Dr. Markus Steilemann, CEO of ����AV, began his speech to the Annual General Meeting with a review of fiscal year 2024, which had been characterized by continuing market weakness, intense competition and geopolitical uncertainties. “Despite the challenging conditions in the chemical industry, we leveraged our strong foundation and unswervingly implemented the transformation of our company to the circular economy. In the past year, we systematically tapped potential and made important progress on our path to becoming an innovative and sustainable chemical company. We’ll stick to this course rigorously in the current fiscal year and concentrate on our strengths in four strategic focus areas.”

To build the chemical company of the future, ����AV has refined its strategy and adapted it to current market needs. At the same time, the company is rigorously scrutinizing its structures. “We are literally leaving no stone unturned in order to identify and implement any as yet unutilized efficiency potential and growth opportunities. We are now even more agile, leaner and more targeted in our approach. Our ways of working and our processes are being comprehensively rethought,” says Markus Steilemann.

By 2028, ����AV aims to cut costs by 400 million euros a year by enhancing its performance and improving its structures. ����AV is focusing its strategy on four key action areas: the ongoing transformation, sustainable growth, digitalization and innovation, and the systematic implementation of ambitious sustainability targets. A vital component of the transformation is the targeted management of global production capacities. By investing in innovative and sustainable materials and expanding key sites, ����AV is strengthening its competitiveness in cutting-edge markets. At the same time, the company is pressing ahead with its transition to the circular economy and reducing its ecological footprint by increasing its use of renewable energies and developing innovative recycling technologies. An additional focus is on digitalization along the entire value chain in order to make processes more efficient and tap new growth opportunities.

Steilemann also emphasized the importance of the partnership with XRG, which is seen as a strong and long-term partner for ����AV: “This is the right step at the right time.” The transaction is expected to be closed in the second half of 2025.

Reelection of members of the Supervisory Board

Effective the end of the Annual General Meeting on April 17, 2025, the regular term of office of five members of the Supervisory Board of ����AV who had been elected by the Annual General Meeting terminated. The shareholders confirmed the reelection of Dr. Christine Maria Bortenlänger, Lise Kingo, Dr. Richard Pott, Regine Stachelhaus and Patrick W. Thomas for a further two-year term of office. The candidates have extensive expertise in the fields of capital markets, sustainability, corporate governance and industry. Dr. Richard Pott was reelected as Chair of the Supervisory Board.

No dividend distribution due to net loss

Christian Baier, CFO of ����AV, presented the key financial figures, emphasizing the impact of the actions to increase efficiency and improve plant availability. “We sold greater production volumes worldwide thanks to targeted measures. Nevertheless, falling selling prices led to a 1.4 percent decline in sales to 14.2 billion euros and, as a consequence, to a drop in the Group result. EBITDA remained stable, while higher impairments on property, plant, and equipment reduced the Group’s net income.”

In accordance with the Group’s dividend policy, which since 2020 has linked the dividend more closely to the financial situation of the company, a decision was made not to distribute any dividend for the fiscal year 2024.

Markus Steilemann ended his speech with a look ahead, summing up ����AV’s strategic alignment for the shareholders: “We face major challenges, but under our strategy we’re driving our transformation with a clear plan. ����AV is committed to cost leadership, efficiency and innovation in order to actively shape a sustainable future. As a pioneer in the circular economy, we are well-positioned to successfully master the transformation in the industry.”

Further information and documents 

• You can find a recording of the 2025 Annual General Meeting, the manuscripts of the presentations and press photos at Media Kit | Annual General Meeting | ����AV. 
• The detailed voting results on the agenda items at the Annual General Meeting are available at Annual General Meeting I ����AV | ����AV. 
   

“We steadfastly adhered to our strategy in 2024 and forged full speed ahead with our transformation – despite the challenges the entire chemical industry once again faced,” says Dr. Markus Steilemann, CEO of ����AV. “In particular, the improvement in our plant availability enabled us to significantly increase our volumes sold. We are continuing resolutely along this path creating the basis for long-term growth with targeted investments in our competitiveness and sustainable future technologies.” 

Investments in production, the circular economy, and efficiency 

A key component of ����AV’s transformation is to strengthen production capacities. In 2024, the company optimized existing plans in Baytown (United States), Shanghai (China) and Tarragona (Spain), among others. Further investments to increase energy efficiency and thus competitiveness in production were also made at the TDI plant in Dormagen (Germany). ����AV also recently announced to expand its site in Hebron, Ohio (USA) with a low triple-digit million euro investment. The company aims to increase the production capacities of differentiated polycarbonates in the Solutions & Specialties segment. Construction is scheduled to begin in 2025, with operations starting by the end of 2026. 

Alongside that, ����AV is continuing to transition to a circular economy in a targeted manner. In 2024, the company secured access to renewable energy from a solar farm in Spain under a long-term power purchase agreement (PPA) with bp. This will increase the share of renewables in ����AV’s electricity consumption in Spain from 10% to 30% and reduce CO₂ emissions by around 16,000 metric tons per year. Moreover, ����AV is investing EUR 100 million worldwide in innovation centers for research and development. Besides these targeted growth initiatives, ����AV is also committed to systematically optimizing internal processes. As part of its “STRONG” transformation program, ����AV thus aims to save EUR 400 million worldwide each year by 2028 by means of digitalization and structural adjustments. 

“We cannot influence external market conditions – but we can control how we respond to them,” says Christian Baier, CFO of ����AV. “That is why we used 2024 to make our processes more efficient and to enhance our resilience.” Digitalization and artificial intelligence play a key role in that. We will continue to optimize our structures in 2025 to make ����AV fit for the future.” 

Due to the negative net income and in accordance with ����AV’s dividend policy, no dividend will be distributed for fiscal year 2024, as was also the case in the previous year. 

Takeover offer of the ADNOC Group successful 

Following concrete negotiations, ����AV signed an Investment Agreement on October 1, 2024, with companies of the ADNOC Group, including ADNOC International Germany Holding AG (“Bidder”), a wholly-owned indirect subsidiary of XRG P.J.S.C. (formerly ADNOC International Limited, together with the Bidder and other companies of the ADNOC Group “XRG”). On October 25, 2024, the bidder made a voluntary public takeover offer (“takeover offer”) of EUR 62 per ����AV share to all shareholders of ����AV. Following the end of the additional acceptance period on December 16, 2024, XRG announced on December 19, 2024, that the takeover offer had been accepted for a total of 154,541,806 ����AV shares. Together with the shares previously acquired by XRG, this corresponds to a stake of 91.3% of ����AV’s existing capital stock as of the above-mentioned reporting date. As a result of further subsequent purchases of ����AV shares, XRG’s stake in ����AV’s capital stock at the end of 2024 is 91.58%. 

