Ladies and gentlemen, welcome to the conference call of Krones. Krones significantly increases revenue and profitability in 2023, and predicts a profitable growth path will continue in 2024. That was the headline of our press release this morning. We would like to present to you now the preliminary figures for the full year 2023, and provide additional explanations. We will also give you additional short information about the acquisition of Netstal, which has not been fully finalized. After the presentation by Christoph Klenk and Uta Anders, you will have the opportunity to ask questions. I think you also know how the question-and-answer session works, so send me just a quick email, and we'll hand over to you. So let's start with the presentation.
I think we are all interested in the details and explanations of the numbers, so I hand over to Christoph Klenk. Christoph, the floor is yours.
Yeah. Well, thank you. Good afternoon, ladies and gentlemen. Warm welcome to our conference call today. Very happy to have you with us. Before I jump to the numbers, we are, of course, very happy about the 2023 figures we have, the numbers we have achieved, and we are particularly proud of our team, since we have achieved an order intake higher than we have planned, which is good. We have realized revenues and difficult conditions. You all know that we had, during the year, significant supply chain issues, and nevertheless, we were able to speed up at the end of the year. We brought our projects in time and in schedule to our customers, which is even more important because I would say the reputation of Krones has increased in 2023 further.
So that's, in a nutshell, my remarks in the beginning, and I'm jumping now directly into the presentation. I skipped that slide because that's a summary, and you see all the details later on. Even this one here, I do not stay too much on it, because we are coming to all the numbers later. So I start with the order intake, and order intake is, if you look to it, first looks a bit puzzling, 7% down. But if you look the comparison between 2021 and 2023, then it's a significant growth over the two years, and it's an average 12% per year. So I would say if you look to that, it's a very stable development, which we have seen. You'll see that later on in a different slide in addition.
With the EUR 5.4 billion on order intake, I think there was a very good development in the market since even pricing was playing a significant role in 2023. It has not the impact as it has the years before, but nevertheless, we used our pricing power even for smaller adjustments. And the important message from my point of view is that pricing came deeper and deeper into the DNA of Krones. Since that, if those joining long term have the historical background of how we deal with pricing, was all the time a bit weak, but this is really one of the special things I would highlight here in the order intake. And Q4 of 2022 was lower than 2023, which is very important for us because we see that even the market is stable and developing.
I would say that's one important message I want to highlight. It's up by 7%, which is an important point. Now, you might ask, what is the outlook? And I think we come to that later, certainly in more detail, for 2024 in terms of Q1. I mean, we see it somewhere on the level of Q1 of 2023. I come to that later on, and certainly in the questions, this will be a bigger point, so I don't stay too much on it. If we look to the order backlog, that has further increased with the high order intake. Of course, that's the difference between revenue and order intake, so very strong fundament on which we are standing. At the moment, for us, it's, of course, still a problem that we have 70 weeks delivery time.
Nevertheless, since competition went to comparable numbers, I would say it's not anymore such a big issue, but long term, we can't stay on the 70 weeks, so we need to go down, and our target is to be somewhere at 40 weeks-45 weeks in the future. We are developing suppliers. This is our most important target at the moment because we don't want to invest all in our own infrastructure once growing, and we want to keep flexibility. That's the reason why we are working significantly on suppliers globally, that we get that in the right direction. Now, and here is confirmed, this is the long-term order intake, and this confirms what I just said. It's a consistent growth.
When you look all over the periods, then you see that's a 7% growth, which, I would say is the reflection of how we see the market based on the big drivers of our markets. World population is growing, all the things you know, I don't want to go in detail here. It's actually a reflection of a very stable market and a very stable business model. So that's what we want to highlight here on, on that page. Now, coming a bit to the distribution, and be careful, this is revenue. This is not order intake. When you look to that, I mean, the highlight is certainly North America, which is now at 25%. If you look to that map here, it reflects a bit what you see in world economy.
And again, this says something about how close we are to the consumer and to the big development in the individual countries. If we look to North America, that reflects, of course, the huge investments we see almost in any industry. Here, it's in particular, modernization and cost-cutting at our customers. And second, it's sustainability, because if we look to the historical install base we have there, it's by far the oldest, and I would say the efforts they need to do in order to get their CO2 targets done is the biggest. If we look to Europe, I would say it looks like it reflects a bit the mood in which we are in Europe economically. But nevertheless, there are significant investments which has happened and which will happen.
So we are even on Europe, with, let me say, 28%, something around 30%, quite satisfied how the market has developed. And again, we see some significant investments, which will be remarkable once you see them becoming public. South America has been quite stable. I wouldn't see the 2022 downswing as too critical, but nevertheless, we see it quite stable. It's a good market. It has a bit of a shift from Mexico to Brazil, but all in all, I would say that's in line. Middle East, Africa, I would say that's a bit of a critical aspect for us, because, for those of you joining us longer, we had even above 17% of our revenues in Africa, Middle East. And there are a couple of things, in particular, the biggest hurdle is availability of FX.
So foreign currencies is a big problem for many of the African countries. And second, it's of course, the conflicts we see in the region. It's not so much what we see in the Middle East, it's more what we see in Africa itself. I would say that's not so much on the highlights since other conflicts are stronger, here, at least in Europe, as in the recognition. But nevertheless, Africa has some conflicts which is influencing the business. Asia with a strong growth. I mean, this is in line with the predictions we have made because they are coming out late out of COVID. And the countries which are strong, out in front, is India, which has been developing very good, but even Japan, Vietnam, Thailand, Philippines, Malaysia, and Australia had good order intake.
China, we take separate in Asia, and it looks like from, let me say, from the, graphs, you see that it's a bit of a downswing. Nevertheless, we see it quite stable because it's 1%, less in terms of the share of the revenues. But if we look to the order intake, that's quite good, and we are investing further into our facilities in China, extending the business there, since the local production is a big help to maintain the market share there. And finally, Eastern Europe and Central Asia, quite stable. Here you see reflected that we have around 1.5% loss of revenue in Russia. This is exactly in line what you see here. So that was the number we all the time said. But nevertheless, the Central Asian states and Eastern Europe are working quite well.
That's in a nutshell where we are on the markets, and with that, I hand over to Uta to give you further insights in revenue and, in particular, in profitability.
Good afternoon, also from my side. Yeah, as usual, I will continue with revenue development throughout the fiscal year. First of all, let's look at the overall number, EUR 4.721 billion revenue, 12.2% increase, and with that, we are well in line with the guidance we had given, 11%-13%. Also to mention that at this point, as we said, the other quarters, about approximately a quarter of the growth is coming from price. Looking at the fourth quarter, EUR 1.235 billion revenue. So, above EUR 1.2 billion shows, first of all, that the bottlenecks we had in the supply chain decreased further, but shows, secondly, also an indication into what to expect for 2024.
