Welcome to the OMV Group's Fourth Quarter 2023 Results Conference Call and Webcast. [Operator Instructions] Please be advised that today's conference is being recorded. At this time, I would like to refer you to the disclaimer, which includes our position on forward-looking statements. These forward-looking statements are based on beliefs, estimates and assumptions currently held by and information currently available to OMV. By their nature, forward-looking statements are subject to risks and uncertainties that will or may occur in the future and are outside the control of OMV. Therefore, recipients are cautioned not to place undue reliance on these forward-looking statements. OMV disclaims any obligation and does not intend to update these forward-looking statements to reflect actual results, revised assumptions and expectations and future developments and events. This presentation does not contain any recommendation or invitation to buy or sell securities in OMV. I would now like to hand the conference over to Mr. Florian Greger, Head of Investor Relations.

Yes. Thank you, and good morning, ladies and gentlemen. Welcome to OMV's earnings call for the fourth quarter 2023. With me on the call are OMV's CEO, Alfred Stern; and our CFO, Reinhard Florey. As always, Alfred will walk you through the highlights of the quarter and discuss OMV's financial performance. Following his presentation, both gentlemen will be available to answer your questions. And with that, I'll hand it over to Alfred.

Thank you, Florian. Ladies and gentlemen, good morning, and thank you for joining us. Before I discuss the fourth quarter performance in detail, let's have a brief look at our full year results and key achievements of 2023. Last year was another challenging year characterized by various geopolitical conflicts, high volatility, lower prices and margins in E&P and refining combined with a weak chemicals environment. In this environment, we were able to achieve a strong financial performance; a clean CCS operating result of €6 billion, the second highest in OMV's history; an excellent operating cash flow of €5.7 billion; a very healthy balance sheet with low net debt and a leverage ratio of 8%. And ladies and gentlemen, as promised, our shareholders will benefit directly from this success. For the financial year 2023, we will propose to the Annual General Meeting a regular dividend per share of €2.95 and a special dividend of €2.10. This will mean, in total, a cash dividend of €5.05, an amount equal to the record level of previous year. In 2023, we also made significant progress on the execution of our strategy. Let me briefly highlight some major milestones. In Chemicals & Materials, we successfully concluded the divestment of Nitro, our European fertilizer business, making our portfolio less dependent on a very volatile market segment and more focused. We further strengthened our circular economy solutions business through the acquisition of Rialti and Integra, almost doubling our recycling capacity to around 200,000 tons. And together with Interzero, we took FID for the construction of Europe's largest sorting facility for chemical recycling, which will provide a significant quantity of the feedstock required for our planned commercial ReOil plant. In Fuels & Feedstock, we signed further MOUs with leading airlines for sustainable aviation fuels, totaling now almost 1.5 million tons of SAF up until 2030. In addition, we were able to sign an agreement with Microsoft for Sustainable Aviation Fuel certificates. This new innovative business model will help companies to offset emissions from air travel and air transportation of goods. Last but not least, in Energy, we took FID for Neptun Deep, one of the EU's largest gas projects. And since then, we have secured more than 80% of the execution agreements required to deliver the project. Moreover, we made considerable progress on building a low carbon business. Together with Wien Energie, we founded the joint venture deeep to develop deep geothermal plants with an output of up to 200 megawatts, thereby generating climate-neutral district heating. For CCS, Aker BP and OMV were awarded the Poseidon license in Norway for the potential storage of 5 million tons of CO2 per year. At the beginning of this year, OMV Petrom signed the contract for the largest acquisition of green projects in Romania. This comprises a 50% stake in Electrocentrale Borzesti, which holds approximately 1 gigawatt capacity of renewable projects and 100% stake in Renovatio Asset Management, the owner of Romania's leading electric vehicle charging network with more than 400 EV charging points. As announced yesterday, we have signed an agreement with TotalEnergies for the sale of the 50% share in SapuraOMV. The overall cash consideration amounts to $903 million. This includes the full repayment of the outstanding $350 million shareholder loan granted by OMV to SapuraOMV as well as net working capital and other elements subject to closing adjustments. Let me move on to the fourth quarter results. Brent crude oil prices were slightly lower compared to the previous quarter and to the prior year quarter. European natural gas prices increased compared to the previous quarter on the back of Middle East tensions and damage to the Baltic connector subsea pipeline. However, ample quantities in storage and mild early winter temperatures, strong nuclear and renewable power generation and increased LNG imports eased the prices towards year-end. On average, the hub prices were almost 60% lower than the exceptionally high level of the fourth quarter in 2022, but at around €40 per megawatt hour were significantly above historic averages. At around $10 per barrel, the European refinery indicator margin was on a very strong level, far exceeding the 2015 to 2021 historic average of around $5 per barrel. However, compared