Ladies and gentlemen, welcome to the preliminary half-year figures 2025 conference call. I'm Vasilios, the call's call operato r. I would like to remind you that all participants will be in a listen-only mode and the conference is being recorded. The presentation will be followed by a question and answer session. You can register for questions at any time by pressing star and one on your telephone. For operator assistance, please press star and zero. The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Dr. Peter Podesser, CEO. Please go ahead.
Thank you very much, Vasilios. Good morning, ladies and gentlemen, and thank you very much for taking the time to join our call on short notice where we are reporting on the recent and the background for the adjustment of our 2025 forecast yesterday. As always, Daniel and myself will share the presentation, and after going through this and giving you the background, I think it's also important to summarize the outlook a day after the revision of the guidance. Natalie, we are looking forward to the question and answer session thereafter. Now, let me first of all state that I and we, and as a team and as a company, Natalie, we are particularly unhappy to be obliged to go this route and undergo a revision of the forecast.
We took a fact-based decision, and after a clear analysis, I think we also have a clear way and path forward which we want to share with you. Just summarizing the key reasons here, I think we are reflecting a massive overall uncertainty in the economic environment from fluctuating exchange rates to, I'd say, impact in decision-making, especially, I'd say, with customers looking at new technologies when a various impacting also our price decisions. That's the one element. The other element is that we also have to face, I'd say, very recently and at the end yesterday, some unexpected delays in defense programs here that we have planned for this year's execution, particularly in India. I will go into those reasons together with Daniel in more detail.
If we now look at the revised guidance, we expect group sales for 2025 financial year to be in the range of EUR 146.5 million to EUR 161 million, which is a shift and a reduction from the previous range from EUR 160.5 million to EUR 180.9 million. We also are reflecting a new guidance for adjusted EBITDA in a range between EUR 13 million and EUR 19 million, down from EUR 24.7 million to EUR 28.2 million. Also, the adjusted EBIT, new guidance being between EUR 5 million and EUR 11 million compared to EUR 17.5 million to EUR 20.6 million before. If we look into the details of the reasons, I think starting with the macroeconomic uncertainty, the depreciation of key functional currencies, namely Canadian dollar, U.S. dollar, but also Indian rupee, affects our top line as well as the profitability here within the first six months. We took our assumptions also for the month to come.
That's a significant impact we are reflecting also in our numbers here. The second one is more a qualitative topic. We are seeing, I'd say, that uncertainty is also driven by, I'd say, tariff policies, especially out of the U.S. and then also into the U.S., have an impact on decision-making patterns with our customers. Especially when we look at new customers and also in customers in new end markets where it is a decision to invest into a new technology or not. Here we see reluctance increasing over the last couple of months, and it slows down, especially in the new customer business. As an example, it is having short-term impact. We look into our U.S. business. Especially new customer business has fallen short of expectations in the current fiscal year.
I think this is also important because there's also still a positive side in this, let's say, overall negative situation. We are still growing, so we are ahead of last year. If we talk new business, we are still growing by 16%. If you look into the overall business, including the business with existing customers, we are looking at a growth rate here in the U.S. also between 20% to 30%, let's say, going forward into the year. The second element, I had mentioned this before. If we look at our current assessment, we, as I received information yesterday, out of India, the key program for this year, in our year-end forecast previously will not be executed this year because funding has been reallocated to other purposes.
We are told, or we got word that we are talking here about a shift of funds in general towards funding of, let's say, drone and counter-drone activities. This is having an impact in 2025, but it is also at the same time expected to happen in 2026. We add this for the forecast here in the next year to an existing and strong pipeline in defense in general. At this point of the year, looking at 1st of August today, we have difficulties and saw no immediate compensation potential here for those delays. If we look at the profitability, and Daniel will go into this in more detail, we have an impact out of the exchange rate here on the profitability side, and we have temporarily high expenses in the first half year.
For those of you who have, let's say, been with us now for the recent past year, you would remember we are in the midst of our digitization of the organization, investing into the introduction of a new ERP system. We have been doing quite some investments in IT and cybersecurity infrastructure. Altogether, this puts a burden on the current financial year, although we expect this to normalize over the year, especially on IT and ERP. Before I hand over to Daniel, I think for completeness's sake, and definitely of lowest significance here in terms of quantitative impact, but still looking at the entire picture, we also see a noticeable slowdown in investments in our hydrogen system. We still see activity in selected regions. We are happy with the activity in Scandinavia. We are happy with the activity also in Benelux countries.
