Earnings Call: Q3 2023

Nov 8, 2023

Good morning, and on behalf of Montega, a warm welcome to today's earnings call of the Knaus Tabbert AG following the publication of the Q3 figures of 2023. The CEO, Mr. Wolfgang Speck, as well as the CFO, Mrs. Carolin Schürmann, will speak in a moment and guide us through the results and the presentation. After the presentation, we will move on to a Q&A session, in which you will be allowed to place your questions directly to the management. We are looking forward to the presentation, and with this, I hand over to you, Mr. Speck. Thank you very much. I warmly welcome you to our reporting on today's publication of the first nine-month results of Knaus Tabbert in 2023. Ladies and gentlemen, this morning we published a result that once again represents a significant increase and is also characterized by a continued positive perception and attitude towards caravanning as a favorite style of travel. The interest and also the associated desire to buy are still clearly visible. EUR 319 million in turnover, an increase of 30%, and an EBITDA of EUR 19 million, an increase of 187%. We are proud of this. The fact that the margin in the third quarter of 2023 could not keep pace with Q1 and Q2 of this year is largely due to our annual three-week company vacation in August. The earnings quality of the quarters show the same pattern every year, as you are already aware. With a margin of 5.9%, we nevertheless delivered a solid figure in the year-on-year comparison. If we look at the first nine months of 2023, we can report a truly impressive performance. With sales of EUR 1.1 billion and an EBITDA of EUR 89 million, we have once again shown that our investments and our strategy are supporting our impressive and successful growth story. In other words, we have remained true to our solid, healthy and sustainable growth path, and we have delivered. Our order backlog still amounts to more than EUR 1 billion. Another important indicator, the used car market also shows that the industry is on a healthy growth trend. Ladies and gentlemen, in our industry, fall and late summer are known to be the time for trade fairs, and as a result, the start of the next model year. In this respect, I would like to give you a review of the Caravan Salon 2023 in Düsseldorf. This trade fair is not only the largest in the industry, but also a benchmark for the entire industry. We are by far the largest exhibitor and have been for years. In 2023, we started the 2024 season with three innovations that are unique in the industry with great success. The Weinsberg CaraLive was particularly well-received by media representatives and visitors alike. It is the first serially produced campervan that has been developed based on the ideas and visions of a social media community with very close emotional ties to caravanning, and is therefore intended to appeal to a completely new target group. Keyword, #vanlife. There are more than 2 million interested parties on social media channels who want to realize their dream of individual caravanning through elaborate self-construction. With the Weinsberg CaraLive, we are reaching precisely this previously unreached target group. We are also one step ahead of our competitors when it comes to electromobility. With the KNAUS YASEO, specially designed for electric towing vehicles, we have introduced the first caravan that can use the towing vehicle as an energy source. Gas-free infrastructure, standard household 220-volt infrastructure, bi-directional charging, high self-sufficiency, variable interior architecture, design optimized in the wind tunnel. In short, the perfect vacation companion for your electric car. Our successful KNAUS and Weinsberg model series based on the Volkswagen Bulli, the T6.1, are still a unique selling point in the industry. Compact, city-friendly, carport compatible, and at the same time a living space miracle for up to four people. Ladies and gentlemen, many doubters have said that the industry will take a break after the COVID years and the Caravan Salon in Düsseldorf will be the indicator. The opposite is the case. 254,000 visitors, and only in 2019 we saw more. Sales figures in line with previous years, and a good third of visitors came to the trade fair for the first time. We saw a huge, huge interest. What are we doing now with this insight? What is Knaus Tabbert doing to convince this young new target group visiting the Caravan Salon for the first time? How can you reach a young and digitally educated target group better than with a media campaign? With the so-called Open Dealer Days, we have repeated a marketing campaign that was already very popular in 2021 and has also ensured considerable reach and awareness of our group brands this year. We saw in 2023, 70% more search queries for dealerships than average, 46% more impressions through social media advertising, and 110 million views through TV advertising. These figures are related exclusively to Germany, Austria, and Italy, and the campaigns are still running in three other European countries. Ladies and gentlemen, our order backlog is still well over EUR 1 billion. This corresponds to a volume of around 25,000 units. This continues to provide a high level of planning security well into the second half of the 2024 financial year. If you look at the order backlog in units compared to historical data and compare the sales volume, that means the units sold, it is easy to see customers still have to wait around one year for their desired vehicle today. In terms of delivery times, we have not yet reached the normality of the years before COVID. Our order backlog has also become significantly younger. This is also a pleasing development of our increased capacity and better chassis availability. As at mid-2022, the orders in our order book of EUR 1.3 billion had an average order date age of 19 months. Six months later, at the end of 2022, we were able to reduce the average age of orders to 10 months, thanks in particular to the strong fourth quarter. The order backlog remained at the same