Ladies and gentlemen, I am pleased to welcome you to our Analysts and Media Conference. I look forward to sharing an overview of the financial year 2024 with you. The first part of my presentation will be followed by our CFO, Bernhard Wiehl, who will provide more details on Autoneum's 2024 financial results. I will then share our outlook for 2025 before we move on to the Q&A session. Please remember that this conference call shall not be recorded. In 2024, we once again achieved important milestones and made further progress in various key areas. Most importantly, we have met all the financial targets we issued in our original guidance from March 2024. This is a real achievement considering the overall challenging environment of our industry. Revenue in local currencies grew by more than 4%, resulting in a consolidated revenue of just over CHF 2.3 billion.
In addition, Autoneum recorded the highest level of order intake in its history in 2024. Our EBIT margin reached the higher end of the guidance with 5.3%, which is one percentage point higher than in the previous year. Finally, our free cash flow was with almost CHF 110 million, even slightly above our guidance. Thanks to this positive financial performance, the Board of Directors will propose a dividend of CHF 2.8 to the annual general meeting, which corresponds to an increase of CHF 0.3 compared to the previous year. Let us look at the factors that made this result possible. First, I would like to thank all our employees and stakeholders for their hard work, dedication, and trust. We truly have a great team and many excellent people at Autoneum.
Already two years ago, we started to optimize our footprint and adjust the organization to a more volatile industry setup. Flexing our production capacities and cost structure is essential to secure our competitiveness. In addition, we continued our consistent but fair price renegotiations with our customers in line with the changed market reality. Last but not least, we were able to improve in several other areas, including our operational efficiency, our innovation process, and of course, in our performance in North America. This allowed us to clearly reconfirm the turnaround in this business group. The foundation of every company and its long-term success are solid guidelines and a strategy that are adapted to the market and its requirements, together with a strong execution. We introduced our new purpose, vision, mission, and values, as well as the new corporate strategy at our Capital Markets Day last October.
In parallel, they were rolled out globally to ensure that they are not only understood by our employees, but also lived in our daily business. We received a lot of positive feedback from our locations across the world, as well as from our external partners. We feel confirmed in our conviction that we are on the right path in this respect. In our focus region, Asia, we also realized important milestones: the creation of a local research and technology center in Shanghai, and of course, the signing of the master transfer agreement with the owners of Jiangsu Huanyu Group in November 2024. With this transaction, which was completed about two weeks ago, Autoneum is getting immediate and important access to Chinese OEMs in China, which have become the key players in this market for all vehicle types, including battery electric vehicles.
This will help to strongly improve our position in the world's largest automotive market. Furthermore, Chinese car manufacturers such as BYD are also expanding their production footprint to other regions. Autoneum, together with Jiangsu Huanyu Group, can support them globally, both inside and outside of China, which will prove beneficial to all our business groups in the medium term. Finally, the opening of two new plants in the important automotive hubs in Pune, India, and in Changchun, China, will also contribute to reaching our medium-term target of increasing the share of Asia in our group revenue to 20%. As promised at last year's CMD, we would like to share with you another highlight of 2024. We have achieved a significant increase in our three-year rolling order book. The cumulative awarded lifetime sales of 2022, 2023, and 2024 have reached now CHF 7.8 billion.
As we continuously update our order book with the latest market data, it is unfortunately just short of the CHF 8 billion initial target. This is only due to overall lower market volumes, according to the latest S&P Global forecast of January 2025. However, it has significantly increased versus the CHF 6.4 billion of last year's order book. We will continue to remain focused on further profitable growth. The 2024 record order intake of CHF 3.2 billion lifetime sales is a first, but great step towards achieving our ambition of a CHF 3 billion annual revenue for the Autoneum Group. The high order intake underscores how well we are positioned with our customers as the market and technology leader. Finally, our order intake was well balanced across all regions and all product families.
