Earnings Call: H1 2021

Jul 30, 2021

Dear ladies and gentlemen, welcome to the conference call of Anders AG. At a customer's request, this conference will be recorded. The presentation, there will be an opportunity to ask questions. May I now hand you over to Wolfgang Leitner to lead you through this conference. Please go ahead. Good morning, everybody. Welcome to our midyear analyst conference call. Let's just start with some general remarks. I have communicated today a change in our personnel and on our Executive Board. And that is excuse me, I just need to sort out here something, whatever it is. Yes. We have communicated some changes in the Executive Board. I think we have found a very good combination of continuity and innovation and new blood for the Executive Board. As referred, I will retire from the Executive Board with Henry Schelding meeting next year and hope to be elected appointed to the Supervisory Board. From then on, it is possible according to the rules of the Austrian Stock Exchange with this Corporation Act. And with regard to the succession, continuity is provided by Joakim Szentek, who has been with the Andrews Executive Board since 2014. He's been responsible for working together with Humbert Kurfler and he'll take over as Head of the Executive Board from April 2020 onwards. His responsibilities for the metals business area, metals business area, will be taken over by Domenico Iacovelli, who has been with Andriy since 2011. He has we have acquired him with a small company in Switzerland that in the following years, he has developed extremely successfully with a really high-tech company serving the automotive industry, by the way. And then has taken over as CEO of Schuller. And in Schuller, has gained experience in two directions. Number one, restructuring. As you're aware, we have done a very serious, very far reaching restructuring in especially in Germany. And at the same time, and extremely important, we have succeeded and always on the way to see it to be a little bit cautious also on repositioning Schuller, broadening its markets and making sure that Schuller hopefully has a very good future. So much the changes in the Executive Board. If I move on to some general remarks on half year results. Obviously, we had good development for the intake with €1,900,000,000 is in Q2 is very good, driven by actually all business areas. It's also very positive that services picked up quite nicely since we are increasingly gaining access to the respective meal sites. Revenues as a consequence of last year's limited order intake is somewhat down or slightly down. And therefore, it's quite remarkable that we have continued in increasing EBITDA. And I think we also have reached quite a nice profitability and quite a nice margin. If we move to the presentation, I think on Page three, we have covered everything Page five, the summary of the numbers. So EBITDA at EUR 127,000,000 and the margin at 8.3%, up. Continuing favorable development in Pulp and Paper in separation, That was continued its positive earnings development. I would say we are continuing the turnaround. We are making progress on the turnaround. Obviously, I would not say we have turned around completely and permanently. I think to be able to say that we need to wait for a few more quarterly results that hopefully are going into the same direction as we have seen over the last two quarters develop. On Page seven, then the order intake on the left side, Q2 comparison 2020 to 2021. On the right side, first half year comparisons. As I said, 1,860,000,000.00 order intake, very good, up substantially. If you look at the middle, so you see that all four business areas have added or the impact compared to the immediately quite low Q2 twenty twenty, obviously, which was heavily impacted by COVID. So I think it's cautiously cautious that the percentages may appear to be very high. But the starting point has been rather low apparently. Half year results, half year order intake plus 18% and both capital and service are nicely up. Keep in mind that we have some first time consolidations, especially La Roche, basically La Roche. La Roche has contributed about EUR 22,000,000 to the order intake in Q2. Next Page eight. Quarterly development over the last several years, you see the good trend the last three quarters. You see especially on the lower right side that service has gone up from $530,000,000 to $744,000,000 now at Q2 twenty twenty one. Service accounts now for 40% and capital for 60%. Service slightly lower because of good capital for the intake. Page Slide nine. Revenue slightly down in the quarter, minus 5% sorry, 8% in half year, minus 5%. Pulp and paper down from a quite high level. Reason predominantly that these large orders that are under execution are approaching the final stages. And therefore, the invoices declined somewhat and that has caused a decline in revenues for Pulp and Paper. Other business areas, depending on quarter over half year, are up or slightly down for the half year. Here, La Roche contributed marginally with only EUR 3,000,000 in Q2 in revenues. On next page, development of service percentages, again, down from a peak of 51% to 43%. Now it sounds negative, can't be negative. In this case, it is not negative because the reason for the lower percentage in of service is that capital has developed very nicely. Metals, 25%, very stable. Hydro, 38% and separations, slightly increasing from 45% clearly to 50% in spite of quite good revenues. On Slide 