XRG sees ����AV as a key component in its performance materials and special chemicals business and shares its strategic vision of becoming fully circular. The takeover is an important step in XRG’s strategy of becoming one of the world’s top five chemical companies. 

The takeover offer is subject to the usual conditions of completion with regard to antitrust and foreign trade clearance and clearance under EU law on foreign subsidies. Completion of the transaction is not expected before the second half of 2025. 

Outlook for 2025: EBITDA between EUR 1.0 billion and EUR 1.6 billion anticipated 

����AV expects economic conditions to remain challenging in 2025, too. Against this backdrop, the Group anticipates EBITDA of between EUR 1.0 billion and EUR 1.6 billion for the current fiscal year. ����AV expects FOCF of between EUR 0 and EUR 300 million and ROCE above WACC of between –6 percentage points and –2 percentage points. The Group anticipates that Scope 1 and Scope 2 greenhouse gas (GHG) emissions, measured in terms of CO₂ equivalents, at ����AV’s environmentally relevant* sites will be between 4.2 million metric tons and 4.8 million metric tons. The Group expects EBITDA for the first quarter of 2025 of between EUR 50 million and EUR 150 million. 
 

Increase in sales at Performance Materials; Solutions & Specialties impacted by declining prices 

Sales in the Performance Materials segment rose to EUR 7.0 billion (previous year: EUR 6.9 billion). While a successful pickup in volumes of 12% drove up sales, a weak market situation with excess supply weighed on selling prices and margins. EBITDA fell by 1.2% to EUR 569 million (previous year: EUR 576 million), while FOCF decreased to EUR 78 million (previous year: EUR 162 million). 

The Solutions & Specialties segment posted a 3.6% fall in sales to EUR 7.0 billion (previous year: EUR 7.3 billion) due to lower average selling prices coupled with lower raw material prices. EBITDA fell by 9.4% to EUR 740 million (previous year: EUR 817 million). In addition to a drop in margins, the reason for this was that, unlike in the previous year, there was no non-recurring positive effect resulting from the sale of the additive manufacturing business in 2023. In addition, expenses due to implementation of the STRONG transformation program reduced earnings. The segment’s FOCF decreased by 24.3% to EUR 417 million (previous year: EUR 551 million). 

Fourth quarter of 2024 with positive EBITDA and cash flow

����AV’s sales rose in the fourth quarter of 2024 by 0.9% year over year to around EUR 3.4 billion (previous year: EUR 3.3 billion). EBITDA increased by 44.7% compared to the prior-year quarter to EUR 191 million (previous year: EUR 132 million). FOCF amounted to EUR 253 million and was therefore 246.6% higher than in the prior-year period (previous year: EUR 73 million). 

"This investment in our U.S. compounding plant is an important component of our 'Sustainable Growth' strategy. With this expansion, we can meet our customers' growing demand for specialized polycarbonate materials, grow together with our customers, and strengthen our position as a leading provider of polycarbonate materials in North America," says CTO Thorsten Dreier. "The move also aligns with our strategy to produce in the region for the region, to manufacture close to our customers and ensure reliable supply."

The capacity expansion is an important step to meet the growing demand for high-quality materials for the automotive, electronics, and healthcare industries in North America. "To be successful in these markets, you need the right portfolio, consistent quality, and supply reliability, as well as solution-oriented technical expertise,” says Lily Wang, head of the Engineering Plastics Business Entity. "The expanded production capacity for differentiated polycarbonates enables us to better serve our customers' complex needs for high-quality, high-tech materials with individualized properties.”

����AV already has an established R&D center in Pittsburgh and is now doubling down on its U.S.-based compounding capability. In the future, both facilities will work even more closely together to drive the technology transfer from lab to industrial production to support major transformation processes, such as the electrification and automation of mobility, sustainable developments and digitalization.

“This investment, which follows our recent announcement of an almost 40 million Euro investment in our R&D capabilities in Pittsburgh, underscores how critical our U.S. sites and the U.S. market are to ����AV’s global strategy,” says Samir Hifri, chairman and president of ����AV LLC. “The expanded capacity of our polycarbonate compounding capabilities in Ohio will both help us better supply our customers as well as represent a commitment to our employees at the site, the Hebron, Ohio community, and the U.S. market as a whole.”

Construction of the new production lines is scheduled to begin in 2025, with operations starting by the end of 2026.

At the start of the Annual General Meeting, Dr. Markus Steilemann, CEO of ����AV, looked back at the past fiscal year, which can be considered one of the most difficult for both the chemical industry as a whole and ����AV. “Numerous different external factors, from geopolitical tensions through inflation down to the weak global economic situation, led to a collapse in global demand in almost all areas. That is also reflected in our financials: Business was extremely challenging in the past year – and is expected to remain that way in 2024. We will therefore focus on those aspects over which we have control: driving our strategy and a clear focus on four key operational focus areas.”

The first of these focus areas is production: ����AV is increasing the safety and reliability of its facilities and working even more energy-efficiently. A second focus is on increasing sales volumes, which will be achieved by optimizing plant capacity utilization. By maintaining strong customer centricity and concentrating on lucrative solutions for customers, ����AV aims to improve margins, which have recently been weak. That is the third focus area. Finally, cost discipline in all areas of the organization and the systematic reduction of fixed costs are at the center. The comprehensive use of artificial intelligence (AI) will provide support in this context in all business and administrative units.

In 2023, ����AV continued to drive its vision of becoming fully circular by, among other things, expanding the procurement of renewable energy by entering into a power purchase agreement in the United States. Recycling technologies were developed further, for example in chemical recycling for polycarbonates on a pilot scale in Leverkusen in Germany. The opening of the world’s first pilot plant for manufacturing bio-based aniline marked another milestone. This underscores ����AV’s claim to being one of the pioneers of the circular economy.

No dividend distribution due to net loss

In his contribution, Christian Baier, CFO of ����AV, talked about the financial indicators and put them into context for shareholders. “The global market environment was impacted by weak demand and declining selling prices as a result. This is reflected in our results for the year 2023. Due to the numerous global challenges, ����AV generated negative net income of 198 million euros for fiscal 2023 overall.”

Given the difficult fiscal year with low profitability, ����AV’s redoubled its focus on free operating cash flow. Despite the significant drop in EBITDA, the company successfully generated a positive figure of 232 million euros in 2023.

In light of the net loss, the Board of Management of ����AV decided not to propose any dividend for fiscal 2023. This is in accordance with the Group’s dividend policy, which since 2020 has linked the dividend more closely to the financial situation of the company.

