The conference is now being recorded. Welcome to the conference call regarding the publication of Gerresheimer AG's Q3 2022 results. At the moment, all participants have been placed on a listen-only mode. The floor will be open for questions following the presentation. Now I hand over to Ms. Carolin Nadilo, Head of Investor Relations at Gerresheimer AG. Please go ahead.
Hi, everybody. Good morning from our side. Nice to have you with us on this call today as we release our Q3 numbers. With me today, as usual, are here in Düsseldorf, our CEO, Dietmar Siemssen, as well as our CFO, Dr. Bernd Metzner, where we are presenting a set of slides accompanying the management notes, followed by the Q&A session. Please note this call is being webcast live and will be found on our website too. Before we start, I have to remind you that the presentations and discussions that may be subject to the disclaimer. We will not read the disclaimer but propose taking it as read into the record for the purpose of this call. Now it's my pleasure to turn the call over to Dietmar. Please go ahead.
Yeah. Thank you, Carolin, and welcome, everybody. Thank you for joining us today. Yeah, Bernd, our CFO, and I will now run you through the highlights of our strong third quarter as ever. We'll then be happy to take your questions. Now we are on track with our third quarter 2022 results. We provided further evidence of the strong ongoing momentum in our business. We are navigating Gerresheimer solidly and strongly through a wide spectrum of challenges, and at the same time keeping firmly focused on our growth opportunities. In spite of the Russian war of aggression, rising inflation, energy discussions, supply chain issues, and other challenges on the global market, we are sailing our ship with stability through the storm.
Not only are we managing the ongoing challenges, but we are also decisively implementing our Formula G strategy process and transforming Gerresheimer into a strong, sustainable, profitable growth machine. We will show you in today's call the details of our progress in the third quarter of 2022. We have clearly started to harvest the fruits of the transformation process initiated by Formula G. This transformation process is built on various pillars. Our growth is broad-based and sustainable, and all areas of our business are in growth mode. 2021 was already a successful year for us, and now after three quarters of strong profitable growth, we're proud to be on track for another record year in 2022. The last quarter was another double-digit quarter.
In more detail, we delivered organic revenue growth of 17.4%, building on our strong performance in the first six months. The organic growth in adjusted EBITDA came in at 13.3% despite the significant impact on input costs following the challenging geopolitical situation. This was supported by a continued strong customer demand and the ongoing success of our High Value Solutions, which grew more than 20%. We continue on our profitable growth path and are managing the challenges of the geopolitical and inflationary environment successfully. We are firmly on track to deliver on our guidance for the current year. Order intake remains strong, and we are committed to our midterm and also long-term targets. Let's now turn to market dynamics and the external environment, as these are a source of concern for many of you.
We have proven that we are well-positioned to keep a firm grip on the steering wheel even in these challenging times. Geopolitical tensions have risen significantly this year, and there are unfortunately no signs that they will abate anytime soon. Well prepared, we are facing these challenges to remain on course and invest in further growth opportunities. As an international company with a global footprint of 36 plants in 15 countries, we're well diversified and positioned for such a dynamic market environment. Over the past decades, our business has proven its resilience, particularly in the health care and pharma. In the last couple of years through the pandemic and in the current environment, this asset becomes more and more visible than ever before. I would like to highlight five points to show you that we are well-positioned for these challenging times.
We have a long-term and diversified energy supply agreements as well as price-fixing contracts in place with both investment banks and also a leading European utilities company. They protect us well against energy price volatility. We entered these energy agreements at levels significantly below today's pricing, and this offers us a unique competitive advantage. We have proven in the past quarter that our strong market positions allows us to pass on cost increases to customers, even at short notice. The German government is taking decisive actions to stabilize the German energy market for businesses and consumers by setting up a protective shield, also by nationalizing utilities and the decision to implement a gas price brake. Our products and services are an essential part of the healthcare delivery system in clinics, doctor's offices, and vaccination centers, therefore, an important part of the critical infrastructure.
Our medical systems and pharmaceutical packaging solutions ensure the availability of medicines and vaccines. As such, we are confident in being granted priority access to gas supplies in the unlikely event of restrictions. Last point, at the same time, we are continuously improving the energy mix at our facilities as part of our sustainability strategy. We will continue to actively monitor the evolving situation, and we'll respond appropriately to guide Gerresheimer safely and effectively through these challenges. We do not allow the current situation to distract us from our goals and our growth course. We are delivering. We are rolling out our Formula G strategy process continuously. There are four main drivers of our success this financial year. The focus on High Value Solutions, capacity increases, and regional expansions, as well as contract manufacturing and the beauty-goes-health trend.
