Ladies and gentlemen, thank you for standing by. I am Alexander, your operator today. Welcome and thank you for joining the AT&S Nine Months 2022/2023 Conference Call. Throughout today's recorded presentation, all participants will be in a listen-only mode. The presentation will be followed by a question and answer session. If you would like to ask a question, you may press nine and the star key on your telephone. If any participant has difficulty hearing the conference, please press nine and the rhombus key for operator assistance. I would now like to turn the conference over to Mr. Philipp Gebhardt. Please go ahead.
Good afternoon or morning, ladies and gentlemen. Welcome to the AT&S Nine Months 2022 Through 2023 Conference Call. With us today, Andreas Gerstenmayer, CEO, and Petra Preining, CFO. Mr. Gerstenmayer will start with a brief overview of the key developments of the first nine months, and especially on Q3, as well as a market update. Afterwards, Ms. Preining will comment on the financial figures and our guidance. As Alexander mentioned, the presentation will be followed by a Q&A session. Now, I would like to hand over to Mr. Gerstenmayer. The floor is yours.
Thank you, Mr. Gebhardt, a very warm welcome to everyone. Wherever you participate, good morning, good afternoon, or good evening. In the beginning, I have to apologize. I'm not sure whether you have a good line. On our side, the line is a bit unstable, so I hope we can later on receive your question properly. Don't be surprised if you have to ask the one or the other. Let's move to the Q3 results of AT&S. We have started the fiscal year very nicely. If you have seen in the half year's results, when the market is stable and the demand is strong, we can show a very competitive performance, both in revenue generation and also in profitability.
You all know since fall time, the market conditions have significantly changed, especially in the tech industry. I also see it, we are not the first one who have to announce lower business volumes just recently. Yeah. As it is, you cannot plan for everything, and unfortunately, the latest information we received the last few days, you know, forced us to do the ad hoc announcement yesterday. It also shows that what we have so far communicated during the last calls, that visibility in the given environment is quite low. This is one of the dominating factors in the business, which makes it a bit challenging.
I can assume some of you will ask later about the our forecast for the next quarter and the following quarters. I can already state here it is difficult still to really predict what will be the volumes, especially when it turns to a new fiscal year. From today's point of view, I cannot give you a guidance for the next fiscal year. So far we are still calculating, investigating, talking to our customers and whatever we can do, so to create a solid, consolidated picture. Once we have that, we hope we can do that as we do it typically with our annual earnings call in May timeframe. I ask for your patience until then because the market conditions are not good enough to throw out any kind of solid numbers so far.
As you will see in the presentation, we are anyhow preparing for this and are prepared for this environment we are in currently. The low visibility requires a very, let's call it agile management. This is what we always did. We did it in the COVID environment. We did it before. So far, we were successful in managing that, and we apply the same pattern, the same tools we have in place also this time. This is what we can do. We cannot change the market.
We cannot change the demand side, but we can manage it, and we can talk about the long-term or midterm part because there is still a lot of opportunities available, and we see a solid technology and market trends that point to a more stable development in the future. Coming to the details of the quarter three, we have different impacting factors. Some of them I have already communicated now or commented on. For sure, we had also to fight with the COVID situation in China in Q3. You know, our Q3 is calendar quarter four for sure.
You know, there was also the shutdown of the one or the other area and part of China, where there was a lot of shutdown in some of the factories of our customers, some partners in the supply chain, which has impacted the sourcing and also the demand side. Nevertheless, I think we have managed quite well. Our factories from an operational point of view, were not impacted by that and we could manage through the situation. Nevertheless, if the next partner in the supply chain is missing, it is also not a very favorable situation. We all have seen from the reports of the microelectronic industry that especially impact in the computing area, notebooks, client computing and so on is significant.
It's All market participants are showing quite some weakness there. The server part is a little bit less impacted, but still there is also some weakness because the Hyperscalers are hesitating to do their full investment they originally had planned for. They are managing through these turbulent times, and they are managing their investment and their CapEx spend. Positive, we have started to talk about our module business we created a few years ago. This still is on a very good track. It is still nicely developing and also contributing already to the market. I think it's a three-digit revenue participation. I think this has shown quite successful implementation.
