Earnings Call: Q3 2019

Oct 25, 2019

So good morning, everyone, and welcome to Wartsila entering report presentation this morning. I have here with me the whole Board of Management and also our new Head of HR, Ali Detke. Welcome. And of course, Natalia Waltasari, the Head of Investor Relations. I have a short presentation. And then As usual, we can have questions and answers session. Wartsila's 3rd quarter was burdened by project related challenges as you know. And at the same time also low equipment demand. At the same time, our services activity has remained Sound. Couple of words about the market. Our marine market Conditions are today quite sluggish and full year contracting is expected to be below 2018. Cruise, ferry and LNG are actually doing quite well and they are compensating the weaker Markets and weaker merchant and offshore markets. Customers today Remain unwilling to commit to scrubber investments due to uncertainty On fuel price development and fuel availability, despite still the supporting initial price indications. In energy, the short to mid term outlook is challenging. The energy landscape is Evolving rapidly as a technical as is technical development, the political agenda and public opinion. This is really today making the investment environment complex and creating uncertainty among our customers. The geopolitical and economic environment is further slowing decision making, particularly in emerging markets. If you look Wartsila's short term outlook, the current market expectations In sales is, in our view, realistic. As we have communicated, we expect Comparable operating result to be €100,000,000 lower than the €550,000,000 profit of 20.18 Due to the project related charges. And 2020 will be a challenging year with the main risk Being related to energy equipment orders. At the same time today, Pricing is another headwind we face. And of course, we are following all this progression of Ongoing savings initiatives and the development in the market and we'll take further actions if necessary. If you look at the specific figures now in Q3, order intake went down. Both businesses, but heavily, of course, at the moment because of the market situations in energy. Order book is still or has been growing. Net sales is also down mainly because of energy. And result was €39,000,000 Here in Q3, We took €65,000,000 of hit of the €150,000,000 earlier communicated. Now cash flow also is negative at the moment. We are building our inventories and the working capital is very high So that we can get the deliveries out in Q4. As said, order intake was weak in both Equipment businesses, I'm not so worried about Marine. That might be a seasonal situation. And of course, now when we compare Marine Q3 in 2019 to last year. Last year, we had a very high order intake in scrubbers. And this quarter, we haven't seen that one. As said earlier, let's see how the scrubber ordering develops going forward. The decline in sales really due to concentration of deliveries towards Q4. And book to bill still the rolling number is above 1. Order distribution here. This, of course, supports now the Q4 development Over €1,700,000,000 orders for this year. And going forward, of course, the order book has been growing bit by pieces? The result really burdened by the project challenges and I will come back to the project challenges in a moment. And actually the slide is now here. We already communicated about SEK150 1,000,000 and the projects which have affected This situation are 12 marine gas solutions projects For gas tanker vessels. Then we have 1 LNG terminal construction project, and I think everybody knows That's Hamina here in Finland. And we have 2 engine EPC projects also in countries With a very strict local standards and requirements. So I would say handful of projects. Wartsila has Over 700 projects yearly. And now unfortunately, quite big projects of those Where impacted? Of the SEK150 1,000,000 During January September, we have recognized now €85,000,000 The rest is going to be in Q4. And the main Issues behind the cost overruns. In Gas Solutions, it was new technologies And the technologies in new applications. And these new technologies now is only on the gas solutions side. We also have had challenges related to new suppliers, really difficult situations with some Of our suppliers. And specifically in the energy side, the local standards and codes Have not always been fully priced at the sales phase. At the same time, regarding the specific EPC projects in energy, the subcontracting and engineering costs Have been underestimated. This development was realized as you know now During Q4, and we have started corrective actions to strengthen, 1st of all, Our sales and project execution processes. So how do we sell and how we finally then link Our project execution. We are doing good projects, as I said, over 700 projects And most of them are doing well. And then of course, we have to learn from these ones. We have also changed The structure when it comes to the organization, both in marine and energy, we have strengthened our project management. And of course, have created more strict processes to Analyze and understand the risks upfront in these cases. At the same time, looking at the technologies and where Wartsila It's working. The assessment has to be tighter and of course at the same time looking at our suppliers. Sometimes we have noticed that probably the competencies have in specifically in these cases not being at the Right level. So a lot of training, new introduction of tools to facilitate the processes. Cash flow negative and really this is as you see regarding the working capital, Specifically now delivering a lot of engines in marine and energy. At the same time, the huge Amount of scrubber deliveries are burdening our cash flow situation. Gearing, A bit higher