Continuing on, with EBITDA, EUR 457.3 million. With that, we have an increase compared to 2022 of 22.5. And overall, we achieved a margin of 9.7%. And also with that, we are in line with the guidance we had given, rather on the upper end of the guidance between 9%-10%. And looking at the fourth quarter, EUR 125 million, we achieved, a margin of 10.1% in the fourth quarter, so well above, 2022, but also, 2023 quarters. And, with the numbers we have achieved in 2023, we are well on track also to reach our midterm profitability targets of 10%-13% by 2025.
Continuing on with EBT, we achieved an EBT of EUR 310 million, 6.6%, an increase by 28.3%. Also with that, we are in line with our expectations. As we had it already, year-to-date, quarter three, also year-to-date, quarter four, we have both in depreciation, but also in interest, extraordinary effects, equaling out each other in EBITDA and EBT, but having an impact on EBIT. But other than that, all in line with our expectations. Continuing on with personnel and material expenses, as the main components of our profit and loss statement. First of all, personnel, personnel cost-...
Close to EUR 1.4 billion, an increase of approximately 10% compared to 2022, and the 10% increase is well distributed between increase in headcount, which you will see on the next page, but also increase in overall tariffs and overall personal expense per person, approximately 5%-6%, as we had indicated also in the other calls. For us, it's important that personal cost remains below 30%, and with the 29.5%, we have achieved that. Material cost, two point four billion, close to that, 50.4% of total performance, slightly above last year. Reason being the higher share of new machine business in overall revenue, which comes with a higher higher share of material cost.
As we have also indicated in the other calls already, further cost increases in all categories are included in our expectations and in our forecasts. Krones employed as of end of December 2023, 18,513 employees, which is 1,300, approximately more than end of 2022. That's 8%, so below the revenue increase we had by 12.2%. If we look at the composition between Germany and rest of the world, it's more or less as we had it in 2022 already, so no major change and looking into the increase of employees, very similar to what we had said in the other quarters already.
Ampco, of course, 140 service technicians, change of temporary labor to own employees, but also increase in the digital community, just to name a few of them. So far for Krones in total for P&L. Now let's come to the three segments. First of all, to start with filling and packaging technology. So as you can see, EUR 3.925 billion revenue, with quarter four being above EUR 1 billion. And with that, we are slightly. We have achieved a growth of 12.2%, and we are slightly above the guidance we had given between 10%-12%. And looking at the EBITDA and the margin, EUR 402 million, 10.3%.
So we are in line with our expectations here as well, 9%-11%, and have been also consistent over the quarters in 10.2%-10.3%. Process technology, EUR 453 million revenue we have achieved, which is an increase by 23%, also in line with the guidance we had given, 20%-25%. Also, here I want to state that the impact of Ampco is not major here. It's low to middle 2 million digit. Looking at the EBITDA, EUR 34.7 million, 7.7%. So here we are above our guidance because we had a very, very strong fourth quarter, also partly due to mix issues.
Also here, the Ampco effect is still minimal, as further Ampco effect will come in 2024. Last but not least, intralogistics, revenue of EUR 343 million, so approximately as we had it in 2022, so no growth. Here we are also not meeting our expectations, the guidance we had given, because we had some delays in revenue recognition here, rather smaller projects than bigger ones. The smaller projects also led to the reason that we are, despite of the lower revenue, we are more or less in line with the guidance in EBITDA margin, 5.9%, so very close to the 6%-7%, which we had as a guidance. So far for P&L. Now, equity and liquidity reserves. Let's start with equity.
You see that we have increased our equity by EUR 117 million. This is 7.3%. The same was true for our balance sheet total, which leads to exactly the same equity ratio of 38.3%. And, looking at liquidity, here comes maybe a first positive, very positive news, is that we had a much better cash position than we had anticipated with EUR 448 million, due to several reasons. First of all, maybe a certain conservatism in our, assumption, but secondly, also very strong cash generation efforts in Q4. I will come to cash flow later.
So 448 million free credit lines and used ones, and taking together with the cash coming to EUR 1.3 billion liquidity reserves, so very strong and a very resilient capital position of Krones. Working capital, 17.8%, as an average working capital in relation to average revenue of the last four quarters. So also here, a little bit better than we had expected. And if you look at the right portion of the chart, you can also see where it's coming from. I mean, received prepayments remain very high and are even higher than end of 2022. And that's because of strong down payment recognition in the fourth quarter, also due to very high or high order intake we have generated.
I also want to highlight receivable with POC with 39.3%, very high as well. So that's something that's the reason for that being that very high order backlog, long lead times, and. That is something we will look even more into in 2024. Overall working capital is EUR 766 million as of end of December 2023. We had started with EUR 594 million, so we have increased working capital by EUR 172 million. But as I already said, much lower than we had originally estimated. Which also leads to the fact that our free cash flow before M&A with +EUR 13 million is much better than we had estimated with the -EUR 100 million we had given as an indication.
Reasons I already mentioned, very strong cash generation in Q4 and a certain conservatism as well. Looking at the cash flow statement, we can see that the main change, also in comparison to 2022, is coming from change in working capital, which I already highlighted. I also want to highlight CapEx, EUR 163 million, so above what we had 2022, and it's also a little bit above our 2.5%-3%, just because we have invested into some extraordinary, not extraordinary, but we have heavily invested. M&A activities, EUR 115 million, you know about Ampco, so no news there. And financing activities, other is a combination of dividend payment, lease payment, but also foreign exchange changes in free cash flow. This chart is already familiar to you.
Here we want to put into perspective or into proportion our free cash flow generation before M&A of, present and past. I mean, as we have said, in last year already, you have to see that together, 2021 and 2022, because cash conversion ratio there was well above one in all years, so that's why 2023 is much lower. But in 2024, we will come back to a normal free cash flow for Krones. ROCE, seventeen point, 17.3%, and the 17.3% is an increase compared to last year, mainly because of increase in EBIT.
And, looking at average capital employed from approximately EUR 1.6 billion average last year, end of last year, so 2022, we increased to approximately EUR 1.8 billion, which is coming from average working capital, as I have already highlighted, but also higher fixed assets, and all in all, coming to 17.3%.
Good. Now we have a very small session about Netstal because we thought we should familiarize you with the acquisition. We have not finalized yet, but we are on the way to. So Netstal is based in Switzerland. It has around higher than EUR 200 million revenue, and we have around 560 people there, and they're doing injection molding machines. We have done the signing beginning of February, and at present, we are dealing with the antitrust authorities in the individual countries, so we do expect closing by end of March.
