Good morning, ladies and gentlemen, and welcome to our today's Q1 earnings conference call. With me, as usual, are Klaus Engel, CEO; and Ute Wolf, CFO of Evonik.

And with that, I would like to hand over directly to Klaus Engel for the presentation.

Thank you, Tim. Good morning, ladies and gentlemen, and welcome also from my side.

I am more than happy to provide you with a big picture for the first quarter of 2016 before Ute will elaborate on the more detailed financial afterwards as usual.

We had, all-in-all, a solid start into the year. Despite an ongoing, not very inspiring, global economic environment, all of our businesses developed as expected and guided with our Q4 reporting in March.

And consequently, we confirm our outlook for the full year. In Q1, adjusted EBITDA came in at EUR 565 million.

Resource Efficiency saw another quarter of good earnings growth. Prices in Nutrition & Care normalized as expected, and Performance Materials was impacted certainly by the lower oil price.

This led to the overall decline in adjusted EBITDA of 13% against the very strong prior year.

Our profitability nevertheless remained high. The adjusted EBITDA margin of 18.2% continues to be among the best in the European chemicals sector.

Our business fundamentals remained strong also for the start into 2016. In the first quarter, Resource Efficiency and Performance Materials showed a solid volume growth.

Our 2 growth segments, Nutrition & Care and Resource Efficiency, continued on highly attractive margin levels well above 20%.

As to CapEx, we carried on with the disciplined approach for the use of our funds. We are focusing on attractive and selective investment opportunities.

For example, we recently paved the way for the expansion of our PA12 powder and our polyamide fiber membranes capacities. And in Q1, CapEx was 15% below prior year.

Together with solid operating cash flow, this led to a strong free cash flow generation almost on prior year level.

Our 2 growth segments, Nutrition & Care and Resource Efficiency are built on a solid basis for future profitable growth. An important element for this is and remains, of course, innovation.

For example, we are innovation leader in high-value additives for Personal Care products, a fact that was just confirmed in China where we recently won the 2016 China Personal Care and Cosmetics Innovation Award for 2 new emulsifier systems; and in Resource Efficiency, our Oil Additives business just became founding member of the Atomic Research Center. This institute is a joint center of 2 top U.S universities, Penn State and Rice University; and leading industry partners, such as Honda, Lockheed Martin and Evonik.

It is devoted to the development of advanced coating formulations for resource-efficient lubrication.

With that for the time being, I would like to hand over to Ute, who would comment on the current development of our segments.

Thank you, Klaus, and welcome to everybody on the call also from my side. Let me skip to Page 7 with a well-known group KPIs and move directly to the operating segment.

In Nutrition & Care, Q1 turned out as expected. Sales decreased with both lower prices in volume.

The main reason for the lower price was Baby Care, where our selling prices reflect the pass on of a significantly lower propylene price. Lysine also saw lower prices whereas methionine price differentials was not that pronounced in Q1 just yet.

As guided, the year-over-year GAAP in methionine prices will widen in the 2 upcoming quarters due to the high comparables of last year. Volumes came in below last year partially in Baby Care and partially in methionine, wherein last year's Q1, we had enjoyed a very strong volume expansion.

In methionine, usually Q1 is a weaker volume quarter, especially in Asia due to the Chinese New Year. But this was not the case last year when we benefited from the very tight supply situation in the market.

Generally, the earnings development and methionine for the first quarter was in line with our expectations and in line with the assumptions incorporated into our full year guidance. Apart from the flat declines in Animal Nutrition and Baby Care, all other business lines like healthcare, Personal Care or Comfort & Insulation had a promising start into the year with, at least, stable or higher earnings.

Resource Efficiency continues its success path. Good demand led to solid volume growth.

Prices declined slightly as in some businesses who sustained low raw material prices, and we had to start on to -- start to pass them on to our customers. But overall, we benefited from the low raw material cost in Resource Efficiency.

Earnings grew nicely by 5% and the adjusted EBITDA margin climbed to almost 23%. We saw good business development across our key activities.

Silica benefited from strong demand for rubber and specialty silica especially matting agents. Crosslinkers continue to enjoy favorable demand trends across the whole value chain and almost all end markets.

