Earnings Call: Q2 2020

Jul 6, 2020

Good morning. I am the academic operator for this conference. Welcome to the Gatorade Conference Call. Please note that for the duration of the presentation, all participants will be in a listen only mode and the conference is being recorded. After the presentation, there will be an opportunity to ask questions. This call must not be recorded for publication of both counts. At this time, I would like to turn the conference over to Mr. Christian Buhl, CEO, accompanied by Mr. Roland Ries, CFO and Mr. Roland Ruhmann Sittler, Head of Corporate Communications and Investor Relations. Please go ahead, sir. Thank you for the introduction. Good morning, ladies and gentlemen, and welcome to this conference call. The objective of this communication is to inform you directly and promptly about the current situation and the impact of COVID-nineteen crisis on our business. We will cover the following three topics in this call. 1st, a data update for Q2 followed by a review of the first half year sales figures. 2nd, a stated update on the impact of the COVID-nineteen crisis on Geberik. And thirdly, our priorities going forward. Let me start with our net sales figures for Q2. The 2nd quarter was substantially impacted by the COVID-nineteen crisis and the negative currency development. In Swiss francs, net sales declined by 16% to CHF671 1,000,000. Thereof, the negative currency development led to a sales decline of minus 100%. In local currency, net sales declined by minus 11%. The severity of the COVID-nineteen impact on demand varies substantially by geography depending on the degree of the local lockdown. In markets where construction sites were temporarily closed, sales declined substantially or in some cases even collapsed in the 2nd quarter. These countries include Italy, France, Spain, the UK, India and South Africa. The remaining companies were also impacted by lower construction activities imposed by the COVID-nineteen restrictions, which led to a sales decline in Q2, however, much less pronounced. As a result, net sales in local currencies declined in all four regions in Q2. In Europe, by minus 10%, in America, by minus 11%, in foreign facilities by minus 16% and in Middle East Africa by minus 37%. Let me now continue with a review of our net sales figures for the first half of the year. In Swiss francs, net sales decreased by -9.8 percent due to the substantially re performed currencies and the COVID-nineteen crisis impacting the business since mid of March. The negative currency development, mainly driven by substantially weaker euro, led to a net sales decrease of minus 5.3%. In local currencies, net sales declined by minus 4.5%. In Europe, net sales decreased in local currency by minus 3.3% in the first half of the year. In countries without the severe COVID-nineteen lockdown of construction sites, we recorded a sales growth or at least based on previously level in H1, mainly due to a strong Q1. In Germany, net sales grew by 2.9%, in the Nordic region by 2.2%, in Eastern Europe by 1.4% and in Switzerland, Austria and Benelux net sales reached previously at level. In the remaining European countries with the severe COVID-nineteen lockdown of construction affinities, net sales declined substantially in the first half of the year. The UK by minus 34%, in Italy by minus 25%, on Gabriela and Clinindra by minus 21% and in France by minus 90%. Turning now to the markets outside Europe. In North America, net sales decreased by 9.5% in the first half of the year. In Far East Pacific, net sales decreased by -18%, driven by the lockdown in China in the first quarter and the sales collapse in India in the 2nd quarter. In the Middle East Africa region, sales decreased by minus 26%, driven by the sales collapse in South Africa and substantial decline in Israel and the Gulf. Let me now comment on the sales development product area, again in local currencies. All three product areas were impacted by the COVID-nineteen crisis. Installation and Applause Systems decreased by minus 4.8%, bathroom systems by minus 4.6 percent and piping systems by minus 3.8% in the first half of the year. Let me now comment on the current status of our business in the context of the COVID-nineteen crisis. I'll start with the demand side. After a strong decline in demand starting mid of March due to the impact of the COVID-nineteen restrictions on construction activities, the situation started to continuously improve since mid of May, in line with the release of the lockdowns in the various countries. Building construction sites are now largely open again in all countries and overall demand on group level has almost reached previous year's level. However, there are 2 important remarks to be made to the current demand situation. First, demand is still very volatile. 2nd, we have a indication that demand in June was positively impacted by inventory orders of wholesalers. And thirdly, selected individual countries still suffer from COVID-nineteen post restrictions and demand is still substantially below previous year, namely in the UK, in Spain, in the Gulf, in India and South Africa. Especially weaker economies show a slightly slower recovery back to normal gaming. Let me now comment on our supply chain. Overall, the supply chain was intact with only a few temporary production closures forced by local authorities. Since mid of May, all plants and logistics sectors are up and running again. The availability of our products was secured during the entire lockdown period, except for temporary production interruptions of our shower toilet unit. The order backlog from this production interruption has been almost eliminated in Q2. Let me now comment on our priorities going forward. Independent of the rate for the second wave, we stick to the priorities defined in March. 