Earnings Call: Q3 2017

Oct 24, 2017

Afternoon. This is the Chorus Call conference operator. Welcome and thank you for joining the SJP 9 months 2017 Results Conference Call. As a reminder, all participants are in a listen only mode. After the presentation, there will be an opportunity to ask questions. At this time, I would like to turn the conference over to Mr. Laurent Hebenstraat, CEO of Fujifi. Please go ahead, sir. Hello. Thank you very much. Welcome to this Surgessy conference call for the 9 months of 2017 results. I have with me today, Jan Malbras, our Chief Financial Officer and Stephane Ocanaut, our Investor Relations. I will follow the presentation, which is now available. Going to Page 2 on the 9 months highlight, We have good revenue growth in 9 months 2017 with revenues up 6.3%. Positive performance of all three business units and in all geographical areas. EBITDA at €131,000,000 is up 14.4 percent and reaching 10.4% on sales, stable contribution margin despite higher material costs and better fixed costs absorption. EBIT at €70,200,000 which is 5.6 percent on sales and free cash flow at €32,500,000 We reported last year €12,300,000 in the 9 months of 2016, which was including €11,200,000 of positive one off. Net debt improved €47,400,000 to 266 €700,000,000 while it was €314,100,000 at the end of September 20.60. No significant developments in the claims issue. If we now move by geographical area, I will focus on the results for the 9 months. The Q3 numbers are available as well on the same page. We have overall reported change at 6.3%, which is broken down by 2.8% growth in Europe, 3.3% growth in North America. While in South America, we had growth of 19.8% and 25.2% in Asia. At constant exchange rate, we digit a more balanced growth across the year with 11% in Q1, Q2 at 4.6% and Q3 at 4.2%. Moving on Page 4 to the revenues by business unit. Again, focusing on the 9 months, we have a reported change, which is 6.7% for suspension, 6.9% for filtration, 5.3% for Air and Cooling. Looking at the 3rd quarter, Air and Cooling sales are declining 4.2% as reported or 3.1% at constant exchange rate, mainly due to the market slowdown in the United States, where you know that production has gone down 14.5% in the United States and 17% in Canada. Moving on to Page 5. Those of you who follow Suretti would remember that we had last year our growth largely from the growth with General Motors. This year the pattern is different. As you see that General Motors over the 9 months is a relatively stable. The growth this year of Surjeffe is chiefly propelled by Fiat Chrysler CNH Group, especially in Sogefi suspensions, the success of the Jeep Compass in Europe, in China and in the new plants in Mexico where Surajesty produces the step bars, stabilizer bars for the new Jeep Compass, which is a good success at Schad Chrysler Group. The other growth which we are happy with is the growth at Daimler. I had mentioned in previous communication that Daimler was one of our growth targets and you can see here the 2017 presence growth compared with 2,006. Moving on to the financial results on Page 6, I would like to hand over to Pierre Lambert, our Chief Financial Officer. Thank you, Laurent. So just as a reminder, sales over the 1st 9 months went up by 6.3%. And as you can see on this slide, contribution margin went up by at least 6.1%. The difference come from a slightly decreasing contribution margin, which goes down from 28.8% to 28.7% over 9 months, roughly the same numbers. Just as a reminder, we were at 28.9% at the end of Q2. EBITDA goes up by 14.4%, better fixed cost absorption and the ratio we update on a quarterly basis. Total labor costs went down from 21.5% to 20.8% over the 1st 9 months. As you can see, EBITDA, which was at 9.7% over the 1st 9 months of last year, now is up to 10.4%, in line with our expectations. EBIT goes up even sharper by 19.6%, Although we had to record in Q2, if you remember well, EUR 6,000,000 of write down of the fixed assets of the Brazilian operation. And as a result of this, EBIT goes up from 5% last year to 5.6% at the end of Q3 2016. I mentioned the point earlier. The proportion of our indirect costs are still going down. They were 19.5% of total sales after 9 months in 2015. They went down sharply to 18.6% in 2016, and they are still down to 18.2% after 9 months in 2017. On EBIT, I already mentioned that the EBIT recorded a €6,000,000 of noncash write down of the fixed assets of the Brazilian operation. It's an accounting issue. It has no cash impact. Results before taxes and minor interest was €51,000,000 versus slightly below €40,000,000 in the same period last year after financial expenses of €19,200,000, down from €22,500,000,000 last year. It is a result of lower interest expenses. We are improving our net financial position, and therefore, our interest go down. And it's also due to a fair value gain of €1,600,000 which is non recurring. As a result of this, net result was positive €28,000,000 versus EUR 15,800,000 in the same period of last year, and it now represents 2.2% of our sales. Therefore, a significant