Earnings Call: Q1 2021

May 11, 2021

Dear ladies and gentlemen, welcome to the Interim Report Q1 twenty twenty one of Nordex SE. At our customers' request, this conference will be recorded. As a reminder, all participants will be in a listen only mode. And after the presentation, there will be an opportunity to ask questions. May I now hand you over to Felix Sander, who will start the meeting today. Please go ahead. Thank you very much for the introduction, Aurelia. Good afternoon, ladies and gentlemen. Here, I'd like to welcome you on behalf of Nordex to our call presenting the results of the first quarter twenty twenty one. Our Board members, our CEO, Jose Luis Blanco our CFO, Doctor. Eli Hartmann and our CSO, Patxi Lande, will guide you through the presentation, sharing the latest developments of Nordex, including markets and financials with you. Afterwards, as you know, there will be, and as you have just heard, a Q and A session. Please limit yourself up to three questions. And now I would like to hand over to our CEO, Jose Luis. Jose Luis, please go ahead. Thank you, Felix. Good morning, ladies and gentlemen, and welcome to the Nordex presentation of our Q1 twenty twenty results. As Felix mentioned, together with Ilia and Patxi Land. Agenda for that we have prepared for you today is an standard agenda with an introduction. Patxi will guide you through the situation in the markets and the orders. Ilya will discuss the financial performance of the company. I will take the operations and technology, talk about the guidance for the year and as well about the strategic targets for 2022. We will open the floor for Q and A, and I will conclude the meeting with, in our view, the key takeaways of our day. So with this, let's move to the first part of the presentation, starting with the highlights of Q1. We delivered €1,254,000,000 in sales, euros 800,000,000.0 EBITDA margin and minus €7,600,000,000 working capital. Despite a very slow start of the year, order intake at the end of the quarter stood at 1.2 gigawatts, showing a catch up and a good start into 2021. '70 '3 percent of the order intake accounts for the Delta4000 platform, supporting the product part of the midterm profitability improvement plan. Sales increased to $1,254,000,000 compared to $965,000,000,000 last year, reflecting high activity level despite COVID and logistic challenges. EBITDA margin of 0.8% as expected due to legacy projects, but as well impacted by the ongoing COVID pandemic as well as disruption and shortages in supply chain as well as starting some inflationary pressures. Very important to remark, the refinancing of the Schulzheim Darling Secure via shareholder loan from anchor shareholder ACCIONA, successfully executed in the quarter. Important to mention as well that Nordea's share was included in the MidCap Index, MDAS, of the Deutsche Borse Group since March 22. And last, but very important, guidance for full year maintain. With this, I would like to hand over to Patxi to talk about the market and customer situation. Pachi, please. Thank you very much, Jose Luis, and good afternoon. Looking at the orders, we closed 1.2 gigawatts of new turbine contracts during the first quarter of the year, down 24% with respect to the same period last year. More than 90% of those orders were closed in Europe with, the largest volumes coming from Spain, Turkey, Germany, and Finland. We continue to have a leading position in the region where we expect good order momentum for the rest of the year. Rest of the orders in the quarter came from Latin America, and the majority of the orders continue to come with Delta four thousand turbines, representing 73% of the orders in the quarter. ASP increased to €730,000 per megawatt from €720,000 in the same period last year. Next slide, please. Service sales amounted to 8.6% of group sales in the quarter with a hundred and €8,000,000 and an EBIT margin of 16.5%. Fleet under contract stands at 23 gigawatts with an average availability of 97%. Next slide, please. Turbine order backlogs stood at €5,100,000,000 at the end of q one, decreasing 13% with respect to the same period last year. And service order backlog grew 8% to €2,800,000,000 for a combined order backlog of €7,900,000,000 at the end of the quarter. And with this, I hand over to Ilya that will lead you through the financials. Thank you, Patxi. Good afternoon, ladies and gentlemen. Also from my side, warm welcome. I would now like, as Patxi said, to guide you through the financials for the first quarter, starting with the income statement. So Jose Luis mentioned it. Our Q1 was, again, affected, among other things, by some COVID-nineteen impacts, but it also went largely as expected. We delivered the sales of around €1,250,000,000 which is €286,000,000 higher than in Q1 of last year. We generated a 10,000,000 total in EBITDA representing the mentioned 0.8% level, which reflects the soft start into the year we had expected and also mentioned during our full year 2020 call in March. Gross margin stood at 17.3% compared to sixteen point two percent one year ago. Main impacts on profitability were COVID-nineteen effects largely from spillovers in operations