1st, no change of our strategic agenda or operational priorities. 2nd, we continue to think long term and invest also during the crisis into our strategic and operational initiatives. 3rd, we do not restructure our growth. On contrary, as a strong and financially very healthy player, we consider this crisis as an opportunity to emerge stronger. And 4th, we adapt our operational activities to the current market realities. For example, by keeping a high degree of flexibility in our plant and logistics centers to cope with the high fluctuations and volatility of demand. Or for example, by further leveraging the digitalization step made during the lockdown internally with our digitalized way of working, but also externally in the interaction and support of our customers with digital. We did refrain in the current situation from providing an outlook for the building construction markets due to the continued uncertainties and risks around COVID-nineteen. The biggest risk of course would be a second wave of lockdown negatively impacting activities on building construction sites, renovation works or showrooms as seen in the Q2. Let me close my introduction with a short summary. Net sales declined in the Q2 in almost all countries driven by the COVID-nineteen lockdown. Since mid of May, the situation gradually improved and demand reached almost previous year's level. However, the situation around the COVID-nineteen pandemic remains to be highly fragile, which makes the short or midterm outlook if possible or not meaningful. Thank you for your attention. We are now ready to answer your questions. And the first question we received is from Fabian Hecke of UBS Asset Management. Your line is now open, sir. Please go ahead. Yes. Good morning, everyone, and thank you for taking my questions. So you said since mid May, the situation improved and demand reached almost pre crisis level. And I remember in Q1, Cord, you were saying in April, you had a low double digit decline, roughly between 10% 50 percent. So it means you had a short and harsh slump in April, followed by a significant recovery in May. And then can you also give some colors on the inventory levels? You said at end of March, you had relatively high inventory levels that should be reduced in April. And now you're saying, but in June, it was increased again, probably of a further expectation of a normalization. Can you explain how over Q2, over the months, revenues, how this level up? And also some comments on the inventories. Thank you. So I'm trying to guide you again on the time sequence starting mid of March until end of June. Mid of March, the crisis started with a potential collapse or decline of demand. And for end of March, the inventory levels of wholesalers were on a rather high level. Then in April, demand and sales declined by a lower double digit percentage between 10% 50%, 5 0%, or the lower double digit. Most probably also driven by a reduction of inventory levels of wholesale. As of mid May, we have seen a constant or continued improvement of demand and also sales at the end of June. And as I said before, we are now almost on previous year level. But we have also indications that at least in June we have seen some inventory orders and inventories are all at a high level due to the uncertainties at the moment with the wholesalers. Okay. Thank you. And then maybe also comment on the lockdown countries. I was a bit more pessimistic on countries like Italy and Spain. So in Q2, it seems you still were able to sell 50% of your previous year's level. So how did you even be able to sell into Italy during Q2? Can you explain a bit here the situation, how it was in the experience? So all in all, these shutdown countries, Italy, France, UK, Spain, but also India and South Africa, don't forget. All these shutdown countries were down by about 40% in the 2nd quarters. They haven't been completely closed. Of course, they were still going on some renovation work, for example. And also these companies, this is one reason. And also these companies started to recover, to open again beginning May, mid May. So also May June are much better than April for these shutout countries. Okay. Okay. And I also saw the last question that you bought Tune Systems. You want to base with the closure of the showroom that this will be particularly impacted and it actually performed the best from all your product categories. Is there have you also seen a certain shift to online channels? Or what is all driven by the reopenings? No, that's just too early. The closure of the showrooms in Europe for around 2 months between mid March until mid May has not yet an impact on our sales figures for end of June. It's just too short because you have a certain delay. Imagine you're achieving your bathroom in the showroom, there's a certain delay until it comes to sales, with installers, wholesales and finally everywhere. Just a question of time. Okay, very clear. Thank you very much. And the next question we received is from Martin Flippin of Kepler Cheuvreux. Your line is now open, sir. Please go ahead. Good morning, gentlemen. Thanks for taking my questions. Just firstly, I'm just wondering whether you could provide a little bit more granularity with respect to your key market, Germany, what you saw there in Q1 and Q2, if I remember correctly. You