time at the same level of EUR 1.3 billion. By mid-2023, the age of the orders in our order backlog of approximately EUR 1.2 billion was still nine months. Just to compare that and look back to 2019, we saw in 2019 an average age of orders of only around four months. Here, too, a pleasing development becomes clear. Our order book has become significantly younger in terms of age structure of the orders, while the order backlog remains high at over EUR 1 billion. Ladies and gentlemen, a key pillar of our positive development is a variety of chassis options. This new variety of chassis has significantly improved Knaus Tabbert's security of supply over the last 12 months. If you look at the current split in the premium segment, we can justifiably claim that our motorhomes built on these new chassis are also in demand. It is precisely this diversity, combined with a high level of acceptance among dealers and end customers, that has enabled us to continuously optimize the product mix over the last 12 months. While the proportion of motorized units, that means motorhomes and camper vans, was still at 40% at the end of the third quarter of 2022, it is now at an impressive 60% at the end of the third quarter of 2023. Ladies and gentlemen, one question that we are asked in many individual discussions relates to the development of the market of used leisure vehicles. Comparing 2022 and 2023, we see that the market for used vehicles remains on the same level. There is no discernible trend towards noticeably higher activity at the expense of the new vehicle business. Overall, the steady level of activity on the used vehicle market is also a positive indicator of the sustained attractiveness of the caravaning industry. In other words, a new form of travel has arrived in our society. Caravaning is enjoying great popularity. Demographic change, in particular, could give the market a further boost in the future, especially in Germany. This is also reflected in a study by the GfK Consumer Life Institute from August 2023, and it shows the following key statements. A, the population of leisure vehicles is the largest in the over 50 age group, with approximately 1 million vehicles out of a total of around 1.4 million vehicles. B, the number of vehicles has increased the most in the 60 to 69 age group, up 35%, and by as much as 41% among the over 70s. C, in 2040, almost half of all Germans will be at least 50 years old and older. Then asked about the reasons for a caravan vacation, the following reasons continue to rank in the top three places. First, being self-determined and independent. Secondly, being surrounded by nature. Number three, being flexible and spontaneous. When it comes to personal values, millennials are not different from the over 50s. Values such as protecting the family, freedom, joie de vivre, are at the top of the list for both population groups. This is exactly what caravaning as a form of vacation stands for, and this is exactly what our products at Knaus Tabbert stands for. Yeah. I would like to thank you for your attention and hand over now to my esteemed colleague and CFO of the Knaus Tabbert Group, Carolin Schürmann. Carolin, please. Yeah. Thank you, Wolfgang, and a warm welcome also from my side to the Q3 Knaus Tabbert earnings call. If we go on the next chart, please. I am happy to announce that the results of the first 9 months 2023 are exceeding the full year results of 2022, both in revenue but also in EBITDA. With the continued availability of chassis, we were able to generate a record 9 months result of EUR 1.07 billion in net revenue, 54.7% above last year's period, and notably about EUR 20 million above the full year revenue of 2022. The driver of the revenue growth continues to be, one, the product mix shift towards higher priced motorhomes and campervans. Second, inflation-related price increases we passed on, which is hopefully coming down, and we can see that in our material cost as we announced already in the guidance. And third, volume increase due to higher production capacities and chassis supplies. When looking at the units, we sold a total of 23,508 leisure vehicles, whereof 58% were motorhomes and campervans, and 42% caravans. Compared to prior years, the adjusted EBITDA developed favorably alongside the increased net sales and plant utilization, and reached €88.6 million in the first 9 months. Considerably above last year's adjusted EBITDA of €31.1 million, which was impacted by chassis shortage and the related plant underutilization, and nearly about double of the first 9 months of 2021. The adjusted EBITDA margin increased to 8.3% and is 3.8 percentage points higher than the first 9 months of last year. Next page, please. When looking at the Q3 specifically, it is seasonally lower due to 3 weeks of vacations in our plants during August and the ramp-up of new models, resulting in lower sales volumes compared to the first 2 quarters. The net revenue amounted to €319.3 million, and thus remarkable 29.5% above prior year's Q3. We sold about 100 units more than in the prior year, a total of 6,928 units. The ratio of motorized vehicles came in at higher levels than last year at about 60% and was a key driver for the net revenue growth. The adjusted EBITDA is seasonally lower in Q3 compared to prior year of €5.6 million EBITDA. The EBITDA came in well above with €18.9 million. The breakdown in revenue by segment for the first half year shows that EUR 947.4 million were contributed by the premium segment and EUR 126 million by the luxury segment through our luxury brand, Morelo. We are investing this year into a second production line at the Morelo site in Schlüsselfeld so that we can meet the demand for their luxury vehicles and reduce waiting times for the top-of-the-line Morelo customers. When looking towards the detailed net revenue by product category in the first nine months, caravans are, with EUR 206 million, at lower levels than prior years as we used our flexible production capacities and recent capacity increases to catch up on motorized vehicles. Thus, the