economic environment, which however showed signs of recovery throughout the year 2017, especially in the fourth quarter.

Looking at the figures of the business areas for the full year 2017 in more detail, starting with Care Chemicals on Slide #6. In Care Chemicals, sales in local currency were about our expectation at 8% year on year.

This progress was achieved by the good advancement in both Consumer Care and Industrial Applications. Within the Consumer Care business, all three business lines, Personal Care, Home Care as well as Crop Solutions contributed to this expansion.

Personal Care reported good mid-single-digit, while Crop delivered again double-digit growth rates. The Care Chemical EBITDA margin before exceptional slightly declined to 18.4%, still within our margin guidance of 18% to 19% for the business area.

The decline was mainly due to the already communicated ramp-up costs for new capacities, the maintenance shutdowns in various locations in the second quarter, as well as some delay in passing on raw material price increases in the first six months of the year. The business area Catalysis expanded 13% in local currency.

The full consolidation of the Süd-Chemie India joint venture in the second quarter 2017 added 6% to the full year. As the organic sales progression was 7% in local currency it came from all business lines.

This significant uptick in the demand already started in the second quarter 2017. The EBITDA margin before exceptionals jumped by 200 basis points to 25.8%, as a result of the pickup of the business cycle, which is reflected by the strong top line sales improvements.

On Slide 7, we see that sales in natural resources rose by 14% in local currency, adjusted for the acquisitions in the Oil & Mining Services business, sales in Natural Resources rose by 3% in local currency. The Oil & Mining Services business, excluding acquisitions reported the single-digit sales performance for the full year, despite the fact that the market trend in the oil business continues to remain uncertain especially in view of customers operating expenditures.

Functional Minerals delivered mid-single-digit sales growth in local currency driven by Asia, notably China and also by Europe and the Middle East and Africa. The EBITDA margin before exceptional items lessened to 15.3% from 16.9% versus the previous year due to the current price consciousness of the oil market and weaker demand in the Refinery business, which we observed throughout the entire year.

Sales in Plastics & Coatings climbed by 5% in local currency for the full year of 2017. The Masterbatches sales expanded across all regions and mainly in Engineering and High Temperature Resins masterbatches and compounds as well as in the Packaging segment.

In Pigments, Asia and Europe were particularly strong, while plastic applications and special applications where largely due to the sales improvement. Additives continued to achieve excellent sales growth across all business lines, which were supported by strong demand in Asia, Europe and North America.

The EBITDA before exceptional items in Plastics & Coatings grew another 5% in Swiss francs to CHF 388 million year-on-year, despite a strong previous year. This improvement largely reflects a strong top line growth and a better product mix.

With this, I'd like to turn over to Patrick for the discussion of the financials.

Thank you, Hariolf. Good afternoon, ladies and gentlemen.

Let's now move onto Slide 9. In 2017, the gross margin decreased to 29.8% due to some lag in passing on raw material increases in the first six months.

The pricing dynamics picked up in the second half of the year, while the progression in volume reduced idle facility. Good increase the EBITDA before exceptional items by significant 10% in Swiss francs to CHF 974 million, mainly as a result of the recovery in Catalysis, and the good performance in the Care Chemicals and Plastics & Coatings.

The EBITDA margin before exceptional items, therefore rose above the previous year's level to 15.3%. Moving onto the Slide 10, net income climbed to CHF 302 million year-on-year, the 15% increase stems from the higher absolute EBITDA result and lower finance costs.

The operating cash flow declined to CHF 428 million versus the previous year, due to higher one-off costs and temporarily higher networking capital as a result of brisk demand late in the fourth quarter of 2017 and anticipated strong demand in the first quarter of 2018, especially in Catalysis. The net debt remained stable at CHF 1.539 billion in 2017.

Let's turn to Slide 12, for the discussion of fourth quarter of 2017. The fourth quarter developed positively and compares encouragingly in terms of sales and profitability to the previous year fourth quarter, which had its strong basis.

Sales in local currency rose 6% and by 8% in Swiss Francs, this rise resulted from progress in four business units. The EBITDA before exceptional items climbed by 9% in Swiss Francs, driven by the improvement in Care Chemicals, as well as by continuing solid contribution from Plastics & Coatings and Natural Resources, as a result the EBITDA margin advanced by 10 basis points from 15.2% to 15.3%.

The growth in different regions can be seen on Slide 13. The sales progression was mainly attributable to volume growth.

Acquisition effects were minimal in the fourth quarter and organic sales growth was a strong 5% in local currency. On a geographical basis, almost all regions contributed to growth.

Sales in Europe, Clariant's largest region increased by 6% in local currency and in Asia grew by 10% with a continuous strong development in China. While the Middle East and Africa improved by a very strong 11%.

In the Americas, the picture was mixed, though North America was slightly negative, Latin America showed a notable recovery and rose by a solid 7% in local currency. For the next few moments, I will focus on the development of the businesses in the fourth quarter, starting with Care Chemicals and Catalysis on Slide 14.

Sales in Care Chemicals advanced by 7% in local currency. The excellent sales development was supported by both the industrial applications as well as the Consumer Care businesses.

The EBITDA margin before exceptional items rose significantly to 19.4% from 18% the year before. The previously communicated ramp-up costs tapered off towards the end of the year.

And the product mix shift towards the higher margin segments was further intensified. Sales in the Catalysis business area increased by 1% in local currency.

The slower sales growth was due to forward shifts on the fourth quarter to the third quarter of 2017 as indicated previously. The EBITDA margin before exceptional items was high at 28.6% in the fourth quarter, but below the 30.7% in the same period of the previous year.

This excellent profitability level was reached despite the slightly less favorable product mix and a strong comparable base. Sales in Natural Resources business area climbed by 5% in local currency in the fourth quarter.

Both the Oil & Mining Services as well as the Functional Minerals businesses contributed to the growth. In the Oil & Mining Services, sales recovered slightly as industry conditions showed signs of improvement while remaining challenging.

Functional Minerals continued to report good sales growth in local currency, primarily supported by the foundry business. Sales were lifted by excellent growth in Europe.

The Natural Resources EBITDA margin before exceptional items increased to 18.1% from 18% amid an ongoing competitive industrial environment. Sales in Plastics & Coatings business area increased by 8% in local currency year on year.

