Yes. Thank you very much, Yudith and a warm welcome from Cologne, also from my side for our Q3 Conference Call.

As always, I have with me our CEO, Matthias Zachert; and our CFO, Michael Pontzen. Please take notice of our safe harbor statement.

And on top of this, I would like to collect our Executive Call, which will take place virtually tomorrow at 2:00 PM CET. With that, I'm happy to pass on to Matthias, for a brief presentation afterwards for the Q&A.

Matthias, please go ahead.

Thank you very much, André. And ladies and gentlemen, warm welcome from my side as well.

I would like to start the presentation directly on Page 4, where we give some key highlights on the third quarter. Q3 clearly shows that this so far in the running year has been the strongest quarter, which normally is not the case.

Normally, Q1, Q2 are the strong hitters whilst Q3 and Q4, you see the normal seasonal leveling off. This was different in Q3, because we have sets three months ago that we still have to catch up on raw material price inflation, on energy and logistic cost inflation.

And if you look into the EBITDA performance, Q3 is a million stronger so at higher levels than Q2, which is abnormal, 44% rise versus previous year is pretty strong and it predominantly stems from pricing, pricing, pricing. On the middle part of the slide, you see the developments on pricing versus Q2 versus Q1.

So when prices started to escalate in Q1, we promised to roll them over in Q2, which we did. Prices moved up further in Q2 and as a matter of fact in Q2, we also saw that energy prices were on the rise.

And what happened in Q3 is exactly what we told you, we will start rolling them over. With around about 20% price increase, which we have seen in the third quarter, we have for the first time not only pushed on the entire raw material price inflation.

The good news is we started to roll over energy prices not one to one, but we started getting them into our contracts. Besides this, the volume increase of 10% also shows you current market environments.

So all in all, Q3 should be a clear strong sign that the portfolio that we have is strong to address all price elements. In some cases with a time lag, but the most important element is we get them rolled over.

What we flagged for Q4, after from our point of view fundamentally strong Q3, there are logistic and freight cost constraints, we flagged them. What we do have to flag as well is in fourth quarter, different to third quarter, we do have reduced volumes, because unfortunately after the explosion in the incinerator in Leverkusen in summer this year, which did not really impact us in third quarter.

The second fallback solutions we have established a variety of other second opportunities, where we can dispose our leftovers. But one of the bigger companies went into a standstill now for four weeks.

This is of course not that nice, because it comes next to the direct incidence, it leads to now a volume reduction in some of our plants like intermediates and Saltigo. This leads to then of course a shortage on volume and profitability, so we take the hits in Q4.

This full back solution is back on stream in mid-December and we consider that also Leverkusen will be back in Q1 next year, so this is a quarterly events nothing for the long term. Of course, we also are confronted with energy concentration.

We took the decision not to hedge, we rather want to get them into our underlying contracts, which takes some time, but of course, in the fourth quarter, we will not be able to roll over the complete energy cost inflation, but we will work on the contracts to get that addressed for 2022. There are some shutdowns in China, but as far as majority is concerned, points number one, two, and three are definitely the more visible one.

Now let's come to the highlights on Page 5, as far as third quarter is concerned. We announced the acquisition of IFF microbial control.

This is a business, is antitrust rulings will be favorable and the good thing is by now the - from our point of view, biggest obstacle has been cleared that was the antitrust approval in the United States. So this is done, we are now addressing one by one the other jurisdictions and from our point of view, we consider that they will also be cleared, but of course we have to still apply everywhere and get the data and questions answered.

We closed the - by the way, this industry is about to consolidate, further. Yesterday, there was the announcements that some the former Lonza Specialty Ingredients business, who according to the Wires were second in the bidding process for IFF microbial control that they lost against us, according to the Wires, now went out and announced the acquisition of Troy, which was the fourth biggest player.

So with this announcement, basically the five big microbial control players in the markets have shrunk to three. And it goes without saying, we are definitely decent global player in this regards.

The second global player, we created is in the F&F industry supplier or precursor industry with the Emerald Kalama acquisition, we took on board pretty good global player with three production sites in the F&F area, we had two. So we will show tomorrow in the executive call, how this business would be configurated.

And definitely, it is a global player leading in this industry. This is what I would like to convey on the portfolio more to come.

