Earnings Call: Q3 2019

Nov 6, 2019

ladies and gentlemen, welcome to the conference call of Andros AG. At our customer's request, this conference will be recorded. As a reminder, all participants will be in a listen only mode. After the presentation, there will be an opportunity to ask questions. I may now hand you over to Doctor. Ladner, who will lead you through this conference. Please go ahead, sir. Good morning, everybody. Welcome to our third quarter conference call. Before going into the detail, there's always a general introduction. I think we agree that the global economy could be stronger. And in light of this rather weak situation of the global economy, we are quite satisfied with the results we have received in the third quarter and also in the 2019. Order intake in Q3 is up again and reached nearly EUR 2,100,000,000.0, predominantly driven by Pulp and Paper. Order backlog has continued to rise. Now for two years, we have exceeded the first time EUR8 billion as backlog. And with regard to the earnings development, we have booked in the third quarter the restructuring charges, predominantly Schuler, whereas for some smaller capacity adjustments in the other business areas adjusting to the overall economy. We have seen very positive developments in net working capital and in operating cash flow. So overall, in our view, the third quarter developed solidly and in line with our expectation, and therefore, we are maintaining and continue to confirm our guidance for the full year 2019. We now go into the details on Page three. So group order intake, 2,100,000,000 in the quarter. Third quarter with an increase. Pulp and paper, extremely active, second highest quarterly figure in our history. While the backlog already covered, exceeding €8,000,000,000 first time, Sales increased to nearly €1,700,000,000 predominantly due to the growth in Pulp and Paper. EBITDA, obviously, impacted by the restructuring charges, where we booked overall of EUR95 million, thereof metals of EUR84 million. And profitability adjusted for these extraordinary items at six point zero percent, so at the same level as in the third quarter of last year. On Page five, order intake on the left side, quarter on the right side, first nine months. So a substantial increase from not quite $1,500,000,000 to nearly $2,100,000,000 plus 43% of that 33 percentage points organic. Newly acquired companies contributed $139,000,000 predominantly Exerium and some other smaller companies. Similar picture on the right side, first nine months, holding pickup 22% and of that 13 percentage points. Organic newly acquired companies contributing €460,000,000 and of that $347,000,000 Clarion. If you look in the middle, there are changes by business area for the first nine months, pulp and paper up 79%, metals down by 12%, hydro down by 11, and separation down by 5%. So you see quite different developments in our four business areas. Slide six, quarterly development continuing increase What was driving the order intake in Q3, a large order for a pulp project in South America, but also Hydrocook pumped storage power order from Dubai, believe it or not, euros 125,000,000. We are building going to build water pumped storage water power plant. Slide seven, sales. Again, good growth, predominantly, in this case, driven by first time consolidation. Obviously, it takes some time to convert order intake sales. Slide eight, Service. Continuing growth. Last four months, we saw growth of plus 31%. Longer term content annual growth rate of 7%. Last four quarters amounting now to 2,600,000,000.0 and corresponding to 40% of our sales, which is a very positive development and should create substantial stability in the years to come. Slide nine, share of service business in the respective business areas. Pulp and paper are leading. More than half of sales in pulp and paper are repeat service sales, more or less repeat sales in the aftermarket. Separation traditionally has had a higher share of service sales of 47%, hydro 30% and metals 27%. Especially metals, not for hydro. We see good potential to increase the share of service sales. On the hydro side, we are promoting this O and M contract, operate and maintain, where we are running a growing number of hydro power plants globally. And this the operations are managed centrally from our control center in Italy. And the metal side, especially Schuller has or should have very good opportunities to expand the service sales there. Slide 10 order backlog, as we said, highest ever, 8,100,000,000.0. It's a good basis for next two to three years of revenues to come. Hydro and pulp and paper traditionally account for the vast majority of this order backlog. Moving on to profitability on Slide 11. EBITDA in Q3, 85,900,000.0, 6% in 2018, from there up to $101,700,000 before non operating items also 6% and after charging, other charges down to 6,400,000.0 or 0.4%. What did we charge on the right side in restructuring? 