Earnings Call: Q2 2024

Aug 8, 2024

Summary

H1 adjusted EBITDA margin rose to 9.6% despite lower revenue. Dealer inventory costs led to reduced production and lower FY24 guidance, while motorhome demand and new orders remained solid.

Good morning, ladies and gentlemen, and warm welcome to today's earnings call of the Knaus Tabbert AG. In today's earnings call, we will delve into the financial figures of the first half year of 2024. I am delighted to welcome the CEO, Mr. Wolfgang Speck, who will start with the presentation shortly. After the presentation, we will move forward to a Q&A session. With this, let's start. Mr. Speck, please, the stage is yours. Yeah, thank you very much. I would like to welcome you today to our reporting on the release of the figures for the first half year of 2024. Ladies and gentlemen, the signs for a successful caravaning year in 2024 remain bright. We are again in a position to produce and deliver vehicles with the usual reliability. This benefits customers as the dealer stock levels are well-equipped just in time for the start of the season or model year change. Another positive indicator for the industry is the continuing popularity of our holiday type. This development comes as no surprise, as the crisis of recent years have impressively demonstrated that the benefits of mobile holidays, such as freedom and individuality, are becoming increasingly important to people in their leisure activities. Just last weekend, an article in the FAZ, the Frankfurter Allgemeine Zeitung newspaper, with the headline, "Everyone wants to camp now", was dedicated to this form of holiday. The conclusion, the trend towards mobile traveling, is not only attributed to the coronavirus pandemic, but is also seen as a long-term social change. It is precisely this social and demographic change that we have been pointing out as a driver of our growth since the beginning of our stock market listing. Ladies and gentlemen, the German market for leisure vehicles looks back on a pleasing first half year. A total of 57,893 new leisure vehicles were registered in Germany in the first half of 2024. This corresponds to an increase of 6.6% compared to the same period of the previous year, and thus marks the second-best figure behind the record half year 2021 with 62,839 new registrations. With 45,344 new registrations, the motorhome segment exceeded the previous year's result by 9.3% and is well above the average of previous years since 2019, and only just behind the all-time high of roughly 49,000 registrations in 2021. With 12,549 new registrations in the first half of the year, caravans recorded a result slightly below that of the previous year, but leveled off at a stable level in the long term. The main driver of the positive trend is the motorhome segment, which remains well above the pre-pandemic level. Thanks to improved vehicle availability, larger motorhome models, in particular, are once again seeing an increase in demand. Knaus Tabbert continues to occupy the top positions from new registrations of motorized vehicles. In the most important segment of semi-integrated motorhomes, KNAUS and WEINSBERG occupy first and second place for new registrations, and they are well ahead of their competitors. Ladies and gentlemen, before I explain the half-year figures for 2024 in detail, I would like to take this opportunity to explain the background to our forecast adjustment of July 17th again in more detail. The following observations are very important. First of all, the market for leisure vehicles continues to grow. With 45,000 new registrations, the motorhome segment exceeded the previous year's results by 9.3% and is well above the average of previous years in 2019, and only just behind the all-time high of 49,000 registrations in 2021. Secondly, demand for leisure vehicles of all Knaus Tabbert Group brands has been solid in line with our expectations in the 2024 financial year to date. Knaus Tabbert sales figures in the important motorized vehicle segment in Germany have increased by 5.1% year on year to 6,982 vehicles. Third, following the presentation of the 2025 model year in mid-June, our order book is showing the expected positive momentum and is currently well over half a billion euros. In the month of June and July alone, we are stable at the level of previous years with 6,514 new orders. However, we do not sell directly and immediately into what we see as an intact and growing market, but sell our products to dealers who serve the end customer market from their stocks of showroom vehicles. These dealers' stocks are at a completely normal level by historical standards. What makes a difference compared to the previous years? These dealers are now financing their inventories at interest rates of up to 8%, compared with just 3%-4% a short time ago. This interest burden is placing a heavy load on retailers. They have to temporarily reduce the level of their stocks. They are doing this by continuing to sell well into a growing market, while we, as manufacturers, are temporarily supplying reduced quantities to our dealers. To summarize, A, stock levels are generally higher today than in the past, as dealers have restocked after being sold out during the