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Intrinsic Value is all-important and is the only logical way to evaluate the relative attractiveness of investments and businesses.
First of all, hello to everybody. This is Michael Majerus. I would like to welcome you to this call, also in the name of my colleague, Stephan Bühler, who is also joining. Both of us will be available for the subsequent question-and-answer session after the presentation.Now let's start with the presentation first, and let's move to the first page with content, which is Page #3, which shows the development of our Composite and Fibers & Materials division, CFM. Starting with revenue, revenue was down 9% at roughly EUR 105 million, but that was expected and overall not materially impacted by COVID-19 because the main reason here was that we decided to restructure our Textile Fibers business and substantially reduced the number of lines we are running last year, reduced the cost and optimized the structure of this business. So therefore, this is the main reason of this revenue development. We saw some corona-related effect in revenue in the automotive and aerospace sector. However, this was compensated by better-than-expected sales growth in Wind Energy. We have here customers in China, and here we saw a strong development, both volume-wise but also price-wise, we could even get through some price increases. And the sales in Industrial Applications was rather stable.What was good was, of course, the earnings development. And also this is related to the measures we have implemented already last year. And one is, as I mentioned already, Textile Fibers business where we reduced the number of lines, adjusted the cost structure, optimized, of course, our customer portfolio because we kicked out, of course, the business with the worst margins and, in addition, came a little bit positive effect from the market because, in the first quarter, we had rather low raw material prices for acrylonitrile. So therefore also, we could increase our margin.Another very important reason, it is maybe the most important reason, is that also overall the cost reduction measures as well as the operational improvement measures, primarily in the production area, really showed effect. So we were benefiting from overall good operational performance. And in addition, as I said, Wind Energy, we were able not only to increase volume but also the prices. And that's led to the positive EBIT of EUR 3.7 million.As you know the first quarter last year was rough, we view. But that's maybe even not the best suited comparable basis because you know that the second half last year was much weaker than the first half year. And overall, if you take the average, we had roughly minus EUR 2 million per quarter. And now with plus EUR 4 million, this is an improvement of EUR 6 million. And that is also remarkable because, in addition, we had a negative effect in the first quarter coming from our at-equity result, and this is related to our joint venture with Brembo for our carbon ceramic brakes. And this joint venture was heavily affected by corona, first of all, very early in March due to the health situation in Northern Italy because our manufacturing site is close to Bergamo. And then pretty much after that, in our German site, due to the shutdown of the German OEMs, so therefore, there was, compared to the usual level, a EUR 3 million lower contribution from at-equity to be reported.Yes, with regard to ROCE, of course, it's a little bit surprising on the first glance why this improving result. ROCE was down. This is a more technical aspect because we are here always calculating the rolling 12 months. So of course, in the first quarter 2019, we had the good results of 3 quarters from the year 2018 in, whereas, of course, now we have a rather improved Q1 in 2020, but we have 3 quarters -- last 3 quarters of the last year, and so that is a more technical effect.Now let's move to next page, GMS. Also here, overall, no material impact from COVID-19 so far despite the fact that we have, of course, see a substantial reduction. But the reason here is the development in our lithium-ion battery business. And that has to do with a shift in the supply chain of our major customer, which is Hitachi, who is then serving with this material Panasonic. And Panasonic has significantly shifted market share away to another customer. In addition, of course, also between Panasonic and Tesla, you might have heard there is some negative development. So that was already anticipated in our budget, in our guidance, which we gave in March. It was also the main reason why we guided EBIT down 10% to 15% compared to the previous year, so that was not related to the corona crisis.We are, of course, working here anyway and had started this already some time ago to broaden our customer base, especially with regard to projects in Europe. And we are pretty advanced here, both in the development in material and taking place in the projects going on. But this will, of course, not have effect in the current year. More will when -- for the current year is the development of the -- of our fuel cell business, which we have now allocated to GMS. This is a strong and growing business. But of course, we cannot, already in this year, fully compensate the reduced volume from the graphite anode material.With regard to the other market segment, we saw some slight declines compared to the prior year. Here, we saw some effect already from the COVID-19 pandemic, for example, in the Chemicals business. What was running very well is semiconductor, which is still strongly increasing and is, of course, at least with regard to our productions not to be negatively influenced here by the crisis so far.EBIT, as a consequence of this development, decreased