Cicor Technologies Ltd.

Ladies and gentlemen, welcome to the Seeker Annual Media and Analyst Conference Call and Live Webcast. I'm Vicky, the Chorus Call Operator. I would like to remind you that all participants will be in 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 and 1 on your telephone. For operator assistance, please press star, then 0. The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Alexander Hagemann, CEO. Please go ahead, sir.

Thank you very much. And I wish all of you a very good afternoon. Yes, 2024, it's absolutely a pleasure to present to you the results and where we are standing. And like usual, this will be done together between Peter Neumann, our CFO, and myself. 2024, definitely a year of strategy, implementing growth and defining the way forward to 2028. At SECOR, we stay true to our strategy. We stay true to our market focus. So those of you who are following us for some time will find and will know the charts that I'm going to present, although they have been updated to the present state. And SECOR continues to be the fastest growing design and manufacturing partner for advanced electronics in Europe. That is the result of a very disciplined execution of strategy, I have to say, in a very volatile environment, I think, as you are all aware. With pro forma sales of above 500 million Swiss francs and pro forma EBITDA of above 60 million Swiss francs, and Peter Neumann will comment on how we derived these figures. We have achieved, again, the best results in the history of the company. Today is also the result of an unchanged focus since 2017. The focus on those markets that are the most attractive, that are demanding, that are giving us pricing power and strong loyalty of our customers. You will hear in a minute about these markets and they're becoming more and more even in size between healthcare technology, industrial, aerospace and defense. Maybe more important is what we don't do. We don't do we don't do consumer communication and computer, or at least only to a very small extent. Staying away from the commoditized markets allows us to grow, also in a recession, and allows us to deliver superior margins. Let's start with the aerospace and defense markets. Three acquisitions have been helped us building that market on top of what we have developed in Germany and Switzerland over the years. Since 2024, SECOR is the European leader, a very clear leader. And the acquisitions that we have made over the past few years have delivered excellent organic growth. But now, since a few weeks, we are living in a new reality. We are living in a situation where Europeans are forced and willing to invest into their own safety. European Union, European Commission has mentioned the amount of 800 billion Euro of investment required for the rearmament of Europe. And at the same time, we have to become more independent from the US. Why do I mention this? Because the position of SECO is absolutely unique to be the partner to rebuild the European supply chain for defense goods. Healthcare technology, absolutely important market for us. It is a market where C-Core has developed over the years very strong USP. The USP from two areas. Number one, core technologies that are complementary and make C-Core a true one-stop shop. Complementary technologies like hybrid substrates, miniaturized PCBs, micro-molded plastics, or chip-on-board technologies. And the second, driven by acquisitions we have completed in 2024, creating together. We have quadrupled our product engineering resources through the acquisitions in Romania and in Sweden and are now a prime partner of our customers in the medical and the healthcare technology field. And I can tell you that already we see significant new product ramp ups from such products that we have developed and co-created for our customers. Our third core market is industry. Industry is a very diverse market. It is a market with many niches and we are picking those that are either most profitable or fastest growing. Over the long-term trend, despite the recent recession and the construction sector, we see that smart building technologies are important. Sensors are a fast growth application for SECOR and semiconductor manufacturing equipment also. We are very focused on regional customers in the DACH region and UK, and now also in Sweden, striving for regional market leadership. So it is about leadership. It is about leading in defined markets and defined regions so that we can establish economies of scale and a strong partnership with our partners. Number 10 European market position that we are holding in 2024 is a significant improvement. CCOR is the fastest improving as far as market position overall is concerned in Europe. We have mentioned already our number one position in aerospace defense. our number four position in healthcare technology, but also in those complementing core technologies, we are strong. Very clear market leadership in hybrid substrates, number one in Europe, on par with the leading peers in the US. And in miniaturized PCBs, we are a very strong niche player, number three worldwide, for example, for hearing aids with a very strong new business pipeline in healthcare technology. Now, let's move to the highlights of the year 2024. First of all, SECOR has gained significantly in market share. The overall market has been difficult. The EMS market has been shrinking according to the latest numbers by 14% in Euro currency calculated year over year. The result being that after the supply chain crisis and inventory buildups, that there was a strong inventory correction combined with weakness of automotive and also machinery sales, and especially automotive sales, SECOR is not active. With only minus 1.6% organic sales reduction against the backdrop of the market with minus 14, SECOR has organically already gained significant market share. Before acquisitions, that we have completed in the past year have been true value drivers. And they have been value drivers through the integration process. A very disciplined integration that we are typically completing in only very few months has allowed significant cash returns and profitability increases. And I'll comment on that a little bit later. Peter will comment on the financial results. increased profit margins at all levels. And especially the earnings per share jumping more than doubling to six francs 20 are making us proud because they show that the implementation of the strategy actually has worked. In operational excellence, very