than previously, EUR0.44. And then moving on a bit to the different businesses. As you know, Vessel contracting this year has been extremely low, one of the lowest for many, many years, A short pickup in the last couple of months, but still below anybody expected. Supporting Wartsila's business in LNG, in cruise, in ferries. And when you look at this quarterly development, as I already mentioned, you have to remember from last year the big amount of scrubbers. What and why is why this is happening? I as I said, I think it's going to be Coming back, the price difference between low sulfur and high sulfur fuel is large. And the vessels going forward starting from next year, they need to find a solution and scrubber Is a very viable solution going forward. The installed base Now again, shown in megawatts, if you look at it in euros, we are not worried. Some of our customers have Transferred a 2 stroke big megawatt agreements To be handled through transactional business. And at the same time, the net sales now A bit lower, but of course, when you look at the Q4, there will be huge amount of Business is or delivery is going out. One highlight and this is now what comes to technologies. We developed a From our 31 actually, 31 platform, a new engine which is pure gas Engine for the marine market. This is extremely important because the marine market is more going more and more to sustainable solutions, Reducing the environmental impact and this engine is very much suited to work In hybrid operations. Moving on the energy market share A bit down the whole market is or has been going down. And our order intake in new equipment was very low. Services again also here in energy is doing fine. And in energy, of course, The big dilemma today is when you look at the structure of the energy market that Renewables are gaining more and more role in the energy systems. At the same time, you have The old systems in place and before the market is really starting to reduce, 1st of all coal, You don't see some of the developments on the flexible gas side. And at the same time, we have a pipeline regarding all the developments going on in developing world And at the decision making because of in many times because of the structure, but political situations And financial situation has been taking more time. This is the 1st 9 months. Really, if you look at the megawatts almost I mean pretty much down from last year, Asia has played a quite major role and Asia and Middle East and Africa is going to play a role also going forward. We have been able to increase our engine energy agreement base. This is an example in Hungary and really showing that Wartsila's Combined solution with the equipment and life cycle possibilities is gaining Really good opportunities. Net sales pretty much down partly because Of some of the order intakes we were order intake we were expecting in Q3 now happening in Q4 affected the newbuilding Sales, but the services again quite stable development in a challenging market. And an example of the future of combustion engine possibilities, You can burn renewable fuels. You can burn synthetic fuels in our engines. And the way how the development of these fuels are going to be gaining place in the energy market is promising. This is a collaboration with the Finnish based Q Bauer, which is basically pioneering biomethanization, Creating synthetic fuels, which can then finally be used in our with our technology. We also now, looking at our prospects, downgraded The energy from soft to weak. And as I already said, the market looks challenging. And before We get all the understanding about the structure, how the energy systems are going to be Built this relief effects also to our market. So this is the presentation So far and now we are open for questions. And do we have any questions here in the audience in the Helsinki Campus? No questions yet. Then we can go to the lines. And Please remember that you could limit your questions to one question and then one follow-up question And then get back to the line if you have further questions. Let's open the lines please. Your first question comes from the line of Alexander Virgo. Your line is open. Please ask your question. Thanks very much. Good morning, Jaakko. I wonder, could you go a little bit more into How far or why I suppose you've been so far off on the estimation of costs? I guess, particularly given you flagged 12 marine projects, 1 LNG and 2 EPC. And yes, the balance of the charges you recognized so far suggests the EPC business is where the problems are. Does that weighting change, I guess, when we look at Q4 and the charge the remaining charge that needs to come in Q4? But maybe just talk a little bit about The sort of the difference in problems. And then as a follow-up, it sounds very much as if, Particularly on some of these technology challenges and the supply chain in particular, it doesn't sound like that's a problem You can address quickly. So how do we think about how this develops over the next 12 to 18 months and looking into the midterm? Thank you for the questions. And first of all, now I mean, now we have 2 separate Kind of difficulties. 