pandemic years. B, the stock value has increased significantly due to the change in demand towards motorhomes. C, on average, dealer stock levels show a level of around 30% of their annual sales. In other words, more vehicles, which are on the market for longer, are more expensive and have to be financed with higher interest rates, are currently prompting dealers to reduce their inventories for cost reasons. In other words, our dealers' current stock levels are in line with the market demand, but not with their necessary cost structure. What does this mean for us? First, the market has leveled off at a high level after the coronavirus boom phase. Secondly, the market for caravans in the sense of towables is declining slightly. We already reacted to this two years ago in favor of motorhome production. Third, the market for motorhomes and campervans continues to grow. Knaus Tabbert is at the forefront of the growth markets. Fourth, dealers are reacting to the high financing burden and must adjust their stock. We are supporting our retail partners by adjusting our production planning accordingly. In more concrete terms, in addition to actively supporting the marketing of stock levels with the Champions Deals sales initiative for KNAUS, WEINSBERG, and TABBERT brands, we have decided as a further consistent measure to extend the regularly scheduled factory holidays in August from three weeks by a total of eight working days or two weeks. With this clear signal to our retail partners to support them in optimizing inventories, we also accept that we had to update our own expectation for sales and the adjusted EBITDA margin in 2024 financial year, despite the positive end customer business. Ladies and gentlemen, in my presentation when reporting on the 2023 financial year, I already focused on optimizing the balance sheet and the quality of earnings for 2024. In this respect, the figures published this morning are certainly viewed positively. From this perspective, we have taken key decisions in the first half of 2024 in connections with a return to normal business operations, which should also have a positive impact on earnings performance in medium term. A, focus on earnings quality and free cash flow, and B, optimizing working capital. Ladies and gentlemen, Knaus Tabbert recorded consolidated revenue of EUR 699.4 million in the first six months of 2024. The lower revenue compared to the previous year is related to the model year changeover during which vehicles are pre-produced, which will gradually flow out to dealers in the coming months and then have an impact on our revenue. We prepared Knaus Tabbert for the change market conditions at an early stage. A key factor here is the adjustment of the product mix and the broad product range in line with our multi-brand strategy. This rapid, very fast adjustment is supported by ultra-modern production facilities and our flexible production plant strategy. As a result, we achieved a strong earnings performance in the first half of the year. At 9.6%, the adjusted EBITDA margin was a pleasing 0.4 percentage points higher than the previous year's figures of 9.2%, despite the lower consolidated revenue. Adjusted EBITDA for the first six months of 2024 was slightly lower, in line with the sales trends, and amounted to EUR 67.5 million. Ladies and gentlemen, cash flow from operating activities amounted to EUR 25.5 million at the end of the first six months of 2024. The negative change in working capital of EUR 21.3 million was mainly characterized by an increase in trade receivables and an increase in finished goods. In total, both items increased by around EUR 18 million. In contrast, we were able to significantly reduce inventories of raw materials and supplies by over EUR 70 million in the first six months. Cash flow from investing activities fell significantly by 41.3% to EUR 13.2 million in the first six months of 2024 after EUR 22.4 million in the same period in the previous year. Significant payments relate to investments in the completion of the new production line, including the construction of the new hall at Morelo in Schlüsselfeld. In total, Knaus Tabbert thus generated a positive free cash flow of EUR 12.3 million as at June 30th, 2024. In June 2024, we signed a syndicated loan facility totaling EUR 250 million together with our longstanding banking partners, Commerzbank, NordLB, and Raiffeisenlandesbank Oberösterreich. The facility has a term of three years with the option to extend it by another two years and has replaced the previous financing line. With a higher volume of EUR 100 million, we are also taking account of the growth. The company is currently financing itself at interest rates of 5.7% under the syndicated loan agreement and at 3.5% under the long-term financing program. The terms of the syndicated loan continue to oblige us to comply with certain financial ratios, which relate to a net debt ratio less than or equal to 0.75, and the equity ratio greater than or equal than 27.5%. As a reporting date of June 30th, 2024, both the ratio of net debt and the equity ratio were within the agreed targets. Dear ladies and gentlemen, on July 17th, we updated the forecast published on March 28th. Accordingly, Knaus