11, order backlog. Picking up from Q4 twenty twenty onwards, now at DKK 7,400,000,000.0, quite high order intake, as always dominated by large projects, large orders and by hydro, a combination of large projects and rather long execution times. Yes, on Slide 12. Earnings Q2 in the left side, 127,000,000, up 22% from last the second quarter of last year and half year, up 36% from 174,000,000 to $238,000,000. Profitability, again, 8.3% in Q2, up from 6.3% and the half year, 7.9%, up from 5.5%. What happens, I think, a combination of reasonably good revenues, reasonably good margins in the projects and the consequences of relatively strict cost containment starting middle of last year. We had the goal to get into shape by the end of last year, meaning to adjust our capacities where it we help people to necessary midterm, long term that was done across the board, but obviously, predominantly in the markets that where we would not expect substantial growth in the future, which is basically European market, where the number of employees went down by more than 1,000 for the last twelve months and overall by about 10% over the last two years. Obviously, limitations traveling, etcetera, contributed to the overall profitability, maintaining the good profitability. If you look on the next Page 13, EBITDA margins by business area of Q2 and first half year. So you see Pulp and Paper is continuing the good development to double digit EBITDA percentages. As you will remember, we have increased the guidance for the Pulp and Paper profitability. And I think we are in a good way in this regard. Metals, small numbers, unfortunately, still not above the waterline, 2.4 in the half year, 2% in Q2. As I said, good progress, again, driven by various substantial cost reductions, but also driven by pickup in order intake and in increasing or decreasing under absorption in manufacturing and engineering as a consequence of the restructuring activities. Still a long way to go, to be honest, to get it up to the average profitability that we want to have in the group. But I think we will see some increasing or continuing effects of continuing reductions in workforce. The majority has been achieved by the middle of this year, but some minor activities are going on. So we expect to see some additional cost savings in the next several quarters also rather limited. We hope obviously, we hope to now from here not only to stabilize this level, but to see a positive trend, which will not explode, but should gradually get us up to the 57% EBITDA levels. Hydro, 6.6% in the half year and 7.2% in Q2. I think is development compared to last year, but obviously, last year has been impacted by under absorption of capacities, which by now have been taken out again, addressed quite substantial restructuring and hopefully, has another cost structure that enables it to provide profitability in a market that we do not expect to grow substantially. Very positive separation, excellent profitability, good to have. Our doubts, your doubts, whether we should whether we can turn it around, whether we can increase profitability, whether it fits into the Androids portfolio, hopefully, are somewhat reduced. And we see it definitely as a long term promising business area that we think can be developed further both on the top line and hopefully also a little bit on the bottom line. We can now pass on to Norbert Nettisheim, our CFO, to take you through the detailed source of change analysis regarding EBITDA and other numbers. Gorbod, if you take over? Yes. Thank you, Doctor. Lehner, for passing the mic on to me. Good morning to all of you who are on the call. And in the last calls, I'll take a few minutes to explain everything what is below operational profits in our P and L and give you a short view on the cash flow and on our liquidity situation. As you see on Slide 14, starting with $237,000,000 which Doctor. Leiden explained in detail, EBITDA, 7.9% in the first half year, significantly improved compared to last year's first half year. And let's say, not very breathtaking changes in the other elements of the P and L. IFRS amortization, regular amortization out of our acquisitions in the past, 30,300,000.0, including a slight number from the new acquisition La Roche. Normal development will decrease further on in the future as long as we don't make much additional investments. So this will be a contributor to the constant improvement of our net income, then it stays normal. With regard to extraordinary issues in terms of goodwill, we do the regular testing every quarter. And this half year, slight adjustments in the compact hydro goodwill, but it's not very important, only €3,300,000 that's a pure housekeeping measure, really important. Financial results, 18,200,000.0. Here, we have a hidden improvement, which you can see in our direct interest results. Interest expense and interest income improved to minus 8% from minus 15 in the year before due to ongoing improvement in our financing structures. We had an extraordinary effect here of about €7,000,000 for payments out of our total former minority shareholder, which has to be accounted as financial cost and according to IFRS of 18.2%, including a favorable development in the interest area. Taxes, 27.5 percent. This is purely the outcome of our ongoing initiatives to improve our tax structure, especially in Europe, so that we are able to use losses carry forwards more intensively. And now, let's say, see a tax rate of 27% for the near future