I'd like now to illustrate these drivers with two strategic projects from the tubular glass business. Our recently announced investment in the United States is a splendid example for both our global capacity expansion and our focus on High Value Solutions. Moreover, this growth project speaks volumes about our standing in the market as a critical supplier for the global health industry. Through an investment of up to $94 million, we will rapidly expand our manufacturing, supply, and logistics capabilities for glass vials in the United States. U.S. government is supporting this project with up to $66 million via its Biomedical Advanced Research and Development Authority, called BARDA. The vials we will produce in our facility in Morganton, North Carolina, and can be used in vaccination campaigns against infectious diseases such as, for example, COVID-19 or others.
We are very honored to support the U.S. government in strengthening its pharmaceutical supply chain for public health emergencies. The agreement confirms our role as a supplier of system-critical products, such as pharmaceutical primary packaging solutions and drug delivery systems for the healthcare sector. With this new state-of-the-art forming lines in Morganton, we are ready to serve the rising customer demand for glass vials, Elite glass, as well as ready-to-fill vials out of North Carolina in the future. This investment will serve our growth strategy beyond the initial purpose of producing glass vials for the U.S. market, and will further strengthen our leading market position. Second key contribution of our growth strategy is a new powerful ready-to-fill solution platform. We recently announced our collaboration with Stevanato Group to transform the global vial market.
Market leaders with a combined market share of above 50%, we aim to develop a new high-end ready-to-fill solution platform. Our common goal is to establish a new industry standard for secondary packaging and processes. Customers will benefit from a number of advantages, especially a reduction of their total cost of ownership, which leads to market and price advantages on all sides. The new ready-to-fill process can be easily integrated into existing fill and finish lines. Due to usage of green energy and reusable materials, it also improves the sustainability. Moreover, it improves quality by minimizing the risk of expensive production downtimes, and it helps to avoid vial breakage, lowering the so-called scrap rate. A significant improvement for quality is the game-changing reduction of particle contamination, and the solution offers an alternative to the classic EtO sterilization.
In other words, customers can produce even better quality at lower costs and can focus on their core competency, the development of important drugs. Today, less than 3%-5% of the vials and cartridge market are already transformed to ready-to-fill. Our market analysis shows significantly rising demand and indicates that ready-to-fill vials will increasingly replace bulk vials in the future. We already saw such a transition with syringes, and today more than 95% of our syringes or the worldwide syringes are ready-to-fill. We will further accelerate this transformation from bulk to RTF by also licensing our offering to third parties. This will therefore be another accelerator for Gerresheimer's transformation into an innovation leader, solution provider, and system integrator. With these insights on our global capacity expansion strategy, I will hand over to Bernd for the financial details of our third quarter. Thank you for the moment.
Thank you, Dietmar, and welcome everybody also from my side. Let's dive into the analysis of the key financials for the third quarter, 2022. The third quarter, 2022 has developed as expected, despite a challenging economic and geopolitical environment. We showed another solid quarter with double-digit organic revenue growth and earnings growth. Reported revenues increased from EUR 382 million in Q3 2021 by 23.8% to EUR 473 million in Q3 2022. We had an FX tailwind of around EUR 24 million, mainly coming from a stronger U.S. dollar. The organic revenue increase amounted to 17.4%. As already in last quarter, this organic revenue growth rate includes tailwinds from pass-through effects as well as sustainable price increases. More on this in a minute.
Worth mentioning, Q3 again proves how our strong pricing power is the basis for sustainable, profitable growth. The reported adjusted EBITDA increased from EUR 75 million by EUR 16 million to EUR 91 million in Q3 2022. FX support was around EUR 6 million, resulting in an organic adjusted EBITDA growth rate of 13.3%. This was another solid performance as we continue to absorb the headwinds of higher energy costs and other inflationary headwinds. Worth repeating, we are well hedged against the significant increase in energy prices. This is valid for both gas and electricity, and provides us with a good competitive cost position. We have a long-term comprehensive hedge in place with leading investment banks, as well as a price fix with a larger utility supplier.