Tabbert now expects consolidated revenue for the full year 2024 to be in range of EUR 1.3 billion to EUR 1.4 billion. You remember previously, EUR 1.4 billion to EUR 1.55 billion, and the adjusted EBITDA margin of 7%-8%, previously 8%-9%. Thank you very much for your attention, and I look forward to receiving your interesting and valued questions. Thank you very much. Yeah, thank you so much for the insightful presentation, Mr. Speck. Now we are moving forward, as said, to the Q&A session. To keep the conversation engaging, we kindly request that you post your question via the audio line. To do so, please just use the Raise Your Hand button. If you dial in by a phone, you can use the key combination Star nine followed by Star six. If speaking directly is impossible, you can also post your question in our chat. We have a first question from Alice Acton. You should be able to speak now. Thank you so much. Yes. Good morning, Wolfgang. Thank you for the detailed presentation. Good morning, Alice. Good morning. I'd like to circle back to your lengthy overview on the dealer inventory. It's just a couple of things to follow up to complete my picture. Can you maybe share with us what the parking lots and the showrooms actually look like? I mean, how many vehicles do they have to keep on premise? Obviously, they can't keep one of every single model that you have in your portfolio. The second part to that, I would just be curious, are those for show only, or do customers come in and actually drive them off the lot? What sort of percentage between the two might occur with the sales? Could you please repeat the second part of your question? I missed that. Yeah. I'm just curious, the vehicles they have in their parking lot, do some customers actually drive away with them on the same day, or are they just there for show only? Yeah. First of all, the dealers on stock. We have not a full clear picture on that since we are also depending on inventory datas of our dealers. But what we see is that they have roughly 30% of their yearly sales on stock. This is something what I can say. Secondly, that's a little bit, I would say, that your question is leading of how long do we expect do we have to shorten our capacities and from our point of view, it's something where we see it will definitely end up end of the year, maybe also earlier. It depends also a little bit what we will see in Düsseldorf. As you know, end of August and then for 10 days, we will have the worldwide biggest caravanning show in Düsseldorf. This is always an indicator on the market and dealer behavior. Normally we sell more than 1,000 vehicles just in that couple of days. This is something, again, which will deliver a nice signal to us. But again, the measures we take, longest end of the year. What we see short-term, also let me add that is, and I mentioned that already, that we have a really nice momentum in order income. What we see specifically during the months of June and July. I mentioned that numbers are received only in those two months, 6,540 new orders. Compared to the previous years, will deliver that number in 2022. We saw in those two months, 6,400 and in 2023, 6,600. So, also a signal where we see this is in line with the very good years, 2023 and 2022. End customers, when they come to the dealer stock, of course, first of all, they check, they try out, they figure out. But very often they have a clear picture on specific models. Because what we learned during the last years, also based off several studies, is that end customer prepare their buying decisions for a long time. So sometimes, at least one year ahead of buying something, they start with collecting datas, interviewing friends, peoples on the campsites to receive a little bit on more specific datas to make the right buying decision. Also when we look to RENT AND TRAVEL, our rental platform, we see that during the autumn seasons, that one family is renting out for weekends in a row. Always different types of vehicles just to confirm their buying decision in terms of layout, size, and stuff like that. I'm not sure if this was the point. Yeah. That's all very helpful. It just helps complete the overall picture of this important topic. Yeah. If I may, just one shorter follow-up regarding the registrations. If I'm looking at the numbers, including June, overall caravans and motorized vehicles, they were down about 1% in May and then up 3% in June, which compared to the 6.6% for the six-month basis, we have a bit of a slowdown. I'm just curious if you can comment on that cadence and how we should view that the past couple of months versus the whole year. Yeah. We have, of course, seasonal patterns in the registration, and that is the case in Germany, but also in other European countries. What we see normally, that when season starts, we see always the all-time high in the 12-month pattern in March normally, and then it goes down slightly April, May, June. Then we have a very flat registration situation then for the month August, September, October, November. The whole year then, the whole rest of the year, until it comes back to then February, March, again peak. This is always the pattern. What's different, just to give you a little bit of