increase in revenue happened mainly in the category of motorhomes with EUR 592 million and campervans with EUR 257 million, which are in average higher price than caravans. Compared to the prior year period, we doubled the motorized revenues and output, showing that our capacity strategy and keeping our valued personnel on board paid out. Next page. Looking at the cash flow development, the operating net income in the first nine months amounted to EUR 44.8 million, but was strongly absorbed by working capital, mainly driven by inventory increases for chassis and finished goods such as trade fair vehicles and vehicles at our own dealership, as well as ramp-up related inventories of unfinished goods. We are currently targeting on bringing inventory levels down by about EUR 30 million to EUR 40 million by year-end, impacting cash flow positively. Other effects, such as non-cash items, counterbalance this effect. The investing activities, especially for the final steps for our capacity increases in Jandelsbrunn and progressing capacity increase at Morelo, required about EUR 35 million in cash flow in the first nine months of this year. The free cash flow ended with a negative EUR 23.3 million at the end of the third quarter. Next page. Due to the inventory-driven working capital increase, the total balance amounted to EUR 678.2 million. The equity ratio came slightly down to 26.1% compared to year-end, and is in line with the financial KPIs we agreed with our banks. The net debt balance increased to EUR 243.6 million, resulting in the net debt ratio now at 1.9, down from 2.8 at year-end. Thus, well below the 2.75 net debt ratio as one of our standard bank-related KPIs. Coming to our guidance. As already seen on the first page and communicated, we currently see the Q3 2023 results within the range of our 2023 guidance published on September 20th of this year. The management board has revised, at that point, its group revenue forecast and is now expecting to achieve between EUR 1.35 billion and EUR 1.45 billion of revenue for the 2023 financial year. This adjustment of the revenue forecast is based on the ongoing stabilization of supply chains and the resulting improved predictability of production processes at Knaus Tabbert. Compared to the previous planning, the management board now anticipates significantly lower cost increases in material purchasing. The management board has therefore raised its forecast for the adjusted EBITDA margin for the 2023 financial year, which now stands between 8.5% and 9%. The updated forecast of the 2023 financial year was prepared on the basis of the current market environment and under the assumption that geopolitical and economic conditions will not deteriorate significantly. Thank you for listening in. We are now available and able to answer your questions. Thank you very much, Mr. Speck and Mrs. Schürmann, for the presentation, and congratulations on the results. We now move on to the Q&A session. For a dynamic conversation, we kindly ask you to ask questions in person via audio line. To do so, please click on the virtual Raise Your Hand button. If you have dialed in by phone, please use the key combination star nine followed by star six. If you do not have the opportunity to speak freely, you can also place your questions in our chat box. We already have questions from Mr. Kruse. Mr. Kruse, please go ahead. Yes. Good morning. Thank you for taking my question. Yes, first question for Wolfgang. Could you maybe give a bit of your impression of the competitive landscape? Any changes in Q3? I read that Hymer has still some supply constraints. Maybe in that respect, you could also comment on your supply situation. Obviously, things have improved significantly, but, yeah, on what materials or parts you still see some constraints due to your inventory uptake in Q3, as you said, which was also fair related, but that would be very helpful. Thank you. Yeah. Thank you, Tim, for the question. Starting with the market situation. Yeah, we still see that we have a lot of tailwind, specifically the Knaus Tabbert Group with the brands Knaus and Weinsberg. Maybe you remember last time, when we talked about the market positions of our Knaus products, specifically in the segment of the motorhomes, that we had been able to overtake all competitors with the brand of Knaus in the segment of motorhomes. At the end, we found ourselves at the pole position in the registration charts. I have just some figures in front of me, but just showing January until August. So we ended up with Knaus Tabbert, with 8,400 registered motorhomes in that period. That means +75.1% compared to the previous year, and we ended up with a market share in Germany, I am talking about Germany, of 15.9%. There was nobody else showing positive developments during that period. All other big groups, you mentioned Hymer group Trigano, but also the big player Pössl, they showed negative volume developments in that period. We also see no significant change in September. Wohnwagen, so the towables, the caravans, it is a situation, as you know, that the whole world last year produced a mass of caravans to substitute the lack of chassis supplies. Everybody was in minus since everybody focused now 2023 back on motorhomes. Nevertheless, looking to the market shares, we had also been able to increase our market shares, and we are now in Germany at roughly 25% market share. We are very proud of that development overall. In terms of supply situation, well, it helped a lot that we made a decision last year to increase our supply base of our chassis suppliers as we talked several times. This helped a lot to secure our supply chain situation. Also, Fiat was back in 2023, but what we saw in end of Q3 and also in Q4, that Fiat started to shift a lot of chassis in between the year 2024 and 2023. To be more specific, we had an order volume of 3,000 units placed at Fiat for the Ducato, and meanwhile they moved 1,000 to 2024, and what we ordered for 2024, they moved forward to 2023. This also caused problems also in Q3, but we had been