Evonik Industries AG

XETRA:EVK

Earnings Call Transcript 2021-Q1

[Operator]

Dear, ladies and gentlemen, welcome to today's Q1 2021 Earnings Conference Call of Evonik Industries AG. At our customer's request, this conference will be recorded. [Operator Instructions] After the presentation, there will be an opportunity to ask questions. [Operator Instructions] May I now hand you over to Tim Lange, Head of Investor Relations. Please go ahead.

[Tim Lange, Head of Investor Relations]

Thank you very much, and good morning. Welcome to Evonik today 1 hour earlier than usual. And I think you all have the next call already scheduled ahead of you, so we get started right away and also have, I think, a hard cut. So should keep this relatively crisp and short today. With that, I hand over directly to Christian for the introductory remarks.

[Christian Kullmann, CEO & Chairman of the Executive Board]

Thanks a lot, Tim. And ladies and gentlemen, a very warm welcome also from my side. Thanks for taking the time to be with us today. I hope you are all in good health and successfully managing all the challenges the current situation is demanding from us. 2020 was a year of the unknown, in which we all need to order to learn, to learn how to deal with the virus, how to protect our friends, families and colleagues and adapt our private and professional life. 2021, despite a still challenging start with the pandemic, is a year of growth and optimism, growth and optimism, in which we all have grown together to fight the virus and supporting each other in these difficult times and so finally overcome the pandemic. At Evonik, ladies and gentlemen, we are likewise optimistic. First, for our employees, we are enabling digital work and new ways of working. We've started to deliver lipid nanoparticles to BioNTech. We distributed 15,000 test kits to our workforce lately and are preparing to vaccinate our employees and their families with our medical staff. Second, on the business side, the consistent execution of our strategy; also, throughout the pandemic, is getting rewarded by a strong start into the year. Of course, compared to the 2020 pandemic year, this might look more obvious and less challenging. Therefore, our ambition level is rather the year 2019, the pre-pandemic year. So in the first quarter, we are posting an impressive close to double-digit EBITDA growth compared to the first quarter of 2019. This is a solid basis for our full year growth aspirations. The target is clear, crystal clear, to grow above the 2019 pre-pandemic level. This growth both in the first quarter as well as in the full year is not a result of commodity-driven cyclical recovery. Performance Materials, for example, is still below the 2019 level in the first quarter and most likely also for the full year. Our growth, ladies and gentlemen, is and will be generated by the core and heart of our portfolio by our 3 growth divisions. Whilst group increased an EBITDA of 9% plus versus the first quarter of 2019, our growth divisions progressed at double this rate, plus 18% versus the pre-pandemic level. Of course, we also benefit from the currently favorable environment. But beyond that, it is another proof point for the quality behind our growth divisions, their structural growth drivers and their innovation and sustainability achievements. Just 2 recent highlights to showcase our consistent progress on these 2 elements. First, a perfect example for innovation driven by sustainability, Evonik has introduced the new silicon carbon composite material as a material for lithium-ion batteries. This makes batteries more powerful by increasing energy density and improving the fast-charging capability, thus, increasing energy efficiency. Second, we have set up a new production site for lipid nanoparticles, an essential component for mRNA-based vaccines against COVID-19, in Hanau, a lovely village in Germany. Internally, this project has been christened speed of light. What would otherwise have taken at least a year we get up and running in less than 6 months from the first talks with our partner, BioNTech, to the start of delivery mid of April. Innovation and sustainability were also in the center of our first Division Spotlight event on the 13th of April. We hope you have the chance to listen in, with a record attendance of close to 200 analysts and investors. Nutrition & Care early addressed structural market trends around sustainability as their guiding principle very consistently executed their strategy with successful innovation and acquisitions. The result is a strong position in very attractive growth areas like active cosmetic ingredients, drug delivery systems or biotechnology. They will drive definitely the division towards its operational and financial targets, like an EBITDA CAGR of above 8% and EBITDA margin level of above 22% and ROCE of above 14%. With that, back to our quarter 1 reporting and over to you, Ute.

