We are in the final stages. The stage of contract negotiations is now underway. But we know that such negotiations can be prolonged. I am much more impatient at this point than the lawyers. They rely on thoroughness, not speed. But we are on the home stretch.

There is clarity that we will not sell this year. Selling C4 chemistry in this economically challenging situation would most likely not result in the desired sales proceeds. A firesale is not necessary because the business continues to have a solid cash function for us this year as well. I don't know exactly when it will be sold. We could give the starting signal very quickly, but we have not officially started the bidding process yet.

Meet the person

Since April of this year, Maike Schuh has been a member of the executive board of the chemical company Evonik. Initially hesitant to reside on the top floor of the imposing corporate headquarters in Essen, because of feeling distanced from her team, the 49-year-old executive seems to have adjusted to her role on the board. However, this does not mean she has lost her team spirit. Schuh is also known for her strong determination and results-oriented approach.

Starting her career in the tax team at KPMG, she moved to the Heraeus Holding in Hanau in 2002, where she held various leadership positions. In 2015, she joined Evonik in the accounting department before transitioning to the Performance Materials division. Initially as CFO and, since July 2022, as the head of the division.

We did not put this business up for sale because of its carbon footprint. It is a volatile business with significant fluctuations in downturns and upswings. Therefore, a different price level will be achievable for C4 chemistry again.

That's true. However, there are many projects and successful research projects in this business area, for example in the area of oxo-alcohols, on how these can be reduced – and significantly so. And a sale by Evonik does not necessarily mean that the CO2 emissions will disappear. In general, the industry as a whole must consider how to reduce emissions. It doesn't help the climate if only Evonik improves itself.

Yes. But I will not be driven by external demands to get rid of the energy-intensive business immediately. Investors ask questions, of course. But it's a strong business. It would reflect poorly on us if we sold it below its value.

We do not foresee any further write-downs for this business today. We are producing there on almost fully depreciated assets. Additional write-downs would be highly unlikely.

We produce in Antwerp and Marl. The business is international in terms of product flows. But production takes place at our integrated sites. C4 chemistry is close to the cracker. The crackers are directed towards the target products ethylene and propylene. The resulting C4 by-products come to us via pipelines and are processed almost completely within the integrated system.

I would not underestimate the C4 business, as it continues to evolve. I would be cautious to say that there will be no C4 chemistry in 30 years. Many have claimed that in the past 30 years – unjustly.

We want to address a broad field, including private equity and strategists. That's one reason why we haven't started the bidding process yet. Private equity is currently acting very cautiously, and strategic investors are waiting to see how 2024 unfolds.

We have invested a lot in methionine in the past. We are globally present, which aligns well with our global footprint. We have recently invested hundreds of millions in the US and Singapore, in backward integration and cost positions. Saying that we want to exit now wouldn't make sense. It's a nice, albeit volatile, business. We are reorganizing the business now because it has commoditized in many areas.

At the moment, we are too expensive. When businesses commoditize, we need to cut costs in these areas. I am confident that the business will be enjoyable again once we achieve that.

Our animal nutrition business segment also includes specialties. We manage that part of the business accordingly and will grow there. However, to invest more in specialty chemicals and grow faster, I need cash cows. For the expansion of specialty chemicals – such as lipid production in the US – I need money. This comes from our cash cows. Methionine is crucial as a financing business. It is essential to have a balanced portfolio between growth and financing businesses.

Whether we sell the chemical parks or not is not currently up for debate. The fact is, we are establishing Antwerp, Wesseling, and Marl as independent legal entities and will then explore all options. It's true that, as a chemical company, we don't necessarily have to operate chemical parks. There could be better owners. But for now, we are restructuring the segment.

Completely independent of our project, there is chemistry and infrastructure. Chemistry is not going away. We have well-managed chemical parks, large facilities, and a very stable value flow. Therefore, I am convinced that there is interest from infrastructure funds.

We recently looked at how many companies were interested in investing in the Marl chemical park this year. There were more than in previous years. In principle, chemical production likes to settle in existing, well-managed chemical parks. This will continue to be the case in the future.

In 2022, we had general administrative costs of around €550 million. I have been with Evonik for eight years and have experienced two streamlining programs since then. It works by eliminating positions and consolidating work. A year later, the controller is called a business analyst, is back on the payroll, and costs shoot up again. Such projects lead to short-term success: the last cost-cutting program brought us savings of more than €200 million. This time, we want to do it differently, with a lasting impact, and determine exactly how our administration should be organized best. Only through this process can we identify areas where there's currently an overabundance of individuals focusing more on themselves and the organizational structure than on supporting the chemical businesses.

Yes, they are mostly back. Hence the new approach. But this time, we're not going through consolidation of work. Our matrix is not well-defined today. Therefore, we have formed a project team that looks deep into this matrix: what activities do we need to expand? Which roles are dispensable or require more stringent organization? We are neither a bank nor tax consultants. We have the necessary governance, and everything else must be there for the businesses. That means the divisions must be able to buy cheaply, sell expensively, and have the right control models. We don't need anything else.

We do a lot of duplicated work. Just one example: at some point, Evonik decided that we don't need regional control. Nevertheless, we have pretty extensive control in the regions. There is a lot of proliferation and complexity.

We have up to ten management levels in the company and an average of four to five direct reports per manager. So, we have quite a few managers who, in turn, manage only a handful of employees. The target is an average of seven. This means we will remove management levels.

The project doesn't originate solely from me. It's a board project. It has to be something the entire board wants to do. Simple cost programs would be easier – but not necessarily more meaningful.

That's what we discuss most on the board. As a finance person, I am naturally very cautious and ask – I exaggerate now: "Do I need investments at all?" The COO, on the other hand, says – also exaggerated: "We also need to invest counter-cyclically." On the one hand, we don't want to worsen the net financial debt because I don't want to endanger the investment-grade rating. On the other hand, we don't need expansion investments in existing plants due to a capacity utilization between 70% and 80% at the moment. Therefore, we can focus on investments in growth markets such as lipids. We don't currently need additional capacity. But – if I invest today, the plant will only start operating in three years. There are different opinions on this topic, all of which are valid. But it is crucial that we always question each other.

That varies from year to year. In terms of the €850 million, it's less than 50%, but it's in that direction.

In essence, it's quite simple. On the one hand, we look at overdue receivables. The goal is to keep their share as low as possible. It is less than 5% for us. On the other hand, we have significantly reduced inventories, which is the most active part. I have to be careful not to be behind the curve. We already reduced the inventories to a low level in the third quarter.

That's true. It's always a balancing act. We have to extremely closely coordinate with the sales division. If sellers suddenly see ten flashlights and not just a small torch at the end of the dark tunnel, then we have to ramp up production. It's a very detailed job that takes place deep within the divisions. As a board member, I have to take that risk.

I generate cash flow not only for dividends but as the core metric when steering towards cash. Regarding the dividend: We not only have RAG Foundation as a shareholder. We promise a stable dividend, Evonik is a dividend stock. Hence, we must strive to consistently achieve results that do not require payouts from reserves.

Reducing the dividend won't be viable if the stock price is decreasing. Investors won't go along with that. Last year, we also paid from retained earnings, but that was a special accounting situation. In principle, I agree with you. We cannot distribute from reserves for a long time. We have to position ourselves so that we can distribute from the profit. That is one of my clear goals.