Good afternoon, ladies and gentlemen and thank you for standing by. Welcome to today's Q4 Full Year 2018 Earnings Conference Call. I must advise you that this conference is being recorded today, Tuesday, 5th March, 2019. I would now like to turn the conference over to your speaker today, Tim Langer, Head of Investor Relations. Please go ahead, sir.
Hello, and good afternoon. Welcome to our Q4 earnings call, with me today are Christian Kuhlman, CEO of Evonik and Utewold, CFO of Evonik. And as we have quite some topics, last night and today, I think we'll start directly with our short presentation followed by the usual Q and A.
Of course, we have. Thank you, Tim, and also a warm welcome from me. Thanks for taking the time to be with us today. We have some quite busy days behind us, but we are happy that we successfully signed our MMA deal yesterday afternoon. For today, and especially for the 2019 outlook, this was prepared before we knew the exact timing of the deal.
So a negative pattern, that the outlook statement still includes the MMA business. We reported as discontinued operations from Q1 onwards. So with Q1, we will also provide an up outlook statement without the MMA business. So far with the housekeeping remarks, Let us now have a look what we have achieved. What we have achieved over the recent months and what are our main topics today.
At first, 2018 was a successful financial year for Evonik. We delivered on our promises even despite a more difficult environment towards the end. Secondly, we addressed one of our main challenges: cash generation. We are not only proud of a strong improvement in 2018, but also of the solution for one of our main structural issues, the cash out for pensions. Vutel will talk about that in a second.
And finally, as announced yesterday, the sale of the MMA business. This is a major step in our portfolio transformation towards the best in class specialty chemicals portfolio and another proof point. Of our consistent strategy execution, reduce the cyclicality and complexity of Evonik by exiting a rather mature and capital intensive business. Hence evaluation at 8.5 times EBITDA even above our current trading multiple is pretty attractive for a rather cyclical business. This is a result of a well prepared and timed divestment decision.
Over the last years, we have successfully restructured the business. And we have set up a fully integrated so called Verbund structure with downstream products and specialty solutions. This made it attractive for a broad range of interested parties. Finally, in 2018, it was a perfect timing to start the divestment process with an improved cost base and at the peak of the cycle. All these efforts finally paid off and led to the attractive multiple.
This deal, ladies and gentlemen, is not only attractive from a standalone perspective. It is another proof of our successful portfolio transformation story. Our target our target is to establish a more balanced and more specialty chemicals portfolio with improved financial metrics. Looking into the financials, of our 4 acquired businesses. They are all stable businesses with GDP plus growth and EBITDA margins above our target range of 18% to 20%.
And also from a cash perspective, this businesses are very attractive with cash conversion rates of up to 60%. I think we all agree that the MMA business does not deliver KPIs on this stable, attractive level over the cycle, but we achieved a comparable valuation for the divestment as our acquisitions. The financial strength of our acquired businesses also becomes very obvious on the next chart. Our 4 combined acquisitions show a higher end over the cycle significantly more resilient margin profile north of our target range. MMA was clearly more volatile and an average below our margin target range.
So we are delivering on our specialty chemicals strategy by actively shaping our portfolio towards more resilience and less cyclicality. And last, but not least, The proceeds of a financial headroom for deleveraging our balance sheet and further targeted growth. With that, now let me hand over to Ute for the 2018 financials.
Thank you, Christian, and welcome also from my side. 2018 was a successful year for Evonik. We delivered on our promises. Operationally, we improved on all of our main financial targets and in some cases quite significantly. Free cash flow is one of them, if not the most important one for us.
So we are proud to report further progress here with a 30% increase in absolute terms and a clear improvement of the cash conversion ratio. And it is worth highlighting that we achieved our earnings guidance, which we increased at midyear, despite the more challenging macro environment, and the special situation on the Rhine towards year end. This was also supported by our efficiency measures. Most important for us when it comes to cutting costs, the progress must be visible in our bottom line numbers. That is what counts at the end.
So if you take a look at the P and L lines targeted by our SG and A program, the progress is obvious. Administration costs declined in 2018 and also selling costs moved into the right direction. Despite the higher logistic costs, from the Rhine water levels. Also on the R and D side, where Harald Schwager is bringing in much effort and experience we have made good progress. Leading And Innovation does not necessarily mean leading in expenses.