1 is in the marine side and that's Gas Solutions. And clearly and this is probably covering both the first one and the second question is the technology. And we deliver a huge amount of Projects in the gas solutions market and the technology, what has now been affecting to the businesses Is something we are using in new applications. So it's basically not new technology, but new technology in new applications. And So that's why I think we are quite confident on what comes to that to solve the problems and go forward. And I could actually also ask Roger Holm, the Head of our Marine, to go through a bit about What was going on with the technologies? Roger, please. Yes. Thank you, Jakob. Good morning also from my side. Just a clarification, first of all, so We are all starting from the same starting point, so to say. So please remember now, this is gas solutions or gas Technology, this has nothing to do with our gas engines as such. So that's the first clarification point. When we talk about the challenges we have in Gas Solutions, These twelve projects, we talk about tens of vessels of gas tankers. The background for this It's new technologies where we have partly failed in the cost calculations for these new technologies. We have underestimated the cost. And on top of that, we have not received the proper deliveries from certain sub suppliers according to agreements. And this means then that when you combine these 2, it has led to a situation where we have been delayed in our deliveries to the customers. And our clear intention is, of course, to deliver to the customers what we have promised to them. So we have had to do a lot of rework and cover up for delays To do this. We are confident that this is something now that we with the processes Jako already mentioned, We are in control of the enhanced processes. But this means still that we need to make sure that the deliveries we have in the pipeline go as planned. And regarding the amounts, we said that €65,000,000 Was actually taken into account is Q4 and €17,000,000 was in Marine and €67,000,000 in Energy. And so the rest, which is now for Q, is probably be a bit more on the marine than in energy because That's how you calculate the SEK150 1,000,000 When it comes to the EPC, we have hundreds of EPC projects in our energy business. Okay. One was the LNG, and we clearly failed with that one. Going forward, we don't do LNG terminals anymore. And but the rest, when you look at Wartsila delivering EPC projects globally In 178 countries and now we have 2 cases in cases where we underestimated the cost. So I'm not so I'm not worried about that. But Marco, we read the head of our energy group a bit say about the energy Now going forward, what I mean, how do you see it? Yes. Thank you, Jakar, and good morning from my side as well. That's correct. It's 2 large EPC contracts that we took actually 2 years ago. And in the sales phase, we didn't quite understand the requirements that are set to us from not only from customer side, but also The legal side and the government side. And this is the reason why we miscalculated. And now when we are Proceeding with those and doing, we have realized that we have to comply with all these requirements that we didn't know About and that's why the cost came up and we couldn't actually do something else than just take the cost and because The applications we have. What we have done is that we have already beginning of this year, we have implemented a new training for Our project managers, but also now we have changed the organization. So we have a specific center of excellence For these large complicated projects so that we have dedicated project managers Instead of just shifting from a simple project to a large project, but only doing these large complicated projects. At the same time, we have gone through the whole approving process. So now it's much more tighter, and we will actually bring up the risk evaluation to the Board of Management level as well. So we understand that we have taken into consideration all the different aspects that we have to going forward. So I feel that we have taken the right steps and we can fix the issues that we have had in the past. Okay. Thank you. And your next question comes from the line of Saban Wajer. Please ask your question. It's Sven from UBS. First question is on the seasonality. You already mentioned, obviously, if you look at the marine business, the OV side, you also had very low cruise orders this Quarter and also on the gas carrier side, where I suspect those markets are still quite active. So should we expect The order intake in Q4 to return to a more normalized level. That's the first question, please. Thank you, Sven. And I mean, Roger is happy to talk about the orders. Please, Roger. Thank you, Sven, for the good question. First statement is, of course, we are not immune to the lower vessel contracting on the development side. That's clear. Having said that, there are 2 things to notice when you look at the Q3 order intake. 1 is the very, very low order intake of scrubber, and the comparison Period was clearly much better. And then the other side is that there are some Timing issues also now looking at Q3. So I would say that scrubbers, we still need to look at Q4 and start of next year, we have hopes that if I put it like that, We have hopes that we will still see increased activities in scrubbers going into next year. But at the moment, that's very silent. But in general, as you said, cruise, gas carriers are still active, and we don't Foresee huge changes on that part. Yes. Because if you look at the sequential development on cruise, It almost went down 2 thirds, right? And it grows from 180 to 60, right? So I guess that's quite an element of lumpiness in there. It is correct. And timing wise, as you know, we from the yard point of view, We have extremely long order books, which also means that there are enough time to discuss and negotiate new deals, which makes it also sometimes a bit It's more tricky to say exactly when it will happen because the yards have time. And that will be used then according to their schedules. We will see timing issues also going forward. But as said, the pipeline for cruise still looks healthy. And the second question is the same for energy, new equipment business. Obviously, also Q3, that's Probably also an element of seasonality here. What does the pipeline look like for Q4? I mean, is it like that, that we should Not have the usual seasonality in Q4 and things are really pushed into