A special highlight was the very successful order intake with our commercial vehicle customers, which confirms our strategy to have a special focus on this market segment. As a responsible company, employer, and manufacturer of components for the automotive industry, we are not only committed to financial success, but we also consider ourselves as a leader among our peers in other areas such as sustainability. In line with this, we aim to be the global leader for innovative and sustainable solutions in acoustic and thermal management of vehicles. Our level up strategy defines clear ESG initiatives, including developing eco-friendly products, introducing new products for electric cars, working with suppliers to become more sustainable, creating a roadmap to achieve net zero emissions and zero waste, and helping employees align with Autoneum's vision and values.
Some of the main achievements you can see on this slide, but I would also like to encourage you to have a look at the comprehensive corporate responsibility report, which we also published this morning. I would like to hand over to Bernhard, who will guide you through the financial results of 2024.
Thank you, Eelco. Good morning to all of you attending online. It is no secret that the automotive industry was facing some major challenges in 2024. However, by focusing on what we can influence ourselves as a company and as a supplier, we nevertheless managed to achieve a very positive result. I will now provide some more details on Autoneum's key figures. Let me start with the revenue bridge. In local currencies, group revenue rose by around CHF 36 million or 4.2%. This positive development was supported by inorganic growth resulting from the first-time full-year consolidation of Borgers Automotive, which contributed with over CHF 160 million to the top line at group level. Since most former Borgers plants are in Europe, Business Group Europe benefited most from this acquisition-related growth. However, Business Group North America and Asia also recorded some inorganic increase in revenue.
While the nearly CHF 27 million in Business Group North America were generated through business with third parties, the inorganic growth of the some CHF 3 million in Asia is almost exclusively due to the intercompany business related to purchasing activities there. Organically, revenue in Business Group Europe declined by around CHF 34 million or 3.2%, but still exceeds vehicle production volumes in the region, which declined by 4.1%. With an organic decline of 1.7%, Business Group North America developed roughly in line with the market, which dropped by 1.5%. Revenue development in Business Group Asia was once again impacted by the significant increase in market share of Chinese vehicle manufacturers compared to Western and Japanese OEMs. Organically, revenue declined by around CHF 40 million, which underlines the importance of the acquisition in China, as already mentioned by Eelco.
We are very positive that the takeover will enable us to counteract this negative trend. Business Group SAMEA once again reported a great development on the top line. However, we need to bear in mind that this increase is significantly impacted by inflation effects. In terms of production volumes, Business Group SAMEA was pretty much in line with the market, which recorded a decline of 1.6%. Revenue at corporate level remained almost flat. In terms of earnings, operational improvements that we achieved in 2024, particularly in North America, were once again the main reason for the significant increase at group level.
In Business Group Europe, EBIT grew by nearly CHF 12 million, which on the one hand reflects the positive impact of footprint adjustments that were implemented in 2024, for example, the consolidation of the plants in Krumbach and Elze in Germany, or the closing of the production facility in Halesowen, England. On the other hand, Business Group Europe made further progress operationally, including a headcount reduction of around 7%, and delivered a strong performance regarding successful price management. Business Group North America not only confirmed the turnaround in 2024, but also managed to take another important step towards a targeted EBIT margin of 5%. This was achieved thanks to continuous operational improvements such as successful scrap reduction, a more efficient allocation of staff, and consistent price management.
Considering the significant drop in revenue in Business Group Asia by over CHF 40 million, the decline of just CHF 9.5 million in EBIT reflects the active and successful cost management within this business group, which resulted in a very solid EBIT margin of 8.6%. Business Group South America once again reported the highest EBIT margin of all business groups. This is mainly due to the continuously efficient and stable operational performance and the consistent price management in a market environment characterized by high or even hyperinflation. Let's now move on to the income statement. Revenue grew by around CHF 36 million compared to the previous year, which resulted in an increase in EBITDA of some CHF 20 million. EBIT, on the other hand, rose by some CHF 26 million.