84,000,000 is metals, hydro, 7,000,000, pulp and paper, 3,000,000, separation, 1,000,000, so some minor capacity adjustments. Since we are rather cautious on our view on the economy for next year, you will see continuing minor adjustments in our capacities to make sure that we are fit and strong as we go into the next quarters. On Slide 12, the first nine months, similar picture, obviously, less impact from the restructuring charges, down from EUR $287,000,000 in the day to 184,000,000. Our business area on Slide 13. The rate numbers are always before the adjusted numbers are before restructuring charges. Pulp and paper, continuing good profitability, 9.1%. Metals, slightly profitable at 0.3%. Profitability, negatively impacted by under absorption, under utilization on the Schuler side, and I'm going to come back to that in more detail. Hydro, 6.5%, pre restructuring of 5.6%, and separation quite positive continuing good development of profitability compared to the first nine months of last year, up from 4.6% to 5.8%. On Slide 14, net working capital. We started the year or the end of last year at $160,000,000 in the first quarter, it went up to $183,000,000 and down to $84,000,000 in Q2 and is now down to $30,000,000 in Q3. Pulp and Paper, due to the booking of new orders in down payments, down. Net was up somewhat. Cyber down. So overall, post development down to 30,000,000. Obviously, that contributes also to the operating cash flow. On Slide 16, you see the bridge from EBITDA to the cash flow from operating activities. The numbers in parentheses show you the comparable numbers from the 2018. Depreciation, obviously, is up substantially to 136,000,000. Of that is 146 depreciation, 61 is amortization of IFRS three. Of that, 39,000,000 from new acquisitions, predominantly Exerium, and $29,000,000 impairment of goodwill in metals is predominantly, like actually all these show off that is Schuler. So that adds about nearly 150,000,000 on the way to the operating cash flow. Correlations also contributed positively, and net working capital improved by compared to last year to by $400,000,000 or minus $265,000,000 to plus $154,000,000 and some minor adjustments. So overall, we show our cash flow of operating activities of four thirty nine million euros after minus €85,000,000 a year ago. Obviously, a lot of that is driven by project specific circumstances, but obviously, we are not unhappy about this development. On Slide 16, we also provide you with the income with the EBITDA to net income bridge, starting with 329,900,000.0 EBITDA, 6.9% depreciation of that IFRS $1,631,000,000 and new first time consolidations, 26,000,000, down to EBITDA, $2.84 then with IFRS three amortization, 60,000,000, twothree of that for new acquisitions, then impairment, 29,000,000. I mentioned that Metals, EBIT, 94,000,000. Then financial results, minus EUR 35,000,000. To a large extent, foreign exchange valuation of basically subsidiaries, balance sheets, cash accounts, etcetera, to an EBITDA of 58,000,000 or net income of 40,700,000.0 To summarize on Slide 17, we have the full set of numbers. I think we have covered probably everything that is of interest. Maybe to summarize IFRS 16, so total asset number went up by $218,000,000. Property, plant and equipment, sales are the same, obviously unaffected. EBITDA is up $38,000,000 Depreciation is up $34,000,000 EBITDA up $4,000,000 and interest also up by $4,000,000 interest expense. So, EBITDA, obviously, effect is zero. Now moving on to the business areas. Pulp and paper, very good situation, very active market. In spite of, as I said, difficult overall economic environment and in spite of a lot of thermal yield on pulp prices on the pulp market, but we see continuous good project activity. As always, we cannot speak for our potential customers when they will go ahead with the projects, but I think many of you are following the announcements or the silence that has followed some of the announcements with regard to projects. From our standpoint, all these projects are real. All these projects are tangible. Nearly all of these projects are in the hands of large companies committed to continuing to expand the pulp capacity. When so there's another question whether they will go ahead with these projects. Question is always when they will go ahead and it may be impacted by permitting issues, it may be impacted by political issues in the countries where they consider to invest that may be short term impacted by inventory issues in the global pulp market, price issues. So long term, we are very confident for the future of this market. Short term, we need to continue with our wait and see activity or position. Power generating boilers are continuing good project activities, especially in Japan. We continue to be very successful in Japan. So overall, very good situation. On Slide 20, you see the numbers. What do you think of sales up? Earnings at a very good level. Obviously, with this higher backlog, our employee numbers have started to go up, predominantly in Brazil, in Finland, and some other countries. By region, you see the difference between order intake and sales. So sales here in North America are still dominating with order intake. The emerging markets are dominating. Different picture on metals, 21. Metals forming, obviously, heavily affected by the automotive industry, very weak activities. Some board executions also delayed uncertainty of the side of some large customers where they should build, if at all, should build a new plant. We have followed in the press the discussion in Volkswagen, in Turkey and Bulgaria. We have some other second thoughts in with some other car companies where to build new capacity. And as always, when the market is low, then pricing becomes very aggressive. Everybody tries to fill up its backlog, and therefore, the situation there is certainly not very good. Similar situation in metals processing, steel industry is in not very good position. And low number of orders placed for new projects are heavily contested between the main suppliers with a negative effect on the prices. Yes, on Slide 22, the numbers, if you look at Q3, EBITDA is before extraordinary items, 9,900,000.0. So a slight improvement compared to the first two quarters. The majority of the €10,000,000 is goes to Schuler, was earned by Schuler. As I said, Schuler is still impacted by under absorption underutilization. When we look on the next page on Schuller, you see development on sales, organic sales development minus 