OMV AG

Good morning, ladies and gentlemen. Welcome to OMV’s Earnings Call for the Second Quarter 2020.

We hope you and your families are well. With me on the call are Rainer Seele, OMV’s Chairman and CEO; Reinhard Florey, our CFO; Hans Pleininger, Deputy CEO and in the Board responsible for Upstream; Thomas Gangl, the Board Member for Refining & Petrochemical Operations; and Elena Skvortsova, who joined the OMV Executive Board mid of June and is responsible for Marketing & Trading.

Rainer Seele will walk you through the highlights of the quarter and will present our new ambitions for carbon reduction. Following his presentation, all Board Members are available to answer your questions.

And with that, I’ll hand it over to Rainer.

Yeah. Thank you, Florian.

Good morning, Ladies and gentlemen, and thank you for joining us today. The second quarter of 2020 was one of the most challenging quarters in years.

We were confronted not only with the biggest oil crisis in decades, but also with an unprecedented collapse in demand due to the coronavirus pandemic. As a result, we have seen significant and simultaneous deterioration in both segments.

Whereas Downstream proved more resilient and performance declined to a lesser extent, Upstream was substantially negatively impacted by extremely low oil and gas prices. Let me start by providing a brief review of the economic environment.

The oil market experienced extreme volatility during the quarter. Following a prolonged period of disagreement among OPEC+ on production cuts and a decrease in global oil demand by more than 20 million barrels per day in April, due to the COVID-19 pandemic, the Brent price fell to a 21-year low and WTI turned negative for the first time ever.

After the trough in April, prices rebounded to around $40 per barrel, as demand slowly showed signs of recovery, and global oil supply fell sharply due to the agreed OPEC+ cuts. Brent averaged $30 per barrel in the quarter, down 41% from the previous quarter and 57% from the same quarter of last year.

European gas prices further declined in the second quarter. CEGH spot prices dropped 57% compared with the second quarter of 2019 and 37% versus the first quarter of this year.

The decline was driven by a combination of weak demand, high storage levels and increased LNG imports. The OMV indicator margin plummeted to $2.3 per barrel, which was 54% lower quarter-on-quarter and 29% down year-on-year.

This was driven by a sharp decline in demand due to the lockdown measures in response to COVID-19. While the margin in April was supported by a sharp drop in crude prices, the dramatic demand decline across the entire product range sent cracks into free fall in May.

Towards the end of the quarter, crude prices regained strength and contributed further to the overall decline of cracks, even turning margins temporarily negative in June. In addition, we have also seen an increase in the Urals-Brent differential, which adversely impacted the Petrom refinery indicator margin.

Ethylene and propylene margins declined by 14% quarter-on-quarter and 17% year-on-year despite a strong start in April. In May and June margins came under pressure from rising feedstock cost.

Demand in the second quarter remained robust, supported by packaging and healthcare. While construction improved slowly during the quarter, demand from the automotive sector remained subdued.

The disagreement among OPEC+ countries on production cuts in March, combined with the coronavirus pandemic led to an unprecedented simultaneous deterioration of the market environment for both Upstream and Downstream. A combination of low oil and gas prices, challenging refining margins and weak demand led to a sharp decrease of the clean CCS Operating Result to €145 million.

In this extremely challenging market environment in the second quarter, we were able to deliver a cash flow from operating activities, including net working capital effects of €545 million, demonstrating the strength of our integrated portfolio. As communicated yesterday, in line with our dividend policy, we will propose to the Annual General Meeting a dividend of €1.75 per share for the financial year 2019, and thus, maintain it at the previous year’s level.

This is an adjustment to the previous proposal, reflecting the exceptionally difficult market environment. However, it underlines OMV’s resilience and financial strength to maintain the dividend and offers our shareholders an attractive dividend.

At 464,000 barrels per day, our Upstream production was 5% lower than in the same quarter last year, due to the shutdown of our operations in Libya. Production cost was reduced by 10% to $6.2 per barrel.

In Downstream, we were able to run our refineries at almost 80%, a decent rate given the sharp demand decline. However, this is significantly below our usual utilization rate of over 90%.

Despite the extremely challenging environment and the necessary crisis management, we have not lost sight of our long-term ESG initiatives. In June, we signed a Memorandum of Understanding with Lafarge, VERBUND and Borealis for collaboration on carbon capture and usage.

The objective is to capture CO2 from Lafarge’s cement plant in Austria and use it as a raw material. In combination with green hydrogen produced by VERBUND, the captured CO2 will be transformed by OMV to renewable based hydrocarbons.

These can in turn be used to produce renewable-based fuels or be utilized by Borealis as a feedstock to manufacture value-added plastics. In early July, together with VERBUND, we have started the construction of the largest photovoltaic plant in Austria.

The plant will generate around 14 gigawatt hours annually, equivalent to supplying 4,400 households, and will prevent 10,000 metric tons of carbon emissions per year. Start-up of the first phase with approximately 80% of the capacity will be in November this year.

The plant will supply our Upstream operations with green electricity and will help us reduce our Scope 2 emissions. Last but not least, this morning, we announced new and more ambitious targets for Scope 1 and 3 emissions for 2025 as well as our 2050 ambition for our operations.

I will talk in greater detail about these after the quarterly results. Let’s now come to our financial performance in the second quarter of 2020.

Our clean CCS Operating Result decreased by around €900 million versus the prior year quarter, primarily due to a sharp decline in Upstream of around €800 million caused by the adverse market environment. Downstream earnings were down €118 million versus the prior year quarter.

This was due to lower margins and volumes in all markets, partially offset by a positive hedging contribution and very strong performance by our gas business. The clean tax rate amounted to 19%, which was 20 percentage points lower than year-on-year.

This was the result of a proportionally lower Upstream contribution from high tax rate fiscal regimes and a comparatively higher Downstream contribution. Clean CCS net income attributable to stockholders decreased by 87% to €65 million.

Clean CCS earnings per share came in at €0.20. Let me now discuss the performance of our 2 business segments.

Compared to the second quarter of 2019, the Upstream clean operating result decreased to minus €152 million. Main drivers were a negative market effect of €649 million, a direct reflection of substantially lower oil and gas prices, and the missing contribution from Libya.

OMV’s realized oil price decreased by 61%, thus slightly more than Brent. This was because of the timing of the liftings, which were more skewed to the beginning of the quarter, when prices were lower and higher discounts were necessary.