proportionally by 55%. If you look in absolute terms, it's coming down from EUR 26.5 million to EUR 11.9 million, so close to EUR 15 million. However, a big part of this portion, EUR 6 million is coming from IFRS 15 effect because we had in the -- and that's also mainly related to the GAM business because we had a positive effect of almost EUR 5 million in GMS in the first quarter '19, and there's now a negative effect of more than EUR 1 million, and that has to do with the increasing volumes last year and the decreasing volumes now. That has also been taken into consideration.Also, the other market segment had slightly lower earnings. That said, by far the most biggest effect is the graphite anode material effect, and Semiconductor has not only improved on revenue but also on the profit side and also automotive transport more stable despite some lower sales revenues, and that has to do with the productivity improvements we have started up last year. So we were not on the optimal productivity level. So therefore, we could see -- keep our profits stable in that sense.Now let's move to the next page to Corporate. We see here improvement in EBIT by 20%. However, in absolute terms, of course, it's roughly EUR 1 million. And the main reason is here that we had a onetime income from the final invoicing of services to divested business units of our former business unit, Performance Products. The reason is that the new owner is building up its own IT systems, and we had to support this. And this was then here invoiced and gave us additional profit. So that's the reason for Corporate.Now let's move to next Page 6, which is the overall group view. Sales overall declined by 15% as expected. As I said, so far, no major corona impact in it. EBIT is positive with EUR 9 million, however, declined by 50%. One factor here is, as I already mentioned, the development of the business unit, primarily GMS, of course, while CFM has improved. The other reason that we had roughly is EUR 3 million lower financial result, which moved up from minus EUR 6 million to minus EUR 9 million. And the main reason here is foreign exchange valuations of internal company loan, mainly coming from the British pound to euro development. And as a consequence, net result was slightly negative with minus EUR 4.3 million.Now let's switch to the next, Page 7. Of course, in current times, even more than normal, cash is king, so which was, of course, a good development is the development of free cash flow and our cash position. So we have not lost EUR 1 in the first quarter despite the start in corona crisis, but we rather have increased it, as you could see now. So free cash flow was EUR 17.9 million positive, which is remarkable because normally, we have the first quarter as a negative cash flow.There are several reasons for that. One is, of course, that we started early to reduce our expenses in almost all areas, and the expense in some area or some CapEx made up this. And we pushed out, of course, on the time axis here, expenses. And we improved also our working capital where we started a lot of activities also to provide cash on the working capital side. So therefore, we could keep the working capital stable, which normally is showing an increase in this season. And in addition, as has already said, free cash flow also was supported by some lower CapEx. And the main reason for the negative free cash flow from discontinued operation is coming from a tax payment related to a time when we were the owner of the graphite electrode business whereas, in the previous year, we had a much higher negative cash flow of minus EUR 10 million, and that was due to a settlement with the acquirer of the HITCO Aerostructures business.So let's turn on Page 8, a few on the balance sheet. Equity ratio improved. So we are almost back at our 30% target, the range and the reason is mainly coming from the effect of the pension provisions due to the fact that we have an increased long-term interest rate environment here in Germany. This gave a positive effect of EUR 25 million in the equity side, and that's the main reason the other effects were much smaller and were offsetting each other. And as a consequence of the already alluded free cash flow development, we have increased our liquidity to nearly EUR 150 million at the end of first quarter compared to the EUR 137 million we had end of last year. And also as a consequence, we see a slight improvement in net financial debt. Yes, so far to the first quarter 2020.Now let's move forward to the outlook 2020. On to Page 10, of course, this is a really pretty busy chart. However, as you can imagine, in this unprecedented times, now we are working here since quite a while on the daily drivers, management, models. We started very early, of course, with the preventive measures to protect health of our employees already starting in January with regard to the China -- development in China. And we have set up here a lot of measures to protect our employees, their families but also our business partners. And thanks to this, we have so far only very few positive cases for the corona crisis, and we have kept the situation under control.The second target, of course, of our measures beside the -- those related to the employees, and the [ main reason ], of course, running our business. And of course, we were affected here already in the quarter, partially by related measure by the government. This was the case in China where we had, in February, to shut down the manufacturing. In India, in Italy, it was the health situation, as already mentioned, and also in Spain. So those were effects in the months of March and/or April. But in the meantime, those measures have been lifted, and the sites have resumed to operations.Now in addition to the more health and