For sure, we have also significant FX effects in our top and our bottom line, more in the top. That details Ms. Preining will comment later on. As you have seen yesterday, we had to adjust the guidance for the running fiscal year. I just wanted to comment on that because in some of the releases there was mentioned we have adjusted it a second time. Yes, that's true. We also have adjusted it upwards in summer in the very good market conditions. It's an up and two downs, and finally it's negative, but not so negative like it looks like currently. As I said before, we have initiated a lot of activities, measures to take to navigate through the current situation, cost efficiency, cost control, CapEx control, whatever we can leverage, we are doing.
Or we have started that already in our Q3 and continue to accelerate the activities to support the current situation and to support the numbers generated. In numbers on slide three here, you can see some in view about the market. I will not go in each and every detail here. The light blue bar is the last fiscal year, last calendar year's numbers. Left-hand side, the server business. Here you can see the 2022 server was quite strong. It was a bit front-loaded. The most upwards generated business was created in the first two calendar quarters. The further development throughout the year was a bit more flat.
What we foresee for the running calendar year, 2023, it will come down to, I would say, normal levels like we have seen it in the past, still showing a nice growth trend for the upcoming years. Notebook and client computing. Here you can nicely see what happened during the COVID situation, 2020, 2021. There was significant uptake on demand. Now with the current environment, COVID ending, inflation, energy price increase, consumer sentiment significantly down. Also the demand here came down and is also expected to come further down in 2023. Still we are above the levels of 2019. Also the expectation is once the general economic environment recovers, also there we will see a certain growth again because the replacement cycle has not completely finished.
PCB market, also in the future, a nice growth. In 2022, 2023, there was a certain decline. Also on the one hand side, generated out of the ending COVID hype. Again, closely linked with the computing segment and also some impact from the consumer market. Expectation is, somewhere end of 2023 and beyond, recovery should take place. This is what we have available from the market intelligence, and this is how we are simulating our future demands. Similar picture in the automotive, industrial, medical, aerospace part.
The weakness of the automotive segment, mainly caused by the chip shortage over the last couple of years, should come to an end and should also take up again, in the growth rates, especially driven by the two trends of electrification, which is the stronger trend. We should also not underestimate, the autonomous driving, even if it's not so much used in Europe. We see a lot of activities in China and other markets, and most likely China and U.S. will overtake Europe in implementing this functionality in terms of autonomous driving. As I said before, we have initiated already in fiscal Q2 not initiated, accelerated our, optimization projects in terms of efficiency, productivity in all areas, and we will accelerate them further.
Expectation is that we will achieve a sustainable cost optimization of at least EUR 180 million in 2023, 2024 and beyond. As here stated in this one bullet, further programs are under consideration. For sure, we will align our CapEx spending profile with the demand profile we see from the market. I need to potentially explain that a little bit. For example, when we talk about the project in Kulim, we are now still in constructing the buildings. We have a next milestone where we can decide how to proceed. First of all, it's always factory shell is finished. We call it wind and water tight. If the demand is there, you continue.
If the demand is potentially weak, you can stop or push it out for a while. Next step would be infrastructure, equipment, things like that. Until then, that is finished, and we have power on in the factories, we can decide whether we install all the expensive, important, production equipment or not. Once that is done, the production will begin to ramp, will begin to be operated, and we need to ramp one line after the other. This is important milestones, and this gives us also the opportunity in uncertain environment that we can adjust CapEx spending according to the market demand. For sure, once the factory is there, it needs to be operated and hopefully fully loaded.
Just to give you a little bit of flavor of the background, how we manage that. This is not unusual. We have done that several time in the same pattern. When we ramped Shanghai, when we ramped Chongqing, we had similar situations all the time that we had to adjust and are adjusting the capacity implementation. Okay, this is a bit about the market environment, how we see the situation in the market. Summarizing and also giving a lead to Ms. Preining later on. The trends that are in the market, especially when it comes to electrification and digitalization, are still valid and very strong. The current situation is not caused by a weakness in that trends.
The current situation is caused by the global economical environment like we see it today, increasing interest rates, high inflation rates, uncertainty of the consumer sentiments, energy prices going up, and all these kind of things. People are hesitating to invest in more expensive, more valued goods. The question is how long that will stay. From the market intelligence and also from other market participants, the assumption is it will stay at least the next Q2 . This is the time at least where we need to manage through and observe closely what will be the further environment developing. Therefore, we are, you know, adjusting our range like I described before. Now I hand over to Ms. Preining to guide you through the numbers.