Markus Steilemann ended the speech section of the Board of Management with a look at the milestones reached in the circular economy and presented the reduction targets for Scope 3 emissions, which complete the Group’s climate neutrality strategy. ����AV is planning operational climate neutrality for Scope 1 and Scope 2 by 2035. The first milestone for Scope 3 emissions is also expected to be achieved by then: a 30 percent reduction in greenhouse gas emissions from upstream and downstream processes in the value chain. Four specific levers have been defined for implementation. ����AV starts with suppliers reducing their Scope 1 and Scope 2 emissions, drives sales of products based on alternative raw materials, and develops innovative processes for alternative and recycled raw materials. In addition, there is a large number of other supporting measures, which have been combined into the fourth lever.

Improvements in operational performance and competitiveness as well as the systematic focus on the circular economy will ensure that ����AV is positioned for the future.

Further information and documents 

• You can find a recording of the 2024 Annual General Meeting, the manuscripts of the presentations and press photos at Media Kit | Annual General Meeting | ����AV. 
• The detailed voting results on the agenda items at the Annual General Meeting are available at Annual General Meeting I ����AV | ����AV. 
   

In addition to the reduced complexity of the new production process, the connection to the existing infrastructure in Antwerp with four production lines for polycarbonate also has an advantageous effect, as it combines global scale in production with the flexibility of a stand-alone unit.

"The new production process is the first and only one of its kind in the world and enables us to offer a broad portfolio of material innovations," says Sucheta Govil, Chief Commercial Officer at ����AV. "With the new plant, we can now produce and launch new polymer materials on an industrial scale much faster than before. This is the result of several years of development work by our research and process technology teams, as well as our long-term experience with polycarbonates. In our Solutions & Specialties segment, we focus on sophisticated products with a high pace of innovation, which is a key success factor since customer requirements change quickly. The new production line is a prime example of how we implement this strategy and support our customers to the best extent."

"Compared to pure polycarbonates, the copolymers open up new possibilites for us to integrate further functionalities and properties into our materials," explains Lily Wang, Global Head of the Engineering Plastics business unit. "These can range from improved mechanical properties, a higher resistance against chemical attack to an enhanced flame retardancy. By that, we can offer innovative materials that meet the high requirements of our customers in a wider range of applications. We will focus first on materials for the electrical, electronics and healthcare industries, while future innovations might focus on mobility and other trends." To understand its customers' needs, ����AV will showcase some of the products that could be produced with the new plant at the Chinaplas exhibition in Shanghai in April and looks forward to talking to customers about these innovative material solutions.

The lower than average selling prices and decreased sales volumes, resulting from weak global demand, led to a decline in Group sales. Compared to the previous year, 2023 saw a decrease in sales by EUR 3.6 billion (–20%) to EUR 14.4 billion (previous year: EUR 18 billion). EBITDA fell by EUR 537 million (–33.2%) to EUR 1.1 billion (previous year: EUR 1.6 billion). Although net income in fiscal year 2023 remained negative at EUR –198 million, it nevertheless improved slightly compared to the previous year (EUR –272 million). In addition, thanks to consistent working capital management, ����AV again generated a positive free operating cash flow (FOCF) of EUR 232 million (previous year: EUR 138 million). ROCE above WACC was –6.1 percentage points (previous year: –5 percentage points). Greenhouse gas emissions for Scope 1 and 2 rose slightly to 4.9 million metric tons of CO₂ equivalents (previous year: 4.7 million metric tons). This is among others due to a more emission-intensive energy mix for purchased power and steam in the United States and Germany last year. 

“2023 was one of the most difficult years for the chemical industry in recent decades with ongoing geopolitical tensions, an ailing global economy and high energy prices, especially in Europe. In addition, there are a number of structural problems, especially in Germany. The overall weak demand for our core industries is reflected accordingly in our earnings,” says Dr. Markus Steilemann, Chief Executive Officer of ����AV. “That is why we have been even more resolute in driving the implementation of our strategy “Sustainable Future” in the past year. For this, we are relying on four key levers: We are permanently getting more out of our facilities, we are boosting sales volumes and optimizing capacity utilization, we are focusing on high-margin demand and, last but not least, we will continue to be cost-conscious. In doing so, we continue to put all our energy into ����AV’s transformation in 2024.”

With a negative net income in 2023, the ����AV Board of Management made the decision not to distribute any dividend for the fiscal year 2023. This decision was made in keeping with the Group’s dividend policy, which calls for a payout ratio of between 35% and 55% of net income. ����AV has created a stronger link to the Group’s overall business situation. 

Foundation for sustainable growth expanded 

“2023 was again defined by a weak global economy. As a result, although we closed the fiscal year in line with our estimates, we want to get back on track for growth, particularly with regard to our volumes and EBITDA performance,” says Christian Baier, CFO of ����AV. “To that end, in 2023, as part of our growth strategy, we implemented important principles: We are cutting costs, continuing to invest in the right places, ensuring that our plants have the right capabilities to deliver, and leveraging efficiencies. We are therefore taking the right steps to position ourselves for long-term sustainable growth.” 

Despite the very challenging environment in 2023, ����AV has continuously worked on optimizing its production processes in the past fiscal year. For example, the company improved the energy efficiency of its production facilities in Shanghai, China, and Dormagen, Germany. In addition, the Group reduced its fixed costs by a mid three-digit million euro amount in 2023. 

At the same time, ����AV invested in the expansion of its sustainable product range and production capacities, which also included commissioning a polycarbonate compounding plant for mechanical recycling at its site in Shanghai, China last year. ����AV will thus be able to supply more than 60,000 metric tons of high-quality polycarbonates made from mechanically recycled materials annually in the Asia-Pacific region by 2026. 

Climate neutrality target for Scope 3 emissions announced 

The efficiency measures implemented and initiated last year have allowed ����AV to further strengthen its foundation for sustainable growth and make more progress towards a circular and climate neutral economy. 

In this context, ����AV has now completed its climate strategy to reduce greenhouse gas emissions. In 2022, ����AV announced ambitious targets for scope 1 and scope 2 emissions with the aim of making its operations climate neutral by 2035. ����AV is now taking the next step and, as a short-term goal, plans to reduce its scope 3 emissions by 10 million metric tons by 2035. That corresponds to a drop in emissions of 30% compared to the 2021 base year. In the long term, ����AV aims to be climate neutral in its scope 3 emissions by 2050.