14% between 2013 and 2018. You see also that we together with the actions that we have announced and we have now provided for in the third quarter, we take down the employment of Schuler in Germany by onethree from 4,000 employees to 2,600. We'll be achieved fully achieved by 2022, but large part will take place next year. Where do we stand? With regard to the social plan, you are aware that Germany is a very difficult area for that, time consuming, but we are making, I would say, reasonable progress in the negotiations. We have passed some of the gates that has to be passed on the way to an agreement on the social plan and interest, what do they say, finding an agreement on which criteria should be followed in the restructuring. And we hope to have results by year end, but as always, we cannot agree to agree for certain times, so we need to see how things go. But it's currently, it's on a good way of taking into account the very complicated procedure that has to be followed in Germany. So much about Schuller. As we have said, we expect total savings of €60,000,000 fully in place from 2022 onwards, but sizable improvements already starting from the middle of next year. Slide '24. Hydro still quite low market activity. We have booked this some storage order. We see some interesting larger projects for next year where we think that we should be in a good position. So let's see. I think this year will still be a relatively subdued order intake. But if one or two of these larger projects would go ahead in the first half of next year, I think next year could see a certain pickup of order intake. 25% the numbers, maintaining in spite of gradually shrinking sales, so maintaining profitability. And I think that's also what we would expect. We will continue our gradual capacity adjustments following the sales. And with that, we should be able to maintain profitability also in the next few years. Slide 26, smallest business area separation, doing quite well. So continue to improve profitability. I think we are making good progress in some of the segments that we try to where we try to expand. And if you look at Slide 27, order intake for the first nine months is down by 4.6%, but we booked a large order for separation of nearly €50,000,000 last year for the sludge drying in for the wastewater treatment plant of Shanghai, which, obviously, a similar size order has not been booked this year. So compared to that, taking that into account, show quite good continuous growth and, as I said, improving profitability. So there, we are increasingly optimistic that we are now back to a good profitability and showing organic growth, which together would also enable us to look into some M and A activity in this field where we have always said there are plenty of should be plenty of opportunities there due to the quite fragmented structure on the supplier side. Conclude on Page 29, obviously, we see a slowdown of global economy, and we expect a further moderate slowdown of the global economy with some country specific issues. Turkey continues to have a negative impact on us. Brazil, uncertain. Chile, we can't add to the difficult countries. Unfortunately, we are executing a large project for our route consider. There hasn't been any impact on that. But clearly, the investment plan in The Philippines in Chile has deteriorated and may have an impact on activities on the pulp and paper industry there. Nevertheless, pulp and paper continues to show very good project activity, and we expect that also to continue into next year. Steel automotive industry particularly are very much down, and we do not see any light at the end of the tunnel in these two industries. Where do we stand? We have a very good quarterback down of €8,100,000,000 good visibility of sales going into 2020. Progress of Schuhler restructuring is, I think, reasonable and should see first visible effects on the numbers in Q3 twenty twenty. We'll continue to do our homework in the other business areas, which will mean certain minor capacity adjustments also and expect continuing good profitability in Boston Paper, continuing step by step improvements in separation stable profitability in Hydro And Metals, looking at next year, probably shows to breakeven and showing some sizable positive results due to the fact that we need to we have to observe notice periods, etcetera, so that we will only start to see effect from the middle of next year onwards. So that's my report, and I look forward to your questions. The you. First question is from Andreas Willi of JPMorgan. Your line is now open. Yes. Good morning, Doctor. Leitner. I have two questions, please. The first one on the end market commentary relative to what you said at the Capital Markets Day in mid September. Is there a conscious change to the commentary? Or is it maybe just the language in the release that's a little bit different if we compare like separation now described as solid versus good and maybe some of the comments in hydro as well on aftermarket. Is there a change or is it just the words that were chosen? And the second one on the dividend proposal for the full year in terms of payout, how should we look like at the payout ratio and how you think about it in terms of the charges and write downs this year that affect net income? With regard to the first question, you feel I'm more cautious than the capital market, they are more optimistic? Maybe slightly more cautious. No, I don't think so. It is certainly not intentional, and I don't see any dramatic change, or any real change in the in the overall economy. I think, you know, it could personally and really this is now in a very slight difference in shadows of gray, I think China may look a little bit more