With this, we are not only well protected as long-term hedges are locked in early, but this also gives us a competitive advantage. In addition, recent well-considered German government actions like the Uniper nationalization and the abolition of the gas levy are clearly supportive. Let's continue now with the figures. The adjusted EPS increased from EUR 0.927 by 18.6% to EUR 1.15. Stripping out the FX tailwinds, organic adjusted EPS growth amounted to 10.1%. Before we come to the divisional performance, I would like to zoom into the pricing effects that supported our revenue development. In Q3 2022, our organic revenue growth rate for the group was 17.4%. The strong revenue growth can be divided into volume and price effects.
For the price component, we can separate two effects, the tailwind from contractual pass-through effects, mainly related to higher resin prices, and the effects from the re-negotiated sustainable price increases that we implement as a result of higher input costs. The tailwind from pass-through price increases amounted to around 1 percentage points in Q3. These effects are rather volatile and hard to predict, but adjusted for these effects, our revenue growth would have amounted to around 16%. Looking at the price-volume mix in the underlying revenue, we see that around 9%, the growth comes basically from volume, the remainder from price effects. Let's zoom into the organic adjusted EBITDA margin for Q3 2022 of 19% and look through the inflation top-line effect at the same time. As you know, we basically pass on the inflation to the customer without additional margin.
In other words, what does it mean for our Q3 margin? Our margin is technically inflation-induced distorted. If you would take out the inflationary-induced price effect, our margin would look clearly better even than previous year. Let's have a closer look into the divisions. Plastics & Devices. Reported revenues in Q3 2022 grew from EUR 208 million by 17.5% to EUR 244 million. We had an FX benefit of around EUR 10 million. The organic revenue increase was therefore 11.3%. This includes support from contractual pass-through of higher resin prices of around EUR 6 million. In Q3, we had a strong contribution from our plastic business as well as in the area of contract manufacturing. Two items to be highlighted.
First, our primary plastic packaging business, including Centor, achieved strong underlying volume growth in the third quarter, which was again also supported by a pricing tailwind from passing through higher resin prices. Second, our medical systems operations, including syringes, showed an outstanding performance in Q3 with a double-digit growth rate. The sustained high revenue momentum clearly reflects our strong execution on the back of a record order book level. The adjusted EBITDA increased from EUR 51 million in Q3 2021 by 16.1% to EUR 59 million in Q3 2022. We had an FX benefit of EUR 3 million, resulting in strong organic growth of 9.3%. Now, let's turn to primary packaging glass. The primary packaging glass division showed another impressive quarter.
Reported revenues increased significantly from EUR 174 million by 31.2% to EUR 229 million. FX support was EUR 12 million, translating into an organic revenue growth rate of 24.5%. Both business units, Moulded and Tubular Glass, showed double-digit revenue growth rates. The strong growth in Tubular Glass business was once again fueled by the high demand in High Value Solutions, especially RTF vials and ampoules. On an as-reported basis, the adjusted EBITDA increased from EUR 35 million in Q3 2021 by 25.6% to EUR 44 million in Q3 2022. Excluding an FX tailwind of a mid-single-digit million EUR amount, we achieved an organic growth rate of 18.9%. Our sustainable price increases are taking hold on the back of a very competitive cost position, supported by our bench. Advanced Technologies.
Advanced Technologies is running on plan. Reported revenues stand at EUR 4 million in Q3 2022. Adjusted EBITDA was EUR -4 million, essentially unchanged versus Q3 2021. Also in Q3, we had a high focus on R&D in this segment. For the full year 2022, we expect a slight increase in revenues and a negative adjusted EBITDA in the magnitude of approximately EUR 10 million. As a reminder, at Advanced Technologies, we continue to strive to establish Gerresheimer as an innovative original equipment manufacturer for smart and connected devices in the healthcare industry. In August, we announced a strategic partnership for electronically controlled MedTech systems with Zollner. Together, we are pooling our market-leading pharmaceutical and medical technology expertise and will offer pharmaceutical, healthcare, and biotech companies our conceptual design, development, and manufacturing capacities for drug delivery and medical technology systems, including complete electronics.
This is a further proof point that Advanced Technology is becoming increasingly relevant and will clearly contribute to our growth and margin acceleration. Let's turn to the cash flow. The second half of the year is regularly our harvest time as far as our free cash flow is concerned, also this year. As planned, our Q3 showed a solid free cash flow development. We achieved a cash inflow from operating activities of EUR 77 million, and this was despite an increase in working capital. This net working capital increase relates particularly to our strong revenue growth and to the build-up of safety stock. Net CapEx increased by EUR 11 million to EUR 60 million as we had a furnace overhaul in Tettau during the third quarter 2022, and as we continue to invest in global injectable capacities and further ramp up contract manufacturing projects.