Sales in Masterbatches reflected excellent growth across all regions, especially in Asia, in Latin America as well as in North America. In Pigments, all regions performed well, in particular China, India, the Middle East & Africa, and Europe.

Additives sales also progressed with robust growth in all major regions. EBITDA before exceptional items grew by 2% in local currency to CHF 72 million despite a strong comparable base in the previous year.

Moving onto the overview on Slide 16 and summarizing the fourth quarter of 2017. We expanded sales by 6% in local currency supported by four business areas.

The EBITDA before exceptional items grew by 9% Swiss francs to CHF 257 million driven by the strong improvement in Care Chemicals as well as by the continuing solid contribution from Plastics & Coatings and Natural Resources. As a result, the EBITDA margin before exceptional items on Group level increased further to 15.3% from 15.2% in the previous year.

With this, I'll hand back to Hariolf.

Thank you, Patrick. Ladies and gentlemen, we were initially planning on providing you with an update on the Clariant's strategy to date.

However, given the new situation with our new strategic anchor shareholder, we have decided to postpone the announcement of the update to summer this year, that we have concluded the discussions with SABIC new and further possibilities to create value. In the meantime, we will however continue to build on our existing strategy based on five pillars investing in the development of sustainable products and innovative solutions.

As a specific demonstration of our innovation, we want to give you some more insight on our sunliquid technology. The announcement of the commercialization of our sunliquid technology in autumn last year demonstrates that we are the right track for further growth and profitability improvement, and we on the right track while spending money for biotech research and development.

As you know, the global liquid fuel consumption and the greenhouse gas emission from transports are rising. This is in tandem with the limitation of fossil resources, energy security, climate change and environmental protection represent the central issues concerning today's society, governments and also the energy sector.

Reduction of greenhouse gas emissions and alternative sustainable sources of energy must be plan to reduce dependence oil. This is most evident in the transport sector.

In the U.S., in the EU and China politicians had laid down legal frameworks to promote the use of climate friendly energy sources such as advanced biofuels. The requirement for superior sustainability through the use of agriculture basis, thereby not competing with length requirements for food and feed has led us to develop the sunliquid technology clearing the way for the second generation of Biofuels.

Until now agricultural residues post many obstructions as a feed stock for the production of Biofuels such as the stable structure of lignin, a cellulosic material is difficult to breakdown enhance the sugars contain in straw remain largely unused they're validating to a costly process with the low yield of ethanol produced. However, with the development of the Clariant sunliquid technology we could address end result these challenges and therefore in the whole position.

Sunliquid process is based on feed stock specific bio catalysis, which efficiently provide excess to the difficult to extracted sugars, which are contented in the straw and integrated enzyme production simultaneously C5 and C6 fermentation, and then energy saving ethanol separation method. This gives rise to efficient, extremely economic and therefore competitive process for the production of cellulosic ethanol which in turn is almost carbon-neutral.

This process also overcomes the food versus fuel debate and offers an efficient way to reduce greenhouse gas emissions in the mobility sector. The sunliquid process as shown on Slide 18 comprises four steps, starting with mechanical and thermal pretreatment, which reduces straw to fiber bundles.

The second step is the enzyme production, which is an integrated part of the process itself, making the overall process very cost efficient. Tailored microorganisms, which are added to the straw, rapidly produce large quantities of enzymes.

The straw fibers are liquefied by means of these enzymes, which are especially tailored to the raw material used. The enzymes release all the available sugars in the straw and covert these sugar polymer chains into C5 or C6 monomer sugars like glucose or xylose.

The insoluble lignin is then removed and employed as fuel to provide the energy required throughout the entire production process. The sunliquid process is therefore energy self-sufficient, as no additional energy from fossil fuels is needed.

In the third step, all C5 and C6 sugars are fermented simultaneously with the help of special fermentation organism, thereby converting the sugar into ethanol. Due to the use of these specially developed fermentation organism, 50% more ethanol is being produced compared to a similar process.

And in the last step, ethanol is separated from water in a very energy efficient, highly integrated process using specialized absorbers. The thus separated pure ethanol can cut carbon emission by around 95% when compared to normal gasoline.

Thus within the production process, what makes the Clariant sunliquid technology so unique? Number one, the Clariant sunliquid technology offers a distinctive chemical free and simple thermal pretreatment which enable an optimal hydrolysis.

Number two, the unique process, integrated enzyme production, reduces costs to a minimum. Number three, enzymes can be adapted to the new feedstock allowing for efficient hydrolysis with maximum yields.

Number four, organisms used for fermentation can ferment old sugars that in both C5 and C6 sugars in a one-pot reaction leading to 50% higher ethanol yield than other processes. Number five, the byproduct lignin is used as a fuel and fulfills the entire energy demand of the plant.

No fossil fuel is needed in the process. Number six, in addition Vinasse and other byproducts from this process can be even used as an organic fertilizer.

So what does that mean in terms of outlook for the business line Biofuels & Derivatives? Let's turn to Slide 19.

As we just mentioned, the Clariant sunliquid process is a unique process that converts any lignocellulosic agricultural residues into cellulosic ethanol in a highly efficient, extremely economic, energy-neutral and sustainable process. Government programs in the U.S., EU and in China with other countries to follow require a statutory minimum volume of advanced biofuels being used, starting latest by 2020.

We therefore expect annual sales coming from both licenses for the sunliquid technology as well as from bio-ethanol sales from the production plant in Romania of at least CHF 100 million by 2021. The EBITDA margin will exceed 40% for the more conversion into cash will be highly attractive.

In September 2017, Clariant already announced signing the first technology license agreement with Enviral. And end of October 2017, we approved the investment of new full scale commercial cellulosic ethanol plant based on its sunliquid technology.

This production coming from this plant is anticipating for 2020. I'm delighted to see the high market interest in sustainable advanced biofuels and also to announce that the entire bioethanol production output of the plant is already contracted for several years.

Besides the success of sunliquid in advanced biofuel production. We see further application of the sunliquid platform into production of additional highly sustainable downstream products.

This opportunity from our innovation pipeline represents of further upside potential - a strong further upside potential not yet included in our guidance. The business line Biofuels and Derivatives is established as part of the business area Catalysis, since the beginning of 2018.