Thank you very much. A warm welcome also from my side. Allow me to start at slide number seven, as this is meant to be the normal Q3 Earnings Call. I will then wrap it up at the very end, come back to yesterday's capital market information. As Mr. Gerstenmayer has mentioned already, we had a very nice first half year. We, as I find, had also an appealing Q3 leading in total to a revenue of a little shy of EUR 1.5 billion, to be exact, EUR 1.489 billion, which shows an increase of 30%. The 30% is, as we have heard already, impacted by FX gains.
Even without those FX gains, 17% year-over-year increase is a very nice improvement given the headwinds, the general geopolitical situation and the markets have shown. The revenue is supported by both BUs. Mobile Devices & Substrates grew almost equally 34% in year-to-date numbers. The division AIM, Automotive, Industrial, Medical grew nicely 19%, strongly supported by the division Automotive. The EBITDA year-to-date Q3 led to EUR 416 million. Grew very impressively by 71%. Also here, even without FX effects, 29%, which we deem a very appealing number. The EBITDA margin was up by 6.7 percentage points and reached 28%. On adjusted levels, we have even reached 30.4%.
Net profit shows a number of EUR 221 million and increased by amazing 260%. Also here, 41% without currency effects, showing that we have already managed in the last quarters to increase our efficiency and our productivity. Turning the page. The quarterly revenue and EBITDA margin development, as you can imagine, and as we have already stated, shows a weaker Q3 compared to the very strong first two quarters, as we have stated. The Adjusted EBITDA margin as of year-to-date Q3 remains at a very satisfying level of 28%, which was, as we have already stated, supported by the measures we have implemented in Q2.
The business development, Mobile Devices & Substrates, turning the page to number nine, shows a decrease of 13%. You see already in Q3 the quite steep decline, mainly driven by IC substrates. This is the development we also see forward-looking, where I will come back to in a few moments. The EBITDA margin was came already compared to the first two quarters under pressure. On Automotive, Industrial, and Medical, we see a steady growth of 17%, which as I already said, is strongly supported by automotive. The EBITDA margin still reflects the start of cost and the higher R&D expenditures, as we have already stated the past quarters. This is driven by our R&D project here in Leoben, our R&D center.
What is important to mention that due to timing difference, we still expect the grants to come in Q4, so that will turn out when looking at Q4. Turning the page to the financial position. We see that cash and cash equivalent has decreased from March 2022 to December 2022, and almost at the same level we have increased our unused credit lines. This does not come by surprise. This is a sign of the deployment we have due to our large CapEx projects, and also gives you the comfort that AT&S is in a position to also finance the upcoming projects with the unused credit lines, which we have. We are prepared for the deployment of the next tranches when it comes to CapEx.
On debt financing, similarly to what I was able to tell you last quarter, we have roughly 40% at a fixed interest rate. We more and more diversify our products to be in a very good position when it comes to different opportunities. Currently, at the current status, we talk about 2% of financing costs as of December last year. As you do know, we also do expect further customer prepayments to come. Turning the page to the balance sheet. I don't think anything will come as a surprise. Total assets have rised due to the CapEx projects we have mentioned a couple of times already.
The equity ratio still remains strong, but of course, due to the deployment of the CapEx of the assets, the increase of the assets, we see a slight decrease to 32%. Net debt at 1.2 times higher than what we had at the half year, but in line with our deployment of when it comes to the projects. Our cash flow year-to-date as of December remained very strong, which was supported by very good results and customer prepayments. The deviation compared to last year when it comes to investing activities is of course due to the CapEx we have mentioned a couple of times today already. Allow me now to say some words on yesterday's profit warning.
The capital market information was triggered by significant reduction in IC substrate orders due to high inventories in the market. In the light of the magnitude and the obvious short notice, we will face a very disappointing Q4 with an EBITDA trusted likely to be below zero. Further countermeasures, as Mr. Gerstenmayer has already mentioned, are evaluated and aligned with the magnitude and duration of the demand shortage. I further am allowed to tell you that the management, in alignment with the trends Mr. Gerstenmayer has already elaborated on earlier, confirms the midterm outlook as we had it before. The outer years, the guidance for the years, 2025, 2026 remain unchanged. With this, I have come to an end on my part and hand over to Mr. Gerstenmayer, and your questions, basically.