didn't provide the Q2 Q1 sales numbers at the time. So I was just wondering to get a little bit more granularity the dynamics in that market for you. That's my first question. In Germany, we have had a very strong first quarter. And in the Q2, we have seen an impact from the COVID-nineteen restrictions, but much less severe compared to the other countries, of course. But also in the Q2, sales in Germany were slightly down. Okay. And then just on your just on the sticking with Germany, just on the order backlogs that installed, the last number I saw was 9 point something weeks, if I remember correctly. Has there been an update? And if yes, could you quote that update? And could you actually see or do you expect a favorable impact from the lower order backlogs as installers have now more free time to deal with your products? The order backlog of installers in spring came down substantially to actually 9.6 weeks. That's around 25% less than in spring 2019. And one of the main reasons for this decline was cancellations of projects, smaller or bigger projects. And that gives you also an indication that for the second half of the year, especially the Q4, we are somewhat more pessimistic because we have seen that projects which were planned are delayed, was told or maybe also canceled. And you see that in the figure of order backlog of installed in Germany. Okay, thanks. And then my final question will be on your performance in the shower toilets business. And if I remember correctly, in Q1, your shower toilet model tumor was impacted. I think the situation there with Mera and overall how your supply sorry, how your shower toilet business performed in Q2 versus Q1? Thanks. It was only one model which was affected from a temporary production that was NERAV. Tumab was not affected. It was only the most near off. In the Q1, we have been able to almost eliminate the backlog from this production interruption in the Q2. So we had a relative weaker Q1 for shower toilets but a very strong Q2 because we were catching up from the production interruption in Q1. Okay. And I guess that double digit growth rate you targeted didn't materialize because of the external circumstances. But could you provide us with an indication of how well you did in shower toilets? We did very well in the first half of the year with shower toilets, and we have been growing double digit in the first half of the year. Okay, thanks. The next question we received is from Charlie Ferenberg of AWP. Your line is now open, sir. Please go ahead. Good morning, gentlemen, and thank you for taking my questions. I'm not sure if I got your comment guide how you adapted your production. Did you reduce the capacity of workforce because of the lower sales? And my second question is, as you said, the trend between April June was, beginning with May was a trend up again. Is the assumption correct then that the Q3 should be the sales development should be better than Q2? Thank you. To the first question about our production plans, we did not restructure our production plans. But of course, what we did during this crisis and the lockdown, we tried to be as flexible as possible in the plan, which means with temporary workers or also by increased flexibility of permanent staff, for example, holiday planning, but also flexification of work time. We're trying to cope as good as possible with the lower demand in the plans in the Q2 without any fundamental restructuring. Regarding sales Q3, as I said before, it's very challenging at the moment in any outlook, also short term because demand is still very volatile. So we refrain from our outlook for Q3. But what we have seen at the moment is, if you look at the project pipeline that we see that running projects are still running and they are maybe a little bit delayed, but they are going to be completed. We expect also in the Q3. But we see in the funnel also that new projects are postponed or sometimes also canceled, and that might have an impact more midterm or maybe versus the end of the year. Thank you very much. Before we take the next The next question we received is from Martin Husler, Deutsche Bank. Your line is now open. Sir, please go ahead. Yes. Good morning. I have two questions. First of all, about the U. K, which seems to be strongest hit by lockdown and in terms of sales decrease. Was it only lockdown? Or do you think this also underlying demand that was weaker? Or not possible actually to tell the difference between the 2. I also saw that last year in the first half actually UK was pretty strong. That's the first question. And the second one is more a Channel 1 market observations. If you detect any change in competitor behaviors, Do you see that you get stronger because you have a strong balance sheet? What do you see in terms of payment terms? Do you see the customers pay later? Do you have any problems with cash ins? Just maybe a very high level observation from you. So the first question in the UK, is it the lockdown or fundamental demand? Very difficult to say, but predominantly, obviously, it must be the lockdown, which people on construction sites are not allowed have not been allowed to work. So that is the predominant driver for our sales decreased in the first half of the year. Of course, going forward now, it will be a very important question, not only in the U. K, how will demand develop, how will the economy develop, how will consumer confidence develop, but that is too early at least for us to have a view on that. Your second very, very broad question about competitive landscape and payment