and project execution as already mentioned and commented in a bit more detail also by Jose Luis before and after this section. Our EBIT is on similar levels to the first quarter of twenty twenty, so minus €28,000,000 versus the 24,000,000 minus of last year, and the net profit dropped by 17,000,000 compared to 2020. The key driver here were higher financing costs compared to the first quarter of last year of roughly €10,000,000 The two key building blocks here were a, our interests and fees under the RCF and b, the high utilization of our guarantee facility than twelve months ago. The latter is a consequence of our increased business activities as shown earlier. And sorry, and as mentioned at the beginning, P and L for Q1 has been within our range of expectations. Now on the next slide and looking at the balance sheet, the structure of our balance sheet remains in substance unchanged compared to year end. With approximately EUR $740,000,000 of liquidity, we achieved a very solid cash position at the end of the quarter, also in comparison to the roughly EUR $780,000,000 we had at year end 2020. In comparison, one year ago, we stood at around EUR $430,000,000. Among other effects, we can here see the cash contribution from the still pretty decent order intake as explained by Pachi, product execution and, of course, the working capital management. Equity ratio and equity have dropped when compared to year end. This is a consequence of the impact on profitability by the factors we explained earlier. Probably again worth to mention, we have now repaid, as Josef mentioned, the promissory note or Schuldschein dalen, and for this, we have indeed used the proceeds from a shareholder loan by Akceona, which was another strong support by them. With that, I would like to go to the working capital shown on the next slide. Our working capital ratio for the quarter ended at minus 7.6%, an improvement from our year end level, which stood at minus 6.3. So current level is similar to the level of Q1 '1 year ago, minus 7.5% and quite below our guided figure of below minus six for 2021. The positive development of more than €80,000,000 in absolute terms between the end of the year and Q1 was largely driven by the continuously high level of project execution in the quarter. And this has also resulted in the corresponding decrease of our inventories. So in other words, the working capital development has continued to be a good success story at Nordex, especially when taking into account the still ongoing COVID-nineteen backdrop. With that, I would go to the cash flow statement. Cash flow from operating activities saw an increase to plus EUR45 million when compared to Q1 last year of approximately minus EUR20 million. It was largely affected by our positive development in working capital. Cash flow from investing activities were basically on the same level as in Q1 a year ago, both €35,000,000 Key driver here was the expansion of our supply chain and blade production facilities. Overall, free cash flow went positive for the quarter with approximately EUR 10,000,000, it is also substantially above the minus EUR 57,000,000 in Q1 twenty twenty. That is, of course, a positive development, but we will have to see how this plays out in the remainder of the year. Finally, cash flow from financing activities was at about minus EUR46 million and it was largely determined by the utilization of the shareholder loan, but overcompensated by repayments under the RCF and the EIB facility. So in a nutshell, in terms of cash flow, Q1 was more and broadly speaking, the usual one. That brings us to the investments on the next slide. Our total investment in Q1 stood at EUR38.6 million, slightly above the prior year level. Chief investment targets mentioned already were again blade production facilities in India, for example, molds, as well as equipment and tooling for increased installation activities worldwide. We can also see a slightly higher portion of intangible assets as a result of somewhat increased development activities compared to Q1 twenty twenty, But all in all, it has also been a regular quarter in terms of investments. That brings me to the next and my last slide about the capital structure. Leverage ratio further declined to 0.3 compared to Q4 at 0.4, with that continued well below our long term ambition level of 1.5. And just for comparison, the ratio stood at 1.2 one year ago. Equity ratio slightly declined compared to year end from 17.5% to 16.2%. Contributing factors were again the same as those when we were communicating and commenting on the profitability. So that would be it for the financials. But before handing it back to Jose Luis, I'd also like to characterize our Q1 with three key takeaways from my side. First, the start into the year was as we had expected it. Second, our forward looking business maintained its resilience in Q1. Despite a bit of a slowdown in the sector, Nordics came out with a decent showing in order intake. And third, again, none of this is over. While vaccine rollout picked up in many countries, others are hit hard by another wave of infections. That in turn could affect supply chain, factories, or