government-related effects, we had also, of course, customer-related effect. Half of the business at CFM is, as you know, mostly automotive related. And of course, the shutdown of the automotive OEMs here in Europe has, of course, as a consequence, led to the situation that we reduced our activities in the production side in Wackersdorf and Bavaria and in Willich as well as the Austria's 2 manufacturing sites and have introduced short-time work. And this was also related, of course, to the Brembo side of our joint venture. And however, we were -- in the remaining sites in all the countries mentioned here, we were able to largely maintain production and deliver our products without interruption. Of course, with different degrees of capacity utilization, but overall, we see also here a positive development with increasing production.Again to the end -- to counteract, of course, those effects, we have introduced a lot of measures, of course, primarily short-time work or other applicable forms and other [ mitigation ], reduction of vacations, overtimes. And administrative employees and teams have continued to work largely out of their home office. So we have usually 200 [ tailor ] workplaces. We have increased this, on the peak, 1,200, and our IT team has done a great job in making this all work without any major problems.Now let's continue onto Page 11. Given the situations, which I mentioned here in March and April and with all the effects we saw, we had to withdraw our guidance for the current year because there are so many uncertainties. And we do not see that we will reach the original targets. And of course, we are doing a lot of scenario planning. No one knows currently which scenario will happen, but we have to be prepared for even worse scenarios. And -- but the only thing, what we can say today is that we will see a significant decline in the major KPIs to be expected this year. However, we are still continuing to work as we have done it so far to keep things here running and stabilize the situation. As I said, we already increased liquidity, and we are working on additional funding measures independent of the capital markets to get additional cash in. One thing is, of course, related still was working capital-related measures. The other is we have substantial real estate not needed for our business, primarily here in Germany and in the United States, which is even partially rented out to other companies, using it. So we are not using this for our own. We'll not use it for our own. So they're a noncore asset, and we are in a process and anyway had started this already in advance of corona.And to get the additional funds in, we are intently working on intensifying mitigation of potential risk. As I said, we have set up a comprehensive crisis management covering all areas from sales customer side to the operations and manufacturing side to purchase and to the whole spending areas and so on. And so yes, the first quarter, as I said, has remained in the scope of our initial forecast. However, according to the second quarter, we will see this effect now with the time shift because, of course, the first quarter, we still had the revenue from the situation where all the manufacturing sites were running in the months before. And now the effect will come here in the second quarter. Therefore, we currently expect sales revenue to decline substantially. We expect a double-digit percentage reduction and a negative nonrecurring -- and a negative recurring EBIT.Yes, a reliable outlook for the entire fiscal year 2020, of course, we would love to do it, but we still need to wait a little bit to see how the overall economic situation is developing. So far, what we see, of course, as all of us, a rather improving situation in Far East. So China, Japan and Korea are also, for us, good markets where we can increase volumes. Europe has been affected now in the last 2 months, but it's now starting to reopen again, which we also see on our sites. And U.S., of course, we still have to see how the situation there is. And so therefore, for the time being, we still do not see that it's now the time to give a precise outlook.Yes. On Page 12, now regardless on the development of 2020, which is, as I said, quantitatively now, difficult to exactly predict, we see, overall, looking more in the mid-term some rather positive effects on the crisis because what we all see is that digitization and sustainability will get even more important. I mean with now company experiences that conferences done by video, by Zoom or any other systems is working quite well, this is a trend which will, of course, further continue. Digitization will be even enforced due to that.And the other aspect is sales sustainability. We could see it from the German government as well as from the European Commission of their thoughts about setting up big programs to reactivate the economy. The sustainability aspect will play an important role. And this is, of course, good for us because, as you know, we are supplying alternative energies like the wind energy with our carbon fibers, the solar industry with our special graphite. We are contributing products for lithium-ion battery for -- as well as for fuel cells. And also, of course, the lightweight aspect to reduce the CO2 footprint will play even bigger role both in the automotive as well as in the aerospace industry.And coming back to digitization, I already mentioned that even now we see that this market is improving for us, and we expect this to continue, especially in the area of wideband-gap technology, which is mainly related on silicon carbide-based semiconductors, which is a positive driver for our key investments.So far, an overview on the first quarter and the outlook. And with this, I hand back to the question and answer.
