Welcome to the Dürr Conference Call. As CEO Ralf Dieter, Deputy CEO Dr. Jochen Weyrauch, and CFO Dietmar Heinrich of Dürr AG, we present the Dürr Group's preliminary figures for 2020, followed by a Q&A session. I will now hand over to Andreas Schaller, Head of Investor Relations of Dürr AG.
Thank you, Operator. Ladies and gentlemen, good afternoon or good morning to those of you in the U.S. Welcome, everybody, to our financial year 2020 earnings call. As always, our earnings presentation is available on our Investor Relations internet pages, and I assume that you have it in front of you. Let's quickly turn to page two and the disclaimer. Please be aware of our disclaimer regarding forward-looking statements, and now, I would like to hand over to Ralf Dieter, the CEO of Dürr AG.
Yeah, thank you, Andreas, and a warm welcome from my side. And as already announced, with me today are my colleagues in the management board, our Deputy CEO, Jochen Weyrauch, and our CFO, Dietmar Heinrich. So our agenda on slide three is pretty much unchanged from the last earnings call. I will start with an overview of the business development and major achievements in 2020. Then Jochen and Dietmar and I will comment on the performance of our divisions. And after that, Dietmar will go into more details regarding the financials. And at the end, I will present to you our group for 2021, including a breakdown by division. So let's start with the highlights on slide four. Due to the Corona pandemic, 2020 was a challenging year, but it finished on a positive note. We saw strong order momentum in the fourth quarter.
Our book-to-bill ratio for that quarter increased to 1.09, and our order backlog rose by more than EUR 100 million compared with the end of the third quarter. Fourth quarter sales revenues were the highest on a quarterly level in 2020. For the full year, sales revenues remained 15% below the level of 2019. EBIT margin before extraordinary effects for the full year came in a bit better than expected at 3.0%. This was driven by strong Service business in the group and better-than-expected margins at HOMAG in the fourth quarter. Cash flow performance for the full year was very strong with EUR 111 million. It is always very difficult to predict this figure as it depends on the timing of large customer payments in our Automotive business. In the fourth quarter, we saw major prepayments coming in.
As a result, we started into 2021 at a record total liquidity of more than EUR 1 billion. We also did our homework with respect to the announced capacity adjustment measures, and I will show you an overview later in the presentation. Despite the fight against the impact of the pandemic, we also set the stage for further profitable growth. We successfully signed and, meanwhile, also closed several M&A transactions in 2020 that Jochen will talk about in a minute. Now, let's have a look at the overview of the key financial indicators for the full year on slide five. Due to the Corona pandemic, order intake declined by 90% and sales revenues by 50% compared with 2019. Sales revenues declined less than orders as we still benefited from the solid order backlog from 2019.
EBIT before extraordinary effects came in at EUR 100 million, and the margin was slightly above our guidance. Improvement in free cash flow was mainly due to disciplined net working capital management and tight control of CapEx spending for the full year. On slide six, we can see a comparison of the targets we set in July 2020 for the full year and the respective achievements. P&L items came in as guided or a bit better. All in all, we were able to cut costs by some EUR 120 million in response to the pressure exerted by the Corona crisis. Cash flow and net financial status were stronger than expected due to the reasons I already mentioned before. We believe that this is a very solid set of results given the extraordinary situation in 2020. Slide seven shows the development of order intake on a quarterly level.
After the downturn in Q2, we experienced a strong recovery, and in the fourth quarter, we could secure additional larger automotive projects in Europe, for example, from Turkey. On top of that, we saw increasing order levels at HOMAG. Now, let's have a look at the regional split of order intake on the next slide. China had a very good development in order intake in 2020 with a growth of 8%. Germany and Europe caught up after a weak first half year. Germany even closed the year with a growth of 12%, driven especially by a large project from a premium automotive OEM in the third quarter, and the rest of Europe remained slightly below 2019 levels but saw strong momentum in the fourth quarter. America and the rest of the world declined from an exceptionally high 2019 level.
Let's have a look at the development of order intake related to e-mobility on slide nine. Order intake growth even accelerated despite the crisis, and we reached a level of EUR 650 million in 2020. This is 67% above the 2019 level that had already grown by 46% above 2018. We believe that we were able to secure a large share of the available projects in 2020, which is proof of our competitive strength. Orders related to e-mobility made up about 40% of our overall Automotive order intake. Slide 10 shows the implementation of measures to safeguard our future. We made good progress in 2020.
First, at Dürr Systems and Schenck, we implemented various capacity reductions measures, including the closing of the Ochtrup and Karlstein sites, the closing of production at Goldkronach, the closing and relocation of production at Wolfsburg, where only a service team will remain to support one of our major customers. Headcount reductions at the site Darmstadt, Püttlingen, and Bietigheim-Bissingen are agreed or already implemented. Outside of Germany, we also made progress and negotiated capacity adjustments in Western and Southern Europe. At HOMAG, we closed the production at the Hemmoor plant at the end of 2020. In addition, the SAP rollout in HOMAG Poland went live smoothly in early 2021. All in all, we booked EUR 63 million restructuring charges in the full year. These figures made up the largest part of the extraordinary expenses for 2020, amounting to EUR 88.4 million.
The implementation of the measures is on track, and we expect to reduce our cost base by EUR 60 million from 2021 onwards. And now, I would like to hand over to Jochen to comment on our M&A activities and sustainability.
Thank you, Ralf, and welcome to all of you also from my side. Slide 11 gives an overview of our M&A activities in 2020. Despite the pandemic, we were very active and realized some interesting opportunities driving profitable growth going forward. On February 5 this year, we closed the acquisition of a 75% stake in the German automation specialist teamtechnik. With this transaction, we strengthen and complement our e-mobility offering with eDrive test systems, and very importantly, we enter into the new field of production machinery for medical devices. We also further strengthened our position in the Woodworking Machinery market for solid wood construction with the acquisition of all shares in WEINMANN and the acquisition of 80% of System TM, a Danish company. On the software side, we did a couple of smaller transactions.
We bought Techno-Step and, more recently, Cogiscan, which allows us to expand our reach to a wider range of third-party machinery and broaden our footprint in North America. We also increased our stake in HOMAG eSolution and will integrate this activity in our digital factory. In China, we acquired the outstanding shares of our joint venture, HOMAG China Golden Field. By this, we do not only take control of our sales channel in China but also of significant service resources and the software development team. Overall, this strengthens our footprint in China significantly. Now, let's come to a topic that we have not presented too often in the past but that will play an increasingly important role in the future: sustainability. On page 12, you can see an overview of our sustainability framework and the five fields of action that we cover.