periods, which we considered out here in the first half year, leads us to 134.8% or 4.5%. Net income, which is a significant improvement compared to last year where we had a 2.8% in the first half year. And we are very proud that we go our way up to the 5% net income, which we target to achieve in future periods. Also a slide remark, which you don't see on the slide, OCI plus 43% in the first half year due to exchange rate development leads us to an equity portion of equity quota of 18.6% in the first half year. So next topic is cash flow on Page 15, starting with the numbers you see already. Net income adding back the taxes results. And considering now in the first half year, EUR 28,300,000.0 from release of provisions, which is included in the results, but not included in the cash flow. This is simply from the restructurings, which we are doing. We accrued all these things in the former periods, and now we have to spend all the severance payments and also the layoffs of people. And then this will be a slight burden on the cash flow in this quarter in this half year and also in the next half year in these ranges, 30,000,000. So that we come to a gross cash flow, which is despite the improved net income in the range of last year's because of the higher taxes and the higher sorry, the higher standards for the severance payments. Going down from cash flow, from gross cash flow to cash flow from operating activities, major topic is increase in working capital, which is lower than in last year's first half, but still DKK 53,000,000, mostly driven out of normal increase in work in progress from completed contract orders and more or less a physical development that in the first half year, we, let's say, increase the work in progress and then in the second half year comes invoicing. So this will hopefully turn in the next half year. And also maybe first to mention, euros 74,000,000 taxes paid. This is simply a temporary effect. We will see in the second half less cash payments for taxes. This is purely because of the prepayments of taxes were adjusted to the higher profitability level, which we expect. So in total, have EUR 163,000,000 operational cash flow, which is a significant increase compared to last year's first half cash flow of €100,000,000 Coming then to the total financial position. The cash flow of 153 Deducted then by 60,000,000 investment spend, 100,000,000 dividend and 50,000,000 for acquisitions and earn out leads to a slight decrease in the net liquidity of €6,000,000 or a decrease of €48,000,000 in the cost liquidity because we paid back a slight amount for loans. But overall, let's say, for the first half year, also a very satisfying future. The second half year, we will not have these high spends for dividends. And also the investment level will stay on the level as it was in the first half. So we expect in the second half the typical increase certainly to a level, which hopefully will bring us back to a €1,800,000,000 gross liquidity level. And this gives us the opportunity to do something in our financing structure, as I said. So we have planned to pay back some of the loans in the second half. So DKK 120,000,000,000 is announced to the banks that we paid back, which will have due to the cost liquidity a little bit down then again, but we maintain the level we have currently, and we consider it as highly sufficient for our business where we are in. So this is for net liquidity. And then a summary slide Slide number 17. I will not go to individual numbers, simple interpretation of the overall view. Everything better than last year despite the small decrease in revenues and a little bit unfavorable development of capital employed. But this will turn certainly better in the second half. And when we look into profit, cash and liquidity, everything is significantly improved double digit numbers, see the 86.9 improvement of net liquidity or the 60% improvement of net income. So I would say, a very favorable first half year twenty twenty one. That's from my side. And I want to pass back to Doctor. Leidenhorn. Thank you very much, Norbert. We now continue briefly through the four business areas, starting with Pulp and Paper on Slide 19. So overall, a very good development. 1,700,000,000.0 order intake in the first half year as if you compare it. So this is really a very good level. Also driven by continuing very high order intake or project activity in our nonwoven division, which, as you may remember, has shown dramatic flexibility last in the spring of last year by converting a pilot line into mask, COVID mask production line and selling, I think, more than 30 lines of this mask production globally. Is now also benefiting very substantially from the overall trends to nonwoven, which is an important raw material for many hygienic applications, but also other applications. So that last year accounted for nearly DKK 500,000,000 order intake within this pulp and paper business area. And this year, we are on a very good track. If that continues, then it could be another year on the same similar level as last year in order intake. Looking at the margins, they improved in spite of some decline in revenue. I explained this with this late phase order execution. And yes, I think nothing special by the regions. And also looking forward, I think it's good activity, and we are happy with the performance of this business area. On the next page, Metals. So order intake significantly up, although from a low level in both areas, of those parts. Revenues