While the CEGH gas price dropped by 57%, the OMV realized gas price declined by only 32% due to the limited exposure of our portfolio to European hub prices. Market prices in Romania, New Zealand, and Malaysia declined less steeply than European hub prices, while domestic prices in Russia remained stable.

Production decreased by 26,000 to 464,000 barrels per day, mainly due to Libya, where the fields have been shut in for the entire quarter. The decline has been partially offset by higher production in Malaysia, Norway, and the UAE.

Total sales volumes declined by roughly 50,000 barrels per day, thus, more than production. This is explained by the fact that in the prior-year quarter we had above average sales in Libya, as we had sold our total production volume from the first half of 2019 in the second quarter, due to the security situation in the country.

The negative impact of lower sales revenues was partially offset by lower E&A expenses. Depreciation decreased by €78 million compared to the second quarter of 2019 due to reserves revisions in New Zealand and lower production.

Downstream earnings were more resilient than Upstream. The clean CCS Operating Result declined by 28% to €309 million, primarily due to lower demand and weaker margins as a result of the coronavirus pandemic.

A positive contribution from margin hedges, strong performance by the gas business and oil trading as well as improved retail margins supported the result. The utilization rate decreased to 79% due to the contraction of demand and maintenance works at our Schwechat refinery in June.

The flexible setup and forward integration into petrochemicals allowed us to crack jet fuel into monomers, and thus to run our refineries above the European average. Total refined product sales were down by 23% due to coronavirus-related travel restrictions.

Jet fuel volumes dropped by more than 90%. At the same time, sales volumes at our retail stations were down by around 50% in April, by about 25% in May, and by some 10% to 15% in June.

Lower volumes in retail were to a great extent compensated by improved fuel margins. The commercial business decreased year-on-year due to lower volumes.

In the petrochemicals business, sales volumes were stable, but the result fell by 47% to €41 million due to lower margins. The contribution from Borealis decreased from €118 million to €24 million, as a result of significantly negative inventory valuation effects, decreased light feedstock advantage versus naphtha, and an unplanned outage of the steam cracker in Sweden.

Polyolefin sales volumes in Europe were almost stable year-on-year, because lower demand in the automotive and construction industries was compensated by an increase in demand in packaging and healthcare. Borouge recorded higher sales volumes, but weaker polyolefin prices in Asia negatively impacted earnings.

The clean CCS contribution of ADNOC Refining and Trading amounted to minus €18 million, mainly due to the difficult market environment and the extended shutdown. After the major turnaround was completed, the refinery ramped up in May and June, and operations at the FCC unit are now stable.

Our gas business returned excellent performance and contributed €89 million to our result, an increase of €85 million versus the prior-year quarter. This was due to a better storage result, improved trading performance, and significantly higher earnings from power in Romania.

Gas sales volumes rose by 21%, driven by increased sales in Romania, Germany, the Netherlands and Belgium. At €431 million, second quarter cash flow from operating activities, excluding net working capital effects were solid, given the extremely challenging market environment.

However, it declined sharply compared with the strong prior year level. Net working capital effects generated a cash inflow of €114 million.

Consequently, cash flow from operating activities came in at €545 million for the quarter. Looking at the half year picture, cash flow from operating activities excluding net working capital effects amounted to €1.3 billion, a decrease of almost €1 billion compared to the first half of last year.

Cash flow from operating activities decreased by 17% to €1.7 billion as net working capital effects showed a big swing. While in the first half of 2019 we recorded an outflow of €234 million, we had an inflow of €397 million in the first 6 months of this year.

The organic free cash flow before dividends decreased by 38% to €714 million. This was the result of the substantial deterioration in the macro environment.

OMV’s balance sheet remained very healthy and showed a strong liquidity at the end of June with a cash position of €5.8 billion and €3.2 billion in undrawn committed credit facilities. Compared to the first quarter of 2020, net debt excluding leases increased slightly to €3.4 billion.

Consequently, our gearing ratio defined as net debt to equity rose slightly to 21%. In the second quarter, we issued senior bonds with a total volume of €3.25 billion at very attractive rates, and thus have successfully refinanced a major part of the committed facility for the acquisition of the controlling interest in Borealis in the amount of €4 billion.

In April, we issued 3 tranches of senior bonds for a combined amount of €1.75 billion. In June, we issued 2 additional tranches of senior bonds totaling €1.5 billion: a 3-year note of €750 million with a coupon rate of 0% and a 10-year note with a coupon rate of 0.75%.

Honestly, I think, these sentences are coming from Reinhard, because he is so proud that he could manage this successfully. All right.

I would like to give you a quick update on our portfolio measures. Our acquisition of the majority in Borealis is on track.

We have already received regulatory approvals in several countries and expect this transaction to be closed until end of the year. Meanwhile, we have set up joint teams to identify synergies.

We have received a binding offer from VERBUND for the divestment of our 51% share in Gas Connect Austria. The agreement is expected to be signed by year-end.

There is great interest in our second ongoing divestment project, the sale of our retail network in Germany. Around 40 companies have indicated interest in acquiring the network.

We have opened the data room to a shortlist of interested parties and the due diligence process is currently underway. We expect binding offers to be submitted in the next months.

Last but not least, we expect to close the sale of the Maari field in New Zealand in the third quarter. We have updated our outlook for the full year 2020.

Based on the developments we have seen so far, we maintain our forecast of an average Brent price of $40 per barrel for 2020. We update our view on the average realized gas price, which we now estimate to be below €10 per megawatt hour for the full year.

We expect average production in Upstream to be between 450,000 and 470,000 barrels per day in 2020, depending on the security situation in Libya and production cuts imposed by governments. Production in the third quarter is anticipated to be below the average of the first 6 months of 2020 due to maintenance in Russia, Norway, and Malaysia, which will negatively impact production by some 20,000 barrels per day.

The refining indicator margin averaged $3.6 per barrel in the first half of the year. During this period, we saw an extremely volatile margin with a sharp downward trend in May and June.

Thus, for the full year, we now assume an indicator refining margin of around $3 per barrel. As guided before, we expect a positive contribution from margin hedges – hedging in the amount of a mid-range, double-digit million euro figure for each quarter, which is not reflected in the indicator margin.

For petrochemicals, we estimate the ethylene/propylene net margin to be slightly below the previous year’s level. The utilization rate of our European refineries is now expected to be around 85% in 2020.