Overall, as planned, we generated a free cash flow of EUR 17 million in Q3 2022. Looking at Q4 2022, we plan with a very strong free cash flow performance, which despite meaningful investments into profitable growth, should be at least at the level of last year of around EUR 60 million, if not even better. Apart from this, as you know, due to phasing effects and cut-offs between the quarters, it is very difficult to predict the free cash flow in an isolated quarter to the last penny. With this, I hand back to Dietmar. Dietmar?
Yeah. Thank you, Bernd. It's on me to do. To summarize the whole thing, yeah, the first nine months of the current fiscal year were strong, and we are now entering the final quarter of the financial year with an excellent momentum. We've been navigating the challenges of the current environment successfully and are structurally well-positioned. The order intake is on record level, and we are now harvesting the benefits of the investments already made and are continuing to invest in our future growth. We are therefore confident in delivering on our guidance for the current year. We are also optimistic about our prospects over the medium and long term.
Looking at our progress after nine successful months, we expect a strong final quarter leading to another record year, with revenue growth of at least 10% and adjusted EBITDA and adjusted EPS growth growing at high single-digit rates. In other words, we confirm our 2022 guidance as well as our midterm objectives. Since our last Capital Markets Day at the end of 2020, we have successfully reached key milestones to transform Gerresheimer into a sustainable and profitable growing company. As you have seen through, there are a lot of activity in our business that will drive the subsequent chapters of our transformation and contribute to delivering our goals and missions.
As I mentioned in our last earnings call, we'll be hosting another Capital Markets Day this year to give you a strategy update and also elaborate on the growth opportunities we see, and the investment programs we put behind. The save the date invitations for December 6th will follow shortly. We hope you can join us then. I'm now happy to take your questions. Thank you so far.
Dear all, the lines are now open for your questions. Anyone who wishes to ask a question may press star followed by one on their touchtone telephone. If you wish to remove yourself from the queue, please press star followed by two. The first question comes from Oliver Reinberg from Kepler. Good morning, Oliver.
Oh, yeah, good morning. I have three questions from my side, if I may. The first one would be on visibility of top line growth going forward. It's obviously encouraging to see that volume growth is now accelerating to high single-digit rates. I saw on results statement that you expect high single-digit growth for next year. Can you just talk about how good is your visibility for next year and this kind of guidance for high single-digit growth for 2023? Does this include inflation or do you expect that also on volume terms? The second question related to that, can you just provide some kind of color specifically on cosmetics, in the wake of the macroeconomic uncertainty, what kind of demand patterns do you see, and probably also comment on stocking levels?
Secondly, on vials, obviously we see that the demand for COVID vials is fading while the industry is ramping up more capacity. Any kind of color in terms of the supply-demand situation for vials will be helpful. Then the third and last question, please, on energy. We obviously have the proposals of the Gas Commission on Monday. Assuming this will be implemented, can you just talk about would you be part of this kind of group of corporates that would get 70% of gas supply at preferred terms? If so, is it actually any kind of benefit or not, given the hedging in place, I guess it depends a bit on the kind of hedge mix between the Uniper and investment banks. Any color here would be appreciated. Thanks very much.
Yeah, thank you for the questions around that. I'll take the first three, and then Bernd can take the gas topic. Yeah, the visibility of the top line growth is actually pretty strong. We had, I think as we indicated several times, very strong order impacts over the group of the last two years, especially also in the areas of contract manufacturing and the areas of the high-value products. That's why visibility is strong, and we are pretty confident that strong growth remains. The guidance that we send out is of course not including extra price increases, price adjustments as it was in this year. So the high value, the high single digit that we actually guided mid-term is absolutely on track, and I don't see the reasons why we wouldn't definitely confirm this.
Yeah, cosmetic, actually cosmetic is doing very well. It's returned strongly. It's not only the recovering of the market itself, but it's also the benefits of our sustainability strategy that pays off. We have good orders here also in cosmetic, which is actually doing very well. The third question was concerning the vials, the COVID. Actually, as we indicated several times, it's a bit difficult for us to oversee whether it's a COVID or whether the vial is used for COVID vaccines or for any other applications. Order intakes remain strong. What also happens is actually that, as we always was hoping for, that more and more of the now free capacities for COVID vials can be replaced by high-value products.