We have, I would say, piloting key projects in India as well as in Singapore in the pipeline. Natalie, against this overall development, we are assessing timelines and also resource allocation to this part of the business. With this, let me hand over to Daniel to lead you through, I'd say, the current status of preliminary half-year figures as well as, I'd say, the profitability-related part of the outlook.
Good morning, everybody. Thank you for joining the call. Thank you for going and looking into what happened or what you performed in the second quarter where GLN gave a little bit of the outlook on the cost basis. I think when we look at the last quarter, especially towards the end of the quarter, there are three major impacts really that broke down our profitability. I think one of them, Peter mentioned it, is, of course, the currency impact. Remember, we made substantial sales in Canada. We made substantial sales in the U.S. as well, you know, as in India. All three currencies have gone down when it comes to currency. Because all the benchmarks rate into the lower broad for George Washington because we sell in the U.S. dollar, we sell in the local currency.
I think this is the one bigger impact where we are a bit more competent at the end of the first quarter. We're going to see those currencies go down significantly and/or at least potentially stay stable. The second impact that we've seen, I think, is also temporary nature. We are mentioning already the investments in a new transition of our ERP system were slightly higher towards the end of the quarter. We're excited to read about the transitions and get out there a little bit earlier and then expect a little bit of implementation. There was a cost that, you know, we expected would go into the second half of the year. Our half occurred in the first half of the year, also with some other digitization projects, so that cost was a little bit higher than we expected.
Last but not least, we again had a third factor, a loss on our currency, translating mostly off of intercompany interesting liabilities and receivables. Unrealized, but still, you know, it's still grown to an extent in the P&L. These are basically the core or the three major factors why profitability has gone down. Now if you look at each quarter on quarter, please also don't forget that the second quarter is the difference between the half-year numbers in the first quarter and obviously the deterioration of the exchange rates in the first half-year applied to the full six months. If you look at that and put that one out, the second quarter is a bit better than if you stick to the six-month quarter. Nevertheless, for us, it's important to look forward to implement measures to make sure that we increase profitability again.
Look how we can manage it to increase our margin. I think we've quite a bit of constructing cost-cutting or cost optimization patterns. We want to make sure, of course, that we don't grow. We want to make sure, of course, that we don't invest in those key problems that we have invested, which enable us to grow. Of course, some of those things may be postponed a little bit. Some of those things may shift into other quarters. Overall, we want to make sure that we implement those measures, which include reviewing hiring, which include looking at what we spend in the digitization processes, in the digitization project, now or what could be a little bit pushed towards the future without impacting our operations significantly because of the key measures that we implement going forward.
I think overall, again, you see the net cash position that we're having for the EUR 6 million. It's still a very solid net cash position from operating cash flow. You know, you can do the math. You do it well with all of what we have on the screening over in the second quarter. That is also a little bit of an effect on the cash flow, but what we would consider to be solid in our financial position. I think more details we'll provide for you, obviously, once the first half-year report goes out to the public.
With this, I will take over again and summarize the outlook here. I think at the end, a baseline here is, as I see, remains and will remain on a profitable growth path. Two elements to this. If we look into the ongoing and existing customer base of our methanol fuel cell business for industrial customers in Europe and the U.S., we are still seeing a dynamic organic growth of about 20% and above. Just yesterday, we received another significant multi-million dollar contract of Lightyear after closing of the dates. That's something that naturally will also translate into the continuation of this growth path. If we look into our clean power management segment, we are on track and we are showing approximately 10% growth year on year organically after six months. We have to address that.
Have to accept the setback and the delay in the defense part of the business. There is a significant and strong project pipeline in Europe as well as in India. We expect contracts over it in the near term. We are talking about weeks or within the quarter. In parallel, additional difficult programs next to the one we published in May with Polaris are in execution. Also there, I think we are happy and we will be happy to announce as soon as they are ready. We see significant potential with our capabilities, our fuel cells being a highly agile, lightweight energy source that doesn't create a lot of noise and no temperature. No signature energy source, which fits also to the driving of batteries for drones. We started the first project in Germany as well as in India. Another new segment I think we have successfully entered.
We are looking at significant infrastructure investments in Germany in traffic and construction site safety. We did our first large-scale project in Germany on a highway, Autobahn bridge, and completed it recently. We are looking at about 50 e-foils being deployed at one construction site for a couple of months. The next step is to solidify the partnership with one of the market leaders in the area of traffic and construction safety against a reliable energy source that runs longer than battery, and therefore you bring down maintenance costs and total operating costs. That's another forward-looking step here. If we now look into, let's say, our M&A strategy, we are naturally continuing to add evaluation targets here with a focus here to the U.S.