In July, we are undertaking scheduled maintenance works at our refinery in Romania for around 2 weeks. We expect product sales to recover from the low levels of the second quarter.

Retail sales volumes have already recovered from the trough in April to almost the prior year level in July. We also see a slow recovery in jet fuel, but demand in the second half year will remain subdued.

By the end of 2020, we assume that demand will improve to minus 50% compared to the same period last year. Retail margins will likely be higher than in 2019, while commercial margins are expected to remain at the level of the previous year.

Organic CapEx is now projected to come in at around €1.7 billion, €1.1 billion of which will be in Upstream. Exploration and appraisal expenditures are expected to be €250 million.

The clean tax rate for the year 2020 is estimated to be in the low-30s. This concludes my comments on the second quarter, which was one of the most challenging in recent history.

However, also in such difficult times, we continue to work on the most important issue for our industry going forward, climate change. We have taken an active approach in successfully repositioning OMV in a low-carbon world, and we are fully committed to the Paris Climate Agreement.

By the end of last year, we had reduced the carbon intensity of our operations, Scope 1, by 22%, and of our product portfolio, Scope 3, by 4%. In absolute terms, we have lowered our greenhouse gas emissions by 1.8 million tons of CO2 equivalent over the last 10 years.

I am pleased today to announce our new more ambitious targets for CO2 reductions by 2025 and our new important long-term commitment for our operations. To demonstrate our focus on a lower carbon footprint, these targets have been integrated into the long-term incentive plans for our Executive Board members and Senior Management starting this year.

The carbon intensity of the group’s operations will be reduced by at least 30% by 2025, compared to our 2010 baseline, a substantial improvement versus the initial target of 19%. We not only look at carbon intensity per unit produced, but also at total absolute emissions.

We plan to decrease this figure by more than 1 million tons of CO2 equivalent in the next 5 years. These targets do not yet include Borealis.

We will incorporate Borealis in our targets after closing. In Upstream, we aim to reduce carbon intensity by more than 60% in 2025 compared to 2010.

This effort will include portfolio changes, a reduction of routine gas flaring and venting and other projects like the photovoltaic plant in Austria for powering our Upstream production. In Downstream, we plan to reduce the carbon intensity from our refineries by more than 20%.

This reduction will come from improved energy efficiency and optimization and modernization activities in the refineries. One example of modernization is the turbine revision program at the power-plant in Schwechat.

The CO2 reduction of this project is in the magnitude of 40,000 tons per year. First part was commissioned by last year and the second part will be finished within the next days.

But we are not only looking into our own direct emissions. We are one of the first oil – we were one of the first oil and gas companies to define a target for our product portfolio several years ago.

Our strategy is clear: we want to focus on low and zero carbon products. What does it mean for us?

More gas and more petrochemical products, which are non-energy, low-emission products, as they are not burned. In addition, we will blend more bio content, bio- or waste-based oils and bio-ethanol into our transportation fuels.

We are now aiming for a reduction of the carbon intensity of the products we sell of more than 6% by 2025. Today, we are not only providing an update on our mid-term targets, but also announcing a clear commitment to where we see ourselves in 2050.

Ladies and gentlemen, we aim for net-zero emissions from our future operations, including Borealis, by no later than 2050. One thing is clear, attaining this transformative ambition will require us to leave familiar paths, to develop fundamentally innovative low-emission technologies.

I am firmly convinced that openness to innovation inside and outside OMV will be essential for success. Therefore, we will pursue such a culture not only among our own employees, but also in the broad group of stakeholders in our industry.

New technologies need not only the right mind set and creativity, but also strong partnerships and the right regulatory framework. CCS and CCU technologies are good examples of that.

Scrubbing carbon dioxide from flue gas reduces carbon emissions by 55% to 90%. However, in order to realize the full potential of these technologies, we need more research and policies that support investments.

The aforementioned project here in Austria together with Lafarge, VERBUND, and Borealis is an initial important step in the area of CCU, which is still in the early stages. We believe there will be much more potential going forward.

In our view, green hydrogen will be another key pillar of a low-carbon future. Hydrogen is carbon-free, non-toxic, and can be used to generate heat or electricity, wherever it is needed, leaving behind only water vapor.

Hydrogen can be used to power cars, supply electricity and heat homes, all with zero carbon emissions. Hydrogen is also an essential component of ammonia, which is a key ingredient in most fertilizers.

Therefore, the development of industrial-scale and commercially viable green hydrogen technologies is tremendously important. In petrochemicals, there is huge potential for reducing greenhouse gas emissions.

For instance, when renewable electricity would be used to replace fossil fuels in the operations of steam crackers, greenhouse gas emissions can be reduced by up to 90%. The key challenge is to develop a process that is not only technologically feasible, but also competitive.

Borealis is part of a consortium with other leading petrochemical companies that have joined forces, invest in R&D and share know-how to assess possibilities in this area. Last but not least, we believe that recycling, both mechanical and chemical, will become much more important in view of its potential to substantially reduce greenhouse gas emissions.

To give you an example, our proprietary ReOil® technology has shown that CO2 emissions can be reduced by 45% when crude oil is replaced by synthetic oil obtained from post-consumer plastics. This demonstrates the tremendous potential.

We aim to become a leading player in the circular economy. With Borealis in our portfolio, we will have a much stronger platform to achieve this.

The net-zero ambition for our operations is important, but it is only the first step. Of course, we are aware that we also need to address the emissions caused by our product portfolio.

We will share with you our ambition in that area at our Capital Markets Day summer next year. As part of our commitment to the Paris Agreement, we have conducted an in-depth analysis of how the activities and policy positions of key industry associations align with those of OMV.

The report will be published tomorrow. This is a starting point for an ongoing process in which OMV will actively monitor its membership in industry associations to ensure that their positions align with our own.

Thank you for your attention. Now, my colleagues and I will be more than happy to take your questions.

Yeah, thank you, Rainer. Let’s now come to your questions.

I’d like to ask you to limit your questions to only 2 at a time, so that we can take as many questions as possible. The first question comes from Mehdi Ennebati, Bank of America Merrill Lynch.

Please go ahead, Mehdi.

Hi, so good afternoon, all. And thanks for taking my question.

First, congratulations for the resilient Q2 earnings. So, 2 questions, the first one regarding the asset disposal program.

So you’ve announced the issuance of hybrid of bonds for €1.5 billion, which will happen in the third quarter. Is this related to difficulties regarding your asset disposal program announced a few months ago?