First question is from the line of Richard Phelan from Deutsche Bank AG.
I just had 2 questions. Can you just update us with the status of the final payment for the BMW joint venture, whether that also can be deferred? And then secondly, when you say in order to boost liquidity, you're looking at some independent measures independent of the capital markets. Can you provide a little bit more detail? Could that include direct funds from your shareholder or one of your significant shareholders, I should say?
Yes. First of all, thanks for the question. Yes, and the payment for BMW's stake in our Moses Lake carbon fibers site is, of course, deferred until the end of this year, in the amount of EUR 60 million -- somewhat about EUR 60 million. And we intend, of course, not to defer it. Of course, if it would be necessary, which I don't expect to be necessary, of course, we would approach BMW. But frankly speaking, it's in our interest to get these things done. And then BMW was rather generous with -- the acquisition was done in 2017, they gave us time until the end of 2020. And the reason why we are not so interested to push this payment out is that we're making a big focus, in my view, with the cooperation with Solvay on the aerospace side, and which is the most attractive market in CFM. I mean if you look in the earnings potential there, the people who are in today, their EBITDA figure in the magnitude of our revenue in that business. And we, alone, will not get there. But together, we have excellent chance to get into that business. Customer, in my view, is already waiting for this because we can offer a prepreg base on a more cost-efficient fiber. And especially in the situation of the airplane industry, this will even become a bigger role than it has been in the past.So -- but having said this, I mean the next phase will be because the customer are expecting a stable supply chain because you enter into contracts was 20, 25 years or so. So that's what we are currently discussing with Solvay. Of course, it's not finally resolved, and we're still working on a lot of topics, is to get in the next step to a joint venture also with some of our production assets. And that would, of course, also contain part of the Moses Lake carbon fibers lines. And of course, we are -- and this is really not possible as long as BMW is the owner. So therefore, we are not -- it's not our primary focus to push out. And what is even more important, we do not see it as necessary because, coming back to what I mentioned before and that is now related to your second question, is what we are doing here is primarily real estate related. So as I mentioned, we do have a lot of real estate in both land and buildings here in Germany and in the United States, which we're not using for ourselves. And we are in the process of selling those noncore assets. We are working on working capital-related measures. And that is independent from capital markets and that is also, in my view, independent from the corona pandemic because the real estate market for those things is still there. And overall, to give you an idea, we are targeting here a mid- to high double-digit million euro amount of money, which would at least cover the payment from BMW.
Mid- to high double-digit being EUR 50 million to EUR 100 million?
Yes, maybe not EUR 100 million, but maybe EUR 50 million to EUR 80 million, somewhere in that range.
Next question is from the line of Christian Obst from Baader Bank.