optimistic. Looking at the stock market, apparently, people in China become a little bit more optimistic. Obviously, if there would be trade agreements in place that could come into S. I think there is substantial upside on China. On the other side, Turkey, Brazil, Chile, obviously, rather slightly negative developments. So overall, I think the negative thing is that I don't see a real big change to the positive, but I don't see a deterioration. I think it's unchanged. Does that answer your question? Yes, yes. And on the dividend? Yes, dividend, think let's wait and see until time comes to form an opinion. I think it will depend on the our view on next year. And obviously, this restructuring charges have an effect on the income, so we cannot negate it completely. But as I said, I think we would prefer to wait and see how the general situation is and then decide what to propose. Thank you very much. The next question is from Sven Weier of UBS. Your line is now open. Yes. Good morning. Thanks for taking my two questions. The first one is on the project pipeline. Obviously, you already mentioned still quite a busy pipeline on the greenfield and pulp. I was just wondering if you could share like a number with us for the next twelve months of projects that would be worth, say, more than $203,100,000,000 euros for you, if there's a total number that you see? And also on Metals, I think your order intake in absolute terms was actually not so bad, I would say, in Q3 and Q2. But you mentioned, obviously, pricing is tough. So does that mean that these orders have a certain lower margin tailwind? Or what should we keep in mind in terms of the margin quality of these orders? Thank Yes. Thanks for those questions. Starting with the second one. Clearly, as the prices are we have to offer aggressive prices if there were a chance to get the order because our competitors are doing the same. So clearly, the margin content of the backdrop in metals has declined. Obviously, we do our best to contain it, this reduction. We try to pass it on to our suppliers. And as I said, I think once we can adjust our capacity in Schuler, that certainly will make us more competitive and will help to improve also the quality of the backlog. With regard to projects going into next year, it's, I would hesitate to really mention a specific number, but I would say there's certainly a handful of large projects for pulp that would not be surprised if they are realized next year. Okay. Understood. The second question is a bit more personal question because I think your contract is running out in the next two years. And I was just wondering how you plan on succession, what we should be expecting there in terms of maybe internal solutions and what all of that means in terms of strategy. Obviously, you've been obviously very, very impactful on the company in the last twenty or so years. So I think I would be quite interested in your thoughts on that very issue. Yes. I need to check my contract. I don't think it's starting to I think it's in three years or probably three years. No, there will not be a new contract for sure after that. And I'm obviously aware of my age. Publicly, I reserve the right to make any decision, but currently, I would not expect to sell my shares. So therefore, my interest is to have a very good taxation. My interest is not the proof that it has been difficult to replace me. Obviously, that's something that I have an eye on that the surprise report has an eye on and we all think that we are in a good position with regard to succession. Well, it was an appetizer, yes? So we'll have enough time to continue talking about that, I think. I will prepare for the next conference calls with maybe slightly more tangible answer, yes? Yes, that's fine. Thank you very much. Thank you. Next question is from Aurelio Calderon of Morgan Stanley. Please go ahead. Hi, good morning. Thanks for taking my questions. So I would just like to ask on your employee footprint at Schuler. So if you think in three, five years' time, do you see that employee footprint moving more towards China given that it's now around 35% of all this and only represents something like 20% of the employees? And how do you see that developing in Europe and especially in Germany after 2022 and with all these announced cuts? Obviously, it depends on the market. And if we would know now or if we would think now that we have to go down further, obviously, we would communicate now that long term, we will continue with these reductions. Currently, that's not the case. But currently, I cannot exclude that neither because it's driven by the demand for the Schuler products. I think Schuler has been has seen six very successful years, which certainly resulted in being busy enough not to think about long mid term, longer term necessary adjustments of the footprint in the balance between high cost country and low cost country and where the markets are for the product. But having said that, Schuler products are very appreciated worldwide as and so if we succeed in bringing down the costs, maybe to a certain extent also the products, more specific to the customer needs. I think Schuler has a very good chance. I'm quite convinced that no, the center of excellence will remain in Germany. I think we have excellent people here. Manufacturing can easily be the case that we see a continuation of the trend to other countries, whether that's China or other European countries, I think remains to be seen. I think we currently, the distribution between China and, for example, Eastern probably Eastern Europe would be a close decision. So China is not the only low cost location in the world. Okay. Thank you. The next question is from Tally Long of Erste Group. I would