And do you still feel comfortable with the [validation] [ph] of that asset disposal program by the end of 2021? And second question, related to Borealis, so Borealis have been negatively impacted by the shutdown of steam cracker in Sweden.

Can you tell us more about that? What happened and when do you expect the production to come back to normal in Sweden?

Thank you.

Mehdi, this is Rainer speaking. The hybrid announcement that was given yesterday is in no whatsoever context of our disposal program not working in the way as we have announced as this is still the case and fully on track.

The hybrid bonds as such is an important diversification of our financing portfolio, as it is partly also an equity measure. And strengthening the equity and strengthening liquidity is in these times specifically important and part of our risk management in general.

It is also the case that it is an instrument that due to its almost perpetual nature has the possibility to strengthen the balance sheet as such and give us a long-term stability, which is very much to be seen in the context of our Borealis acquisition. And in these times, it’s a measure of risk management to take this in the portfolio as such.

So in absolute magnitude, we will increase our exposure to hybrids. In the relative share of our financing portfolio, we will be about the same.

Me, one comment, of course, we still feel very comfortable that we will realize the €2 billion for divestments until the end of next year. We are well on track with the 2 divestment projects, which are well known to you.

So, let’s wait until year end, whether or not we can successfully execute these 2 projects and then you will get the next story.

And, Mehdi, I would like to answer the question about Stenungsund, Borealis, the incident they had in May. So what we know now is they have done the incident investigation.

So there was a fire and they have done – they have started immediately also with planning and repairing the unit. So the impact from financial point of view is not very big, because they have good coverage for property damage and business interruption.

So there is a certain impact in Q2, but for Q3 this will be covered by the insurance. And we expect them to come back in Q4 with production.

They’ve done a tremendous good job to keep the polypropylene – the polyethylene units running. So the polymer units are still running.

And they have to rebuild some areas in the cracker, so all that is well on track. And the good news, as I said, from financial point of view, there is not a very big impact.

All right, thanks. Thanks to you all.

Now, we come to Thomas Adolff, Credit Suisse.

Good morning and thanks for taking my question. I think the first one is for Rainer.

You grew up with gas pipelines and you’re very fond of gas, generally speaking. So in your view, is the Green Deal missing a link here?

What’s your take on that? And then, secondly, specifically to gas in the second quarter, Downstream gas that is, I wonder if you can go into a little bit more detail on a quarter-to-quarter basis what has really driven that strong contribution.

Now, we’ve heard from other companies say that trading was a bit more difficult, but you say trading was good. Obviously, you have strong contribution from storage.

Maybe it’s – I don’t know what specifically you’re doing there. But working capital is actually a positive contribution.

So if you can get a bit more detail that would be great. Thank you.

Well, Thomas, the way you have asked the first question, I can’t agree more. Yeah, of course, we are missing a link to natural gas, the Green Deal the European Commission has set up, yeah.

I agree with the long-term targets defined. It doesn’t matter whether you talk about 2040 or 2050.

Yeah, so we have to climb up the mountain. But we also have to agree what are the first steps, especially if we have such a long lasting journey in front of us.

And the first step, we really can substantially, substantially reduce CO2 emissions if we switch from coal to gas. And I would like to see a bit more brave politicians, yeah, supporting the initiatives that we step out of coal and that we are guaranteeing for security of supply that we are mixing natural-gas-based power generation with renewables.

This is the way which was demonstrated, the big potential. If you look into the UK, they clearly make huge progress.

And if the Green Deal would copy only part of it, we would see lots of progress in the short term. And we all discuss now what is going to be in the long-term and how much money you would like to send into that.

I think the short-term potential is enormous. And that’s the reason, Thomas, why I see natural gas, especially in short- and mid-term not so depressive.

Right now, I think the market is so well over supplied and we are digesting to mild winters in the market. But they’re awaiting better times.

I am convinced the future of Europe is natural gas in the short- to mid-term. I can smell the potential.

And that’s the reason why I think that our strategy is absolutely clear, that we should focus on natural gas. Your second question quarter-on-quarter, what was really special in natural gas?

Well, part of it I explained in my presentation. I’m surprised by myself that our sales team could manage to increase our market share in all markets despite a corona pandemic situation.

We’re not talking about growing markets in terms of demand. We are talking a market where we are capturing market share from competitors and we did it successfully.

So the volume of the portfolio, of the gas portfolio is increasing, and therefore, as bigger the portfolio is, as bigger are our opportunities to optimize our portfolio, which means that we can squeeze out the potential to increase our average margin. When we look into Q2 an enormous increase compared to previous year quarter.

And the main reason is the positive summer/winter spread we could see in the market. And the positive summer/winter spread means that we could sell storage capacities with a higher price in the market.

We could lock in the summer/winter spreads at very attractive terms. And I haven’t seen that so often in my gas business life that you really can make a hell of money more with storage than with selling and trading the gas.

So, the gas business – the gas storage business will also positively be impacted in the third quarter, because in the third quarter, we also could manage to lock in positive summer/winter spreads.

This is Elena Skvortsova. I just wanted to add to what Rainer has already mentioned.

And a couple of things, one is the strong performance of the East with regards to gas and the Northwest Europe as well. And in the Northwest Europe, with our significant strategy change and repositioning, we have gone after the large industry, customers and city works, contracts, which we benefited from getting as a result of the fact that we operate as an integrated company and this is something that is definitely appreciated by our customers.

In addition to the spreads, the summer/winter spreads that Rainer was already talking about, it’s been very – the team has managed very closely the supply, of course, to make sure that we have adequate amount of supply for all of our larger customers. And we see now that the smaller and midsize customers as well are getting a lot more interested in working with us now that we have gotten a foothold with the larger customers in these markets.

Now, Germany, Belgium, Netherlands, I would reiterate again, based on what Rainer has presented earlier, and of course, Austria.

Right, thank you very much.

We now come to Michele Della Vigna, Goldman Sachs.

Thank you very much for taking my question and congratulations on a very resilient set of results in a difficult macro. I had 2 questions if I may.

The first one is about refining margins. They’re clearly very tough at the moment.

I was wondering whether you think we’re going to see another wave of refinery closures in Europe. The one that happened in 2011 to 2014 actually proved to be very, very positive for the margins in the following 5 years.

And it feels like this is an industry that is ripe for restructuring. Secondly, you indicated that there’s need for a good regulatory framework in order to support decarbonization, particularly carbon capture and synthetic renewable fuels.