strong focus was on inventory reduction and that has supported an extremely strong free cash flow generation and very low debt leverage in the balance sheet, and again, Peter will comment on that. Finally, as we have achieved so much over the past few years, Strategy 28, Creating Together, is defining our way forward for the next few years. Let me comment on the markets. We have seen growth in all of our core markets. However, most important has been the growth in aerospace defense, almost doubling in revenue. But also the other core markets, medical and industrial, have grown with a small to medium single-digit percentage growth. I should also comment that other markets have grown significantly by roughly one-third, and that has been the result from our acquisitions, where some of the acquisitions had, for example, some business in automotive or consumer area. Looking at the regions where we are, strongest growth driven by M&A, of course, has been Europe outside Switzerland. In Switzerland itself, we have been seeing customers reducing their inventory levels. Therefore, for us, we saw a negative growth of 5%. Asia has grown high single digits, about 9%, and America has grown in the low double digits. So we have seen everywhere outside Switzerland we have seen growth with a focus on Europe. Now, about the two divisions. In our EMDS division, while we have commented that we have truly achieved a breakthrough in the European market through significant growth, 26%, becoming a top 10 player in Europe, and we definitely don't want to end there, and a 31% increase in EBITDA. That has been against the backdrop of very adverse market influences. So the market share gains that I had mentioned already were very real. We have done four strategically and financially significant acquisitions and integrated them. We have quadrupled our product development and, as mentioned before, successfully executed on our operational excellence initiatives. The advanced substrates division, although only less than 10% of group sales, continues to be very important strategically to deliver the technological uniqueness that is so important for some markets like medical. Both operations, printed circuit boards and hybrid circuits, performed very well. We have seen organic growth. Again, in a difficult market, we saw organic growth of 5% and a 13% increase in EBDA, which shows that the actions to improve operational excellence, especially in our PCB manufacturing, are bearing fruits. In hybrid substrates, we have made a first very important step in streamlining our operations by moving the production from the facility we acquired in the year 2023 from AFT Microwave to other locations, and we have announced and will be completing in the next few months the relocation of our own Germany site to WANGS in Switzerland. Our strategy 2028, creating together, is paving the way for what we are going to do in the next few years. Why did we need a new strategy? Since 2017, sales were going up 150%. EBITDA has tripled. Net profit has quadrupled. And we need to amend the strategy. SECOR has become a leader in our industry, and we need to define the way forward. Our vision statement, although it's very short, I think it condenses very well what we want to achieve. and what you are going to see in the next few years. If you are looking at the statement, number one, we are the leading and maybe the only pan-European player in our industry. And pan-European means that we are very local in the strong markets where we are active. So far, that is Switzerland, Germany and Great Britain. We are adding a presence in Sweden and I will comment on that later. we are looking into options to branch out into the French market. The second important element is that we are becoming a design and manufacturing partner. We are offering support for our customers from the cradle of the new product, from the beginning of the product. And that is creating the true strategic partnership that we want to have with our customers. We stay very true to our core markets, healthcare technology, aerospace, defense, and industrial. And we put a lot of emphasis on people matters, strengthening our position as an employer of choice, and absolutely committed and strengthening our activities to operate in a sustainable way. We have defined a total of 21 strategic actions. that can be summarized under eight pillars. And I won't go into detail of those because we have done that at our last investors capital market event in November in Zurich. But as I mentioned, the focus on high growth verticals is key. The transformation into a true creator of products, as I mentioned, being a strong design partner for our customers is important. We have developed a business excellence model, which is quite unique. which is capturing performance elements everywhere. The synergies between our divisions are extremely important. And therefore, the advanced substrate division is a true high-tech differentiator also for our EMS business. We continue on M&A, and we'll comment on that. We are strengthening our position as employer of choice and as a sustainable company. Of course, and that's definitely not least, financial value creation is a focus where we have identified actions to drive financial performance. Let me again talk about M&A. We are still in a very fragmented market. Many of you know this. We are in a fragmented market, a market that is returning to growth with high cost customer loyalty and strong economies of scale. This is the market that stands for consolidation and we are maybe right now the biggest driver in Europe for consolidation. And that has been a successful strategy so far because we are selective, because we are disciplined, because we are engaging on all levels of management and because we are very focused on disciplined integration. So far, Our track record shows that we have acquired 208 million Swiss francs of revenue since we started that strategy in end of 2021, contributing 25 million in EBDA. And we had cash outlays of roughly 130 million Swiss francs to achieve that. So this is, as you can see, roughly five times the EBDA that we have acquired. More important is what you see in the lower half of the chart. Revenues post-acquisition have grown 15% of our targets. Profitability, almost 50%. And free cash flow generation has been so strong that more than 40% of our net cash outlay has already been earned back by the targets that we have acquired. This is what we mean when we are saying that we are generating