We have introduced this already during our Capital Markets Day in November, and I would just like to point out a couple of developments in 2020 and the actions planned in 2021. In 2020, we set up a sustainability council that is chaired by me and coordinates and controls sustainability actions within the Dürr Group. Sustainability will also play a role in the remuneration of the managing board members going forward. The new remuneration system that has been valid since 1st of January this year includes an ESG component in the variable part. We underline our commitment to sustainability also by becoming a part of global networks such as the UN Global Compact that we joined in October last year. In 2021, we plan to publish our first sustainability report according to GRI guidelines, and we are working on the definition of our climate strategy.
We believe that we are an enabler for the transformation towards a carbon-neutral future with our portfolio of resource-efficient equipment, not only now but already for quite some time. For example, we support with our product offering the production of electric vehicles and construction elements for wooden houses, which play an important part in this transformation. Now, let's have a closer look at the divisional development. We start with Paint and Final Assembly Systems on slide 14. The year ended with a very solid order intake in the fourth quarter. We could continue our strong order intake in China but also gain several projects in Europe and Turkey. For the full year, sales decline was lower than the reduction in order intake as we still benefited from a strong order backlog from 2019, as mentioned already by Ralf, especially in North America.
EBIT came in at EUR 6.4 million despite the large restructuring charges taken for the necessary capacity adjustments. In the fourth quarter alone, we recorded EUR 27.2 million in charges. Before extraordinary effects, the EBIT margin showed a solid development, and we can clearly see that margins benefited from the successful implementation of the FOCUS 2.0 program in the past. Let's turn to Application Technology on slide 15. Order intake developed very positively in the fourth quarter. In addition, we saw very solid margin development as the Service share of the business was better than expected in Q4, especially with respect to spare parts. Consequently, the EBIT margin before extraordinary effects reached the upper end of the guidance. Similar to PFS, we recorded a large part of restructuring charges in the fourth quarter.
With the recovery of production volumes in the automotive industry, we see this division on a solid recovery track. Next is Clean Technology Systems on slide 16. This business was very resilient in 2020. Despite the pandemic, we recorded sales revenues and EBIT very much comparable to the prior year. Order intake was a bit slow in Q3 and Q4 as we saw some project delays. However, we do not see this as the start of a negative trend but expect the business to continue to grow in the future in a profitable way. Now, I hand over to Dietmar for the comments on Measuring and Process Systems.
Thank you, Jochen, and welcome to everybody also from my side. Let's take a quick look at Measuring and Process Systems on slide 17. This division was not only impacted by the pandemic in 2020 but also by lower sales levels with respect to ICE-related balancing equipment. However, we left the downturn behind us in the second quarter, and after that, we saw positive trends in order intake and margin in the second half of 2020. Order intake has improved in the aerospace industry in the last couple of months as we see increasing preparation activity from maintenance and checkups. With respect to margins, we saw a solid improvement in the second half of the year based on cost reductions and the recovery of the Service business. We also successfully addressed the margin problems that we reported in the first quarter after having shifted towards more project-related businesses.
We now see a clear improvement of the margin development over the project lifetime. All in all, Measuring and Process Systems is in a recovery mode, and we see some solid business opportunities with the balancing of eDrive going forward. With this, I would like to hand over to Ralf.
Yeah, thank you, Dietmar and Jochen. Finally, let's look at Woodworking Machinery Systems. As you know, I'm running myself since January 1st on slide 18. Overall, the impact of the Corona pandemic is less pronounced at HOMAG than in the Automotive business. We saw an increasing momentum in order intake in the fourth quarter and even exceeded the level of the fourth quarter of 2019. This was also supported by the acquisition of System TM but also by a healthy project pipeline. As already predicted during our last conference call, sales revenues and EBIT in the fourth quarter were impacted by the lower order intake in the first half of 2020. However, the EBIT margin before extraordinary effects did better than expected, and we reached the upper high end of our guidance.
We are on track with our optimization program at HOMAG, and I'm very happy with the revitalized high motivation level of the team. We had a solid start in 2021 with respect to order intake and look forward with confidence. Now, let's take a quick look at the Service business on slide 19. On the diagram on the left, we can see the continued Service recovery in the fourth quarter, and we even reached a new high in revenue share of slightly above 30%. This was mainly driven by a strong spare part business at Application Technology but also by a solid Service development at HOMAG. And Service margins are on the same level like 2019. So now, I hand over back again to Dietmar for further financials.
Yeah, Ralf, thank you. Let's take a look at the financials starting with slide 21. The overview of the key financial indicators shows a solid set of figures for 2020. Earnings came in as expected or slightly better, and cash flow was strong. Now, let's have a closer look at these developments on the following slides. On slide 22, we can see that sales revenues increased in the fourth quarter by 10% compared to the third quarter and reached the highest level per quarter in 2020. For the full year, we came out 50% below the level of 2019, which is a smaller decline compared with order intake as we were still benefiting from the strong 2019 order backlog.
Sales revenue development will continue to be a bit muted during the next few months due to the lower order intake in the first half of 2020 that now starts to translate into revenues. From a geographic perspective, solid project execution in the Americas and Asia played an important role in sales revenue generation in the first nine months, while the contribution from Europe, including Germany, declined. Let's move to EBIT on slide 23. As already indicated in the third quarter conference call, EBIT margin in the fourth quarter was impacted by the restructuring charges taken. But even without this, we saw a slight decline in margins due to the lower order intake in the first half of 2020. Looking at the EBIT bridge for the full year, we can see that we could partly compensate the decline in gross profit by savings in overhead expenses.
Nevertheless, we ended up with a 62% decline in EBIT before extraordinary effects. But let's also keep in mind, being in positive EBIT territory despite a sharp sales decrease and almost EUR 90 million of extraordinary expenses is by no means self-evident. EBIT margin before extraordinary effects was even a bit better than guided, with 3%. Looking at the free cash flow on slide 22, we can see that the development in the last year has been much less volatile than in 2019. At the end, we reached a level of EUR 111 million in 2020, which is more than double compared with 2019. This was driven by a couple of reasons that I would like to explain more in detail. First of all, we could significantly reduce the net working capital.