As we would usually expect a conversion rate of revenue into EBIT of around 20-25%, the average increase in EBIT is due to operational improvements, footprint adjustments, and a strong focus on price management. It also reflects the further progress we made in Europe and in North America. The 2024 financial result improved by CHF 7.8 million, which was mainly caused by the reduced interest expenses due to lower debt levels and lower interest rates. Additionally, the financial result was driven by the expenses related to our leases, which tend to develop in a fairly stable manner. By contrast, gains and losses from the revaluation of the balance sheet items in foreign currencies can vary considerably from year to year and also have an impact on our financial result.
Including the impact of hyperinflation accounting under IAS 29, we recorded a net foreign currency impact of minus CHF 15.1 million in 2024 compared to minus CHF 15.6 million in the previous year. Income tax expenses returned to a normal level since the 2023 effective income tax rate was positively influenced by the non-taxable bargain purchase gain, which resulted in a relief of around CHF 17 million. Basic earnings per share declined slightly because of the capital increase since the net profit was attributable to a higher average number of outstanding shares compared with the prior year period. This brings me to the cash flow statement. When we compare the 2024 free cash flow with the previous year, we need to consider that free cash flow in 2023 was greatly impacted by the one-off net cash outflow of CHF 96 million for the acquisition of Borgers Automotive.
On a comparable basis, free cash flow in 2024 was with almost CHF 110 million below the 2023 level. This decline was mainly driven by the following factors. Investments in tangible assets increased compared to the previous year, but were still below the depreciation. Overall, we are well on track to achieve the investment level of 4-4.5% of revenue that we need for our business model in the longer term. In this context, we also need to consider that the net working capital of Borgers Automotive was exceptionally high when we acquired the company in early 2023. Its reduction to a normal level over the course of the year supported the free cash flow in 2023. Nevertheless, free cash flow in 2024 also reached a triple-digit figure and exceeded the guidance we issued in March 2024.
This underscores our continuous focus on cash flow and the overall capacity of our business model to generate cash. Let's now have a closer look at Autoneum's main positions and key figures in the balance sheet. Naturally, the solid EBIT, as well as the triple-digit free cash flow, further strengthened our balance sheet. For several items in the table, the values reported in Swiss francs were boosted by foreign currencies such as US $, CNY, and EUR. Thanks to our active management of net working capital, this remained on a solid low level. The moderate increase was driven, among other things, by the usage of provisions for the footprint adjustments and foreign currencies around over CHF 3 million. The decrease in cash and cash equivalents needs to be considered in relation to the development of our borrowings in 2024. Overall, net debt decreased to CHF 399 million.
With this decrease, the net debt to EBITDA ratio further improved to 1.6. Together with the equity ratio of now 37%, we consider our balance sheet to be solid and well-suited to our business model. In this context, let me say a few words about net debt. Those of you who have been following Autoneum's financial activities for some time know that generating solid free cash flow and reducing net debt have been among our top financial priorities for several years. I'm very pleased that we are able to significantly and consistently reduce our net debt over the past few years. The improved profitability and solid free cash flow give us the freedom to act as we need to further develop Autoneum and seize opportunities that may arise among our competitors.
For smaller transactions that may arise today, we have a substantial liquidity reserve from the unutilized portion of our long-term syndicated credit facility of CHF 219 million as of December 31, 2024. However, we want to be prepared for further potential opportunities on the horizon. Therefore, the Board of Directors will propose the creation of a capital band to the shareholders at the annual general meeting of April 2, 2025. The cornerstones of this proposal are as follows. Shareholders will be asked to authorize the Board of Directors to increase the share capital by issuing up to 2.9 million new shares. The purpose of this capital band increase is limited to the acquisition of companies or parts of companies, participations, financing, and other strategic transactions. The capital band will be valid for five years, which means until April 1, 2030.