improvement against last year where it was 1.3%. Moving on Page 9 to the P and L. Sales floor went through it and production margin, as you see, fairly stable. Gross in direct costs increasing by 4%. We have more activity this year. Therefore, lots of manufacturing costs, even indirect costs having a sustained activity means, for instance, having a lot more maintenance costs to keep our plants in good working conditions. EBITDA, as mentioned before, up by 14.4 percent EBIT 19.6 percent good translation in pretax income, which goes up by 28.3 percent and net income going up by 78% over last year. Moving on to the real KPI for our CVC cash flow. Operating cash flow is significantly higher, almost double what it was last year. Although CapEx, as mentioned on the right hand side, are increasing towards last year. We already have launched €39,000,000 of tangible CapEx versus €32,000,000 last year. And we are still shooting for something in the region of €70,000,000 of tangible CapEx over the year. So just a reminder, we were roughly €40,000,000 in 2014, €50,000,000 a year after, €60,000,000 in 2016, shooting for €70,000,000 And despite this increase in our manufacturing capability, cash flow is growing up, as you can see, both in the operating cash flow and the free cash flow. On nonrecurring items, for those of you who attended the calls last year, last year we had favorable one offs. Roughly speaking, over the 1st 9 months, we had an exceptional €11,200,000 of positive one offs, €5,700,000 coming from the recovery of tax credits from the French tax authorities. It took us 10 years to recover them. Of course, it's a one off. And 5,500,000,000 which we cashed in the Dayco Disputes. And over the year, we recovered almost €10,000,000 as you remind very well. Taxes, the result was increasing last year, so we paid more taxes. Interest, as you can see, EUR 16,500,000 versus EUR 21,500,000 of cash disbursement a year ago. As a result of this free cash flow of 32,500,000 over the period, it was 12,300,000 a year ago. And if you take out the fact that last year, the free cash flow included €11,200,000 of really exceptional one offs regarding the tax disputes and the warranty claims. It's EUR 32,500,000 versus EUR 1,100,000 a year ago. So therefore, roughly EUR 30,000,000 increase year on year. Free cash flow over the 1st 9 months represents 2.6% of sales. As a result of this, net debt now down to €266,700,000 I. E. A 47 improvement versus the same figure last year. Moving on to Slide 11. Value Creation is increasing. It was 12.8% at the end of Q3 2016. It now stands at 17.5%. So a significant 4.7% improvement of the ratio in a year. And as we continuously pointed out, an NSP EBITDA ratio on Page 12, which went down from 2.18 in Q1 2016 to 2.27 in Q3 2016 and now down to just below 1.6 at the end of Q3 2016. Thank you very much. We move on to the last part of the presentation, which is the performance levels update in 2017 outlook, which is on Page 14 of the presentation. We presented our profitability levers, which are purchasing, shop floor, program management, direct cost reduction and competitive footprint. We are pleased today to update the shop floor level. Let's move to Page 16. What we have done is a thorough analysis of the total cost. As you've seen from the 2016 cost base, we identified €1,200,000,000 of total cost, of which we excluded €945,000,000 They are excluded for the shop for purpose, they are not excluded of our actions, of course, because they are on the first lever. Looking now at the €380,000,000 of transformation costs, we made an in-depth analysis of €290,000,000 of which we found around EUR100 1,000,000 of productivity potential, which are different types of losses, different types of non efficiencies, different types of productivity potential we have. We highlighted this number because within the next 3 years, we are going to have we have built detailed action plan plant by plant, quarter by quarter to achieve a substantial part of this productivity potential over the next 3 years and to continue to reach higher productivity potential over the next 5 years. If we now look at the following page, which is Page 16, is a page we've already presented. We just remind you that at Sogessi, we started definition of the standard KPIs at the beginning of the year. We had pilot and deployment in the pilot plants starting mid February till June, then what we call the plant improvement plan. The 4th line, which is called productivity potential, is basically 2 days workshop in each plant, which we did and then the further analysis, which stretched over the period of 3 months for all plants of Solvency, from which we build our master plan, which is detailed as I mentioned by quarter. And from there we've built a saving book which covers the next 18 months week by week, where we have all our actions laid out, with of course an identification of the potential of realization. At the same time, we have defined and deployed our standard and work methods and the best practices. So this is now since September being deployed. The good news is that