to both the previous and prior year quarters, it declined. Gasoline spreads fell compared to previous quarter, affected by seasonally weaker demand. On a year-on-year basis, the fall of the indicator margin is mainly linked to the decline in middle distillate crack spreads, which reached unprecedented highs in 2022 due to the disruption caused by the Russia-Ukraine war. In chemicals, end market demand continues to be challenging. Olefin indicator margins benefited in the short-term from an increase in contractor prices driven by the shift toward easier to meet gasoline specifications and limited supply due to cracker outages and voluntary cuts. Polyolefin indicator margins remained weak because of the high availability of imports and domestic supply as well as weak demand due to the ongoing cost of living crisis. Let's now turn to the financial performance in the fourth quarter of 2023. Compared to the third quarter of this year, our clean CCS operating result improved by 7% to €1.4 billion. However, compared to the exceptionally strong prior year quarter, which was supported by record high commodity prices and refining margins, the results decreased by around €700 million. The performance of Energy dropped by around €300 million. Chemicals & Materials declined by around €50 million and Fuels & Feedstock decreased by around €300 million. The clean CCS tax rate decreased from 54% to 41%, mostly due to a reduced share in the overall Group profits from companies in the Energy segment located in countries with a high tax regime. The clean CCS net income attributable to stockholders declined by 5% to €665 million. Clean CCS earnings per share amounted to €2.03. Let me now come to the performance of our business segments. Compared to the fourth quarter of 2022, the clean operating result of Chemicals & Materials dropped from €57 million to €5 million. This was driven by weaker margins, missing insurance proceeds of around €50 million, which supported the result in the fourth quarter of 2022 and increased fixed costs. This was partially compensated for by a higher contribution from Borouge and the divestment of the Nitro business, which had a negative contribution of minus €30 million in the fourth quarter of 2022. The ethylene indicator margin declined by 2% and the propylene indicator margin went down by 12%. The polyethylene indicator margin decreased by 16%, while the polypropylene indicator margin declined by 19%. As a consequence, we recorded negative market effects of €56 million in our European olefin and polyolefin businesses compared to the fourth quarter of 2022. Inventory effects were slightly positive in the quarter due to increasing naphtha prices, while in the prior year quarter, they negatively impacted the result by minus €30 million. Looking at the operational performance, the olefin contribution was lower, driven by a reduced cracker utilization rate and was only partially compensated for by a more positive light feedstock advantage. The polyolefin business performance declined due to a less favorable product mix and higher fixed costs caused by the inflationary environment. Polyolefin sales volumes were overall stable as higher polypropylene sales volumes were able to compensate for lower polyethylene sales. While sales volumes in the consumer products, mobility and healthcare industries saw some increases, volumes in the energy industry declined compared to the fourth quarter of 2022. Realized margins for standard products decreased substantially, while realized margins for specialty products remained stable compared to the fourth quarter of 2022. Our value enhancement program initiated at Borealis at the beginning of the year supported the results by around €140 million in 2023. The result is coming from different areas such as cost efficiencies, commercial excellence, asset reliability uplift and energy efficiencies. The contribution of the JVs increased to €28 million, driven by a higher performance of Borouge, primarily driven by increased polyethylene sales volumes. At Baystar, the new polyethylene unit Bay3 has been in the start-up process since October, leading to a small increase in polyethylene sales volumes. However, the soft market environment combined with continuing operational challenges at the ethane cracker resulted in a slightly more negative result from Baystar compared with the fourth quarter of 2022. While the standard polyolefins business showed a similar development as the market indicator margins, you can see that our specialty business kept actually steady and provided a stable earnings base. The specialty grades account for approximately 45% of the polyolefin volumes and deliver very resilient margins over the cycle. The chart shows the development of the total polyolefin clean sales margin in euros, split into standard and specialty products since the first quarter of 2020. As you can see, the clean sales margin of our standard products follows by and large the market indicator margin development, while the clean margin for the specialty business has been very resilient. In 2023, the specialty products margins slightly increased compared to 2022, while volumes were only slightly down. The majority of the total sales margin was generated by the specialty business, accounting for some 80% of the total sales margin. The pricing of these grades is based on performance driven by innovation and technology. We produce specialty grades for various industries, such as energy, automotive, healthcare and consumer products. In energy, we sell polymers for the insulation of high-voltage cables that are used in mega projects such as the German energy corridor. We see significant growth potential in this area based on necessary investments in the energy grid globally. In automotive, we are one of the leading suppliers to global OEMs and Tier 1 producers. We are also