Part of that was driven by the lower sales volume, but we could also reduce the number of days working capital towards the lower end of our target range of 40-50 days. In the fourth quarter, we received a couple of larger prepayments for projects. In the end, these are timing effects which depend on order nomination and are difficult to predict. When we would have received the prepayments a couple of weeks later, we would have recorded them in the first quarter, and free cash flow would have looked different. With this, I would like to stress that there will always be some uncertainty regarding free cash flow and net financial status at the end of the year because of timing effects. In addition, we successfully cut CapEx in 2020 as targeted.
In regards to the EUR 50 million item Others, mainly this includes lower tax payment and higher restructuring charges. We are altogether very happy with the development of free cash flow in 2020 and start 2021 from a very solid liquidity level. Now, let's take a closer look to the net working capital on slide 25. On the left side of the chart, we can see a further decline of net working capital in the fourth quarter due to the reasons just mentioned. In the table on the right side, we see the declining level of contract assets and the small increase in contract liabilities. At the year end, we reached 41 days working capital, and it will be one of our major tasks for 2021 to manage this very tightly in an environment of sales revenues recovery, especially in the second half of this year.
Now, let's turn to our net financial status on slide 26. Driven by the strong free cash flow, it has improved by EUR 50 million to a level of EUR -49 million. This includes about EUR 98 million leasing liabilities. The leverage, that means the ratio of net debt to EBITDA, remained at a relatively low level of 0.4 compared with 0.3 at the end of 2019. All in all, this results in a comfortable liquidity headroom as shown on slide 27. This is a proforma view that includes already the new EUR 200 million Schuldschein loan that we issued in December 2021 and for which we received the respective funds in January 2021. Upcoming maturities of about EUR 350 million in 2021 are well covered by available funds of about EUR 1.7 billion, including cash and cash equivalents, money market deposits, and available cash credit facilities.
As you can see, the maturity profile spreads already until 2031, and there are no maturities of financial instruments in 2022. We are very solidly financed entering the year 2021. That was it in regards to the financials, and I would like to hand back to Ralf for the outlook.
Yeah, thank you, Dietmar. But first, before I start with the outlook, let's have a quick look at the trends and market developments as we see them from all the public sources. On slide 29, we can see the fundamental trends that drive our business: population growth, growing middle class, resource efficiency, and environmental protection. Based upon our core competencies in automation and digitization, we offer our customer solutions that are leading in efficiency, and that's our claim since years. With our machinery and system offering, we cater demand for solutions in e-mobility, solid wood, construction, and medical technology now that we see growing in the future. So now, let's turn to the single markets. On slide 30, we see the forecast of LMC Automotive for light vehicle production in 2021 and until 2027.
Predictions are for a strong rebound of production volumes in 2021 to almost 2019 levels. But however, semiconductor shortages since the beginning of this year have led to production stops. LMC estimates that production volumes will be impacted in the first half of 2021 and recover partially in the second half. So for the full year 2021, there's a risk of 1 to 2 million less vehicles being produced due to those same semiconductor shortages. As our Service business is linked to production volumes, we will probably see a similar pattern there. But beyond 2021, LMCA sees midterm growth potentials to above 100 million vehicles per year. Looking at the furniture market on slide 31, we see a similar picture. The low point was in 2020, and we expect to recover in 2021. Whether it will take until 2023 to reach prior peak levels, I'm not sure.
We currently see a strong increase in demand for woodworking machinery, and we might end up with a steeper growth curve, and signs of new investment cycles are clearly visible, and recently, order intake for certain equipment types and system orders has already been at a very high level. We added two more interesting market slides in order to cover parts of our activities that are still smaller, but exhibit solid growth potential. On slide 32, we see an outlook for the market of Woodworking Machinery and Systems for solid wood. Demand for solid wood construction remains strong, and it is expected that the market will recover to 2019 levels already this year. We have strengthened our position with the acquisition of System TM last year and look forward to further M&A opportunities, maybe in that area.
The order intake in that field is very strong in the first weeks of this year. A new market for us is automated production equipment for medical devices such as injection systems, inhalers, or contact lenses. We entered this market with the majority acquisition of teamtechnik. Here, we expect solid market growth in the high single digits over the next years. teamtechnik has done its homework over the past years, gaining traction at several customers with pilot projects, and we would like to build on that going forward. This might also be a field for potential acquisitions. Now, let's look to the year 2021 on slide 34, which will be a special year for the Dürr Group as we are celebrating our 125th anniversary.
If you're interested, you can read more about our history, by the way, which is worthwhile to read, on our web pages, and we will be actively pushing some flashbacks during the year on social media. Andreas, for those who have a little more time, we will publish end of the year, how do you call it in English?
A Chronicle.
A Chronicle, which is really worthwhile to read, maybe over a rainy Saturday or something like that. But now, let's take a look to the guidance of the Dürr Group for 2021. The guidance assumes that we will not see major lockdowns affecting production and project execution until year end. So we expect a strong increase in order intake to a range of EUR 3.6 billion-EUR 3.9 billion, driven by the recovery after the pandemic and our acquisitions. Regarding sales revenues, we target growth to a range of between EUR 3.45 and EUR 3.65 billion. This growth will be more second-half loaded as we will still feel the impact of the lower order intake from Q2 and Q3 2020. EBIT margins before extraordinary effect are expected to come in between 4.2% and 5.2%.
This translates into reported EBIT margins of between 3.3% and 4.3%, as we expect extraordinary effects in 2021 to amount to roughly EUR 30 million, mainly related to purchase price allocation effects. For ROCE, we expect a range of between 9% and 13%, and the net income should turn out between EUR 40 million to EUR 90 million. Free cash flow needs maybe a bit more explanation. After strong performance in 2020, we expect neutral to slightly negative free cash flow in 2021. This is driven by several factors. First, we expect an increase in EBIT margins. On the other hand, we expect net working capital to change from tailwind to headwind in 2020. In 2020, free cash flow was mainly driven by strong reduction in net working capital, with sales revenues expected to grow this year, and this will yield a respective increase in net working capital.
We should also not forget that most of the capacity reduction measures agreed in 2020 will lead to payouts in 2021. It is fair to assume a mid- to high single-digit million figure for cash outflow for this alone. In addition, tax payments were greatly reduced in 2020, especially tax repayments. And this will be different again in 2021, but for a good reason, obviously. Last but not least, we will increase capital expenditures as we want to invest in our facilities to improve efficiency at HOMAG in Poland and in Schopfloch. Consequently, we expect the decline in net financial status to between EUR -175 million and EUR -225 million. This corresponds to a leverage of about 1x to the end of 2021. For more details, as you always want, let's look at the divisional breakdown on the next slide.