Once we talk later on, how much revenue we have integrated in our forecasts and how much profitability, keep in mind, it's the timing, so there might be between, I would say, maybe 7 months-9 months, we'll let you know once we know of revenues then be consolidated. Nevertheless, we do expect the closing by end of March. That's our target. If we could, if we succeed, we don't know yet. If you look to the right-hand side, the strategic rationale, I mean, Krones has been the one who has shaped, in terms of, OpEx cost reduction, the industry significantly over the years by having machines integrated in a different way than it has been done historically.
And combining machines closer together and getting dense synergies out of it is actually the strategic rationale we have behind the core business we have, because we believe we can do injection molding, where the preforms for the PET bottles are made, and our blow molders, we bring that together. I don't want to go in deep because we could talk hours about that, but nevertheless, if we bring that together, we have a quite unique know-how in the industry. While we have preform injection molding, we have already a company called MHT, we acquired 5 years or 6 years ago, doing molds for injection molding, and we have our blow molding. And if we combine that, we are generating a know-how position and later on, a technological position, which we can utilize.
Second, once you do recycling and bottle-to-bottle recycling, which is one of the most important things that we have long-term PET as a feasible package in the industry, if you bring that know-how together with injection molding, you can realize further technological synergies. So there's a huge benefit if we combine that for Krones in. Now, this is, you see how immediately what they are doing in detail. And second, of course, they have a reasonable life science business in syringes and vials, which we want to utilize as well, because, again, we have just over a year ago acquired a company in the U.S. dealing in that business, so it's a good add-on. Financials, I said it, we can't say more at the moment because we are not yet have done the closing.
And if you see the sales higher than EUR 200 million, what we are going to do in the future, once we have closed the acquisition, then we give you details about revenue and profitability that you can actually follow up, how the company is developing over the years, because we see that with having transparency on that, this is the best way we deal with it. But for the time being, it's not possible. You see that a margin improvement program is already established by the management running Netstal, because it will be an independent brand. This is introduced already and established, and if we have passed the day of closing, I think we can bring more momentum to the party. Now, just one overview. You see here, roughly how the business is distributed. They do PET preforms.
You see that on the right-hand side. They do caps, which you see on the lower side. Those two are directly going into our core business. Then you see on the left-hand side, the packaging, which is going into our processing business because most is either liquid or close to liquid. And then you see on the upper left-hand box, you see life science, where they do the syringes and device and so on. So even interesting business. And the company we have acquired over a year ago in the U.S., has already done historically, business together with Netstal. So even on that side, a good fit for us. Yeah, and here, once again, you see on the left-hand side, the machines they built, so that's state-of-the-art. It's a high-class machine. It offers very good technology, very good technical data.
And on the right-hand side, you see our intention, and that's marked in red. We are closing the loop with the injection molding. So it's a unique situation for us, and we are, I would say, the first in the industry having now the full value stream of PET in our hands, except the, let me say, the taking back of the bottles from the market. So, but nevertheless, all the rest, technologically, is in our hands, and this is what we believe will drive the industry for the next coming years and decades. So far to Netstal, not more on that. Now to the outlook, 2024. Yeah, and in those days, outlooks are always difficult. First, the order intake, which you don't see here, our statement is we do expect the book-to-bill ratio above one.
It will be very slightly above one, but I would say this is what we see right now, and we are sitting at present on a fundament where we believe, I said it, Q1 would be a good one. And the order pipeline is six months from what we see right now, so I would say there's a good chance that we have the order intake, as I said, with a book-to-bill ratio positive, greater than one. Revenue growth should be between 9% and 13%. If you look to that, this includes the acquisition of Netstal, and we have anticipated around EUR 150 million, just roughly, into the revenues of Netstal, which would lead to a growth of EUR 450 million-EUR 600 million around. Then EBITDA margin, I mean, the margin of Netstal is dilutive.
Nevertheless, we want to improve the EBITDA margin, so we have been at 9.7% for 2023, and we are heading for 9.8%-10.3% in 2024. So this is where we are going to, and we believe we can compensate for the dilutive effect of Netstal. ROCE, I mean, that's, let me say, following number 17%-19%. I would say the last quarter of 2023 showed a lot in terms of revenue and in terms of profitability, that we have the fundament to grow the way we say it here, and the order backlog is given.
So I would say we are sitting on an extremely good fundament, and with all the caution as you can have at the beginning of a year, with all the things going around in the world, we still believe that this is manageable for us and looking to- with some optimism into the year that we are growing, like we said here, and that we're managing the EBITDA margin as stated here. So that's, for the time being, the presentation from us, and now we are looking forward to the questions you have. Oh, sorry, I've missed one. Oh, thanks for the advice, Olaf. So we-- I forgot, of course, I forgot the segments. But here, even no surprises, so filling and packaging, the core segment, growing 9%-13%, so in line with what we have in the group.
The EBITDA margin should be between 10.3% and 10.8%, so even improvement here. Processing will grow quite good, 15%-20%. Of course, we have the full effect of the acquisition of Ampco, and you see that even in the EBITDA margin of 8%-9%. And for those of you being historically with us, I mean, this is something where we believe the team in processing has done a really a good job, that we are today of a forecast and a guidance of 8%-9% EBITDA. Intralogistics, this might be one of the bit weaker areas. Nevertheless, we do anticipate a growth,...
Even if the industry is maybe the most difficult one we see at the moment, and we see even there a chance for a further profit improvement with the EBITDA margin of 6%-7%. Yeah, and then I have one more slide where the key takeaways are on it, but nevertheless, I said all of it, and I don't want to repeat it. We had a very good 2023. We are looking for a strong 2024. We have a good fundament sitting on it with the order backlog. Yeah, all the rest is said. I think we have a good chance to do it. Thanks for that, and then now we are going to the questions.
Thanks to Christoph and Uta for the explanations of the figures and topics to Netstal and also the expectations for 2024. So now we start our Q&A session. You can use the hand-raising function or also send me short email, and then I will hand over to you. So the first one today is Sebastian Growe from BNP Paribas. Sebastian, or I can also already see you, so please give us your questions.
It's a good start indeed. Yeah. Good afternoon, everybody. Two areas of questions. The first one would be around Netstal, if you can start there. So you mentioned that it's slightly dilutive, and I would love to understand what the key measures are to double eventually the profitability over time, and then by when that might be achieved. And the second part that goes to Netstal is that I found a Reuters article pointing towards around EUR 170 million as an enterprise value that you would have agreed on. If you could at least comment on that, and adding to this also, if there are any earn-out clauses that you would have agreed with the seller. So if you could start there.