able to handle that more or less by. Again, this helps a lot now. We had been able to substitute that also by other chassis, so we are not so much impacted, besides an increase of working capital topic since we now store chassis planned for 2024. That is a little bit of situation, but supply chain in average, it is a much better situation compared what we saw in 2022. As you remember at that time, every second vehicle we assembled had been unfinished, and that caused a lot of problems, but meanwhile we have a much better situation. That is a little bit in general, Tim, the situation, based on your questions. Thanks, Wolfgang. Maybe one follow-up on a different topic. Could you give us an update on how you are progressing in Malaysia? How is that ramping up? What are you seeing there, that will be interesting. Yeah, it is just the week of Malaysia now since my colleague, the CEO, Werner Vaterl and CSO, Gerd Adamietzki, they left on Monday, flying first of all to Australia for a week. We have a cooperation partner since years, but we would like to speed up with the activities in Australia. It is a nice market so far, dominated by bigger U.S. players, and some Australian players. But, as we know, also the Australian people, they like European design and vehicles and, we are planning to increase our activities now in Australia, and that is the reason why both Gerd and Werner are there to work on that. Then they will fly to Malaysia to continue to talk about all the necessary next steps. As you remember, we had been able to make a homologation for two caravans of Knaus end of last year. We are working on homologations for the first campervans this year. We are supporting the people over there also to plan the right infrastructure in Malaysia. And, we installed the first importer structure in Malaysia, which is also important for us. So we are moving forward step by step and not big steps. Since we should take care and focus still on the European business where we earn money, specifically in Germany. But, on top, we are moving forward in Malaysia. I was yesterday here in Northern Germany. We have one big partner, the Speerstra Risen Group, and this is a group, and the people importing our products to South Korea. And also there we have a lot of success in homologation, for also diesel engine Fiat Ducatos, MANs for the South Korean market. And also this, we see that we make big steps also in increasing volumes. So there is a headquarter there in South Korea, and they are now able to stock up and to have cars and vehicles available in South Korea. So we believe that we will defend also our pole position in South Korea in both in caravans and also in motorhomes. Yeah. Thanks a lot. Then I have a final one for Carolin. Carolin, could you elaborate a bit on the other operating expenses and personnel expenses. The operating expenses were quite a bit on absolute and relative level higher than in the previous quarters. Could you shed some light, are there any special effects, or did you have some swap effects between personnel expenses and other operating expenses? That would be helpful. Thank you. Yeah, sure. Obviously, it was mentioned by Wolfgang, we had quite, in this last quarter, an activity going on advertisement campaigns for our Open Dealer Days, which absorbed, of course, additional marketing costs that have not been there in the first quarters that you've seen. Then we have, as a major expense, obviously the trade fair in Düsseldorf and also ongoing fairs throughout Europe. That was also mentioned by Wolfgang, which are happening and obviously involve fair cost, which are typically covered in these operational expenses. I think these were the main blocks, I would say, that you could see a difference in compared to the other quarters and the main drivers. The TV campaign was probably also not in the previous quarters, right? Correct. Yeah. Yeah. We just did that basically adjacent after the Caravan Salon Düsseldorf, and had basically this started during the September timeframe, mid-September, so beginning of October, and that's where also the cost basically incurred. Okay. Thanks a lot. Well, then, all the best for you for the last quarter. Thanks a lot. Thank you. Yeah, thanks, Tim. Thank you, Tim, for your questions. We will now move on with the questions of Mr. Acklin. Please go ahead. Mr. Acklin, you can unmute yourself now. All right. Then we will move on with the questions of Mr. Gloor. Please go ahead. Yeah, good morning. Can you hear me all right? We can hear you. Yes, Christian. Oh, perfect. Okay. Listen, I have two questions. My first one, and let's do them one by one, is on Q4 and related to your order backlog and order intake. I think earlier this year you indicated that you were aiming for vehicle sales of slightly more than 30,000 units for the full year. If we now assume that you also want to keep that order backlog of 24,500 vehicles stable after nine months, also at year-end, then that would basically imply that you need to sell more than 7,000 vehicles in Q4. You also need to have an order intake that basically matches unit sales. So roughly order intake of 7,000 units in Q4. If I do look now at your Q4 order intake, you basically have merely an order intake of more than 1,500 units. Can you remind me why the order intake last year in Q4 was so low? Was that on purpose because you focused on executing the backlog and stopped accepting orders from dealers? Let me phrase that question differently. What do you expect in Q4 in terms of order intake and year-end backlog? First of all, when you compare. Thank you, Christian, first of all. Yeah, when you compare year by year backlogs on a quarterly base, you have to take into consideration that indeed, and you mentioned that we made an order stop last year and several times. So there was an order stop on accepting orders on Fiat Ducato. We mentioned that in some of our earning calls, because Fiat was not able to deliver, we had the order book full of orders based on Fiat Ducato. In the meanwhile, people had been waiting for more than 