the potential for reaping the benefits in terms of cost reductions in front of us as we receive at the start of this journey for productivity in a systematic and structured world. Going to Page 17, giving you some more specifics about the profitability levers on the shop floor. Here are the 11 key performance indicators that we have chosen for Surgeons, which apply worldwide to all our plants. I'm pleased to report significant progress on some areas. Accidental frequency rate is improved by 26% since January. The customer claim rate is improved 12%, The customer line return has improved 36%. Supplier return is still subject where we need to improve as it's flat currently. The reduction in scrap, that means the materials or the finished products we need to discard is 18% improved since January. The customer misdeliveries is improving by 40%. On the supplier side, I would say same as on quality, we still have to work to show an improvement on this indicator. Direct absenteeism rate is flat. Direct worker efficiency is improved by 3%. The yield rate of equipment has already improved by 10% and days of production inventory, which is physical production inventory is reduced by 6%, which goes in the right direction. So we decided to share with you the information to provide some more information on the both the level of depth and the intensity and the focus on the operations performance and the translation of this operations performance into the financials of service. Moving on now to the outlook. As most of you know, the global market outlook for the last quarter shows a slightly positive trend referring to IHS and other forecasts, albeit at a slower pace than the 1st 9 months of the year. Europe is expected to grow, while North America is expected to show further detail. Nevertheless, in this context, for the whole of 2017, Social Security expects revenue growth in line with the 1st 9 months. Remember that I had given guidance for mid single digit growth. We are now at the end of 9 months at 6.6%. So we see the rest of the year being roughly in line with the first nine months. In this context, the profitability should confirm the improvements versus 2016 registered until now despite an increase in the cost of raw materials. I have already mentioned the raw materials in our last conference call. There is a certain tension on the raw materials, specifically the steel for suspensions for us, which remains negotiation subjects with the car manufacturers in order to have the appropriate shares of costs taken by the car manufacturers and by Suri. So here is the outlook for 2017. We are now looking forward to answer your questions. Excuse me. This is the ColorScore conference operator. We will now begin the question and answer session. The first question is from Monica Bolzio with Bancaise. Please go ahead. Thank you very much and good afternoon everyone. I would have a few questions. The first is on the restructuring charges. Restructuring charges in the Q3 year to date? And could you please tell us if you are going to confirm the €15,000,000, €20,000,000 of restructuring for the current year? And the second is on the impact on the rise in commodities. I can imagine that most of the impact was has been penalized, the suspensions business. Can you quantify the higher material cost in term of lower margins for the group in the Q3? The third question is on the order intake in general and especially as for Air Liquing, given the performance the negative performance of the 3rd quarter. If you can comment on the trend going forward? And the very last question, it's a housekeeping question. Can you please remind us the tax rate for the full year? Thank you very much. Thank you very much, Monica. Jan, on the restructuring charges, can you provide some so Monica, on Q3, the restructuring costs were €2,800,000 for the group. And year to date, EUR 8,700,000. Okay. And do you still confirm 15, 20,000,000 for the full year? Full year, we probably should not be at the level we mentioned earlier. Probably are going to spend less than discussed with the analysts in previous calls. Okay. On the impact of the materials, until the end of June, we had very different impact of the material increase. We had the first impact in Q3, where basically we had increase of purchasing prices and only some recognition of the car manufacturers in the selling prices. We are in negotiation with the car manufacturers and our goal is to have the appropriate shares recognized by each party. But our current understanding is that the steel is go up. That means that initially we expected that the after the increase, there would be on some types of steel relative reduction is not the case actually. The prices are still going up. So that means this subject of raw materials is going forward an important element, one of my top 5 priorities. But this does not change our guidance for the end of the year as you have seen. So basically, we are we have a number of compensating actions, both in suspension as well as in filtration and Air and Cooling. We will not be able to offset all of it. Okay. Okay. The