The breakdown by division covers order intake, sales revenues, and EBIT margin before extraordinary effects. Now, what do the numbers tell us? Order intake is expected to grow across all divisions. Main contributors will be the Automotive and the Woodworking business. Sales revenues are also expected to grow, but less than anything as we still feel the low order intake of 2020, especially in the system business at the Final Assembly systems and also in HOMAG. EBIT margins before extraordinary effects should also improve across all divisions, but to different extents. At PFS, the improvement is lower due to the lower order intake with related margin pressure in 2020. APT is expected to show a stronger improvement with car production levels and with the related service business, which recover strongly in 2021. CTS was not so much affected by the pandemic, and as such, should improve moderately.
MPS has overcome the project business issues of the beginning of last year and sees new growth potential in aerospace and e-mobility. At the same time, cost reduction measures were put in place, and this drives a stronger margin recovery, and at HOMAG, even the cost savings, continued growth improvements, and increased sales levels are expected to drive a solid margin improvement. On the next page, 36, we would like to confirm our strategy and midterm targets. We believe that we are well on track despite the downturn caused by Corona last year. More than half of the margin improvement between 2020 and our midterm goals are driven by measures under our own control. In addition, we believe in the future potential of the markets we are in. In conclusion, let's summarize on page 38. The year 2020 was challenging, but we were able to show solid performance.
Earnings came in as predicted in July 2020, and cash flow performance was strong. We start 2021 with a record total liquidity of more than EUR 1 billion. We also have a position for profitable growth going forward. We have closed attractive acquisitions that offer us new opportunities and further broaden our market scope. We have done our homework with respect to capacity adjustments, and we expect to benefit from related cost reductions starting in 2021. Finally, we will focus on margin and cash flow management in 2021 and see us well positioned for a successful year 2021, followed by an even stronger 2022 when we expect further earnings increases. So thank you very much for your attention so far. Now, we are happy to answer any questions you might have, and I hand over to Mr. Benigam.
Thank you. Ladies and gentlemen, we will now begin our question and answer session. If you have a question for our speakers, please dial zero one on your telephone keypad now to enter the queue. Once the name has been announced, you can ask the question. If you find a question that you prefer to change your speech, you can dial zero two to cancel your question. If you are using speaker equipment today, please lift the handset before making your selection. One moment, please, for the first question. And the first question we received is from Lucie Carrier of Morgan Stanley. Your line is now open, madam. Please go ahead.
Thank you and good afternoon, gentlemen. Thanks for taking my question. I have a few questions, and I will go one at a time if it's okay. My first question was related to the Paint and Final Assembly business, and just to understand a little bit better the balance between orders and sales development in 2021 and possibly beyond, because you've ended the year 2020 with a backlog of nearly EUR 1.3 billion in this division, and you're guiding for 2021 for sales, which are a little bit more modest than that. It also seems, if I may write my calculation, that the EV orders you've had in 2020 in this division are actually exceeding the orders you've had in ICE for this division, so does that make the backlog particularly longer timed, I would say, in terms of execution? Just to try to understand those elements.
When do you expect these projects to materialize if they're not fully materializing in 2021? That's my first question.
Thanks, Lucie, for asking. It's Jochen answering. You've discovered it well. We have at least two larger orders in Europe sitting in the backlog that will turn into revenues mainly in 2022 and partially 2023. So different, maybe, to a year ago, we have a backlog of EUR 200+ million that has a longer reach. This is why you see we are a bit more cautious in 2021 because some of the backlog that we already have really turns into sales more in 2022 and 2023.
Is that related to the shift from ICE to EV, or is it independent of that?
No, it's pure project timing and the fact that with one large OEMs, we have negotiated and contracted three projects together that have a long lead time for different countries. Now, one of those projects is in e-mobility, but it's not technically related whether it's ICE or e-mobility.
It's a famous bundle order, isn't it?
Yeah.
Thank you. My second question was also related to the backlog, but in this case, on the margin level. I was wondering if you could qualitatively comment on the margin level you have in the backlog currently versus your margin expectation for 2021, because obviously, we are seeing a lot of move on the FX side, also raw material cost inflation. And I just wanted to know whether you feel you have sufficient buffer between what you have signed on and what you're kind of guiding on, and what's really the margin of error you have here.
Yeah. To answer on that, what we see is, of course, with a tough market, especially in 2020, that we have some sort of margin discussions. On the other hand, with the measures we've put in place, we believe that we can well execute the orders, even despite the raw material issues, with a strong setup in our purchasing and bundling of purchasing. We've changed to some extent project execution, but even more so the way we source projects. So yes, it's going to be some work, but we're confident that with the orders on hand and what comes in, we can secure the margins that we have guided.
We have also examples where we have better margins at the end than calculated in the beginning.
Yeah.
Thank you. And I guess my last question, just to kind of make sure I understand well the guidance on your net financial position for 2021. Because obviously, you haven't communicated yet on the dividend. Shall we assume that this is including potential dividend, or that's independent of dividend?
That includes, Lucie , that includes a dividend because we will propose our supervisory board and dividend proposal, which is much less than last year, but we are intending to issue a dividend also for last year. Also to demonstrate our strong optimism for 2021 following.
Thank you very much.
Pleasure.
My next question received is from Ingo Schachel, of Commerzbank AG. The line is now open, sir. Please go ahead.
Thank you. My first question would be on your paint systems on a backlog as well. Just regarding the margin outlook, I think for 2021, it's clear why you only expect a moderate margin improvement. What's your visibility on improving margins closer to 50%, maybe in the year 2022? I guess with improving order intake, it's plausible for most of us to assume it's going to get better. You're already seeing it in the more recent order intake. The pricing is getting better. Are you seeing much incremental restructuring benefits in 2022? And yeah, we already have the visibility that there should be better paint systems for margin perspective.
Ingo, thanks for the questions. Jochen again. Yes and no, to be quite frank. Obviously, we're carefully watching the markets. We assume that Europe and especially some brownfield business will come back more. So there's no reasons not to believe that after 2021, we will continue the path of increasing profitability and continue to do our homework on the cost side. And obviously, for good reasons, we've implemented or we are implementing as we speak restructuring measures that reload our cost side, which all in all makes me quite confident for increasing margins further midterm after a slight recovery this year in Paint.