We clearly focus the money on our 6 defined innovation growth fields. We aim to be more efficient and quicker to market when it comes to innovation. But it is important that we do not cut on future growth prospects here. Hence, it is good to see that sales with new products increased steadily To give you some color, our membrane business, double size in 2018, and the CAGR in our 3 d printing products was over 100% in the last 5 years. Let us now take a look at the strongly improved cash generation in 2018.
We did not only grow free cash flow significantly in absolute terms. Finally, we came out closer to the 7 than the guided 6. Also our cash conversion as a rate of free cash flow to EBITDA improved to almost 20%. Besides a better operating performance, a high cash focus throughout the whole organization, as well as our efficiency measures contributed to this improvement. The progress is even more remarkable when you take into account the cautious customer behavior and the logistical challenges on the Rhine towards year end.
This led to an outflow of working capital, which was above our expectation. This headwind will turn into a tailwind for 2019. Some support in 2018 arose from lower cash offer taxes, this line item will normalize in 2019. Let me now give you a brief overview of the performance of our operating segments in the fourth quarter. Starting with Resource Efficiency.
In 2018, for the 4th year in a row, the segment delivered higher earnings and continue to improve its margins to a now excellent level of 22.6%. The trend of strong pricing continued and also volumes turned positive again in Q4 despite the just mentioned weaker macro environment. The start into the year was quite solid. So overall, slightly higher earnings in 2019 should be possible. However, not with the growth rates of the last year.
Moving on to Nutrition and Kia. After some years of heavy pain, 2018 was a step in the right direction for Nutrition And Care. Although the segment is not yet where it is supposed to be. In Q4, Nutrition And Care had very strong volumes, driven by Animal Nutrition And Baby Care. At the latter, demand slowly, but steadily improved admittedly from a low base.
On the other hand, the industry leading businesses, especially the additives for pu phones, built some cautious customer behavior in China towards year end. For 2019, we expect slightly lower earnings in Nutrition And Care, Like in 2018, most businesses will grow earnings, but with the arrival of new capacities, we expect the average remaining time to be lower year on year. And we will see ramp up costs of around 1,000,000 for our new methionine plant in the first half of this year. Concluding Mr. Corners Materials, 2018 was a successful year for Performance Materials despite some challenges in the second half.
Spreads in our C4 business were rather on average levels throughout the year but earnings were impacted by the situation around the low Rhine water. This is predominantly visible in the Q4 results, with a negative earnings impact of around 1,000,000 for the quarter. For 2019, we have the expect at margin normalization in MMA and PMMA. So overall, and not surprisingly, earnings will decline significantly on the segment level. Now to the special topic of Financial Management.
Let us take a more detailed look at what we have done to tackle our above average pension cash out. We started to address this topic already a couple of years ago. Evonik has set up a contractual trust agreement or short CTA in 2010 to mitigate the volatility of pensions on the balance sheet. Until 2015, this DB Bank was steadily filled up with top ups. And the better than planned asset performance constantly enhanced the overall asset base.
This helped to reach the targeted CTA funding ratio of 70% 2 years ahead of our initial planning. So we are able to start reimbursing pensions out of the CTA already in 2019. More practically, this means that the pension payments so far down by Evonik will be partly taken over by the CTA. This will lead to a significant relief in pension cash out of around EUR 1000000 per year, from now on in each and every single year. To wrap it up, we addressed one of our main free cash flow challenges and reviewed our pension setup.
We have found a smart solution to decrease the cash burden and thus sustainably improve free cash flow by around 1,000,000. And to be clear, all without any additional top ups or funding, Also no need to invest any proceeds from the MMA's divestment. With that, back to Christian for the outlook.
Thanks a lot, Uto. 2019 will be a year with less macro tailwind and most likely lower overall growth rate, but nevertheless, we are looking ahead with confidence for good reasons. Our portfolio will show that it is already In our 4 growth engines, the growth trends are fully intact. Despite the more challenging macro environment, We expect a year on year earnings growth in more than 3 quarters of our business lines. Our challenges are clearly addressed.
And self helping measures will contribute to improve our earning space. As already mentioned, Our official outlook statement for 2019 still includes the MMA business. This means around 150 1,000,000 lower earnings only from the expected normalization in MMA. Nevertheless, We are confident to achieve only slightly lower, if not stable earnings. Today, 2 months of the year are already behind us.