logistics in some part of the world where we operate. And in addition, we have also seen some pressure from inflation within the supply chain, which has persisted for longer than most expected. So volatility and gradually increasing pricing pressures are probably the most visible consequence of that. So this adds an extra layer of risk into the current year, which we will have to manage closely. And with this, I would go back to you, Jose Luis. Thank you. Thank you, Ilja. If we talk about operations, I think it's fair to remark that we keep operating under a COVID business continuity task force that we established around one year ago as COVID is is not yet over and is still affecting our people and our business as as mentioned before. On top, we see disruptions in supply chain shortages due to containers issues and the associated risks with for cost inflation in logistic and in certain commodities. In those circumstances, our focus is still to protect our employees and execute our customers' projects with the minimum impact possible. Despite all the mentioned additional challenges that we are confronted with, is remarkable, the operational capabilities of the company. It's a total installation of three fifty six turbines in 20 countries in the first quarter compared to $269,000,000 quarter of last year. So an increase of 5056% compared to the same quarter of the last year. Geographically split in megawatts in the first quarter of this year, '50 '7 percent Europe, '20 '1 percent North America, '16 percent Latin America, '6 percent rest of the world. So continuing the already mentioned trend of de risking the geographies for the medium term, at least until COVID is still with us. Talking about production, we are ramping up Delta 4,000 production for nacelles as we speak in Brazil, India, and Spain. And India, Brazil and Mexico for different blade models of the Delta4000 platform. We, as mentioned, we're still facing several disruption that we are managing in a daily basis in the context of this already mentioned business continuity task force. We expect the situation to stabilize once the vaccination campaigns are rolled out worldwide. And we expect as well commodity prices and logistic disruption to ease over time. And that is our assumption. Output of turbines amount to three zero four units in the first quarter, '1 hundred and '70 '4 in Spain, One Hundred Eighty in 174 in Germany, One Hundred Eighteen in Spain, all Delta 4,000, 12 in Brazil from legacy product, but already ramping up Delta4000, and as we speak ramping up India for Delta4000 ascent. In house plate production, three eighty three units in the first quarter, '1 hundred '70 '2 Germany, '90 '5 Mexico, adapting the plan for four lines of Delta 4,000, 80 two in Spain to launch Delta 4,000, 30 four in India delta 4,000 as well. And outsourced blade production, all all the in house blade production is is or majority big big majority Delta4000 outsourced fleet production, five seventy units in the first quarter, keeping the reasonable balance between outsourced and in house. With this, we are approaching to the end of the presentation, so we move to the guidance. So summarizing, guidance for the year is maintained. Sales between 4,700,000,000.0 and $5,200,000,000 EBITDA margin between 4% to 5.5% working capital below minus 6% and CapEx around hundred and $80,000,000 And as discussed by Iria, we need to be aware that the assumptions underlying the guidance are subject to greater uncertainties than normal as we discussed due to several risks ahead of us. Talking about strategic targets, the same applies. The strategic targets, we target to achieve sales around €5,000,000,000 in the short term, maybe even before 2022. Let's see. And it's our strategic task to achieve a group EBITDA margin of 8% for our financial year 2022. And we have updated the wording to reflect what we see actually based on the 2021 guidance because revenue might come earlier than profitability for the already mentioned factors. And with this well, capacity remains unchanged, six gigawatts plus. With this, we open the floor for Q and A. Thank you very much. Now I'd like to hand over to our I'd Of course, ladies and gentlemen, we will now begin our question and answer session. Once your name has been announced, you can ask a question. If you find your question as answered before it is your turn to speak, you can dial 02 to cancel your question. If you are using speaker equipment today, please lift a handset before making your selection. And the first question is from George Fellerstone, Bank of America. Your line is now open. Please go ahead, sir. Hi. Good afternoon, gentlemen, and thanks for taking my questions. My first one would be on the market environment. You've obviously noticed a soft start to 2021 for the industry in Q1. Have you seen a change in dynamics so far in Q2? And could you also give us an update on the negotiation with Axione for the one gigawatt Australia McIntyre wind farm project? Patrick? Yes. I can take that one. No. We have not seen a change in dynamics in in q two despite the environment that you were describing. We continue to see to have good visibility on on