flavor on that. In this year, in January, in Germany, motorhomes, we saw 3,700 registrations. In February, 5,800, and then in March, 10,200. Followed by April 9,300, and then again roughly 9,000, and then June 7,500, and July 7,200. This shows a little bit that pattern, which is the same in all segments. Caravans or motorhomes, you see the same type of seasonality in registrations. Of course, you can understand that whether we as producers nor the dealers can follow this seasonality curve by adapting, whether us with production patterns nor the dealers with big deviation in demands and stock levels. We have to keep production more or less over the 12 months on the same level and the dealers too. The dealers always act a little bit as a buffer between us keeping production normally on a flat rate and the market with the seasonality. This is also creating those stock levels over the year. This is where we also are together with the dealers are pre-financing to equalize a little bit market demand. I have also the two most recent figures, July, in front of me, just to give you a little bit of flavor of what we saw there. For the January until July, in the segment of the motorhomes, we see roughly 53,000 registration, which is a plus, in that seven months of +9.5%. When it is just about the month of July, it is a plus of 10.9%. Also very positive signals. As I mentioned, the first seven months are close to the all-time high during the last six years. We saw just 2021, which was really driven by the pandemic, as slightly above what we saw now in 2024. All other years, I just give you the number to compare, in 2019, we saw 40,000 registrations in the first seven months. Again, now we saw roughly 52, 53,000 registration. This is a nice signal. Motorhomes. In caravans, it is slightly different, and that is because we have that trend in the outside markets, specifically towards the campervans, and they are substituting more and more, also caravan demands. Nevertheless, caravan stays on a very nice and high level, and I would say, we will also the future see caravan registrations which are, when you now look to the first seven months on the level of 17,000 units. What we also saw in caravans, a plus in July of 3.1% compared to July 2023, and we are more or less on the same level when it is about the first seven months to compare them with the first seven months in 2023. That is a little bit of situation, in Germany on registration and also looking to other countries. The Netherlands are well known as to be a caravan nation. These are now numbers covering the first six months, +5.3% in caravans and +10.7% in motorhomes. France also as one behind, besides U.K., as one of the biggest markets. We saw the motorhomes with a plus of 9.2% in the first six months. It is a market situation where we feel very comfortable and also that leaded to those nice results in the first six months in 2024. Nevertheless, again, we have to take care of our dealers. It is a very valuable asset. We work with dealers together with 50, 60 years. We have to take care of them, and that is the reason why we will help them to release that burden of those high interest costs. That's great stuff. Thank you very much. I will look forward to seeing you in a couple weeks. Yeah. Looking forward to meeting you, Alex. Thank you. Yeah, thank you so much for the question, Alex. We've got another question from Mrs. Martha Forks. You should be able to speak now. Hi. Good morning. I just was hoping to understand your revenue development a little bit more. I understand that it's linked to the change in model year and you pre-producing vehicles linked to the change in model year. But clearly, this didn't have the same impact last year, this time last year. Is this an early impact from the dealer inventory situation or could you talk about that a bit more? Thank you. Yeah. Thank you, Martha, for asking me that. Revenue development, of course, yes, we have a different situation what we see in 2024. What we see in 2024, by the way, is the normal situation, what we saw also ahead of COVID. What happened in COVID, and sometimes we humans are very good in forgetting sometimes things. You remember very well that we as Knaus Tabbert run out of chassis. We had the delivery constraints coming from the coronavirus. We had the problems with the Suez Canal where one container ship blocked that. We produced roughly 50% of all our vehicles to unfinished stock. It was catastrophic. When you look then to the order book, to the structure, to the end customer behavior, you remember that we received orders on Fiat Ducato chassis in a time where we produced roughly up to 90% of all our motorhome production on the Fiat chassis. That was the reason why the dealers sold motorhomes on Fiat Ducato chassis. Then just a couple of months later, we received from Fiat the news, that they are not willing to support the whole industry in the same volume as they did the years before. So instead of delivering 13,000 units to us, they just delivered 7,000. We had been forced to start immediately with a multi-brand strategy. But people outside ordered a Reisemobil on a Fiat Ducato, and we had been obliged to deliver that. Also that leaded to a situation, that