And we have seen a very solid start into the year, actually slightly above our own expectations. So as of today If I had to give a more specific indication for our outlook statement, we would see ourselves closer to a stable than slightly lower earnings level. But probably more important, than our earnings outlook, we are targeting another significant improvement in free cash flow. As you know, this is in the apple of our eyes. It goes without saying that this will be more than sufficient to cover our dividend and to be very clear that we'll still hold true after the divestment of the MMA business already The Estrella's deal was a milestone in our portfolio transformation.
2019 will be a more challenging year, but we are pretty well prepared to deliver on our promises also in a more difficult environment. And the start into the year was quite solid and more than underpins our guidance. So ladies and gentlemen, Thank you for your
Thank you. Your first question comes from the line of Gunther Seishman Please go ahead. Your line is open.
Hi, good morning, everyone. Can I start with two questions? Firstly, when I look at your current portfolio, then it's still very complex with 17 business lines from the cyclical and more commoditized businesses that now remain, how integrated are they and how complex would it be to perform a carve out also what are your priorities for those businesses over 2019? That's the first one. The second one on free cash, how much can you just quantify us or help us dimensionalize what's the impact on free cash from the low water levels on the Rhine River, please?
For your question, I guess I would take the first one and then Ute will enjoy to answer the second one. Talking about, further portfolio opportunities. I guess that is a question behind the question. First of all, as of today, there's still nothing for sale. And as you know, we are still at start at the starting point of our portfolio transformation.
That means in other words, that the of our businesses are constantly changing in a way, the things that are maybe today, we would describe them as specialty could be from our perspective, in the future, they could commoditize And having this in mind, there are some businesses. We have identified where we'll see that the performance during the last 2 to 3 years was not as good, as we have expected. And therefore, we have to give it a let me say, a deeper look. And the second thought, how to deal with it, but to bring it to the point, first of all, as you know, how we are first of all, we have to do our homeworks and then we will give you some more insights about this. It is step by step.
And, once more, as of today, there is nothing, nothing for sale. Having said this, I will turn it over to it.
Yes, thank you. Good afternoon, Gunther. Free cash flow effect from the low Rhine water 11. For the full year, we have given the number that costs increased by 1,000,000. So that is 1 to 1 cash.
And the working capital build up is also around 1,000,000 where we had higher inventories and all that. So that is more or less the cash effect in 2018 just from the low Rhine water levels.
Thank you. And if I can just follow-up on the first question please, on the portfolio opportunities,
if I, yes, give me the chance to add something.
Thank you.
Because yes, sorry, you know, I guess I was on the right track, but I have to find that my my answer. First of all, yes, thinking about the C4 chain, partly into because partly into our PHLF and no, for example, talking about the Baby Care business. I guess that is complementing my answer.
And your next question comes from the line of Andreas Heine. Please go ahead and ask your question.
Yes, 3 small ones. And the first, could you clarify a little bit about the volume trends you see in the 1st 2 months? You said it was above, your expectations. The last year and the first half was very strong. So is volume, how you see it in the 1st 2 months up?
Compared in a year on year comparison? Then secondly, on the free cash flow, the free cash flow guidance you provided was, obviously, also based including MMA. If I would strip that out and assuming that you take 1,000,000 as EBITDA you would have had, include M and A. Is it fair to assume that free cash flow your free cash flow guidance might be in the range of January 20 1,000,000 less. Is that the right way of looking at it?
And then lastly, you pointed out in, how you see the gross engines in your Folio, is that any kind of indication how you might, restructure the organizational volume also on the reporting line. If I go to Slide 18, so that we have, let's say, these 5 reporting businesses going forward, let's say, as of 2020, or is it premature to talk about this?
A lot for your questions. Let me start with the third one, and Ute will take the first and the second one. As you know, we have 4 growth engines, specialty additives, smart materials, animal, attrition and health and care. And we are targeting to create revenues between 1000000000 to 1000000000 in those 4 growth, regions both regions of our portfolio. And they are thinking about the future, the Galloton of Evonik, but it's really a little bit, too early, to talk about the restructuring of the organization of Evonik.
Having said this, Ute will take the first and the second question.
Andreas, good afternoon. Yes, with the volume development, the current trading is early in the year. Of what we can say so far. January February were somewhat better than we would have expected, reduced efficiency with growth across virtually all business lines. The only little exception we see is Oil Additives as they have some decent auto closure, also growth in a lot of the businesses in Nutrition And Care.