Yeah. I might jump in briefly. Thank you, Mr. Gerstenmayer. Thank you, Ms. Preining. We will now start the Q&A, and in order to give everyone the opportunity to raise questions, we would like you to limit yourselves to two questions. When we are through and there are still questions and time left, we will start another round. Now I would like to hand over to Alexander to handle the session.
Thank you very much. Ladies and gentlemen, if you would like to ask a question, please press nine and the star key on your telephone keypad. In case you wish to cancel your question, please press nine and the star key again. Please press nine and the star key now to state your question. The first question comes from Daniel Lion. Please go ahead.
Good afternoon. Thanks for taking my question. Indeed, a very demanding environment and of course, very difficult to provide short-term guidance. Maybe I'll just try differently. When we look at the especially the IC substrate trends, which are the issue at the moment, and we look at the leverage we or IC substrate suppliers have compared to the OEMs, given the eight times bigger requirement for production capacity for each CPU, for each heterogeneous CPU, wouldn't you expect that IC substrate suppliers would actually rebound faster than the OEMs? First part.
The second part, by when would you expect when you look at the transition now towards heterogeneous CPUs, when would you expect to be roughly back on track towards your midterm guidance as we have maybe you had expected to see maybe half a year ago?
Okay, let's try to answer that. First of all, about the question, the production leverage. I have to mention, first of all, you know, that quite some of those products have been delayed in their market introduction. For us, it's not, so far not visible how the design-in cycles will be achieved, how the design-in cycles will accelerate the demand side because this is not the business relationship we have visibility about. This is one part. We need to wait until we get a proper forecasting from our customers on that in that regard. Once the business is taking up, we should not underestimate also from the other side, the total value of the component is not just defined by production capacities.
If you sell a complete CPU, you have more than just the component here. You generate software end to end, and sometimes also services behind. This for us is not easy to judge on. For us at least, as I said before, we are lacking sufficient visibility, also due to the reasons I just explained, how is the design-in of these new products. Yeah, that we need to observe closer and continue to observe. It's not good to say, but we have to wait until the new forecasts are kicking in.
Okay. Maybe a follow-up on this one. We are actually starting from actually zero EBITDA when we take the fourth quarter and going into next year. What would you need in order to come back to former performances, also in terms of profitability, in terms of market developments? Is it enough to work off the excess inventories or, do we need to return to a level?
Of, market demand level, like we've seen it a year ago? Or what's actually the environment that you need in order to be back, at this, at the level, we wanna see it?
I understand the question. If it's just a consumption of the heavy inventories, then we also need to assume that, first of all, what is the demand behind the consumption of the inventories and how fast that is. If the consumption is accelerating, still the question is what is the underlying demand curve and how to refill the pipeline. At least, if we would come to a level that we have better balanced stock levels and a continuous outflow of products, the demand should show a stable situation so that the consumption and the turnover of the stock volumes is sufficient. Then we anyhow have a combination of a strong market demand and a consumption of the products provided.
You cannot decouple it.
The next question comes from Alexander Thiel. Please go ahead.
Hi, good afternoon. Alexander Thiel from Jefferies. A couple of points from my side. The first one would be on your guidance definition. You guide for around EUR 1.8 billion. How much range of fluctuation is underlying the, on definition on this side?
Will you raise the second question, or shall I answer this one right away?
I can ask them.
No, no. It's okay. You just mentioned you have several questions, that's why I was waiting. You do know the usual game of market communication. Usually, we talk about bandwidths. Now the year, our fiscal year will end in 2 months from now. Even though that the transparency or the visibility is limited, we do believe that we have a quite good understanding of what we are against for that particular year. We see the guidance of 1.8 quite solid. Frankly speaking, we always have a bandwidth when we talk to the capital market.
Okay. My second one is basically how we should think about the overlap between the Intel Raptor, this 13th generation chip, and the following chip, which is already launching end of 2023. I mean, how do you basically prepare for that kind of overlap together with Intel? A follow-up question on that would be if Intel has already started pricing discussions for IC substrate. Thank you.
How to prepare for the overlap? I think typically we have different generations of products in the pipeline all the time. Starting with, for example, Sapphire Rapids, which is just introduced to the market somewhere in January already, and the next one to the Granite Rapids to come. For us, it's, I think it's business as usual. We start ramping the one, and we prepare and qualify the next one, and once the demand kicks in and the approvals and releases are there, then we start producing. There's nothing special for that. The special thing is more on the customer side. Is he able to communicate to his customers a very frequent change of products in a similar field?