the pipeline of of orders that are to come. And with respect to to the Afyaena deal, we we do not publicly disclose individual negotiations that we have with customers. But as I mentioned in the previous call, yes, Acxiom announced a large investment potential investment that they will be doing in Australia, and we are in discussions with them to supply that. However, we do not expect to be closing that deal in the short term. Thank you very much for the color. My second question would be around raw material cost inflation, and and some of your peers have noted that there'll be some impact on margins, in the medium term. Firstly, to what extent is this already incorporated in your guidance for both this year and also for 2022? And then secondly, within the answer, maybe if you could explain your hedging policy and any mitigation you have in terms of price increases or indexation within contracts. Okay. So I will take the first part, and Elia will take the hedging part. Regarding costs, we have built our guidance to the best of our knowledge, and we see some impact in 2021 as well as some impact in 2022, which we the 2022 part, we still think we can counteract with the price. So we build both the guidance and the strategic targets, taking into consideration what we know. But it's fair to say that the belt is slightly tighter than before without those risks. But at the same time, you know, this could be an opportunity to reset the margins of the sector in a more sustainable level. So to your question, we have considered what we know. There are slightly more risk that in normal circumstances, there are opportunities to reset the the margin level of the of the industry following what was announced by market leader. And we welcome that announcement very much. Regarding the margin policy? Yeah. I would say probably thanks, Jose Luis. You've answered also the hedging question to a degree, because, the straight answer for that one is where orders have been closed and have a lead time, let's say, of six to eight months to installation, we are covered to the degree that we have locked up and locked in our supply chain. For orders longer than that, part of our value chain is exposed as you just explained, so we will have to manage that closely, of course, with certain limitations. So when taken into account managing of working capital, that is a crucial lever and and a constraint to manage that. In another example, shipping costs is way more difficult to hedge that per se because they come on the back of of spot pricing. And then I think the third, block you already described, Jose Luis, which is that for new orders, we will have to pass on those increases to the value chain. And you also mentioned that other players have indicated the same. Thank you. If I could if I could just follow-up on, on one of the points you made there, Jose Luis, on resetting the margins. What what does that mean for Nordex? And and are you are you basically intimating there that as with, I think, you you're referring to a vest. I was just saying that you are expecting to raise prices to to offset as I think as you just mentioned then with new contracts coming in? Well, very much this you are anticipating my closing of the session today, but very much we welcome the announcement of the market leader to protect gross margin and to pass the cost increase to the consumers through the customers. So I don't think the customers will be affected mid term. We are fully convinced that the competitiveness of the sector allows for higher price and even eventually better margins. There is no need, of these very low price auctions, you know, low thirties, high twenties if the spot price is in the sixties, so consumers can pay more. And this might be if things, you know, if we behave rationally, a good opportunity to reset the margin of the industry. So we welcome the announcement. We will follow the strategy. We don't plan to use this strategy of the market leader to capture more market share keeping a low pricing strategy or a low margin strategy. So we will follow and protect the gross margin and pass the cost increases to customers that will pass to consumers. At the end, temporary, we can have effects, but long term might be positive for the industry. Okay. That's great. Thank you very much. The next question is from Vivek Mehta, Citi. Your line is now open. Please go ahead. Thanks very much, and thank you for taking my question. So a bit of a follow-up from George's question. So around the 2021 guidance, so I guess at the midpoint, you need to deliver about a 6% margin EBITDA for the rest of the year, rising to about 7% at the upper end, which is not that far off your 2022 margin target despite not having India fairly up to speed. So could you maybe talk about your views around the lower end and upper end of the guidance, your confidence at either end? And secondly, following on India, obviously, it's a terrible situation there. Could you maybe just expand on how you see that affecting the ramp up in India and when you now expect to get to full operations there for Delta four thousand operations? Okay. So I will make an statement, and then Ilya will