a leader in polyolefins with recycled content supported by our proprietary Borstar technology. The clean CCS operating result in Fuels & Feedstock decreased by 46% to €368 million, driven by lower refining indicator margins and partially offset by a significantly better retail and commercial result. In addition, the fourth quarter of 2022 was supported by insurance proceeds of around €120 million received for the incident at the Schwechat refinery in June 2022. At around $10 per barrel, the refining indicator margin was still very strong, but significantly lower than the exceptional level of the prior year quarter when it averaged almost $18 per barrel. Total sales volumes decreased slightly, mainly due to lower retail sales volumes following the divestment of the Slovenian retail business, which were partly offset by higher commercial sales volumes. However, the contribution of the retail business rose substantially despite the missing earnings from the Slovenian retail stations. Higher fuel unit margins, lower variable costs and an increased non-fuel business contribution boosted the results. The performance of the commercial business improved considerably as well, mostly because of higher margins driven by better achieved term prices. The contribution from ADNOC Refining and Trading decreased significantly to €36 million caused by lower refining and trading margins. The clean operating result of the Energy segment decreased by 23% to just above €1 billion from the extraordinarily strong prior year level, primarily due to substantially lower gas prices, declining oil prices and lower sales volumes. This was partially offset by a strong improvement in the Gas Marketing & Power business by €145 million. OMV's realized oil price declined slightly by 5%, in line with the Brent price. The European gas hub prices dropped sharply by 60%, while OMV's realized gas price declined less than the hub prices by 42%. As a result, we recorded negative market effects of €478 million versus the prior year quarter. Compared with the fourth quarter of 2022, production volumes decreased by 21 to 364,000 BOE per day, mainly due to natural decline in Norway and Romania, planned maintenance in Romania and gas injection constraints in Libya. Production costs increased to $10.6 per barrel on the back of inflationary cost pressure, lower production volumes and a weaker dollar to euro exchange rate. Sales volumes decreased by 11,000 BOE per day, thus to a lesser extent than the production decline, as this was partially compensated for by additional liftings in New Zealand and Libya due to schedule. The result of Gas Marketing & Power improved considerably to €98 million. The contribution of Gas Marketing West rose significantly, mainly driven by an increase in supply results as the fourth quarter of 2022 was impacted by Russian supply curtailments. This was partly offset by a lower LNG and storage result and an increase in a provision related to potential higher transport tariffs in Austria. In Romania, the contribution of the Gas & Power business increased substantially by €75 million, reflecting good performance in both Gas and Power businesses. The fourth quarter of 2022 result was affected by a provision for risks assessed by the Group in the area of sector-specific taxation. Turning to cash flow. The cash flow from operating activities, excluding net working capital effects for the full year 2023 amounted to €4.6 billion, one of the highest results in OMV's history. Supported by a sizable cash inflow from net working capital effects, cash flow from operating activities in 2023 amounted to €5.7 billion, down by 26% compared to the exceptional level of 2022. After payment of record dividends of €2.3 billion and organic investment cash flows of €3.4 billion, the organic free cash flow after dividends was slightly negative. Looking at the quarterly picture, the fourth quarter operating cash flow, excluding net working capital effects, amounted to around €1.1 billion, a small decrease of 7% compared with the prior year's quarter, primarily driven by lower commodity prices and partly compensated for by lower income tax payments. Net working capital effects generated a small cash outflow of €51 million in the quarter, mainly due to higher seasonal trade receivables in the Gas business. The organic cash flow from investing activities was around €945 million. Besides ordinary ongoing business investments, this included the PDH plant in Belgium, the ReOil plant and co-processing plants in Schwechat and EV investments. As a result, the organic free cash flow before dividends for the fourth quarter of 2023 came in at around €150 million. The inorganic cash flow from investing activities generated an outflow of around €60 million and included payments of €46 million to Baystar as well as an outflow of €45 million related to the acquisition of Rialti. Our balance sheet remained very strong in 2023. Net debt at the end of December amounted to €2.1 billion and our leverage ratio stayed low at 8%. At the end of December 2023, OMV had a cash position of €7 billion and €5.3 billion in undrawn committed credit facilities. Ladies and gentlemen, as mentioned before, we will propose to the Annual General Meeting a regular dividend of €2.95 for the financial year 2023, an increase of €0.15 per share versus 2022. In addition, we will be also proposing a special dividend of €2.10. In total, our total cash dividend for 2023 will amount to €5.05. Both dividends are subject to approval at the Annual General Meeting and will be paid in June. Ladies and gentlemen, I think this is a strong testament to our promise to reward our shareholders. I will now move on to the outlook and start with capital spending. For the year 2024, we are expecting organic CapEx of around €3.8 billion, which includes around €200 million of non-cash leases. In C&M, our