For further technical details, please refer to the invitation to the annual general meeting, which has been available on our website since this morning. In conclusion, let me have a look at our medium-term financial targets. As Eelco already outlined, we are well on track to achieve our revenue target of CHF 3 billion in the next few years. We have not yet reached our targeted EBIT margin, but we are confident that we will do so in the foreseeable future thanks to growing production volumes and our strong focus on operational excellence and lean cost structures. Our cash flow in 2024 is very close to the targeted at least 5% of revenue, and we see no reason why we should not reach this target. The same goes for the leverage ratio, which at 1.6 is already almost at a targeted level. This concludes my part of the presentation.
Thank you very much for your attention. I will now hand back to Eelco, who is going to present the outlook for 2025 and an overview of Autoneum's strategic priorities.
Thank you, Bernhard. Thank you. You may recall our Level Up 168 strategic program, which addressed six short-term priorities that we started to tackle in early 2023. After its successful completion in 2024, we designed our new strategy, Level Up, which we rolled out globally in October last year. Just as a reminder, let me briefly summarize its six pillars: Shape a future-fit product portfolio, Innovate to create customer value, Accelerate global growth, Foster a people-centric culture, Be the sustainability benchmark, and Boost cost competitiveness. For each of these pillars, we created a comprehensive implementation plan and continuously measure our achievements against specific predefined targets.
For today, I would like to focus on the following three pillars: Shape a future-fit product portfolio, Accelerate global growth, and Boost cost competitiveness. Our global innovation network, including our new R&D center in Shanghai and our specialized new mobility team, are working closely with our customers to continuously develop our technologies and products further. To give you some examples, in 2024, we launched further fully recyclable interior products made of 100% polyester and developed several product innovations around the battery housing. Another example of our outstanding technical competencies is our contribution to Renault's sustainable demonstration car, Renault Emblème. In 2024, Autoneum contributed over 30 environmentally friendly components for the vehicle interior and exterior as a key partner in this flagship decarbonization project. All of these activities are part of the strategic pillar Shape a future-fit product portfolio. I already talked about Asia in the first part of my presentation.
We made progress last year, but our strategic focus of accelerating growth in this region remains in place. Main drivers will be the acquisition of Jiangsu Huanyu, further potential M&A opportunities, the cross-selling of products which were not yet available in this region, and our expansion of the truck business. In terms of cost competitiveness, we are continuously working on reviewing and optimizing the bill of materials of our products as well as our manufacturing processes. We will also continue to assess our footprint against the future market needs. Other drivers for profitable growth will be a higher level of standardization and a more globalized approach in purchasing. This leads me to the overview of the priorities we have set for each of our four business groups for 2025. Europe is expected to maintain the level of profitable order intake we saw in 2024.
Another task will be to balance the footprint of this business group with the structural market development. As in all other business groups, we need to work diligently on our sustainability KPIs. In North America, we expect to take another significant step towards an EBIT margin of 5%, which is required to meet our group medium-term target of an EBIT margin of 6-8% over the cycle. The second task includes the rollout of new technologies such as Propylat in this region. This will boost our revenue by realizing the full potential of parts that are currently sold only in low volumes. Our main task in Asia will be the customized integration of Jiangsu Huanyu Group in China. This will be done in several phases and over several years.
While we plan to realize synergies and potential for optimization quickly in purchasing and operations, the current top management and sales organization of Jiangsu Huanyu will remain in place and enjoy a certain independence in order to demonstrate continuity to our Chinese customers. Developing technologies and parts adapted to the specific needs of the Chinese market is another priority which will support an above-average growth rate. In SAMEA, which for us is Brazil, Argentina, Turkey, and South Africa, we also see potential in expanding the products offered in these regions, mainly carpets, trunks, and parts for trucks. We also expect to continue to successfully navigate the challenging environment of inflation, especially in Argentina and Turkey, and continue to pursue vertical integration in our plans. Finally, our corporate organization will drive profitable growth, advance innovation, and foster a people-centric culture, fully in line with our level up strategy.