[Ute Wolf, CFO & Member of Executive Board]

Thank you, Christian, and welcome from me as well. Christian already highlighted our EBITDA improvement. Hence, I will start with our achievements in free cash flow. Indeed, we delivered a record high free cash flow level of EUR 312 million, the highest figure ever recorded in the first quarter since our listing in 2013. Of course, the higher EBITDA level helps as a starting point. On top of that, our consistent cash flow growth and our structural improvements continue to pay off. We managed to keep the working capital outflows limited despite growing sales. And we recorded lower tax payments in the first quarter. Both impacting factors will revert to some degree in the remainder of the year. Nevertheless, the Q1 free cash flow builds a very strong basis to continue our track record of free cash flow growth in 2021. Let's now have a look at our operational performance by division. Specialty Additives was the growth engine in the quarter. The leading portfolio of mission-critical additive solutions unveiled its power. That translated into strong volume growth and a margin level of 30%. We experienced strong demand -- strong demand, sorry, especially from the coatings and construction industries across all regions. And we also enjoyed a solid start into the year for Crosslinkers, so far, there are no signs yet of a slowing momentum in Asia. Consequently, we uplift our full year outlook for the division. Now we expect an EBITDA figure slightly above the already-strong prior year levels. Our second growth engine is Nutrition & Care. Earnings were up year-on-year by 20% or even 25% versus the pre-pandemic 2019 number. This strong performance is driven by the robust structural growth of our end markets. We have experienced an unchanged strong demand especially for active ingredients and care solutions. In Health Care, we had a slower start into the year which was related to a planned maintenance shutdown. The effect of the shutdown will be offset soon, not at least by the additional lipid nanoparticle business with BioNTech. On the efficiency side, all businesses have structurally lowered their cost base further. This drove the margin to a level of above 18%. As a result, we increased our full year outlook for the division and now expect earnings to be well above the 2020 level. Smart Materials have shown a continued nice sequential improvement. Inorganics for hygiene, personal care and environmental applications are growing on the back of a solid and resilient 2020 level. In the auto-related businesses, silica for tires have continued their way of recovery. And also, PA12 has followed these improving trends and is already back to high utilization rates. So the margin is back to the prior year level of 19% again. In Performance Materials, we continue to see improving demand and spreads in the C4 chain. We are observing a favorable environment for Butadiene and Oxo products partially supported by competitor outages. MTBE is also on a recovery path. Baby Care was impacted by lower weather-related volumes in the U.S. and the usual 2 to 3 months time lag to pass on rising raw material prices. Here, I'm talking specifically about propylene. So overall, our portfolio and especially our growth divisions have proven their growth potential in the first quarter and should continue to do so for the remainder of this year. With that, I'm handing back to Christian.

[Christian Kullmann, CEO & Chairman of the Executive Board]

Thanks a lot, Ute. Now let's dive into our full year outlook. On the back of these positive results, we stay confident. And it's worthwhile to underpin it, we stay confident for our clear growth aspirations in the year in 2021 against 2020 and also against the pre-pandemic level of 2019. In the first quarter, we were 9% ahead of the first quarter of 2019. And there are 3 growth divisions as our driving force give us confidence, strong confidence to deliver a similar growth rate for the second quarter as well. This will put us around 10% ahead of the 2019 pre-pandemic level in the first half of 2021. Looking ahead, we still have to recognize that the pandemic is still not over. For example, we experienced more and more raw material shortages in several businesses. Nothing dramatic yet, of course, but something to keep a certain level of caution for the rest of the year. And also, our customers secure volumes throughout the supply chains to avoid any kind of shortages in tight markets. So this might explain some part of the strong volume growth we have seen in the first quarter and are currently seeing and enjoying for the start into the second quarter. While this might normalize in the course of the year, there are still several other businesses in our portfolio which have further growth potential in the second half of the year, like Veramaris from the end of the lockdowns or our Health Care business from the further ramp-up of our lipid production for vaccines. Thus, we're confident, confident to upgrade our outlook and cut the lower end of the range. We now expect EUR 2.1 billion to EUR 2.3 billion. Or to put it differently, it is our clear ambition to come out better than the 2019 pre-pandemic level of EUR 2.15 billion. For free cash flow, we continue to guide for a cash conversion on the high prior year level of around 40%. And since we narrowed the EBITDA range towards the upside, this translates into now expected higher absolute cash flow for 2021 as well. With that, ladies and gentlemen, we thank you so far for your interest and your time. And now we are happy to take your questions. You could now start to ask us with anything you want to know.

[Operator]

[Operator Instructions] The first question is by Charlie Webb of Morgan Stanley.

