Hello, ladies and gentlemen, and welcom e to the HELLA conference call for the results of the first half of 2023. This call will be hosted by the CEO, Michel Favre, and the CFO, Bernard Schäferbarthold. At this time, all participants have been placed on a listen-only mode. The floor will be open for questions following the presentation. Let me now turn the floor over to your host, Michel Favre. Please go ahead.
Thank you very much. Good morning to everybody. Thank you for your attendance. I am with Bernard, and we'll be very happy to answer your questions afterwards. Starting with slide 3, it is only to remind you that we have changed of fiscal calendar year. That means that now we are fully calendar. Of course, for the comparison, we have, I will say, the six months pro forma last year. Going now to slide five. I hope that on internet, we can go to slide five. It is, I will say, the main, I will say, the performance for the group.
Firstly, we had very good sales, slightly I said that already, yeah, slightly below budget, but anyway, very good growth, plus 19.2% organic, group reported with the Forex plus 17%. A strong outperformance, 610 basis points. We'll detail it afterwards. We have a very good order intake. We continue to be close to EUR 1 billion per month. All, I will say our activities are growing, as order intake, as sales, you will see that afterwards. On the operating margin, EUR 245 million, up 76% respect to last year, plus 200 basis points respect to last year.
I think, I don't want to be arrogant, but I think that with the team, and I would like to thank the team, all the team, we have made the job. Net cash flow, if we, I deflate from the factoring, it is a low net cash flow positive, but it is positive in a not easy year, and we confirm, you will see that we can achieve a 2% net cash flow. Going to slide six. Slide six, what we can say is that we are on the order intake, fully in line with our targets. You can see that Lighting was very successful, to get some very large order intakes, with some, of course, some EVs, because as you know, we are very much exposed to EVs.
We are very successful for SSL | HD, for the new family of rear lamps, for the digital front. Electronics, we continue to be a strategic partner for the battery management, for the radars, and as well for a more traditional activity, which is a Smart Car Access. Even Lifecycle Solutions , very good, I will say, order intake, including Electronics. We are developing, as you know, it is a 80% activity in Lighting, and we are accelerating the development of Electronics. Now, going to page seven, some highlights. Firstly, we have accelerated on the cooperation with FORVIA, with one goal, we want to communalize the key, I will say, back office departments, and here we speak of IT, indirect purchasing, but not only, like audit.
Second, we want, of course, to achieve the very big synergies that we have planned. We have, of course, this back office cooperation. We have as well, we are cooperating as well on all what is safety. We will not make twice the work for cyber security, for instance. Last but not least, we have some good initiatives, joint initiative, for, I will say, all the booth, all the technology, I will say communication. For the figures, more than EUR 300 million of cost synergies, EUR 400 million of revenue synergy. This is for all the FORVIA Group, but what is clear is that our target official is 50%. Sorry to say that I will be arrogant.
We are making more than 50%, and I am convinced that we continue to make more than 50% because our team in HELLA is focused, and again, very performing. We continue to focus on profitability and cash flow, investing in the future, and investing in the future, that means we have the famous master plan in Lippstadt. We have started all the projects for the new SAP S/4 . So we continue to invest in the future. We continue to have a big order intake, but of course, a big focus to improve the margins, and you know that the rally is to go to 8% in 2025 and to start the rally of the cash. We were not very cash generative in the recent past.
This year, 2% and more than 4% in 2025. Seeing that now, I give the floor to Bernard.
Thank you, Michel. Also from my side, good morning to all of you. I would continue in our presentation on page 9. As mentioned, a very solid organic sales growth, 19.2% in comparison to LVP growth of 11.2%. The currency effect is negative in the first six months, specifically on US dollar and the Chinese renminbi, so overall EUR 65 million. With that, we have a record sales level on H1 of around EUR 4 billion, with 3 segments which were performing at double digit and still a very robust demand on all our products. If we look specifically on the segments, Electronics is growing organically at 14.7% in comparison to LVP growth of 11.2%.
We are posting a result of 6.5 percentage points of operating income margin. Still we see in terms of sales, that we are impacted by material shortages. It's not as severe as 1.5 years ago, but still, we are trying to manage it best way possible. Demand continues to be volatile, despite a continuous high demand on our products, especially on automated driving and energy management. In terms of our results, we are able to increase overall the compensation for inflation by our customers. Overall, in the first six months, at HELLA, we are at around 85% for the first half of the year.