As published already, we are looking at the defense sector as well as the oil and gas sector, and we are doing a similar thing in Southeast Asia and also on particular targets here in Europe. The pattern is similar. It's all about market access to have a faster access to markets and then be a platform for organic growth. The last one to mention is, I think, with the launch of our only production facility in the U.S. in the fourth quarter, we are going local for local, like we have been doing before, like we did it in India. We are sending not just a strong signal to our customers of customer proximity, but with the local value add, naturally, we immediately have a positive impact on potential tariff impacts. We are balancing and offsetting the impact of U.S. tariffs here.
At the same time, I think, again, it's a good basis for, let's say, especially new customers to accelerate their decision-making. In total, as mentioned before, it is very obvious that we are naturally unhappy with the situation to cut back and bring down our targets for the year 2024, seeing the facts we are obliged to do so. You see us with a clear view ahead. You see us also convinced and optimistic, I think, with the right facts and with the right products, technology, and customer base to be back on and remain on a profitable growth path. With this, we would like to conclude the presentation here, and we'll be happy to answer all your questions or listen to your comments. Thank you very much. Handing back to Vasilios.
Thank you. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone. You will hear a tone to confirm that you have entered the queue. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use only handsets while asking a question. Anyone who has a question may press star and one at this time. The first question comes from the line of Usama Tariq with ABN AMRO ODDO . Please go ahead.
Hi. Good morning, Dimi. Thank you for the opportunity. I hope I'm audible. I just have three initial questions, if I may. Very general questions with regards to North America. Could you provide a bit of split as to what has gone wrong there in terms of customer appetite? Is it more oil and gas angle to raise? Could you just provide a little bit more granularity there? Secondly, how is the production capacity going on there? I believe that you have previously indicated that by August or September, there would be production capacity up and running. If I'm correct, please correct me if I'm wrong, is there some advancement there? Finally, with regards to India, what is the visibility for 2026? Thank you.
Usama, good morning. Thank you very much for joining us. In North America, looking into the details here, it's not a particular end market where we see new customers being more hesitant and maybe delaying the decision-making to enter our new technologies. It is in oil and gas, but also in our surveillance CCTV business. At the end, you're right, we are now at our original expectation that we're also lying for the new business at a 30% growth rate. Still, just as a matter of fact, we are looking at double-digit growth here, 16% organic growth also for the first six months. It is disappointing not being at the targeted level. I think calibrating it at this point in time and shifting our production over there and offsetting and eliminating some of those hesitations and delaying factors is exactly the strategy and the plan.
With this, we are at the status in Salt Lake City. I was there two weeks ago. The preparation is up and full speed, we are ready. Q3 is the timeline where we want to complete it and be ready for commissioning. Production is Q4. We are on track there. At the end, if you recall with us here, it's basically also doing the same we did already in India, two and a half years back, overcoming perfectionist hurdles. Localizing off the supply chain afterwards is the second step, which we are performing in India as we speak. In the U.S., it's the next step. Looking at the visibility in India, having news as of yesterday, it's actually very, very recent.
It is also, at the same time, a very logical sequence here that we are told, and I think we have no reason to question this, that those programs are still in execution and it is a postponement to 2026. Definitely, we expect this to be within the 2020 then, and we will factor it in into our 2026 forecast and the budget there. I think that's maybe at this point in time, the baseline assumption without having been able to go into more detail since yesterday afternoon. It's a logical one. Those programs don't go away. It's about building a next set of systems for border security and also infantry battalions. It is, once the funding is cleared, then again a mechanical process.
Okay. Thank you. I will wait and assume for the next question. Thank you.
Thank you.
The next question comes from the line of Michael Kuhn with Deutsche Bank. Please go ahead.
Good morning, gentlemen. Thanks for taking my questions. I'd first start with, let's say, building blocks. Obviously, it's quite a bit tapped through your top-line forecast. Could you put, let's say, like rough price tags on it? What was India, what was North America, and what other factors made you move the top-line forecast down significantly?