terms of customers. I give you a high level answer. Of course, we try to emerge stronger from this crisis, which means we want to be stronger than competitors. And we do that in various dimensions. We do that short term, for example, that we use, if possible, some availability issues of competitors. And also mid and long term, manual restructuring by continuing our investments into our R and D pipeline by continuing to invest in our clients. The second part of your broad question was around customers. Have we seen any impact in terms of customer payments? We have not seen any impact so far, so no bankruptcies, but also no losses from bad debt to customers. Little bit of really minor prolongations of payment terms, but not material on the group level. Okay. Thanks a lot. And the next question we received is from Christian Arnold of May 1. Your line is now open, sir. Please go ahead. Good morning, gentlemen. Thank you for taking my questions. Like Fabian, I was also surprised this morning by the outperformance of the bathroom systems in the Q2, thinking of the closed showrooms. And I think we got 2 explanation for that on the one side, the catch up in Q2 on the Mera and on the other side on the buildup of the inventory levels at the wholesale. Nevertheless, Mr. Bull, you also made a comment that this negative impact of the closed showrooms will be felt with a delay of 2 months, if I understood that correctly. So that means that most likely in the Q3, we will see underperformance of this product segment. Could you confirm that view? I confirm your fundamental thinking. I will not confirm this exact figure of 2 months. It's depending, of course, on the project length, but typically maybe 3 to 6 months until we see an impact from showroom closures on our sales. 3 to 6 months? Yes, not 2. It's also not an exact science. Yes, sure. Hopefully, Then the second question on Far East Pacific. Here, you were mentioning the collapsing demand in India. 2nd quarter was compensating the positive impact in China, I believe, in the second quarter. Could you give us your view on India for the future? I mean, does it stay like it is now? Do you expect also recovery to normal levels? Let me first comment a bit on the dynamics of India in the Q2. In April, our sales were basically down to 0 in India because everything was closed. And this time it's gradually improving, but still as of now, the demand is substantially below previous year. I and we believe that in general, it's weaker economies like India but also Southern Africa will take more time to recover to a normal level back to previous year's level than other economies like, for example, France or Italy. So generally, we are more pessimistic, also especially for India but also for South Africa. Okay. Then third question on pricing. Could you actually increase the prices you the magnitude you planned, like this 1% point I think you have guided us in the last call? Yes. We did implement the price increases as planned around 1% as of April. Yes, the end of April. Okay. And the last question on margins. I know you don't want to talk about margin at this point in time. Nevertheless, we had a positive impact of some 100 basis points on EBITA margin, I think, in this Q1. Can you confirm that you won't have this kind of extraordinary impact again in Q2? Yes. That is true. That was a one time effect in the Q1. We do not expect that in Q2. But there are mainly there are 3 main levers for our margin in the Q2. First of all, of course, lower raw material prices. We have seen lower raw material prices in April May. Year to date, raw material prices are down minus 3% for May 2020. That's EBITDA number 1. Secondly, of course, the operating leverage will impact our margin in the Q2 because volume is down around 10%. And that's an indication in normal times for the operating leverage. We have about 50% fixed cost, 50% vertical cost of the 15% of. And thirdly is the possibility to mitigate this margin impact from lower demand. First of all, by the flexibility in operation, I mentioned before, flexibility in the plants, temporary workers, those permanent staff. And secondly, cost containment measures we took made in the SG and A area, hiring freeze, but also where possible and meaningful lower market costs, priority costs, of course, that should support the end of the market. So these are the 3 main leaders: lower raw material prices in the Q2, negative effects from operating leverage, but mitigating measures from flexibility in the operations and cost containment measures in SG and A. Thank you very much. And the next question we received is from Raimo Rosenau of Deutsche Bank. Your line is now open. Please go ahead. Yes. Thank you. Good morning. You mentioned 2 times the postponements and or cancellations of new projects in Germany. Could you give any more details about the impact of sub sectors? I mean, is that mainly commercial construction, where you're not that much involved? Or is it also concerning the housing sector that much? First, the remark. I was not only referring to Germany. I think the delay of postponement of new projects will happen across geographies, not only in Germany. Secondly, yes, there is a different picture if you go one level more detailed, mainly non residential projects are affected, typically hotel projects but also retail projects. The residential sector seems to be less affected at the moment if it comes to project delays or postponing. Okay. And it's stated, too, of course, that your exposure is much larger in the residential sector than in the other ones