decreased slightly as a consequence of the low order intake last year and earnings and profitability improved as a consequence of lower costs, especially on the metals roaming side. So much to metals. Again, we are in the late phase of the restructuring and the realization of cost containment, things are still going on, maybe some very minor adjustments happening in the balance of this year, some long term retirements that have been agreed upon one or three years ago will go into next year, but the vast majority should be done by the end of this year. Hydro on Page 21, some business developments, order intake up. I'm not promising any very large orders for the second half. Also, there is hope, so you will smile when I continue saying that, but we at least we had in Q2, we had kitchen order with about $75,000,000 roughly order intake has been booked. And yes, there are some projects that should be either decided or one or the other only needs to come into force in the next few quarters. And again, we see this as stable. We do not expect a dramatic pickup and also stable profitability. Our dynamic is on the next page separation, 22, very favorable business development. Order intake, up 7%. Revenue, up 8% and a very nice EBITDA margin of 9.7%, 6.5%, 9.7%, maybe very high level, but we are confident that we can maintain an above average profitability compared to the overall group profitability level. And then coming to the outlook. Pulp and Paper, good project activity, heat pulp predominantly. So we are optimistic that some larger orders will be larger projects will be decided in the balance of this year. And if everything goes well, I think we should see and expect another year of good order intake in Pulp and Paper. Metals forming metals traditional metals P part, continuing good investment activity, also competitive. And on the Schuler side, it's obviously still dominated by the automotive industry, which is pondering investments. Much of that we will really go through remains to be seen. But overall, we hope that Schuler will have a reasonably good order intake for all of 2021. Clearly, the high steel prices from Metals P division benefits more from the high steel prices than Schuller. Hydro, think we have covered in separation. We have covered. So to conclude, once again, regarding the change in the executive board, I think Jochen Schoenberg and Dominik, we have established a very good succession to me. Both have come from the outside, by the way, have been with the end with five, eight years something and represent also a good combination of age with Dominica being in the mid-40s, obviously, important for good diversity, so to say, age diversity on our executive board, if not we achieve. Unfortunately, we have not yet achieved other forms of diversity on our Executive Board. Looking forward, clearly, COVID has continued to have an impact on our business in the first half year. I'm not going to repeat the countries where the COVID is raging, countries where we typically are quite strong in employees in order execution. I think you probably will agree that we cannot assume that this will go away immediately. We will have to continue to live with COVID some ups and downs and activities and some lockdowns, also again to be expected for the second half of the year, especially in the Northern Hemisphere, especially in Asia, for example. So but on the other hand, we have learned to live with COVID. And I think we have shown that we can maintain profitability in COVID times. And therefore, we are optimistic that we have the right setup. Overall, economic activity is good. Commodities are expected to go up, which should result in some new projects. Again, the overall environment currently looks good, although probably is, to a certain extent, volatile. And our main industry is steel, pulp, mining, others are do not forget, nonwoven are well positioned to benefit from a hopefully continued good economic activity. As a consequence, we still expect slight decline in group revenues, which would compare to the EUR 6,700,000,000.0 in 2020. We expect a significant increase in the reported EBITDA compared to 2020. This time there is EUR $392,000,000, and we expect the profitability to hover around the 8% level compared to reported EBITDA margin in 2020 of 5.8%. And currently, we do not expect any substantial nonoperating expenses, extraordinary effects. There may be some smaller, but we do not expect that, that should have any substantial impact on the profitability. So much my presentation, and I look forward to your questions. The first question is by Svenweier of UBS. Yes. Good morning. Thanks for taking my questions. It's three and I'll go one by one. The first question, Doctor. Leitner, is on your decision to retire from the Executive Board. Congratulations on a great career and all of your achievements in the last thirty four years, quite impressive, of course. And maybe the question is a bit more rhetoric, I guess, because, I mean, I take that as a sign of timing of the decision that you probably believe that now all the turnaround at Schuller is clearly more sustainable. But also when I look at the implications in terms of your shareholding, to me, seems like very long term commitments of the foundation. And the fact that you go on the Supervisory Board probably also implies that the strategic direction of the company will not change after you retire from the executive. Is that the kind of right perception of the situation? Partially, I would