Yeah. Okay, thanks, Mr. Growe, for the questions. First, how do we want to improve the EBITDA margin? I would say there are basically two significant points in it. Number one is that once we are together, we can use the procurement power of Krones, that we are getting many of the components to better prices than they have today. That was one of the fundamentals we are sitting on, and we are strongly believing in how we can fix the issues. Netstal has a very low own production, so they're buying more or less everything from third parties, whether it's components, whether it's parts, and they have only final assembly remaining. So we have a quite big lever on that, and this will help a lot. Second, is growth. With...
Let me say, being together with Krones and using our sales power in the beverage industry, we can bring them into a totally different growth path. There is an underlying subject, and this is services, because they have been, since they have been belonging in other structures, they have been not so strong on services. With the power we have in services and supporting them in all the regions, we believe we can relatively fast build up a good service network, even for this technology. Because we all know good service sells new products, and if you take that together, there are two factors in growth, and of course, in case we can increase the revenues and services per se, this will help the profitability in addition.
So this is how we believe we get it relatively fast on a level where we need it in order to be on the same level as the segment, PPE. The second question about the earn-out, that there is no earn-out in addition, so we acquired 100% of the company without any additional obligations which we have. Does that answer your questions, Mr. Growe?
I don't know if it was on purpose or not, but the acquisition price, if you want to comment on that?
Well, as always, it's always too high. But it was a quite strong bit of process, so we have been not alone in that one. We have wished a much lower price, but at the end... It was actually our limit. We have been most probably, I don't know where we are, but, we have been maybe the best partner, I would call it this way. So there have been several factors why we have been finally selected, not only the price itself. But, you know, either it's, I would say the price is okay, then the company is, in most of the cases, not so profitable. In case it would be highly profitable, the price would have been much higher.
On the other side, if you look to the real value of the company from a financial perspective, it's, yeah, it was a high price, I can say that. But nevertheless, we strongly believe into a significant growth in the future and a very good add-on in the beverage industry, strengthening the overall position of Krones. There is the real value behind.
Yeah, understood and appreciated. The second part that I would like to discuss is around profitability and that for the FPT business. And the reason why I'm interested in this is that you are now guiding to the 10.3-10.8, and maybe it's margin, and that might be like 20 pips or so diluted via Netstal. But nonetheless, for 2025, you're rather shooting for a 12%-14% margin. So that looks like quite a jump in the next year. And I know if we are here to discuss 2024 guidance, but nonetheless it's also, you do have this 2025 framework out. I think it's worth at least have a bit of a discussion around it.
So the question that I really have then is, what are the key levers with regard to the margin step-up that you had planned for so far, by 2025? And in that regard, I have two thoughts around the capacity leeway. I think that you mentioned also that you invested quite heavily in 2023, so should we eventually also consider under absorption, which is rather temporary nature. And maybe you can also comment on the pricing quality in the backlog, that eventually the mix in 2025 is better than in 2024. So and here I stop. Thanks.
So quite, quite complicated. Hopefully, I get everything together. First of all, I mean, we can say that Netstal might be in a magnitude of 0.1%-0.2% to the overall group profitability, what we see as a dilutive factor, okay? And if we translate then that into the segment of segment of BPE, where is it coming from? Number one, I said it earlier, the pricing was going quite okay. We are getting back into more, let me say, calm in file processes, because we have in 2022 and 2023, in our core, we had a kind of a mess with all the problems we had in the supply chain. So there is a kind of a productivity increase, which is an extra effect, which helps us to improve the segment per se.
Then we anticipate that even the growth in services and in our lifecycle business is still okay. Those three factors are together, are making, let me say, the 2024 guidance for the segment. So, I would say that's, that's the three major aspects. And as I say that, those are helping even of the profitability for 2025. Now, I hope I, I explained it the way that it, it's transparent. One other thing which is good is material cost. I would say what we see right now and the calculations, or let me say, what we have in the budget, there might be, by the second half of the year, a slight tailwind, slight. And this is all the time a bit to be handled with care, but nevertheless, we see on material cost, a good development.
Now, the question was, we have invested in infrastructure. Do we have an underutilization? No, we don't. In none of the, let me say, facilities we have around the world, there's any underutilization at present. There might be some spots because of product mix or whatever, but certainly not because we have invested and have a bigger infrastructure than needed. The investments we have made are in infrastructure to a certain extent, but in most of the cases, we are consolidating because we had already what we call this outsourced facilities, and we are consolidating them like we do, for example, in the facilities in Flensburg. All the rest, I would say, is either logistics investments or in production and automation that we get leaner in the future, but there is no underutilization. So hopefully, that explains this point.
And then finally, to the order intake, I mean, in February, to go into detail where we are with the individual segments would be difficult. I can say that into our logistics, like last year, is certainly the one which might be, in terms of prediction, the most difficult ones, because it's depending sometimes on larger projects. They are there, so it's not a question, do we have the pipeline? But we have seen that some of them have been postponed even by more than 12 months, and this could happen as well. So there's the biggest uncertainty.
The second one is, let me say, in processing, because big breweries in those times are a bit more difficult, but thanks to the fact that we have not taken large brewery projects over the last, let me say, 18 months on board, we are even better set than in the past that this might, let me say, then spoil the whole order intake. So we are relying on much smaller orders. We are decentralized in terms of our infrastructure in processing, so that gives a different stability. And the most stable one at present is our core, with the new machines and with the life cycle. I hope that gives you a bit, a nutshell, in a nutshell, where we are with that. Does that hopefully answer the questions?
Yeah, yeah, yes. It was only the last one, I think, that we had a bit of a misunderstanding. I was just asking for the order backlog quality. So if there's sort of any obvious from what you have taken on board in terms of orders, sort of margin gain that you would expect in 25 over 24, which would then explain 100 pips jump as well in the margin, because that's what it's about.
Yeah. No, I mean, this is most probably one of the biggest success factors which we had and where we are sitting on, that the order backlog is, I would say, really in a very good condition, that we are in 2024, about on the safe side with the cost development we see. And even for 2025, we have done the same thing. I just want to repeat it. We are reviewing every 6 weeks the development of material cost and personnel cost for the period, once the project is quoted and executed, then later on. And with 16 months or 17 months of delivery time, I mean, we have to look very much ahead. And this is even true for those things we have in services, being done in mid-2025 to be executed or even to the OEMs we have to buy there.
What we see at the moment in the backlog, that we are really 100% confident that this is a good foundation even for 2025.
That's encouraging. Thanks.