And Oil Additives also had another strong quarter, especially in Asia and in Europe.

For Performance Materials, the first few months of the year were difficult. While volumes increased mainly from the new C4 capacities in Marl and Antwerp, prices were dragged down again notably by the low oil price.

Our methacrylate business showed a mixed picture. MMA was clearly weaker compared to a strong Q1 2015 demand, especially from Asian coatings and construction markets, slow down and supply was ample.

PMMA, on the other hand, improved year-over-year helped by a strong automotive demand from Europe and the U.S.

Products in the C4 chain helped the impact from further lowered NAFTA quotation. Prices, and therefore, sales declined notably.

Also price spreads over NAFTA fell further, leading to pressure on earnings. On top came inventory write downs in the magnitude of a mid-single-digit million Euro amount.

The situation, both in MMA and in the C4 chain, stabilized at the end of the quarter so that we are optimistic for a quarter-over-quarter improvement for Performance Materials in Q2.

With that, I hand back to Klaus for the outlook.

Thank you, Ute. So let me briefly summarize.

Q1 results demonstrate our strong business fundamentals also in 2016, good demand and solid earnings growth in key business lines, such as Silica, Crosslinkers, Oil Additives and Comfort & Installation; volume growth, particularly in Resource Efficiency and Performance Materials; a strong group adjusted EBITDA margin above 18%. Nutrition & Care and Resource Efficiency with adjusted EBITDA margins well above 20%; disciplined use of funds.

CapEx was 15% below prior year in Q1. And finally, a positive free cash flow generation almost on prior year's level.

Against this background, we confirm our outlook. So all-in-all, we anticipate slightly lower sales this year against a strong year 2015, and we expect to deliver an adjusted EBITDA between EUR 2 billion and EUR 2.2 billion.

That closes our brief presentation. Thank you for your attention so far.

And Ute and myself are now more than happy to take your questions.

The first question on methionine. Obviously, the prices came down further in April.

And my question is do you see more buying interests at the current price level compared to the demand weakness you are describing that you saw in Q1? And second question is still on methionine.

You are talking, in your presentation, you are talking about increasing supply during Q1. I'm just curious whether this is the supply from the new Adisseo plant you're talking about or is this still the ramp-up from the capacities that were brought online last year?

And the third question, if I may, on free cash flow. Obviously, last year, you had a very strong increase quarter-over-quarter in Q2 and Q3 versus Q1.

I think it would be wrong to expect something very similar this year. Still I'm just wondering, if you were to still expect a positive seasonality in free cash flow generation in Q2 versus Q1?

Yes, thank you for your questions. Let me start with methionine.

I think the price development we see is the normalization we expected. I think we described that several times.

So from our point of view, this development is in line with what we expected. Volumes for Q1, if you look at other years, is usually a weaker quarter with regard to volumes as Q4 is the ramp up for Chinese New Year.

And then once Chinese New Year has happened, there is some smaller -- or some slower volumes in Q1. That's the normal pattern.

This is what we have seen this year. Last year, as I described, we experienced a different development as the market was so tight.

If we look further down on the full year, we had a very strong year in the market last year. So from that point of view, there could be temporarily a lower market growth and shorter-term customer order patterns.

That's what we see. But again, here things are normalizing again.

We continue to execute on our value-selling strategies. This is what we have to thrive.

So all-in-all, I would say development, fully in line with our expectations and fully in line with the guidance. Free cash flow, there were some technical effects in Q1.

This is just due to the timing of certain payments we've had. At the end of the year, we've had payables, which were links to investment projects, that's normal.

But EUR 50 million of these payables were paid in Q1 so that goes into that change in the liabilities. So maybe if you take that into account, the cash flow looks somewhat more.

I think for the full year, we stick to our free cash flow guidance. We do not guide the free cash flow on a quarterly basis.

Thank you for taking 2 questions. The first one is in Nutrition & Care.

You're talking about improving Personal Care products, Silica and chemicals, et cetera. Can you talk about the margin gap of the products that are clearly under pressure, i.e.

Nutrition and Baby Care versus the rest of the division? That would be very helpful.