say. Regarding your the first part of your question, I took the last exit before turning 70. Yes. So it will be 69 next year when they have the shareholder meeting. And clearly, it's time to it was not I was waiting for a good year and could not have waited longer. To be honest, I stayed on for probably two years longer than I had intended to say initially. But as you probably can understand, obviously, I like and I love what I do. But clearly, now it's time. And I look forward to work on the Supervisory Board. There will be a regular member according to the regulations for to the legal regulations. We cannot talk over the chairmanship of the Supervisory Board, which is no problem whatsoever. Regarding the shareholding, yes, it's a long term shareholding. I have no plans whatsoever to reduce my stick in Android. Because of that, I have really done everything possible to make sure that my successor and the overall the future Executive Board is not only be as successful as we have been in the past, but hopefully being more successful. Yes, continuation is, I think, an element that is good for the company, but innovation, new blood, new ideas is also very important. And my long term as CEO, obviously, was not the worst thing to happen to the company, but in the long run, it's also a risk and a danger. And therefore, definitely, I'm not expecting that everything continues as it has been in the past years, but we see new ideas and new directions and inhalation. And being a large shareholder, the best thing that can happen is if my successes are much more successful than I have been. Does it answer your question? Absolutely. I was just wondering according to the Austrian law, how long is the cooling off period until you could theoretically become the Head of the Supervisory Board? Not my legal requirement. Or It's not my most important plan, but at least I'm not sure. Okay. Okay. Fair enough. Thanks for the answer. Yes, it's three years. Yes, it's three years. Okay. Thank you. That's very clear. Second question, kind of a more normal one, guess, then on the pulp situation, but you talked about how good the pipeline situation is. Mean, in terms of your own capacity to take on new projects, how is the situation there? Are you having enough capacity to take the projects that are coming? Or because on the recent filing, you sounded a little bit more reserved. I guess, this is good for you. Just Just wondering about your stance on that. We are open for business, very clearly. No problem to take orders. Obviously, we there is a level of overfeeding, but we definitely are have not reached that. And we yes, no, we I think it's also some of the large projects are approaching, as I've said, final stages of the execution. So we have experienced people that are eager to move to the next project. So no problem with limited capacity. You decided at least one see even more than one? Could be more than one. No, I'm not forecasting a super boom, but obviously, there is quite a good probability that one large will be decided and we'll go ahead. But there are one or two others that definitely are mature enough to be really started. Let's see what really is happening then. Okay. Understood. And the last question is on the hydro. You announced this call by NBN on hydrogen. What's just generally, maybe you could give us some more color about the prospect of that very cooperation? And also, if you already see more momentum in the pipeline you have driven by, of course, demand for more green energy, Does that do anything already to the progress? Or is that more a long term option? We look at the if I may start with the hydrogen market, we look at it as a real opportunity for various parts of the endurance universe, so to say. On the one side, it hopefully has a positive impact on future capacity increases in hydropower because clearly, that makes, for example, remote hydropower locations feasible. If you can transport the high value fuel in the form of hydrogen to locations where that is needed, it's not as expensive as having to build large electric lines. It's also an opportunity for our metals business area. And here, both for Schuller, they are in production processes and products to produce, what do you call it, flammellas for its fuel cells. And we are on the metals the side, we're also looking into certain production technologies for hydrogen. I mean, we have been building electro galvanizing lines for many, many years to electrogalvanize steel coils going into the automotive industry, the high quality and steel are. And that opens also or creates a basis for electrolysis technologies. There we are also looking into that. So we consider this complex of hydrogen together with our hydro business area and our metals business area as one of the, let's say, innovation opportunities, growth opportunities will not show up next quarter, but next two, three years, think that could create some interesting growth island for us. And on the general hydro pipeline, I mean, kind of stimulus from all the climate change discussions there already? Or is that something you perform more in the outer years? A lot of talk. And a lot of talk on the basis of a stable business, We'll see now a really dramatic and tangible pickup in demand. But really, I think it's I'm not concerned about any decline. So I think it's there's definitely much more upside than downside from starting from the current level. My thing is many quarters to announcing that next few quarters will show some large