Earnings versus previous year have improved on all segments, especially Specialty Additives and Engineering Materials. Additives has posted its strongest EBITDA since its formation, so they suffered last year, so the rebound is quite strong and as a matter of it all three business units have contributed to it nicely.

Engineering Materials with a strong rebound, but this was I think flagged before, it's a continuation on second quarter performance and of course here massive price increases had to be rolled over to the end customer, which we did. Also, consumer protection did well, but here you need to consider that in Q3, we unfortunately had a production, unplanned production fallout shortage and we lost around about EUR8 million to EUR10 million, where basically a production vessel compressor fell-off or fell-out, it had to be replaced.

We went off-stream for around about three weeks. The production is back and running on the fourth quarter, but Q4 was set and of course, the volumes are lost for the entire year, which is of course sad, but these one times happen every now and then.

Operating cash flow was substantially impacted by working capital increase and just to make it very simple, if you post the price increase of 20% on your receivables, you post the invoices in the running months in September, but you only collect the money next quarter and the same of course holds true for the inventory. So, if you look into the net working capital that has inflated, because of raw materials and energy costs, et cetera, we take here an increase and we had to absorb working capital increase of EUR400 million, I've never seen that before.

Of course, we need to collect it in the forthcoming quarter or quarters, but that was impacting operational cash flow. And the capital markets, Oliver Stratmann and Michael did some nice piece of work of EUR500 million, benchmark bonds with the zero-coupon.

I was not capable of issuing at the time of being in the finance leadership and it's good to have gifted people that do better than you are - that you have done. So with this, I move to the Slide number 6, we are trying to illustrate here to you the raw material, energy logistic prices in illustrative way.

So you see that raw materials sky rocketed this year. They are somewhat now leveling off stagnating at a high level.

What is now moving up quite substantially across the globe, but notably in Europe are energy prices in Q2, it happens, it started, it went on in Q3 further escalated in Q4. We suppose that this is going to be an element to stay potentially not at high levels, but we should consider that Q4, the pricing has to be embedded going forward, which we are addressing customer by customer with a certain time delay, but that we can do it, I think Q3 fundamentals have shown and proven.

Logistic prices not as important as energy and raw materials, but they're also on the rise and need to be addressed and pushed to the next level. On page number 7, we show you that we also further advance on ESG, so Sustainalytics, we wanted to improve our rating clearly as well.

The last time we could show you that also MSCI upgraded us, now further Indeed, our ratings follow, so we are happy that we are also here now in the top range of the ESG ranking and as far as products are concerned, we signed an alliance with BP, a company most of you know, and we are here addressing to source bio-based raw materials and that they would be embedded for instance into cyclohexane and therefore, we are producing a product called Durethan Scopeblue, which is 92% the bio-based. Wow.

So also on not only climate and on water efficiency we are working, we also addressing cyclical economy, we also address bio-based raw materials, of course, as far as the letters concerned, we are at the beginning, this would take a few years, but we are addressing it business by business, and I think you see that we also take first strides in the right direction as fast this is concerned. Linksys we specify the guidance I think macroeconomies have been addressed during the reporting season, no needs to shed further light on this.

And as far as our guidance is concerned, we stick to what we have said before; however, due to the virus, various one timers that we've seen with Saltigo in Q3 rolling over into the full-year guidance, but also constraints on freight costs, the hit on reduced waste water management capacity, which will be visible in November fully and first week of December. We take that into consideration and energy cost inflation, we have no financial hedge, we always consider that this is something we should be able to embed in our operational contracts.

This takes time, we are working on that. In Q3, you saw that we advanced nicely on this one, but those were financial hedges will most likely still have to do the work in 2022.

We are starting to take the pain now, but hopefully will then be in a better shape in 2022. Shutdowns in China we see that, but it's in the single-digit million area, it happens everywhere, sometimes you get notification three hours before, sometimes it's a little longer, a lot of times, so that you can preparatory steps, but this is a little erratic and our assumption is this will still be a theme coming or lasting until February next year and potentially will then be done with, but at this point in time, we still have that on the radar even though with only a small blip.

Based on this, I cut a long story short. I think the key seem out of Q3 is we have pricing power and momentum is strong.

However, we are living in an environment, where you continue the dealing with price inflation, but Q3 has shown that we are able to mitigate that. And therefore, our company is on track and we will continue driving with all energy into the strategic direction that we have highlighted in the past and will also do tomorrow.