And then the second question, again back on the cash flow point and operating cash flow conversion. Apart from that timing issue, can you maybe talk a little bit about cash taxes, which definitely went up year-on-year.

And more generally, about other things we should be aware of when we think about conversion, EBITDA to operating cash flow conversion this year versus last year. Because obviously was very strong and I think a lot of us were thinking that this step-up was due to your good action as opposed to some exceptional factors.

Laurent, this is Klaus. Thank you for your questions.

I will start with some more color on Personal Care, and then Ute takes the cash flow question. First of all, let me say that we had a good start into the year with year-on-year improved performance across all market segments and regions as we speak about Personal Care, NAFTA, APAC and EMEA.

And this is mainly due to a favorable product mix, so we had a higher share of specialty businesses, actives and functional additives. We have seen a solid market demand in this spot of our business and that combined also with lower raw material costs.

This is also a segment of our business where we are able to keep our margins. You see this very nicely.

And it shows that here we have, of course, some pricing powers, power. In particular, we see increased contribution from our new oleochemical plants.

You might recall from other calls that we mentioned our activity. At Shanghai, China, all parts of the plant are now in operation, so the base business and specialties.

We are happy to report we have already a high utilization rate, at least in some products, like Esterquats for fabric softeners. We also had additionally, successful launch of new sustainable betaine products for local customers.

And from there, we are currently operating very successfully, deliveries to China, Japan, Vietnam and Philippines and Indonesia. The situation in Americana, Brazil that was the other major investment in the area of Personal Care, here production started up successfully.

The start-up measures were finished in December. Again, all product lines here are producing, including betaine and Esterquats.

The ramp-up under way is accompanied by a successful product registration with our customers. We see of course, a very particular current economic situation.

In Latin America, we are all aware of this. But this even more motivates our customers to switch to local supply, so that's not all bad.

We think the long-term perspective despite the very difficult environment in Latin America is clearly there. Industry-linked businesses, to finish on this issue, silicon-based products also continued to perform well here.

Comfort & Insulation with a strong performance, driven by the stabilizer business in all regions. Also here, we have a raw material advantage.

Interface & Performance, also good performance with the EU and NAFTA core, particularly in the EU and NAFTA core markets. And finally, also good start in Healthcare.

As expected, earnings are more back-end loaded in 2016, but we had a good start here and according to our projections in the year as well. But still please bear in mind that this is part of the business here that production starts in the first half.

And we get the billings here usually in the second half of this year, which is a particularity of the healthcare business. Ute?

Yes, okay. To the cash flow.

Cash taxes, I think, there are some, yes, regulatory and technical effects. First of all, we have tax ordered every 3 years, so there will be some tax payments related to prior periods just coming out of the tax audit.

And also, the tax prepayments are calculated with some time lag. So from that point of view, we will have higher paid taxes in this year.

I think we've described it here and there. But this is really more or less due to a very technical process, how the authorities calculate prepayments and run then the amounts out of the tax audits.

That's basically what you see in our cash flow.

Sorry, Ute, on the working -- go ahead.

On the cash conversion, I think, we've had an extraordinary year last year. And I think we returned to the more normal rates in this year again.

Net working capital, I think there is significant efforts that this will improve. So this should lead to overall positive contribution in the full year cash flow.

I would like to know the -- some more flavor on the raw material price impact and cost advantage in Resource Efficiency. How do you see this going forward?

And then particularly in the methionine volume, as far as I know they have 2 shutdowns in the second quarter. Will that impact your volume?

Or have you built up enough inventories that you run as the demand sort of pick up in the markets demand in the second quarter? Will you follow this?

Or are you affected by the constraints you have with these shutdowns? And I would like to know whether you could share a little bit more on what you see on the contract prices.

There was a considerable decline in methionine spot prices, but usually, that is not converting to the same extent to contract pricing. If you could, some flavor, what you see in your discussions with customers going forward?

How they see and the situation between rather high contract price in the first quarter, and now the very low spot prices you see currently?

Okay, Andreas, thank you for your questions. I'll start with the raw materials part and then Klaus will carry on with methionine details.