24 months or more than 2 years, to receive their vehicle based on Fiat Ducato. That is the reason why we said, first of all, we have to produce these old orders, in our order book before we accept new ones. This is the first point. Secondly, overall, I mentioned the average age of our orders in the order book, and we had been up to year by 20. Between 15 and 20 months, I explained the numbers. That was also the reason why we said, "Okay, we have to stop," because otherwise, we will create a lot of trouble between us, the dealers, and the dealers and the end customers. Because, remember, we had times where we said, "Okay, no, you have to wait additional 6 to 9 to 12 months for your vehicle, and by the way, you have to pay more." This was a time where we said, "Okay, the order book is overheated and we have to cool down." That was the reason why we made that decision, from quarter to quarter to stop the order intake. Secondly, you also have to take into consideration that we change model year around June in terms of receiving orders. It makes no sense to introduce new vehicles to the dealers and at the same time to say, "But we are not able to produce them because we have an order book of more than EUR 1.5 billion and we will produce the next 12 to 18 months just the old vehicles." Then we would be in 2025 to introduce the next models for 2026 and so on. So that was also the reason why we said, "Okay, let's cool down. Let's introduce new models to the market as we do every year, and create room in our capacity to produce these new models and for the model year 2024." That was more or less the reason, Christian. We are still in a good position to make decisions like that, to open the pipeline and to close the pipeline, since the demand for our products is still high, and this is, from our point of view, a very comfortable situation. Okay. In other words, because if I would apply this order intake of Q4 last year, 1,500 vehicles and the potential unit sales in Q4 of more than 7,000, you would end at year-end with a backlog of 20,000 vehicles, potentially even slightly less than 20,000. That would basically be the level prior to COVID, right? So the tailwinds from COVID would have been completely gone, at a level pre-coronavirus. You initially said in the meeting that this is not the case, that you have still momentum and the demand is still brisk. Essentially, the order intake in Q4 this year must be much higher, must roughly match unit sales. Is that the right way to look at it? You have to also to take in consideration that the business is very depending on the seasonality. You can imagine that every year, Q4 in normal times is not the quarter where you receive the same level of orders as you do in Q1 and Q2, where the season starts, people are going out. Snow was melting because a lot of dealers, they are offering the products on outdoor area and not indoor. That is a little bit the seasonality. We always see that the order intake is different from quarter to quarter. Secondly, again, what we need to do is also to normalize. Even if the order backlog would go down from 25,000 to 20,000 units, we would not mind, since then we will have a situation that people who are willing to buy our products are able to get them with a normal period between, I would say, six and nine months. That is something which is normal, and this is something we also would like to see in the future. I just wonder if that will maybe have an impact on your cost coverage, because I see that you continue to increase headcount. If you have a lower output, rather towards 20,000 vehicles, I assume that you have a weaker fixed cost absorption, right? Now you're mixing up a little bit things. The order intake is the order intake and the output is the output. Even with order backlog of 20,000, the output of the company will be the same. I mean, the- 30,000-plus. Yeah. At least, this year, this is what you can calculate when you are following our guidance. That means we talk this year about 30,000 units for 2023, and not giving a guidance now for 2024 and the coming years. But the midterm plan is still in place, so until 2027, it is a plan to achieve EUR 2 billion. And that means- Yeah if you recalculate on units, you will not see Knaus Tabbert moving backwards. We always will move forward. And that is a clear point. Okay. Yeah. Thanks, Wolfgang, and sorry to be so nitty-gritty about this thing here. Thank you. It leads me to my last question, actually, which is on your midterm guidance. Yeah. Your midterm guidance actually aims for almost 20% annual revenue growth, 16% to 18%, and 8% to 9% unit sales growth. However, unit sales growth in Q3 was 1.5%, and potentially it's declining in Q4 against a high base. Is that still intact, the 8% to 9% high single-digit unit sales growth that you're aiming for on average per annum? Yes. There's no doubt on that. First of all, look backwards, and that is a little bit also the proof we gave. From 2021 to 2023, we doubled. You remember still years in 2021 where we ended up with EUR 750 million in sales, and now we talk about roughly EUR 1.4 billion, and that happened just within two years. That's the first point. Secondly, we talked about an average growth rate, and that is what you mentioned. But in the average growth rate, we have years where we do a bigger step. Two times, and also this year, we talk about a growth of more than 30% within 12 months. Therefore, next year we'll see. I would say next year is more or less also a year where we are going to move sidewards after having that big step. The only reason therefore is to focus more on productivity, to focus more on increasing level of EBITDA quality, to focus more on working capital stuff, to focus more on cash flow outcome. This is something which you can expect in 2024. Having done that in 2024, then we will speed up again up to 2027. I mentioned that the EUR 2 billion target is still in place. That should not mean that you cannot expect a further growth rate in 2024, but for sure, not again more than 30%. That is very clear. Thank