I was wondering what form do you think you would like those incentives to take? Do you think the best thing would be a strong CO2 pricing or perhaps regulated prices for clean hydrogen or mandated renewable synthetic fuel?

What do you think would be most helpful from Austria and from the EU as a whole? Thank you.

Michele, Thomas is speaking. Refining margins, you’re right, they are really on a low-level.

We’ve seen even negative margins, the last month. And this is something which is not very healthy for the refining business and we have seen utilization going down quite significantly all over the place.

And we also saw that some refineries were not able to manage their stocks. So they had to shut down due to issues with balancing between inflow of crude and outflow of the different products.

So, this is something where the industry is heavily challenged, and the forwards do not look very bright as well. So, we see a certain recovery, especially also the crude price went down a bit the last week, but we will not see a quick and fully recovery of what we have thought that the margins will be last year.

Last year, we had the bright outlook of the sulphur reduction in bunker fuels. So everyone was thinking this will be a very great year for refining.

It’s the other way around. It’s a challenging one.

And you’re right, this is really the chance for a step which is needed anyway. We have 2 high capacities in European in refining business.

We have a lot of refineries which are not really very efficient, old, smaller refineries, and there is a good chance that some of them will just not be able to continue to operate. On the other hand, we know that it’s also important to understand that for some countries where they have only 1 refinery, they will not give up very easily.

We know that there are political topics as well. If you look back to what we have seen in France, so it’s really something where it needs a lot of pressure that someone is shutting down.

What we see now, there are some refineries which are sold at the moment. There is a good chance that the one or the other might be not running as a refinery anymore.

It’s more like a depot or bio refinery that sometimes the way out, that companies seem not just closing down the entire site. So I agree this is a great chance.

If the refining margins stay longer on that level, definitely there will be a change in the structure in the market.

Michele, I’d take your second question. And you forced me to talk about regulation, as I am well known in the market that I hate regulation.

But I take that question and try to give a good answer. I’m more talking about a framework and it starts how European politicians are responding to CCS.

What I do see is that we are all driven by – we don’t like CO2. We only support technologies initiatives, where see CO2 doesn’t come out as a molecule.

And I think that’s only one side of the metal. I think we should send some money into that.

But we should not ignore that CO2 is a molecule we might handle differently. And then it comes to CCS and CCU.

And from my point of view, CCS is not welcome in Europe. I see so many bands of different members of the European Union.

It’s not allowed to even think about CCS in France. You cannot do that in Germany.

You can’t do that in Austria. So it’s a very long list.

And I think it’s the same story I mentioned with the UK, when it comes to natural gas as a potential to reduce our CO2 emissions. It’s the same story I can tell Brussels to look into Norway, which are ready to support and to grant and to approve a big CCS project in their country.

We can technologically manage this. We can guarantee for security.

We can guarantee for proper investments, everything. So what I would like to see, of course, is that the European politicians agree that this technology is not bad, that this technology is welcomed, because it has a potential.

As the industry is telling everybody in Brussels, it has a potential to substantially contribute to reduce our CO2 emissions. So therefore, I also would ask, well, if this technology is being applied that they might subsidize this initiative.

The CO2 price, you know my view, I’m a market man. I don’t want to have a regulated CO2 price.

I would like the market to determine what is the price of CO2. It’s working.

Currently, we see that CO2 is increasing in all our plants. And I can see also from other companies, they are calculating with higher CO2 prices and the market will determine the price.

But besides the CO2 pricing, I think we also have to create a premium market if we go for such [clear] [ph] products where we do get a brand, it’s CO2-free production, it comes from CO2-free production.

Thank you.

Next question is coming from Alwyn Thomas, Exane BNP Paribas.

Hi, thanks for taking my questions. First up from me, just on your carbon emissions target, I know you haven’t committed fully to a Scope 3 neutrality or intensity reduction by 2050 like some of your peers.

Perhaps after the Borealis acquisition is closed, is that something that’s on your mind and considering whether to implement Scope 3 type – longer-term target? And my second question, if I could just ask for actually a little bit of – on the sale of your bond – sorry, of your gas infrastructure, the bond, you’ve chosen this quarter and potentially next quarter the benefits of having storage and gas infrastructure along with your trading business.

I guess, my question is, how can – are you able to maintain that next year or without those businesses? And how does that make you think?

Thanks.

So Thomas is speaking. Coming back to your Scope 3 targets question in Borealis.

I think, overall, we have defined the target now for 2025 for our product portfolio, and this is a very important step because, we, of course, need to have targets for long-term, but it’s very important that we get started with the things we can do that we can show that there is a step forward and there is progress in finding a way to do that and to reach the target. The products from Borealis, they are typically ending up not in incineration.

So there is no CO2 production from that. And therefore, I think here we are more Scope 3 target is more talking about the gasoline, diesel and those products.

In here clearly for the long-term view, we’re working in different areas to develop on technologies to realize that. I think there is a lot ongoing, we’re working together, also on European level, [infuse] [ph] Europe in defining the way forward.

We have together also made a vision 2050, where we see that we could land, and this is giving the clear signal that there are possibilities. But now the next step is to make sure that we reach the target for 2025 to develop the technologies.

And then we can define more granular steps, how to get there in 2050, I would say.

Alwyn, I take your second question. Well, when I made a comment on the very positive development of our gas trading business, I have mentioned transportation at all.

The transportation was not the big upside; we managed in the second quarter. So when we divest the business, of course, the contribution from transportation will be not in our figures anymore.

But we are talking about the smaller sizable number, but anyhow, from our point of view, a declining contribution, because the contribution from the transportation business will be determined by the regulator and not by us. That makes a difference in the nature of the business.

Can we repeat the good performance also in the next years to come in natural gas trading? I would say it depends, of course, how odd the summer, winter spreads especially.

But can we use our big secret of success in the 2 summer quarters? Yes, because we are not divesting our storage capacities.

We are only divesting the pipeline capacities, the pipelines and not the storage, the storage is will remain in our portfolio.

Okay. That’s very clear.

Thank you.

We now come to Henry Tarr, Berenberg.

Hi, thanks for taking my questions. 2 really.

One on the sales processes, there ongoing, which is great. I wonder whether you could comment on – whether the – so the current crisis has impacted either prices or interest across the portfolio.

And then just on gearing. Is there any change to your view on the gearing target?