orders. They are still not lost, but they are still delayed. So I'm being cautious. I'm learning. Next question is by Sebastian Grover of Commerzbank. Three questions from my side. The first one would be on the service part. We have seen, obviously, a strong uptick since the 2020, up a little in second and third quarter last year. So my question here would be what are the key drivers and measures? Are there any particular areas worth mentioning? And in this regard, can you mention also comments on how Experion has performed in the acquisition? Is there any really particular area that sticks out? The question is sort of going into the direction that we have seen with other companies, if there's a certain plateauing eventually on the more short cycle part of the business. So I would be interested in getting also here and then continue on that as well. Yes, obviously, quite strong growth over the last four quarters cannot be extrapolated indefinitely. That's clear. We see a plateau currently, no, because there has been, as I said, a demand that has accumulated over the last at least four quarters. And so I think that still has not been removed completely. And so therefore, it's I think it's I would yes, I would rather see a normalization. So coming back to a reasonable growth to what we have seen in the last years prior to 2020, I would say. No, but no particular, I would say, individual trends where we can say, okay, this is something that has popped up and will disappear. Nothing in this regard. I think, I would say, back to normal business, which means back to normal growth rates. And for Ferium, any update? Perion, sorry, are developing as expected, good profitability. We are investing quite substantially in China to expand capacities there, where we have been particularly limited and not been able to fulfill the demand or have had the shipment from Europe, which certain cases is not really economic. So we continue to be happy with Clarion, no clouds on the sky. Okay. That is helpful. Then moving on to the business segment. Well, it's a bit picky, quite frankly. But nonetheless, the margin has been down sequentially. That's more just for clarification. Is there any sort of mix related issue in a way here or any other aspects that would be worth mentioning? And the other part around metals comes in line with the, yes, over a high steel price that we currently see. Would you interested in your thoughts around the pricing quality, especially in the legacy part of our business when it comes to the recent orders that you have taken. And clearly, the question goes into the direction that the business has historically been operating at rather low margin. So could there be any sort of windfall gains because of that very, very strong steel price value we have seen? To start with the last one, I would not expect too much of that. I mean, obviously, with the pickup in project activity and with all the capacity reductions that we have made and others have made, obviously, the pressure, the price pressure was extraordinary. But I mean, companies still have their older projects. Same things have been discussed before you cannot increase the price by 10% just because it's how you feel that your customer has a lot of money in the bank. So I mean, if you look at the guidance we gave for business areas, metals continues to be on the lower side. I think we have to live with that and need to be realistic. Coming to this quarter to quarter difference in Q2, Q2 versus Q1, I would first of all, I would not over interpret that. Secondly, clearly, the situation is fragile. We I'm waiting quarter to quarter to see a continuation and the confirmation of the trend. And therefore, I think we are making progress in the turnaround, but I have not used the perfect that we have achieved the turnaround. That's too early. And why was the first quarter more profitable? If I remember correctly, think there was a really small release of some small provisions we have had, which have not been needed. So again, I would not over interpret this tens of percentages from quarter to quarter. We have made progress, substantial progress compared to last year, but we are not yet there, and we have not yet a fully stable situation. Okay. That makes sense. The last one is around separation. Actually, very strong momentum now for the last quarters, especially on the margin side, but also now with more than DKK 200,000,000 of orders in the segment. I'm just curious what is behind this. So is there any kind of change in the offering that gives you kind of a much better traction there with the market? And how should we think about this business going forward, which has been hovering around €600,000,000 plusminus in terms of revenues? Can that be an DKK 800,000,000 business? Any thoughts here would be appreciated. I think that's the beauty of the business that there is no simple straightforward explanation. They are active in so many different segments. And clearly, what we see is that both as you probably remember, we have this separate part of separation that goes into environmental industry, into mining, into food industry feed. And then we have the feed division within the separation, which produces equipment to produce animal feed, fish feed, other feed, other animal feed. And both are doing well. I think that's more a result of overall economic activity. Again, demand has been not fully fulfilled in the last year. And therefore, now life becomes more active. But no, I cannot say that we have