And with this, I open up the call for your questions.

Yes. Good afternoon and thank you for taking my two questions.

Firstly, what is your visibility in your order book and what can you tell us about the demand pattern going into the year 2022. And the secondary question is on your guidance, you mentioned four reasons for the slight cuts.

Is the order of the reasons indication about expected earnings effect, so number one reason logistic issues, freight costs, most important factor waste management, that's the second and then for some example reason fall the shutdown in China are rationing the least important. Thank you.

Well, thank you for your two questions. On the order book, I mean we do have of course stronger visibility for the next two months.

We have visibility also for, in light of the shortages that we have in various value chains, of course there are - the customers started to go for longer time indications that on binding contractually binding, but of course they try to secure volumes due to the disruptive value chains in the last two quarters. So we do see that the completely overheated environment levels off a little, some regions contributed to this like China for instance, so here there is a clear softening, not a drastic decline, but a softening.

So the overheated situation levels off, which might not be that, it should lead to softening as well and with more which from my point of view in '22 towards a good economic environments; however, then with running value chains and not disrupted value chains. As far as Q4 order book is concerned, the order book is healthy.

However, despite on this - in the past, we had - in the third quarter, we still had to go on allocation for sea customers. This will no longer be the key theme for Q4, so the order book is still strong, but we don't need to decline sea customers anymore, which of course was different in Q2, Q3 and also this, I would say is healthy.

Now to the four bullet points on Q4, I would like to put things into perspective, our guidance was EUR1,000 million to EUR1,050 million, midpoint being EUR1,025 million. We go to the lower end, so we are talking about something like EUR25 million.

So whatever the magnitude is the first three bullet points are definitely the bigger bullet points, the fourth one being the lowest, but none of them is one that should send shockwaves through the system. And I hope that clarifies the second question of yours.

Thanks for taking my questions as well. So first thing is on the consolidation comment, you made Matthias around the buy side market.

So you see the, I think they're calling it Akshada - I don't think I can pronounce that, but the Lonza-Troy deal yesterday you're seeing that as a positive. These are not also the flip side of our argument, whereby those two become a lot more powerful and make your life as a new owner of the IFS business a bit tougher.

I'm just interested in specifically, where you overlap with these guys and where you don't, it's not a market, where I can get a lot of facts, so I'd appreciate any insights there. That's the first question.

The second question was a bit more straightforward on 2022, you helpfully pointed out that Saltigo is an EUR8 million to EUR10 million impact, so roughly that seems to me you'll be traveling between 19% and 20% underlying EBITDA margin in Q3 for consumer protection. What's your thinking around 2022 all in, so thinking about the two deals plus the underlying business in terms of your margin opportunity?

Thank you.

Andrew, on the first question, it's - as we've indicated in our emails and invites for tomorrow. Let's address the first question, I think tomorrow we will shed more light on F&F an app and also on the acquisition of IFF microbial control.

So we clearly think this is a positive for the customers, it's a positive for ourselves, we think it's a positive for the industry, it's a natural consolidation in light of what I always accommodate, this is an industry that needs quality and industry that needs highest standards and industry that is exposed to high regulation and only the strong ones will make it happen. And therefore, what we offer to the industry will be compelling, I fully understand the consolidation process that the PEs like to do, this is their buy and build strategy.

I think we were a little faster and potentially even little smarter as far as the IFF move is concerned, but all in all, I fully understand what Bain and Cinven are doing on Troy and I think all of us will contribute to consumer happiness, customer satisfaction and contributing to the improvement of addressing viruses and diseases and what have you worldwide. More on this one tomorrow.

On Saltigo, I mean Q3 without Saltigo production shortage, the business would operate around 19% - 20% margin, if you address the I mean fourth quarter should is normally seasonally weaker, but we assume that Q4 would be operationally better than Q4 last year. If I look into 2022 for consumer protection, of course, we will close the transactions or if we close the transaction on IFF, but even without the closure of the IFF transaction, the business from everything that I know as of today will be clearly the 20% plus division, as it used to be in last year and that should also be the same for 2022 without doubt.

And more to come on this one also tomorrow.

And sorry, just a quick follow-up Matthias, but can you just explain again what happened in Q3 with Saltigo, I didn't quite catch the detail. Thank you.