value through our m&a strategy with that i want to hand over to peter who is presenting the financial results thanks a lot alexander um let me dive a bit deeper into the financial results of 2024. first a small reminder up front we had announced in june 24 a change in accounting principles we are now offsetting goodwill inequities versus amortizing goodwill. We transparently disclosed the impacts and over the rest of the presentation and in all our reporting, we stated the path to make it on a comparable basis. Here, as the question came very often up, here is the long-term view on a restated basis across all key measures of the P&L. Now, let's dive into the long-term view of SICUR. As you can see, there are a couple of points that are very important. First, we have been driving organic and inorganic growth in a combined way, making us the fastest growing player in very highly attractive industries. Secondly, if you look back versus 2020, we have more than doubled in terms of revenue and tripled in terms of EBITDA. And I think last but not least, as you see this on this chart, it has been a very consistent delivery of top line and bottom line progression and margin progression. Now, 2024 results. Overall, the financial highlights are excellent across all key areas. Our strategy really comes alive in the numbers. Revenue is up 23%. Organic growth significant above market despite a decline of 1.6%. And what I think is really nice to see that organic growth has been picking up. In the fourth quarter, we already have been growing back 4% organically. Second half growth, organically, 1.2. And then we had a small impact of the negative FX and obviously a large impact of M&A. EBITDA and EBIT margin progression ahead of top line as we're building scale. Net profit significantly up as we don't have anymore some of the negative one-time impacts we have seen in 2023 on tax and ethics. Last but not least, free cash flow is an absolute new record. We have been delivering 61 million of free cash flow, up 132% versus last year, as we have really been able to bring down operating networking capital to below 25%, so to our target levels. We are reporting two divisions, the EMS and the AS division. The EMS division is the vast majority of our business with 91%. This is also the last acquisition in 2024. They're all completed, and this is also where we have seen the vast majority of our growth. In 2024, on the other hand, I want to highlight that our AS division had a very strong progression, both growing organically as well as recovering profitability. The ASB division is small, but it's a critical division as it really gives us a technology advantage mainly to medical and A&D customers. If you go into the P&L details, first you can see material expenses remain the biggest cost block with 50%. This is also, as Alexander and I showed, why our M&A strategy in the scale we're gaining is delivering significant EBITDA pickup because we are able with our scale getting synergies on the 50%. Now, I mentioned EBITDA and EBIT progression ahead of top line as we're building scale. Now, if you look down on net profit, this is where we had the biggest progression and the biggest dump. It is really from two reasons. The first one is that FX has normalized. We had, in the previous year, a hurt of 4.1 million. This year, in 2024, we had a small help of 1.4, so a real swing of more than 5 million, driving the financial results in terms of 2023 to 2024. And secondly, income tax normalized. Last year, we had significant one-time impacts as the UK tax rate, for example, was increasing. So overall, this is driving net profit and also it's a more normalization of the structural P&L in this area. Looking at revenue and revenue contributions, you see here that we had significant benefits of more than 100 million from the acquisitions. We have closed in 2024, the biggest being the TTIOT Solutions acquisition. also from STS, Evolution, Medtech and Nordics engineering partners. We continue to see the Swiss franc strengthening against most major European currency in the US dollar. And then you see here the organic decline that we had in the EMS, partially offset by the top line growth in the AS division. Now, if you look into it, and this is very typical for an M&A strategy, there are various one-time effects. Hence, we thought it is very important to give some performer perspective. As you can see, EBITDA in 2024 was impacted by really by a lot of one-timers. The first one being purchase price allocation effects that are really swings between the P&L and balance sheet. In a normal course of business, we would have seen higher profitability here. Secondly, as you recall, we have some one-time costs because we had the OEP monetary offering and also some M&A projects that we abandoned. So, hence, overall, this is one-time costs that are not structurally in our opinion. And last but not least, we also announced the closure of the Ulm site to optimize our footprint. And not most of acquisitions were coming over the course of a year. If you include all of these acquisitions per former as of 1st of January, so the 12-month view, then we would have added another revenue of 23.6 million and EBITDA of 1.3. So this would give us then our view of 504 million revenue and EBITDA of 62 million as for the closed acquisition 2024. Now, we had also a significant subsequent event. We closed the acquisition of Perfecta. So, if you then take into account all acquisitions that we have made in 2024 and up to this point in time, we would be on a pro forma basis at 526.7 million revenue and EBITDA of 64.1 with a very attractive margin of 12.2%. This is also what we believe is very important because this is where we are structurally in terms of the size of the business at