Yes, Mr. Majerus. First of all, coming back to the financial debt, can you remind us if you have any covenants on your debt so far? Of course, if you compromised the entire debt -- net debt currently in the balance sheet, you have approximately EUR 260 million plus EUR 60 million, you're coming to EUR 420 million with the declining EBITDA. So that looks not very healthy, let's put it that way. This is first question. Next one is on acrylonitrile, it seems that you have turned around Fisipe, at least a bit. And now, of course, raw material prices declined further below USD 500 per ton. So does that give you an additional opportunity going forward and you are gaining back some customers there?
Yes. Thank you for your 2 questions, Mr. Obst. Yes, with regards to financial covenants, of course, given our leverage structure, we do have financial -- usual financial covenants in our credit facility. But we're still fulfilling the covenants. So -- and the line is, of course, still available for us. However, we are, as other companies also are, currently in negotiation with our bank. As I said, we are, of course, calculating the scenarios, and we also want to make sure that even in a real downturn, severe downturn scenario, this will be also available for us for the future. And here we are, of course, in a negotiating process. But as I said, so far, we're still fulfilling the covenant. With regards to -- and I'm very optimistic that we will also find a solution with our banks and to protect also this against further downturn developments in the market.Now with regards to acrylonitrile, yes, you're right, prices have come down to very low level. However, it's a little bit difficult to say what are theoretic prices and what are practical prices because that $500, I think no one is, from the end producers, selling currently. But in essence, you're right. In essence, you're right. There is an opportunity in that market. As I said, we anyway had optimized the structure. Interestingly enough, also here, we see some positive corona effects, especially in the U.S. because a lot of people sitting at home, and they -- what is the English name now -- they produce their [ clothes ] now using textile and also with our materials. So we had rather some strong business in the U.S., which has still continued.Yes, there might be an upside also in the -- but I see it even more in the wind energy market than in the textile fiber market, as I said. Overall, alternative energy will further progress. And as I said, since our customers primarily here are in the Far East, we have here really concrete requests from customers to provide more volume, which could eventually lead to a situation that we would even start another carbon fiber line, which we are currently not using in Moses Lake. So on the short term, I would see the biggest opportunity may be even in the wind energy sector. But also, of course, the Textile Fibers can have an upside. But it's -- of course, the Textile Fibers business is difficult to predict. Also the -- as you know, the pricing of acrylonitrile is always very volatile, so this can, of course, change over time.
Okay. One additional question coming back to the lithium-ion batteries. So with the change of -- or with additional suppliers -- change in the supplier structure of Panasonic, can we expect an ongoing decline there of your deliveries going forward? And what is the time line until you have maybe expanded your position in another structure of your material that you are building up new customers? So what is the current expectations for the next 1 to 2 years? So -- and what is the time line when you have maybe a broader base of customers there?
Yes. First of all, maybe this is a rather ironic answer now, given the low volume, the downside is limited, the downside with regard to the coronavirus. So therefore, I think we have little downside. More opportunities in that sector. As I said, the volume has been substantially reduced. So we have currently -- to give you an idea, we are talking maybe of 20% of what volume-wise was last year. So this is already included here in our figures. And of course, yes, there might be a further downside potential, but for the time, we do not see it from the signals we get here from Hitachi. Yes. But of course, we are not counting on that business anyway. So whether this will continue on a low level or that it will go out in the next 1 to 2 years can both happen. Also a slightly higher volume could happen then, but this we don't deem likely currently.With regard to European project, we have to see. I think we have -- I mean the whole graphite anode material is a very customer-specific material. So the material we currently mainly provide is optimized for the cylinder cells, metal cells, which Tesla is using. Most of the European projects are related to either pouch or prismatic cells where you need some different properties of the GAM. So I think we have solved this. So we have developed now a product, which is suited technically also for other battery cell types in the next phase, and that is done now in the course of this year, the industrialization of the production processes for this. So we can do it now in small volume but, of course, we have also to be able to do it in larger volume and also one production step has to be added here. And how fast this will become good business, we have to see. This is, of course -- I do not expect an already big volume for the next year to come. But I would say, in the next 3 to 4 years, there could be a substantial market to come.But what is even more important for us is that the fuel cell business, that is definitely running up. And to give you one idea about different situation on the OEMs. In the U.S. and in Germany, they all shut down. In Korea, I had to participate here on a video conference and [ excused ] us for the question of a Board member. But of course, we could not ramp enough fast enough the demand of Hyundai because we had an insolvency of one of our suppliers supplying us the machine which we needed. We have solved this now, and we have another machine, and we are delivering now. But you see how different the situation is. So what we see in Korea, especially with regard to the fuel cell, it is full steam underway. Hyundai has entered now into a joint venture in China, which might give even additional volume. And to give you one idea, what we see here is that, in the next 3 to 4 years, this will be in the range of EUR 80 million to EUR 100 million revenue, which is already what we had in the full volume of the GAM last year. So all alone, this will compensate the GAM business and additional chances, both on fuel cell as well as on the GAM business are coming on top here.