go more into detail of the guidance question. I think the range is broad because the uncertainties are weak. I mean, we are not operating into into, let's say, stable, stable circumstances. And India is a is a good example for that. We don't see we don't see risk from the from the order intake to cover the revenue. More most of the orders are almost in place and in execution to cover our revenue, but we might have a purchase delay. We might have lockdowns. We might have factories affected. We might have ramp ups affected, which is the case of India. As we speak, we were ramping up delta 4,000 in India, Two malls in operation, four moles in the middle of the ramp up of our biggest blade facility and nacelles in conversion to produce delta 4,000. As you saw in the presentation, we were already producing rotors in India. So the running factory is still running. So we are not affected by the lockdown because we are an export oriented unit. But the factories that are in the middle of the ramp up are temporarily affected. For how long? Honestly, we don't know. We expect to be resumed soon as the vaccination campaign is is rolled out. But, we expect a couple of weeks to resume those activities, but it's somehow not in our control. And, maybe, yeah, you can give more color about the the guidance. Yeah. Yes. Of course, Jose Luis. I think you already basically answered the part of the range and what are the uncertainties and factors that that will impact where at which side of the bookends we will come out. But to your questions on on the queues, obviously, we're not giving intra year guidance. But when listening to your question, I think there is a set of fair assumption in there, so expecting q two to be already substantially better obviously than than the queue we're presenting here. And then, in the rest of the year, q three, q '4, going up to a run rate that would bring us into, let's call it, striking distance of what we target for next year, I think this is a fair picture. That's helpful. Can I just quickly follow-up in terms of the upper end of the guidance range? You talked about the sensitivities within the range, but what would you need to get to the upper end of the range on your profitability on margin? Thank you. I will say executing the the projects like a switch clock, not the not delaying anything, not having any extra extra cost, not failing in any slotting in production. So it's somehow approaching to a best case scenario, which is is possible, but but present certain challenges, but still possible, of course. So basically Thank you very much. Execution. We don't rely on order intake to achieve the top end of the guidance. The next question is from AJ Patel, Goldman Sachs. Your line is now open. Please go ahead. Good afternoon, and thank you for taking my question. So mine carrying on the theme actually sticks with the raw materials. I just wanna understand this in a little bit more detail. As in as far as I'm hearing from the other wind manufacturers, when an order becomes firm, you lock in the raw materials underlying to the best you can, currency to the best you can. So just thinking about how much raw materials have moved over q four and q one, I would have expected your average selling price to start to move up, and it was flattish. And I I I just wanted to get an idea of all the orders that you basically captured here consistent with the margins that you will achieve next year. Or and how should we think about how the average selling price will evolve in the order intake over the year given where the current environment is on raw materials? And just maybe whatever you can offer in terms of the understanding on how one filters into the numbers to the other so we can look in on the company and know what to expect. And then the second question just was on India. Do you have any exemptions on the way that production works there, or or or or is it effectively just purely government guidelines? I just remember last week mentioning that they do have some exemptions that will allow them to produce. So just wanted to get a similar sort of arrangement or not. Thank you. Okay. So I can take and my colleagues can jump in and further elaborate. I think the average selling price as usually Pachi mentions is an indicator, but, you know, it's a compound of location, scope, turbine type, so on and so forth. So as we mentioned, we are derisking by design the selection of markets where we where we operate, concentrating more in mature markets in those circumstances. And what on top, it was not mentioned, but give you some color, we have a substantially lower share of Turkey projects. So majority of the order intake more than, I think, more than 80% is turbine is clean sale, and the rest is only with foundation. So almost no Turkey compared to the previous year that we had some different scope. So that's a distortion in the average selling price. It's true that the inflationary forces we started to see in Q1 and we are starting to react to that with the market to protect the gross margin. So the gross margin is the indicator that we try to protect. And in the new orders that we are in discussion, we are always