How is that appreciated by the customers, and how is it, as I said before, the design-in? Are they all accepting Sapphire Rapids and I mixed the names before. It was, I think, Emerald Rapids. It could also happen that the one or the other customer waits for the second generation, but this is not in our field of influence, and it's not for us to predict on that. As I said before, it's unfortunate, but we need to observe the market and need to wait until we see how the new products are taken up and the demand develops further. New products, new opportunities. Hopefully, customers will appreciate them and design them in. Question about price negotiation never ended.
For sure, in situations where market provides more capacity, in... The situation is more intense than it was in the past, when we had a very favorable situation that it was more a supplier market. Now it turns again more to a customer market. Also nothing very special on that regard. This is the typical fluctuation we have already always dealt with.
The next question comes from Jürgen Wagner. Please go ahead.
Good afternoon. Thank you for taking my question. Actually, I have one on substrate pricing. You mentioned in the past when those Taiwanese competitors reported strong increase in spot
... pricing that you were not really tied to the spot market. Now with prices, spot prices going down, and does that, yeah, does that still hold also on the downside? I assume the substrate capacity is underutilized. Yeah, what will happen to the products you currently produce? Or can you reuse them or reuse the capacity for other clients or even other markets? Thank you.
Okay. Let's start with the spot pricing. Typically, IC substrate business is not a spot price market. It's a very custom-made, custom unique and product unique component. Referring to what I have said before, if you build a IC substrate for a Sapphire Rapids, it's only to be used for Sapphire Rapids because it's a very specific design only fitting for that. Typically, allocations are done quite ahead of shipment. Shares are distributed over the qualified suppliers. You cannot just move from one supplier to the other. If he is not qualified for the product, he is not allowed to ship.
It's very dedicated, high-level technology and typically it takes us some years to get started with a new generation of product to prepare all the processes, to qualify the processes and be qualified for a new generation. Not really a spot market, and I think this is also an answer to your second question. Single use, because it's only one product, one customer, you can use the substrate.
Okay. Thank you.
The next question comes from Patrick Steiner. Please go ahead.
Good afternoon, ladies and gentlemen. It's Patrick Steiner from Kepler Cheuvreux. Thanks for taking my questions. I would have two questions. Maybe we'll process them one by one. First one would be, in their earnings call, your largest customer stated that they are on track to ship 1 million of their new Sapphire Rapids chips by mid-year 2023. Can you give us more context on that from your side? I mean, what are the implications for AT&S in terms of revenue utilization, etcetera? And how will the volume mix be between substrates for the new server chips, Sapphire Rapids, and for the isolated legacy server chips?
I think you know it. We cannot comment on single customer situation, especially when it comes to our relationship, potential customers. I can only comment in general. I think I can only refer what I have said before. Typically, this is can be an announcement of a market participant he intends to ship. Whether he is really able to sell them is a second question because it relates completely to the design-in at the customers. This is the mechanics how the market works. Even if I would call and talk about the customer, I could not help.
Okay. Thank you very much. Understood. Second question would be about the refinancing of the maturing bank debt, which should be around EUR 1.1 billion within the next three years. How much of this is secured already? Do you see any issues with securing new debt or an existing debt in terms of covenants if the current market conditions prevail or even worsen?
Okay. There are several scenarios you have now drawn. We basically have actually secured everything which is closed or within the next year. Of course, if the situation worsens significantly, then we have to find new financing, but we have to adapt as we go. We have not given guidance, and we will do so with the Q4 Earnings Call. For the time being, within 12 months, we are fine and we are, as you also can see from the unused credit lines, and the increase we have today reported, we should be safe. It definitely depends on the further escalation. If there is a further escalation, it depends on how the situation will develop.
The next question comes from Jean-Marc Mueller. Please go ahead.
Yes. Thank you for taking my questions. Two, if I may, purely financial, also to understand the dynamics a little better. I mean, if I look sequentially, the way you guide now for the fiscal year, and I look at the first nine months, and I look at Q3, and then I look at Q4, you're basically guiding for sales in Q4, which are EUR 100 million lower than in Q3. You're also guiding for an EBITDA, which is, EUR 100 million lower. You're probably even loss-making on a gross margin level. I mean, just for me to understand, I mean, that would imply either a dramatically deterioration of the pricing environment or a huge problem on the cost side. If you can elaborate a little bit on that, if I look, you know, sequentially quarter-over-quarter.