the right. Yes, that's right, It is also so always so that Q4 is always very heavy on the order intake side. And we definitely see That the pipeline is good for quarter 4 as well. What has happened now that is many orders have been postponed, Different reasons. Just like Jako mentioned earlier, one reason is that it takes time from the financing institutions to approve projects In especially in the emerging markets. And the reason for that is the uncertainty of the macroeconomics, trade wars and so forth. But also in some countries, we see political reasons. It takes a long time for politicians To make a decision. It could be that there might be government changes or a new government, and they just want to understand what policies they will Support and how they're going to approve these different power plant projects. Thank you. Thank you. And your next question comes from the line of Manur Rimpel. Please ask your question. Good morning. It's Manu Rimpela from Nordic Markets. My first question would be on the overall pricing environment you're seeing in and especially in energy, but also in marine. So how do you see that this price pressure is starting to intensify given the low level of activity in the overall market? And also How do you think about cost inflation? We heard other industries talking about labor cost inflation and installation costs going up. Will we start seeing squeeze of margin from the pricing turning negative and then on top of that we get volume contraction? Manu, Thank you for the question. And you are right. The pricing is getting tougher. And of course, It comes from both sides. When the market is getting smaller, you get more competition and That we have seen now in the market developing clearly. And at the same time, of course, you see some inflation coming from the other side. So It's getting more and more challenging. If I could follow-up on that. So how do you see the other turbine producers and other kind of energy And providers reacting to this? And are they also getting more aggressive on pricing? Or are we talking more about these It's combustion engine based technologies. Manu, yes, we all know what's the situation with the big players And they are aggressive at the moment. They of course, they try to get in places where they can use that technology against our technology. They are extremely aggressive. And of course, if you look at us, we our benefit is always With our technology to be faster and decentralized and so on, but the whole market is getting more and more Accuracy. Okay. Then my second question would be just on services growth. I think that Slow down in the Q3. So I mean, can you just update us on your thinking around the services business? And that's obviously key For your margin development as well. So I mean, should we are we going into a risk of slowing or declining momentum also in the Q4 and into 2020, Given the overall uncertainty and low level of activity in your markets? Of course, the market is challenging. But at the same time, if you look at the first 9 months here. I mean, not always only the quarter. Services has been growing. And we have seen Elements in the services where Wartsila can bring value. You have seen agreements growing in energy. We have seen our customers Using more Wartsila spare parts in marine. So at the moment, I'm not worried. I would rather say it's a stable development, but who knows about the future. So far, our customers have realized Why they should use Wartsila for the services and I mean, let's see how it develops. Okay. Thank you. I'll get back in the queue. Thank you. And your next question comes from the line of Antti Suttelin. Please ask your question. Yes. Thank you. I'm just curious why did the fall in marine equipment happen now? We've seen 20 year low contracting for already for some quite time. And It has been looking like until now that you have been protected by gas carriers and crews and ferry, but now it was a clear fall in Equipment orders, why now? Thank you. I mean, please remember now if you compare Q3 last year to Q3 now it's a scrubber. I mean that's a big difference. And And of course, if nobody orders any scrubbers, then we just forget it, but that's not going to be the case. And then cruise and ferry, and I think Roger already Explain it a bit that cruise orders, because there is a huge time period before they finally We'll get the ships outtake and actually negotiate and play with the exact timing of the orders. I don't know, LNG, Roger, do you want to comment a bit? Is there any specific in Q3? I don't Not any specific. And if you look at, yes, Gas carrier orders in general are slightly below last year's levels, but last year was really good. And all activities we see Is that gas carrier orders will continue from a vessel contracting point of view. So That's not a change. If you look at going back, since we have had very low contracting now for quite many years, We are actually at the newbuild level now that we probably saw somewhere during 2016 quarterly levels. We have managed to utilize our flexibility, and we still see that as a strength to support different segments. I have not seen any major change to that part. As I said before, we are not immune to the vessel contract Going down at the moment. But from a big picture point of view, if you exclude the scrubbers that we will continue to see big deviations on, I don't see a major difference. And on the scrubbers, I mean, the overall tone in the industry appears to have improved. We've seen some of your competition booking a comeback in scrubber orders. Is there any market share change in the game also? During the last quarter, no big difference. As far as we see it, There are not exact reliable figures available from any third parties. There are indications that we also use, but not from that part. I think