Health Care is stressed at several times last year, we'll see a more flattish development in this year. So from that point of view, and normally I also had a more skewed development towards the 2nd half in their seasonal pattern. So from a phasing perspective, We have higher comparables in H1. So that might here and there be important in the comparison But overall, we expect a solid Q1 as described on the segment, of course, in Performance Materials segment, lower prices in MMA, step by step Materialise, we described that. And we have some weaker press in the C4 business as there are some temporary supply constraints, but again, these are relatively small issues at the beginning of the year.
You asked on the free cash flow contribution, that MMR is would have been given in this year. So if you take the 1,000,000 of EBITDA some CapEx, some tax, you more or less, okay, to range to 1000000, 1000000, 1000000 of cash flow, theoretical contribution MMA.
Thank you. Your next question comes from the line of Thomas Swaboda. Please go ahead. Your line is open.
Yes, thank you. I have two questions, please. And I guess both both are for Ute. Just coming back to Andreas's question on free cash flow, in 2019, obviously, if we strip out MMA, that, that will be the biggest part, but you still have some other moving parts like the IFRS 16 and the working capital. So my question is based on a top down calculation, even without MMA in 2019, I would see a free cash number, which is relatively close to the 600 are 72, you have reported for 20 18, is there anything that's usually wrong in my calculation?
We guide for significantly higher cash flow. Of course, that includes all accounting effects maybe if I just walk you through the biggest components in the change. First of all, we will have a significantly better contribution from working capital or less negative, if you want to put it this way. Taxes are somewhat higher. As I said, we have the million less pension payout, as we said, some are positive contributions on the savings side.
Some may be a cash out for the personnel measures that we have. And then we have, the effects from the IFRS accounting, the numbers are unknown. And that overall leads us to our cash flow guidance. I want to really also underpin what Christian said even without MMA, we will cover the dividend with the free cash flow. Also, if you theoretically stripped out IFRS effects.
That's fair enough. Thank you. The second question, if I may, is on your CTA and the pension payments out of the CTA, In many other cases, in other companies, actually most of the pension payments are being covered by the CTA. You have, for some reasons, this decided to do it the other way around, and obviously, fixing the issue by taking out the 100,000,000 100,000,000 of cash payments from your cash flow already helped. But the question I have is, is it all you can do?
I mean, your CTA seems to be very well funded. What does speak against the CTA assuming even a higher proportion of the pension payments. I think you have in total roughly 200 And you're covering 100 from the CTA going forward.
First of all, CTA is, there for the German pension provisions. So the 200, of course, is a group number. And what I have given you is a net. What we have given you is a net effect. So there are, of course, some growth effects here and there.
In Germany, the companies pay the pensions. So that's just the legal framework and the CTA can reimburse the pension payments. We started in 2010 to fund the CTA, started to fund that as the assets were, really managed in a very interest sensitive way. We had this good development and now we can reimburse the pension payments from the CTA.
Can I just follow
Maybe one one further comment? We also sell pensions with the MMA business. So there are also pensioners in that legal entity that also will lower our payouts going forward. By around $20,000,000 or so per year.
Perfect. Thank you. And if I just may follow-up, will you be revising the potential of the cash pensions reimbursement from the CTA on a frequent basis, or is it basically
We are, looking every year, what are the pension payments and what is the right level to reimburse from the CTA for the next years, the million are what we foresee.
That's perfect. Thank you so much.
Thank you. And your next question comes from the line of Sebastian Bray Berenberg. Please go ahead. Your line is open.
Good morning, good afternoon, I should say, and thank you for taking my questions. So I would have 2, please. The first is, again, coming back to the CTA. Can I confirm that the million is fully effective in, for the year 2019 onwards? And just to double check, have there been any assumptions such in change to achieve this funding ratio involving the expected return on future plan assets?
Or is it basically you've got a big asset base when you were initially anticipating, and that's enough to service the funding ratio at a constant assumed That's my first question. And my second is the am I right in saying that on a full year basis, the MMA has included. So you haven't made an assumption. I appreciate this may have been answered before, but I just want to check. That you only have 10 months of this business or 9 months and then it goes.
The guidance for the 2.6 or thereabouts a stands assumes that you have the whole $300,000,000 or $350,000,000 of EBITDA from the to be divested business?
Yes, Sebastian. Good afternoon. For CCA, very clear, the EUR 100,000,000 is a sustainable level. We took really a lot of time and effort to model our pension portfolio to make it as robust as you are expecting from it. So the return is planned relatively conservative at around 2% what we have seen in the past.