you for taking the questions. Thank you, Christian. Thank you, Mr. Gloor. We will now come back to Mr. Acklin. Please unmute yourself. Good morning, guys. Can you hear me now? We can hear you very well. Hi, Alice. Good morning, Wolfgang. Hi, Alice. We can hear you. Hi. Just one financing question for Carolin Schürmann, if I may. In terms of your working capital credit lines with the banks, I was wondering if you could give us a hint on what you might be expecting for next year in terms of interest rates and how that might compare to now, and also, how does the EURIBOR factor in if you are paying that as well? Yeah. With the banks, we expect comparable rates, I would say, to this year. What we basically experienced this year, we came down our net debt ratio, and we have a certain combination in our, especially for the consortium credit line. When you come down in these KPIs, you have a little bit of a lower interest rate. The EURIBOR, we saw that now. With the ECB going flat, we would expect that this would not increase much further unless they would need to do another step if more inflation would kick in, but that doesn't look like this is at the horizon. I think we could see comparable levels as of today, or what you have seen thus far during this year. Obviously, with the working capital, we will try to bring this down by the end of the year, and with that, we will also have less of a draw on the consortium credit line. But overall, I think comparable to this year, that would be our expectation. Okay. Thank you very much, and all the best for the last couple of months of the year. Yeah. Thank you. Thank you, Alice. Okay. Bye-bye. Bye-bye. Thank you. Thank you, Mr. Acklin. Now we will receive the questions of Mrs. Forge. Please unmute yourself now. Hi. Morning. I just have a question first on the composition of your order backlog. It was, you say, 57% motorhomes in Q3, but this is slightly below the levels in Q2. Is this just because you are selling relatively more motorhomes and therefore the backlog composition is going down, or are you seeing fewer orders of motorhomes? In which case, do you have an idea of why this could be? Thank you. Hi, Martha. Yes, as already explained, first of all, yes, you are right. We increased the output of motorhomes significantly compared to last year. Because last year, as we remember, we produced roughly 14,000 caravans because of the lack of chassis. We made a decision to increase that capacity, increase the outcome. Instead of 11,000, we produced 14,000, and we delivered them. This year it is just the way around. We increased dramatically the outcome of motorhomes, though by end of the year, you can expect that we are more or less at the level of roughly 18,000 motorized vehicles and just, yes, 11,000-12,000 towables. This is one reason that we increased the output. Secondly, again, it is also because even in Q2, we reduced the order income for some specific chassis suppliers. Great. Thank you. Then maybe on the margin bridge for Q3. Obviously you have the seasonal impacts, which mean that it is down sequentially, and you mentioned the advertising campaigns and the trade fairs. But the contraction between Q2 to Q3 is slightly bigger than usual. Is there any operational costs, one-offs that have been worse than usual? Or why do you think the contraction is bigger than usual? Shall I take that, Wolfgang? Caroline, yeah. Too big a CEO question. Please go. Yeah. Martha, hello. We mentioned, I think on the OpEx side, we had higher elements, and you also see, obviously on the net sales side, we came in also lower on that. With that, obviously, there are also adjacent effects accordingly. But no major unexpected things rather than really these trade fair and advertisement campaigns that we started on that element. Yeah. I will also add something, Martha, to that. I mentioned that during my speech that you will see every year the same pattern, and Q3 will always be a quarter where, I would say, 2-3 percentage points lower on EBITDA percentage rates compared to the other quarters. It is because we have the break in August, so it is 3 weeks of no sales, no production. Then we have the show. Then we have the model change in the year. This, the production also happens in Q3. So this is always a quarter which has to cover a lot of this impact I just mentioned. Great. That makes sense. Thank you very much. Thank you, Marta, for your questions. Just a quick reminder, if you have any open topics left, please feel free to raise up your virtual hand or place your questions in our chat box, and we will move on with the questions of the person who is dialed in by phone with the number 2809. Please go ahead and unmute yourself. Yes. This is Miro Zuzak speaking from JMS Invest AG. Can you hear me? We can hear you very well. Yes. Okay, great. I have a follow-up question regarding what you said in response to Christian Gloor' question before. You mentioned that the order intake was stopped for the Stellantis models. Until when were these orders stopped? Um- Until which quarter? We are end of Q1, more or less. As of Q2, one could order also the Stellantis models again. Yeah. Okay. The new ones, yeah. Mm-hmm. Okay. Then another question is, I have seen that on your website, you now promote the Open Dealer Days, so you give discounts. Yeah. I think that was during the previous years. That was rather unusual, at least from what I heard from people buying a motorhome or a caravan. Can you elaborate on this? The discounts that you give right now versus the discounts in the previous year. When you look to the discounts we announce on the Open Dealer Days, these are discounts between dealers and customers. So, what is different is what rise shows between us and our dealers. Compared to the previous years, yes, it is different. So, what we do is, and that is what we negotiate also with the dealers, to enable the customers to receive a little bit, a sweetie, buying the products now. But when you compare rebates to the pre-COVID phase, we are far away compared to what dealers had been