overall intake of the Airline Cooling is impacted by reduction in volumes in the United States and Canada. Order intake for LNG, for filtration and for suspensions is actually above our targets in all 3 business units. We are rather on a successful path for order intake. You know that speaking of order intake, we are speaking with the OEM business, so that will start to impact the business in 2019, 2020 with ramp up, which can be quite slow, both in the case of engines and in the case of large platforms. So order intake is healthy in the 3 business lines. Okay. The last question was on other entity and on the tax rate, sorry. Yes, thank you. Kiki, the last question was for me. So the tax rate in year to date is 39% as you will see in our detailed accounts. We are projecting a tax rate without one offs in that region for the full year, but we'll do additional cleanup of deferred tax assets That will increase the tax rate, the full tax rate on a full year basis in the region of 45%. So for the full year, it will be 45? Slightly below 45%. Slightly below. Including non cash depreciation of different tax percent. Okay, clear. Thank you very much. Thank you. The next question is from Niccolo Sore with Mediobanca. Please go ahead, sir. Yes. Thank you. Thank you and good afternoon to everybody. I've got three questions for you. The first one is on Latin American performance. If you can provide us with the split between what happened on the aftermarket and on DOE and on Brazil, the Argentine? The second question is on the outlook for the North American market. What is in our view driving the reduction in production and this trend to continue into the 4th quarter with the strong following the strong reduction seen in the Q3 and following all the damages from the hurricanes? And the last question is on trucks. I saw that the Q3 was pretty healthy for trucks, in particular in Europe. Have you benefited from this trend in terms of profitability or not? Thank you. Thank you, Niccolo. So on Latin America, our activities are in 2 business units, suspensions and filtration. As far as suspension is concerned, we are fully benefiting of the volume effects of the recovery of the OEM activity in South America and also from a good configuration in terms of raw materials increase versus pricing fees. So that means our margin in suspensions in South America is going up both in percentage and in absolute terms due to the growth. Now if we look at filtration, in filtration we have in Argentina mostly aftermarket activities and here the situation remains difficult due to the situation of the Argentinean market and specifically competition from imports from China. So this is for us a difficult market where we have actions ongoing to improve the profitability. As far as Brazil is concerned, in Brazil Filtration, we have 2 activities. 1 is OEM, which is benefiting also from the volume effect, And we are also able to launch new products. So our growth is quite healthy there. On the aftermarket, after having had some difficult times, which I had referred to before, I'm pleased to share with you that the Q3 for aftermarket in Brazil, we hit our targets, both in terms of volumes and in terms of margin. So that means our marketing strategy as applied now in aftermarket starts to bear fruit in the markets which remains difficult because the purchasing power of people in Brazil is not very high. But it seems that we have find the right marketing mix to support our activity. So all in all, Latin America is showing progress, both in terms of profitability and in terms of cash, but it's still lower than the average of the group. So that means for me, it remains a priority area. We continue to restructure. Monica was asking before about the restructuring amount. A good share of that is continuing the restructuring both in Brazil and in Argentina, specifically in filtration, to continue to work and improve our situation there. On North America, you're right, we are all expecting a hurricane effect of around 500,000 additional cars to be sold. And basically, the volume trend we see certainly linked we are at the limit of the financing capabilities due to the purchasing power of the car buyers. And we're in a situation where the market cannot grow unless the car manufacturers will continue to subsidize the sales of car with higher rebates, which they are not doing. So what we see is several car manufacturers in the U. S. Looking at rather margins than I wouldn't say names, but I think you can identify who that is. Rather looking at margins rather than looking at volumes. And then on the other hand, a situation where the credit situation for buying new cars remains difficult because there is not much, I would say, people who can afford to buy new cars through financing. So that's why we expect the market to continue to slow down. We do not see a very fast reduction, but we see a continuous slowdown in North America. In North America, most of our activity is in Air and Cooling. We know that Air and Cooling has a relatively lower share of fixed cost than the other service