Welcome.
Thanks to Sebastian Growe. The next question coming from Sven Weier, from UBS. Sven, your questions, please.
Yeah. Thank you, Olaf. Thanks for taking my questions. Good afternoon. The first one is to follow up on Netstal.
I'm looking for analogies here to the Contiform acquisition that I think you did, like, 20 years ago. I remember that one.
In a way, it reminds me of it, right? Because I think when you bought Contiform, the market was a bit asking tough questions. I think profitability was also not the greatest. And now I think it's one of the crown jewels in the processing lines and leads to a high profitability in PET lines, if I'm not mistaken. On the other hand, I also see this similarity, right? Because on the stretch blow molding machines, you could say the client is the same, whereas for the Netstal machines, I would say it's typically different manufacturers, the packaging manufacturers. So I'm still looking for the, let's say, the sales synergy here that you have, that you bring to the table. Am I missing something here on that side?
No. No. No, I think that was a perfect summary of how we see things. The only correction I have, that we tried to acquire, at the time, blow molding machines with the Contiform, and we have been not successful, and we decided then to do our own development, which took us 5 or 6 years of doing, I would call it efforts, which had some impact on the P&L. This time, we are moving different forward because we have, to be honest, we have even considered to jump ourself into that business, but, our point was once doing that ourself, that would take years to get a significant size and take scale. So we do believe that this will be the next big move in the industry, and, we have not published that sign in a broader audience.
But we had already, despite the acquisition, signed a cooperation agreement with Netstal, that we are using their machine to incorporate them in a different style than used to be in the past, into our lines and into our blow molding machine. So there's a relatively big technical program behind to get an injection molding machine closer to the blow molding machine. And the reason is obvious, we heat up plastics to 240 degrees Celsius, get out a preform at the same temperature, cool it down to ambient, and then heat it up in the blow molder. So this doesn't make sense, so we need to bring things together. So we see it, and I have called it internally, the next big thing. We see it exactly that we can integrate it.
Now, you are right, the competition in that field is different. The biggest competitor, can say that here, is Husky, based in Canada, taking a huge proportion of the market share. Then we have some smaller Italians in the core business, having some shares as well. And I would say at the time being, there's a good need for a supplier having a larger service network. Husky is excellent on that. They are the market leader by far. But behind there, there's a, from our point of view, a lot of room in the market with the things I said. We have good technology, but service in the field is not so good, so we can bring a lot to the party with our service network. And once doing that, I would say we have a good chance to position ourself very good in that field.
Once we combine it with the blow molders, we have a unique selling position, at least in the core, which we are going to utilize and where we believe we can push growth significantly. I would summarize this way. Of course, we are using sales synergies and service synergies. This is one of the underlying schemes we have for getting Netstal profitable at the end of the day.
So you, if I understood you correctly, you're anticipating that the big beverage firms at least are starting to make the preforms themselves?
Yeah, well, we have a lot of customers doing already preforms themselves, so this is not completely new. There are a lot of them, but it's still that they have, of course, different suppliers, and this goes in the direction that they are buying more turnkey. I would say historically, we have around maybe 10-15 projects per year where we bought already preform injection machines and incorporated those in our projects, and we believe this becomes a much larger scale.
Understood. The second question I had was just coming back on the order intake, because you said order intake in Q1 should be on the same level as last year, so around EUR 1,500. At the same time, you say book-to-bill should be slightly positive, so that would tell me that the overall order intake should be kind of flat this year against last year. So why is it now that we have such a Q1 seasonality in the orders, right? I mean, if I look pre-pandemic, Q1 was a good quarter, but, but not so outstandingly good. So what has changed that Q1 is such an outlier now?
Yeah, well, I wouldn't say that this is really something we see as a external seasonality. Number one, there are one or two projects in which might be really—they have been taking long to accomplish them. And I would say the year 2023 was a bit too short to get them, let me say, finalized on the customer side. So they, there's a bit of a move from the last quarter, last year into the first quarter this year. And then indeed, we have a couple of bigger orders still in front of us, which we believe we can finalize in Q1, which leads then to this good order intake. That's the reason behind. But I would say I wouldn't go to seasonality in terms of order intake.
This is just by, maybe you wouldn't say by a coincidence, the two underlying factors I just said, which are in Q1, but nevertheless, we look to the full year. And I would say, as I said, we are hopefully slightly above one with the order intake, which is then a slight growth above the revenue. Yeah.
Thank you. And, maybe the final one on the intralogistics business.
Yeah.
Is it that you see more competition from the likes of Dematic and so forth, because they have slower market in e-commerce? Are they starting to compete more with you in beverages, is that why, you know, you've been struggling a bit on getting the orders?
Yeah, indeed.
The bigger ones.
Yeah. There have been maybe two or three projects where it is true what you said, and where we didn't compete further because we wanted to stay with the pricing, because that has some erosion as well. And I would say we anyway concentrated on smaller projects because it's like we see with the breweries, whenever you have very big projects on board, this is a kind of a risk. And we see ourselves in order picking quite strong, where we have realized very nice projects with good margins on a reasonable risk profile.
This is what we did at the end of the year, where we said: "Okay, we are concentrating more on that, rather than fighting the last fight on having a big project on maybe very weak margins." But yes, the competition is stronger since, I would say, e-commerce has slowed down, and we all know that there has been more than 1 billion on orders which have been not realized in 2023, in the intralogistics, from the e-commerce, and I would say that had a kind of a hit into the, let me say, the market for intralogistics. Yeah.
Very clear. Thank you, Mr. Klenk.
Yeah. Thank you, Mr. Weier.
Thank you, Sven, for your questions. The next questions are coming from Lars Cleff from Deutsche Bank. Lars, your questions, please.
Yes, thank you very much for taking my questions. Two quick one, if I may. The first one, when you talk about free cash flow this year reaching a normal level, do you then have a certain cash conversion ratio in mind, or is it rather referring to the absolute levels we, we saw historically?
It's rather to the absolute levels, and cash conversion rate itself will be again below one, so it will not be at one, but it will be at a 3-digit million EUR level.
Okay, perfect. And then you said earlier, a quarter of your revenue growth was coming from price last year. I assume the rest is volume. Does FX play a role? Is that included in, in the price component or in the volume component?
FX is not major, so it's, as I said, it's, the rest is mainly volume. Yes, FX is not major because-
... we have a mix between different currencies going up and down, and so that's why it does not play a major role.
Excellent. Perfect. Thank you very much.
Thanks to you, Lars, for your question. The next one I have on my list is Benjamin Thielmann from Berenberg. Benjamin, your questions, please.