In terms of R&D, we are impacted by an overspending in within our Electronics in the first six months. Proportionally, it is roughly two percentage points of operating income margin, only on overspending in the first six months, which was quite a big burden. As we said, it should now, in the second half, continuously slow down this overspending, so that we come back to a more normalized level in the upcoming quarters. If we look at Lighting, quite a strong sales development, 25.6% of growth. We had a very strong demand on some of our large products, also specifically on electrified cars, and this supported the growth globally, but also specifically in China for our Lighting business overall.
We improved in terms of operational efficiency and also our R&D efficiency. Overall, quite a good development and the first good step into the direction of our much more profitable Lighting business in the midterm, what we also communicated within our capital market day. If you would look then also at full consolidated numbers at FORVIA, this result is even better, considering the purchase price allocation, the opening balance sheet. We are around 1.5 percentage points even better in consolidated FORVIA numbers within Lighting. Lifecycle Solutions again with a very decent result. Quite a strong organic growth despite a stronger currency effect also coming out of Turkey, where the inflation is extremely high.
We had a very strong demand in all segments of our life cycle business, the independent aftermarket was developing quite decently, specifically in many of our sales companies here. We are mentioning Mexico, Poland, Brazil as examples, globally, a very good demand on our products. Nicely also, within our special application business, we continue to have a good development here on agriculture, on our customer segment, agriculture, also construction and truck and bus with quite decent growth rates. Within our workshop products, we had also in the first six months quite a good development in terms of sales, also with our new product Particle Counter, which is in Germany necessary because of the regulation.
Overall, 13.5% of operating income margin, even an increase in comparison to last year with higher volumes, and here also the path through of inflation and the continuous SG&A cautiousness. Continuing on page 13, the development within the regions, quite a decent growth globally in all 3 regions. Overall, an outperformance in comparison to group sales of around 6% with an over performance to LVP growth in Europe and Asia, and NSA being impacted by a negative currency development. It should also improve going forward.
If we look at full P&L on page 14, what is very promising is that we are again, at a gross profit ratio of around 25%, which is a very solid number, and a number we only had also before the crisis. On one hand side, the growth, our efforts we have done in passing through the inflation, but also continues improvements on operational efficiency, supported that strong development. R&D is up because of our overspending in Electronics. This we should get better under control in the upcoming quarters and get to the reduction we are targeting.
SG&A, overall in absolute terms, an increase in relative terms, a slight reduction overall of 10 basis points. With that we are posting EUR 245 million, an improvement in operating income margin of 200 basis points to 6.1%. Coming to the cash flow on page 15. A strong Q2 . We have EUR 89 million of net cash flow. There is an increase in factoring. That number of EUR 60 million included with a new program we have initiated in Mexico. Despite that, we turned the very negative number in Q1, which we explained to a good positive development, despite quite a significant organic growth. The working capital overall is slightly negative, still inventories are too high.
First improvements were realized now in the last month. Additionally, Capex was down, so we are actively managing Capex numbers best possible. This supported also the solid development on net cash flow in the first half. Having said that, I hand back to Michel, with the outlook and happy to take your questions later.
Thank you, Bernard. Slide 17, huh? We have tried to give a highlight on the volumes, huh. Now, what is important to notice this year is that EV, mainly in Europe and China, is evolving at a quick pace, and this drastically change the customer mix. In China it is quite visible because the Chinese OEMs were, I would say 18 months ago, at something like 40% market share, and now they are overtaking 50% market share. Of course, the international car makers are losing. Of course, the champion of the EV are the winners in both market. In U.S., as you have seen, probably, the American players all together, even with Tesla, because Tesla is a big winner, huh? Are only maintaining now market share of 50%.
We have a strong geographic mix, because Japan, for instance, has not the same trend as China, and we have, of course, a strong change of customer mix. Saying that, with the figures of S&P, we have, as a FORVIA Group, restated our guidance to something like 86.7 million cars. Before it was 85. With this basis, we only, sorry to use this word, only confirm our guidance, because as I said, we are below budget. This new mix is less favorable than the mix we have in our assumption. Today, in our forecast, we are just, I would say, in the middle of the range. Of course, first half will help a lot to achieve the full year.
We have more safety and more confidence, and you have understood that in our work, we have done. We can only today confirm that we will be in a range of EUR 8 billion-EUR 8.5 billion of sales, 5.5%-7% margin, and a net cash flow of 2%. Of course, with Bernard, we try to be more in the top than in the middle of the range. Page 20. The key takeaways, huh? I think we are in line with the sales slightly below budget, I insist again, huh? We are totally in line on the performance, that means profitability and cash. What is very good, is the fact that our 3 business group are progressing, huh?