activity. Therefore, flexing our activities with the slowdown of the market is something that we can do. So although this is an element to take into account, I would say with the level of exposure that Sergey has to North America, which is 17.9% of our sales base on the 9 months, it is something which we can manage. On the trucks side, you are right. Trucks activity was healthy, both in South America, where we do parts for trucks, both filtration and suspensions, as well as in Europe. And to some extent, we are benefiting to the volume effect on the trucks. So yes, it has been a positive. All in all, the truck activities of Sur La C still have a modest size in comparison with the passenger cars. So it's a positive. We expect it to continue to be positive in the next month. Thank you. Thank you very much. Very clear. The next question is from Renato Gargiulo with Intermunde. Please go ahead. Yes. Good afternoon to everybody. My first question is on the outlook. So clearly, you're saying that in the last part of the year, you are going to outperform the market, which is seen with a slightly positive, but with a slower pace compared to the 1st 9 months. I was wondering in which markets, in which areas do you expect to gain market share? Because looking at the Q3, you are basically performing in line in Europe and you started performing in line also in North America. So just if you can give us more details on that side. The second question is on cash generation and net debt. We are seeing that market consensus is pointing to around EUR 270,000,000 of net debt for the full year. Could you give us any kind of indication also on the back of your project increasing CapEx in the last part of the year? And then last question is on M and A. Do you confirm that you see the sector as in a consolidation phase? And do you see any opportunities going forward? Thank you. Thank you, Renato. On the outlook, I confirm that we have limited but significant growth versus the market. Have a number of new products, which are ramping up. Overall, this concerns mostly Europe as Europe is still 61.6% of Surgic's sales. We also see a healthy 4th quarter for SOGESY in South America And in North America, we will be in line with a little bit better than the market, thanks to some new products as well. It's mostly Europe, I would say in mass, mostly Europe and South America in comparison with the markets where we are performing the market. On cash generation, you see that we are at 266 now. I think the 269.7 the number you mentioned could be achievable. Okay. So roughly speaking in terms of net financial position, we are shooting for a cash lending at year end in the region of where we stand at the end of Q3. We probably are not going to push too much, but we should achieve that number even with the investments we mentioned before. Knowing that we had a lot of one offs last year, so that means you need to appreciate the performance by taking off the one off of last year in order to see the real underlying cash generation, which is healthy. On the merger and acquisition side, we've seen in the second quarter more activities than in the 3rd quarter. We see some activity in mergers and acquisitions As we have as Monica Mondani, our Chairman of the Board has communicated, Sergey is looking to grow 3 activities, both organically and potentially through acquisition, if we find suitable opportunities. So I confirm that this is on what we are working actively, but I have no news to communicate to you today. Okay. Thank you. If I may, just a quick follow-up on the tax rate. So looking forward to next year, what could be a reasonable and normalized tax rate? Thank you. And that's all I mentioned, 39% without one offs. We are going to shoot in the coming years the tax rate between 30% 75%. Okay. Thank you. The next question is from Filippo Pini with Kepler. Please go ahead, sir. Good afternoon. I've got two questions. The first one is back on the spike of raw material. How much of these spikes are you planning to share with your client and over which period could be achieved the sharing? And the second one, if you can please go back to Page 15 of your presentation. The €100,000,000 of that you highlighted, is what you're expecting to deliver as a saving over next 3 years? Or is the base where you plan to start at the low 20%, 30%, 50% saving? And if you can give us at current stage some more indication of which is the which kind of costs are within and this review for potential? I heard two questions. One is on the raw materials and one is on the productivity potential, right? Yes, it's correct. 