incorporating this higher cost. So eventually, in a like for like comparison, in the next quarters, will see this impact. We believe that order intake in volume will not be affected by this increase in by this pass through, of course, increases to customers. But we will see over time in a like for like the ASP evolution. Talking about India, as I mentioned before, the problem is not the governmental permission which we have and we are still operating in one blade factory. The challenge for us was the support of international teams that needed to support our Indian colleagues in the ramp up of Delta four thousand products. So for safety reasons, until we can't guarantee availability of of health care case in case they they are affected by by COVID or they are vaccinated in Europe or U. S. Or in India, we decided to temporarily put on hold the ramp up activities. We plan to resume those activities in the next couple of weeks. And as we speak, we have the governmental order to operate because we are export oriented units. We have three factories. One is operating. The others are as well operating, but, ramp up in in in a slowdown until we, vaccinate our technicians and continue the the ramp up support. K. Next question is from Sean McLaughlin, HSBC. Your line is now open. Please go ahead. Thank you. Good afternoon. I wanted to ask firstly about your visibility You said you're you're covered already for the top end of 2021 guidance. What, yeah, what what level of visibility do you do you have currently on on 2022? That's the first question. I don't know if we have the exact number. Pachi Pachi We do. Yes. We do, but we generally don't anticipate with this patient. Generally, don't provide these type of numbers. What I can tell you, Sean, is that goes very well in line with what we had same period last year. So and that goes also to the to the first question. So we see a good visibility on the order pipeline, and we are filling up the twenty twenty two P and L sales with orders at the same pace that we were doing last year. But somehow you can do the math on the backlog. If we have a backlog roundabout of five gigawatts, roundabout Five six. Yeah? 5,000,000,000. Yeah. 5,000,000,000. Yes. That's a backlog of slightly more than one year, and we have consumed one quarter. So we have slightly more than one quarter of backlog already secured for next year. And as Pachi mentioned, with good momentum on the pipeline. So we are not concerned about the visibility in the pipeline. Understood. Thank you. And the second question, I mean, related to that and building slightly on on the previous questions. I mean, thinking about the 8% target now, I mean, you've talked about new uncertainties and increased uncertainties. But, I mean, you're you're sticking with that with that target. So, clearly, you you do believe that that that you can achieve that. I suppose how quickly would the situation need to normalize for you to continue on that pathway to 8%? Okay. So there are two normalizations. One normalization is easing the disruption or other top normalization is with cost increases being able to do a pass through to consumers through the customers. So those are the two normalizations. And the second is ongoing. I think we welcome the announcement of the market leaders. So we are acting to protect our gross margin as well because we cannot take more cost increases. And this might temporarily impact profitability. So depending how the two factors evolve, we might have a temporary effect. But if the size of the market remains strong and the midterm perspective remains strong and if we keep our market share because we have competitive products, we are where the market is growing and the market acts rationally and not entering into price war, which should not be the case in current profitability circumstances of the sector. It might take us a little bit longer or shorter to get there, but the underlying basic assumptions remain the same. Fantastic. That's that's super helpful. My last question on on debt cost. I mean, finance costs are continuing to creep up. I'm just wondering what opportunities you have over the next few months, either from refinancing or restructuring around debt to to to bring those costs down. Yes. So I'm happy to take that one. So I I I go back to to my statements earlier that we're looking at the financing costs of the first q. They're probably skewed a bit by extraordinary effects when we had to accumulate some of the fees payable under the RCF in that quarter. So I would not extrapolate that too much for for the entire year, which we would believe to be on similar levels like like last year. But to to the core of your question, and I think I mentioned it last time, yes, it will be one of the of the first and foremost tasks of of myself and my team to look into options to how further bring down those financing costs from where they are right now. And, I mean, is there anything that you can give in terms of, you know, the the kind of objective that that that you've set yourself or or or anything that that you would expect is is a kind of reasonable assumption to make on on that cost reduction front? I I don't think