Michael, good morning. Thanks for joining us. It is a big curtail right there, equal and significant. If you look at it, we're looking at, let's say, $4 million to $7 million, rather the upper end in India for the defense part. We are looking at, let's say, depending on the final currency development here until the year end, we are also looking at $4 million to $6 million here in the U.S. Overall, about $2.5 million on hydrogen. That's, let's say, overall where you have, let's say, the main elements. Others are, let's say, more, let's say, there's more granularity in this, like some, let's say, projects as in the usual process of doing the year-end forecast and the budgeting.
I think without this last impact here of a firm and clear decision given to us yesterday on India, I think we would have suggested the impacts here of the environment with a reasonable, let's say, lower-end guidance result. This was one element too or one bit too big to swallow. One bite too big to swallow, sorry.
All right. Understood. There's a $4 million to $6 million for the lower U.S. business, the second element.
Okay. This is really, let's say, where I said we had an expectation of higher organic growth rates with new customers. We are now at the run rate of 16. I think given the circumstances, still a significant organic one, but simply not the 35% we had planned for. I think we had a good momentum, let's say, in the later part of last year.
Understood. On ethics, you mentioned the moves in your functional currencies. Although, let's say, looking at last year's average rates, the moves are not, let's say, too dramatic. What was in your initial budget on ethics rates versus the U.S. dollar and the Canadian dollar? What are you budgeting with now? Is there a buffer built in now? Was there a buffer built in initially?
Right. Good morning, Michael. Hi. Quick call. In our initial budget, yes, we had not significantly, but slightly more favorable as increase with regards to U.S. dollar, INR, and Canadian dollar. We're talking about ASICs. It depends on which currency, but we're looking at, you know, 5%, 6%, and different, 2 or 3%, right? In that range, depending on what the currency is. For bridging, the second one, what yet will be now built in the buffer after three to four times with the end of the year, is, based on what we would consider a conservative, and a stage rate where we would not expect an appreciation of any of these three large currencies. That is really what we base it upon. Again, the having impact, obviously, on the top line, it has a little, a bigger impact, on the growth margin.
It's part of the fact that, you know, with huge growth in U.S. dollar and huge growth in Canadian dollar, but the time mark, until we're willing to go into the custom material in the long run because some of the stuff, obviously, we've been using, we've been forming a supply chain has been pushed six months ago, especially those very specific components, would require, of course, some of the near production, which are good in the U.S., which are good in the long, on long term. This is one. Obviously, it will be then looked at the exchange rate, and I mentioned it's mostly in the company. Receivables, and liabilities, you know, some of our requirements or subsidiaries with share on the loan, which are also in local currency, basically for, I mean, you can have those customers in our subsidiaries.
All of this, really catered, now has an impact. Again, two-thirds of that is unrealized, right? Yes, it's there. I think I hope that answers your question.
It does. It does. Thank you. Two more, maybe. On the ERP cost, are you, let's say, within budget there, or have you, let's say, incurred some cost overruns versus the initial budget here over recent months?
Basically, on a full year, we are in budget. Potentially, we have a slight cost overrun, but the cost overrun would not be significant. For instance, we really did off on individual measures, trying to get the implementation done on time. A lot of the costs that we planned would happen in the second half of the year have really accrued in the first half of the year, so that cost has been lower. It is a big project. It's a complex project, right? I would not exclude that there's a cost overrun, but at this point in time, we are not looking at a significant cost overrun on the current basis.
Thank you. On your diversity with guidance, at the low end, you're guiding for EUR 5 million, and you have actually generated EUR 4.6 million in the first half. At the low end, you're basically guiding for pretty much no profit in the second half. What would be, let's say, this very adverse scenario that would make you generate no adjusted EBIT in the second half?
We look at this yesterday. Sarah and Peter and myself always were discussing this, up and down. We really are looking at, you know, what would be the worst case. I think that what I know I have to at least discuss. What would that mean? That would mean, you know, that we would have a further deterioration in exchange rates. That would mean that we would obviously end up at the lower end of our top line. It would imply, certainly, that we would have a low or lower gross margin, which again could also be, is also based on the fact that we are selling to the U.S. in U.S. dollar, to Canada in Canadian dollar. Obviously, some of the portions, you know, we were even ahead. Let's assume that the exchange rates develop worse. Let's assume that additional customs will be added to the export.
Really, this would be the worst, worst case. I think these are the three variables that we're really looking at. Let's assume, as you know, the worst will not come to worst. Let's assume that the status quo would maintain as it is. Now then, you know, we would not expect to get the worst case.
All right, very key. Last question, promised, and I know it's a generosity one. Looking at the past three years and your earnings improvement, what would you say was underlying improvement and what was in hindsight more driven by favorable FX moves?