2 thirds of our contracts for suspensions, we had indexes. And with some car manufacturers, we have already passed in phases and with some car manufacturers, we are still in discussion with some car manufacturers. How fast do we plan to operate the page sharing? I would say this depends on the car manufacturers, not just on Surgesi. If it would be, it would have all begun by now. But I expect it to the discussions to continue through the Q1 as I see the increase going on. But the discussions are really going on right now, but it could be that in some case it continues due to the new increases that we are seeing into the Q1. Okay. The productivity potential, the €100,000,000 is a total potential. We are we are aiming at is to gain half of this productivity potential in the next 3 to 5 years. What is in there? There is a good chunk of labor, direct labor. There is good churn of less natural production and there is also €500,000,000 is not our goal, it is maximum potential and our goal is within this. It's okay, Felipe? Yes, it's okay. The next question is from Gabriele Gambaraba with Banco Acros. Please go ahead sir. Yes, good afternoon everybody. Just a couple of quick questions. The first one is on the last quarter contribution margin. If you could expand a little bit on this aspect. Basically, do you see it where do you see it? Basically, what are the moving parts we should consider? And second question is on the reinforced glass fiber suspensions. This is a project you have been working on for years years. And I was wondering if you have any news on this side on its on the perspectives of this important product? Thank you. In the Q4 contribution margin, what we are seeing today, as I mentioned, is continuing the rise of this deal, that there will probably be a slight reduction in the contribution margin in the Q4 compared with the Q3. This is taken into current on the material side. Now on the other elements, so on the material side, we see a slight deterioration of the material. We see an improvement in the direct labor. There is a very strong focus on productivity. We see also an improvement on other factors. So all in all, despite the negative material impact, we are shooting for, I would say, slightly stable or slightly increasing contribution margin as we have the impact in Q4 of the steel negotiation with the carbon prices, which we have not had in Q3. In Q3, we have a negative impact in Q4. Once we finalize the agreement, we have the money in Q4 for this. That's why we have a slight positive we expect a slight positive impact despite negative impact of the material itself. This is for the Q4 contribution margin. I don't know if it was clear or So basically, you are targeting, if I understood well, a slight reduction quarter over quarter, sequential reduction. We're expecting the size reduction in the material impact, but the total contribution margin will impact, we forecast the size improvement due to other factors and material. Okay, okay. Thank you. Because in the contribution margin, there is material, but there are also some other things. On the glass fiber springs, I have no new announcement to do today. We are working on this technology, which presents a great potential, still remains a challenge in terms of manufacturing large volumes at the right quality and productivity expected by the car manufacturers. Okay. Thank you. The next question is from Michele Baldelli with Exane BNP Paribas. Please go ahead, sir. Good evening to everybody and thanks for taking my question. I had several questions, but were already answered. I just got one left. And it is about, given that you have in mind pretty well what is going on in terms of possible business plan on your side for the coming year. So I just wanted to understand because I didn't follow the first 15 minutes. So I don't know if you already said that. Will you present any business plan update in the coming months? Or is it still a question mark? As far as the do you mean the business plans for the coming years or for the coming year? Yes. No, I just want to understand if you will present officially, let's say, to the investment community and in business plan in the coming months. That will relate to the coming years, yes. Okay. What we are working on now is to, I would say, prepare a presentation on the Suruichi Technology Evolutions, especially in the areas of powertrain. As has 2 thirds of its sales in the powertrain, We have here some headwinds, but we also have some tailwinds and we are preparing a presentation on technology addressing this and showing the potential for Surgicine, the risks but also the opportunities for Surgicine in the future. So we have not yet set a date. As soon as we are ready, we will let you know with a date, which will enable with the information we give on this occasion to form an opinion on where the company is going. Okay. Thank you very much. The next question is from Martina De Ambroggi with EBITDA. Please go ahead, sir. Yes. Good afternoon, everybody. Sorry to repeat the question, but the line was extremely noisy. And when you were answering to the EUR 100,000,000 of reduction in cost or at least the improvement in productivity you want to achieve. Knowing that part of this will be offset by inflation, price pressure, competitive offers and so on, what could be the rough indication of what you expect to keep out of the €100,000,000 productivity potential you looked at? Thank you, Martin. This is a very good question. The €100,000,000 we are referring to is the total productivity potential identified. Within this, our goal is to capture 