like to get a little bit more flavor on how the order situation or the delays in the Pulp and Paper business could turn out. Would you see already received orders being delayed? Or would you have you just reflected on protection new orders that are being delayed now or the process has been delayed? Maybe a little bit more color on this one. Yes. I was referring to some press announcements that have been made by companies that are a little bit overdue now in terms of following actions. But I do not see that as any indication of general question mark on this project. As following the market situation for pulp orders, there has been a big buildup of inventory in the beginning of this year, which is now softening again. So it's reduced, but it's coming down, which certainly will help to the market is not in stable, but it has been obviously a cloud over the market. Have 2,000,000 or 3,000,000 tonnes of inventory in ports in China. So that is now being resolved, being absorbed. And that should that could have had an impact on some delays. I think it's I would rather think it's more specific more project specific reasons, being political situation in one or two countries, permitting delays or overly optimistic schedules for permitting that have not been achieved, and therefore, it may actually take a month or two or three months longer until one or the other project goes ahead. But it's not a it's clearly, in our opinion, to a large extent, project specific, maybe to a smaller extent, impacted by the overall situation in the pulp market. Maybe a follow-up on this one. When we look at the price developments, paper prices seem to be on a somehow bottoming out, maybe even maybe also indicating that we see some the breakeven points of the producers might have been reached when we look at the historical development comparison of the current price levels. In Pulp and Paper, we are certainly not that far yet. Would you expect that just basically the inventory situation would help to stabilize prices going further maybe in the 2020? Or is there a risk that we see some longer term impact on demand maybe from the price developments? I mean demand continues to grow. Fiber consumption is growing 2% plus per year. We still have some high cost old capacities that ultimately will go out of market, as you said, once the cash cost when the prices are meeting or hitting the level of the cash cost. We have very positive trends with regards to plastic bags, with regards to plastic in general. We have very interesting technology plans in regard to fully organic packaging liquid packaging. We have high-tech developments, nanocellulose going into food, into pharmaceuticals, etcetera, microglutanolin cellulose. So I think there are plenty of activities. Not to forget that a year ago, I think the majority has expected that one would see more stable pulp prices when Susana acquired Vibria, creating a clearly dominating market pulp producer with, I remember correctly, 12,000,000 tonnes capacity. That has turned out not to be true. I'm not going into speculation about what has happened there. But this quite high level of consolidation is still in place, and I think everybody has learned that I would expect, let's say, stabilizing prices on a reasonably high level, which for the low cost producers in South America should provide EBITDA margins of 40 plus percent of sales. Okay. And then two questions related to the Metals segment. One is the EV subsidy that has just been announced for Germany starting in 2020. Have you heard any positive comments related to maybe a demand pickup for your business into 2020? Or would you expect this to take longer to take into effect? And the second would be related to the layoffs. Would you see any change in timing to the official expectation that we should see first impact from the layoffs on your financials in the second half year? The answer is two times no. So we have not seen any impact on the CV. I think the longer the slump in demand for new cars is lasting, the higher the probability becomes that we suddenly find a recovery. So because people are postponing the purchase of a new car by half a year, by year, by two years maybe, but at some point, they go ahead. I think what drives now reluctance of buying cars is the uncertainty, whether it's going to be gas or diesel or electric, see the price we would get if we would sell it after a few years. But again, I don't think this will last five years. So the longer it lasts, the higher the probability will see a pickup. Same for China. And with regards to the restructuring, there's no change in the schedule. The next question is from Sebastian Grover of Commerzbank. Yes, good morning. Thanks for taking question. Have a bit of a nitty gritty question, to be honest, but the margin in the quarter was comparatively low at around 8%. I was just interested in hearing your thoughts around the drivers for that. I'm assuming it's more a function of the greater paper content. Maybe you can just confirm that and also then give us a sense of what we should expect for the fourth quarter and also generally speak about what is indeed the impact the book at Pulp and Paper and how that splits simply between the two, Pulp versus Paper? And that's the first one. Maybe we take them one by one. Yes, mean, the third quarter was slightly lower. It was on the capital side. Service side was continued to be very good. Some lower margin quarters, maybe some cost overrun or maybe that's certainly one of the other cost overrun, but nothing, let's say, dramatic or above the regular fluctuations. What was the second question? What was the second question? The order split in the book between Pulp and Paper? Because I would assume that usually