So we’re looking out 2 years, so assuming all of the divestments come through, you’d hope to be back in a sort of a normal range within your targets by the end of next year? Thanks.

Your first question, the current crisis situation from my point of view did not really impact our negotiations. So we think that we can manage to get a good price in the market.

What we do see and that’s the only impact of the crisis that we might have some delay in finalizing the transactions, because one and one meetings weren’t possible, especially in the hot faces of April or May, so a little bit of a delay in the execution. But as we speak about the impact on interest in prices, just remember 40 companies showed up for the German retail network.

I think that’s not a negative impact on interest. It was surprisingly much, much more than we anticipated.

To your second question, the gearing target of around 20 – around 30% gearing, excluding leases will stay upright. This is our long-term target.

And we also have the ambition that in 2 years time as you have mentioned, end of 2022, we will reach this target again. It is important for the financial stability that we also are able to display this kind of stability, this kind of ambition, because we can see in a cyclical industry that, of course, having these kind of reserves this kind of headroom has clearly benefited our company in the way, how we digest to growth and opened up opportunities to enrich our portfolio.

Of course, we will see higher gearing level by the end of this year after the closing of the Borealis transaction. In Borealis is also on profitable organic and inorganic growth path as you have seen, but this is something which stays as an ambition for the group and we will not change this target.

Great. Thanks.

We now come to Henri Patricot, UBS.

Yes. Hello, everyone.

Thank you for the update. I have 2 questions, please.

The first one is around the decision to cut the dividend proposal to €1.75 from €2. I wonder, if you could elaborate on why you made the decision.

At the last results call I didn’t get the impression and this was likely. And you’ve actually been more resilient than expected in the second quarter and intend to raise them a hybrid.

So just make it a sense of why you decided to revise that. And secondly, I wanted to ask about the risk of impairments and the long-term macro assumptions took some impairment for the short-term out of this year, but you haven’t changed the long-term assumption.

So when I give you feel comfortable with these and you mentioned the possible impact of revisions in any report. Can you get us a sense of timing, if there would be a revision when could that take place?

Thank you.

Thanks for your question. First regard the dividends.

I think the clear message that we have given is that we stay within our dividend policy and there is no change of our dividend policy. Yes, of course, the times are tough and also require measures to make sure that there is no financial overstretch of the company.

But for us, it is important that it is acknowledged 175 is a proposal has been the record dividend of last year and we are keeping it exactly at this level. So it is both a signal to say, we appreciate very much our shareholders and our shareholders requirements to be also rewarded.

And on the other hand, we take care of the company’s way to the future because, of course, the environment this year is not that strong. Regarding your question of risk of impairments, we have not adjusted our long-term views on the development of the oil and gas prices.

The reason mainly is that we are in a situation where we cannot see the current market environment as the normal one for the future. There are so many uncertainties and so many special factors that are currently distorting the levels of the prices, so that it is at the moment very hard to see through that there is really a long-term change of the environment from our point of view.

So therefore, yes, some uncertainties remain and we will always reconsider the situation if there is any kind of major change. But for the moment, we don’t see that and we stick to the assumptions that we have in our views.

Okay. Thank you.

Now come to Jason Gammel, Jefferies.

Well, thanks very much. First of all, I wanted to ask about the very modest lowering in guidance for petrochemical margins based on what you’re saying about refining margins and seeing that feedstock costs are going to remain relatively low.

So is that a function of in demand still being relatively weak? And just within that, are you still able to divert a lot of your jet fuel production into petchem feedstock?

And then the second question I had was related to the Upstream CO2 reduction target. You mentioned that portfolio change would be part of that reduction.

Can you talk about which of the assets in the Upstream portfolio are the most CO2 intensive?

All right. I’m going to start, Jason, with the first question.

And then, Hans, time to think about the portfolio changes, okay. So the petchem margin, well, I have not so much concerns on the demand side even there – I would say there is more positive trend, because consumption from automotive industry might increase in the second half of 2020.

What I can see is that the supply side might be an issue in the second half, because, first of all, the propylene on FCC plants as the run rates of refineries will go up is also going up and there will be a higher supply of propylene. And the second is that ethylene crackers.

The same story with ethylene, not so much concern on the demand side, but more on the supply side, because some ethylene crackers are coming back from maintenance and therefore the availability is on a higher scale. That’s why we are a little bit more cautious for the C2, C3 margins.

And the third argument and then I’m done. The third is, of course, we have to wait and see how the naphtha prices will develop into the second half.

And I only can advise that we are all together a bit more cautious. And that’s the reason why we are a little bit more cautious on the petchem margins for second half.

I take the second question regarding CO2 reduction. So a baseline we set in 2010, and we’ve achieved the rate is 30% reduction until 2020.

So we’re ahead of schedule and we want to achieve another 30% until 2025 based on 2010 actuals, which means we had in 2010 0.4 tons of CO2 per ton oil equivalent of production and this should go down by 60%, and 2025 will be in the range of 0.14, just to be clear what the target is. What we have achieved so far is mainly via new technology, improving our processes, renewing of old facilities also mainly in Romania, for example, compressor stations but also gets the power, we’ve been implemented, but also in Austria, we have a closed system from the well down to the refinery where there is no CO2 emission anymore in operations in Austria.

So that’s what we are going ahead and that’s what we are pushing for further modernization is one thing. The second topic is portfolio optimization.

And here we have been starting already with 2 projects, which we – where we will divest, which will have a significant impact on the CO2 emissions in Upstream. One is in Maari in New Zealand, where we still do some flaring and the other one is Kazakhstan.

Our assets in Kazakhstan, which are also not at, let’s say – and not the most modern facilities. So here also we will see a strong reduction of our CO2 footprint.

So these are the 2 assets, which we have in mind right now. The other ones, which might come I can’t talk right now, as you can understand.

Yeah. Fair enough.

And Rainer, I just back on the jet fuel. Are you still primarily diverting that into petchem feedstock?

Jason, maybe I take?

Sure.

Sorry, we had some problems with tuning on the micro. Jason about your question.

So, first of all, we have to keep in mind that the share of kerosene which is then used for producing jet fuel. In the overall portfolio when you distillate crude is not a very big one, so that’s – so the total volume is not that big.

And the situation that we had when there was the lockdown, there was nearly no jet fuel needed at all. So we have had a reduction of 90%, 95%.

And this was the situation where many refineries had troubles to store the volumes. As we are now having some volumes, which are going to the jet fuel business already, this has relaxed a bit.