50% of that in the next 3 to 5 years. Having said that, you are right. There are other factors such as inflation, price pressures and other elements, which of course will impact the P and L. So what is in the net for Solvency? What we have communicated in previous meetings is that basically the contribution margin is a very important indicator for SurjeC. We had an erosion this year of the contribution margin due to the impact of the steel, although we were able to mitigate that to some extent. Net of this natural impact, our goal is to either maintain or increase year after year the variable margin. And in the productivity potential, which is identified here, most of it goes to variable margin. As you've seen in the structure of our profitability levers, the other actions as far as the high cost, as far as competitive footprint from a geographic basis is not included in this 1000000. So these positive actions are one of our tools, not the only one, but one of our tools to keep either stable or slightly increasing the variable margin of Suruisi as we go year after year. Okay. Thank you. If I may, one more question on the guidance, because you stated the profitability should improve. I just wonder if you can clarify if the improvement is in as a percentage of sales in absolute value, maintaining the same trend as it was in the 1st 9 months like for sales or what else? Just to have a better understanding of your guidance for the full year. Our guidance is that we see a profitability, which will be in order of magnitude in percentage, comparable with where we are at the end of the 9 months, order of magnitude. This will depend on different factors, including how we advance in the negotiation with the car manufacturers, for instance. Okay. You are referring to the EBIT after or before, meaning adjusted before restructuring costs? Full EBITDA. So after? Yes, EBITDA after, yes. Okay. And one of your previous question was on the restructuring cost between 201520. Actually, maybe it's my mistake, but I had in my notes this year guidance between 10 15, maybe closer to 15 than 10. Am I wrong in something? Jan, you want to give the number? We are still shooting for something between 10 15. Okay. The closer to 15, but not I don't think we'll get to that number. Okay. Very last. The sale of receivable in the 9 months figure. And if you think to change the amount of sale receivable for the guidance you provided for the full year? Thank you. Not sure I understood the question. Could you clarify the question on the Yes. Just the amount of sale of receivable or factoring that you had at the end of the 9 months? And if you are planning to change this amount when you talk about €270,000,000 net debt position at year end? I expected that question from Monique, as you know. Yes. She didn't ask you. So factoring for the first 9 months of 2016, we increased factoring last year in the 1st 9 months by €1,000,000 It went up from €89,000,000 end of 2015 to €90,000,000 end of September. So €1,000,000 of cash generation was due to an increase in factoring last year. This year, in the same period, factoring went up from EUR 98.9 million end of 2016 to €104,700,000 end of September 'seventeen, that's to say a €5,800,000 increase, which means that year on year, if you look at the cash generation we referred to, we said, and if we take out the one offs we had last year in the 1st 9 months, roughly was EUR 30,000,000 increase. Let's say EUR 4,800,000 comes from an increase in factoring. And we can assume this figure will be the same figure at the end of the year in your guidance. Yes, we are shooting for a similar time. Okay. Thank you very much. Thank you. We'll take just one last question, if there is one. The next question is from Roland Cohenen with Value Holdings. Please go ahead, sir. Yes. Good afternoon to all from my side. Thank you for taking my question. Question is regarding the interest rates. Your financial expenses developed very nice, especially the cash interest you paid. Could you please remind us of the average interest rate you are paying this year and how this will develop in the next 2 years? So do we have to calculate this roughly EUR 2,000,000 less interest per year the next 2 years? Thanks a lot. We know we still have an average interest rate, which is very high. This was mentioned in previous phone calls. This is largely due to the fact that a significant amount of our bank borrowings carry high interest rates and it's difficult to exit them at present. And nonetheless, our interests should further increase next year and in the following years. Next year, because some quarters are going to drop halfway through the year. And then we'll have to wait till 2020 till 2023 to see the costly borrowing expire. So we still have a further improvement to come next year, and then you'll have to wait till 2020 for the next significant improvement. The other improvements will come from the improvement in our NFP. Thank you, Jan. Thank you very much to all suggestion 9 months 2017 conference call. We thank you very much for your participation. Thank you to all.