One of the things we see in the very strong contribution of high-value products is, of course, attracting this trend that we have more and more Elite RTF vials and so on these lines that are now contributing to our profitable growth story. Hope this answers these questions. I hand over to Bernd for the gas support or potential gas support.
Thank you. Thank you, Oliver, for your question regarding the gas price break. In terms of the technical implementation of the gas price break, many questions, as you know, are still open. Current working assumption is that it covers only 70% of the gas consumption at EUR 0.07 per kilowatt hour. Considering these two ballpark figures only, we will continue to profit from our fixings. That's for sure. We also don't see that it affects our bank hedging, and that's our perspective on it. Further information by the Gas Commission and the federal government is expected in the next weeks. For sure we will monitor this closely. Whatever it is, it's not bad for us and can only improve our situation. Okay, thanks so much. I'll be back in with you.
All right. The next question comes from David Adlington from JP Morgan. Hi, David.
Really glad to follow you. I've got a very good line, I think. Maybe you could just remind us of personally what percentage of your sales comes from cosmetics and beverages. I think you said that demand remains robust. I was wondering what your thoughts were in terms of particular outlook for both of those, areas. Secondly, just on cash flow.
Sorry, David. Sorry to interrupt you. We can hardly hear you. Can you please repeat and speak up a little bit?
Just on cosmetics and beverages, could you remind us what percentage of your sales that those represent? I think you said that the demand outlook was still strong. Just wondered if you had any sort of thoughts in terms of how those might develop into a recessionary environment next year. Then secondly, on cash flow, down minus 46 year to date, looking like a strong-ish Q4, but still only probably in the mid-teens positive for the full year. Do you think we will see an inflection point in cash flow as we go into next year or maybe a bit later? Related to that, the investment in the RTF vials will that have a significant impact on that cash flow, particularly CapEx, obviously?
Just to start with cosmetic accounts for 15%-20% of our revenues, in ballpark. As mentioned before by Dietmar, if I look at our order books and what have you, we have not seen any signs of reduction here, at least pretty strong, yeah. Therefore there's nothing to, we have nothing in our order books. Opposite, we have full order books, and we are sold out here. No effects there. Regarding the free cash flow, as you know, we have the strongest quarter comes now in Q4 as far as our free cash flow is concerned. As I said before, we expect to be at least at the level of previous year.
This was up to EUR 60 million, and we expect to be even better there. It's always difficult to really pinpoint this down by EUR 10 million, EUR 20 million or something like that. We are very well on the way, looking also at our cash intake in September now and our forecast for October, so we are very well on the way. Regarding the investment into the fuel cells you just mentioned, obviously this has an impact on our cash flow. The biggest chunk of it is already invested in the last couple of quarters. If you look at Morganton, this is still coming in the next 12 months.
As you know, we get subsidies by the government by around EUR 60-70 million, something like this, and we are investing EUR 80-90 million there. There might be a certain timing phasing effect when we make the CapEx cash out and getting the funding, but this is not something what really keeps us up at night. I hope it answers your questions, David.
That does. Then just one follow-up. I mean, given your performance year to date, just wondered why you weren't increasing the guidance for the full year.
Yeah. In the end of the day, we are always careful in as far as our guidance statements are concerned. We always want to overachieve and that's the way how we are guiding to be on the safe side.
Yeah, thank you.
All right, the next question comes from Falko Friedrichs from Deutsche Bank. Hi, Falko.
Hi, thank you. Good morning. My first question is how do you plan to go about refinancing your debt in 2023 and 2024 in light of these rising interest rates? Secondly, can you quantify how much CapEx you have already spent on this project with BARDA in the U.S. instead of trying to get a feeling for where free cash flow could have been in the quarter? When precisely do you expect to start being reimbursed for these upfront investments? Thirdly, can you provide some kind of outlook for depreciation and amortization charges going forward? Thank you.
Just to start with the refinancing thing, next year, end of next year, we need to refinance our debenture note of around EUR 160 million. Very well advanced. We launched on last Friday our new promissory note in light of this and by the magnitude of EUR 150 million, and we can provide you an update here in four to six weeks from now. Also important question is obviously what does it mean the increase of the interest-rate environment, let's say, how does it affect us? Practically, we have one-third of our total gross loans. Only one-third is based on variables. The rest, so two-thirds is really based on fixed interest rates.