it was a type of, how to say, traffic jam in our order pipeline. We received the order, we had the orders, we had not been able to produce and to deliver because we had not the capacity nor the chassis. That leaded, at the end, to this extraordinary level of order book of EUR 1.4 billion, EUR 1.5 billion. It was not only because the market was booming, it was because of that, again, traffic jam in our pipeline, that we had not been able to produce as fast as we received the orders. Then we had situations that we had officially the model year change, but the order book was still filled with orders from the previous model year and the previous model year. This leaded to a total other pattern to that what you see now in 2024. Now in 2024, we have the model year change, first of all, and that is always the same, around June, where we have the dealer days. June, July, ahead of the summer break. Then the whole production system is changing products from the old model year to the new model year. Then we do a pre-production to be ready after the summer break to deliver to Düsseldorf and then to the market. Then that leads also to higher inventories at the end of the first half year of every year in the normal pattern. That is a little bit the situation, compared to the previous years, Martha. I hope that helps to answer your question. Thank you. That makes a lot of sense. Thanks very much. Yeah. Thank you so much, Martha, for the question, and also for asking the question. We have another question from Tim Kruse. You should be able to speak now. Yes. Good morning, Wolfgang, and thanks for taking my question. Can you help me understand your expectation on the next two quarters, especially the next quarter with the extended work holiday? What can we expect in terms of sales development? Do you expect a similar decline, year-over-year for the quarter as we saw in Q2? Is it more an inventory effect we can see in the third quarter as you are probably selling out more of the stock levels you have? That would be great if we can get a bit of more understanding on, what your expectations are for next and the fourth quarter. Thank you, Tim, for asking me that. First of all, it's quite easy to calculate. I will give you, of course, more information on that. Just to start with that. You see where we ended up in the first half year, roughly EUR 700 million in sales and the EBITDA of 9.6% and roughly more than EUR 60 million. When you look now to our guidance, you see that we guided between EUR 1.3 billion to EUR 1.4 billion. That means you can expect that we have to add EUR 600 million to EUR 700 million to the guidance, means in sales, but also in total output. We have to add more or less the same what we delivered during the first six months to end up on that guidance level. Number two, on EBITDA, it is a little bit more different situation because we have to cover the cost structure by exceeding our output now during the summer periods. In August, for example, we closed for six months without having any output. Then we reduced working time. That was also what we addressed already. Meanwhile, we are down to 35 hours. We will work 35 hours, but in the overhead, we reduce to 28 hours. We are on a more careful side when it is about EBITDA margin. What you also will see is, and that was one point on inventories. To receive the total output, to make the EUR 1.3 billion to EUR 1.4 billion happen, yes, we will also continue to decrease our inventory level at Knaus Tabbert. This is also something where we will generate then total output at the end of the day also, EBITDA margin. Okay, thanks. Is that rather evenly, just to follow up, because I have not really understood it yet. Will we expect an even sales development for Q3 and Q4 or a slight dip in one of the two quarters? In sales, we will have a situation that in Q3, we will slow down, and this is just because of summer breaks, because we close the factories. We have no people in, even not delivering, being able to deliver something. We will see then a slightly better Q4. Okay. Maybe remember that it was, I would say, 2022, where we ended up with a very fantastic Q4. This is also something which you can take into consideration that we are able to get adapted the whole machinery very fast, on, off. This will help us also now to speed up in Q4 then. A lower Q3 and a relatively higher Q4. Okay, that makes sense. Yeah, thanks. One more question on the order intake development. Great to hear that June and July have improved. Can you maybe comment on, I remember that dealers have some kind of mandatory order volumes and how you are seeing sort of order behavior over the whole dealership. Is that on that level or above, below? Below probably wouldn't be possible, but maybe you can just comment on what behavioral sort of patterns there are. Yeah. Yeah. What we see in the order income is, and I mentioned that point, that after the model year change, and we had the dealer days in June, we had that really nice order income for the model year 2025. I mentioned that roughly 6,500 units in two months, and in accordance, by the way, to the previous years. This is for us a signal that we see and that also it's about trust of the dealers to their