Let's now have a look at the market environment. The latest production forecast for the full year 2025 expects a flat development globally, with volumes under pressure in the first half year and a recovery in the second half year. From a regional perspective, Europe and North America may have to deal with shrinking volumes, while in Asia and in the rest of the world, vehicle production is expected to further increase. Taking all this into account, that what has been said before, we present the following guidance for the financial year 2025. According to the latest market forecast, automobile production will show no growth in 2025. Consequently, Autoneum expects a revenue of CHF 2.3 billion-CHF 2.5 billion for the financial year 2025, which includes the acquisition of Jiangsu Huanyu Group effective as of February 28.
Based on the expected revenue, Autoneum anticipates an EBIT margin of 5-6% and a free cash flow of around CHF 100 million for the 2025 financial year. This excludes the one-off net cash outflow for M&A transactions. With this, I would like to conclude the presentation part of today and invite Bernhard to join me for the Q&A session. As outlined on the slide, please use the raise your hand feature and join the question queue to ask a question. The meeting organizers will then activate your microphone and also your camera. As soon as the moderator announces your name, you may ask your question. Please be aware that you need to unmute yourself as well, as we cannot do this for you. You can also activate your camera if desired.
Thank you, Eelco. We have a first question from Walter Bamert. Walter, please unmute yourself and ask your question. Thank you. Walter, we can't hear you. Good morning, everybody. Can you hear me? Hello? Doesn't work. All right. Waiting for your question. We will unmute you on our side, and please unmute also on your side in addition. Yeah. Now you are unmuted. Ask your question.
Can you hear me? It seems that it works.
We don't hear any question yet.
Okay. My first question is about the development in the semester.
We'll come back, Walter, to you. I'm sorry if it didn't work correctly. We'll come back to you in the second round. We'll go to the next question.
May I ask you, Patrick Rafaisz, to ask your question by unmuting yourself and switching on your camera if you want?
Yes. Good morning, everybody. Two questions, please. The first would be a clarification on your guidance for the sales development. If I calculate or exclude the M&A effects as of March, right, I get to something like -7% to +2% as an assumption for the organic development. What's your assumption on average price levels within that, and why is your sort of implied midpoint on volumes below a flat unit growth for the entire market? That's the first question.
I think, first of all, we don't expect any significant impact on pricing on our overall revenue for 2025. The second element on the overall revenue stream, we have, of course, included our acquisition, which we made recently with Jiangsu Huanyu. At the same time, our organic business, we expect to be in line or marginally below, but in principle, close to the overall market development.
Is the reason for marginally below still maybe the loss of share of the traditional Asian customers, Japanese and European JVs in China?
I think there are two reasons. One is, of course, the European and U.S. market, which has been forecasted to decline actually this year, and the Asian market to increase. We see that in China. That is also why strategically it was for us so important to acquire the company in China. We have to say that at the same time, last year, our order intake was very successful. It was the highest order intake ever. That will support us in our ambition for growth. That is why we hope also then to be able to outgrow the market, respectively, still reach our 3 billion ambition.
Okay. Great. The second question would be on the North America margin in the second half of 2024, which declined somewhat, right, versus last year. Of course, revenues are slightly lower, but the first half performance was here highly encouraging. I was just wondering what was driving the negative margin development in the second half. Would it be too aggressive to assume that the 5% EBIT target could already be reached in 2025 in the flattish markets? Should we more assume maybe 2026 and beyond for that?
I think for 2025, our ambition is to come into the direction of the 5% for North America. That's maybe not too ambitious from that perspective. We're actually quite confident that they will come into the direction of the 5%. The second half here, you're right, was a little bit lower than in the first half. As you recognized correctly, there was also a little bit less revenue. We also made some risk adjustment for the lower volumes to make sure that we are competitive going forward.