What is good as well, it is our strong co-contribution to FORVIA Group. As Bernard was explaining, we have a 6.2% margin. Our contribution to FORVIA will be more close to 7% margin. Second thing, we can confirm the outlook, which is normal, huh? It is our duty. Anyway, we are, I will say, very confident in this outlook. What is not, I will say a small message as well, we are on track to achieve the 2025 targets, which are not easy. You know, sales of something like close to EUR 9.5 billion. I will say the more than 8% margin, 4%, I will send the cash flow.
Again, I would like to thank the team because I think it was a good half year, and we are on the good track for the second half. Now with Bernard, we are ready to answer two questions.
Ladies and gentlemen, if you would like to ask a question, please press nine and the star key on your telephone keypad. In case you wish to cancel your question, press nine and the star key again. Questions can only be asked via the telephone line, and we kindly ask you to limit your questions to three at a time. The first question comes from Jose Asumendi. Please go ahead.
Thank you. Good morning. Good morning, Michel.
Good morning, Jose.
Good morning. Good morning. Just a couple of questions, please. I think the first one, can you comment a little bit where we stand in terms of the renewal of the contracts with regards to yourself and Mr. Schäferbarthold? Also whether have stakeholders indicated anything so far with regards to the renewal? That'll be the first question. Second question, if you could elaborate a little bit more with regards to the margin potential in the Lighting division, as well as your exposure to Chinese OEMs in APAC or in the, in the Chinese region. Thank you.
Thank you, Jose. I will start with the second question, I will not escape on the first one. For Lighting, my conviction is that Lighting is a very technological activity. It is a big differentiation for the car makers. You can see that when a car maker is starting to present a new model, there is immediately a flash on the front because the two headlamps are something like the eyes of the car. Through the headlamps, not only through the Digital FlatLight, the car maker can give a personality to his brands, his signature, and so we are participating to that. It is why in Lighting, I will use, I will be a little arrogant, I will use the word partnership.
Saying that, you know that technology is a key driver for profitability. For me, Lighting should be, must be, at something like 7%-8% margin. You will say, HELLA is a little far away. We are coming from another reality for some different reasons, huh? Europe Industrial Plan. We're making our own work on that to I will say, specialize as a plant and to improve through the systems all our efficiency. We have as well as some commercial, I will say, three points, and we are clearly more disciplined on the commercial side. What I can tell you is that the order intake is at a good value, and Andreas and his team are making a very good job on this side.
7%-8% for me should be the right level of margin. We will continue to improve. As you know, we are committed to 6% in 2025. It will be more, probably more for the year, the contribution, and probably will go to 7% in 2026, latest 2027. Renewal of contracts, I am little, how to say that? Unbalanced on this question. Normally in Germany, we should one year before indicate when the contract or how the contract will be renewed or not. As you know, and you were speaking mainly for Bernard and for myself, we have contract until end of June 2024.
Today, the situation is, for me, Bernard will comment for him. I was, there was a start of discussion end of May. Based on the time, I was at the end, opened to renew for next two years. Since early June, no news, no clear decision, no clear, I will say, communication. What I will say today, and I can only say that there is a low probability that my contract will be renewed or prolonged. Bernard, you want to add something?
Yeah, what I can comment is that we have started discussions on the renewal of my contract some time ago. The discussions are still ongoing, but no decision-taking yet on both sides. I would, but I would assume, no, that in the next month, we will be clear, no, on a renewal or not.
As you know, Jose, I am 64, I don't think that my case is important. I will insist on the fact that in HELLA we have a very good and smart CFO. I have already made some, I will say, put incentives in order that the contract of Bernard will be renewed. I think it's very important for the company and for me.
Understood. Thank you very much, and looking forward to hear additional development on this front. Thank you.
Thank you, Jose.
The next question comes from Michael Jacks. Please go ahead.
Hey, good morning, Michel, Bernard. Thanks for taking my questions.
Morning.