Okay. One additional question is concerning the related CapEx, too, if you now -- you are forced to switch a little bit capacity from one part to another or to have to change the architecture in the graphite anode material business, what is the impact on CapEx? Have you increased your CapEx to deliver them the growth in the fuel cell business? And -- or can that be compensated by the reduction of CapEx in the other businesses? And what is the current plan there?
No, in the current year, we have reduced the CapEx, so we are now at roughly EUR 60 million currently. Of course, not with project, which are customer-related and important here in the future, which is primarily the gas diffusion there, which is, as I said, ramping up here with fast speed. But the good thing was the graphite gas diffusion layer business, this is not very capital intensive. That has much lower capital intensity than the GAM business. And this is already included in the EUR 60 million budget, and we are roughly spending it for the machinery equipment, EUR 10 million this year for this. A large part of this is, of course, already there or a bit -- some part is already there. And with regard to the GAM -- and also in the future, it will be a rather foreseeable investments here in the -- to bring this to a volume of EUR 100 million revenue, we need over the next 4 years in total EUR 40 million accumulated, to give you an idea.And coming back to the other question with regard to GAM. We do have the capacity, of course, in Poland, which is currently heavily underutilized. So we can re-ramp this business, of course, to the volumes we have seen in 2019 with our substantial new investment. It's only one additional production step downstream, which is a new one, but this is also not very capital intensive. We're talking here about low double-digit figure.
[Operator Instructions] The next question is from the line of Richard Schramm from HSBC.
Yes. I have a question concerning the outlook you gave on Q2. If I calculated correctly the operating leverage in Q1, it was about 25% or so. Is this a figure we might also assume going forward into Q2? Or will this be higher because of the underutilization of capacity spiking more into margin development? How do you see this?
I'm not sure -- sorry, Mr. Schramm, I'm not sure whether I got your question precisely. What was calculated to which leverage figure and which concrete figure you gave?
So just -- if you look -- you lost EUR 42 million in sales in the first quarter and about EUR 10 million in EBIT year-on-year. If I put this in to relation, it's around about 25%. So my question would be, should we expect this as a reasonable ratio going forward? Or will this be higher in Q2?
I have not made this calculation and put those into figures now and to percentage together. But as we said, if you look at the figures individually at revenue and at EBIT or whatever you take, we expect, as I said, a double-digit percentage-wise decline. Let's see how big it is. But I would not expect a high double digit or a lower double-digit percentage deviation. And with regards to EBIT, we said it will likely be negative. So we have a plus EUR 9 million now. So how big it is, we have to see. And I'm very reluctant now with making here a more precise guidance than what I gave. What we can see so far, if I look into April, it has been somewhat better than expected. And as I already said, we now see also that customers are getting back to business again. We are also reopening our manufacturing site. Most of them are already open. The only one, I think, which is currently not yet opened, is Wackersdorf. But yes, since we have, as you know, the take-or-pay agreement with BMW, that is financially not weighting us. And also here, we have a date that this will be opened, I think, end of the month. Positive at this side.So -- but I'm lucky to give here a percentage. I mean the decline in the first quarter, you mentioned, is also a different thing than what we're talking now because, as I said, the big thing here in this calculation you are making is the decline of the GAM business. And the GAM business, I think, is developing rather stable throughout the year on a lower level. So here, that has nothing to do with the corona effect. And -- but as I said, we cannot be more precise on the guidance than what we said.