Thanks. And then one on medical technology. This topic, medical technology, has got an emphasis in your presentation to get the market outlook and so on. So it seems to be very important and very attractive for you right now. I think there are many ways in which you can develop your business. You can, like you've done in the past with similar acquisitions, invest in the global footprint and allow it to grow based on just a strong global footprint, or you can do more both on M&A. What does this strategic development process look like? I mean, it's a new market for you, more or less.
So I guess you still need some time also after the integration of pieces to assess the market potential and to decide on bigger investments, or could it happen rather quickly that you even use this anniversary year this year to make a bold statement and make a bigger acquisition to make it a true third pillar for you?
Yeah. Let me answer this way. You can be assured that acquiring teamtechnik has not just fallen from heaven. We have made our homework before. We've analyzed the market, and we found this market to be attractive even before we had the opportunity to acquire teamtechnik, and the medical business within teamtechnik is still much smaller than the Automotive business. Nevertheless, it was equally important for us compared to the e-mobility business because that's a clear statement. We want to use this as a buy-and-build platform, which, of course, the growth that we intend to have can only be done inorganically.
And on that path to inorganic growth, because in the last 10 years, I think Jo was very successful in buying assets at very attractive low multiples. I think HOMAG was not fairly reasonably priced. And even teamtechnik was quite cheap as far as I can see. So when it comes to acquisition in that area, is there any, let's say, different acquisition multiple that you're willing to pay or that you regard as the right factor multiple for acquisitions in this area, or are you still very price-conscious even in those markets?
No. I might have to consult you because you could probably tell me the right multiple for add-ons, but no, I'm just joking. So cheap is relative. And we know that the market we are now entering with medical devices might have slightly different multiples for good reasons because it's a very sustainable business. And yes, we continue to make our homework in not overpaying. On the other hand, it might well give reasons to apply somewhat different multiples for acquisitions in this field compared to Automotive because we assume that this, in the end, will also be reflected in our enterprise value.
Okay. Thanks very much.
The next question we received is from Alexander Hauenstein of DZ Bank. Your line is now open, so please go ahead.
Yes. Hello, Alexander Hauenstein. I have three questions, please. First of all, coming back to the microchip issue, I was wondering, you were referring to the consultant LMCA, etc. I was wondering whether you already see and hear from your clients about certain production stop activities or certain production reductions. And the second question is a bit similar. I understand that so far you were guiding for a weaker Q2 2020 order intake, probably materializing in weaker sales and profit, especially in Q1 2021. Have you so far in the current quarter already seen this, or is this the assumption that you expect from, let's say, March or April onwards? And the third question is on HOMAG, Q4 order intake, but also adjusted to be quite a bit better than I had estimated.
I was wondering where this positive trend is coming from. Is it only market or any special things in terms of potentially the systems business coming back a bit better than expected? Or how should we think about this to continue potentially in Q1 or Q2, or is this also related to the lower order intake from last year's Q2, probably leading to, yeah, into a certain decline again in the first two quarters of this year? Thank you.
Alexander, thanks for your questions. We will answer them, but for the next people who ask, please put one question after the other. It's easier for us. We start with the microchip.
Yeah, I can comment on that. Obviously, our clients are the OEMs, and you've already news about Daimler closing production in Rastatt or Volkswagen closing some activities in Wolfsburg for some time. So and Ralf has given the figures. We obviously have talked to the OEMs because they were also keen to know where we are. And I can assure you that despite a few spot purchases that we had to do on a few components so far, and I have to touch wood, obviously, we are not affected by this. However, we, of course, hope that production is not really impacted because some of our business, as you know, on the spare part side, especially on application technology, is related to the production of our clients.
The second question was regarding our splits in the first quarter, whether we assume it or whether we see it in the numbers. Both is the case. We will have a weaker start with revenue, but that's how we saw it, and we will see it. I think we will be a bit better in HOMAG. We were predicting a slower start in HOMAG, but due to the fact that it leads to a third question, the order intake in HOMAG was very good in the fourth quarter again to get to normal levels. Also, from me in the last call, I explained more details about the System business or larger orders where industrial customers are investing in capacity increase. This business really has picked up. We are looking at a very healthy project pipeline for the next some months.
We also secured this year one or the other larger project. And by the way, also mainly in Europe or Central Europe, where the kitchen manufacturers, for example, just reported these days a nice growth in 2020. And this is due to the cocooning effect that people sitting at home seeing their kitchen. Normally, they're out working from home late, but now you see every day your furniture, and you want to have new ones. And that's driving that trend. And we look at a very healthy project pipeline also for the next, basically through the whole 2021. Is that answering your question, Mr. Hauenstein?
Yes, it does. Thanks for that. Maybe a last one here, a smaller one. I'm a bit surprised about your APT margin guidance. What is the main driver apart from restructuring efforts? Is it more back-end loaded over the course of the year, or what are the assumptions here? Thank you.
The main assumption is that our service business comes back to normal levels. And if you look at historic numbers of APT, this is not something we haven't seen before. And of course, we assume that some of the restructuring helps us bottom line. We're working on also cost reduction of some of the products. And all in all, this is what comes out. And again, if you compare profitability to, say, three years back, two, three years back, you will see this is what we really want to achieve for this business.
You only said you were surprised. Were you positive or negative?
Positive and surprised. Yes, I compared it to the past. Obviously, it's quite below that. But yeah, I was still a bit surprised how quickly it's coming back.
Thanks for helping me out. If it wasn't that difficult, otherwise, I would have given the wrong answer.
Oh, that's fine. Thanks for that.
The next question received is from Philippe Lorrain of Berenberg. Your line is now open. Please go ahead.
Thanks. Good afternoon, everyone. Philippe Lorrain here. I've got a few questions. Perhaps I start a very quick one. On APT, can you tell me whether the industrial product subsegment is still doing some operating losses? Just wondering how to model this one.
I think the answer should be no.
Okay, but we know the question. Shall I answer it quick? No, we're not.
No, it's just one after the other.
Okay. Then shall we answer one after another?
No, we answer now, and then you ask the question.
Okay, good. Philippe, we have, as you've probably read or I can tell you, we have now bundled all the activities around that business in Bietigheim, be it gluing, but also the industrial business. The answer is no, we're not doing losses anymore because we've also significantly adapted the product portfolio away from being kind of a full range supplier to a very specific range now, and now we're not doing losses anymore.
Okay. Does that mean that the margin that you get from that business is in line with the rest of APT, or is it still a little bit below the rest of the segment?