On one hand, you have heterogeneous Catalysis and on the other hand, bio-Catalysis that's the reason for this decision. Therefore, the EBITDA margin before exceptional items will be leaning towards 30% for the business area Catalysis in 2021.

With such attractive prospects for further growth, profitability improvement as well as cash constitution and outcome to the outlook 2018. As seen on Slide 21, we are convinced that 2018 will bring little change to the macroeconomic environment, therefore come to the economic view on the current business year for 2018.

Clariant expects the good economic environment in mature markets, which represent a high comparable base to continue. We also anticipated emerging markets will be supported especially in Asia, and I'm more confident that Latin America might improve as there are preliminary signs of recovery.

As to our outlook, please move to Slide 22. For the full-year, we are confident to be able to achieve growth in local currency to progress operating cash flow and to further improved absolute EBITDA as well as the EBITDA margin.

We confirm our target for the mid-term to reach a position in the top tier of our industry. This corresponds to an EBITDA margin in the range of 16% to 19% and a return on invested capital, ROIC above the peer group average.

With that, I turn the call back over to Anja. Thank you.

Thank you, Hariolf, thank you, Patrick, for taking us through the achievements and progression of the full-year and also the fourth quarter 2017. And as well as the elaboration of the uniqueness of our sunliquid technology, which really offers a great opportunity and excellent upward potential in the years ahead.

And with that, I would now open the line for questions.

Good afternoon, everybody. Hariolf, Patrick, Anja, thank you very much.

Two or three questions, if I may. Firstly, on your guidance for 2018, you talk about higher absolute EBITDA and higher margins.

Could you help break out some of the major components that you see driving that expansion into 2018? Secondly, obviously, as you go into your new meetings with your new shareholder, could you give us some sense of what your aspirations are that you would want them to do, them to proposal for you to work with?

Where do you see the upside potential in terms of having SABIC as a major shareholder? And then, lastly on sunliquid, by the looks of it, could you just explain in very simple terms what is unique relative to the other second-generation technology that's out there?

It looks, subject to the capacity data that you're able to build capacity maybe at half the costs of previous projects. Yeah, if you could help explain a little bit?

Obviously, you said what's unique, but what is unique relative to existing technology would be very interesting. Thank you.

Right. I'll start with your first question on your guidance 2018.

Yeah, we indeed guide for an further improvement of the margin and on the absolute EBITDA. Then if you look at the dynamics, we would expect clearly Care Chemicals to continue its progress.

They had been hampered in 2017 from the idle facilities, would expect those ones to be vanishing progressively as we increase capacity utilization and as we upgrade the product mixes, where we fill those capacities in 2017 by higher margin products. So I will expect less volume growth in Care Chemicals, but more margin increase in 2018.

We expect another year of good development for Catalysis, including a strong Q1 as we mentioned in the presentation. Therefore, those two elements will drive the margin up.

And then, I would say, if you look at the Oil & Mining development, that's one area where in 2017 we were slightly behind our plan to see the turnaround and improving figures. We probably have seen the turnaround, but not yet including figures in Q4, where growth has come back.

We would expect that if price levels continue at this level and production level as well increased, we would expect our sales figures to develop positively in 2018, which would be a good element to increase both absolute and in margin figures and as well as cash flow for the group in 2018. So that's the three, I would say, drivers.

Plastics & Coatings will deliver as usual a solid performance, but probably would not be the driver for tremendous increase from the absolute [Technical Difficulty] in the average right now. I'll turn now to Hariolf for the second question I guess.

Yeah, the second question about SABIC, our exploration and upside potentials. First of all, we have together with SABIC a very clear common understanding about the strategic intent of this strategic investment.

And we have signed a letter of intent before the transaction took place and this also shows clearly common understanding. SABIC currently is waiting for the anti-trust clearance.

Our lawyers are telling us this will take time until June/July. And for the time being we cannot talk about details of potential co-operations, business upsides, focus areas.

And I think it is - I really kindly ask you for your understanding about this situation. It will be much easier for all of you to understand the entire concept if you see the full picture, which will be currently painted and drafted in an implementation agreement.

And we will sign this implementation in June/July after SABIC has achieved the anti-trust clearance. And then, it is time to talk about the details and all - yeah, the facts and figures, which will be documented in this contract.

It's such too early to go into these details now and raise any kind of rumors or speculations. Your third question was sunliquid.

I can do this, I can respond very, very simple. The real difference to all other project is that our process works.

Okay. Sorry.

To be a bit more sophisticated. When you go the script I just presented to all of you, you have the points one to six talking about a very simple thermal pretreatment.

We have an integrated enzyme production to reduce costs. We have fermentation for all sugars.

Our yield is 50% higher than other process. We have energy more or less process without any fossil fuels from the outside.

And in addition, we also can use another byproduct as an organic fertilizer. I think this is more or less the summary.

And, Anja, just give me a - hand us the Slide 18, where you can find more or less everything what I just mentioned. Thank you.

Sure. Okay.

Thank you very much.

Yes, good afternoon. Thank you for taking the question.

First one actually, I fully understand why you can't talk too much about SABIC and their intentions. But as it sounds today, just looking at your previous intention for Plastics & Coatings over the medium term where this potentially could come out.

As it stands today, has anything changed with that? And that would be the first question.

And then, secondly, the gross margin was up in the second half, having been significantly down in the first half. Looks like you got to grips with the raw material cost inflation.

Just wondering if you feel in 2018 you will recover what you lost during the first half for 2018 on that gross margin. So those are the two questions.

Thank you.

Yeah, concerning Plastics & Coatings for the time being nothing has changed. As we always stated, Plastics & Coatings, especially Pigments and Masterbatches are businesses we look at strategic currency.

We always said if we find something which will support and increase our financial performance, we can use one of these businesses as a currency. And this is exactly current status of affairs.

Nothing has changed so far.

All right, I may add to the slight guidance from Hariolf that implies the Additives is that it's a business which we have reclassified as a growth business, and as we see tremendous potential as well for growth in the future and make some profitability as well. If we then now look at the gross margin improvement that we have had indeed in the second half, we actually almost closed the gap we had opened by half way, which really shows that we have improved on our pricing speed in the second half, which we had a bit commented on negatively in the first half, Q2 results.