organic CapEx is estimated to be around €1 billion, slightly lower than in 2023. Major projects are the PDH plant in Kallo, improvement projects for polyolefin specialties in Schwechat and investments in circular economy solutions such as the plastic waste sorting plant in Germany in partnership with Interzero and the ReOil plant, which will have a capacity of 16,000 tons per year. The start-up of the plant is expected to start in the second half of this year. In Fuels & Feedstock, our organic CapEx is estimated to be lower at around €800 million. This includes investments in finalizing the co-processing and hydrogen plants in Schwechat, EV charging stations and new SAF projects. The new co-processing plant at the Schwechat refinery will have the capacity to produce up to 160,000 metric tons of vegetable oil, waste products or advanced feedstocks, together with fossil-based materials into sustainable fuels. The co-processing and hydrogen plants are planned to ramp up in the first half of 2024. In Energy, organic CapEx will increase to €1.9 billion, in line with our plan to develop the Neptun Deep gas field in Romania. In addition, we will invest in the development of gas fields in Norway and Austria, the Jerun gas field in Malaysia and the Ghasha gas project in the UAE. Moreover, we plan to make increased investments in various low-carbon projects, mainly geothermal energy and renewables. Let me conclude with our outlook for key market assumptions and operations for 2024. We forecast an average Brent price of around $80 per barrel. European natural gas storage levels are expected to remain high throughout the year and industrial activity will likely remain subdued. As a result, we forecast the THE gas price to be lower than in 2023 at around €30 to €35 per megawatt hour. The OMV average realized gas price is expected to be around €25 per megawatt hour. In Chemicals & Materials, we believe the market environment will remain challenging in 2024. Subdued demand, the ongoing cost of living crisis and import pressure are expected to continue weighing on margins. In Europe, we forecast that the ethylene and propylene indicator margins for the full year will be slightly lower than 2023. Ethylene is estimated at around €490 per ton and propylene at around €370 per ton. In polyolefins, demand is assumed to remain weak across all market segments and grade families. Imports are expected to continue arriving at a stable rate, especially across the Atlantic. The European polyethylene indicator margin is forecast at a similar level to 2023 at around €320 per ton in 2024. The polypropylene indicator margin is estimated to be below the 2023 level at around €320 per ton. For the full year 2024, we expect to see only slightly negative inventory effects as we forecast marginally lower naphtha and olefin prices. In 2023, the inventory valuation effects without the Nitro business were at around minus €130 million. The result will also benefit from the divestment of the Nitro business, which showed a loss of €28 million in 2023. The utilization rate of our European steam crackers is forecast to increase to around 85% as we have no turnarounds this year in Europe. There will be a planned maintenance shutdown at Borouge 3, which will impact the annual volume by an estimated 500,000 tons. The polyolefin sales volumes of Borealis excluding JVs are projected to be higher than the 2023 level at around 3.9 million tons, driven by increased sales in specialty products, in particular for the Energy segment in Asia and Mobility as well as higher sales of circular economy solutions supported by the new acquisitions. We expect the Bay3 polyethylene plant in the U.S. to reach commercial production in the first quarter of 2024 and contribute fully to the result thereafter. The cracker in Port Arthur was affected by the freezing weather in Texas and has been shut down since mid-January. We are planning to restart the operations in the first half of February, and we expect to run it continuously at a high utilization rate. We expect to receive around €210 million from Borouge in the first quarter of this year as the second payment for the 2023 dividends. Borouge announced today that for 2024 it will distribute $1.3 billion in cash dividends to be paid in 2 tranches, 1 in the third quarter of 2024 and the remaining in the first quarter of 2025. In Fuels & Feedstock, the refining indicator margin is projected to decline from the 2023 level to around $8 per barrel amid new refining capacity additions and slowdown in annual demand growth rates. The start to the year has been strong. However, we expect the normalization in the quarters to come. We anticipate the utilization rate of our European refineries to increase to around 95% as we have no major planned turnarounds this year. Total product sales volumes are projected to be higher than in 2023, supported by a higher utilization rate. Retail margins are expected to be slightly below the 2023 level, while commercial margins should normalize. In Energy, we expect average production between 330,000 and 350,000 barrels per day in 2024 depending on the timing of the divestment of the assets in Malaysia, the situation in Libya and also due to natural decline. Exploration and appraisal expenditures for the Group is expected to be around €200 million. Production cost at OMV Group level is expected to be around $10 per barrel for the full year of 2024 due to inflationary pressure. The clean tax rate for the full year is expected to be around 50%. Before we come to your questions, I would like to address an obvious one about the potential combination of Borealis and Borouge. We continue to be in open-ended negotiations with ADNOC. And at this point in time, I cannot give you any additional information. Thank you for your attention. And now, Reinhard and I will be happy to take your questions.