Yes. You run better margin at It's dominated by Pulp, then by Power, and the lowest one is smallest one is Paper. And no real change compared to what it was in the prior years or so, yes? Well, it's because of this high order intake, obviously, pulp the share of pulp has gone up. But other than that, no permanent change. And everything is project specific, order specific. Yes. And with regard to the large orders, there's also nothing which is striking in terms of the price quality of these very orders secured or anything that would be worth mentioning in terms of working capital terms related to these very large projects? No, no. I mean, obviously, the development of the net working capital is impacted by the down payments and progress payments of the large orders. So there's a positive effect, obviously, yes. Yes. Okay, okay. Fine. Then working on and walking on to operating cash flow on working capital to take that a bit further. We see now the second consecutive consecutive improvement in working capital. And you have been highlighting, I think, contract liabilities, which goes without saying, with the much increased load. But you also point to lower receivables as a key driver. So can you just comment around what is still sort of the headroom that you see in the receivables part? And if you could also comment on what is explaining the weak working capital development at Metals, in particular, which you're referring to on Slide 14? Nothing. No longer term specific trends. It's really driven by individual quarters. So obviously, yes, there has been a that's obviously the increase in working capital for metals is driven by a lower intake to a sizable extent. Maybe some delayed payments, but no one project where we have a problem where we are not able to collect the money, whatever, that's not the case. Yes. Okay. And then on M and A, because I think you have been commenting on that in your introductory statements. If you could elaborate a bit more on what you and the general boundaries of what you can say at this point, but it seems really that you are more prepared eventually to become more active again on M and A. If I remember correctly, I was this was with regards to separation, where we see continuing improvements. And as we have said in previous calls, once we feel confident that this positive development is sustainable and solid, and yes, then we would also look into some would have more focus on M and A in connection with separation. And yes, that's the case. So we will start cautiously. It's nothing imminent. I cannot guarantee that we will make an acquisition in separation next year, but clearly, this is M and B has a very strong position in Pulp and Paper. So we are certainly more dependent on the market than on ourselves. Same as in hydro, metals has its own issues. So the one where we see potential for M and A related activities in separation and not only because the others are, let's say, in different situations, other business areas, but also because the market is fragmented. There are many customer segments. We have products that can be applied in many more applications. For example, we are in tests with one of the companies to produce, what do they say, plant based meat from protein, from plant based protein, where we have several machines that can be used in these processes. So there, I see in our market share is definitely not dominating. So therefore, it's natural that we will increasingly look into growth opportunities in the separation side. Well, we were hesitant to do that in the last two, three years because of the weak performance of the existing activities. Yes. Okay. That's helpful. And then very last one is on the extraordinary items, which have been breaking out by segments, which is much appreciated. I was wondering simply to see you booking sort of smaller restructuring measures beyond metals, which at least I did not really have on mind. Maybe can you just talk around what is behind that? And then if you would rather see that as really a 2019 specific item? Or is there anything else we should have in mind when it comes to outer years? I think it depends on the development of the overall economy. I mean, in our budgeting process, we are rather cautious. I think it's a good time to look into our internal structures to see where we have added some fab, where we can increase, improve our competitiveness. So I would rather I would not say that this is a one time thing. I think depending I mean, if the economy turns around and becomes very strong again, obviously, we would have other focus areas. But if it continues as it is now, we would continue to look into opportunities to improve our competitiveness, meaning that there may be continuing smaller and extraordinary charges. But nothing as seen from today, nothing dramatic. Okay. And just to get that right, it's all personnel related, what you're doing there, and it's not really a complete closing down of a certain plant, etcetera, but rather just trimming it a bit to be less fat, if you raised it? I think we are openly looking at everything. If we would come to the conclusion there is there's not a plan to do that now. But if we would find out that this would be advantageous for the future, we would also go ahead with that. But as I said, as we see today, it will it might be continuing smaller charges, but nothing dramatic. Okay. That's helpful. Thank you. As there are no further questions, I hand back to the speaker. Thank you very much, and we look forward to discussing our full year results in about four months, I think, probably in March. Thank you, everybody. Thank you. Bye bye. Ladies and gentlemen, thank you for your attendance. This call has been concluded. You may disconnect now.