All in all, it's below, but the P&L looks different. It's higher margin in gross margins. On the other hand, relative to the size, you have slightly higher overheads, but still, all in all, slightly lower, but it's not creating any issues anymore.
Okay. Perfect. Thank you. Then the second question was on the PFS segment. Again, it seems like perhaps another cancellation impacted the backlog towards year end. I remember that you had something like that in PFS in Q2, which was around EUR 70 million that was disappearing. I calculate with a shortfall of about 35% for APT in Q4. Is it the same order, just a different timing, or is that something else? Because otherwise, most of the effect that you've got on the backlog from one quarter to the other is FX.
Yeah. No, it is a different order. It is an order with a German OEM who has decided to approach the extension of a site differently. So it's nothing any performance related, or so it's simply that the German OEM has decided to reevaluate investment. The investment will come, hopefully, with us, but they are going back to planning. So that's the story.
Okay. Perfect. Then the third one, which is also kind of housekeeping, the adjusted EBIT margin for the Corporate Center and consolidation was a positive EUR 2 million or so in Q4. Is there a specific reason for that?
No, this was internal charges, actually, on the expenditure side that we see, and we had some special effects as well.
Yeah, but the special effect as well is that the member of the board, us, are earning quite significantly less than the year before.
We have a quarterly adjustment regarding LT, long-term incentive, yes.
Ready for questions.
Okay. Then the next one is there an update perhaps on when you aim to reach your mid-term margin targets, the ones that you've laid out during the Capital Markets Day? And perhaps as well, how much of sales would that require? The related question as well around that is you put it in this presentation that you assume 2%-3% annual sales growth. Is that meant to be from 2021 or further down the road because 2022 would still see a further recovery of the business?
This is the $100,000 question always asked. We said always it's about 24, 25 is our mid-term view. It depends on the markets. I think 24, from today's perspective, how much more revenue we need. You have the growth numbers, which were basically, I would say, we have to put on top of what comes out this year. So it's about EUR 4 billion, a little bit more maybe. But I think we have improved our profitability position, our cost structure. I think we don't need the same revenue as we would have needed two years ago for to achieve that.
Okay. Perfect. And the very last one is just a quick follow-up on the raw mats. So to my understanding, the pricing of projects was done based on what you were observing in terms of raw material prices. And then before the signing of the contract, there was a final update on how the raw mats had been evolving, and then everything was hedged. Has there been any change on that side, sorry, or is it still the same?
Oh, that's still the procedure we try to do. It's not always happening, but as you said, we always had this in the last years, ups and downs with raw material prices, which were never affected as much as the prices were going up or down. I think we can manage that. And by the way, steel price, which is up now, expected to go down again in the third quarter. Why? Because the steel mills need six months to ramp up production. That's a physical constraint, and then the prices will come down again.
Yeah. Okay. This is very interesting. Does that mean in this market you are still able, let's say, in terms of pricing negotiations with your customers to pass through these developments?
Yeah. To some extent, let me say. But you have to know we're not buying a lot of raw material. So we are typically buying semi-finished goods. So this already dampens the peaks from raw materials. We have frame contracts that secure a big portion of what we buy. So can we be sure that there's not some short-term impact to some extent? No, but are we concerned? No.
Okay. That's a very valid point. Thank you very much. I'm back in the group.
The next question received is from Will Turner of Goldman Sachs. Your line is now open, so please go ahead.
Hi everyone. Hope you're all doing well, and thanks for taking the questions. I have three questions or two, a follow-up one from one earlier. The first question is, when we look at equity capital markets over the last nine months, one of the areas which is in particularly strong has been those which kind of are busted into a green category, and of which electric vehicles are obviously one of them. I was wondering, and sometimes there are obviously disconnects between equity markets and reality, and also sometimes equity markets run ahead of reality. So I was just wondering, in the last couple of months, for customers, have you seen a material change in conversations with your customers in terms of building out EV capacity? Has there been a really notable difference in the last two or three months?
It was a little bit difficult to understand too, so we try. Do we understand right that you're saying either our customers' capital expenditure behavior has changed regarding now to move to e-mobility?
Yes, exactly, and in particular, given the amount of market rewards of electric vehicle companies.
The answer is no because a paint job is a paint job. You have to paint the car, so they have to have the quality criteria, so there's no change on that. What we saw more is on the Schenck side, on the MPS division, the transition from combustion engines, where in those areas, there are no investments at the moment. But we had a huge drop of the turbochargers, where all the investments go into the drivetrain of e-mobility. That we can say, but for the PFS and the APT, not.
Or positive because you have all those new players in China or the US who make the first initial investments. Capital invested in paint jobs is not equally used. Some of the plants are not fully loaded. But on the other hand, you have those new players like Rivian and Lucid in the US, which we were supplying, but also all those new players in China, and this is where we're benefiting from, and this is also the numbers that you've seen earlier from Ralf.
Yeah, the chart you could see that we have increased strongly compared to last year, 67%.
Okay. Sure. And I suppose relating to that, relating to this, financial conditions at the moment are quite loose. And like I said, the market is willing to pay quite a lot for electric vehicle players like Lucid and other companies. And those companies can get access to capital quite easily now. How come the net working capital to sales for you isn't declining, given that they can get access to capital quite easily and therefore potentially put on higher prepayments?
You think that they are overloading us with prepayments? They don't because they have a lot of.
No, no.
They try, but I think they would ask for a higher discount.
So I think the prepayment behavior is more or less the same in all areas, and your question is why we can't improve our net working capital? Because I think last year we had a downturn in sales. Now we have to ramp up sales, so we need material and semi-finished goods. And that's why we are very cautious in our focus for the net working capital as well. But that's it. Not this year. We'll give it some months, and then we know better.
Sure. And my final question was just relating back to the production downtime that we've had over the last couple of months due to the semiconductor shortage. Can we assume that this is in your guidance? You said this is one of the reasons for the Application Technology being weak. But can you quantify how much of that is due to the shutdowns? How much of your services is due to shutdowns? So that we can gauge if these shutdowns last longer, how much the impact could be?
We have not in our guidance and calculation how many downtimes we will see because nobody knows. The ones we have seen so far, as Jochen mentioned, here and there for some days, I think that we can manage because it has no direct impact on us if it's only for one week or so. Downtime is not really. If tomorrow there's a third wave and we have a lockdown worldwide for two months, then it's a different game. Then we would need to do the same like last year, change our guidance. We don't see that at the moment coming. I think nobody can afford that.