Yes. Thank you, Alfred. Let's now come to your question. As always, I'd ask you to limit your questions to only 2 at a time so that we can take as many questions as possible. You can of course rejoin the queue for a follow-up question. The first question comes from Irene Himona from Societe Generale.

I understand you cannot comment on your discussions regarding the Borealis Borouge merger, could you perhaps say something on your expectations regarding the timing to conclude such discussions one way or another? My second question. You referred in your prepared remarks to inflation and higher fixed costs, offset in part by your energy efficiencies, cost restructuring, et cetera. Can you say what overall inflation you assume in your CapEx guidance for €3.8 billion this year, please?

Yes. Irene, I will start with your Borouge and Borealis question and then I will ask Reinhard if he can talk about the inflation discussion assumption. We announced in the middle of last year that we will pursue discussions with ADNOC on a potential combination of Borouge and Borealis and to create a world-leading polyolefin company where we would have equal shares. It would be stock-listed equal rights and that we would want to use as a growth platform in order to take that forward. So since then, we have been in ongoing negotiations and made good progress. At the same time, the negotiations are still going on and are open-ended in that sense. We are of course hoping to conclude on these discussions as soon as possible. However, our focus is really on achieving optimal negotiation result rather than a fixed time limit.

Yes. And Irene, on the inflation, we are in general calculating with an inflation rate of 3% to 4% for the year 2024. However, the CapEx guidance that we gave is less driven by inflationary tendencies, but rather by the content that we have in there, specifically when it comes to special projects like the Neptun project, which is going into its high investment phase and other projects like the Jerun and Sapura as long as it's still in our portfolio. And therefore, there is a little bit of uncertainty about the total amount there. So this is the base as we can guide for the moment. But as Alfred has said, there's a very strong effort in this company on cost discipline, on CapEx discipline, on all the counter-measures that we have to bring fixed costs down. And therefore, we are optimistic that inflationary tendencies will not play a significant role in our finances for 2024.

And the next question now comes from Sasikanth Chilukuru from Morgan Stanley.

I had two, please. The first was related to the dividend. Good to see a flat dividend and being maintained. I was just wondering if you could provide more details on the rationale behind the split of the dividend into regular and special, especially given that the year-on-year growth in the regular dividend has been lowered. Just wanted to understand how you have fixed the regular at €2.95. The second was more related to Baystar. You've highlighted the Bay3 [polyethylene] plant in the U.S. will reach commercial production in 1Q. There have been operational issues here before and the commissioning costs have been higher. Just wondering if you could just confirm whether these issues have been sorted and how should we expect any inorganic payments into Baystar in 1Q as well? Also, do you expect any dividends to come from Baystar in 2024?

Thank you for your questions, Sasi. Let me start with the first question regarding the dividend and the logic behind. If you look into our dividend policy, it is very evident that on the one hand side we give a guidance for the full dividend consisting of the regular dividend and a special dividend to be in the range of 20% to 30% of our operating cash flow including net working capital effects. With this proposed €5.05 per share, we are reaching close to the upper end of this range. And this is a very clear signal to the market that we are willing also to use this kind of span and flexibility that we have in order to reflect both the performance as well as our trust in the stability of this company. When it comes to the split between the regular dividend and the special dividend, I think it is very clear. While keeping this whole dividend on a record level, at a straight level, we have a progressive dividend policy on our regular dividend and we are living up to that. And we have to see that the cash performance as well as the operational performance has been quite good considering the challenges in the market. When it comes to clean CCS operating result, it's even the second best result in the history of OMV. And that is where we want to let our shareholders participate. And you see that in our capital allocation guidance and capital allocation policy, our regular dividend is on rank #2 already and shows our strong commitment to give back to the shareholders. Regarding the Baystar question. Your question was about dividends to be expected from there. I don't think that we are in the situation where in 2024 dividends can be distributed. We have ahead of us hopefully very successful ramp up phase where both the cracker can be back in operation after the cold spell and the Bay3 polyethylene plant will ramp up and reach stable levels. So we are expecting that this is still a year full of work and full of hopefully positive experiences, but no dividend to be expected.

Any inorganic spend going into Baystar in 2024?

We have not announced any capital injections so far. We will look into the development here. And we also have a loan still outstanding from Borealis to Baystar where we are also looking into potential refinancing. So all of that will show the course of the business in that year.

We now will come to Peter Low from Redburn.

It was on capital allocation. On your slides, you kind of made the point that net debt is pretty low, especially once you exclude leases. You've got a lot of cash on hand and about €900 million more coming in from the Sapura disposal this year. How are you thinking about deploying that cash as kind of it's clear it probably don't need to get to the balance sheet? So any thoughts around that would be helpful. And then the second question was just a clarification on the chemicals result. I think that you said the inventory effect for the full year 2023 was €130 million negative. Can you confirm that was the right kind of absolute contribution for the year? And then perhaps what that was in 4Q specifically? That would be helpful.