we have the same comment as we have seen also from other players in the market that assuming now that the fuel spread It's continuing to be where it is. We have still for our customers a very good business case to install scrubbers. Let's take out the concern some might have about the HFO availability in port and the fuel spread continuing. I think we will See more uptake on scrubber orders next year for retrofits. And I think in the scrubber business also the Situation is today that if you order now scrubber, you will be anyway late for the 1st January. So that's why many, many of our customers are saying that they will want to see the situation 1st January and then they make a decision. And on top of that, in some segments, there are really good day rates at the moment. So this is not the time either to Start installing scrubbers. They want to utilize those day rates and then come back to scrubbers later on. Thank you. Thank you. And your next question comes from the line of Sean McLoughlin. Please ask your question. Good morning. Thank you. Looking at Q4 and the very large order book you have For delivery in Q4, I get there's an important component of scrubbers, and they all have to be delivered by the end of the year. Is there risk of slippage potentially of other projects Into Q1 and how are you how have you prepared the business for this best ever Q4? Thank you for the question. Yes, the Q4 is really large and it of course, there is a huge amount of Engines and normal products what we deliver. And of course, we take care that they will all go out. At the same time, there is a huge amount of scrubbers. And as already, Roker hinti that in some and specifically, there is one segment In the marine market, which are the tankers, they are earning so well with the day rate. So if you have any tanker as a customer, You might see there some risks. But of course, we are taking care of that one with our customers. And now I talk about retrofitting We think business. But we take care of the deliveries out and still we need some our Services business to perform as it has and we still need couple of our energy orders in the pipeline to be signed And then we can also start delivering them out. So this is the picture for the Q4, but you are right. Of course, now all the operations in Wartsila has to work very smooth and perfectly. Thank you. And a quick follow-up, if I may, just on the services. I didn't quite understand The fall in penetration of the installed base of long term service agreements. What exactly has caused that? And is this any way of a trend that we can say is actually a headwind on you increasing further penetration of your installed base? Thank you. That was the Marine and Roger. I mean, you can now open it up what's actually happening there. Yes. Thank you for the question. And If you look at the reason, it's we have had 2 agreements now impacting these statistics, 1 in Q2 and 1 in Q3. There are clear similarities on both of these agreements. Both are 2 stroke agreements with huge megawatts involved. In the Q2 change, the agreement ended and customer decided to renew only half Of those vessels for agreement and other half due to operational reasons would go into normal transactional business. And now we also had a 2 stroke agreement that ended in Q3, but very, very, very small Financial impact. These are really tiny components if you look at that what we have supported from an agreement point of view. So when you look at the sales development, I'm not worried. It looks bad in these statistics, and we need to come back later on how we can picture this better. Thank you. And your next question comes from the line of Robert Davies. Your line is open. Please ask your question. Yes. Thanks for taking my questions. My main question is just really around some of the Discussions you're having with your customers around the technology adoption. You've highlighted, I think, on some previous calls Some of the challenges, I guess, from kind of elevated reserve margins or financing. When you're having that conversation with customers more broadly, how are you, I guess, Convenience them to sort of stick with the technology type because I mean there's obviously a decision making process between a battery storage, Reciprocating engine, a large gas turbine, what are the customers seeing? Are you seeing any sort of change in the thought process over the medium term investment? I know the near term headwinds Quite well flagged. But how are those conversations going on a medium term investment horizon? Thanks. Thank you. Very good question. And definitely The tone has changed and Marco meets customers every day. So please tell us. Yes. Thank you. Very good point. And definitely, I would say that differs a lot between different geographies as well. If you take United States, which is a good example because they actually have already Deployed a lot of renewables and they have bought already a lot of engine from us to balance up The intimacy that you get when you have renewables. There actually customers have taken down coal power plants because of the cost reasons And invested in engine based power plants. So it's not the renewable Story itself that is driving this, but for the cost reasons. And when we discuss with customers, we always do the modeling together with the customer. So we get the information and data from them and see how is their grade or their region actually functioning. And then we calculate what is the most optimal based on the patterns that you have in solar and patterns in wind And what is the most optimal solution for just for you and your customer or this region? And what is the combination that you should have? And they still might have other fossil fuel generation assets as well, and they will say that these will be key for certain years Because of the