We would expect this positive dynamic to continue, as businesses are very much focused on increasing prices. I think we have seen two waves of raw materials.

I think the first wave came at the end of last year, end of 2016, starting 2017, where in some businesses as we pointed in Q2 a bit slow and reacting. We got speed in, in the second half, which also contributed to the good margin development in the gross margin level in the second half.

And we would expect the businesses to tackle the second wave of raw material increase, which is happening now in a speedier way, as everybody is focused on it, but also to be fair as we are returning to more inflationary environment and therefore it is probably easier today to increase pricing at your customers than it was a year ago. So we are confident that we will be able to keep pace and process on raw material price increases.

How much we recuperate from what we've lost last year will be a little different in our business, it's a product mix topic as well.

Thank you.

Yes. Three questions, please.

Good afternoon, Anja. Good afternoon, gentlemen.

First of all, can you illustrate the CHF 45 million tax charge, you booked in Q4, and what would be your underlying tax rate going forward? Second, within Care Chemicals, how do you see the underlying demand trend for agrochemicals for this year?

And then finally, how much of your group operating cash flow comes from Plastics & Coatings in 2017? Thank you.

Yeah, we booked CHF 45 million tax costs, which is the depreciation of the tax assets in the U.S. as a consequence of the known tax reform in the U.S., we had taxes in the average are now worth less than they are - than they were with higher tax rates.

So we - that was one-time non-cash charge of $45 million. So obviously increases the tax amount you see in the P&L.

The underlying tax rate is unchanged to 25%, 26% for the whole group, and positive in a few years' time, a bit better as well. If you look at the Care Chemicals dynamics and in particular agrochemicals, so we expect Care Chemicals to continue to grow, as we guide for growth of 4% to 5% for that business.

And we have regularly outpaced this guidance in the last three years in a row, particularly driven by Crop which are another good year 2017 very much in line - actually exactly in line with 12% that would be as an average in last two years. We would expect this growth to continue in Crop as it is as well, but strong as well in Personal Care.

From the back of innovation and new products being launched, we expect here to a continuous good improvement in Care Chemicals. And I'm referring to cash flow in the proportion in 2017 was very much unchanged to previous years, where Plastics & Coatings is almost half of the operating cash flow from the group, but it's slightly shorter for 50%.

Okay, very helpful. Thanks, Patrick.

All right.

Thank you. Good afternoon.

Three questions, please. First on the working capital increase of about CHF 200 million, how much of that you think you can look down again in 2018, especially in the first half with the strong start in the first quarter?

And secondly on pigments and the EBITDA drop through from 8% growth in the last quarter. How come the EBITDA contribution our growth was so low at the top line?

And then lastly, on the one-offs and the CHF 50 million from takeover defense and merger talks that ended. Will you expect in the 2018 cash flow to see a reversible of this CHF 50 million in full?

Thank you.

Well, thanks, Patrick. So looking at the working capital indeed we had CHF 188 million increase in working capital compared to previous year, that brings the working capital as a percent of sales actually to 20.1%, which is quite a high figure which we have never had quite few years.

So if you look at 2018 cash flow generation, probably see two things. First of all, we'll avoid another increase, right, of what we did.

And therefore, mathematically the cash flow is really increased by that amount, because we've not absorb the increase again. And then to your question how much can we actually come down from that level.

While, we certainly expect if you take it as a percentage of sale that we shouldn't stay above the 20%, we should come down two figure between 18% and 19% of working capital. And the guidance that we prefer to 2016, where we'd probably 18.6%, if I am correct, so that's more or less the order of magnitude, where you'd see working capital and going forward again.

There is significant cash inflow from that development of working capital. Now if you look at the development of Plastics & Coatings in the second quarter, we need at a good growth of 8% in the fourth quarter, which was not totally correlated to the increase in the EBITDA margin, partly we do, because the component, which had a very good sales growth in the last few month of the year was long after which is as you know with the lower margin business in that segment.

And that's giving up to quite a strong demand development in the last couple of quarters and this is also expected for Q1. So we had Pigments anticipating good Q1 and therefore increasing inventory in Masterbatches, quite a lot more, which is quite logical from the flow in the plastic chain, but decrease the EBITDA margin in the first quarter, while also increasing inventory and reducing the cash generation in the fourth quarter.

And then looking at the one-off, indeed we spend them as more than CHF 50 million on the two projects, one is Huntsman merger, and the other one was defense against White Tale. That's something - not something which will hopefully come back in 2018, so from that point of view, it's a zero cost down for 2018, it's the one-off adventure in 2017.

Okay. So it's really purely what you mentioned takeover defense and the merger talks nothing else in there, which means completely reverse, right?

On this guidance of 50-plus, absolutely yeah.

Okay. It's still a big number?

Indeed, they are big effort [indiscernible].

Okay. Thank you very much.

Hi, thanks for taking my questions. I started first on with follow-up on Patrick's question on cash flow.

I saw some headlines this morning on Bloomberg saying that you're expected 2018 cash flow to match 2016. I'm not sure based on your answer to previous question, whether that it was actually a comment referring specifically to working capital or overall cash flow.

So if you could clarify that? And second question would be on strategy, if I think back to the Huntsman Day last year, you talked about how part of the rationalizing scale and the size was important to succeed in Specialty Chemicals.

I appreciate you had change a lot of shareholder in this time, it's really talk of ground on that. But has your view on sort of scale changed since last year?

And them the third question would be on Catalysis, what do you expect the underlying market growth rate to be, in which part would you expect to see the most growth and can you give us a sense of how the mix shape of this year? Thank you.

I take the first - third question first and then I'll pass on to your strategy. So looking at the cash flow for 2018, it will be just additive to it now and the question Patrick had before.

I think the main improvement will be the non-increased in absorption by working capital, right. So if we take the CHF 428 million of 2017, you add back the increase of working capital of CHF 188 million and then you probably - we will come down from CHF 20 million, where we are today to when I said before between 2018 and 2019 will be a reasonable view.

With that all adds quite a lot of cash during - for the year 2018. If you then deduct, yeah, higher tax with people of higher results and so on, you probably will come in your calculation to something evolve CHF 600 million - between CHF 600 million and CHF 700 million, which is where the figure of 2016, I think it's right.