Sure, Peter. On the capital allocation, I think we are in the lucky position of having a very strong balance sheet, specifically in the times of high interest rates. We are rather advantaged by that. But of course, with both organic and potentially inorganic investments, there is some headroom for us to maneuver and we are following our guidance that we have given in our strategy that we will execute very strongly on our transformation and our strategy. And if there is a reasonable possibility, we will accelerate this execution of the strategy also by inorganic measures. Now this is something where we have not announced anything to come up in that respect. On the other hand, Alfred mentioned, we are still in negotiations, in open-ended negotiations with ADNOC on the combination, which would potentially allow us also to inject the money to come to a good governance structure with an equal rights and equal share structure. So in that sense, both the organic and the inorganic opportunities are available for us, but we will have a very strong discipline in our cash return expectations. And we said be it a traditional business or be it sustainable business, we expect a double-digit return rate on our investments. When it comes to inventory effects in chemical industry, in fourth quarter actually, the inventory effects were slightly positive. And that came specifically from the situation that we had more or less flattish development of the prices with some smaller developments and the inventories that we had on stock gave us a little bit of an advantage in that respect.

We now come to Matt Smith from Bank of America.

I just wanted to come back to the dividend logic, again, if I could, please. Like you said, you've used the top end of your sort of payout policy range this year to keep that DPS payment in totality flat. So I just wanted to test again really, should we read that that's the intention to keep the sort of total DPS flat if that sort of the 20% to 30% payout ratio allows you to do that or are there other factors to sort of point towards, sort of giving you the confidence in declaring the dividend, which was clearly ahead of the market expectations yesterday? So that would be the first one on the dividend. And then secondly, if I could, come on to Borouge Borealis, the merger talks. I just wanted to take a step back actually and just coming back to the industrial logic here, because in the past, as part of your strategy, you discussed synergies as a very important driver of any M&A. So that's really my question. We all know the strength of the Borouge business. But really, the question is, what can the 2 businesses do together that they can't apart, please?

Let me start with the first question and I'll turn to Alfred for the second. Regarding the dividend logic, let me reiterate. We have 2 parts of this dividend, a regular dividend and a special dividend. The regular dividend is announced from our side to be in a progressive dividend policy so that we intend to increase this regular dividend year-after-year or in difficult situations keep it on the level of the last year. When it comes to the special dividend, there is of course flexibility. And this flexibility means that on the one hand side, we need to maneuver within the 20% to 30% headroom that we have from operating cash flow when it comes to the both of them. So in a case of a lesser operating result, this of course, limits this opportunity for the special dividend. On the other hand, it allows us to increase also the special dividend if our operating cost is higher. So keeping it flat on the top-line for this year is more of a message to the market to say, first, we are in a position where our intention to return to shareholders is a reality that we are capable to live up to. Secondly, the bandwidth of 20% to 30% is a real bandwidth in which we maneuver. And thirdly, it is adequate to the performance of the company with the full foresight that we have with possible developments in our strategy where we have the liquidity and the stability of the company fully in our view.

Okay. Matt, I will go for the second question that you had on the industrial logic of a potential combination of Borouge and Borealis. This is quite straightforward to explain. Both of these companies are leading players in their individual regions. Borealis is in Europe #2, Borouge is in the Middle East #2. And globally, they are both in position 14 and 15, right? Combination will move them up to #5 or 6 in that polyolefin market. So the combined entity will be a global market leader in the polyolefin segment. And what is, of course, one -- so there's 2 drivers there that we can through such a combination use, of course, the strength of both companies in the areas of technology, application development, the specialty product development, the feedstock, the market access and so on. But on the other side, of course, also use synergies. It would -- it could allow a much better service to our customers, to the market. It could allow us to optimize across the company's S&OP process, which could unlock synergies if it materializes. And this is, of course, a part of the idea. But the idea is also to use such a potential combination as a growth platform together to continue and grow further. This is based on the more than 20 years of partnership that we have in developing this and the success that we had together. So a certain belief that we can extend that partnership success into the future also.

We are now coming to Michele Della Vigna, Goldman Sachs.

Congratulations on the strong results. I wanted to ask 2 questions. The first one, I was wondering if you could give us a sensitivity for your earnings or cash flow from TTF, we've seen quite a lot of moves in the European gas price? And I was wondering if you could help us quantify it? And secondly, I had more of a market question for you, Alfred, on polyolefins. We clearly are at the trough of margins at the -- towards the end of destocking. So usually, this is a really good time to start to see upside in polyolefin margins. But there are some companies that are saying that because of all of the capacity that China is building up and also the Gulf Coast and the Middle East, it could take longer for this cycle to absorb the spare capacity and it could be a more muted cycle than what we've seen in the past. You've got tremendous experience there. I was wondering if you had a view on this topic?