The last part of your question, acoustically, I did not get. What was underlying and what was?
What was favorable, currency moves? Because obviously, we had quite a strong dollar depreciation until the end of last year. That coincided with your earnings moving up. The kind of obvious question is, what was underlying earnings strength and what was actually favorable currency moves?
I think we can differentiate that pretty clearly. If you look at it, if you talk about the organic growth and the unit growth, including the price stability, and therefore, let's say, the gross margin development, I think we are able to show that the major price here is, let's say, an underlying growth line. At the same time, I think, yeah, and we show this also in our, let's say, extraordinary earnings. Daniel will go into this in a second. I think this was also very transparent to see that there was a point where we had, let's say, exchange rate change. At the end, the fact that we have a growing customer base with very stable pricing is, I think, the underlying driver here.
I think, you know, Michael, if you look at the shape of the 2023 and 2024 quarter, there was not a favorable development of that shape, at least not sustainably over 3,4,5 quarters. More or less, you know, those growths were, over four quarters, with the gains and the losses that we made, more or less stable. Ultimately, we even looked at it and managed those dips. What we really see is this beginning of 2025. If you look at the chart of, U.S. dollar chart with U.S. dollar to 10 dollar an hour, I think that a major amount of depreciation on those all three exchange rates, which we've never seen in all the INR and all the things. There were not these changes. They were not too lucky on that.
With the dollar here and there, and I think this is really something that, let's say, this is deep time. Obviously, and, you know, we discussed it before. Of course, we discussed it with our customers, exchange rate spots. If we had not stopped you from that, you know, the 2,3,4 months ago, but it's a shame we share the pain. I would not say that our profitability and the gains that we made is really based on exchange rate. I think the other two things, right, is it's a huge amount that we have for the ERP and the IT expense. We're talking about, you know, more than EUR 2 million that we spend in the first quarter. That really is our admin expenses, which we did not have until we say quarter that amount of April and showed in 2023.
In addition, that's something we'll report on that, in, in, you know, in a few, a half we reported. You know, the capitalization of R&D expenses, we have to reduce that significantly compared to developing on certain other parts like the MIRA where we cannot, obviously, not capitalize. In spite of the fact that our R&D expenses have not increased significantly, as far as our R&D spends, given the much, much lower capitalization rate, we would see that our R&D expenses in the P&L are year on year much higher, even though the spend the whole time has not changed. These are the number of impacts where you would say it does not impact our underlying profitability. Of course, if I'm missing 2%, 3%, 4%, 5% on the gross margin, that goes directly into the EBITDA margin.
If you look at the EBITDA margin for the first half of the year without justifying anything, we know it's not where it should be. We know it's not exactly not what we want to see. It is, you know, it is okay, right? Not super good, but it's really okay.
All right. Daniel, thanks for the detailed answer.
The next question comes from the line of Karsten von Blumenthal with First Berlin. Please go ahead.
Good morning, Peter. Good morning, Daniel. Am I audible?
Yes, absolutely. Good morning, Karsten.
Okay. My first question is, do you believe that 2025 is in a way an exceptional year and your business will normalize, or you will adapt to the new global situation of tariffs? Do you think that will weigh on your business for a longer time?
If I may start here, yes, I think we are, as we speak, adapting. Now, if you look into, let's say, what we have already done here in India, what we are now doing in the U.S., go local for local, actually, we are taking out this level of risk here. In addition, I think the second element to also look, and continue to look into, let's say, potential M&A also for accelerating market exit. That then helps us to, again, grow organically with our fuel cell business in those regions, like the U.S. as well as Southeast Asia. I think those are two logical measures here. At the same time, and I think that's also maybe still reflecting also on one of the questions here from Michael asked before and also fits to yours.
I think after also this growth phase here, going back and looking at the overall also cost structure, what Daniel mentioned before, going into, let's say, a review of all planned hirings and reassess this. At the same time, looking at, let's say, from G&A to their IT and cybersecurity expenses and calibrate this again to a point where I think, we think it's reasonable. I think it's a healthy and good exercise. We will go through this. That's why I think we are confident, after, let's say, recalibrating our targets here for this year. Nobody intends here to end at the lower end, but still, we have to make an assessment of what an absolute worst case is after, when you start such a revision. Still, confident to look at a growing and profitable company also at the end of this year and going into 2026 and forward.