become much more competitive for that we have now introduced this fantastic new product. It's really it's an aggregate of many, many small orders, which, as I said, is a beauty because it provides liquidity, it provides good margins, it provides low risk profile. And therefore, we are happy to have it. Can there be an CHF 800,000,000 business? For sure, there can be. The question is whether we can make it an CHF 800,000,000 business. We have hopes for that. We have some plans how to continue to grow the business, both organically, but also by acquiring one or the other smaller midsized company. We need to be successful and need to demonstrate that we can develop the business. Clearly, it makes only sense long term to have this division if we can create both growth and above average profitability. The high percentage of service, and this is approaching 50% of aftermarket service content of total volume, obviously, helps and again, makes it an attractive business to gain. Makes sense. Okay. Yes. To just conclude, I can only echo Sven's comment with regard to a very So congratulations on that, and wish you all the best for your future. Thank you very much for all. Don't forget, we will see each other for the full year also. So hopefully, not too soon. The last question is by Daniel Lyon of Citigroup. Yes, good morning. Thanks for taking my questions as well. I would like to focus a little bit on the profitability trends. You've mentioned this already during your presentation, of course, but starting maybe down seeing a profitability level of actually close to 8% already in the first half year and having the strong order intake or the backlog in all the divisions, the restructuring in place, it rather seems that and historically, this is anyway the case that the second half year is stronger than the first one, but it rather seems that, of course, you would be in especially in metals and maybe hydro, improving profitability going forward, yes, based on economies of scale. So it seems overall guidance for this year is rather conservative. And actually, we should start thinking of a new guidance that could eventually be communicated sooner or later here. What are your thoughts in this direction? Well, my thoughts and our combined thoughts have been expressed in our guidance. So the guidance is what it is. Is it overly conservative? No. Is there some upside? Yes. Is there some downside? Yes. I think it would be dangerous to extrapolate some short term trends indefinitely or for several quarters. Again, the guidance is what it is, and the guidance is our best guess. It's in the middle of the range that we foresee, and we could easily give you some scenarios where that it is much more difficult in the second half of this year. Just to mention COVID. I mean if that deteriorates substantially, if there are lockups, if again, the mill is shut, the doors to outside vendors, to outside service providers, things can change very quickly. But we need to keep our feet on the ground and not become too optimistic. Okay. With regards to metals, also now given the order intake, what do you see on the one hand on demand side going forward? How would you expect especially the automotive now to pick up maybe orders further? What's going on there? And relate those to the profitability trend. Is it only a question of scale that will help improving profitability now going forward? Or is it also a question of the sales mix? How are the relations here? I mean it is not only a question of scale of revenue or volume. We need to develop the nonautomotive markets. I'm not here to explain the automotive industry, but just one sentence. In my opinion, we should not mix up the very good profitability of the automotive companies. This is not predominantly not volume driven. It's certainly also a consequence of them being limited in chips. And therefore, probably, I would assume that discounts they have to give from the new cars probably are much smaller than they used to be last year, which doesn't help us, obviously. We believe on volume and on new models and obviously also electric mobility. But electric will continue. To expect a dramatic explosion on the automotive side for us. No, I don't. On the steel side, regular steel industry, yes, the prices are now very good. So again, we will see, in our opinion, a few more quarters of good project activity. But the steel industry is a steel industry, and it will remain the steel industry, meaning that these are very competitive and there are more bad years for our customers there than good years, and it just will probably also continue. So there, if we and that's what I've explained before with regard to our activities in hydrogen, etcetera, we need to find some growth segments, some innovative segments within the steel industry or adjacent to the steel industry or using the technologies we have developed for other steel industry to create some sustainable growth for this business area independent from the steel from the general state of the steel industry. Obviously, we cannot depend on the coming years only. Clear. As we have to step out to another meeting, I would like just one final question here, Daniel. Otherwise, think you should step to another one. Yes. I just wanted to thank you. Okay. Perfect timing. Thank you so much. Thanks. Thank you. Thank you, and bye bye. Thank you for participating. Thank you. Bye bye. Bye bye. Ladies and gentlemen, thank you for your attendance. This call has been concluded. You may disconnect.