given on rebates to the market. So pre-COVID, you sometimes see 10%, 12% rebates, even more, and we are still far away to be back on those times. Okay. If a dealer gives a discount to the end client, this doesn't change your price versus the dealer, or do you also agree to take- We support them. some portion of the discount. We support them also with some portions. Exactly. But which is not influencing now the margin. Maybe this could be the second half of your question. Nevertheless, this is always included when we do our budget planning or we do our guidance and forecast. This is nothing which surprisingly appears, though this is included in our business and sales strategy plan. Okay. Then another question regarding the macro environment. There are people who expect kind of a slowdown in economic activity. I think it is normal that you have some kind of cancellations also in your daily business. Have you seen an increase in cancellation during Q3 and now- I can- in October? No, I can say definitely not. That is definitely not the case. We do not see any increase of cancellations. Okay. I also want to ask another question related to your order intake versus order backlogs. This year, I am now talking really rough numbers here, roughly 30,000 in output in 2023. Probably, if you still achieve a very high order intake in Q4 of, say, 2,000 units, which would be much above even the highest COVID levels, so to speak in Q4, then you would be at roughly 20,000 order backlog and 30,000 produced entities and roughly 20,000 order intake. That would be like the number. So your book to bill would be like 0.66. Into next year, you can still produce 30,000 units, right, and have the same order intake again, or even growing order intake. But then your order backlog would go down to, say, 12,000, 13,000 units. Would that be still okay for you, or is there a kind of minimum order backlog that you need to maintain your efficiency in production and so on? Or would that be no problem, basically, to also go down to a backlog of 12,000, 13,000 units? When you look back to 2019, we had one slide in our presentation today where we see the history, in between volume produced and sold and the level of the order backlog, and you see that we are still far away in that, let's say, coverage rate, compared to the previous year. To be more specific on your question, I would say- At least I would say we should have a coverage rate of roughly 50% of the planned output of the year. In other words, 15,000 units. Then we would have a visibility of six months, and by the way, that is what we had over years before COVID, and that was a perfect balance in between to have planning security, to optimize our production, to find the perfect lot sizes, to combine the products perfectly in the production lines between the European production sites. At the same time, to have a good security and also to take customer satisfaction into consideration that they are happy with the delivery times of six to nine months. That is something I would say this is a normal situation where the company runs the business over years. Okay. Yeah, sure. Maybe on pricing- Sorry, that should not mean that I expect this or that is something I would like to go for. This is just the way around if, where we drop down or we regulate it down, this would be the minimum I would say we feel comfortable. Okay. With regard to pricing, I have a question. If you now start to give incentives again, say to buyers, do you expect the average pricing to be, say, flat into next year or even decrease a bit? Or are you still able to increase your prices? We will. On a like-for-like basis? Yeah. I cannot say definitely, but we will increase prices also next year, as we did also in the past to cover price increases delivered from the bill of material and all suppliers. But I would say next year we will be in line what you saw the years before that the inflation grew up so significantly. I cannot say, but I would say in the past we always showed 1%, 2%, sometimes 2.5%. This was a normal level of price increases, and this is something at least what you can expect also next year. Okay, good. Then I have a question regarding the slide of your presentation showing the secondhand market. Yeah And the development. Do I read this correctly? This slide shows the number of transactions, so the number of vehicles bought. We say, "Besitzumschreibungen," and at the end it is the same. So it is a change of ownership on the. Thank you. registration. Yeah. Are you also able to track prices of the secondhand market? No, we can also track it, what the authorities who record registrations are delivering. You are not tracking the prices of secondhand market, because that would be interesting. Or do we have an idea how the price is developed now versus last year? Because during COVID, I think the secondhand market was even, like vehicles were trading above their new price, if I am not mistaken. Exactly. I would say we are still above what we saw ahead COVID. People are still willing and keen to buy vehicles, but not at all prices. It's difficult for me to say. I will take your question, and maybe we can talk a little bit during our next report during this call. Maybe, I see it's 11:00 A.M., but maybe it's one more question, if I may. Your net working capital increased due to the chassis, the number of chassis that you have on basically your inventory. By when do you think this will turn around? Do you think that in 2024 we definitely are going to see a normalization and a positive contribution to cash flow from net working capital? Yeah, that's our expectation. That's what we are working on. We are already working on now bringing these balances down towards year-end. Then we'll continue throughout basically the next year. As Wolfgang also mentioned, 2024, we would like to bring the net working capital to a status that satisfies us. I think with the growth that we have experienced this year, obviously, and the huge increase of more than 30% in net sales, you also have to consider that the working capital