end customer market situation. Because they are ordering also already for vehicles to be delivered in the year 2025, by the way. In the year 2025. What we also see is that they are ordering more or less on the same level their demonstrators for the model year. What's a little bit different, what we see, normally in the years before, we saw that they ordered 80%, 90% in very short term of their individual target. Now we see they are on a lower level, which means they are also waiting a little bit to know what will happen Caravan Salon Düsseldorf as an indicator before they open their pipeline to send us then again new orders. Yeah, I would say, I have to be careful with my optimism. We are quite confident that we will also see a year 2025 where we can show a nice performance also on the way to our midterm guidance. Yeah. Maybe I would like also to add something. I talked a little bit about our early adaption to the new situation and to also when you look to first half year, please take in consideration that we already introduced April 1st, the four days a week shift pattern. We reduced all overtime. Nevertheless, also with this reduced output, we ended up with a 9.6% in EBITDA, which also should show you, and I can talk a lot about that, and that I talked in past a lot about that, the capability of the company to get adapted to new market situations very fast. That is also the proof for that we are able to do that. Yeah. Okay, thanks. Maybe one last question on Morelo. It seems currently there is no big difference between the luxury and the premium segment. If I recall correctly, Morelo was more production constrained due to the new production line. How is sort of order and output development between the Knaus Tabbert, the other brands, and the Morelo in the next month or quarters as Schlüsselfeld said, I think it will be ready in the second half of the year. That would be interesting. Thank you. Yeah. First of all, when you look to the split in revenues and starting with groups revenues with roughly EUR 700, we delivered in the premium segment EUR 615 and the luxury segment, roughly EUR 85. When it comes again to Morelo, they ended up last year with EUR 87.5. So they showed this year a minus of 3.4, but I will explain that. When it is on EBITDA, they ended up with EUR 11 million and last year was EUR 12.4, so a minus of 11.2. But why? Morelo, Tim, you mentioned that you are aware of the situation. They are in the middle of changing the whole model range. They talk about also roughly, I do not know, more than 10 models, which they now bring to a new design. It is not only a facelift, really new models, which is a real big workload, not only to get all the new parts delivered right in time from Turkey, from Poland, from the Czech Republic. They are working very tough on that. Also, these new products need to be introduced to the production assembly line. Now they must be introduced in the new factory. So they are also in the middle of introducing and ramping up the new factory, which is really a lot of work now because it is parallel to renew the whole fleet in your portfolio and at the same time to introduce a factory with a capacity of 600 vehicles. In other words, they double their capacity. They are in the middle of doubling their capacity. That is the reason why we saw a slight deviation specifically in the month of June. But it is confirmed that Morelo will end up according to their business plan for 2024. So they are ahead of solving those minor problems and yeah, they are in a good mood. Okay. Thank you very much. All the best for the summer and the next month. Thanks. Thank you, Tim. Thank you so much, Tim, for the questions and also for answering. We have another question from someone dialed in via phone. Could you please say your name? You should be able to speak now. Yes. Hi, this is Miro Zuzak speaking from JMS. Can you hear me? Yes. Yes, Miro. Hello. Yeah. Good morning. Excellent. Good morning. I have one main question. In your cash flow statement, you have a EUR 20 million other line negative in the Q2. You have "Sonstige zahlungsunwirksame Erträge Aufwendungen." Other is -17.145 in the half year and it was positive in Q1. That was like a EUR 20 million negative. Can you please clarify what that is? What is behind this booking? Again, it is about the cash flow statement or it is about the P&L? What are you referring to? I was a little bit confused in the question. It is on page 12. On the presentation. Of your report. It is in the half year report. Okay. On page 12, it is the cash flow statement. Yeah. There is other non-cash. Income expenses. Yeah, exactly. „Sonstige zahlungsunwirksame Erträge Aufwendungen." It is -EUR 17.145 for the half year. Since this was +EUR 2.8 in the first quarter, this means it is like we have EUR 20 million negative in the second quarter. What is behind this number? What happened there? Yeah. Give me a second, because I have to just wait for my colleagues. That will be my head of financing. Maybe in the meantime, while we wait, Yeah we can use the time. The 6,500 new orders, that was for June and July, right? Yes. These are the main two months when the dealers order the vehicles? Or is it typically also August is a good