Okay. Thank you.
Any more questions from you, Patrick, or?
No. Thank you very much.
Thank you. The next question will come from Lothar Lubinetzki.
Actually, the one is going to both of you. Bernhard, you mentioned in your presentation that you are well on track to reach the 3 billion sales target within the next two years. Could you elaborate a little bit on that, especially the split between organic growth and the M&A part? Because if we assume, including the acquisition this year, that you will reach the upper end of your guidance, we are talking roughly 500 million in sales in two years. I can follow later with the other questions.
Okay. Maybe I'll take first on the M&A, Lothar, even you addressed that, Bernhard, but I think on the overall M&A ambition towards the CHF 3 billion, we see at least CHF 200 million-CHF 250 million of revenue to be generated through the M&A, on which we are very confident to reach this. We see a strong growth at those target companies we looked at, respectively at Huanyu, which we bought. That should be a significant part in our overall ambition on the CHF 3 billion, which I think we said was in 2028, earliest, latest 2030.
I can add to the organic development and I referred at what Eelco mentioned before, that the record order intake in the next years will launch much more new business into the production sites than it's phasing out. This will give us a positive back in all regions as the record intake was distributed well, balanced over all the regions, excluding the M&A. Also, a certain market recovery we can expect on the midterm, not boosting too much in Europe and North America, but after several years of decline, a certain recovery we also may assume. This is the background for the statement.
Great. Thank you very much. Thank you very much. The second question is on Europe, and I hope my calculation is right, but it looks to me like on a sequential basis, Europe is down almost CHF 90 million in sales, H2 versus H1, while the EBIT margin improved by roughly 100 basis points. EBIT in total was either flat or even slightly up. First of all, congratulations, and maybe you can give us some more clarity how you achieved that.
Yeah. In principle, the key conclusions are correctly emphasized. In Europe, we have for sure in the half year one, a lot of activities also running with the mentioned footprint adjustments, where also movements of machinery, equipment, which is not all, can be accrued. Severance you can accrue, but not movements, for example, of machinery equipment, which also costs a certain money. These kind of activities were ongoing, for example, on the mentioned consolidation of Krumbach to Elze, which also took place in half year one, and debit with some millions in the first half year. On the other hand, we had also not a balanced, I would say, pricing negotiation between half year one and half year two.
We had on some negotiations with OEMs, longer discussions until we come to a reasonable agreement. This was more in last year, more in the half year two by chance, and less in half year one. This also underlines that we do not make a bad deal before we make not the right deal. We negotiate that we come through with that what is required to give us the necessary basic return.
Could you qualify roughly the footprint adjustments you did in H1?
It is around CHF 4 million-CHF 5 million.
Sorry, CHF 4 million-CHF 5 million?
CHF 4 million-CHF 5 million, yes.
Yeah. Yeah. I was wondering whether you can give us an idea on the progress you and [audio distortion] made last year. I think the number you published was sales of CHF 130 million in 2023, but you also indicated that their business was growing very nicely. Any kind of idea would help.
Yeah. I think they see growth significantly above the market. I would indicate that it's even slightly above 20% of a growth rate if you compare 2023 to 2024. Even for 2024 to 2025, in which we will benefit, we hope to see, of course, again, significant growth above the market.
That's a great answer from my side. Thank you very much.
You're welcome.
You're welcome.
Thank you, Lothar.
Thank you. Next question will come from Arben Hasanaj.
Good morning, gentlemen. Good morning. I was wondering around cash flow, so the different components, how are you seeing those for this year, especially net working capital and CapEx? That would be the first question. Maybe we take them one by one.
Okay. I can answer the first question. On the cash flow, as we already have seen in the guidance, we see also around CHF 100 million. We see, I would say, CapEx level, which is probably in a similar level, slightly higher, but not significant versus the 2024. The net working capital, there might be a little bit a debit on the net working capital when we consume further for the footprint activities and on right-sizing in the one or other plans. I don't think that there are material changes. To sum it up, we expect we are on a good level, on a low level to maintain the net working capital, but also maintain in a solid way our CapEx.