[Charles L. Webb, Equity Analyst]

Just a couple from me. First off, just around the guidance, looking at kind of the both upper and the lower end of the guidance and accounting for what looks like it's going to be a fairly strong H1, perhaps you can just help us understand what normalization you anticipate and what you see in the current order books that would need to be a little bit conservative -- or cautious, sorry, I should say, on the second half just given things seem quite positive heading into Q2. Second is just one around the bio lipid nanoparticles. It clearly sounds like you've got that up and running quicker or very quickly. So just wondering what your expectations are from that in terms of its contribution. I think last time, we were talking or we were looking at some sort of double-digit million sales contribution from that this year. Given you managed to get that up a bit quicker, maybe you could just give us some sense of how the ramp-up is going and what you now expect for the full year from that. That would be great.

[Christian Kullmann, CEO & Chairman of the Executive Board]

Charlie, thanks a lot for your question. I guess I take the first part of the first question. Ute then will add something, and I will give a little bit more color about the progress we made in respect of our lipid nanoparticle business. But maybe let me start with the personal address. As you know, I'm a conservative. And since I've taken helm in summer 2017, I have delivered. We have delivered on everything we have promised. This kind of moving ahead, this kind of creating future for Evonik and for our investors is paying off definitely. So don't get me wrong, but not for all the tea of China I would change this attitude, which is much more than an obligation for me. So please forgive me if we and I stay conservative. But nevertheless, it is definitely right that we will see brilliant first half of the year. And following the line of this, I think, prudent conservatism, it is fair to say that there are still chances in the second half of the year, on the one side. On the other side, that is what we should not underestimate, there are some factors, let me call it, we have to watch for. For example, that the markets are definitely very tight, and our customers have secured volumes. And they do really order every kind of kilogram they can get, but not necessarily we see that our customers have started to build inventories in this respect. And it is fair to say that we should not put a blind eye on the, let me say, development of raw materials, and some of them are even critical for our customers. So this might have an impact on volumes in the second half of this year. But on the other side, we do see definitely further growth potential in the second half of the year, thinking about our Veramaris, thinking about the lipid nanoparticle. So in a nutshell, we expect a strong first half and are confident, as a conservative guy like me and Ute, I may say so, it could even be for the second half of this year. With this, I ask accordingly and politely Ute to give you a little bit more color about some details.

[Ute Wolf, CFO & Member of Executive Board]

Yes, with pleasure. Thank you. Yes. I think Christian very well described what would bring us to the upper side of the range. Or if the strong momentum continues throughout the year, you can do the math yourself. But I think you also asked what could bring us more to the lower part of the range. And I think we should keep an eye on rising raw material prices. We had last year, especially in Q3 and also Q4, very low raw material prices. That helps a little bit also in the margin here and there in Q1. So that is a factor to watch. And of course, also the shortages can limit growth here and there to a certain extent. Then last year, we discussed several times what are our one-off savings due to the pandemic. You might remember that. And when -- one was, of course, lower bonus payments for our employees. We had, of course, a much lower EBITDA last year, and then that of course, delivers lower short-term bonuses. That will not repeat this year. So this effect, lower bonuses was a onetime last year. We described that. And of course, that is to be kept in mind this year. If you look at the divisions, Specialty Additives and Smart Materials, we have seen very wide volume growth in Q1, especially visible for coatings, durable consumer goods and automotive. So here, the question is really what is re- or pre-stocking at our customers. Are they -- with all the logistic constraints, we see supply chain constraints. Maybe they are ordering a little bit more than they would do in a normal environment, so that is something to watch. And we see customers fill up the supply chains from very low inventory levels at the end of 2020. That normally will normalize throughout the year and saw this very strong growth of Q1 and Q2; especially also compared with 2019, might not be realizable in the second half. In Crosslinkers, Wanhua market entry is still expected towards the end of the year. I think on the demand side, demand in Asia is very strong, so that helps. And we have to see how the markets reentry, then in the end influences our business, our volumes. Nutrition & Care, all business will see a strong demand in '21. We described that active ingredients in cosmetics and the ramp-up of the LNP, of course, will give further support throughout the year. But also in Animal Nutrition, the tight supply-demand from methionine that we have at the beginning of the year has already normalized, so we'll see normalization of contract prices on good levels throughout the course of Q3. Volumes growth should stay healthy. We described that also in the last quarters that really the market is in a very good and resilient shape here, so volume growth in methionine will be there as in every year, especially then after the end of the global lockdown. So overall, our growth divisions will continue to deliver the structural growth and drive earnings above the 2019 pre-pandemic level. It depends a little bit on the momentum in the second half if we get more to the middle of the range or more to the higher end of the range. And of course, there are some risks towards the lower part of the range. That is what we see from today.