Yeah. Hey, everybody. Actually, most of my questions have been already answered, so next time I try to be a little bit faster. Maybe a follow-up on one of the questions from Sebastian. What is the time frame if you look at the EBITDA margin improvement for Netstal? Is it fair to assume that over the next 2-3 years, you can achieve a double-digit margin there? That would be the first question. Second question is basically on order intake. I remember on the latest Capital Markets Day, you were saying that roughly 70% of your order intake machines should be the Enviro-certified machines in 2024.
Can you maybe give us an update here on what percentage do they account for?
Yeah. That's basically it for now. Yeah, good. Thanks for the questions. So when do we reach with Netstal, I would say, the anticipated EBITDA level? I mean, for the time being, it's a bit difficult to say why, because we have not done the closing. And this is that we cannot really follow up on how things are developing. But what we anticipate is that we have, next year, a significant improvement, that's clear, and that we are close to where we should be.
So it's not a journey over the next 3 years-4 years, because if we look to the particular point of having components bought to the price levels Krones has, this will take until next year, because, of course, they have contracts still in place, which we have to renegotiate and rearrange. But procurement pricing will have already impact for the full year 2025. So that's from our point of what we can see today, a significant effect. If we look to other things like service improvements, this we can start with immediately with the closing, but will bring and will take time and will bring effects even in 2025. So I would say a big step will be made in 2025, and the dilutive effect will be significantly lower in 2025, if any given.
But again, as we make things transparent in the next call, I would say then we can talk more clearer on that. The second question was on the 70% of Enviro machines order intake. Don't forget, this is the new machine of the BPE section itself. So it's of course not 70% of the revenue in total, it's 70% of the revenue of the new machines. And this is going to continue. I have really to say this is a big success, that we have this program long-term already in place. I would say this is going in the right direction. We have seen further developments in terms of shares, like you mentioned, so this is going perfectly the right direction and will continue in 2024.
Okay, perfect. Maybe one follow-up question. Yeah, thanks.
If I may. Yeah, sure. What is your estimate on wage increases we should expect in 2024? Maybe you can break that by region a little bit, so we get a little bit of color what type of headwinds we should expect here.
I mean, overall, for 2024, we have approximately 4%-5% increase estimated in the P&L. And of course, in Germany, it's, yeah, it's coming from the collective labor agreement in place, where starting May, we have the 4.3% plus the other components we know. And in the other regions, it is similar. I mean, China, for instance, was minor because also their inflation is not such so heavy. And so all across the board, as said, 4%-5%. Yeah. Does that answer your question?
Yes. Perfect. Thank you very much.
Thanks to Benjamin, for the questions. I think some questions are already answered, but perhaps Jorge González from Hauck Aufhäuser. You have an additional one?
Yes. Hello, Christoph. Hello.
Hello, good afternoon.
I was wondering if you can confirm regarding the outlook, if I understood well, the difference of achieving the midpoint or the upper end is going to be linked to your capacity to deliver on the larger projects. Is this a good reading of the guidance?
Yeah, I would say capacity. I wouldn't see with the guidance we have given that capacity is playing really a huge role in it. I mean, it's we are running at, let me say, at the limit at the moment, but this is planned. We have looked deeply into that. We are aware of where we are. Our people know what they do. And I mean, you know us, we all the time heading for some midpoints. In the middle and little is Olaf's speech all the time. So but I wouldn't say that for the time being that this is the factor.
I would say maybe it's more on other things where we have tailwind on material costs, how this develops over the year, and this might have some impact then in Q4, because most of it is fixed, so there's only a smaller proportion. And second, maybe how the service business is developing in all the segments. So this is more, let me say, a kind of a factor, rather than the, let me say, the capacities. This wouldn't be the point where we come at the end and say, "No, the capacities have been not sufficient, and we have not achieved, therefore, the profitability where we, it should be.
Okay, because reading your press release, you are then being just after commenting on the very good evolution of the margin in Q4, also linked to the better supply of electronics, that the positive effect now of this better supply is going to have a lag in 2024. Is there any headwind in this regard, any problem in the supply chain at the beginning of the year that might not allow you to continue with this super good trend that you had in Q4?
Yeah. No, we haven't any problem. I wouldn't say any problem. I would say we have problems on a level we can deal with on and with quite big efforts to make sure that they are not influencing productivity. Why do I say that? Because I would say every month there's one supplier popping up where we have a problem, less on the supply chain general issue rather than on the growth we have, and that we might need more capacity than anticipated. That's one of those. Second, of course, we have the Middle East, Suez Canal turmoil, which is another issue. But nevertheless, we have done such a good cooperation with our suppliers over the last two years, that I would say the interconnection is much, much better than before.
I would say what they have on stock is much higher than before, and what we have on stock, you have seen that in our working capital, that inventories went up. That has a particular reason. So I wouldn't see, at least for the next six months, that we run into a supply chain issue.
Okay, and last question from my side. So to understand better the margin, the EBIT margin guidance, are you including here any costs related to the acquisition that is maybe also impacting the margin in a substantial way for the year?
Say it again, the first part I didn't catch.
Yeah, no, if you are adding here, we should take into account any cost related to that decision.
No.
No.
No.
Okay. Thank you very much. I go back to them.
Yeah, welcome, Jorge.
Thanks to Jorge. I have additional question from Sebastian Growe. Is this right, Sebastian?
Yep, that's correct. I also know where to face. So first one is on working capital. Sven, as you say that the working capital has overall played out better than what you would have earlier planned for. If I look just through the quarters, then I believe it's fair to say that the order intake has, in a way, very much played out as you had predicted it. So to me, this would very much suggest that the working capital is really where you want to have it in the meantime. So the backdrop of the question simply is: Is there any risk of a sort of flowback and working capital build-up in the year 2024 over 2023, or would you think that the current level is sort of the right one also when we talk it as a quarter to sales?
Yeah, maybe Susanne, and then I have one quick one on process technology.
I mean, if I look at the overall value of Working Capital, we expect some increase in 2024, coming also from volume increase. But if you, if we look at the percentage points, so, also there will be a slight increase of maybe 1-1.5 percentage points. So that's our expectation currently for 2024.
Okay, understood. And for the CapEx, it would, I'm sorry, I'm just trying to build the, the free cash flow bridge. So, for the CapEx, you would rather think it's going back towards the 2.5%-3% corridor?
3%, exactly. Yes.
Ah, right.
Yeah.