this point in time. Some more details on the balance sheet. Our balance sheet is very healthy with net debt remaining pretty much stable at 44 million in 2024 versus 2023. And as we have been basically growing, driving profitability, we managed to reduce our leverage to 0.74. We're really ready for continuation of our growth strategy and have available funding of worth $150 million to continue to grow via M&A. Equity improved also to the net earnings of $27 million, but more than offset the goodwill that was booked in equity of $24 million. Some words on the cash flow statement. It is obviously the free cash flow excluding acquisitions of 61 million is a very, very strong performance. It's also fascinating to see that the 61 million that we have as free cash flow excluding acquisition is more than offsetting the cash outlay that we had for acquisitions of 55 million. So that's one. And secondly is If you look into what the drivers, and this is important, you see here that half of it is coming from the changes in net working capital. We have really worked with the operations team on driving down net working capital. You see here a help of 27 million. If you look at it also, the 61 million, if you strip out the net working capital, we are very nicely above our 50% conversion of EBITDA to free cash flow. That is the going levels of conversion we would expect. I mentioned the normalization of operating network and capital. We had a very favorable development. Marco Cacchile, our chief operating officer, and his team have done an excellent job together with all our sites to normalize our network and capital below our target levels of 25%. It is clear that we will continue to optimize our operating network and capital, but the future improvements will clearly be more moderate versus what we've seen in 2024. Topics, we are at 3%, and we will continue to remain in our target levels of 2.5% to 3% moving forward as announced in our 2028 strategy with our midterm goals. return on invested capital we like this measure it really brings our our key elements and drivers of our business business together we have focused on one set on optimizing investing invested capital invested capital has been with 255 million been pretty stable despite all the acquisitions despite all the growth of the size of the business At the second, we have stepped up, as you can see, EBIT from 29 to 38 million, driven by, on one side, the absolute growth, and secondly, obviously, by the margin improvements that we see in EBIT. And these together, this magic of keeping invested capital stable and step-changing our EBIT drives when we step up in ROIC to close to 15%. We have also some perspective on the capital structure, number of shares and earnings per shares. You can see here that the average number of outstanding shares remain pretty stable at 4.4 million shares. But we saw that with the conversion of the managed convertible bond by OEP, we simplified completely our share structure. You see only 113 outstanding managed convertible bonds. And really, our number of registered shares being now 4.3 million, outstanding registered shares being 4.3 million. So overall, a very clear simplification of our capital structure. And you see here also nicely the earnings per share, 6.2 earnings per share, up 134% versus a year ago. Really, and I think this is when you go to the next level in terms of progression, you can see very nicely next You can see here very nicely the long-term trends. It is very clear that in M&A, the results always come time-delayed, and you see now our growth strategy showing fruits and kicking in. but at time delayed as mentioned. So you see how we've been gradually from 1.4, 2.7, some dilution as we issued the convertible bond, but now we're getting into the fruits of gradually building up earnings per share as per the plan. We have completed four M&A acquisition in 2024. Please note these four have been STS Defense, Evolution MedTech, IoT Solutions, and Nordic Engineering Partners. The net of these four acquisitions was a goodwill of 24 million, as mentioned, that was offset in equity. We had a net cash outflow of 55 million, and M&A added 41 million to our net assets in the balance sheet. Please note that Profectus was a subsequent event, so none of our 2024 numbers includes any impact from the Profectus acquisition. So that was a bit the highlights of 2024. Overall, an excellent year with very strong financial performance across all measures. Now coming back to our midterm targets, if you look at our midterm targets as shared in the Capital Markets Day, We want to, under the umbrella of establishing a pan-European leader, we have set out the goal to achieve an organic growth over the next four years of seven to ten percent per year. We want to achieve above a billion revenue with margins at current levels. As noted, this is also driven by some of the M&A. That's why we have a wide range, why at this point in time we already above the midpoint in terms of profitability. Now, if I look into this in the perspective of the past four years' performance and the future four years' midterm objectives, we have been growing about 22.5%, organically 8.3%, inorganically 16.7%, and we had a negative FX over the last four years. This puts the objectives into perspective. As you can see, the future is in all areas slightly below what we have delivered in the past. It also gives us a very strong confidence in achieving this. The core pillars clearly will be that we will be a pan-European player, including design and manufacturing. We have a very strong financial foundation to do M&A, 150 million of firepower, And really, overall, it's a continuation of the growth path and the strategies as we have already implemented in the last four years.