Michele, let me start with your question on sensitivity on gas prices and specifically regarding Europe. We are always giving you information not only about hub prices and hub price developments, but also about the realized gas prices that actually influence in reality our profitability. And there, if you take a realized gas price differential of €1 per megawatt hour, this would have roughly an impact of €75 million of clean CCS operating result. And according to the different tax rates, we have an operating cash flow of around €40 million. So this is the level that we have. Please take into account when you look into the regions that part of the gas prices are capped or regulated, specifically when it comes to regulation in markets like Romania or in New Zealand, even Tunisia, we would have regulated gas prices. And the hub prices that we see are mainly in Norway that we see in Germany and Austria and then in other parts of Europe if we are then talking about the imports of LNG.

Michele, let me address your polyolefin market question. And let me maybe start with saying that you are correct that there is a key coincidence of a low demand situation, which is driven by weak market performance because of inflation, because of shift of consumption from product more into services. And at the same time, there was capacity build in particular in China. I do -- and this will take some time. Normally, these type of cycles take about 2 to 3 years. We are now -- this started, let's say, in the middle of 2022. So we are pretty significant through this. We have started to also see some discussions about the potential closures, not just here in Europe, but also other places. But I want to focus more on our position in Borealis, how and why we think we are in a better position here. And there, I want to start with a high share of specialty products. As I showed in that chart, this is something that we continue to grow where we see more stable margins and where of course this capacity build is less of a concern because the specialty markets have to be developed over a long period with innovation capability. Secondly, I think our integration position where we have the olefin and polyolefin production to a large degree integrated is providing for some better way how to react to those market changes. And number three, our feedstock position I think in Borouge is clear, in Baystar it's also clear. But here in Europe also, our feedstock flexibility and our light feedstock advantage that we have here allows us to be in a better position. And you can see all this reflected in our utilization rates always being above the industry average. We are using this time here now, however, also to be ready for the turn-up, because fundamentally, we see a lot of growth opportunities, in particular for our differentiated and for our specialty products going forward. But this is why we have this performance improvement project in Borealis that last year has already delivered about €140 million and we will continue to push to make sure we are also using this downturn to come out stronger on the other end.

The next question will come from Josh Stone, UBS.

I have two questions, please. Firstly, on the increase of CapEx to €3.8 billion, would you describe this as the new normal for the next several years or are there particular projects that will roll off, get you back to the €3.5 billion long run guide? And then second question, if I just look at the quarterly performance on cash flow from operations, the step down was large than that was in earnings. So are there any particular one-offs? Anything tax-related or anything like that that you could highlight to us to flag?

Yes. Very briefly, Josh. I think the increase in CapEx is very much in the range that we have guided for. We have guided already for 2023 with a level of €3.8 billion. We came out with €3.7 billion, which shows the scrutiny that we have on CapEx discipline. Now we have €3.8 billion again guided for 2024. Now of course, that is driven by large projects and on the other hand driven by our assumption of a stable portfolio. Whether portfolio stays stable is always a question of the execution of the strategy. And therefore, this may be a little bit of a moving part. But I would view €3.8 billion as the upper range of where we see our CapEx to go and this should be a sufficient level, but it's not the new normal as you would describe it. I'd rather see it breathes a little bit with the portfolio and with the organic investment projects and their trajectory of specific contracts that we have in there. When it comes to cash flow from operations and why there have been some deviations, what you can see is compared to the clean CCS operating result, which has a stronger decline year-on-year, we saw more stable and better situation in cash flow from operations. On the one hand side, this is certainly due to net working capital. Net working capital was a very strong investment, I call it, in 2022, whereas -- so with a negative effect on the cash flow in 2023, we got €1.1 billion back from that. That is by far not the level that we've invested in 2022. So there is still some cash in that storage that is able to be brought back in the next couple of years. And when it comes to cash from the operations, of course, there we have to see that always tax payments, specifically the Norwegian tax payments have a certain delay that does not directly correlate with the prices and the economic situation that you have reflected in the P&L. So we have about 2 to 3 quarters delay with what we pay in taxes to what we have earned. And therefore, you have seen that with extremely high prices from 2022. The tax payment came into 2023 with a very high level still for the first 2 quarters and normalize to the current situation in the second half of the year. So that has to be taken into account. Other than that, I don't see that there are any disruptions on the cash level. So we are in a good operating environment.

We now come to Matt Lofting, JPMorgan.

Beginning with going back to chemicals, the starting point for your 2024 outlook for polyolefin seems essentially to be one of margins on average plateauing second half '23 levels. Within that average, what's your assumption of the profile first half of the year versus second half of the year for this year? And what triggers are you tracking as lead indicators of industry recoveries as we look forward? And then secondly, I wanted to ask you about gas. Specifically, I think the majority of the contracted volumes OMV takes into Austria from Russia is delivered via the Ukrainian transit, the contract for which expires end of 2024. Can you share your latest understanding of the situation there? And if you believe you have sufficient alternatives now looking to 2025 plus were those volumes to be closed off?