Yes, we've had, again some lower raw material prices in the first quarter. On the other side, we have seen at least with regard to the oil price again, some correction of this.

So going into Q1 -- Q2, we see a stabilization for the key raw material prices. So I think that was a -- especially pronounced effect in Q1.

What have we seen in Q1? Low propylene prices, business beneficiary from methionine, but has a negative effect on Baby Care.

So I think in that segment, there is a big off shape for that. Before I think we described that.

For MMA, we had in, especially in acetone and methanol, a decrease again in Q1. And I think we have also in -- with regards to efficiency in some parts of the product, some pass-on mechanisms.

If you took a PA12, they of course -- our customers know the inputs there will be, over time, a certain pass on of specific portions of raw materials.

Andreas, if I may take the one on the methionine shutdowns and to product availability, I think we have publicly announced that the shutdown of our biggest methionine complex in Antwerp will take place at the end of Q3, beginning of Q4. It's not 100% definite, but in this area.

And this is a normal scheduled maintenance procedure as planned. We expect no major impact on our volumes or sales expected.

Please first of all, remember that we are the only one that has a pretty high flexibility on world-scale plants on all continents in Europe, in the U.S. And in Singapore the demand supply situation is a little bit more relaxed this year, so we have a lot of flexibility to serve our customers competitively from all of these plants.

And of course, we have also built up some inventory to be prepared for this maintenance shutdown. So this is 100% business as usual.

On the general picture, of course as we said, we take on here our responsibility as a market leader. The situation is, as Ute has pointed it out, all in line with our expectations here and there.

You might have seen that we have sacrificed some volumes, so we have taken every business, the methionine, the competition, because we focus on keeping the margins still high. So that has caused some volume decrease, but we believe this is the right strategy for the time being.

Does this answer your question?

Yes. On the volumes side, yes, maybe some flavor how is the discussion with your customers running as when it comes to contract prices, given the very high spread between Q1 contract prices and very low spot prices we see right now?

I think it's common knowledge that we have stated this several times. What you can see and feed info in the other publications, it is somehow, of course, a proxy for the overall situation.

But you know that we have, that with a particular situation we don't have too much distribution. It's very, very rare.

We directly serve our customers. It's a very differentiated picture if we talk about the U.S., Europe and Asia.

All in all, what I can see, particularly to Q2 is that we expect a further price normalization. That is what we have in our plans and that we expect the stabilization of the price trends in the second half of the year.

It's fair to say, but this is not only true for the methionine business. It's for many, many businesses.

But in the overall environment, all customers have become more and more shortsighted on the order, and the quarterly foresight is already something. So that is something that we have to live with in our industry.

And we get more and more used to this.

Could you give us a bit more flavor on lysine? I mean the spot prices do seem to bounce, but you're still talking about it being a very difficult market.

So perhaps, it'll take a while for that to feed through. On the Performance Materials side, we've seen Asian betaine prices rise quite sharply.

And it appears that your U.S. prices are notching up.

So I wonder if you can give, perhaps, a bit more detail on the outlook you think for the next couple of quarters within that division because you -- at the start of the year, you had been pretty bearish on the outlook. And lastly, just on acquisitions.

We've seen some deals, some of the larger deals by some of your quoted peers leading to quite a poor share price performance. I think the market has taken a deal, 1 or 2 deals, a bit on the expensive side.

So what reassurance can you give us, your approach, doing whatever it is you'll eventually do that there will be a positive impact on the share price from any event --

Yes, I'll start lysine and Performance Materials, and then Klaus will answer the more strategic part of your questions. Yes, lysine had a slow start to the year.

Prices were down significantly. If you compare to last year's Q1, several factors impacted that.

China, again, changed their corn subsidies policy leading to lower corn prices, so that again led to higher production in Asia and then that flooding to the other markets. Furthermore, we had a drop of the prices for soybean meal.

This is a substitute for lysine and feed formulations. And so that again weighed on that.

And so from that point of view, also a demand depressing factor is the currently low production rate of the Chinese lime [ph] industry, so very much then food course in China with the several effects we had. We see actually that the markets bottomed out and slightly improve.