Morning. First one, just on the guidance. Where specifically are you seeing underperformance in relation to budgets? I think maybe that's linked to my second question here, which is just on the outperformance metric, or development in Q2. It seems to have slowed down quite significantly versus the 8.7% report in Q1. Just wondering, is it more regional specific? Is there perhaps something in EVs? We're seeing order intake in EVs slowing down in Europe at the moment. If you could just comment on that. Secondly, just on the R&D overspend, to what extent do you expect this to be offset by reimbursements in the Q4 ? Finally, just on working capital, perhaps a little color on what your expectations are for the second half of the year. Thank you.
To start, to start with the underperformance. It's specifically mostly related to our Electronics business, partially also Lighting, no. In Lighting, we have more mixed picture, no. We have on some programs, a much better or a very strong performance, and on some programs, we have a lower performance. Now, the lower performance in programs, specifically in Electronics, but also Lighting, it's more, let's say, a customer mix. Electronics is even more impacted because of, as I said, still a shortage situation, on the supply side, in terms of chips, and with that, still a high volatility, no. On top of that, there is also, a point of regional mix, no.
We think overall, and that was my comment also, specifically in Electronics, the order book is very strong, no? There should be, I would not now look at three or six months, no, to have now a kind of a general trend. Overall, as a general trend, we would continue to see a strong growth perspective on Electronics also be above the market expectations, you know? From our side, no, no critical situation, no? Into the, to the order intake, I think, or I see, no, a continuous strong demand, in both segments, Electronics as well as in Lighting. The very strong order intake trend is continuing as we had it last year.
In terms of overspend, it's specifically related to some programs within radar and electric power steering, no? In radar, it's the 77 GHz generations. These are the ones where there are quite high safety functional requirements, no? In terms of also testing, documentation on testings and so on. There's no issue on the product design overall, no, it takes us much more efforts than we originally thought. Some is related also to late customer changes, no? To your specific questions of reimbursements. Some will be reimbursed, it's a lower proportion, no, in comparison to the overall part.
You could also say it's a kind also of learning curve in terms of new technologies with very high requirements on software and testing and so on. I think we are through this very difficult period. That's why we are quite confident that we should now bring the cost down again. As I said, no, only a part of it will be reimbursed.
That's all very clear, and thanks for the additional detail there. Then just on my last question, I just asked on working capital expectations for the second half. Thank you.
We should see that, or we are targeting a further reduction. We estimate as of now that we should improve in our inventories. Still also on the receivable side, the level is still too high, so the overdue level is still too high. The most important is on the, let's say, receivable side, also towards our customers, is that a bigger part of the pass-through of the inflation to our customers is still not collected within our cash. I mentioned that the 85% we have now within our P&L, and this is an absolute amount which is around or much above EUR 100 million, no? Around EUR 140 million.
This we have not collected yet to a large extent, no, cash-wise. This is then the biggest improvement, no, we will realize in second half and will support us, no, to get to the targets we have set.
Don't worry, it is secured, huh? Yes, it's only a time difference, huh?
Superb. Very useful. Thank you very much.
Thank you.
The next question comes from Sanjay Bhagwani. Please go ahead.
Good morning, gentlemen, and thank you for taking my question as well. First of all, congratulations for the strong results. I have three questions. My first one is on, if you look at the FY margin guidance, the full year guidance, is it fair to say that this is based on quite conservative assumptions? Like if you just look at, for example, the sales in H2 could be better, then also, I think you mentioned that R&D overspend could normalize in H2, and at the same time, synergies could be a bit higher in H2, and at the same time, the pricing and the cost dynamics could be better. So just trying to get my head around, let's say, what could lead this margin to the upper end versus midpoint?
That is my first question, and then I'll follow up with the next one, if that's okay.
Your first question, sorry, before the margin guidance was?
Is it fair to say...
It should be better. Yeah. Sorry.
On the margin.
Good morning. I fully agree with you. We should be better. Unfortunately, we have always, I will say some adverse impacts. Main one is still some inflation, normally with the further compensation, we should, I will say reach our target that we will be close to 100% on the raw material price increase. Here, I will say my concern is very limited. We have some small adverse mix which could cost a little some points of margin, as well budgeted, we have no reason not to offset that. If we continue on the current basis, yes, it is what I said before, we should be more in the upper end than in the middle as our forecast.
It is our ambition with Bernard. I repeat, but of course, we can commit only on what is our forecast, with the right opportunities that we have.
Thank you. That's very helpful. My second question is on, I think you, Bernard, you mentioned that in Lighting, because of the consolidation effect, we may see somewhere around 1.5% more for FORVIA than for HELLA. My question is there some other differences for the other divisions in Electronics and Lifecycle Solutions ? Same for the consolidation. I totally get it for Lighting, it's gonna be 1.5% higher. Similar, any more color on Electronics and Lifecycle Solutions ?