The CapEx will follow a little bit in the increase, also the high order intake where certain equipment is necessary for new businesses. This is just to give you also a background, why the CapEx might be a little bit higher than in the previous year.
All right. Thank you. Thank you. Maybe on Jiangsu, in terms of margin levels, would you say that is comparable to your business group, Asia? You mentioned also synergies. Do you expect that to be significant this year?
I think, first of all, we always guided that the margin will be maybe below the average of BG Asia, but above the average of the Autoneum Group. I would say this remains valid. Also, what we have seen in the conclusion for 2024, and we expect a similar level in 2025. We will see some synergies already in 2025. However, we also have some integration costs to realize them in year one, meaning 2025. Therefore, in 2025, the net result, I do not expect any significant contribution on the synergies, only in 2026 going forward.
All right. Thank you. All right. Thanks. Just final questions, I mean, regarding the whole tariff situation. I know it is changing every day, but kind of what are the thoughts of your customers? How do you see that whole thing kind of developing? What could it mean if you would move, I do not know, more production back to the US? Yeah. Any thoughts on that?
Okay. Good. First of all, it is a very volatile environment, so we will stay very close to that. I think in general, Autoneum is relatively well prepared because we produce very much locally for the local customers. We follow with our production the different OEMs. Nevertheless, we, of course, are also impacted by that. I think even beginning of March, it was initiated, the tariffs, and then three days later or four days later, it was taken back again for the OEMs, so our car makers, Stellantis, Ford, and GM, but not for the component makers. The day after, it was also removed, the tariffs for the component makers. Actually, today, we do not pay any tariffs for the former Big Three in North America. This might change again by beginning of April because this exemption is only valid for one month.
Honestly, as I said, it's a very volatile environment. I believe at the end, there will be some sort of settlement or conclusion, and we will adjust accordingly. The question is how the customers react to it. All of the customers who are aware that they will have to pay the tariff implications. 95% of our products we are selling are ex-works to our customers. From the finished good, we have in principle no impact. For the raw materials or semi-finished, there is some impact. We have informed our customers, and I think they are very constructive in the feedback to say, "Okay, we will look and work with you step by step depending on what will be decided."
Thank you. Thank you.
Thank you.
Thank you. Next question comes from Benjamin Triebe. Please unmute your micro. We do not hear you yet. Does not seem to work. Let's probably move on to the next, which is Christian Braun. Please unmute yourself and ask your question, Mr. Braun. According to my screen, you are still muted, Christian Braun.
Okay. Okay. Okay. Perfect. I have a question concerning China or the acquisition there. Even after that acquisition in China, the shares of sales or revenue generated by the business group Asia will be disproportionately low. Now, do you feel strong enough with Jiangsu Huanyu to make up for the ground there, or are you seriously considering another acquisition there, as you have mentioned during your presentation?
Okay. First of all, I think we feel very well positioned with Jiangsu Huanyu. They have excellent customer access and good products. Together with our technology, we really believe we have the right partner there. Nevertheless, I would say we would still, and we are still trying to conclude another maybe smaller, but significantly smaller acquisition in China to really complete the portfolio. Again, this will be significantly smaller than the acquisition we did with Huanyu. I think even today, we are already very well positioned.
Okay. Thank you. Maybe a second question concerning the tariffs. You say that you follow your customers and, yes, you produce locally, basically. But considering your European customers and the risk of tariffs for cars from Europe, do you have an idea how many of the cars you deliver in Europe go to the US? Or how this will affect your business if there will be tariffs on European cars?
Okay. I think from the European cars, a very small portion is exported to the US on what we supply. I don't know the exact percentage, honestly, but we can check and come back to you on that. To my knowledge, it's not a significant share. Again, we'll have to see what the conclusion will be on the final tariff regulation.
