OC Oerlikon Corporation AG

Ladies and gentlemen, welcome to the Ehrlichon Q3 2024 Results, Score and Live webcast. I am George, the course call operator. I would like to remind you that all participants will be listen-only mode and the conference is being recorded. The presentation will be followed by a Q&A session. You can register for questions at any time by pressing star N1 on your telephone. For operator assistance, please press star and zero. The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Stefan Gick, Head of Investor Relations. Please go ahead.

Morning, ladies and gentlemen, and welcome to Ehrlichon's Q3 earnings call. I have here with me Michael Soos, our Executive Chairman, and Markus Richter, CFO of Ehrlichon. Michael will start the call with an update on our pure play execution. Markus will then provide an overview on our Q3 end markets, financials, and outlook. We will then follow up with Q&A. With that, I would like to open our presentation and hand over to Michael. The floor is yours.

Thank you, Stevan. Good morning from my side and welcome for our Q3 call. And before... I will give you a little update to the PurePlay strategy. I'm happy to introduce you a new CFO, Markus Richter, who is running the OSS division almost for two years or a little longer than two years. He worked very close at that time with Phil Muller, who has now his first four weeks with ThyssenKrupp Elevators and we wish him from here all the best for his job. He contributed five years as a group CFO to our company. And now with Markus Richter, we look forward to going our pure play way. That's why we merged already the OSS financial structure function with the group function. And you will understand when I'm going a little further on that this is one step of several steps we are doing to prepare the pure play. So if I might remind you, on February this year when we announced that execution, where we're coming from, the five divisions in 2014, where we figured out who are really the divisions which have the potential for a market-leading position or where is a better ownership possible, and we divested successfully. We handed over special dividends and the good dividend payments the last nine, ten years. Overall, between 2019 and 2024, we further focused our business on these two market leading companies, OSS and OMF. And now we are on the last step to a pure play organization of Erlikon. And 1st of January onwards, we will do that in a way that Surface Solutions will be merged into the group. And OMF will be 100% subsidiary of the company. All steps are by end of the year organized that we can cut off the assets whenever we want to. We stick to our time plan, which was scheduled 12 to 36 months, because we want to do that in the best way for the company and for the shareholders and for our other stakeholders as our employees. Important on that is there will be no cost overruns. We will do that in a way that all the double layers are already on the way to be eliminated. And we keep only that cost, which will stay with us for the time being as the subsidiary will be with us. And with the cutoff of the subsidiary, this cost will move with the subsidiary. So with the new co and then the remain co, we'll have no cost burden out of the division world anymore. This, I think, is important. The organizational separation, by that way, is on track. It is finalized by end of the year. Cost efficiency, you will see in the numbers of Markus Richter that we are on a very good track on that. And if we simply look on the two divisions for a short moment, Surface Solutions is well positioned for profitable midterm growth. I have to say midterm because the markets we are in are flat. Actually, we are growing in our markets in the regions within their currencies. But with a strong Swiss franc, we eliminate part or a significant part of that growth with exchange rates from euro, dollar, Chinese RMB or Japanese yen towards our currency. Nevertheless, we have pretty strong performance on the execution of our businesses. Aero and defense, where we have a smaller portion in, are running very well. All the other portions like channel industry, automotive, tooling, luxury, they are flat or a little bit with headwind. But this is for term, mid and long term, we stick to our target of the 46% profitable sales growth. And as a Swiss company, we are staying with our Swiss franc and we suffer sometimes a little bit. On the other hand, we have as well some benefits by working in that currency. So on the main main fiber story, That's our position for attractive returns. We dropped, as you know, from 2022. Since today, we will see the drop on that most probably in 2024. Then from then onwards, we see a slightly growth. There are good signals for the future, but as we all know, nobody has a glass ball when we have a very difficult market environment with the situation in China, with the situation in Europe. By the way, European politics is everything else, but not easy to be followed. And for our customers, either it's automotive industry, it's general industry, it's all the supply bases to them. They have the same problems. We are well positioned by that because with the diversity strategy, which we have taken over a significant amount of years now, We have reduced our exposure in surface solutions from 70% to 80% in tools, cutting tools and molds towards 20% to 30%. And we have expanded that field in other industries, which makes us more resilient in this industry. And as I said on man-made fiber, we have the markets in China, India, mainly Turkey, And the Chinese market shows signals for the future, which are looking positive. Indian market, we have smaller projects, but it's still positive. But we cannot judge quarter per quarter. This is a process where we run 8 to 10 years cycles, and there is one quarter which is a little lower and the other quarter which is a little higher. It's more about the outlook in a long-running business. By taking that or saying that, We stick to that what we have presented in February. We stick to that what we have shown in the first two quarters of that year. And now how we do that with the numbers, I would like to hand over to Markus. Markus, give us a little more insight about the numbers.