����AV also made further progress in the use of renewable energy in 2023 and concluded a virtual power purchase agreement (vPPA) for its third-largest production site worldwide in Baytown, Texas, United States. That will result in around 70,000 metric tons of CO₂ emissions being offset starting from the end of 2024. This follows several power purchase agreements that ����AV already signed in recent years for its sites in Europe and Asia. In total in 2023, ����AV covered around 16% of its global electricity demand with renewable sources (previous year: 12%). 

Outlook 2024: EBITDA between EUR 1.0 billion and EUR 1.6 billion anticipated 

����AV expects economic conditions to remain challenging in 2024. The company will therefore pay special attention to leveraging its own potential in 2024 to achieve even greater efficiency. Against this backdrop, the Group expects EBITDA of between EUR 1.0 billion and EUR 1.6 billion for fiscal year 2024. ����AV anticipates FOCF of between EUR 0 and EUR 300 million and ROCE above WACC of between –7 percentage points and –2 percentage points. The Group’s greenhouse gas emissions measured as CO₂ equivalents are expected to be between 4.4 million metric tons and 5.0 million metric tons. The Group anticipates that EBITDA for the first quarter of 2024 will be between EUR 180 million to EUR 280 million. 

Weak demand impacts sales development in both segments. Lower costs support EBITDA in Solutions & Specialties 

The weak global demand situation is also evident in the segment breakdown: Sales in the Performance Materials segment in fiscal year 2023 fell by 24.4% to EUR 6.9 billion (previous year: EUR 9.1 billion). This decline can mainly be attributed to a lower selling price level and lower volumes sold. Due to lower margins, EBITDA fell by 39.4% to EUR 576 million (previous year: EUR 951 million). As a result, FOCF fell by 70.2% to EUR 162 million (previous year: EUR 544 million). 

Sales in the Solutions & Specialties segment fell by 15.1% to EUR 7.3 billion in fiscal year 2023 (previous year: EUR 8.6 billion), again mainly due to lower average selling prices and lower sales volumes. EBITDA still remained slightly lower at EUR 817 million (previous year: EUR 825 million). This was primarily due to the positive trend in margins, since lower raw material and energy prices more than compensated for the decline in selling prices. Lower fixed costs and the sale of the Additive Manufacturing business also had a positive effect. The segment’s FOCF increased by 182.6% to EUR 551 million (previous year: EUR 195 million). 

Fourth quarter 2023 with positive EBITDA and cash flow 

����AV’s sales decreased in the fourth quarter of 2023 by 15.6% to around EUR 3.3 billion (previous year: EUR 4.0 billion). This development is primarily due to the lower price level in the fourth quarter of 2023. EBITDA amounted to EUR 132 million in the last quarter of 2023 (previous year: EUR –38 million). FOCF amounted to EUR 73 million and was therefore also positive in the fourth quarter of 2023 (previous year: EUR 550 million). 

"With this investment, we are strengthening our Solutions & Specialties segment and are committed to further expanding our growth businesses," says Sucheta Govil, Chief Commercial Officer of ����AV. "At the same time, we are responding to an increasing demand and supporting the expansion of future technologies and industries."

"We want to drive growth in the polycarbonate films business with innovation and a strong customer focus," says Aleta Richards, Global Head of the Specialty Films segment. “In doing so, we aim to intensify our collaboration with customers in the Asia-Pacific region and expand our product portfolio for the circular economy.”

Expanded range of films made from alternative raw materials

����AV already offers a whole range of , for example mass-balanced grades certified to the internationally recognized ISCC PLUS standard. Raw materials for these films are produced using biowaste and residual materials, which are taken into account in the value chain and in production and attributed to the products.

Since 2022, the Map Ta Phut site has also been ISCC PLUS certified, enabling it to manufacture and supply mass-balanced products. Customers can use these products in their established processes and apply them to meet their sustainability goals. In addition, ����AV already offers a range of films made partly with plant-based raw materials or recycled plastics.

“I’m delighted to share this important news for our Business Entity. This new plant will enable us to be in close proximity to our customers and the value chains in the IT, consumer electronics, footwear and other industries”, said Dr. Andrea Maier-Richter, Head of TPU at ����AV. “The majority of the TPU market and its growth prospects are in Asia and particularly in China. Our investment there shows our clear intention: We want to remain successful with our customers and partners in the long run.” 

An innovation center will also be part of the investment, enabling researchers on-site to design customized material formulas and to do formula adjustment to meet customer demands within very short cycles. Sustainable and ever more circular solutions are among the long-term core target for these efforts. This shall also support broadening the offerings under the recently introduced, sustainable “CQ” product line. Products labelled as such consist of at least 25% alternative, non-fossil raw materials. The site will furthermore utilize the most advanced production technologies and be run on 100% green power. It will produce injection molding grades for footwear and a wide range of IT devices, as well as extrusion grades for cables, hoses and tubes or automotive applications.

The chlorine is used on site as a raw material for the production of MDI, a precursor for the manufacture of rigid polyurethane foams as used for producing energy-efficient insulation solutions for buildings and refrigerating devices. In 2019, the global MDI market had a volume of around 7,500 kilotons and is expected to further grow in the long term. In addition to chlorine, the plant will also produce caustic soda for the Iberian and European markets. Both chlorine and caustic soda are two indispensable basic chemicals for the chemical industry, and are also key raw materials for many other strategic sectors. 

Andrea Firenze, General Manager of ����AV in Spain, added: "The arrival of this plant allows us to significantly strengthen ����AV's MDI production in Tarragona. Being able to have our own, independent supply of chlorine gives us the ability to further increase the efficiency and competitiveness of our MDI plant. Moreover, the new plant also strengthens Tarragona’s position as the benchmark for chemistry in southern Europe, promotes the economic and social development of the area and both directly as well as indirectly generates new jobs. I would therefore like to sincerely thank all my colleagues who have contributed to the success of this project with their work."

"����AV's business development last year was clearly impacted by the sharp rise in energy and raw material costs, high inflation and a weakening global economy," says Dr. Markus Steilemann, CEO of ����AV. "Nevertheless, our products are part of the solution to the current crisis and essential for a sustainable and circular future." 

Dr. Thomas Toepfer, CFO of ����AV, adds: "The recessionary environment and the extraordinary depreciation, in particular as a result of the current difficult economic conditions in Europe, additionally weighed on the Group's earnings. However, our record-high sales and clearly positive free operating cash flow also show that even in these difficult times we are succeeding in generating cash. Our balance sheet is very solid, so we are also prepared for a prolonged economic downturn." 

����AV provides already today the following preliminary key financial data for fiscal year 2022: 

• Preliminary sales amount to 17,968 million euros. The consensus expects this figure to be 17,999 million euros. 
   