[Christian Kullmann, CEO & Chairman of the Executive Board]

Charlie, back to your second question about the further potential of our lipids. Ute has given you some more color about the potential risks. Here is some more color about potential upside. Tremendous upside for this year, we do expect a clear double-digit sales contribution, like conveyed to you last time, and that is what I could confirm, and that is what I could confirm by underpinning it because there's definitely a chance to come out better. And that, I guess, is the answer -- the crispy answer to your question.

[Operator]

The next question is by Andreas Heine of Stifel.

[Andreas Heine, Managing Director]

I have 3 questions, if I may. The first is on Specialty Additives. You have given very positive comments also on raising the guidance in Nutrition & Care. Actually, the highest deviation to the expectation was the Specialty Additives, where the outlook is flat earnings. Maybe you can comment how cautious you are in that respect? The second, maybe update on polyamide12. My understanding is that effects already in start-ups, the earnings in Smart Materials, maybe you can highlight where you stand there. And lastly, with also your very strong growth in all the high-margin and innovative products, is it fair to assume that extrapolating this in the next years means that your CapEx budget has to be adjusted as well?

[Ute Wolf, CFO & Member of Executive Board]

Andreas, thank you for the questions. I'll start with your first one, Specialty Additives. We described, I think, in our full year outlook that especially the business in Asia and now with entry of Wanhua is a little bit of a risk factor. We described how that has developed in the first quarter. And now that we have more visibility, I think the good momentum will continue in the second quarter and, to a certain extent, also in the second half. We see especially strong demand from Asia. That's true for all of our growth divisions. And we also see continuously good order levels. If we look at Specialty Additives, then I think the others, like Comfort & Insulation, Interface & Performance, are all on a good track. So from that point of view, that explains the now more positive view on that division. I could also now take the third question on CapEx. We have analyzed CapEx throughout the last years and have really found out or, in the end, seen that this sustainable level of EUR 850 million, as an average, is enough for maintenance and for growth CapEx. You have to see that in our portfolio, now step-by-step, the share of more CapEx-light business is growing, so we need less CapEx here for expansion and for growth. Our acquisitions that we had undertaken in the last years also pay on to that. So from that point of view, on that portfolio, step-by-step is getting somewhat more CapEx light. And the number we have given, this EUR 850 million, is designed in a way that it allows the growth that we are seeing in our portfolio.

[Christian Kullmann, CEO & Chairman of the Executive Board]

Andreas, I will try to answer your question about -- in other words, our PA12 plant here we're building up in Germany. Yes, there is a slight delay of a very few weeks, and that translates into -- they're saying, a matter of fact, that we will ramp up -- we will have to ramp up in the second half of this year, around summer vacation, a little bit earlier, a little bit later. But around this time, you could definitely bank on that we will have the ramp-up of this plant here. And if I compare situation, talking about our construction plans here in -- talking about PA12 with those of our competitors, we have really extended and expanded our position. And that might be very helpful and fruitful and paying off in the next year. That is what we do assume, and there's good reason for assuming this as such.

[Operator]

The next question is by Chetan Udeshi of JPMorgan.

[Chetan Udeshi, Research Analyst]

A couple of questions from my side. First question is we've seen a significant increase in crop prices, and I don't know if you had any perspective on how it may or may not impact the demand for methionine in general. That would be the first question. And second question is just around the topic of recyclability of some of the products of Evonik, whether it's in Smart Materials or whether it's in Additives. Can you talk about what is the recyclability scope today or in the future for some of the polymers that you supply to customers?

[Ute Wolf, CFO & Member of Executive Board]

Yes, Chetan, thanks for the questions. I'll start with the first one, and then Christian will talk about circular economy in a couple of minutes. Normally, what we see, there is no correlation between corn prices or crops and methionine. We have had these consolations throughout the last years many, many times. So there might be here and there a local influence but not that it really moves the needle in our overall global methionine business. So from that point of view, we don't see any specific influence from there. What will drive and what drives the methionine growth very, very resiliently and very, very sustainably is really the professionalization of meat production, the sustainability aspects in the developed markets, so less food import, less, of course, waste output, healthier animals. Gut health, I think, is the big headline here. And of course, with increasing wells and increasing food consumption, that is the third pillar. And that is very, very robust now over decades, and that is what we see also for this year and the years to come.