So that's why, I got it for earlier today is that, if you take normal view on cash flow from 2018, we shouldn't be far off the year 2016. Now looking at Catalysis, while the growth is certainly there, as you've seen in second quarter, we had 7% growth organically 2017, and we would expect to be in 2018 within our guidance of growth which is 6% to 7%, around that figure.

So it looks like for the good year for Catalysis as we are guided for already. We would expect probably the mix to be slightly different, it will be probably as far as we can see today more in the Syngas area and the Petrochemical side, therefore slightly dilutive to margins on the one hand, should be progressing with polypropylene plant on the other hand.

And therefore, we'll be offsetting it's rather more unfavorable product mix, just on the pure mix point of view in 2018 by increased sales and reduced costs and added [constructive costs for our TP] [ph] plant in 2018, as we ramp-up production there. So overall, I'd say from the margin guidance will be well within our guidance of 24% to 26%.

And then, we're seeing during the year, how the individual shipments pushup within that range.

Everything, what we stated or what we mentioned justify the merger with Huntsman is still valid. When you ask yourself why is Clariant trying to do a merger?

I refer to the five, six strategic options, I explained several times to crew of analysts, so even I think to you in conference call a year or two years ago. We can continue on our own and try to implement our strategy and achieve our objectives.

This is an evolutionary process and it takes time as you can see we are on that process. If you want to accelerate or intensify your strategy implementation, you can do a merger with a peer.

You can make a transformational acquisition or you can try to find a strategic anchor shareholder, we'll take 25%, 30% of your company and give you the opportunity to increase the operational performance potential, the cash flow profile, the balance sheet, the size of your company, to stabilize the company and to offer more opportunities for the future. And the problem today for me is that I cannot explain to you in detail now, while role SABIC and our strategic intend to place from a strategic point of view.

But when we come forward with our strategy update in summer and this will take place after SABIC got the antitrust clearance after we had signed - we will have signed our agreements. And can talk about the details of this strategy update, you will certainly understand that we can adjust our corporate objectives and can adjust our strategy to get there.

And you can understand, then you will understand that this is an acceleration of the implementation of our strategy to get up to the top tier of our industry.

Okay. I look forward to some of them.

Thank you.

Absolutely.

Hi, good afternoon, everybody. Thanks for taking few questions.

Just one is specifically on oil and gas post the acquisition. If you could give us a bit of split - geographic split.

I think for me it's about CHF 720 million, but if you could confirm that? And going forward into 2018, where actually - in Q4 - geographically what has performed, what has underperformed in your view in terms of both volumes and prices.

Is Latam coming back, so a bit of color on oil and gas situation there? Second question, the one-offs, I think I've read about CHF 127 million one-off, if I take the CHF 50 million of the Huntsman and the defense outflow, what is the remaining part of it, maybe I'm off on that number.

And third question regarding FX next year, could you remind us of what you think the impact, not so much on top line, I think, we can do that bill on the cost base and then on the net exposure you have. How you see that playing into 2018?

And final question, sorry for that here. Is there anything we should figure in terms of margin for Catalysis regarding the sunliquid move, I guess from corporate to Catalysis, in terms of early costs maybe what we should think about when [perpex should you extra] [ph].

Thank you.

All right, Patrick, I'll take your question in the order, right. So starting with oil and gas, we had certainly a better quarter in Q4, it's a quarter where we actually grew in the oil business.

I think from the geographical point of view, it really was linked to an improvement in Latin America. We had a good coming back of Brazil and in particular of oil production.

Europe was rather flattish and the U.S. started to come back with a slight positive increase, which was good news, given that we have been quite under pressure in both those regions during the whole 2.5 years before, right.

So from that point of view, I think, it is good in the fourth quarter, the oil business and itself grew more than what we've indicated for Natural Resources, we think that Refinery business was a bit below over the previous year. So it was above the 5%, which is a good turn, right.

And from the geography, I think what brings, I hope this - increasing dynamics in the U.S., where we look forward to have a return on the expanding market positions for the organic growth we have had below certainly through acquisitions we have done in the U.S. So there will be something to watch during 2018 and an important development.

I think that the volumes are coming back, pricing is still quite under pressure in the oil business per se. We mentioned the price consciousness of our customers, which is still there.

But we would or we see at lease that there is new business coming online. The new projects being down and that's the first time this business overall is getting more attractive again.

When we look at the one-off costs, we in total, if you sum up restructuring transaction costs impairment [Technical Difficulty] million in the P&L for the year 2017. We talked about the CHF 50 million plus for the merger and the defense aspect of 2017 that's really something exceptional.

But the other exceptional was still quite high impacted by - quite a high double-digit amount CHF 30 million, CHF 40 million of environmental provisions for cleanings up sites in Latin America and then in France, which is something what we do the charge now and the cash out will be for quite a few years to come within portions. And the rest was more than the usual one-offs we had as well integration costs for instance for the two acquisitions in the U.S., so overall, quite a high amount.

If you look at 2018 expect to strongly come down in 2018 as far as we can see today, I think our guidance for reaching 1% of sales should something we look forward to be in 2018.

Why was actually the cash outs on restructuring?

The cash out was quite significant, not obviously the CHF 180 million, but above CHF 100 million, yeah.

Okay.

All right. So that's on the one-off side, so if you look at improving net result for 2018 that's certainly one factor, yeah.

Looking at the FX - foreign exchange exposure it is fairly unchanged as you know we have more visible long position of $500 million, short position of €100 million. And a cost block of CHF 250 million, CHF 300 million.

So it's been quite a favorable year 2017. Actually, if you really look at it, you have the exchange rate the average one at the end of our financial review there.

For the P&L, it's been totally flat on the U.S. dollar side and almost flat on the euro.

So we had a good stability there, which allowed us to grow in absolute figures, which sometimes does not happen. If you look at last development of the Q4, we do have in our view of more negative development, because you have a cheaper dollar, which reduces obviously our profits as well on dollar, and increase our cost base as we are short in Europe.

So from that point of view, we enter the year with less favorable foreign exchange situation as we started 2017, so the years long and no guidance for 2018. But I think in principle, slightly unfavorable.