• Preliminary EBITDA amounts to approx. 1,610 million euros. The previous guidance expected EBITDA to be between 1,700 million euros and 1,800 million euros. The consensus expects this figure to be 1,679 million euros. 
   
• Preliminary net income amounts to approx. –300 million euros. The consensus expects this figure to be 420 million euros. The Group's net income is particularly burdened by extraordinary depreciation of non-current assets in the amount of approx. 470 million euros and by adjustments of deferred tax assets in the amount of approx. 250 million euros. 
   
• Preliminary free operating cash flow (FOCF) amounts to approx. 130 million euros. The previous guidance expected FOCF to be between EUR 0 and EUR 100 million. The consensus expects this figure to be –39 million euros. 

The Annual Report 2022 will be published on March 2, 2023. 

"With our first ever green euro bond, we are once more demonstrating that, even in a globally challenging market environment, we are maintaining a clear focus on the circular economy and are embedding sustainability into all areas of our business," said Dr. Thomas Toepfer, CFO of ����AV. "The high demand among investors also, once again, demonstrates the high level of confidence the capital markets have in our strategic direction and forward-looking approach for managing the business." 

With this step, ����AV has underscored its strong commitment to sustainability. The company will use all proceeds from the bond issue to finance sustainable projects that contribute to the circular economy or, for example, relate to renewable energy, energy efficiency and sustainable construction. With this transaction, ����AV is, on the one hand, advancing to become fully circular. On the other, the company is strengthening its liquidity base, particularly against the backdrop of a persistently volatile market environment, while at the same time extending the average maturity of its bond portfolio. 

����AV was supported in the placement of the bond by BNP Paribas, Deutsche Bank, ING and Société Générale. 

"These projects will contribute to the high-quality and sustainable development in China and beyond," said Holly Lei, President of ����AV China. "They will also add to the scale and strength of our Shanghai site, which will be playing a key role in the quest of ����AV to becoming operational climate neutral by 2035."

A leading supplier for sustainable solutions

The new plant for PUDs, as well as a further line for polyester resins, from which PUDs are produced, are due to be completed in 2024. PUDs are used in more environmentally compatible coatings and adhesives for a wide range of applications, including automotive, construction, furniture, footwear and packaging. For instance, ����AV’s Bayhydrol^® and Bayhytherm^® raw materials are used in basecoats for automotive OEM and refinish coatings, as well as in wood and furniture coatings and robust floor coatings, while adhesives formulated with Dispercoll^® U are used in furniture and shoe manufacturing as well as in the automotive industry. Independent of the investment of ����AV in Shanghai, its large portfolio of waterborne polyurethane coating raw materials based on PUDs for various applications also includes products of the Baybond^®, Impranil^®, NeoPac^® and NeoRez^® series. 

"With the new investment, we will be even better positioned to address the rising demand for more environmentally compatible coatings and adhesives across the globe," said Zhong Xiaobin, Senior Vice President of the Coatings and Adhesives segment of ����AV in the Asia Pacific region. "As one of the global leaders in this segment, we will continue to tap the trend where our customers turn to more sustainable waterborne systems with equally good properties to replace solvent-based products."

High performance elastomers to drive sustainable growth

The new facility for polyurethane elastomers, which are widely used in industries ranging from offshore wind to solar energy as well as material handling, is expected to become operational already in 2023. The market for these flexible and durable materials in China and the Asia-Pacific region is growing faster than both gross domestic product and downstream industries.

"The new facility for polyurethane elastomers will ensure that we have a strong capacity to meet the needs of our customers," said Simon Chen, Head of ����AV’s Elastomers segment in Asia Pacific. "Our Desmodur^® based polyurethane elastomers will serve a wider range of applications as they boast excellent performance, particularly in the field of sustainable energy."

Since 2001, ����AV has invested EUR 3.6 billion into building the Shanghai integrated site, which comprises 11 plants and is the company’s largest site in the world. In the past year, the Shanghai site obtained the ISCC PLUS mass balance certification, meaning it can supply customers with larger product volumes from renewably attributed raw materials.

The new capacity is intended to meet the growing global demand for multilayer TPU Films. They are used in automotive interiors and construction, among other applications. Breathable, water-impermeable specialty films have also proven their worth in wound care and outdoor clothing. The new facilities are scheduled for completion as early as the end of 2023.

"With this capacity expansion, we are strengthening our Bomlitz site and our position as a leading supplier of technical specialty films," said Dr. Klaus Schäfer, Chief Technology Officer of ����AV, at the groundbreaking ceremony. "At the same time, we are investing in promising technologies and applications and creating new jobs."

For Aleta Richards, global head of the Specialty Films segment, the expansion offers opportunities to respond even better to individual customer needs and offer more sustainable products. "For some time now, we have also been developing customer-specific solutions with films made from alternative raw materials, as we are also seeing increasing demand in this area. The development and production of partially bio-based products is therefore to become a new focus at the Bomlitz site."

����AV is fully geared toward the circular economy and aims to become climate-neutral by 2035. To this end, the Bomlitz site plans to switch its energy supply completely to green electricity starting this year.

Epurex Films is one of three ����AV competence centers for specialty films in Germany. The other two centers in Leverkusen and Dormagen are focused on research, production and application of polycarbonate films.

The outlook factors in – unchanged – the acquisition of the Resins & Functional Materials (RFM) business of Koninklijke DSM N.V., Heerlen (Netherlands), which was closed on April 1, 2021.

Capital market expectations are based on the average values of the latest consensus estimates of financial analysts, published by Vara Research on July 7, 2021.

����AV adjusts its forecast for fiscal year 2021 as follows:

• EBITDA is expected to be between EUR 2,700 million and EUR 3,100 million. The previous forecast projected EBITDA between EUR 2,200 million and EUR 2,700 million. The adjustment of the forecast mainly results from a further improved margin outlook for the second half of the year. The consensus expects this figure to be EUR 2,611 million.
   
• Core volume growth is expected – unchanged – to be between 10% and 15%, of which around 6 percentage points are attributable to the acquisition of the Resins & Functional Materials (RFM) business.
   
• Free operating cash flow (FOCF) is expected to be between EUR 1,600 million and EUR 2,000 million. The previous forecast projected FOCF between EUR 1,300 million and EUR 1,800 million. The adjustment of the forecast mainly results from the increased forecast for EBITDA while the development of working capital has a negative effect. The consensus expects this figure to be EUR 1,362 million.
   
• Return on capital employed (ROCE) is expected to be between 16% and 20%. The previous forecast projected ROCE between 12% and 17%. The adjustment of the forecast mainly results from the increased forecast for EBITDA.