If we increase now by, let's say, a hundred basis points, the inflation or the interest overall, then it would hurt us by around EUR 4 million - EUR 5 million. That's basically the situation where we are heading in. In particular, if you look now at the new promissory note, this would mean that-
In this particular case, we see that we have around 200 pips, 250 pips higher as based on this of EUR 50 million higher interest rate, and this accounts then for EUR 4 million, something like this additional interest cost as far as this promissory note, for example, is concerned. Tackling now your next question regarding Morganton. In the end, we have maybe around EUR 10 million, maybe we have so far we have not really material investments or further in the cash flow in Q3. However, you will see the gross amount of government grants in the balance sheet, most likely in both assets and liabilities.
Overall, let's say, we expected in Q4 maybe a double-digit EUR amount, EUR 10 million, EUR 15 million, where we are investing, and we expect then there's a delay of 1-2 months to get then the money from the agencies. Regarding the depreciation, your last comment, it's a little bit too early now because we are just planning for the next year. We are just planning our thorough assessment of our depreciation. I would assume that we will see an increase in our depreciation by around 10-15%. Let's see. We give a clear indication in December this year when we discuss in our Capital Markets Day.
Okay. Thank you.
Thanks.
All right. The next question. There is a follow-up question from Oliver Reinberg from Kepler . Oliver, please go ahead.
Oh, yeah, that's very kind. Probably three additional questions I made. Firstly, on molded glass, I mean, obviously the situation continues to evolve with certain price increases. I just wonder, can you just provide some kind of feedback what clients are signaling you? Is there any kind of signs that there's an interest that sourcing moves from Europe to the U.S., I guess, to shorten the issue with kind of capacity? Is it the kind of discussion point you're having with clients? Also give any kind of color how significant would be the burden from transportation costs if clients would try to source in the U.S. compared to the product price. I'm not sure if you can share any color on that.
Secondly, pricing, given the inflation environment, do you also plan for further price increases next year? Any color here would be helpful. Last question, please. You have this 23%-25% margin target midterm out there. Bernd, you just mentioned, obviously, talked about the inflation effects on the margin in Q3. I guess, midterm, when you set this kind of target and, inflation since then has picked up quite significantly, and just as we would have done, we assume 50%.
It was fine. Okay. I'm back. No.
Oliver, we lost you.
This question so far, so no problem with this. No? Okay. Wanna repeat the questions?
No, I can hear someone now.
All right. I'm the only one they talk to. That's great. It's just a joke. Reinder, can you hear me?
Yes. Yeah, I can hear you well.
Oh, perfect. I can start to answer the questions. There are some of our team is obviously out. I start with molded, yeah? You have to see the following situation. Also, in molded, the vast majority of the business is in a regulated market. You don't change back and forth in between competition in a regulated market. We are very protected. If you go ahead and then you look, there are, of course, certain businesses that you could change, but there is hardly any worldwide capacity available. Shipping bulky products that are not so expensive with a lot of air in the middle is actually very expensive. The likelihood that there is back-and-forth transport inflation in between U.S. and Europe is pretty low, so. We don't see this at the moment. It's very stable.
As we indicated before, not only the business of pharma is doing well, but also here food & beverage and cosmetics is doing pretty well at the moment in molded. The next question was here, I cannot write. Are price increases next year?
Yeah.
The price increases next year will only take place if we have clear cost increases. If there are some additional cost increases, we would try to push them forward to the customers, which we did this year as well, and I think we have a good position here. We have not planned them in detail at the moment, so the guidance is actually without any price increases. The guidance towards 2023-2025, there's no doubt about this. The pass-through of the cost at the moment to prices, of course, has a deflation effect on the margin.
Nevertheless, with the very strong success we see at the moment with high-value products on the one side, but also very strong order intake in pretty profitable business, especially, for example, in contract manufacturing, we still stick to this guidance because we see the business clearly developing in this direction. Now, I hope that is not only Reinder that heard us, but also others. I have no confirmation anymore, but I hope this answers your question.
From my side, let's say I have some very correction. Thanks so much.
If anyone has any further questions they would like to ask, please press star followed by one on your touch tone telephone.
I will hear the questions if there would be more questions. If there are no further questions, I'll do a one-hour presentation on the quality ISO/TS 16949, which is very boring.
At this time, there are no further questions.
Thank you. I'm sorry for the technical hiccups. I'm very sorry. If there are any further questions following the call, please reach out to Investor Relations. Very happy to take a question. Take care. All the best. Talk to you soon. Goodbye.
Ladies and gentlemen, the conference is now concluded, and you may disconnect your telephone. Thank you for joining, and have a pleasant day.
Thank you. Bye-bye. Bye.