In the program - in the production, sometimes you have some walls or compressors simply falling off, because of - there is a - they come somewhat, they are coming to end of life, and it was not seen and then the production, you need to replace the machine and then you replace a machine, the machine has been replaced, production is running again, but you had two, three - three weeks of product shortfall.

Okay. Thank you very much.

You're most welcome. And I hope that my treasury team could address the 9/11 questions.

I supported it, so. Next question please.

Thank you. The first question really is on the Specialty Additives and well done on a very good results.

Just around sort of the flame retardants market, especially with bromine, where things have gone a bit crazy in China, can you just give us some indication about sort of your length of contracts and are there going to be massive sort of price negotiations, towards the end of the year into the next year, given that the Chinese market is structurally short and demand is really, really good. That's my first question and the second question is really around cash flow and I appreciate the comments you're making, which are current comments around energy cost and pricing and receivables, but you just taking a step back Matthias here, I would actually like to sort of not say that, Michael and Oliver haven't done a great job, well done on their treasury zero-coupon bond, but when you were the CFO, LANXESS had one of the best-in-class cash generation profile and the last couple of years, that's been a bit lagging.

So when will --

You heard that, Michael? Oliver?

That's what I keep telling you all the time. Continue please.

Yes. So, no, very, it's very simple really is when will LANXESS go back to consistently converting the EBITDA into cash generation, because I guess, we are looking at the share price, I guess this is only justifiable point why stock hasn't re-rated.

Thank you.

Yes, it's - So let me address them one by one and of course as you ask me, I take the liberty to make some comments on cash flow, otherwise Michael would be more qualified to do this. Length of contracts, I mean we do have here and they are longer lasting contracts, some of them were addressed in Q3 already.

I mean you saw also that Specialty Additives that did well in Q3, strong rebound strong absolute EBITDA $100 million plus, so far never achieved, so they did well also because of pricing came through and some contracts were renewed. So we could adjust for bromine prices and also energy prices.

So clearly a positive. What I clearly need to convey to you, however, is we could have done more Jaideep, had we - we could have done more Jaideep had we had less logistic constraints.

Please understand we are shipping from the United States to China and this is a complete wreck you most likely have heard about congestions not only in the United States. So you have difficulties getting your containers on the ships.

And then when they are finally on the ships, getting them de-charged in Asia is simply bloody - not only bloody expensive, if you get volumes at all on time shipped to China. So here it's not so much the pricing, but and the length of contracts, we see that the length of contract some turn towards better pricing now, but we could not deliver all of the goods we wanted to ship to China.

So this is the point number one. I think it will - it will still be stress in the logistic change - chain in the next six months or in the first half of 2022, I think it will take some time to level off.

I spoke to the logistics industry, I even spoke to a CEO of a, one of the biggest container companies in the world, their adding capacities, but the first ones would basically come summer next year and then they will improve further the other companies are going to follow. So, you will still have constraints on container capacities for the next at least 6 to 8 months.

And then the situation should be potentially leveling off, but of course, I want to see that. Non-cash flow, exactly what you're saying, - yes, that's my point clearly, but now let's takes the humoristic side out.

Oliver and Michael, I cannot blame them for price escalation on raws that we've seen this year, I mean the price escalation in Q4 - Q3 sorry EUR400 million within one quarter on net working capital, which is not stemming from a big-volume increase on stocks, it's basically pricing, pricing, pricing, I cannot blame them for that. That's basically the current situation that we are in, you've seen that most chemical companies set a huge increase in net working capital, it's the same on our end.

The second thing that I also don't blame Oliver for and also not Michael, if you look into the third quarter, we completed in the third quarter, the Emerald transaction, so all normally when you do end a transaction, you cash-outs at the closing. You also cash-out when you announce deals like the IFF.

So we did basically in Q3 closing off Emerald, we announced IFF, so we had double-digit million tickets for M&A coming through, if you look into our quarterly reports, we will have year-to-date, I think something like EUR40 million, EUR50 million for M&A. This is a reflection of the company transformation, business transformation that we have done.

Of course, this is something that I have on the agenda. We want that the cash flow definitely has to improve, it's on my radar now, it's on my radar, not only Michael's and Oliver's.

So we will make sure that the cash burners like digitalization, M&A with somewhat still be a theme for next year, but then level off and then we need to have definitely the company at the higher cash conversion going forward, because I want to make sure that we come back to levels, where the capital market understands that not only in absolute EBITDA terms we are moving up, but also cash wise we move up in order to show you that this portfolio is as strong, as we are communicating to you. I hope Jaideep that this clarifies the question.