overall, right? Larger, more than 50%. That's correct, yes. Okay, great. Thank you. Welcome. And the next question we received is from Evesh Seng of Credit Suisse. Your line is now open. Please go ahead. Hi, good morning. Thank you for taking the question. I'm asking on behalf of Andre Touthey. So I've got 3. So firstly, can you please provide an indication of how much the order pipeline was down at the end of Q2 year on year versus the start of the year? I'm not 100% understood your question. Acoustically, but I think you asked about the order pipeline per end of June. Yes. So basically yes, yes. So how much the order pipeline looks like now at the end of June versus the start of the year? As I said in my introduction, currently the demand is almost on previous year's level for end of June. Yes. But on the order pipeline, okay, or maybe for Q2 overall escalation and indication? I can't understand your question. Sorry. Okay. We can move on to that. So I was just on factory loading. So in Europe, in Q2, was it broadly even across the sites? And hence, should we assume normal operational gearing on Q2 decline? Or were the accessories that had some more substantial under absorption? I'm very sorry, but it's very difficult to understand you acoustically. Sorry about that. Is it any better now? Not really. No. Okay. I will go back to your line and come back with maybe back to reception later. Sorry about that. Ladies and gentlemen, Yes. Hi, again. Thanks for taking my follow-up. But just to clarify on your statement regarding raw material prices, I wasn't sure whether you had said year to date up until June or up until May, the raw material price decline of 3%. If I remember correctly, in Q1, it was they were down 2.4%. So I was wondering what the current run rate would be for Q3. And if you could provide the number for Q2, that would be lovely. So you're right. For Q1, it was minus 2.4% in the 1st 3 months. And now for May, the 1st 5 months of the year, we are down minus 3.3%. And as of June, we have seen stabilization of raw materials in slight slight increase for the month of June. But that's sequential, right? That's not year on year? That is yes, that is sequential, correct. 2% is sequentially. And so it's still down year on year, of course? Yes, of course, of course. Thanks. And the next question we received is from Manus Birria of SocGen. Your line is now open. Please go ahead. Yes. So you said about the operating leverage, 50%. I mean, there are some fixed costs on variable. Also you said, I mean, there will be cost containment as well as reduction in SG and A costs. So can you just give a figure, I mean, what will be the net operating leverage after you count your efforts? I think if I understood your question correctly, if I can quantify the cost of payment measures as in the cost structure in the second quarter? Yes. No, I can't quantify. Of course, we do our best to be as flexible as possible and to do our best to face these costs, which are not absolutely necessary in this environment. But this is not a simple restructuring exercise that can't quantify these cost containment measures or the additional flexibility which we have reached through in the plant and logistics centers. And maybe if you compare that development in the second quarter also with our last crisis in 2,009, where you have seen that we developed quite well in terms of margin. We achieved a record margin in 2,009 despite a top line decline. Keep in mind that the 2019 had a complete different situation around raw material prices. As I said before this year, raw material prices are now currently 90 3.3% per end of day. In 2,009, raw material prices were down 11%. So a large driver for the strong margin in allowance prices for the lower raw material prices is not comparable to this year's raw material price development. Or in other words, if you look at our net if you look at our margin bridge, which we almost provide, net price effect, what is the effect on the margins from lower raw material prices and sales prices. In the crisis 2,009, the positive effect on the margin only due to the raw material prices and the mid sales prices was almost 4 percentage points. We did not see that this year. And you received the follow-up of Fagling at the end. Your line is now open again. Please go ahead. Yes. Thank you for taking up the question of mine. Just a very short one. Governments in Europe and elsewhere, they try to support the economy hit by COVID-nineteen through green or sustainable initiatives in infrastructure but also in construction markets. Do you see yourselves as a potential benefit from such greenfield programs or policy support at all? No, we do not see a material impact because these programs you're referring to are very much then around the topic of energy. Our product is obviously mainly about water, and we are less exposed to energy topics. Therefore, we do not expect a material impact of this programs we just mentioned. The next one we see is from Eric Steng of Credit Suisse. Your line is now open. Please go ahead. Thank you for taking the question. A quick one. If possible, can you provide an indication of the sales impact from the June restocking and also from the shower toilet mirror catch up in the second quarter? I think I answered this question before. We have had a strong second quarter for shower toilets driven by the elimination of the order backlog to end of Q1 for a specific model where we had a production interruption. And secondly, the inventory level of wholesalers most probably are at a high level per end