Okay, and on the process technology segment, it appears you have made really great inroads. I'm just asking if you are kind of pushing the boundaries of what's possible, simply. So getting towards a 9% margin eventually, and what is really sort of more turnkey related project business, it feels like very, very strong already. And I would just love to hear if there are sort of, kind of, positive market-related developments that you do see. So just kind of contrary to what you find in intralogistics currently, eventually less competition or whatever is driving this. Yeah, it would be just helpful to hear your thoughts around that.
I mean, if you look to processing, I would say there are four underlying factors why we, where we are. Number one, smaller projects concentrating even on components, like all the others doing anyway. So we copy the business model of others. We have seen that with the acquisition of pumps. Then, having entities around the world, in particular, our entity in India, was having 200 people at present in India for processing, is helping a lot in the Asia Pacific area, that we can actually build on projects there on a good price level and cost level. And number four, sharing the global presence of the team, because we have a North America team, in Asia, in Europe. And once I look to that, there's one driving factor, we have a strong connection to bottling and packaging.
Because in the meantime, for example, once we quote a filler, we go behind that and look if there is water treatment needed in addition, because in many cases, there's a water treatment. We are not selling that together. We are coming usually in a second phase, but having the sales different, organized, and looking deeper into what can we sell as cross-selling, additional selling, however you want to name it, is has a big impact. Second, we are localizing quite a bit of the equipment in India, that we can serve more markets on attractive price levels. So we have moved components from Germany to India. Let me say, scale them down in terms of technical approach, that they are, for example, feasible for Africa and for many cases, to South America and to Asia.
And we do even some sourcing from India to North America, which helps a lot. So we have a different infrastructure build up. And I would say, at the moment, we are increasing the sales network. Why are we doing that? Because we have now a fundament on which we can grow, whether it's components, whether it's what we call units, and even some on the turnkey projects, again, we are careful with those. But all of that, this would provide long-term, a, I would say, a good growth pattern and a good profitability pattern, of course. I hope that answers your question.
Yep, it does. Thank you very much. I'll pass it then on to Chris.
Thank you to Sebastian. The next question coming from Christoph Dolleschal from HSBC. Chris, Christoph, sorry. Chris, your questions, please.
No worries, no worries. Excuse me for my voice. I hardly have any, any voice left. Just one follow-up, to be clear on the, on the pricing. Could you tell us what the expected price component in 2024 is? You were talking about, twenty-three, when you referred to 25% coming from, from price and 25% of volume, if I remember that correctly. And, and so basically, within your guidance, what is, what is price, what is volume in 2024?
Hmm, am I still-
All is all volume. I mean, because looking at the growth from 2023 to 2024, the price component is rather minimal.
Yeah.
So it's more-
Okay, so that also means no price increase is expected in 2024 as well?
We had some price adjustments, but compared to what we have done, let me say, the last two years, that's minor, and it's more playing around on more individual pricing rather than an overall pricing. But what you see in 2025, 2024, in terms of growth, will be almost everything will be volume.
Okay, cool. Thanks very much.
Yeah, welcome.
Thanks to Chris. So, Peter Rothenaicher from Baader Bank. Peter, your questions, please. Peter?
Okay. Yeah, yeah, now.
We hear you. Yeah, we hear you now.
Yeah. Thank you. I would like to ask about your production sites in Hungary and China. To what extent will they contribute to growth in production? And to what extent do you expect here some cost advantages in 2024 and 2025?
Yeah. Hungary will play on a level like all the other, let me say, 10%-12% growth, they will play a role into that. Hungary is, in the meantime, fully functional. We have been asked this morning several times from the folks from the newspapers, how this is. I said it was a no-brainer in 2023. So, it's delivering what we have planned for. We have 700 people there, and if we look to the, let me say, the margin improvements, I would say there is a contribution in a single-digit number for 2024 out of Hungary. China, we are growing significantly. The limitation is, in fact, our facilities there.
So we are growing in terms of the local new machine production that has not to do with all the, with the overall business in China, but we are growing by 30%, and that has no profitability impact because it's purely securing market share in China. It's not giving us any advantage. It's there that we keep profit levels on where we are, and that we increase installed base to continue on life cycle business. And China, we are going to extend further over the next 2 years-3 years. However, this will be on a rental base that we do not need to invest into infrastructure, where we have a chance in the long run to buy then this infrastructure. But to make sure that the risk profile for China investments is low.
Hmm. Okay, another question on your growth limitations in the current year. So if I understand sort of correctly, supply with electronic components is no issue.
Yeah
... anymore, so you could even get more than what is planned for today?
Yeah.
Is that right?
Yes, that's correct.
Therefore, the limitation would be qualified personnel, so engineers for installing equipment at customer site, service technicians, that's always the thing. Or is there any other limitation you would see in plant capacity? Is there any limitation, do you have to do something there, or is it only momentarily in terms of personnel?
I mean, you named the real bottlenecks. I would say that's really service technicians, and I would say qualified person for here factory acceptance tests. This is more or less the same qualification as the service technician, because they are doing the test runs here in the facilities and all the programming. So this group of people is a limiting factor. Nevertheless, I would say for 2024, we should have that under control, and this is one of the most focused items we have in the organization, that we are building up and training this capacity. Because, let me say, out in the field, the growth will be installed with a time lag.
And this is the reason why we have still time to build those people up and where we are really, I would say, on a good path, but this is a factor. Floor space in our facilities might be of an issue, but this we can solve by either suppliers or we have found quite good facilities to rent, because, again, we don't want to invest heavily in infrastructure with that. And once we are getting them back in, I would call it the normal flow, and, according to our processes, I would say there's a good chance that we are getting back into the existing floor space with the support of some suppliers. That should be okay. Most probably, we would not come and say, "Oh, no, floor space was the limitation.
That's the reason why we didn't grow. I would say we have that under control for 2024.
Hmm, okay. Thank you. And, lastly, some technical questions. So, in the FY year, financial year 2023 accounts, depreciations were higher than usual. You mentioned some special effects, which also had a counter effect on the financial results. What is your current view on the level of depreciations in the current year? And what can we expect for the financial results? So, adjusted for all the special effects, I had the impression that the financial result was weaker than I would have expected, considering the higher interest rates.
Let me just take the, take the question apart. So, first of all, what do we expect as depreciation for 2024? So approximately EUR 150 million-EUR 160 million. So we are above normal prior year levels. I mean, normal means without extraordinary effects, also because of the investments we have done in the past. So that's, that's I think the first part to your, to your answer. And then secondly, if we look at the financial results, so what do we expect? I think I have to take that-
EUR 8 million-EUR 10 million.
Yeah. That's what I also have in the back of my mind.
Yeah.
EUR 8 million-EUR 10 million. Exactly. Yes. As a, as a, as an interest expense, as a financial expense, as a, as a combination also of, of lease, lease expenses, interest expenses and leases. So EUR 8 million-EUR 10 million, approximately.