Thanks for the question. As I have mentioned before, the profit warning was triggered by a significant reduction in the order volume. That's what we see for the upcoming 2 months. The top line, as you rightly have calculated, is decreasing. You are also absolutely correct that on EBITDA, we will face a number very likely below zero Adjusted EBITDA, that given a certain depreciation, which is in line with what we had in the past, slightly increasing due to CapEx deployment, will give us a negative income. You're absolutely right.
Yeah. My question goes more in the fact how it deteriorates. I mean, typically, there is a variable component to cost of goods sold. I mean, you have material costs, et cetera. In this case, it seems that EUR 100 million less sales is implies EUR 100 million less EBITDA, at least.
Yeah.
This is, this cannot be explained by lower volumes. I mean, this on top, we have then much worse pricing or dramatically higher costs.
Okay, two things. The volume on one side-
Okay.
which covers certain fixed costs.
Yeah.
Mr. Gerstenmayer has already mentioned that pricing is also a component, and the effects, together trigger the number you have calculated.
Okay. My second question, again, just for me to understand a bit how it works in the P&L. I mean, EBITDA was helped by FX changes. I mean, top line was helped, and EBITDA had also roughly EUR 100 million benefit from I think it's probably mainly dollar-euro. Now that we actually have a strengthening of the euro, is it fair to say that, I mean, if the EUR 100 million was the impact we've seen now in the last nine months, that looking into the next fiscal year, and let’s say we have a stronger euro compared to the dollar, that you’re already facing some EUR 50 million or so headwind on EBITDA level just because of the strengthening of the euro?
Please understand that we will give guidance during our Q4 results publication.
Okay. The dynamics is right? I mean, if you have a positive impact on EBITDA because of the weakness of the euro, obviously, the strengthening of the euro will have a negative impact on EBITDA.
Just a minute.
It's that the correlation is absolutely correct, yes. I will not guide you now on effects.
We have another follow-up question. It comes from Alexander Thiel. Please go ahead.
Yeah. Thank you again. A follow-up from my side would be on the comment during the call with grants coming in Q4. I mean, could you repeat it again? I could not understand the comment acoustically. Attached to that, is it fair to assume for Q4 that the AIM segment will be in line with the run rate that we have seen in the first nine months, and all the weakness is basically coming from substrate? Thank you.
I will take the question on the grants. We expect roughly EUR 11 million coming from IPCEI funding in Q4.
I think the second question was about the weak impact of the weakness of substrates. I would say the majority is definitely from the IC substrates area.
Okay. Perfect. Thank you.
The next question comes from Teresa Schinwald. Please go ahead.
All right. Thank you. I would like to come back actually to the cost efficiency, the optimization program. If you could shed a bit more light on that, especially on how much of this is new, target volumes, and how we can understand the EUR 180 million in terms of what is fixed costs, what is cost of goods sold related, so depending on the revenues. If you could return to this topic, please.
The programs Mr. Gerstenmayer has elaborated on are an acceleration of our ongoing continuous improvement program. Please understand that we will not share the details of which, how much was in which program. The number of the EUR 180 million run rate by the end of next fiscal year is the number we were targeting on. In case, as I have said, further countermeasures are needed, these will be deployed through the organization.
In the worst case, the new volumes could be rather small. Am I right to assume that? Actually, the midterm margin targets did not change although the top line, and the top line, of course, did not change.
I'm not sure whether I understand your question. What do you mean with new?
No. The EUR 180 million, how much of this has been added to the cost optimization program since let's say the second quarter of the current business year, and how much has been part of the longer-running projects?
I'm not sure whether that split up, even if we don't disclose it, would help you. Finally, we have our guidance out there. We told you what we are targeting for the fiscal year. We did not eliminate our midterm guidance. These programs are the underlying programs, like we do them all the time. As we have thrown out the number here to show that we are heavily working on optimization programs that should ensure to somehow compensate for the challenging situation. I think this is what we wanted to communicate.
Okay. Thank you, Mr. Gerstenmayer. Thank you, Ms. Preining. Sorry if the connection was bad. We were struggling a bit on our side. I hope you understood as well. Yeah. We will now close the Q&A session. If you have any further questions, please don't hesitate to contact the IR team, Johannes, Martin, or me anytime. Thanks again and goodbye.