Okay. Thank you very much.
That's all. You're welcome.
Thanks. Thanks.
There are no hands raised currently anymore?
Probably. I'm going to try to go back to Walter. Yeah. Exactly. Which we didn't work out in the beginning. If it works now, hopefully. I need to find him first. Give me a minute. Walter, you are still on the call? Hopefully. Walter, you should be now ready again. Please unmute yourself. It looks like it's still muted.
Can you hear me now?
Yes. We hear you.
Same procedure as before, and it didn't work. Now it works. Good. You mentioned this capital band. The capital band tends to work in both directions, but I think in your situation, it only goes up, or would you also consider a share buyback?
Not yet. Not at the moment.
It sounds like you're very convinced that there are targets around. Do you have lined up something?
No, we have no specific target lined up, but I think we see in the industry and based on the current market environment that there are several other discussions, consolidation possibilities, which might happen over time. I think for us, it is just to make sure that we are prepared for it. I mentioned earlier the potentially smaller second acquisition in China. This is not related to the capital band. This we do, of course, out of existing financial resources. We just want to be prepared. That is why we also have it for five years, because we do not know how the consolidation in the market might happen, and we just want to be ready to be an active participant in such market consolidation.
Okay. This is a very big amount. Can you remind me of the acquisition strategy? Can you rule out that you would go into metal parts suppliers or the seats business, which you know from own experience? Would you like to buy a seat manufacturer?
All right. I like seats very much, but I will not buy any seat-related business. Also, not specifically in the metal side. I think we will focus on our core business and our core expertise. It will be related to our industry setup.
Okay. Okay. My initial question was regarding the margin development in the semesters in North America and Europe, which you touched on. There in the current year, 5% less cars manufactured in the first half than in the second half, we have assumed also in terms of margin that we see some gap between the first half and the second half. The U.S. perhaps continuing on the low level we saw in the second half of last year, and Europe staying in the absence of major one-off costs probably at the same level that we had in the second half of last year. Is that a good guess for the first half of this year?
I would say, without going into much details, I think what is a good guess is that the first half might be a little bit softer than the second half due to the significantly lower volumes in H1 compared to H2. In each of the individual regions, it might depend on also the actual performance. You are not too bad from your estimation.
Okay. Okay. The start of this year was very soft, was it not?
I think January in general was a soft month. Of course, Chinese New Year also happened in January. Overall, the volumes are, I would say, in line with the expectation we see from our S&P market forecast. H1 is much softer than H2 per the current estimation.
You have heavy rains of extended Easter shutdowns?
Not visible until today.
Thank you.
No, I can add on that. We had at least there were a lot of cases that the breaks between Christmas and New Year will be extended because of, especially in Europe, there were a lot of estimates coming along on that. You also be well prepared for that. It did not happen in that way as it was forecasted. I treat that at the moment as a good sign because when a customer makes, I would say, a reduction on the schedule, it is easier to make longer pauses instead of reducing the daily volume. It is now a good sign. I would say probably it indicates that we have reached in some way near to the bottom. If it is going up, we will see.
Perfect. Perfect. Thanks.
All right. Any other final question? I think we missed Benjamin during the session as well. Otherwise, I do not know if we still see Benjamin, Benny.
No. If you may raise your hand, please, if you would go for another try. Yeah. Now I can see you. Okay. Your microphone is open now. Please unmute yourself and ask your question. Looks like you are still muted according to my screen. Does not work.
It is nice to be able to work, unfortunately. Okay. Good. Maybe we can offer that we call you later on and ask the question individually. Exactly. We will do that. Almost a perfect match. Unfortunately, one did not work out. Nevertheless, thank you very much. In this case, we would like to thank you very much for your attention and active participation. A recording of the presentation will be available on our website this afternoon. With this, I would like to close today's presentation. Thank you and goodbye.