In that pensioner group, there are now more and more pensioners into that, the payouts also over time lead to lower, DBO. So from that point of view, also with the payout with the reimbursement now, from our point of view, the 70% funding ratio is quite robust.
2nd question, the MMA is still included for the 12 months for 2019 in our guidance.
That's helpful. So a quick follow-up. Do you still operate a defined benefit plan open to new employees or is that closed? Just as quick reminder.
Now the defined benefit plans are closed for new entrants.
Thank you. And your next question comes from the line of Cetna Udeshi, JP Morgan. Please go ahead. Your line is open.
Yes, hi, it's Chetan. Just a few questions on I think there was a question asked on MMA free cash flow in 2019 and I think the number you mentioned was $1.30 to $1.40 roughly in that range. So if you were to back out what was the 2018 number, should we be adding maybe $100,000,000 higher number for the higher EBITDA. That's number one question. Number 2 is, So yeah, I'm not an ethylene expert on pension and CTAs, but just to understand this better is the funding ratio at the moment as it stands, it's just 70%.
So what happens if the funding ratio falls below 70? Do you have to fund the CT again? And the second question, if I look at your free cash flow, you would usually have a line for cash outflows to fund the CTA in your investing activities line. And in recent years, it's been more like 25,000,000 So how do we tie the $100,000,000 benefit that you talk about with the $25,000,000 funding that you've been doing in the recent years on the cash flow line that we saw. And just last question, I was Just any color on why the pricing has remained strong in resource efficiencies?
Is there any specific businesses where you see the strength continuing into Q4 given maybe the raw material pressures and demand had started probably to weaken in Q4? Thank you.
Yeah, hello, Chetan. Thank you very much for your questions. As the earnings level for MMA was more or less 1,000,000 higher last year. So the free cash flow contribution is more towards 1000000 in 2018, but we have to ask for a little bit of patience you will get, then we could discontinue representation more detail to that that's more or less the level that we have to look at. CTA, CTA is a voluntary funding under German regulation.
So we are not obliged to really show any funding levels The 70% was our internal target and is more or less, also from a financial policy point of view and optimal level for funding our German pensions. Why does the funding level appears so robust as we have pensioners in that? So the payout of the actual pensions also lowers over time the obligation. So that's why our according to our model calculations, the payout with a given conservative return expectations really is robust in the next years. So we are very, very confident that we can keep the level.
The funding that you see is more or less a tax reimbursement, where you have capital income taxes, which go to the company and then have to be given back to the CTA. That's more technical point of view. And again, this is already included in the net effect of the EUR 100,000,000 we have given you.
Okay. As you know, the last quarter of 2018, Resource Efficiency was somewhat weaker in the automotive sector and particularly in China. And looking to Q1, what do we see? First of all, there is an underlying growth trend which I guess is fully intact. High performance polymers, expected really to continue its growth path also in this year was a continued very strong demand for PA12.
Moreover, the cross linkers have also started pretty well, to this year. And if you look the silica and there we have also seen a solid start despite some more isolated cases. From our cautious customer behavior, but nevertheless it was a good start. And, for the coatings and additives, our business line, we do also expect a moderate growth and start into this year. And then what's okay.
And then maybe mentioning the oil additives, here we expect to be a little bit start could be a little bit lower into the year because of the higher automotive exposure in this business line. But overall, the underlying growth trends are fully intact and we do see a good growth start, in this year in respect of Resource Efficiency.
And your next question comes from the line of Mubasher Chaudhry, Citi. Please go ahead. Your line is open.
Is it could you provide some color on the SAP end market and how you're seeing the margins develop into our business given some softening expected in the acrylics market. And then the other question is on the change in treatment for interest expenses on the cash flow. So given that that will be going into the financing section of the cash flow statement. Should we are we right to assume that the dividends will be covered, even if you were to add those expenses back into the cash flow from operations level?
Yes, thank you, Mubasher. I start with the last question. First of all, That representation is what our peers do. So we'll make our free cash flow statement or cash flow statement more parable towards the peer group. And yes, the dividend has to be covered even including all these effects be it leasing or be it interest expense, that's very clear for us.
Okay. Next. Talking about baby care. The demand is slowly, but steadily improving, and I have to admit that it is from a low base, but Nevertheless, slowly, but steadily improving. And, our job is to successfully restructure the Baby Care business.