All right. Thanks for that. One follow-up question from my side. As far as I remember, in the Q1 conference call, I asked you about the U.S. tariffs and currency fluctuation. You were, at that point in time, very optimistic that that would not hit you hard. What has happened in between that you always change your mind?
I would not say we have changed our minds. I think we have seen some learnings, as mentioned before, especially with new customers. I would really like to draw your attention to the fact that the existing business with existing customers is growing by, let's say, above 20%, some of them 30%. New business, we underestimated. I think that's definitely our mistake here. We are happy to also state this openly. The assessment on the new business and on the adoption speed for the new technology, we underestimated the impact here of uncertainties on the decision-making process with customers. I think we only can react to this by, again, being closer with our customers, being within the respective country to simply overcome this kind of risk here.
I think this is definitely the learning curve that at the end also really surfaced now more in the second quarter than in the first quarter.
Right. That's very helpful, thank you for that. Just one follow-up. Do you have the feeling that it is the general insecurity regarding the Trump administration's economic policy that keeps new customers from engaging with you? I mean, that's quite a difference between your existing business and no faith. I exaggerate, no new business. What are the reasons?
As you said, it's more a feeling. I think we have a diverse customer base here with, let's say, maybe different political judgments here. At the end, it's more a fact-based decision-making. When you have, let's say, an impact on pricing, when you have an impact on interest rates, take an investment decision for a new technology. First, it's an easier one to postpone because you don't have to move that month. You don't have to move that quarter. You already have an existing business. That's why it is, let's say, not a must to take a decision at a point where you feel the uncertainty is higher than normal. I think that is even not related now to, let's say, a Trump administration. It's just a factual assessment that if I have more uncertainty and insecurity, I postpone what is not absolutely necessary.
Yeah. Understood. Last question from my side. Do you believe that with your existing customers in Q3 and Q4, you will keep the strong growth you have shown in the first half?
Yes, absolutely. As mentioned, we just coincidentally got a significant order in office yesterday night or overnight here, which was not unexpected. We were there two weeks ago with key customers, so fine on this end.
Perfect. Thank you very much for taking my questions.
Thank you.
The next question is a follow-up question and comes from the line of Usama Tariq with ABN AMRO ODDO . Please go ahead.
Hi. Good morning, team. Just two follow-up questions, if I may. First one is with regards to tariffs. I'm just trying to get a better understanding. Could you quantify the impact of the last stated position of the U.S. administration on tariffs? Could you just indicate where it will impact, of course, the gross margin, but how much would it be impacted? You could provide any numbers going forward for this end of this year and the year after that. Secondly, a little bit unrelated, what was your guidance on CapEx for the year? Do you still, if I may ask, foresee a positive free cash flow for this year? Those would be two questions. Thank you so very much.
Let me start with the tariff part. We did this calculation. We also did, let's say, pull in shipments through, let's say, to Q1 as much as possible. There were very little shipments here in Q2. Now, as they're looking at the remaining time of the year, we did this calculation. We will see, let's say, an approximate impact here of locally produced products and price of 5- 10%, which we will have to, I'd say, or we are confident to split with our customers. At the end of the day, overall pricing structure will be, let's say, impacted within this range at the end customer level. If we look into the gross margins, so on an initial level, 2- 3 percentage points here on the gross margin. With, let's say, localization, we are pretty confident to overcome this.
We factored this in now in our year-end projections that are contained in the new guidance. That was also an element we factored in.
With regards to Shepherd's as well, we didn't give a guidance out, with regards to CapEx. You know, we were looking at CapEx slightly north of EUR 10 million. We are, with regards to CapEx, still CapEx pretty much in line with what we have projected. Most likely, we're even a little bit better from what we have projected here. With regards to customers at the end of the year, I think it's something we aim at having a positive cash flow at the end of the year. However, the key really, the key variable is and remains working capital. It's not CapEx that is feeding into my characterization. It's really how working capital is developed. The main problem of working capital is specifically accounts receivable. I think towards the end of the year we find. Yeah.
All right. Thank you very much. Thank you so very much.
Thank you.
Ladies and gentlemen, that was the last question. I would now like to turn the conference back over to Mr. Podesser for any closing remarks. Thank you.
Thank you very much for coming in and sharing the time with us here. Also, with the, I'd say, challenging and difficult messages from our side. As said, you see us in, I think, a mode of clear analysis and, I'd say, with also a clear look ahead. As always, let's say, Daniel Saxena, myself, we are at your disposal also for the bilateral discussions as a follow-up. Thank you very much for your time and have a good day. Thank you.
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