But it’s important to understand that this possibility to shift is a flexibility that’s not there for most of the refineries, not at all, because you need to have an integrated petrochemicals business. So you have to have a refinery in the petchem unit.

And you have to have a cracker, which can use middle distillates for cracking. This is definitely not the case for the crackers, which are using ethane as a feedstock.

And just to give you a rough number for Europe, for example, we have around 80 refineries and only 20, 25 have petchem integration. So only those are in principle able to use that flexibility and then still you have to check whether those are able to correct middle distillates as well or just naphtha.

And we do it whenever it makes sense for us. So when demand is lower, and the value of jet of kerosene is low, then we shift jet or kerosene into the cracker.

So we are very flexible on that. And it definitely helps us to, to get not in troubles with storage capacities.

Very clear. Thanks.

We now move on to Peter Low, Redburn.

Hi, thanks for taking my questions. The first was just on ADNOC Refining.

You said that performance was restricted in the quarter by the unplanned delay of maintenance. This would appear to be the latest in a series of operational issues.

How confident are you that the performance of the plan can meet the expectations you have when you acquired it? And when should we assume it is fully operational?

The second was just on the Downstream retail result. You cited strong retail margins in the release, despite the weak demand environment.

Given the fixed cost base and lower volumes for your retail sites, I might have expected lower unit margins. Can you perhaps just walk us through the dynamics that allowed us to realize those strong margins there?

Thanks.

Let me start with ADNOC Refining. We really were worried last year about the technical issues that we had at the FCC unit, because this is one of the core units for conversion.

And as you know, the refineries a huge one, so the FCC is a huge one as well. It’s really a big machine.

We were able to with the help of OMV, Eni, and collaboration with other partners, and of course, ADNOC Refining, we were able to find a solution, a technical solution to get rid of this issue with losing the catalysts in the process. So that’s something we’re very happy that we have been able to do that.

And this was done in the turnaround. The turnaround was prolonged.

Yes, that’s correct. But that has less to do with this technical topic.

Just imagine this, everything there, when you talk about units or staff required or whatever, it’s always with multiplying by several times, then what we are used to. And when we had to turn around, we had thousands of people in the refinery.

And we had that in the COVID situation. And also imagine the situation.

This refinery, you cannot just enter as you typically know that from European refineries. There is a military zone, and you have to have special registration.

So that’s also transporting those thousands of people in a COVID situation was a big, big challenge. And they had a lot of COVID cases, of course.

So this was really not easy to manage and taking that into account, they manage it pretty well. And from technical point of view, the units are now on a very solid basis.

So we see them operating, we’ve been running at hundred plus, of course, without the impact on the demand side, we would run them higher and we can run them higher. So we have done the tests.

So from technical point of view, we are on a very good base now, and I’m not worried that we could not run the unit higher. Of course, we need to take all that into account for running higher, we need to sell all the products.

There is a big part of the infrastructure going to jet fuels, there is naphtha dominant product. So this is not an easy situation.

But the technical story and to turnaround, I think that’s now well done.

Peter, this is Elena, I’ll take the second question and considering my time here on board. I’m very happy if the colleagues will contribute as well.

With regards to retail and strong margins, yes, definitely strong margins in the first half of the year, there’s obviously a delay of passing the cost or the pricing rather to customers. So what we’re looking to see is that we’re looking to keep up the margins as much as possible, although, we think that there probably is likely to be some softening in the outer part of the year.

However, having said that, what I want to really focus on is maybe some of the reasons behind the margins in the first half of the year. And this is similar to what Thomas said, I want to give really strong appreciation to the team members, who have worked through the COVID situation.

Of course, we saw significant softening – significant reduction, it’s not a softening, it’s a significant reduction of volumes at the gas stations and retail. But we also were able to pivot and operate at all of the gas stations, pretty consistently throughout the COVID crisis, as well as even added to the offering that we have, so the name of the game pros going forward is going to be to continue getting into the – making sure that we bind the customers to us, and following with a customer loyalty tools and initiatives as well as keeping the cost containment in the forefront.

Okay. Thank you very much.

The next question comes from Josh Stone, Barclays.

Hi, good morning. 2 questions, please.

First, just a follow up on ADNOC, the trading joint ventures in the setup phase, maybe talk about what still needs to be done there and when you think that will be operational? And then secondly, following up on the net-zero by 2060.

I just noticed unlike some of your peers, you haven’t mentioned the use of forestry projects to get to net-zero. Is that something you might consider in the future?

Or something you don’t see a need for these sorts of projects? Thanks.

I’ll start with, Josh. Again, I’m start – I’ll start with the ADNOC global trading.

And then my colleagues will pick up on the rest of the collaboration topics too. We have seen a slowdown in progress of setting up the venture due to COVID and due to the crisis, and I think you understand this, too, that the travel and getting into the countries and close borders definitely contributed to that.

However, we are positively underway and we’re almost back to plan to the original plan of where we need to be. We definitely are aiming at making sure that the ADNOC global trading is operational by the end of the year and we’re well on the way.

Well, Josh, forestry projects are also part of it. Yes.

But it’s not in the first priority list. So it might come later.

We have some smaller projects we have in mind. But we are focusing on the big steps we see now operations and not in forestry projects.

Understood. Thank you.

The next questions come from Raphaël Dubois, Société Générale.

Good morning. Thank you for taking my questions.

2, please. The first one is on the implications of the Norwegian tax changes that were announced earlier this month.

So I was wondering if you could help us better understanding what it could mean for OMV Norge, and especially Wisting. And second question is on the domestic Russian gas price.

I was wondering if you could confirm whether or not there had been increased from early July on as planned by regulation. Thank you.

So I take the first question regarding Norwegian tax impact, especially on the project. We see right now we made really calculations on the new regime.

And we see that we have a 5% to 10% rate of return improvement on the senior project. And this is true for Wisting and this will be true also for others in areas.

So that’s – what’s the impact the only one precondition is that we will have to go for FID, the final investment decision before end of 2022.

Thank you.

Raphaël, thank you for the question about Russian gas prices, because this is something I really like to share with you. I thought I will not see the day, where I want to say that the prices in Russia are higher than the prices in Europe.

Unbelievable, unbelievable, okay. So that’s one of the reasons why there is stability.

So right now we are getting a higher gas, we are getting a higher price for the gas we are selling in the Russian market than in Europe. And you’re absolutely right.