But we'll see how much it fluctuates for the year, where that the end of the day it's really significant.

Thanks.

And then on your…

Catalysis margins?

Sorry?

Catalysis margins with sunliquid…

Yeah, right. You're absolutely right, it's a good question we transfer part of the cost from the development of bio-catalysis of sunliquid technology from corporate cost to Catalysis, we would expect therefore the slight reduction of corporate costs looking at 2018.

I think, low-double-digit Swiss Franc amount is a reasonable guidance. And it should not affect negatively the profitability of the business area.

Catalysis as we mentioned before, we expected to be in the range as we have defined more depending on the actual development of the product mix within Catalysis, then this additional costs coming over. With those additional costs it will oil they'd be more or less covered by…

By the mix.

The license that we have and building of engineering charges, we charge our customers for building their own plant. So we got more or less a breakeven situation there on biofuels in 2018.

Thank you very much.

Hi, good afternoon. Thank you for taking my questions.

I've got two, if I may. And the first is actually in your Care Chemicals margin guidance of 18% to 19%.

So I was just wondering, as I strip out all the one-off you had in 2017, including your glucamide plant ramp-up costs, your maintenance and some of the raw material headwinds, I got easily get up to the top end of that range. And considering what Patrick said before about how is expected grow margin this year, just based on higher capacity utilization and better product mix.

Is that fair to me assume that the range 18% to 19% is fairly conservative? And the second question is, whether you can actually get an update on your active - new active kind of entry in the last year, whether we can consider any kind of contribution in 2018 or 2019.

And last is on your Natural Resources margins 18.1% this quarter, and if we see how growth is pickup in the U.S., and if we expect that to continue acceleration, I think production takes up. And if we see pricing increase, is the fair assumption to assume that 18.1% sustainable and it's very Thank you.

Thank you for your question. So we have Care Chemicals, the unit we have a good progression that business area since 2010, when we shifted strategy to focus on the high margin segment.

I think, we have been in that 18% to 19% range we've got a few years in a row. We eroded a little bit to 18.4% this year, because of this ramp-up cost in our facilities.

As we work through the - we are progressing to our top of the range. But I would say for 2018 that's a scope.

Now, we ambitious enough to consider higher targets for that area, I think, we will generally speaking the strategy of the group during the year, and come out with some new guidance, and that would probably the point in time to address to communicate our next ambition level for that business area. But I think, if you look at 2018, we will be in there, but obviously it's not the end of the road for that business area.

In particular, because also for your second question. So we have entered in our active - in the active ingredients in Care Chemicals particularly for personal care.

I think, we've focused on brand new R&D center in Toulouse in France, which is the cosmetic care center here for all the developments in France, we are very active there, coordinating really some innovations there with coordination of the new products in our joint venture in Korea and products from the Amazonian forest the active ingredients there from Brazil. So we have a nice very high-tech active center, which is starting to have sales.

So there has been a small contribution in 2017, and we expect this business to obviously take off in 2018, 2019. But that I'd say is currently included in our guidance for Care Chemicals, and really one component when we revisit the target range for that business during the year.

So a bit too early to put figures on it, but it's absolutely correct that we are progressing very well in this area. Looking at Natural Resources and Q4, Q4 is already - always quite a good margin quarter for that business, right.

I think, typically this business is a bit lower in Q2, Q3 and as a stronger Q1 and Q4, also because of the Refinery business, which is a more seasonal high margin business, which kicks in, in Q4 and Q1. So don't take the 18.1% now as a guidance for whole year.

But you're absolutely right, that when business picks up in terms of volumes and more importantly in terms of prices and you feel new innovation, we put, we would expect margins to develop further. But we'll come back to that, I think, as well, when we revisit our guidance for the business area and our strategy update during the year.

Nevertheless, I would say, we don't expect this business to grow risk evolve the 20%, 21%, and I don't think anybody earns 20% in that industry. So I think it is very much about increasing size, getting higher sales, higher volumes, higher absolute EBITDA that with a slight progress in the margin.

Okay. Fantastic.

Thanks very much. We look forward to your strategy update then.

Thank you.

Thank you.

Yes. Thank you very much for taking my question, Mr.

Kottmann, Mr. Jany.

Actually, I also have three ones. The first one on CapEx, and here we have seen a significant decline in 2017 now.

Have you reached a new normal level, because you said in the past already that CapEx should come down or was there any timing delays, so what can be expected going forward in 2018 and thereafter? Second question than a bit broader more on the guidance, I mean, you still say margins 16% to 19% as a target, we are still a bit below the lower end, a bit more far away from midpoint of that.

So what is really needed for you to exceed the 16% threshold and even more to move closer to the middle part of that? That would be very helpful.

And then the last one North America, you said in Q4, the growth was basically flat with 1%, if I remember correctly. Oil & Mining services was weak as known before or at least was not that strong as you might wish.

Are there any other reasons why just 1% and or any more behind that number? Thank you very much.

Yeah, looking at the CapEx guidance, where we effectively had a reduction of CapEx this year to around CHF 150 million which is below the CHF 297 we had in 2016. But I would maintain the guidance that we're going to spend around CHF 300 million, right.

It really depends on the single projects. In 2017, we had no big project coming on stream.

That [fifty-plant modest finish before and flukamide] [ph] as well. For 2018, we will start to invest in our sunliquid plan, which is talked about before, it was action planned in a couple of BUs, particularly in BU additives as well.

So I would rather maintain a guidance of CHF 300 million for 2018 and the years to come, right.

Okay.

When you look at the EBITDA margin target of 16% to 19%, it is indeed a progress we're doing every year, but a slow progress. I think if you look at the business development - or 2017, let's say, has not been as good as it could be, and as competitors have seen the environment.

If you look back in 2016, we had a decent development as well. But we had catalyst down, we had oil down, and we had Latin America down.

2017, since the second quarter, we see catalyst coming back. So that is one negative off, but you still had oil in Latin America being down.

In 2018 and 2019 as we see oil coming back progressively now, and Latin America has already turned the corner in our view. You will see fundamentally that we finally can progress as the general economic environment would actually suppose we do.

So I would expect a step, progression towards its margin target swiftly in the next one and two years, right. So we will get there, just because we had a little more negative headwind than probably it's apparent from the good GDP pickup in numbers.