Positive or negative?
Negative.
Negative?
For the next year. It was this year, right?
Yeah.
Like for 2024?
Oh, sorry, for 2024, positive. Sorry, I was mixed up. Sorry.
2024, positive financial-
Yes.
Okay.
Mm-hmm.
Thank you.
No further question from you, Peter? Then I have an additional question from Sven Weier.
Yeah.
Thank you, Olaf, for taking the follow-ups. I got two. First one is on M&A. I was just wondering about the actions after Netstal. Do you think you now have your hands full and plan nothing else afterwards? And just also generally, I mean, I think you've done quite a few acquisitions which were more hardware-related. I mean, does it mean you're quite happy where you are on digital, right? On software, you think you have what you need, or is it simply because software companies would be way too expensive?
First of all, what do we do on M&A if we have, do we have the hands full? I mean, what worked extremely well, since we have the business unit organization, that we can distribute between the business units quite well once we do an acquisition. If you look to what we have acquired in processing, that went very well, and the team is very experienced in the meantime. So this was a good setup. Nevertheless, I would say it would put it more on the financials that we are a bit slow on acquisitions, because first, we have to digest the EUR 170 million and bring things okay that we are hopefully happy at the end of the day with next time.
Now, once we are more hardware-related, if you say that, I would say in processing, we have acquired a lot of know-how, where hardware is all the time a bit difficult to say, so we acquired know-how. And now the question: would we acquire something in digital, and are we heavy with digital? I would say, this is, we can't be satisfied where we are with digital, because we would like to be much ahead up, but I would really qualify that. I think if we look to the industry, we are still on the front end of anybody in our industry with digital. I mean, we said that we invested a lot of people into our digital community. We are running up to 500 people in the meantime.
One of the particular points was we have to bring, and this would be a long explanation, we have to bring our legacy, okay, in our machines, because the architecture we have in our machines grew bottom up, and in the meantime, you need an architecture top-down. Now, in order to do so, acquisition wouldn't help you. That's, that's our point. We had an acquisition, which we sold off in the meantime, because we don't see there is a real help into what we are doing. And our point is, we need own people to understand the business from the basics, because otherwise, sorry when I say that, we maintain on password level and do not have solved the real issues. Then it looks nice, but it, it's not feasible for the long run.
I have 1000% trust into what we are doing at the moment with the team. It's building up expertise, but it's building up expertise in the direction that we can actually live from that in a future decade. That's the point where we are. And that's why we have never looked deeper after the first experiences we had into digital acquisitions, because we believe, even with a lot of examples around us, that they have not really brought in a core with a big legacy the company forward. I have to differentiate for those being not so much on the core and on the legacy, but for us, bringing the core and our life cycle business in the long run with our legacy ahead. This is our big target, and I think we are on a very good path.
Next year is Drinktec, because it's a shorter period than usual, where we hopefully can all invite a few, and we are showing really the next level on digitalization and how lines of the future will look like. This will be quite a step forward for the industry once you see that. So again, I'm 100% confident we are on the right track. Are we satisfied with them? Not yet, because it's not delivering the impact everybody wants, and we have not seen anybody having that, so I have to say that. And that's the reason why we don't do acquisitions, or we are not targeting on larger acquisitions in terms of digital. I hope that long, long story about a short question, but I think I should put that into context.
That makes sense. Thank you.
Yeah, welcome.
The other follow-up I have will be, we talked about Hungary as a production site, China. I mean, I was just wondering, given the whole noise we have around production, industrial production in Germany becoming less competitive, chemical companies moving away, obviously. I mean, you have a lot of people in Germany. How do you look at the environment? I mean, is it also tough for you guys, or is it still okay?
So how do we see it? Number one, we definitely need to have an alternative for the Chinese facilities because they are serving to a certain extent, even, Asia-Pacific. So we are in the final stage of doing a final decision for a greenfield location in Asia. It would be not a surprising case. It would be the biggest country in Far East, with the biggest population in case we would go there. So that's, and that's for geopolitical reasons, that's for cost reasons, and that's for access to the market. But this does not mean that we are giving up here in Germany or that we are, let me say, have a significant change in terms where we do our business. We strongly believe into Germany, I have really to say that. Why?
Because we are exporting in 150 countries around the world, and still Germany offers one of the most attractive places in the world doing business with 150 nations around the globe, and we should never forget about that. I mean, of course, it's in danger with the political developments and the politics taking more ownership of, let me say, industrial policy and influencing us as international companies. That's certainly an issue and a risk, and that's the reason why we are building a, let me say, a geopolitical-driven backup with the facilities we want to do in APAC. And the same way we look to the US, we have not made decisions, because in case even with the Trump administration, which might come up, we do believe that import taxes will still stay reasonable.
Even as the Biden administration has quite some tough import tariffs. So we wouldn't see a too big change there and have been deep into that. So I would say this is balanced. And second, all our people know, in case we want to be long-term in Germany, productivity improvements beyond what we have seen are needed, that Germany is still attractive. But once you are doing that race, we strongly believe that Germany is still attractive. That means automation, that means leaner processes, that needs artificial intelligence, whatever you can think, and on a level beyond what we have done previously. But if I summarize that, we still believe in Germany. Nevertheless, we build up more infrastructure to be more resilient if things are going more south than we expect. Again, long answer to something.
Yeah, hopefully not. Hopefully not. Last question, that should be a quick one, I guess. I was just wondering if you already can share what you have in mind for the dividend?
I mean, you know our dividend policy, and we have been, yeah, at the upper end of our 25%-30%, and with a good result of 2023, we also want that our shareholders will participate, but we will not tell a number at this point of time.
That was worth a try. Thank you. Thank you, both.
Thanks to you, sir, for your questions. I didn't see any additional questions in mail. I had still a hand-raising function from... No? From Peter. Is it a follow-up question, Peter Rothenaicher, or is it just-
No, thank you. No question.
Okay, thanks to you, Peter. So perhaps additional questions from the analyst investors? No, I didn't see any additional questions, so I think Q&A is finished.
Okay, yeah. Then thanks a lot. Now, let's see, we are at the beginning of the year. You see us here standing, yeah, with, let me say, some reflective approach to 2024, but nevertheless, we have a good fundament. And as we had in the past, we have, I think, a deep view on all the aspects to realize what we are going to promise or what we have promised. So I think we have really a good chance to achieve that what we said. Thanks a lot for listening today, and was a pleasure, as always. Thank you.
Thank you.
Thank you.
Thanks. Bye.
Thank you. Bye.