goes up. I think we can still, we have room to bring this down, and that's what we are working on with measurements. Maybe a last word without having asking me that, talking about a new brand, this is also something which you can expect for next year, 2024. You remember that we announced that already during the phase of the IPO. We postponed that due to the fact that we had not been able to receive enough chassis to support that new brand during the market introduction. Now we are ready, and you also can expect that Knaus Tabbert will come to the market next year, with a new brand, which we worked on during the last two years. Secondly, also a little bit expectation on the long term side, referring to the market. As you know, comparing 2023 to 2021, European market, 2021 showed roughly 260,000 registrations. Now we are down to 206. When you look to the registration of Knaus Tabbert, you saw that we had been able, and that is also what I mentioned several times, even though the market is going down, this was always the time where Knaus Tabbert had been able to increase market shares significantly. That is also what we did in 2023. Looking forwards to next year, what we expect, and that is the consensus between all companies involved in the European market. So the big OEMs, but also the big suppliers and dealers, is that we see next year, I would say, 8%-10% increase in volume. Up to 2027, we will see also a continuous growth story in the European market, and specifically Germany. As you know, we do more than 60% with Knaus Tabbert in the German market. This is a market which will contribute year on year on a higher level to the overall European market. So in 2020 and 2021, Germany contributed with roughly 40% to the overall registrations. It expected that, and we saw in 2023, roughly 44%, the German market. Up to 2027, we believe that Germany will contribute up to 50% to the overall European registration numbers. This is also something where we feel very comfortable since we are really the big player with the strongest position in that German market. Also when you compare us, for example, to our colleagues in Paris. This was just something to add today. Thank you. Thank you so much for all these questions. We have a last question from Mr. Gloor. Yeah. Hi, just one follow-up on the secondary market. Yeah. Can you please remind me to which degree the units you are selling are customized? That will certainly give you a certain degree of protection against dilution from secondary market as long as prices are stable there. We are only producing standard models, Christian. But standard models means that we have, nevertheless, extremely high variability in our model portfolio. First of all, we talk about the five brands. Then when you look to Knaus, for example, we talk about three product segments, motorhomes, caravans, and vans. When you look to the motorhomes, for example, we have different models, the Sky TI, the Sun TI, vans, alcoves, a lot of different models. When we go to each model, then we have within the model also different layouts. In terms of location of beds, shape of beds, kitchens, bathrooms- Yeah dinette. At the end, we will end up with a high variability of different models. Plus all the fabrics, the colors of furnitures and so on. That, I would say, nearly each model has a different look, more or less. We produce 10 of them, 50 of them, 100 of them, five of them, which creates a very high level of different models in the market. Even if you look to Morelo, for example, then we talk models selling between EUR 250,000 and EUR 1 million. Even in that area, we are coming from standard products, but also then the diversity is within the layouts and colors and furnitures and stuff like that. But it's enough that everybody is happy to be able to create his own style, his own product. On top, we create from year to year special edition models. Last year, we came with an AMG front grill, for example, for the Weinsberg models. So every year there is a little bit extra, where we make models different. Okay. Thank you. But by the way, and that is different, specifically also to other competitors, when you look to the French world. And that is really difficult because sometimes people make decisions when they have a lot of brands, and you know that we have competitors, they are operating with more than 25 different brands. But to reduce complexity, for sure, they do not produce 25 different model types to make a differentiation. No. There you find one model produced somewhere, and then it is just the outside branding, which is different. And this is difficult when it comes to problems in the market. Because people then say, "What is the difference between that, that, and the other model?" This is something which you find also in the U.S. very often, a type of cloning of products. But this is definitely not so in the world of Knaus Tabbert. When we talk about a Weinsberg, it is a Weinsberg, and when we talk about a Knaus, it is a Knaus. We are talking about total different products with total different characterized technique, looking marketing campaigns, sometimes different dealers. So, this is something where we are very happy that we are so focused just on those five brands. Thank you very much. So, in view of the time, we therefore come to the end of today's earnings call. Should further questions arise at a later time, please feel free to contact investor relations or us. Thank you everyone for joining and the dynamic conversation, as well as all your questions. And a big thank you also to Wolfgang Speck and Carolin Schürmann for your presentation and the time you took to answer all these questions. So with this, dear participants, stay safe, healthy due to the autumn season. I wish you all a lovely remaining Wednesday. And with this, I hand over again to Mr. Speck for some final remarks. Yeah. My last final remark, thank you very much for your interest in Knaus Tabbert, and we are very happy to have you with us as a public listed company. Thank you very much. Bye-bye. Thank you. Bye-bye.