And then at the end, the fundamental factor it's growing Catalysis, growing Care Chemicals and having Natural Resources contributing on absolute numbers. So it's being less dependent from Plastics & Coatings as we increase the margin in terms of shipment [ph].

So we are getting there. We were a bit penalized in 2017 and 2016.

But I think the environment, the business dynamics is more favorable, progression towards the margin for 2018 and 2019.

Let me add the following statement concerning the 16% to 19%. 2017 was a booming year for the chemical industry.

That means it goes without saying that our expectation is that we are at 19% in a year like 2017. And the management is not satisfied with the 15.3%.

This is very clear. This is exactly the reason why we tried in several years to find ways, if you don't continue standalone, different ways of meeting our own objectives.

And also to make it crystal clear what we don't want to is to have a cost reduction program with CHF 150 million, take cost out, because then the company cannot deliver mid-term on these objectives. Everything what Patrick said is totally correct.

And we are convinced that we can make these 16% to 19% over the cycle either standalone in a different way or together with a partner as I already explained to you a few minutes ago.

All right, coming now to your third point, which was the evolution of the U.S. in the fourth quarter, actually with a slight reduction of 1% of sales in North America.

So…

That's right.

Not even positive, but it's negative 1%. It is plus 1% for the year.

When we show 11%, it's due to the acquisition. If you take the acquisitions out, we're actually plus 1% for the year.

But we are minus 1% in Q4. And that actually didn't come from oil.

Oil was as I indicated before, actually turning around and getting growth back. So that's the positive view on 2018 for oil.

It really came more from actually in that case, Catalysis, which is a - which has a very high basis. You may remember that we had a - in the previous year, it's quite a few new crackers and capacity is being built in the U.S.

But we delivered a catalyst for almost all of those crackers being built. This is now finished, this wave of CapEx.

So what you see is that in 2017 catalyst grow in the Middle East. In 2018/2019 we rather see China as the main factor of growth.

But if you compare in a geographical base, catalyst will be eroding that base in the U.S., right. So that was the main driver if you look at the single quarter, why the U.S.

was negative. The other businesses were actually growing in the U.S.

So it is not as bad as it looks. But again, just to pick up on what I kept - as I was saying before, we are not happy either on our growth in the U.S.

It should be higher, but in that particular quarter, it was logically impacted by the higher base in CapEx.

Okay. Thank you very much, gentlemen.

It's very helpful.

Thanks, guys. Hi, Hariolf, Patrick and Anja.

Thanks for taking my questions. I'll make them quick.

Two please. Would you consider larger scale M&A?

That's my first question. And secondly, in terms of the strategic developments set foot, my focus really is on the Catalysis business and putting that against the backdrop of all of this investment that we're beginning to see bubbling in the background in terms of the integration from oil into chemicals, we're seeing a big reacceleration in that theme.

Middle East is obviously a key driver of that. And just wondering if you're beginning to see that, I know it's very nascent.

But if you're beginning to see new project opportunities, sizeable ones, emerging on the radar screen in your Catalysis business, and obviously, their synergy there with the new shareholder as well. I wondered if you could share your thoughts with me on that one.

Thank you.

Thank you. I'll have the second question first.

I think on Catalysis indeed we indicated that we see a good demand development in 2018, 2019, probably also in 2020, but it is too early to talk about 2020 now. And that is based on a recovery in China.

And as just indicated, we expect China to come back as the biggest market in the next couple of years. But also, the Middle East is actually quite strong.

And that's really what made the difference in 2017 already. And that's due to good profitability, good projects, but also new installations, particularly as well in oil to chemicals as you say, but also gas to chemicals as well, where we have had good developments in new contracts being made in the Middle East.

So overall, I think a very good development where we contribute as well with new technology.

Can I be a bit more specific, Patrick, just in terms of, so we're seeing huge projects being announced, the Yanbu one between Saudi Aramco and SABIC before Christmas is a great example? At what point, would we expect to start to see that translate into Catalysis opportunity for you guys, because a lot of these projects are still in the feed stage, right?

I'm just trying to understand at what point you would be brought in potentially to win the contract for the provision of the Catalysis from a - the catalyst from a personal basis? Is that like years away, because I'm not - I know 2018, 2019 and 2020, I know that that trajectory is already in place?

But I'm really talking about the hundreds of billions of dollars of investment that's emerging on the radar screen, because the energy sector is pushing back into chemicals again.

Yeah, you're right, I mean, we haven't talked our pipeline for 2021, 2022, 2023, but I think it's certainly today that we are preparing those contracts and we are winning contracts for 2021, 2022, right. So from that point of view it looks good.

But the actual contract will be signed in those projects when the engineering is done, when they have design of technology. And then there will be a competition between different technologies.

If one engineering company wins that will be our catalyst, if the other wins it won't be ours. And that is how it's done.

The actual delivery, actual sales, is before completion of those projects and that's in the next decade, right.

Got it.

So we are totally on track. We are very optimist of our catalysts, but you won't see that in the numbers until a few years' time.

Understood. And just on the M&A front.

Yeah, responding to your first question, our position concerning transformational acquisitions has not changed so far. We are continuously evaluating different cases, case by case.

And for the time being, there is no real convincing case on the table. Let me say it in that way.

This issue is also a part of the discussions with our new strategic anchor shareholder and you maybe can expect some additional information concerning this packaging in the summer time.

That's really clear, guys. Thank you very much.

Thank you.

Thank you.

Oh, hi, good afternoon, everyone. Thanks for taking my questions.

First one is on the sunliquid project, please. You mentioned it's the most cost-competitive technology out there at the moment, given the unique features you highlighted.

What is the cost in dollars per gallon or whatever metric you use at - that you're targeting for that project once it's on stream? And following up on that, can you just confirm that there is no fermentation technology out there today to ferment the C5 part of the sugar and that this gives you the 50% uplift in the yield?

That's the first one. And the second one, just on your outlook, it sounds like you're getting incrementally more positive on Latin America and improvements in the economy there.

Can you just highlight what's driving that improvement and where we will see that in your business? Is that more in the industrial side or more in the consumer side of things?

Thank you.