Okay. So if, for example, the production downtimes that have been announced, for example, at Ford in the US and GM, and the ones that you've mentioned, if it lasts for a significantly longer time, when does it start to become more of an issue for your service companies?
When they're closing, I mean, every week is not easy, but the only business we have, which is related to production, is our services and spare part business, particularly in APT, and if they have a downtime of one week, that's not much affecting. If they close the plant for two months, it has an effect because we will not sell so much spare parts, but we also see that now companies coming back, also in the HOMAG, that customers are buying more spare parts because they were a little bit reluctant to buy spare parts last year, so I think we should manage, but if somebody closes the plant for two months, it's a game now.
It would be different, but I think Ralf also mentioned there was an expectation, maybe a little bit of impact for the full year compared to the expectation for production volumes as compared to a couple of weeks ago. But there is also strong commitment and signals from our customers that they are going to catch up lost production in the first half of the year than in the second half of the year.
Yeah.
That's clear. All right. Thank you.
Pleasure.
We received a follow-up from Lucie Carrier of Morgan Stanley. Your line is now open, madam. Please go ahead.
Thank you, gentlemen, for completing the follow-up. It was just actually on what you were mentioning on the service side. As you kind of look to that new cycle starting, do you think that at this stage you are going to see, proportionally speaking, more service business coming through before larger CapEx comes through as, let's say, your customer are replenishing their cash balance or they get a little bit more confidence on the economy? And also, from an inventory standpoint, do you have any view on kind of how the inventory level of some of your customers regarding service and specifically spare parts is, as it could also be a bit of a headwind if they need to restock or also on that as they ramp up their production?
Lucie, a complex question I try to answer. I say overall, whether it's Automotive or HOMAG business, when the business goes up and the customers are more willing to invest, they also are willing to stock more spare parts. That's the general trend. Will it be significant? I don't think so. But it will be supporting our business. I think on the motor side, Jochen, we will see maybe more modernizations as we have seen in last year, maybe. Yeah.
That's a bit different by region. We will not see much of a greenfield activity in Europe, but some customers will be more and more obliged to do refurbishments. In Asia, it's more on the CapEx side. All in all, we have already seen in the fourth quarter, with the trend of increased production, proportionally, the service business started to go up again, and I don't see a reason why also this year it should not develop proportionally with the increased car production.
Thank you.
Pleasure, Lucie.
Before we take the next question, just a reminder, if you would like to ask a question, please press zero one one on your telephone keypad. And the next question is from Peter Rothenaicher of Baader Bank. Your line is now open. Please go ahead.
Yes, hello. I have one question regarding your guidance for HOMAG Woodworking Machinery and Systems business. So you're expecting 4%-5% adjusted EBIT margin. This looks in my point of view a little bit low, considering on the one hand that demand has improved. So with the good order intake in the fourth quarter, I think the production capacity utilization is better than one might have expected at the beginning for this year. So why do you only expect 4%-5% margin? I think you have reduced your cost position significantly. The restructuring is mainly done here. So why are you so cautious here?
Do you want a short answer or a long answer?
Long answer.
Comprehensive. Short answer would be because we are conservative. But longer answer is we have still, and we will see that in the next weeks and months, how much the effect of the lower order intake will really be on the different plants we have and the related under-absorption or not under-absorption. It's pretty complex to forecast because we have some machine areas where we are selling really like hell, where we have overload already now. We have some areas where we have underload. This is balancing now a little bit in the next weeks and months. I think it will be better, but the guidance we gave is assuming that we have a continuous improvement, and it's also a little bit back-loaded for the second half of the year. Can it be better? Maybe yes. Do we know better after the first quarter?
If you raise this question again, I can tell you better.
One of my arguments for better profitability would also have been China Golden Field. I think this is offering here opportunity for higher margins as you get also the selling margin in here. Are there any reasons to see this less positive? And with regard to HOMAG China Golden Field, how is the development regarding the trading brand business?
You mean the third-party business they are doing? We contain most of that. Some maybe we don't continue, but this is not significant. The integration is on the way. It's quite complex because it's many different branches, many different companies. The teams over 20 years were a little bit separated. Now we're moving that together. I think it's doing fine, and it's an opportunity, as you say. And for sure, it's adding also to our profitability. But I think the most effect we will have out of the loading of our factories, which will be decided in the next weeks and some few months on order intake, it looks very positive, as I said already. But one month, we have only the numbers for January so far, was strong. And if it continues like that, which we see, then it could be really better.
And again, it's just February gives us a chance. And I think after the first quarter, we can confirm that it's conservative, or we can confirm that it's not conservative, but I think we will confirm it would be good. That's a conservative guidance.
And then a general question on the pricing environment. So clearly, 2020, we have seen in the Paint Shop business some pressure due to the lower level of projects on the market. Do you already see here some improvement? And what is the situation regarding pricing at HOMAG?
Okay. Now you said Paint and HOMAG. Okay. So I mean, the answer is.
Go first.
I mean, the HOMAG, we have competition. As you know, last year, it was maybe more fierce because less projects are out there. But we also have to work on our cost. I would say it's always competition, and I said this many times in the last year. It's always sometimes more than one project somebody really wants, and if a lower price, the next one not. I think there's no significant change. I think that's background of your question. Whether we have any major changes, I don't think so at all.
Yeah. And the same is true for the Paint business. It's changing. We have different regional situations. We continue to see strong pipeline, for example, China unchanged from last year. Europe customers are still a bit cautious. We've been quite successful with the projects that we booked end of last year. Let's see how we can manage this year. North America, the picture is changing basically every day, but nothing significant different now than it was three months or six months ago.
Do you know the only way out of that is that we continuously improve our broader cost positions or innovations in products? Just a recent example in HOMAG, we have an edge banding machine, which is more for the mid-size customers, lower-end customers. Totally redesigned, much better cost position. We are selling like hell. Already sold after two months yearly production. We increased that now. So it's also things we can manage ourselves against competition, our job.
Your midterm margin guidance for HOMAG, I think it was 9%. Is this still valid?
Yeah. No change.
For 2023.
Exactly.
Okay. Thank you.
Pleasure.
We received a follow-up of Philippe Lorrain of Berenberg. The line is now open again. Please go ahead.
Yeah, thanks. I just wanted to bounce back on this topic of the order cancellation in APT. I was just wondering whether you were intending as well to take that from your order intake just to avoid any kind of, yeah, misleading of anybody that tries to analyze the company and get a bit of a trend between the order intake and the sales realization. And also the related question to that is, often do you get cancellations like this where actually the client is just like withdrawing from an existing contract just because it's going back into planning?