The increased EBITDA forecast is based on a preliminary EBITDA for Q2 2021 of around EUR 815 million, that meets the current forecast of between EUR 730 million and EUR 870 million. The consensus expects this figure to be EUR 828 million.

The half-year financial report 2021 will be published on August 6, 2021.

"With this expansion in capacity, we are strengthening our Dormagen site as a production and competence center for specialty films," says Dr. Klaus Schäfer, Chief Technology Officer at ����AV. "At the same time, we are investing in future-oriented technologies and applications."

The new lines will mainly produce multilayer flat films. These products, for example, play an important role in identity documents in order to embed security features and ensure the best possible protection against counterfeiting. They are also used in medical technology and car interiors.

Equipped for the future

Michael Friede, Global Head of the Coatings, Adhesives, Specialties segment: "These high-quality products and applications represent an important future business for ����AV. With the new capacities and their integration into our film center, we are emphasizing our proximity to the customer and our service."

"Our new production lines are equipped with state-of-the-art technology," emphasizes Dr. Thorsten Dreier, Global Head of ����AV’s Specialty Films and Thermoplastic Polyurethanes business. "That’s why we can now supply our customers faster and with higher quality. We also want to improve our development work and bring new products to market even faster."

Competence centers close to customers

The competence center in Dormagen houses production, a technical center for film processing, as well as a showroom and research laboratories. ����AV operates two other German competence centers for semi-finished products in Leverkusen and Bomlitz, as well as several competence centers worldwide.

As a further measure of the global investment program, ����AV started up a new production facility for polycarbonate films in Map Ta Phut, Thailand, last year. Previously, a coextrusion film plant in Guangzhou, China, was converted for the future and the efficiency and quality of production in South Deerfield, USA, were improved.

Capital market expectations are based on the average values of the latest consensus estimates of financial analysts, published by Vara Research on April 12, 2021.

����AV adjusts its forecast for fiscal year 2021 as follows:

• EBITDA is expected to be between EUR 2,200 million and EUR 2,700 million. The previous forecast projected EBITDA between EUR 1,700 million and EUR 2,200 million. The adjustment of the forecast mainly results from a better than expected margin development in the first half of the year. The consensus expects this figure to be EUR 2,206 million.
   
• Core volume growth is expected – unchanged – to be between 10% and 15%, of which around 6 percentage points are attributable to the acquisition of the Resins & Functional Materials (RFM) business.
   
• Free operating cash flow (FOCF) is expected to be between EUR 1,300 million and EUR 1,800 million. The previous forecast projected FOCF between EUR 900 million and EUR 1,400 million. The adjustment of the forecast mainly results from the increased forecast for EBITDA. The consensus expects this figure to be EUR 1,037 million.
   
• Return on capital employed (ROCE) is expected to be between 12% and 17%. The previous forecast projected ROCE between 7% and 12%. The adjustment of the forecast mainly results from the increased forecast for EBITDA.

The increased EBITDA forecast is based on a preliminary EBITDA for Q1 2021 of EUR 743 million and an expected EBITDA for Q2 2021 between EUR 730 million and EUR 870 million.

The outlook factors in the acquisition of the Resins & Functional Materials (RFM) business of Koninklijke DSM N.V., Heerlen (Netherlands), which was closed on April 1, 2021, and the integration into the Coatings, Adhesives, Specialties segment. One-time costs that could arise in conjunction with the transformation program “LEAP” have not been considered.

The Q1 2021 interim statement will be published on April 28, 2021.

“We were able to successfully navigate through this highly exceptional year and maintained our ability to act at all times. We took a broad range of measures to protect our employees, keep supply chains running, and expand our strong liquidity position,” said CEO Dr. Markus Steilemann. “In fiscal 2020, we therefore were able to actively pursue our strategic goals. We defined our vision to become fully circular and took a major step in this direction with the announced acquisition of the Resins & Functional Materials business from DSM.”

Earlier in 2020, ����AV announced to become fully circular. To fulfill this long-term vision and embed circularity into all areas of its business activities, the Group decided to focus on four topics: alternative raw materials, innovative recycling, joint solutions, and renewable energies.

Strong results thanks to consistent measures

“The decisive measures we took early on helped considerably in delivering strong results. Backed by a significant recovery in demand from mid-year, we returned to our growth trajectory in the second half of the year and generated earnings that almost reached prior-year level,” said CFO Dr. Thomas Toepfer. “In an environment that is still characterized by uncertainty, we remain cost-conscious and continue to strengthen our efficiency. In addition, we are focusing even more explicitly on our customers in order to create value.”

To position itself more robustly in the wake of the coronavirus pandemic and secure liquidity reserves, ����AV implemented numerous additional cost-saving measures last year. As a result, the Group saved a total of EUR 360 million in the short term. The efficiency program “Perspective” launched in 2018 also contributed EUR 130 million in savings in fiscal 2020 and was wrapped up at year-end as announced.

����AV also pursued various types of financing measures in 2020. In doing so, the Group has aligned its financial instruments with its sustainability performance wherever possible to underscore its commitment to greater sustainability. The syndicated credit facility of EUR 2.5 billion, signed in March 2020, was linked with an Environment, Social, Governance (ESG) rating, for instance. The better ����AV’s ESG performance is, the lower the interest component of the credit facility will be.

Realignment of the strategy: Vision as guiding principle

With the clear goal of becoming fully circular and as an answer to changing market expectations, ����AV has consequently aligned its Group strategy.

This effort is centered on increased customer orientation and sustainable growth. Starting on July 1, 2021, ����AV will manage its business in a new, tailored structure around seven business entities aligned to customer needs and the competitive landscape. Going forward, the Group will distinguish between two business areas, Performance Materials as well as Solutions and Specialties.

• Performance Materials: This area will form a separate business entity and will comprise Standard Polycarbonates, Standard Urethane Components, and Basic Chemicals.
• Solutions and Specialties: This area will consist of the six new business entities Tailored Urethanes, Coatings and Adhesives, Engineering Plastics, Specialty Films, Elastomers, and Thermoplastic Polyurethanes.

����AV is combining the consistent alignment of products and processes with its customers’ needs with an even sharper focus on addressing sustainability in a profitable way. In the future, the Group will apply sustainability criteria even more stringently when undertaking investments, acquisitions, and R&D activities. As part of its transition towards a circular economy, ����AV is also expanding its portfolio of circular products.

“Our vision to become fully circular is charting the direction of our new Group strategy. The new structure is creating an optimal starting point for the future and will position us to become significantly more competitive,” according to Steilemann. “This will enable us to better meet our customers’ needs, make our company more efficient and effective, and generate sustainable growth. We are truly driving forward the transformation towards a circular economy."