month as well, typically, from a seasonal perspective? Or is everybody on vacation? No, we also receive orders during summer period, since this is also a high season for the dealers. They are there because people are on holiday. They have to do service works and stuff like that. You can see that the order income, of course, also shows a little bit seasonality. But normally we have order incomes on the level of 1,000, 2,000 units per month. It's on a very flat rate. But then we see also peaks and peaks, which we sometimes receive 3,000, 4,000, 5,000 orders a month. These are mainly the month immediately behind the dealer presentations in June. We have the dealer days, we present the new models, then following the dealer days, dealers are then in June, July, August, placing their new orders. Okay. You mentioned that the backlog is stable right now and you expect it also to be at the end of Q3, I guess. Or do you expect the backlog to grow again until the end of Q3? Or is it more stable? Yeah, we will see backlogs more or less on the same level, what we saw in the past. Okay. While you give guidance for the top line, which is well appreciated. On order intake, now that you have a bit of visibility on the orders that you get for the same year and maybe you get some indications, would you give any indication there? Will it be above last year or below last year? What is your current guess or your current estimate? Between, just talking about the turnover or turnover to order backlog, or what specifically do you mean by ask? Just the order intake in euros. It is compared to the coronavirus time, of course, and that is what I explained when I answered the question of Tim Kruse, is that now we are back in normality. Back in normality means that normally, order backlog covers four to five months of a yearly planned turnover. When we look backwards, 2019, 2018, 2017, 2016, it was always a little bit the same situation. With other words, we feel comfortable with a coverage rate of roughly 40%-50% order book volume compared to what we plan to deliver in the coming years. This is one thing. Secondly, we are also, I would say, we can say the production people are happy that they are now with the production, to plan production, to have the chassis in time, and also the dealers, that we are back in a smaller loop. That we have not orders where we, and that was also awful in the past, we have been very happy about that big order. But in that order book, at that time, we had to accept two times price increases from Fiat and from other suppliers, in an already sold order book. Also, the order book in that size, under that point of view, is much more comfortable to handle that business, what we are doing. Okay. Have you got a response yet regarding the EUR 20 million, or shall I ask another question in the meantime? No, that's a good question. I received from my, how to say, competence center, that they have to check it out. It comes from a deviation of credit facilities and the interest payments. This is just to bring on the table. Can you repeat, sorry, the line was bad. It comes from a deviation in the position of a credit institute. So a change in, we changed the credit facilities with our banks, and within that extension. So the new facility agreement, which substituted the old one, and then interest payments. That is more or less the answer, but we will deliver it in more specific. You will receive that in more detail. Okay. Thank you. Yeah. Then, yeah, that is great. Manuel probably will come back, right? Exactly. On Q3, you mentioned will be a bit weaker than Q2 in terms of seasonality. Do you expect it to be below EUR 300 million in sales? Just to give a bit of color there. Will you be able to maintain a positive net profit in Q3? I only can refer today to the full year guidance. This is the only thing I can today, how I can answer today your question. Okay. Yeah. Thank you very much. What I mentioned to Tim is a little bit, it is the quality in earnings and also the quality in sales. Q3 will, on the lower end, while Q4 will be again on the upper end, to come then overall to the guidance of EUR 1.3 billion to EUR 1.4 billion. We have to accept that Q3 will not that fantastic quarter. It is clear. When we close for five weeks production, we have no production. That is something which makes it easy to calculate. Okay. Thank you. By the way, this is nevertheless a pattern every year. Since we have every year, the summer holidays and facilities are closed during August. You have always more or less the same patterns with the first half year, then a weak Q3, and back in Q4. This is every year the same, which is a natural behavior in our business model. Absolutely. That's what I see from the years before 2023 as well. Q3 is typically negative on the bottom line, but in these years, you had a bit lower sales. I was wondering whether you would be able to, at least this year, again, be able to have a positive Q3. But fair enough, you give full-year guidance, no more clarity on Q3. But I think you already gave a good indication. We shouldn't expect too much about Q3. Yeah. Thank you. You're welcome. Thank you so much for the question and also the answers. We have another question