Yeah. So to answer it from the back, it is very, very unusual that we have a cancellation. And actually, last year, there was good reasons. The one reason I already have given you, the other one is I'm not going to mention names, but there is a new player who bought from another player in France close to the German border a car production, which led to the fact that he's taking over that plant and not investing as he had previously announced in Portugal and the UK. These were the orders we had on hand. And for both orders, it applies that we have not had made any significant work on those orders yet. And this is why we technically booked this out from our order backlog, but don't correct it in the order intake because it was previous year.
Okay. So I understand this one is really related to the plant close to the German border.
Very true. It came up an opportunity for the company. Instead of investing, he could buy one. I mean, it makes sense for him. But how often that happens the last 10 years? Three times, four times.
Yeah. So when you got this third order that got canceled a couple of years ago, you took that out, if I remember correctly, from the order intake as well. But that's not because the order was booked in the order intake the same year it was canceled.
This is exactly the principle we apply.
Yeah. And we talked about the order many years before you were here. I think it was 2007 or something like that.
Yeah. Okay. So that means probably you correct that in the 10-year summary or something that you put in the annual report, I guess, like the restatement of the years before then, or?
I mean, what would be the benefit out of that? Only you remember. Maybe it's corrected. We don't know. We can check with Jochen, but I think it's not really changing our decision.
I think the order backlog is a better parameter.
Okay. Okay. Thank you very much.
Pleasure. Thank you.
The last question received is from Daniel Gleim of Stifel Europe. Your line is now open, so please go ahead.
Yes. Good afternoon. Thank you very much for taking my questions. There are actually three of them on current trading and one on the big picture. Starting with the current trading, Mr. Dieter, you briefly explained a little bit what is happening in the kitchen end market, that they have some excessive demand on that front. But I understand HOMAG is also selling woodworking machines for furniture on a broader scale. But maybe you can elaborate a little bit on that front. So excluding the kitchen side, we've seen a very strong order intake in the fourth quarter. Is this already fully penciling in this temporary super boom, or is there even potential that we say overshoot EUR 350 million in orders for woodworking at some point this year? That would be the first question.
Okay. You put some questions in one question, but I can tell you I was visiting in the last week some of the larger furniture or kitchen board users, and they all reported about a strong demand, and I also learned that today kitchen and living areas are more and more merging into that you don't see a difference between the kitchen furniture and the living room furniture or dining room, and so the most furnitures are kitchens, for sure, but also cupboards, wardrobes, which are related to it, or just wardrobes themselves, and don't forget also the office furniture companies, but here in the office furniture business, there's not much demand. The reason you know because you all sit at home, your home office, nobody needs office furniture at the moment.
But the kitchen guys and the living room guys, they have a very, very strong business at the moment.
I'm refurbishing a house. I can only confirm it. Very difficult to get product.
And you can only buy furniture from kitchen builders or an old market machine. That's like the only drive cars which are painted, but yeah.
Do you think that this special boom for kitchen and living room furniture is potentially accelerating? Could this even further fuel demand in the quarters to come, or is this now fully baked into the numbers that we witnessed that you just reported?
I think that's now continuously a demand, which not with strong growth rates, but the good thing is it's back to a growth path. And also because we explained several times, besides the standard machine business in HOMAG, we have the system business, which is mainly for the industrial customers. They have an investment base. They had a strong investment wave in 2017, 2018, and then 2019, 2020, it really slowed down to 1/3 of what it was. And now this is coming back for 2021, 2022. I don't know what 2023 will be, but we are also very successful in the standard machine business. So I think what you can expect at the moment, that's the answer to your question. It would be a continuous good demand over this year as we can see it.
Daniel, just to add, our guidance is already including an increase in order intake of more than 15%. Let's not get carried away, actually. The CFO is always keeping our optimism in check.
He could say, but.
Very clear. Maybe a similar question on the short-cycle business on the auto end market. When you think about the service and spare parts recovery, we saw some softer demand earlier 2020, and some recovery. Has this fully recovered? I mean, where do we stand versus the normalized rates? How much upside is there still possible if the production continues to resume without further hiccups?
Your question is whether the spare part business has reached the level as before. The answer is not yet.
No. We have to watch this. I mean, we've seen now basically two quarters after the worst is over, let's put it this way. What we see is quite positive. It's not stable up to the levels pre-crisis, but we're seeing some good months. So again, probably ask the same thing in a quarter from now, but we believe that the recovery will continue.
And it's also reaching a different level. In China, we have back to the level because Europe is slower, yeah.
Europe is also slowly catching up. So all in all, optimistic. When will we reach or even exceed the pre-crisis levels? Have to see.
Now, one last question, big picture. If I look at slide number nine, it's a very interesting evolution of the EV orders. Quite some explosive growth as of recent. What level would you see in terms of peak? Where could the orders go and by when? Because I understand there's this electrification trend, so eventually probably quite a high share of your orders will be EV. But we also have these new players coming to the market, which could explain the temporary peak demand. When do you see that happening and at around what levels? Any indication you could give us?
To forecast the peak is difficult.
Yeah. You've rightfully said there's a couple of players in there who make the initial investments. On the other hand, as you can read in the press, the traditional OEMs are more and more forced now to accelerate the investments in e-mobility. So can I promise you further significant growth at this moment? No. Do we believe that we can protect those levels? I'm positive, but there will be movements in between.
I think we have to see whom of those who've invested are successful. Some of them expand, some not. Yeah. Very difficult to predict at the moment. We are in an early phase of that business.
All right. Thank you very much to the both of you.
Keep you quarterly informed.
Thank you.
So this was the last question, Mr. Benigam.
Yes. This was the last question. So back to you.
Thank you very much to you all for your questions, ladies and gentlemen. If you have further questions or further questions come into your mind after that call, Andreas and his team are happy to answer most of the questions you will ask maybe.
Okay.
Thank you very much for joining us today. See you again or talk to you again after the first quarter. Do you know the date, Andreas, when we will meet again? April or something?
It will be the second week of May.
Second week of May. Yeah.
We will announce.
Thank you very much, and many thanks for moderating.
Have a nice day. Thank you very much. Thanks, Alyssa. Good one. Bye. Stay safe.
Ladies and gentlemen, thank you for your attendance. This call has been concluded. You may disconnect.