On the other two segments, the differences are quite small, you know. There are some, but they are very little in comparison to Lighting. This is why I highlighted mostly Lighting. The others are more neglectable, you know. The around 1.5% in Lighting adds, let's say, in comparison now to the roughly 7% overall, close to 7%, which Michel Favre mentioned, and on overall, FORVIA. This translate into that, you know. The other two are very small, as I said.
Thank you, very helpful. My last question is just, could you please provide some color on for what's the H2, for example, your estimates for cost versus inflation? I mean, it's gonna be lower, I mean, more favorable in H2 or not? Finally on the synergies, how should we think of the split of synergies between H1 and H2?
For the inflation, if I take what is happening today, because we never know, as you know that, there is a very big slowdown of the inflation. I speak of raw material, energy price, etc. I would not say that the second half is flattish, but is almost flattish on this side, respect to the first half. Inflation is not over, but at least respect to the very high inflation on semiconductors energy, we have a stop, which is good and will facilitate our operations and of course, our discussions with customers. The second one was?
On synergies.
On synergies. Synergies, yes, of course, we have an acceleration, huh? We have an acceleration because we continue to feed the reservoir. We have an acceleration. I don't remember, you don't remember the numbers?
I think it's more 60% in the second half.
Yeah.
to around 40 in the first half. It's around, let's say, from the shares, it's unchanged what we said? Around 50% of the overall synergies are related to, are contributing to HELLA profitability.
Thank you. That's very helpful.
Thank you.
The next question comes from Akshat Kacker. Please go ahead.
Morning. Just one left from me, please. If you could just comment on your total R&D expenditure and net Capex numbers for the full year, that'd be really helpful. Thank you.
R&D expenditure, as Bernard was highLighting, we have some important projects, which we start this second half. We have some overcost, and we continue to have some overcost in Q3. This reflects some difficulties, on some really new standards, but I am confident that Electronics business are now putting everything under control. We normally should go back to a more normal, I will say, trend in the last quarter. The only big indicator is the order intake. We have an acceleration of the order intake last year. We have a new acceleration this year, this will, of course, have an impact on the R&D. On the Electronics, if you take the growth R&D, we still are close to 15%.
In Lighting, we are in the high single-digit. I speak of growth, of course, there are some reimbursements, et cetera, but we are still an activity where we have some very important R&D, but it reflects as well, the strong technology of HELLA. On the Capex side, we are deploying our, I would say, industrial plan. We have some opportunities with standardization, et cetera, to reduce not in value, but in percentage, the level of Capex, and to be more efficient, more flexible. We'll continue to do this work, but anyway, you will see at the end of the year that the Capex figure will still be very high.
How you work?
No, in terms of numbers, no. We should assume, in absolute terms, a slightly higher Capex in comparison to H1. In terms of H2 R&D, We had an overspend on the month, EUR 4 million- EUR 5 million, too much. As Michel was saying, this should month by month slow down now. Overall, we should see a lower R&D expense in comparison to H1.
Okay. Yeah, understood. Thanks.
Thank you.
Sorry, the next question comes from Giulio Pescatore. Please go ahead.
Hi, everybody. Thanks for taking my question as well. On the order intake and your midterm targets, what % of the target top line for 2025 would you say is already secured by the strong order intake that you have registered so far? What does that order intake tells us about implied level of profitability? Second question, still on the order intake, can you maybe explain the volumes assumption and also the kind of the way you're booking this order intake? I think in the past, one of the issues that we had, not only with you, but generally for the industry, has been a disappointing transformation of orders into revenue and profitability. Sorry, last one.
You said that Chinese OEMs went from 40% to 50% market share in China. Can you maybe tell us, give us an indication of what percentage of your order intake in the market is made up of Chinese car makers? Thank you.
Thank you, Giulio. Good morning. It is a very important question, so. Traditionally, some people will say differently, but my experience, you know, that I have now some experience, it is minimum 2 years between the moment you are awarded and the startup of production. You can have some difference according to customers, and the famous EV, American EV, is 2 years maximum. Some luxury are more 3 years, so there is no completely, I would say, truth and law behind that, and sometimes, the startup is delayed. Saying that, we are mid-2023, I will say that we have almost secured everything for 2025.