All right, starting with the Romania and Latin America, I think something we already highlighted in Q3 that we have seen a stabilization in [Technical Difficulty] the getting bigger over the year as we then compare to annual basis. But the trend has turned already, so I think we can be positive on [Technical Difficulty] on that.

And I will expect the whole business to benefit. Right now, we see this development, as I mentioned before, positive in oil.

It is positive in all the plastic chain, consumer goods as well, Masterbatches, for instance, within Plastics & Coatings had a tremendous Q4 already in Latin America, which is typically a good indicator for the general economy picking up overall as the leading indicator. So right now, obviously, Care Chemicals have still not seen most of that growth returning.

But that's what we will expect during 2018 as well.

Coming back to your sunliquid question and starting with the technology part, as I already mentioned, our system can be used for the fermentation of all sugars, including C5 and C6 in a one-pot reaction, which then leads to 50% higher ethanol yield than other process in the industry. Concerning cost and price, we don't disclose these details today.

I just referred to what I said. The EBITDA margin of this investment exceeds 40%.

And the entire output of the production in Romania is contracted for several years. Therefore, we are really on the safe side regarding all financials of the…

Okay. And where do you feel without giving absolute numbers on the cost of the ethanol with that production route, where do you feel your competitive advantage is within the cost structure?

Is it on the enzyme side or is it more on the yeast side or the pretreatment? Is there any particular pocket you would highlight?

I would say in all five steps, in all five steps.

Okay.

The pretreatment, it is the fermentation, it's the enzyme system and it's the water ethanol separation at the end.

Very clear. Thank you.

All right, so I think if you look at Q4, so whether that question is for Q4, we have seen a good development in Personal Care and Crop Solutions. So starting below double-digit, but pretty close to it for Personal Care and Crop, so a good development.

Deicing itself was not a measured factor of growth. In Q4, it's actually below the areas growth, which we show.

So it is okay. It wasn't a bad year, slightly improving versus previous year.

There was probably more business in Europe, if I'm correct, than in the U.S. compared to previous years.

But it wasn't a major growth driver when compared to previous year for Q4. Q4 growth really came through, yeah, good Personal Care business, in that particular case probably higher than crops for the quarter.

And good development overall for the more GDP dependent businesses like Plastics & Coatings and construction chemicals as well.

Yeah, hi, thanks. I also had one question on cash.

You had almost, you now have a run rate of close to a CHF 1 billion in terms of adjusted EBITDA. But when I look at the sort of equity-free cash flow stripping out CapEx and interest charges, the free cash flow last year was just about CHF 60 million.

I understand that our one-off cost et cetera, which sort of depresses the cash flow last year. But do you have a sort of a target in terms of how we should think about the free cash flow, normalized free cash flow conversion of Clariant in, say, mid to long term?

That's number one. And number two question was, just looking through your, again, on Natural Resources, we were in a situation in the first three quarters of the 2017, where the margin was down year on year?

In Q4, you sort of almost got to a level of Q4 2016. So what changed in terms of, was it just a mix or is the pricing environment improving to?

And the last question is on your initial comment around SABIC and anti-trust. I'm not sure why anti-trust is required for this transaction, because it is just a sort of a 25% stake.

So can you just explain why is the anti-trust required? Thank you.

Sure. Starting there, your question by the order.

In cash, indeed you, if you take the cash conversion you all have had, particularly in 2017 quite a big impact on the exceptional items. As we talked about before, we have more than CHF 100 million of cash-outs for one-offs.

And then we had this previously mentioned and discussed increase in working capital of CHF 180 million. I think these things - our working capital as we talked about has to normalize actually to be accretive.

Now, that we have 20.1% of working capital of sales, we have to come down to levels where we have been in the last few years between 18% and 19%, closer to 18% actually. So that will generate quite a lot of free cash if you start calculating free cash for 2018/2019.

I think so probably if you reclassify for that, assume the reduction of one-offs, typically which anyway tailor off, so those costs are gone. And then you have the generally discussed reduction of other one-offs to below 1% of sales.

That gives you quite a clear view on increase of free cash flow generation for the group. Therefore, as we mentioned earlier as well, 2016 is not a bad base, can be extrapolated on those assumption for 2018/2019 quite easily, and giving actually quite a nice return finally on free cash flow, clearly, a focus of ours.

When you look at Natural Resources, you're right we were having the crisis back in 2015, 2016, 2017, so having decreasing business environment and therefore profitability, which really hit us more in 2017 than to previous year. I think, in each single year we beat our competitors in terms of sales and margin progression.

But it - 2017 was harsh on us than to previous years. By Q4, we have turned up and Q4 margin is actually slightly higher, same level at 18.1%, to 18% in the previous year.

So we are slightly turning the corner on the back of - still a good performance of Functional Minerals, which I haven't talked about in the call. But they're doing a great job and the Bentonite business is a very nice business, very stable business.

And Oil, as we mentioned before is turning around by having with some quite a solid growth again. And that immediately gives you a nice leverage on the EBITDA as well, because that business is SG&A business, that you don't have a lot of CapEx.

But you do have cost structure you need to have present in those fields, on those oil platforms. And therefore, when the volumes are down, the prices are down.

You are stuck with having a quite a high SG&A base, cost base, which you can reduce totally dramatically either, if you want to keep in - being in business. So really need higher volumes and/or higher prices to leverage that SG&A cost base which is necessary for the business in a better way.

So that's what started to happen in Q4 and therefore that's why we are positive when we look at the development of the oil mining part of the business for 2018 and 2019, as volume recovers and pricing hopefully recovers as well. And your last question was…

Concerning anti-trust.

Anti-trust, oh, yes, concerning, so obviously, it is an anti-trust theme, just because depending on the stock exchange regulations and the competitive regulation in different countries, around 10, 11 countries in the world, you do have to register to those authorities when you have a significant participation, typically above 20% or above 25% depending on the jurisdiction. All right, so that's really - as you rightly say there is no real competitive issue add-on.

But it's a matter of going through the requirements and the legal requirements in each country.

Okay. Thank you very much.

Okay. Ladies and gentlemen, this concludes today's conference call.

I do apologize that we don't have the time to respond to all the questions still in the queue. However, Investor Relations team is available for you for any additional questions.

And I am sure we will see many of you during the next week to come. So once again, thank you very much, and bye-bye.