Next question is from the line of Wolfgang Felix from Sarria.
I have a couple of questions. More, yes, I suppose, also geared around the corona effect these days. First of all, can I just ask you, what is your liquidity situation now?
Sorry, once again?
What is your liquidity situation now as of the last time you looked at it?
Yes. Of course, it's always fluctuating, but it's currently at around EUR 140 million.
Okay. Wonderful. And then over April, what would have been your sort of working capital effect there? I'm wondering about how that might have -- how the lockdowns, et cetera, and the shutdowns of various facilities might affect your working capital?
I don't -- so just to understand your question, so are you afraid that we might have a rather big increase in working capital?
Yes, or you could also have a big decrease in capital -- in working capital, and you still sort of only, [ in better commerce ], would have EUR 140 million. And then when that working capital would have to increase again, we'd be looking for more cash somewhere.
Yes. I mean, first of all, I do not have here now final working capital figures. But overall, I think -- maybe let me explain how we manage it. I think on -- the effect will be more on the CFM side with reopening effects again. It is not a situation in GMS, I will come later to this. At GMS, production-wise, I expect a rather stable development. We already started to reduce production. As I said, main driver here is the GAM already last year. And so here, I do not see from the production pipeline huge changes to the negative and the positive side. And on CFM, we rather intend to keep it stable. And the reason is that we already put -- or the other way around that we have rather high raw material bought previously. So -- and that we can, of course, reduce that raw material inventories and fill the next production site without a big increase overall on our production pipeline. So therefore, in both divisions, I expect it to be now rather stable and also would expect for the April a rather stable working capital figure.
Okay. Wonderful. Then could you just give me -- you said something about this obviously already earlier, but what is your current situation now? What is your clients' situation? You're saying that volumes are down 20% -- sorry, down to 20%, was that a comment that was more or less...
It was only related to the graphite anode material business in GMS. And not only the whole GMS, only the graphite node material business. But as I said, I expect it rather stable for the rest of the year.
Okay. And overall, your volumes for the business. So your guidance was, I believe, for the quarter or so, but just for the weeks in which things are the way they are. I guess what I'm ultimately trying to drive at is what would have been your burn rate over the last weeks. Just isolate that say, monthly burn rate and then we can sort of work from there in terms of how long you may have been closed down and how about any rebound that comes when things open again, et cetera.
Okay. Starting with this, the current burn rate for this year until today is 0 because I mentioned we are still at EUR 140 million liquidity, we had EUR 137 million last year, so it was not 1 year until today. And so therefore, I think that calculation -- as I said, it's still in liquidity. We are -- so far, we do not have here a burn rate. And of course, we will see now a negative effect in the second quarter, which still has to be seen. As I said, I see, as I said, a low double-digit percentage decline here in the second quarter. Yes, this will have then some negative effect. But overall, I mean, as I said, we're looking at a lot of scenarios. Our most -- I think my personal view, the most likely situation is the second quarter will be the worst and that we'll see a recovery from the third quarter. And of course, we are calculating with much worse effect scenarios than this. But that is what we currently see also from the customer side.And as I already mentioned, in addition, we have here initiated a sale of noncore assets and other noncapital market-related financing activities with volume of a mid- to high-double-digit range amount. So even in case we would see a negative cash burn rate due to a pronounced crisis, we would be able to manage this.
There are no further questions at this time, and I would like to hand back to Dr. Michael Majerus for closing comments. Please go ahead.
Yes. Ladies and gentlemen, thanks for your interest in joining the call and your questions, of course. I think most important thing is to stay healthy. So therefore, for you and your family, we wish all the best. And yes, have a nice day, and thanks again for participating. Goodbye.