The topics are always to have, I would say, the confirmation of some, I would say, restyling, reuse, of existing, I would say, base, whatever, which are not completely taken in the order intake, but which will happen, because, of course, we know if there will be a reuse or not. On the margin side, what we have today in order intake is close to our targets, more than 8%. I will not say it's completely in line. That means that we have some additional efforts to make, but we are totally consistent, and which is very important. On the Chinese OEMs, unfortunately, today, we are at something like 13% of our Chinese sales with the Chinese OEM, but we have some GVs, which are very specialized.
In fact, when I make the full constitution of China, we are more at 20%. We are increasing in our order intake and this percentage. Our target for 2025, will be probably to be as close as possible to 30%. Chinese OEMs, for me, will continue to gain market share in China, but as well, worldwide. It's very important to team with the right ones.
to follow up Volume take-
Sorry. Sorry, Giulio.
No, I just want to follow up on this last point, which I think is key, right? As you see Chinese car makers wanting to open plants in Europe, do you expect to be, you know, a good partner or be in a good position to service them and increase the market share with them in the local market?
Normally, yes, because we have the size, we have the volumes, we have the technology. It will depend as well on the live- model they will put, I will say, in Europe. As a key supplier, we have normally the vocation to go with them. When we were, we have, we probably, you know that, we have our booth in Shanghai. We receive, I don't remember the number of CEOs of Chinese, but it was a very, very large number, huh. They're interested in FORVIA HELLA. They know that they need, I will say, probably to upgrade some supply. We have the vocation to team with them. For some, we are already teaming, of course.
Thank you very much.
Thank you, Giulio.
The next question comes from Stephanie Vincent, please go ahead.
Hi. Thank you very much for taking my questions. I'll start with the first couple and then with a margin question. My first one comes on the strategic, I guess, overview of Special Applications. Is that still ongoing? My next question is just on the HELLA 2024 notes. Just curious about whether or not you think that that will be replaced with similar type of issuance at the HELLA level, or is that something that's gonna go up to the FORVIA level?
Sorry, I have not understood the second part of question, Stephanie. Can you repeat?
The second part, you've got a EUR 300 million bond due, I believe, in May next year. Just wanting to know the intentions for that. Would you refinance it down the HELLA level, pay it down in cash.
Yeah, yeah.
Is that something that would go up to the FORVIA level?
Sorry, we didn't capture the word bond. Excuse me. Excuse us. Bond, you, I think, you will answer. The first question was, sorry?
On Special Applications.
Yeah, Special Applications. Yes, Special Applications, there is no more strategic overview on the Special Applications. Can I answer? short, clear, finished.
Okay.
Bernard?
On the bond, no, we plan to refinance it.
That would be at the HELLA level?
Yes.
Okay. My last question is just on your outlook for margins. This year you did discuss, several things, and there have been a lot of questions about raw materials versus inefficiencies, versus I guess, the improvement in Light Vehicle Production and your gains in share. Can you just sort of strip out, actually, how much raw materials have had a positive impact year-over-year, so we can sort of look at a plain vanilla operating leverage?
When you say positive impact, that means in inflation or in deflation?
Basically your ability to get pricing through to your customers, and that's been an improvement year-over-year, it seems like, through each division versus 2022.
When you take HELLA, the impact of, we say, the raw material price increase was something like the equivalent of 4% of sales.
Right.
I repeat, 4% of sales. We were able, as Bernard was saying, and to compensate 85%, and when we say 85% of this amount, it is mainly recurrent. I insist on this because on a good management, and as it is for the most structural, and it should be anywhere win-win story with the customers, we need the recurrence. Which means that when if the price go down, and I think some prices go down, of course, we will give back this to customers. My bet is that at one moment, semiconductors will go back because price increase were too much, and it was a low, moreover, on Electronics.
85%, we have the vocation because there are still some discussions open to go to 100%, because there is no reason why on this raw material, it was a law in this sector that will not be compensated. I repeat, it is a win-win story with the customers because my bet is that price will, for a part, come back.
Right. Thank you so much.
Okay, since we didn't receive any further questions, let me hand back over to your host for some closing remarks.
Let's firstly thank you again for your attendance. Our next rendezvous will be the seventh of November for our Q3 results, and of course, the nine months cumulative. We will have a specific event, a short event, the twenty-eighth of November with HELLA analyst meeting in Frankfurt. We will be very happy to see you, to see you again and to see you physically. In the meantime, I wish you of course a very good day and for some, a very good vacation. Thank you.