Let me start with your question concerning the polyolefin margins. As I described before, our assumption for the margins, polyethylene, polypropylene indicator margins for Europe is about €320 per ton. This is for polyethylene more or less at the level where we were last year and for polypropylene sort of where we ended in the fourth quarter of last year. So what that basically tells you is that, in average, we are not yet seeing a strong recovery in 2024 in that area, but more sideways kind of development. Of course, the ambition or the hope, whatever you can say, is that we see some improvements in that area going towards the second half of the year and seeing some of the demand picking up again. What we don't know in this of course is what the situation is going to look like now in the first quarter, let's say. I think we started okay for the beginning of the year, maybe some slight -- some possibilities in some of the olefin markets and so on to improve some of the prices in -- during corona, we saw different situation, but similar outcome. There was also some issues on the Suez Canal. There were some logistics issues. There was also this winter freeze in the U.S. with less supply coming there. And we see a little bit some similar situations now. I can't tell you yet what the impact of that will be 2 years ago, during corona, it reduced supply inflows into Europe. And with this, it strengthens the market pricing situation. I don't know if we will see the same or not. Then on Russian gas, we have 2 supply contracts with Gazprom, one in Germany, one in Austria. The German supply contract has not been supplied since the middle of 2022. So the whole of last year, we were not supplied and we are not anticipating any supply against that German supply contract. In Austria, after a very high volatility in 2022, this normalized again in 2023 and Gazprom supplied contractually agreed quantities, which we also took based on our contract. Our contract is such that the supply location, the delivery location is on the Slovakian-Austrian border. And in that sense, this Ukrainian transit is not something that is affecting OMV in such a way. But what we did is because we saw the volatility in 2022, we saw significantly reduced reliability of supply. And of course, we saw that risk of the supply through Ukraine. So we used 2022 and 2023 really well to fully diversify our supply sources and get also the necessary pipeline capacities so that also if the Russian supply in Austria stops completely, we can supply all our customer obligations with non-Russian gas. So we have worked through this. Maybe you have seen, just in December, we have signed another long-term LNG contract with Cheniere, but that's just one of the many things that we have done to fully diversify our supply.

The next question is coming from Tamas Pletser, Erste Bank.

[Technical Difficulty]

Tamas, we unfortunately can't hear you, just some noise. Maybe we can go to the next question. I think that's a follow-up question from Matt Smith from Bank of America.

Just had one follow-up and just a clarification really on the chemical strategy. And I think you sort of characterized Borouge-Borealis, the merger as a potential growth platform going forward. So I mean, presumably, I think consistent with your status report, but just to double check that that would presumably be focused on polyolefin growth. So I suppose my sort of question would be, should we still expect OMV as a sort of standalone company to still pursue its own M&A-led sort of strategy -- growth strategy in the chemical space? And presumably, if so, that would be outside of the polyolefin market?

Yes. I have 3 things I want to say to this. The first one is you're correct that potential combination of Borouge and Borealis is very clearly focused on polyolefins -- growth platform for polyolefins that we would like to do together if we can conclude on the negotiations. Secondly, we do have a significant chemical business already in OMV, which is mainly focused on base chemicals. And further developing this is something where we also make significant investments into. If you remember, last year, we added one furnace to our cracker in Burghausen, which is increasing our production capacity there. And in our Fuels & Feedstock strategy, we are also saying that we will move -- as road fuels reduce in our portfolio, we will increase the share of chemicals production, which is going into that direction. But also, we are increasing the sustainability share in that chemical production, which for example, a project is our ReOil chemical recycling project, where we will then make base chemicals, chemicals based on circular feedstocks, based on plastic waste. And this we will continue to invest and to grow into. We see significant growth opportunities into this area. And maybe you have even noticed, last year, we signed agreement with [Centos] is a starting point, but this is really an important starting point where on butadiene, we are agreeing where they are taking some of the sustainable feedstock of butadiene which will end up in rubber and in tires eventually to also decarbonize that supply chain. So this we will continue to grow and we see growth opportunities. And the third one is, what you said, if there should be opportunities of inorganic nature, we are always looking not just in chemicals, but also in other areas if this can be of interest. But nothing to report at this moment. At the moment, we are fully focused on the negotiation for a potential combination of Borouge and Borealis, which in our view, would be an acceleration of our strategy.

Thank you, Matt, for your follow-up question. I think we give it another try with Tamas. Tamas, are you there? It seems that unfortunately at least we here in the room can't hear you. So maybe we can take that question afterwards. So this brings us to the end of our conference call. We would like to thank you for joining us today. Should you have any further questions, please contact the Investor Relations team. We are happy to help. Wish you all a good day. Thank you, and good bye.

Thank you very much. Have a great day.

Thank you. Bye, bye.

That concludes today's teleconference call. A replay of the call will be available for 1 week. The replay link is printed on the invitation or alternatively, please contact OMV's Investor Relations department directly to obtain the replay link.