Thank you very much, Peter. So as Peter has said, it has been an excellent year. And of course, we're asking ourselves, where are we going? We are living in a volatile environment, as we all know. However, we should state that this is not only creating problems, these are also times of opportunities. Opportunities, specifically in the markets where SECUR is active, we all heard about the investments that have to be done into our safety, but also investments that have to be done into infrastructure. So these are times of volatility, but also times of opportunity. We are seeing that after a slight organic decline in sales, that we can expect a normalization in 2025. We have already seen some very modest organic growth in the second half, as Peter has commented, and we expect the organic growth to continue in the year, not only in the aerospace and defense market, but also in markets where the bottom has been reached as far as the inventory cycle is concerned, for example, in medical devices. We will have, and that is the jump-off point that Peter has mentioned when he referred to our pro forma sales 2024, consolidation of acquired companies will lead to an increase in sales of earnings because all these businesses are included, will be included for a full 12 months. So that is why we are seeing a guidance for the full year of 520 to 560 million Swiss francs. And let me comment on that. We are looking here at the jump off point, which is a little bit above 520 million Swiss francs. Performer 2024 sales. We are expecting a further strengthening of the Swiss franc. And we are expecting low to mid single digit organic growth coming back. EBITDA margin we expect to be very similar to what we have seen in the last year. Now, we have also issued a release this morning that has been a timing coincidence on our offer to acquire certain businesses from Eolan France. The timing is driven by a court administered process. The Paris court has opened On Monday, the judicial reorganization proceedings for several of Eolan France's business. Who is Eolan France? Eolan France is one of the market leaders in the country and, very importantly, with most business in our core markets. So Eolan France is strong in aerospace defense and other regulated markets, markets that CCOR is really strong in. We have made an offer to acquire seven sites in total, five manufacturing sites in France and two in Morocco. And these sites would add about 125 million SPURs of profitable sales to SECOR. Now, this is a public process and a non-exclusive process. Therefore, it is not guaranteed that this transaction will happen. But there is information in the public domain. This is why we are informing you and have informed everybody this morning. That is also why there is no contribution in sales and profits included in the 2025 guidance. So the contribution, should we be successful in integrating EOLAN and acquiring EOLAN France, this will be on top of the guidance that we have given. With that... I want to thank you very much for your attention and we open the podium for questions.