And that is what we have to do next. And I will provide you with more information about this next time.
Thank you. Your next question comes from the line of Geoff Haire UBS. Please go ahead. Your line is open.
Hello. I just wanted to ask if I could ask some 3 quick questions. First of all, I was wondering, could you give us a target net debt to EBITDA excluding pensions for the business now that you have sold the pivot Met the acrylics assets. And also in the presentation, you kind of gave us last night on the disposal. You mentioned remnant costs.
I was wondering if you could just explain to me what that was, what those actually are because it seems to be a 50,000,000 benefit to the group. I was trying to understand exactly what you mean by that. And then I was wondering if possible, would you be willing to give us a target free cash flow for this year
Yes, Joe. Thank you very much for your questions. I'll start with your leverage, question. In for our credit worthiness, pensions and financial debt are considered as debt. So it's makes only limited sense to isolate those and manage them separately.
This is what we have to accept. So from that point of view, we are looking at the overall debt position and how that is mirrored in the rating for 2018, you'll find that on our slides, the leverage was 2.5 and that corresponds with our solid investment grade rating and we feel quite comfortable with that. The proceeds, of course, will strengthen our financial profiles it into our profitable growth, make the portfolio more resilient, more specialty and more balanced. For the remnant costs, of course, there's a snapshot of this year. It's a mix of typical dis synergies and also impact from changed pricing mechanisms where we before had in house pricing and now have to go or are going to market prices And it's very clear that we will reduce these dis synergies over the next 2 years.
And from that point of view, that will phase out over the next years.
I'm referring to the free cash flow question. One thing that's certain, that's certain is that we will see it significantly higher cash flow. And I personally would really be disappointed if it would be only around 10% FCF growth. Having said this, it is a little bit too early in the year to give you here a more detailed, a more detailed information. So I ask you here for your patients.
But one thing is clear that the message is, and that is what we are working for, that the free cash flow will be significantly higher.
Could I just ask one follow-up question? Just on the remnant cost, given what you've just said, does that imply that your downstream businesses were paying higher than market price for the MMA that they were sourcing internally?
No. Yes.
Your last question comes from the line of Martin Grudiger Kepler. Please go ahead. Your line is open.
Thank you. I have three questions, please. Just coming back to Resource Efficiency and your it's a positive experience in the 1st 2 months. You mentioned already the business lines. Can you have us understand the different dynamics in the individual region here, I refer especially to the dynamics in China after the Chinese New Year.
The second question is on the financial result in Q4, which was obviously much better than I have assumed and also better than the previous quarters. Can you explain why the financial result was less worse than previously and directly for the financial results, you give a guidance for 2019 and you say that this line adjusted financial result will be -1000000 sorry, 1000000. That compares to minus 162,000,000 in 2018. 10,000,000 of that comes from the worsening from the IFRS 16 accounting change. I know that you have not factored in financing costs for the PeroxyChem in your guidance.
So What are the levers behind that worsening financial result in the year 2019? Thank you.
Yes.
Maybe Martin, good afternoon. Maybe I'll start directly with that question. In our financial result, there are also effects from costs, currency swaps that we have as a hedge for in general financing. And that very heavily depends on interest differences between the currencies. So I think I do not need to explain that this is very hard to forecast and even harder to forecast precisely.
And that is more or less the effect you have seen in the Q4 that this worked out better But again, that can be in 1 quarter to a 10,000,000 or something like that. We cannot seriously forecast The increase in this year is mainly driven by the effect of the IFRS leasing accounting plus a more normalized level for those currency effects that I just explained?
Okay, Martin. The second question, it's really hard to judge upon the economical chances, expectations, in respect China because on the one hand, there are the trade negotiations and they could create tremendous turmoil, but on the other hand, the Chinese and the Americans could resolve this topic, that could really be, let me say, a push. What we have seen in the first in the last quarter of last year was a sign in particular signs of slowdown, for example, in the automotive and in the coaching area. But however, margin, however, from today's perspective, we do not expect any significant impact, on the overall business forms for 2019. And I guess that answers your question.
So that means, after Chinese New Year, demand came back to normal level.
Yes.
Thank you. I'd now like to hand the call back to the speakers for closing remarks. Please go ahead.
Tim, and I have really appreciated having had you today, that closes the today's call. Thanks for your attention. Have a nice day, and goodbye.
That does conclude the conference for today. Thanks for participating. You may all disconnect.