value that they have. And they might need the base load as well. And the Gas is cheap, especially in the United States, when I give those. And then we factor in that Daytime schedule as well. And rest of that, we will see, okay, what is the mix that you should have. And this is basically the decision making point that you add batteries, you add Engines and you have invested in renewables. So I would say the batteries and engines are The 2 solutions today that covers the flexibility need that our customers have and they are not Competing, they're actually complementing each other. And that's why we feel that we are actually the flexibility solution provider For our customers when they have the need. And then, of course, in emerging markets, it might be different because If you don't have the huge amount of renewables in your plans yet, then they need just a flexible baseload. And that's why we are competing with turbines in those markets. Thank you. And then my follow-up is just how you're Could we start again? Thinking about, I guess, the medium term margin targets. Given the sort of evolution of pricing dynamics, some of the changes of order rates in scrubbers, etcetera, over the 2. How are you thinking about that sort of 14% margin target? Is that something that you're sort of internally formally sort of giving up on? Is there any reason you should Ever be able to get back to that level? How are you thinking of the group margin progression over the next few years? Of course, we look at these targets and what we have been talking about being between 10% and 14%. And clearly this year because of the one offs, we are not going to be there. And we are not going to give up any of these targets. But as I said earlier, We are going to have, for example, for the next year, very challenging year. And let's get back to the next year numbers then later And definitely also we have our Capital Markets Day in November where at least I would like to open up it a bit more. Today, the visibility is so, I mean, low that it's extremely difficult to talk about next year? Even I mean, how do you know then about the following years and so on? But the targets we haven't been giving out. When do we reach them is then the next question. And let's get back to that one in November. Okay. Thank you. And your next question comes from the line of Tom Gogman, please ask your question. Yes. This is Thomas Gogman from Carnegie. I don't really understand what you mean by these EPC EC project, is it one of these all nuclear projects that you have problems with? And then I have a follow-up after that. No. I mean, now EPC in energy. We have 3 projects. 1, as I said, was in Finland. That's LNG terminal in Hamina. I mean, we do it as an EPC with Wartsila Gas Technologies. And then we have 2 EPC Power plant projects in 2 different countries. And unfortunately, we cannot open the discussion about the countries or the projects specifically Because of the customer reasons. But they are our normal power plants, not nuclear. Nuclear, we have already Closed last year and that's not in relation to this one. 2 normal power plant projects in very challenging Markets where we didn't take into account all the challenging environment reasons. All right. And then just talking to investors, it's clear that many people have the view that all the value and value at the moment It's in service, but they don't know the service profitability. And we are all afraid that cost cutting will be Too small on the energy equipment side and that you will start to have big losses there. Can you help us to open up Where you really make the money, so that falling earnings next year and not just starting to frighten the market that service profitability will be plummeting as well. Tom, I'm not going to open it up how much do we make money in service Compared to the new equipment. You already today know how much we make money in marine and how much we make money in energy. And we all know that service is extremely service is profitable. But within services, of course, spare parts is better than anything else. This is Everything what we want to open up at the moment. But you are right, half of Arzile's business is today's services and that's really Supporting, of course. And we need to get our new equipment in order so that at least we don't have any one offs. And that's at At least today, pretty much now cleared and so that we can go forward. Okay. Thank you. Thank you. And your next question comes from the line of Ed Moravanyika. Please take your question. Hello. Good morning, Jaakko and Jean. My question just relates to the self help cost improvement The program you announced at the beginning of the year, how is that coming on in terms of progress? And how do we expect that to maybe stable some of these issues That you have discussed today on the projects, etcetera? Thank you. We started it really, as you said, In January, aiming for €100,000,000 savings and basically With the cost estimate of €75,000,000 The program is progressing quite well According to the plan. And then in addition to this original program, we actually added a bit To that one in September, really looking at what's going on in energy. And we announced A bit further saving program. That has started and according and then going on accordingly. So far, I mean, I'm not Start opening about the savings where we are, but that's really going forward. And a lot of those savings is going to be there next year. So far of the €75,000,000 I think we might have even reported it somewhere we have spent €56,000,000 €56,000,000 €50,000,000 Yes. Okay. Thank you. There are no further questions at this time. Please continue. All right. Any further questions here in the audience? No? Then I thank you all for this one and let's get back to the new numbers then in January. Thank you. Bye bye.