of June. Yes. So is there really any indications in quantification of those impacts? No. Okay, cool. Thank And the next question we received is from Daniel Inderkenried of Newmarket, NCC. Your line is now open. Please go ahead. Yes. Thank you. A classic question. You said that big projects have been postponed. So construction expansions are very important for many countries. Do you see that will be a kind of twinkling down, spiraling the economy if there are big projects are postponed? I think it's a bit too early to have a clear view how much this project delays and postponement will impact them to build capacity overall. So it's too early to give you also a positive answer to this question. The only thing what we see is that we typically larger, typically more non residential projects, as mentioned before, are sometimes delayed or postponed. Your question answered, Mr. Envinkari? Yes, yes. Thank you. Okay. Then we go on to the next one. It's from Christian Arnold of MainFirst. Your line is now open. Please go ahead. Yes. Just a follow-up question. Mr. Wu, you mentioned that you don't see a cumulative impact on green deal initiatives, etcetera. Is there a potential negative impact? Thinking of that some installers are generalists, meaning that they are taking care about bathroom installations as well as heating installations and that some of the capacities could actually move towards heating installation? Yes. I think this analysis or conclusion is correct. Because our installers, especially in the mature market, there are always kind of competition in parenthesis because they can decide or they cannot decide to do their natural renovations or, for example, heating, heating at work. And you're right, everything which is connected to energy, of course, shift sometimes capacity is more heating from the same installer, which you also need to install our products. But your analysis is correct. And where would you expect the potential impact? Would it be more of a mature market like Germany or? Yes. Obviously, yes. You could say where you have the highly skilled installers, you have all the strong average of each day install. It's making mature markets. We Now we received a follow-up of Martin Schuckiger of Kepler Cheuvreux. Your line is now open. Please go ahead. Okay. Thanks for taking my follow-up. You got me curious about your last answer on the EU green deal. Is the situation a little bit more, let's say, complex in the sense that if you have renovation projects that are being pushed as a result of the sustainability initiatives like the EU Green Deal, that renovations are likely going to be more broad based because you don't want to have some construction sites within short time frames within your house or within your non resi building. For it now, I might as well do my bathroom facilities as well in order to prevent to have a construction site 2 years from now. So isn't the whole situation a little bit more difficult to assess rather than saying it's all going to be negative? No. I also share your view and I also agree on your view, but that is not a conflict to what we discussed just before. Take any dollar and this capacity. And by the way, your view is saying that it could also have a positive impact because once you do you renovate your heating, for example, of course, it's a good opportunity to also do pipelining. I agree on that as well. But at the end, it boils down that the capacity, which has to install all these various product categories, makes the installer is 100. And we have to decide or customers decide how much of this capacity is allocated to which product category, And that stays the same. And that was my answer before. There, we rather see a shift or it could be rather a shift from green initiatives towards more heating versus not from more sanitary equipment. That's not a contradiction. Sure. I see your point. On the other hand, if you look at building permits across Europe, except for Germany, you would also think that overall, installers across Europe are going to be less seeing less utilization over the coming few months. And therefore there might be some increasing spare capacity from that end? Or is that something you're not expecting at all? Although true, I don't know, but it could be. But again, it all depends key hands are you in. That is key question. And I agree also on your view, we do not expect a massive negative shift from the screen initiative. I just said before, we've already seen a challenge because it's a competition between sanitary products and heating products, for example, or energy related products when it comes to installation. Rather and negative impact than positive, but not being dramatic also on the negative side. But if the solar backlogs are now at reduced levels, you said minus 25% year on year in the spring survey for Germany, then that competition across the HVAC and sanitary industries should diminish, shouldn't it? From the point of view of the installer, because if he has less order backlog, then he might have some spare time. So he can do both. He can do the HVAC installation and your stuff, no? That would be true. The order backlog is at 0 minus, but we have the spare time. We still have an order backlog, but it's not as big as before. It's still an order backlog of 9.20 We receive no further questions. So I hand back to the speakers. Thank you for your participation. There are no further questions. We wish you all a great day. Thank you. Bye. Ladies and gentlemen, thank you for your attendance. This call has been concluded. You may disconnect.