New dividend policy with stronger focus on Group’s earnings

����AV is setting its dividend payout on a new basis. The dividend policy is based more strongly on the Group's earnings, with the dividend payout ratio amounting to 35% to 55% of the net income generated by the Group. “This dividend policy is more closely linked to ����AV's overall financial position and enables us to increase the dividend in years with strong earnings,” Toepfer said. Based on current performance, ����AV plans to distribute a dividend of EUR 1.30 per share for fiscal 2020. This corresponds to a payout ratio of 55%.

Guidance 2021: Fiscal year above pre-pandemic level 2019 expected

For fiscal 2021, ����AV expects core volume growth of between 10% and 15%. Around 6 percentage points of this figure are attributable to the planned acquisition of the Resins & Functional Materials (RFM) business from DSM, that the Group announced. Moreover, ����AV forecasts FOCF at between EUR 900 million and EUR 1.4 billion, with ROCE between 7% and 12%. The Group's EBITDA for full-year 2021 is anticipated to come in at between EUR 1.7 billion and EUR 2.2 billion. In the first quarter of 2021, the EBITDA range is projected to be EUR 700 million to EUR 780 million.

Recovery in demand across all segments in second half of 2020

The Polyurethanes segment saw core volumes sold decline by 6.1% in fiscal year 2020. Following a drop in demand in the first half of the year due to the coronavirus pandemic, a significant improvement in demand and an advantageous competitive situation in the second half of the year led to an increase in core volumes sold. Sales were down by 13.1% to EUR 5.0 billion for the full year, mainly due to a lower level of average selling prices for the year and the decline in total volumes sold. EBITDA fell by 3.5% to EUR 625 million, also on account of the decrease in volumes sold. However, a lower cost level resulting from cost-saving measures had a positive effect on EBITDA.

The Polycarbonates segment saw core volumes sold drop by 3.0% in fiscal 2020. The pandemic caused demand to dry up in the first six months. In the second half of the year, however, a robust recovery in demand pushed core volumes sold over the prior-year level. Sales were down by 14.1% to EUR 3.0 billion, mainly due to a lower level of selling prices and the decline in total volumes sold. In contrast, EBITDA improved by 3.2% to EUR 553 million, a trend primarily attributable to lower raw material prices and lower costs as a result of cost-saving measures.

The Coatings, Adhesives, Specialties segment's core volumes sold declined by 8.9% in fiscal 2020. In the first six months of fiscal 2020, core volumes sold were down largely because of the sharp drop in demand due to the coronavirus pandemic. By the end of the year, demand had recovered and core volumes sold in the fourth quarter of the 2020 fiscal year exceeded those of the prior year. Sales for the full year slid 13.9% to EUR 2.0 billion, mostly because of the decline in total volumes sold and lower average selling prices. EBITDA dropped by 27.3% to EUR 341 million. This was due to a decrease in volumes sold, lower margins and expenses for the planned acquisition of the RFM business. However, a lower cost level resulting from cost-saving measures had a positive impact on earnings. In addition EBITDA in the prior-year period was positively impacted by a one-time effect from the step acquisition of shares of Japan-based DIC ����AV Polymer Ltd.

Fourth quarter of 2020 well over prior-year level

Core volumes sold in the fourth quarter of 2020 rose by 1.7% over the prior-year period. Group sales therefore increased by 5.0% to EUR 3.0 billion as a result of higher selling prices. At EUR 637 million, EBITDA in the fourth quarter of 2020 more than doubled from the figure in the previous year. Net income climbed sharply from EUR 37 million in the prior-year quarter to EUR 312 million. FOCF also increased in the fourth quarter, by 19.4% to EUR 394 million.

"With these investments, we are preparing for the continued growth in demand for these products and expanding our leading global position," says Michael Friede, Global Head of the Coatings, Adhesives, Specialties segment at ����AV. "In the future, customers will continue to rely on replacing solvent-based products with more sustainable waterborne systems with equally good properties. Thanks to our versatile production, we are at the same time flexible and can satisfy many different requirements."

����AV develops tailor-made PUDs for a wide range of industries, thereby creating new growth opportunities. The company is a leader in research and development of products and process technologies and supports customers around the globe with technical service.

Wide range of applications

The areas of application for polyurethane dispersions are highly diversified. For instance, ����AV raw materials from the Bayhydrol® UH, U and UV series and Bayhytherm® are used in basecoats for automotive primary and refinish coatings, as well as in wood and furniture coatings and robust floor coatings. Adhesives formulated with Dispercoll® U are used in furniture and shoe manufacturing as well as in the automotive industry.

The low-solvent components also play an important role in the production of coated textiles and fiber-reinforced plastics.

"With this strategic investment, ����AV wants to further improve its infrastructure and customer proximity and strengthen its presence in the Asia-Pacific region," says Dr. Klaus Schäfer, Chief Technology Officer (CTO) of ����AV. "After expanding our capacities for polycarbonate films, we are now broadening the production spectrum at our Map Ta Phut site with a new investment project."

"With this additional production line, we are not only supporting our customers´ demand", explains Michael Friede, Head of the Coatings, Adhesives, Specialties segment, "we are also investing in the future global growth of applications and industries with high-end requirements."

High-performance elastomer

"Due to its extremely high mechanical strength and dynamic load capacity, the elastomer is the engineering material of choice for demanding applications," explains Dr. Thomas Braig, Head of Elastomers. "In addition, its long-term functional reliability optimizes the total cost of ownership compared to other elastomers. This makes Vulkollan® the perfect material not only in the material handling industry, but also for a growing number of engineering applications."

The product is one of the most powerful elastomers on the market. It is mainly used where highest mechanical strength and abrasion resistance is required. Examples are wheels for forklift trucks as well as couplings and seals for the engineering industry.

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����AV has successfully completed the capital increase envisaged in connection with the announced acquisition of Royal DSM’s Resins & Functional Materials (RFM) business through partial utilization of its Authorized Capital. As part of the capital increase, 10,200,000 new no-par value ordinary bearer shares were placed with institutional investors in an accelerated bookbuilding process. The placement price of EUR 43.85 per share represents a discount of 0.9 percent compared to the XETRA closing price of EUR 44.25 on October 13, 2020. The gross proceeds amount to EUR 447 million. ����AV’s share capital of EUR 183.0 million thus increases by approximately 6 percent to EUR 193.2 million. The proceeds from the capital increase will be used to finance part of the announced acquisition worth a total of EUR 1.61 billion.