There has been a new round of regulated prices. I don’t know whether we call it regulated.

It’s a state price set. Yeah.

But what I would like to ask you is run into the different industry segments. There is not a price for all industries.

It’s different industrial regions and you have to look into the different industrial regions where the price is set.

Thank you, Rainer.

We now move to Matt Lofting, JPMorgan.

Hi, thanks for the update and taking the questions. 2, if I could, please.

First, just on the new decarbonization agenda, looking at the comments on refining and blending. Could you talk more about the operational capacity and procurement process around visibility to blend more bio and waste product into the refineries and the extent to which meaningful investment may be required over the medium term to further high grade capability?

And then secondly, just turning to Borealis, obviously, not quite a deal completion yet, but a few months on from deal announcement. Could you update us on sort of current thoughts around synergy, potential how your sort of view is evolving around synergy opportunities with Borealis?

Thank you.

Yeah, Matt, bio, here we have, I think also bio and I would like to add recycling here and using waste based stuff here, I would like to add here. So, these topics are really something where we are in a front runner position.

On one hand, I would like to talk about the co-processing. We have started quite early and that’s been one of the first companies in Europe processing, test processing, some bio stuff in the refinery, because we are convinced that adding the bio stuff at the end of the process or just blended in is one option, but we are very limited on that for further extending the – and to reducing the CO2 footprint, which is, at the end of the day, the target of these initiatives.

So we have a project in preparation for co-processing in Austria. That’s something we’re well advanced.

We’re working together also with catalyst companies to make that happen. That would bring us really a big step forward in bringing in bio material into the refinery, process it and ending up with a product which is the same quality as we are used from as we know it from fossil material.

So that’s something where we are heavily working on it and it’s in our plans to realize that project. And the second one is what we are doing with recycling with real process.

Plastic to oil, plastic to plastic. We believe that this topic that chemical recycling will – may play a major role.

And we see that the impact from CO2 reduction is significant. Just looking at the full process from using waste material instead of using oil, we are reducing the co2 footprint in the magnitude of minus 45%.

So that’s giving a big advantage. We are in talks on one hand for sourcing of this waste material.

We have gained quite some knowledge on also preparing the feedstock for the unit and also to be more – to be able to process more complicated feedstock. So it’s something that’s very important in terms of feedstock price level.

And with that, I think we have the technology available. We are scaling up that technology.

And with that we can have an advantage. Also with that – because the issue of using the waste material is getting bigger and there are not too many technologies available at the moment.

Okay, on synergies, we’re well on track. People, teams are working.

About 500 people from Borealis and OMB are working out the synergies, looks very promising. So happy to present it later when we have then the closing.

Great, thanks for the update.

Good. Next is Sasi Chilukuru, Morgan Stanley.

Hi, I had 2 questions, please. The first one was related to the CapEx for 2020.

It’s now reduced further to €1.7 billion and compares to the €2.4 billion that was guided at the start of the year. I was just wondering when we look into 2021 whether you will be able to take this underlying CapEx savings into 2021.

I appreciate there’s Borealis CapEx coming on top of it. But if you could just comment on what drove the latest change in CapEx reductions, as well as if you could comment on the 2021 CapEx levels ex – including or excluding Borealis?

This other – second question I had was just a clarification on your leverage targets. You’ve re-iterated it to be around 30% by the end of 2021 or your target to get to that.

Does this include the hybrid insurance as well, whether it was always in the plan? If you could, just comment on that.

Thank you.

Regarding the leverage target, I mentioned that we feel quite confident that in 2022, we will reach the 30% again. And, of course, this is something that has to include all the measures that we have currently taken in terms of also portfolio changes with divestments, but also assuming that there is a slight recovery of the business environment.

But nevertheless, countermeasures that we have taken both in terms of CapEx reductions, OpEx reductions in terms of portfolio shift that we have announced, as well as I think the very good cash performance that we are still showing even in the difficult environment we are currently having, makes us confident to reach that.

Well – I take the CapEx, I take the CapEx question. Well, the CapEx in 2020, where we’re going down to €1.7 billion.

Well, given the strong growth development of OMV in the past. This is an – let me call it a budget in an emergency situation.

Yeah. And with a €1.7 billion we really reached the bottom.

If we cut further I think it will have a bigger impact on our production numbers. So that’s why we carefully did it step wise.

The further reduction from €1.8 billion to €1.7 billion is partially a shift of CapEx into 2021. So not all is a cut that we have cancelled projects, some of this CapEx reduction is a shift into 2021.

So we go with a bigger wave into 2021. But we prepare our company that in 2021 we might see also a very – a slow recovery of GDP, global GDP.

And therefore, I will remember repeat our CapEx guidance for the future. You remember that the CapEx guidance without Borealis is something between €2 billion and €2.5 billion as a range for the CapEx.

Including Borealis, we have now upgraded it to a range between €2 billion and €3 billion. So €3 billion is the max CapEx budget we are defining including Borealis.

Good. We now come to the – and now we come to the final question from Tamas Pletser, Erste Bank.

Yes, good morning. I just got one question regarding Borealis.

You mentioned in this report that you had a significant inventory loss. Can you elaborate a little bit, how much was it?

And in the future when you consolidate Borealis, can we expect the CCS figures from this company or would you stick to the current accounting? Thank you.

The inventory loss, actually the revaluation that we had to do in the inventories, that Borealis is showing, is simply a consequence of dropping prices. So that means that you have to, of course, adjust to the moment where you account for and that is then triggering these devaluations which you to also run through the P&L.

So this does not mean any kind of change of policy. This is simply – that’s the value chain within Borealis is around 2 months long.

So this means that if you feed in material it takes between 1 and 2 months to finally produce it to the end product. And this, of course, then has a quite potential for fluctuation in the inventory valuation.

And this is when there’s a consistent drop in prices, then of course, you will see that consequence here. So this is the way how it looks.

When it comes to accounting of Borealis, of course, Borealis will undergo a purchase price allocation, a PPA. And this PPA will determine, ultimately, the way how it is consolidated and with what values it is consolidated which will be according to the purchase price that we pay in the acquisition.

Other than that, it will be fully consolidated. And this is the biggest change, of course, in our overall accounting.

Okay. That’s pretty good.

Thank you very much.

Yeah, that brings us to the end of our conference call. We would like to thank you for joining us today.

Should you have any further questions, please reach out to the Investor Relations team. We are happy to help you.

With that, we wish you a good day. Bye.