[Christian Kullmann, CEO & Chairman of the Executive Board]

I take the second question. A couple of weeks ago, Lauren, the Head of our Specialty Additives Department, has added something about our secular plastics program and have announced that this has just started. So that means, in other words, that we do see here in the midterm sales potential of, give or take, EUR 300 million, even more, even more. And that means, in other words, you are very cordially invited to attend our Division Day for the Specialty Additives, which we will have, Tim, in a few weeks.

[Tim Lange, Head of Investor Relations]

Yes, correct. And it's the second one, so it's beginning of July.

[Christian Kullmann, CEO & Chairman of the Executive Board]

And we will try to take this chance to amaze you about our circular plastics program. But I'm -- as you know, I should stipulate here and give Lauren Kjeldsen a chance to explain and to convey those brilliant contents and ideas and initiatives personally to you.

[Operator]

The next question is by Nicola Tang of BNP Paribas.

[Nicola Tang, Analyst]

The first one was actually on Veramaris. You mentioned, I think, earlier that maybe just the sort of upside for H2 versus H1 is lockdown measures ease. So could you talk a little bit more about how this is progressing so far? The second was could you give us an update on the Baby Care carve-out, how that's going. And then finally, could you just remind us of the kind of long-term intentions of RAG as your core shareholder. Just an update would be helpful.

[Ute Wolf, CFO & Member of Executive Board]

Yes, Nicola, thank you for the questions. I'll start with Veramaris. That is, well, progressing well. Sales and utilization is further ramping up. We are further ramping up the production, are working towards the EUR 150 million to EUR 200 million sales for the joint venture. Keep in mind, it's 50-50 and, of course, above-average margins. It is a biotech process, so of course, that's not always linear. But we have really now tackled some start-up things in the last year. And so that technically, I think that is very well up and running. COVID-19, you already mentioned, had impacted the whole restaurant catering business in major salmon markets last year. And in some of the countries, that was down by nearly 50% compared to 2019. However, the overall road map and the value proposition is well on track. And of course, we have seen it in our realized sales prices with -- in line with our business plan. To be more diversified, we have adjusted our focus and building up a presence in pet food. That was always a chance. So of course, that is now maybe coming more into focus because also there, the demand is different and maybe even more stable than in the food market. And we are expanding our footprint with regard to species, into warm water fish and shrimp so that we have a broader appliance range. And of course, it's still difficult to travel and meet the customers to discuss about the new applications. So I think that's more something for the second half, but there is clear, we will further increase the sales in this year and in line also with the increased capital -- capacity utilization.

[Christian Kullmann, CEO & Chairman of the Executive Board]

Okay. I take the next 2 questions. First, about our Baby Care business, the acrylic acid, and I would entitle the answer to this question by saying everything is well on track. We have announced that we will start the carve-out process. We have announced it in the autumn of last year. All work streams, our project work streams are pretty well on track, and so we stick, and I could confirm that we do so to our time line. The separation will be finalized in the middle of this year. And then thereafter, it is our job to evaluate all further strategic options and to choose the best ones, and that will happen in the related time. So once again, everything is pretty well on track, and we stay put to what we have announced. And our aim is also here to deliver in due course. And then there was another question about the strategy of RAG Foundation. Okay. It is my pleasure, and I dare saying it is my utmost pleasure being the CEO of Evonik. And from this perspective, I could comment about RAG Foundation saying that, yes, they do have a very clear intention to remain a significant shareholder of Evonik, as an integral part of their portfolio. And as you know, RAG Foundation is a professional asset manager, so taking this in consideration, their intentions are pretty well aligned with the intentions of the other shareholders of Evonik Industries, which I do really appreciate so far from my side.

[Operator]

The next question is by Thomas Swoboda of Societe Generale.

[Thomas Swoboda, Research Analyst]

I have one question, and it is on your pricing strategy, especially regarding Smart Materials and Specialty Additives. Earlier on the call, you stressed that input costs are rising. So in both of the aforementioned segments, pricing was slightly negative in Q1. So my question is, do you expect that you can increase your prices accordingly to avoid margin pressure? Or should we actually prepare for some headwinds on your profitability from input costs in H2?