Dr. Thomas Toepfer, Chief Financial Officer of ����AV: "With the completion of the capital increase, ����AV is taking an important step in the announced acquisition. This measure is a key element of the financing: with a balanced ratio of equity and debt capital, we clearly commit ourselves to our solid investment grade rating. The successful placement of all offered shares is an impressive proof of the capital market's confidence in ����AV and the financial and strategic logic of the transaction.”

The newly issued shares are to be admitted to trading without a prospectus on the regulated market with additional post-admission obligations (Prime Standard) of the Frankfurt Stock Exchange on October 15, 2020 and carry dividend rights for the fiscal year 2020. Trading is expected to commence on October 16, 2020.

The capital increase was executed by Joint Bookrunners BofA Securities, Citigroup and Credit Suisse, with additional support from Co-Bookrunners Banco Santander, Commerzbank, Deutsche Bank and UniCredit.

Therefore, ����AV provides already today the following preliminary key financial data from the Q3 2020 interim statement:

• Preliminary EBITDA amounts to EUR 456 million. Consensus expects this number to be EUR 373 million. The difference is mainly driven by higher cost containments as well as a stronger volume growth and a better margin development.
  
  Preliminary EBITDA for the Polyurethanes segment amounts to EUR 220 million, for the Polycarbonates segment to EUR 148 million and for the Coatings, Adhesives, Specialties segment to EUR 99 million.
   
• Preliminary core volume growth compared to prior year amounts to +3.0%. The recovery from the effects of the coronavirus pandemic has developed more dynamically than so far anticipated.
   
• Preliminary sales amount to EUR 2,760 million. Consensus expects this number to be EUR 2,847 million.
  
  Preliminary effects on sales amount to +0.9% by volume, -9,0% by price, -3.3% by exchange rates and -1.4% by portfolio.
  
  Preliminary sales for the Polyurethanes segment amount to EUR 1,315 million, for the Polycarbonates segment to EUR 801 million and for the Coatings, Adhesives, Specialties segment to EUR 495 million.

The Q3 2020 interim statement will be published on October 27, 2020.

As a consequence of the better than expected Q3 2020 results and a better than expected operational start into Q4 2020 ����AV adjusts its guidance for full year 2020 as follows:

• EBITDA is expected at around EUR 1.2 billion. The previous guidance projected an EBITDA between EUR 700 million and EUR 1,200 million. The adjustment of the guidance is primarily due to higher cost containments, a stronger volume growth and a better margin development for the full year. Consensus expects this number to be EUR 1,005 million.
   
• Core volume growth is expected – unchanged – to be below previous year (in 2019: +2.0%).
   
• Free operating cash flow (FOCF) is expected between EUR 0 million and EUR 300 million. The previous forecast projected FOCF between EUR -200 million and EUR 300 million. The adjustment of the guidance is mainly the result of an increased forecast for EBITDA as well as partly compensating effects from working capital. Consensus expects this number to be EUR 185 million.
   
• Return on capital employed (ROCE) is expected in the mid-single-digit percent range. The previous forecast projected ROCE between -1% and 4%. The adjustment of the guidance is mainly the result of the increased forecast for EBITDA.

The 2020 annual report will be published on February 23, 2021.

As a consequence of the coronavirus pandemic and the increasingly adverse business environment, the provided outlook cannot be upheld. The Board of Management therefore provides the following adjustments to the Group financial guidance for 2020:

• Core volume growth is expected to be negative for 2020 compared to 2019 (previously: positive low-single-digit-percentage range). Preliminary core volume growth in Q1 2020 was -4.1%.


• EBITDA is expected to be in the range between EUR 700 million and EUR 1,200 million in 2020 (previously: between EUR 1,000 million and EUR 1,500 million). This adjustment is primarily due to declining core volumes.


• Free operating cash flow (FOCF) is expected to be in the range between EUR -200 million and EUR 300 million in 2020 (previously between EUR 0 million and EUR 400 million).


• In 2020, the return on capital employed (ROCE) is projected between -1% and 4% (previously: between 2% and 7%).


• The company publishes a Group EBITDA of EUR 254 million as a preliminary number of the Q1 2020 Interim Statement. This preliminary result is within the published range of EUR 200 to 280 million. The full Q1 2020 Interim Statement is scheduled to be published on April 29, 2020.


• The Board of Management increases the target for short-term cost savings to more than EUR 300 million in FY 2020 (previously: EUR 200 million) in addition to the ongoing ‘Perspective’ restructuring program that is expected to contribute savings of EUR 100 million in FY 2020.


• Capital expenditures (CAPEX) are reduced by around EUR 200 million and are now expected to amount to around EUR 700 million in FY 2020 (previously: EUR 900 million).


• ����AV continues to maintain a strong balance sheet and has significant sources of liquidity. Presently, these include around EUR 1.2 billion in cash or cash equivalents as well as an undrawn revolving credit facility (RCF) of EUR 2.5 billion.

This update takes into account the negative impact of the coronavirus pandemic as it is foreseeable on April 15, 2020, and assumes a recovery of the current situation starting in Q3 2020. As the pandemic is still evolving, further updates to the financial expectations may be necessary.

The health of employees, shareholders and service providers involved takes absolute priority. By postponing a meeting with physical presence, ����AV would like to actively contribute to the slowing down of the spread of the coronavirus. In addition, the city of Bonn has prohibited all events of any kind for an unlimited period of time. In view of the current course of the wave of the infection, it cannot be assumed with sufficient certainty that this legal situation will change by April 17, 2020.

As a result of the cancellation of the Annual General Meeting on the original date, the resolution on the use of the distributable profit 2019 and consequently, the payout of the dividend, among other things, will be postponed.

The Annual General Meeting shall be scheduled to take place on a new date within the first eight months of the current financial year as stipulated by the German Stock Corporation Act. ����AV will inform its shareholders as well as the public of the next steps in due course.

The new facility replaces the existing EUR 1.5 billion revolving credit line, which was also a backup liquidity facility. It provides ����AV with additional financial flexibility and increased liquidity reserves on favourable terms.

One important new element of the facility is the link with an environmental, social and governance (ESG) rating: the better ����AV’s ESG performance is, the lower the interest component of the credit facility will be. In this way, ����AV is once again underlining its commitment to greater sustainability and creating its own financial incentives for sustainable business performance.

“We decided at the end of 2019 to increase our liquidity resources with a new EUR 2.5 billion syndicated revolving credit facility, which is provided by all our core relationship banks. This facility ensures that we have considerable financial leeway over the next few years. By linking the interest on the facility to an ESG rating, we are embedding sustainability as a topical focus in all areas of our business and setting ourselves ambitious targets,” said CFO Dr. Thomas Toepfer.