I actually would like to follow up a bit on the last question. Given the moves in the working capital and assuming the IFF deal closes, where do you think you land in terms of net debt at the end of the and when you look into 2022, how much flexibility or headroom does that give you to fund interesting CapEx projects or interesting acquisition opportunities.

Does the working capital essentially remove some of the flexibility in-house unless you look at potential disposals? Thank you.

Yes. Michael will take the first part.

I'll take the second part. Michael, come on, start with the first one.

Hi, everybody, a very warm welcome from my side. Yes, at this point in time, as you all saw indebtedness of the Group is around EUR2.2 billion, we indicated that the transaction of IFF is at the amount of $1.3 billion, which would then lead to a pro forma indebtedness of EUR3.4 billion.

On the other hand, we said that for the next months to come, we will focus on reducing our net financial debt. And I think given the pattern, which we saw in the past and the pattern we saw in the past was that there is a relief, one from working capital in the fourth quarter especially if you look for example, last year in the fourth quarter we were able to release some $200 million in the fourth quarter, it's too early to say what the effect will be for this quarter given the still high raw material and energy price inflation.

But again the pattern shows at least in the past years that the Q4 will give a relief on the working capital. With regards to our ability to fund CapEx like Matthias said, we will clearly look into 2022 and our expectation as well when it comes to our ability to generate cash that will hopefully our expectation is that some of the exceptionals will no longer be in the P&L in 2022 and according to that, we will then decide on the budget for CapEx, but the group is in a position to improve cash flow next year and that will then decide over the CapEx budget.

All in all, under the line with regards to our indebtedness, we will of course remain focused on our investment grade rating, which is still one of the major, let's say, underlying definitions, which we have here in the Group.

So then on the strategic side, I think we clearly affect the 12 months of now digesting the two M&A moves we made on the bigger scale and clearly for the next 6 months to 12 months, we will digest and start deleveraging and then of course, if we move further on CapEx or on M&A, it means that we have to get the respective proceeds further, this can be achieved through divesting other businesses or swapping like we have done in the past. If not, we have to be more humble and that will be the direction that we take going forward.

Just to follow-up Michael then, so if I include the pension deficit, you're not too far away from about four times net debt-EBITDA. Is that a concern for the rating agencies in their view of investment grade or is there a kind of a pathway that's been communicated to them as to how you work that leverage down over time.

Yes Matthew, if you take a look in the reports, which were displayed by the rating agencies, when we announce our transaction with IFF and they included in their models the implication from IFF, they didn't seem to be overly concerned. If you refer to this year's EBITDA, you are right that we going in that direction, but the rating agencies like you guys players forward looking DCF models and with regards to the implication we will receive from Emerald the benefit from the first time control year consolidation.

Then we have consolidation effects from IFF, both businesses attractive, when it comes not only to margin, but as well when it comes to cash conversion profile. They will further improve the business risk profile for the Group, so therefore at least with regards to the reports on the rating agencies published a few months ago, there are no red flags, just the opposite they basically didn't even move the outlook for our rating.

Hi, it is Chetan now actually. I just had one question and you know it's more on the Engineering Materials business, we've seen DSM talk about putting their material business on the block, you know, we've seen announced something like, what is the LANXESS' strategy on the Engineering Materials business from a long-term perspective, given some of these large transactions being announced by the key players in the industry?

That's the only question I have, Matthias.

Yes. Chetan, that is a valid question.

The only, I mean the only comment I can make is we are aware of what is happening and what plans are prepared, so we know how to move in the one or the other direction. I'm not in a position to convey more, but everything that is currently happening does not surprise us, and I think we can operate out of a position of strength.

Well, ladies and gentlemen, it was a pleasure talking to all of you and I think the key comments that we have made, third quarter was a strong quarter with strong operational performance. We are looking forward to first of all, if you - if time allows in the call tomorrow, where we will explain our recent acquisitions that we have done, the strategic rationale, and of course the next week, we will be the first time physically on the road.

So, I hope then to speak to you no longer through Zoom, Teams and WPS, but face to face and looking forward to doing that. All the best until then.

Stay passionate about the industry and stay healthy of course as well. Thank you very much.

Bye-bye from Cologne.