[Ute Wolf, CFO & Member of Executive Board]

Yes, Thomas, thank you for the question. I think what you see is an aggregated number for the whole portfolio of the division. It's a little bit a mixed picture if you go to the business lines. So overall, I think prices were broadly stable. In Specialty Additives, as I said, if you look into the specific business lines, there are some where price is up, some with prices slightly down. That's also due to product mix and other factors. If we look at Smart Materials, also here, a slight price decrease of 1%. There is some energy costs passing on especially in the silica business, so that has -- might have an influence. And also here, in other divisions, we had a very good price development. And sometimes, if it's Catalysts, it's really how -- it's the product mix in that given quarter. So I would not overemphasize that. I think we are pricing our products in accordance with the specific value that they create for our customers, value-based pricing. So from that point of view, that is very well intact. If raw materials are expected to rise, that is also part of your questions. Of course, we have to see that very early. We have to have early indicators to then be able to phase that into our pricing policy as early as possible. That is what we have done in the last years. We had here and there quite significant price increases in one or the other raw materials, like 2 years ago, and we really managed to, in the end, yes, compensate that or work on that with nearly no EBITDA effect. So that is how we look at it. Again, I would not overestimate and overemphasize here the little fluctuations on the price side for Q1.

[Operator]

The next question is by Gunther Zechmann of Bernstein.

[Gunther Zechmann, Research Analyst]

Just a follow-up on the full year EBITDA guidance, please. You already said it's conservative. But if I can take that a little further, back with the full year results in March, you guided for EUR 550 million EBITDA in Q1. You did just under EUR 590 million. So what do you see different in the next 9 months that you decided to increase the lower end of the guidance range by EUR 100 million but keep the higher end unchanged, please? And then the second part of my question is,that if I take your reported Q1 earnings and the Q2 guidance, that implies just over EUR 1.2 billion EBITDA for the first half this year. When I take a typical seasonality of Evonik over the years, that implies full year EBITDA of EUR 2.3 billion. Is that what you see as well, that you're very comfortable with the upper end of your guidance range, please?

[Christian Kullmann, CEO & Chairman of the Executive Board]

Gunther, your question is, as always, a very tricky one. Yes, you've got me totally right that I'm conservative, and I would stay put to it. And as mentioned, not for all the tea of China I will change this position because we have given ourselves the aim to deliver on what we promised to you. Having said this, it is that certain that we will see a pretty attractive and pretty good first half of this year. And please, Gunther, forgive me, but if I would now start, together with Ute and Tim, to give you more color about what we do see, what we do judge and how we should deal with the second half of this year, what, Gunther, what would be the next -- the half year quarter reporting, what would it be good for? It would be good for nothing. So in other words, first quarter, great; second quarter, we assumed to do better. And then in the meanwhile, it is not to mitigate your optimism about Evonik, but it is to say please feel invited to come across in the summer of the year, and we will give you our numbers and figures about the second quarter of the year, and then we will see how we could do it. Give us a chance and give us a chance to convince you once again with our numbers and figures. I guess that is a fair answer I could give to you as of today. Don't be too much -- don't be too disappointed.

[Operator]

The next question is by Martin Roediger of Kepler Cheuvreux.

[Martin Roediger, Equity Research Analyst]

I have only one question left. It's on Animal Nutrition. Sales in Animal Nutrition was up by 2% year-over-year only. And this was mentioned in your fact sheet due to pricing. So you did not mention volumes in your publication, so I conclude that volumes did not contribute to growth or were eventually slightly down. Is this correct? And if so, I wonder why you mentioned that supply and demand is good globally in Animal Nutrition. And Mrs. Wolf indicated in her speech some volume growth in methionine. So my conclusion would be, is there any drop in volumes in lysine, threonine and tryptophan, which has caused this volume performance?

[Ute Wolf, CFO & Member of Executive Board]

Yes, Martin, so please keep in mind that last year's Q1 Animal Nutrition had a record volume development because you might remember, in China, the pandemic was already going on, and China was doing everything to secure food production and feed additives supply into the market. So from that point of view, the comparison to last year's Q1 is very high. So that's why, of course, the volume growth is maybe not -- in this specific comparison, quarter 1 2020 versus quarter 1 2021 is not the usual one. Basically, the overall growth trends are intact. I described them just a couple of minutes ago for the other question. We see that, and that is what we are also working on. We see it throughout the globe. We have also that antitrust examination going on in the U.S. So that is also potentially helping us. As we produce in the U.S., that is what we see for Animal Nutrition.

[Operator]

There are no further questions, so I hand back to you, Mr. Kullmann, for the closing remarks.

[Christian Kullmann, CEO & Chairman of the Executive Board]

Yes. Thanks a lot, ladies and gentlemen. Having had you today, it was our pleasure to keep you informed about how the company is running. And from our side, we wish you pretty well summertime and stay healthy. And hope to meet you soon in person. Goodbye.

[Operator]

Ladies and gentlemen, thank you for your attendance. This call has been concluded. You may disconnect.