We have firmer soybean prices ahead of us. And we have seen some price increases announced in China, so I think there is some fair, fair reason to see we've seen the worst of it.

And I think it's a little bit too early to build on that. Performance Materials, yes, you were right.

We were somewhat cautious in the middle of the first quarter as the oil price was so low. Now, oil price and over the respective derivatives have regained some momentum in price.

So from that point of view, we are somewhat more optimistic for Q2 than we were for Q1. Spreads, perhaps, widened again.

So in the other product lines, MMA price have stabilized. We may continue to enjoy good demand.

So from that point of view on the back of these developments, as I said in my speech, we are somewhat more optimistic for Q2 for that segment.

Andrew, on MMA strategy, honestly, there has been no change in our growth strategy. And let me reiterate that finding the right targets strategically and financially is, for us, more important than simply closing a deal at a given point in time for maybe unreasonable prices.

Our MMA discipline in 2015 is approved for our diligent and deliberate approach. And so we will stay disciplined in using our funds also in 2016.

We are not under pressure and there are no MMA deadlines. If and when there's anything to report on the MMA side, we will let you and the public, of course, know.

Thanks for taking my 2 questions. The first is on the Q1 performance on a monthly base.

I'm not expecting you're giving me the numbers here. But some of your competitors have stated that the performance towards the end of the quarter has improved, especially end of March going into April.

And it would be great to give us new insights here on the run rate performance in the quarter. And the second question is regarding volumes in Performance Materials.

We've seen there an uptick of 5% in the first quarter. And so I tried to find out if that is more restocking related because your customers started to speculate on rising raw material prices?

Or if you can really put that into the box of underlying demand, which has improved?

Yes, Lutz, thank you for the questions. I think there is some limitations to really discuss developments month-over-month.

Overall, we have no -- not seen a real change in the sentiment over the last month, neither to the positive or the negative. The major trends we described for Q1, I think, are also true for the start into Q2.

I think one different angle is the oil price. I think I described it with the other questions.

If you look at methionine, we described that market prices will continue to normalize. Also here, there's more or less seamless extension of the trends into Q2.

And I think our activities in Resource Efficiencies will continue to do well and support the growth that we expect from them. Raw material tailwinds might persist at least for the next month.

So from that, I think that describes a little bit the trends. Other C4 volume increase is mainly our new capacity that we have in Marl and Antwerp, so we started to premarket these volumes very much ahead of the start of the facilities.

So I think that's the normal procedure if we have a new, big scale facility that we will make sure we have a certain utilization guaranteed from beginning on, so that's the main effect.

One question, if I can. The situation of the superabsorbents is quite dire.

So how do you see the overcapacities in the market? Is it a cyclical problem?

And is there light at the end of the tunnel? Or is this structural?

So how do you tackle the situation as a market leader?

Peter, of course, Baby Care, that is a difficult situation that will prevail in both acrylic acid and superabsorbents. We have seen newly negotiated lower contract prices and volumes effective being for the beginning of this year.

And as well, we have seen a continued pressure on the private label markets resulting in lower earnings in the first quarter. And we clearly expect this trend to persist throughout all of the full year.

So we are working on all parts of the value chain to improve this profitability. Therefore, we are working, for instance, on improvements in our raw material supply.

We have some options here. We are negotiating with one or the other partner in the industry to optimize this.

And in addition, we work, of course, on improving our process technology as well as our cost structure and further intensify our strong ties to our key customers. Overall, I have to say the global market is currently characterized by an increased competition and price pressure due to the existing clear overcapacities as well as further investment plans by competitors, in particular, in Asia.

You are probably aware that there have been significant capacity additions over the last years. And the challenging situation for all acrylic acid and superabsorbent producers would probably -- are expected to persist throughout 2016.

It will clearly take some time for the market growth rates, which we expect to be around 5% still, to absorb the additional capacities. However, it should be also noted that the superabsorbent demand growth remains sustainably at an attractive level, which is well above GDP.

So we need to be patient here. And you can be sure that we will try the utmost to use all the options that we have to mitigate the pressure here.

Yes. Thank you, folks.

Ladies and gentlemen, thank you again for joining today's call and goodbye.