we would be in a position today to have a tangible result for that because that would already need the execution of these kind of options. So I don't think today we can give already an indication. Super. Thank you. And the next question is from Constantine Hessen, Jefferies. Your line is now open. Please go ahead. Hi there. Good afternoon. Thank you very much. I also have three questions. So number one would be really on Q2. Has there been any visible improvements in production and installation processes in Q2, two, which do support higher margins. Ilya, going back to your point, and if you can also give some color on the timing of your price increases. So I'm just trying to understand if the zero point three seven three in q one were mostly driven by mix and only part of that by price? That would be my first question. Okay. So, Q2, we see an improvement coming mainly for a good level of activity and the ending of legacy low margin projects. So if we don't face any major disruption that we don't expect, we should see better profitability and mainly driven by the quality of the projects We execute more Delta4000. And this loss making project that we announced in the previous calls is approaching to the end and less legacy projects in Q2. So that's the main factor for the improvement in the Q2. That's great. Thanks. And just on the pricing timing? The pricing, of course, I mean, what we are in discussion now is for delivering maybe Q2 twenty twenty two. So the pricing discussion that is ongoing following the market will not have a substantial impact in 2021 nor in Q2 of twenty twenty one. That's great. Thank you. So question number two would be on other operating expenses, which have grown considerably. And it seems that this has been driven mainly by expenses from remedial work for projects and post contractual customer claims, which was worth about €26,000,000 compared to zero last year. So I'm just wondering if this was a one off or how should we really think about this one? Thanks. Thanks, Konstantin. So without being too specific, yes, a, I think there's two factors to that. A, is that we have we're in a growing business. So both on exopax side, we have a growth rate, which reflects the increase of our activities. And second, yes, there is some effect, like you mentioned in that, for example, we do have some, some costs coming over from a Mexican project, where, part of that increase you're mentioning is coming from. So, yes, it's a mix of some in that regard, one off costs from from those legacy and and b, the increased business activity. Okay. That is great. Thank you very much. And then maybe just lastly, you said that the order intake is covering most of revenues in 2021. I'm just wondering how much that is today. Because I think back in March, said it you had about 80% visibility. I'm just wondering about how much has then gone up by from now at the moment. I think it's 99% as we speak. Perfect. Thank you very much. And we haven't received any further questions. So I hand back to the speakers for closing remarks. Okay. Thank you very much, Aurelio, and then thank you very much from our side for all your questions. And I'd like to take the opportunity to pass over to Jose Luis for your final remarks. Thank you very much for your interest, for your questions. And with this, we approach to the end to the key takeaways from our side. So first, we see positive business development expected in the rest of the year with increased EBITA margins in the course of the year, of course, to meet the guidance. Demand for the most profitable projects remains promising even for the latest rotor variance. We talk a lot about the course of the presentation today about volatility and inflation in commodities, ongoing COVID pandemic and logistics risk might have an impact in short term. However, in the medium term prices could structurally improve as the wind industry remains one of the key pillars and the key pillar competitive in the global drive to achieve net zero emissions and to fight against climate change. Price is not a roadblock to achieve that. We talk about the challenging situation, temporary challenging situation due to COVID in India. Hopefully, will ease very soon. And we hope that for India as a country and for our Indian colleagues, this might cause some delays in the ramp up, which we think are going to be temporary. And as mentioned, guidance for the financial year 2021 is maintained. We talk to conclude as well in the course of your questions, the our position towards the announcement of the market leader. We welcome the announcement of protecting gross margin in the industry and pass the eventual cost increases to consumers through customers. So eventually, we will try not to hurt much our customers. And this is an opportunity to reset margins of the industry eventually to a more sustainable levels in the future, although we might have some pain in the implementation of that. So with that, thank you very much for your time, for your questions, for your interest, and wish you wonderful evening. Ladies and gentlemen, thank you for your attendance. This call has been concluded. You may disconnect now.