We will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 on the telephone. You will hear a tone to confirm that you have entered the queue. If you wish to remove yourself from the question queue, you may press star and 2. Questionnaires on the phone are requested to disable the loudspeaker mode eventually to turn off the volume from the webcast while asking a question. Anyone who has a question may press star and one at this time. The first question is from Dominic Felges, NZZ. Please go ahead.

Yes, good afternoon. I hope you can hear me. Yes, we hear you very well. Good, thank you. My question would regard the defense business. Would you maybe elaborate a bit on that, how you expect it to develop? I think I understand that you have doubled the revenue most recently together, I understand, with aerospace, but maybe you can be a bit more specific about defense, how big this business is now in terms of revenue and how big it could really become within the next few years. And one other question is then, I mean, you've mentioned this is, of course, an industry where loyalty by customers is high, where you have enjoyed pricing power. But what are maybe the challenges also in defense? Thank you.

Thank you very much for your questions. Yes, the defense business is the large majority of what we are showing inside the aerospace and defense market. So it is a business that is already well above 100 million Swiss francs. So in itself, it is above 20% of SECO group revenues. It is a very diverse market. It is a business due to our market leadership where we are supporting most of the major European companies active in that field. And as some of these companies are public companies, it is known what they are having in increase, especially in the order book. Now, the growth in that market, this is due to the clear acknowledgement that Europe needs to become more independent in keeping Europe a safe place. That perception has started in 2014 after the hybrid war that was started in Ukraine and has since evolved. And the market is a very long-term market. All projects are taking extremely long. So I would say that today we are at the beginning. We are only at the beginning of the growth that we are really seeing showing in revenue. Now, What is the biggest challenge? The biggest challenge is to be able to do the growth. And of course, here SICO is in a very unique position because we are having very significant capacity reserves in our factories in the UK, in our factories in Germany to support that business. We have mentioned earlier that our overall capacity is now roughly at 750 million Swiss francs. for all of our business with roughly 520 million utilized. How big could that business become? It's very difficult to say, but I would, and it's too difficult to give a guidance, but I would not be surprised to see a business above 200 million Swiss francs within a few years time. Thank you.

The next question is from Alexander Zinkovich, NWB. Please go ahead.

Hi. Can you hear me?

Very well. Thank you.

Oh, thanks. Congratulations on the results. I have three topics to cover. Perhaps, firstly, could you shed some light on your view on U.S. tariffs and also maybe on global tariff policies in your markets? Secondly, maybe coming back to defense, do the defense opportunities maybe somehow translate into your M&A pipeline? If you could talk about perhaps some white spots which you might want to cover. And thirdly, more for some housekeeping, looking at your tax rate, what to expect there going forward. That would be it.

Okay, thank you very much. Now, as far as U.S. tariffs and global tariffs are concerned, I'm clearly not smarter than any of you here in the room. I can only say that we are, let me say we are long in Southeast Asia and we are short in China, if you wish to say so. We have relatively small factories there and we have very large factories in Southeast Asia. which is a lesser risk as far as tariffs are concerned. Also, our nearshoring is quite successful with our operations in Romania and also in Northern Africa and Tunisia. So therefore, we are not immune. Nobody is immune against the detrimental effect of tariffs that we're going to see. But we are, let us say, we are hedged in a way against these. On defense M&A, of course, we have a very deep understanding of the defense market in Europe for electronic assemblies in the meantime. And that allows us to be a prime acquirer of businesses also in that field. Of course, you will not expect me to comment on our existing M&A pipeline. Let me only say it is very alive, this pipeline. And as I've mentioned, the activities around Eolan France. They are already also, of course, strongly rooted in the defense and aerospace area. But again, this is not a done deal. This is something which is in the process. On the tax rate, I would ask Peter to comment.

Yes, thanks for the question on the tax rate. The tax rate that you see in our 24 results of 23% is really what I would say the normalized tax rate that you can also use going forward. Obviously, we continue to look for tax optimization, but in principle, this is a very good assumption moving forward. The 2023 rate that we had was rather driven by exceptional one-time effects, negative one-time effects. please use the 23% effective tax rate moving forward as assumption. Thank you very much.