from someone dialed in via phone. Again, please say your name, and you should be able to speak now. Hello? Yes. Hi, can you hear me? Yes. Oh. Thank you. Okay. Yeah, great. Hi, it's Alessandro from Kepler Cheuvreux. Just three quick questions from my side. Your CapEx significantly increased in H1, and I was wondering what was your expectations for the full year. How should we model this going forward? Because I had in mind your CapEx budget was between EUR 40 million and EUR 50 million. Maybe this has changed. The second question is about the net working capital, which also increased in H1. I was wondering what was the expectation for the full year. Should we expect an increase year-on-year in 2024? The last one, if you just could remind us what the new interest rates on the new financing. I think I heard 3.5%, but I'm not sure. If you can confirm that. Thank you. Yeah. Thank you, Alessandro. On CapEx, yeah, you mentioned the range where we guided between 40 and 50, and you can expect that we are on the lower end of the CapEx situation, since we will for sure try to shift some investments to 2025. Specifically, in the segment of premium, we shifted. We made decisions to shift CapEx to 2025. When it's about Morelo, we will also have some shifts to 2025 because the final release of factories with the suppliers and stuff like that, we see that this is also a moving target, where we possibly end up in 2025 and not in 2024. With other words, on the lower end, Alex, that is what you can calculate for your models. When it is about net working capital, we mentioned that we have been able to decrease dramatically by EUR 70 million, the level of raw materials and inventories, and in that segment. At the same part, which is the counterpart, we showed increased level of finished-unfinished goods, and I mentioned that. That was more or less based on the pre-production for the new model year 2025. This is going to be released in the second half year, so we can expect lower levels, specifically in the segment of finished goods in the working capital. When it is about trade receivables, also this is something where we believe then that we can reduce that by a couple of EUR 10 million until end of the year 2024. Short-term interest rates, we see 5.6% to 5.8%. Long-term, that means it is a Okay, thank you very much. Yep. Thank you so much for the question. This is a reminder for you. If you would like to ask a question, you can always use the audio line. We have a very last question from the chat box. The adjusted EBITDA margin increased in the first half of the year, but a lower annual margin is still expected. The margin would have to fall to between 4.4% to 6.4% in the second half of the year to meet the forecast. What are the biggest influences on the margin in the second half of the year? If you could elaborate on this again, Mr. Speck. Yeah. The main driver for the lower margin are, first of all, the reduced working hours per week, and we started already with April 1st, as you remember. Also when you compare Q1 and Q2, you also already saw in Q2 that we showed a little bit lower EBITDA margin compared to Q1. This is the case because in the past we worked more than 40 hours, and starting in April, we came down to 35 hours. Secondly, we have to increase, and we will do that. I mentioned that as one action to help the dealers, the holiday time. So with another 2 weeks. So without output, so no output, but at the same time, we have to pay the people and everything we need, costs in the production plan. And then number three, of course, I mentioned that we are supporting our dealers in decreasing their stock level. We have the Champions Deals, for example, which are specific marketing initiatives, and we support them at the end, also with money. So when it is about to say, okay, we help them to sell to the market. This also is something where we pay into those marketing initiatives. That means to reduce level of stock is always something where you have to bring money with you. All things have been taken into consideration when we made the ad hoc release for the full year, and that is the reason why we said, okay, we have to decrease our expectation in top-line growth, but also in profitability in terms of EBITDA margin. All those topics I mentioned and some more are included in this relatively lower performance for the second half year. Thank you so much for the answer. As no further questions have come in, we draw today's earnings call now to a close. I have to thank you to you, Mr. Speck, but also to the leadership team, your presentation, also to you for your time in participating and listening. Should additional questions arise in the future, please don't hesitate to contact Manuel or Werner from the Investor Relations management team. I thank you so much for your attention and hope to see you very soon in another earnings call. I give the last words now to Mr. Speck. Thank you so much and have a beautiful day. Yeah. Again, thank you very much for your interest in Knaus Tabbert, for supporting us, and yeah, I am happy to work together also in the coming years and to deliver again nice and successful stories about Knaus Tabbert. Thank you very much for your support. Thank you.