Next question from Bernd Lauks, ZKB, please go ahead.

Thank you. Good afternoon, gentlemen. My first question is regarding your takeover bid for EOLAN. Assuming you would be succeeding and getting the opportunity to acquire the business, do you view that opportunity similar to what you got with the TT Electronics transaction about a year ago? Is it a comparable case for a turnaround investment? The second question is regarding the networking capital. at 24.8% of revenues, you have reached your target level, but maybe you have a new target now, or can you give us an indication what additional funds could be freed as a result of tighter working capital management? And the last question, You had a very strong margin in the second half of 2024. Is there any reason that this has been somewhat impacted by one-offs or is it just a favorable mix and good execution that may also reoccur in coming years? Thank you.

Thank you very much, Mr. Lox. I will focus on the first questions and defer for the two other ones to Peter. Now, of course, the takeover bid for Irland France, it is what it is. It's a takeover bid for now. And therefore, it is a little bit early to comment in detail. Now, this is part of a core administrative restructuring process. So what we have seen is we have seen a business here that has very solid customers and that has good factories. And we believe that we will be able to restructure the business in a positive way. And that is why I commented that there will be a positive profit contribution from the beginning. Now, will it be exactly like what we did in TT? Maybe not. I assume it will be taking longer to achieve the level of margins that we have. So the cash outlays, of course, In relation also to what we are getting, of course, they're relatively low compared to the size of the business. So what you will see, you will see a business that is profitable from the onset, but that will be somewhat dilutive to overall margins at least in the beginning, in the first one or two years, despite, again, contributing profitability.

Okay. Thank you very much.

You're welcome.

Thanks a lot for the question on operating network and capital. We have not set out a new target, but I can reassure you that if you look how we operate, we are looking to continue to optimize further and especially maintain very stringent on operating network and capital that As we are growing back organically, we are not seeing significant investment into it. So we will continue to optimize, but I would expect a more pivotal optimization and progression versus what we've seen in the last two years. And on the EBITDA margin, it's a very good question, because indeed, if you look into it, we had in the first half, we had an EBITDA margin of 10.7. In the second half, we had an EBITDA margin of 13.5. This is driven by mixed effects, and I think the real normal level is probably the average of the two, so we are at the 12%. That's why we have given also the guidance for 2025 in terms of range at similar levels of margin. I would not recommend to use the second half margin as an indicator on the going levels of our business profitability.

Okay. Thank you very much.

You're welcome.

As a reminder, if you wish to register for questions, please press star and 1 on your telephone. Gentlemen, there are no more questions registered at the moment. I'm sorry, we just had a registration from Reto Huber, Research Partners. Please go ahead.

Good afternoon, gentlemen. Just again on the net working capital, could you maybe elaborate a little bit on what exactly did, I mean, how much is this a structural break in the time series, this improvement?

Thanks a lot for the question. If you look into the longer-term perspective, We have been at these levels already in the past. The supply chain crisis, COVID and the supply chain crisis was driving it up and we are back to these normalized levels. So I don't, look, I really think that below 25%, we can operate our business. And so this is not a one-time level, but it's more of a going level. And we will continue to gradually work on improvements on our operating network and capital. Especially in the regulated markets that are growing faster, we usually have lower levels of operating network and capital. It also helps us structurally to improve our percentage moving forward.

Okay, that helps. Thank you.

You're welcome. Thank you for your question.

For any further questions, please press star and one on your telephone. Gentlemen, there are no more questions at this time.

Ladies and gentlemen, thank you very much. Thank you for your interest in SECOR. Thank you for attending this conference. It has been an exciting year and the new year 2025 will absolutely not be less exciting. I think I can promise that to you. We already see it from the external factors that we have. We are doing our best to continue to grow the company along our strategy. So again, thank you very much for your interest. I wish you a very nice and sunny afternoon. Have a good day.

Ladies and gentlemen, the conference is now over. Thank you for choosing Coruscall and thank you for participating in the conference. You may now disconnect your lines. Goodbye.