Geberit AG

Thank you for the introduction and good morning ladies and gentlemen. Welcome to our Q1 results conference call. Geberit had a successful start into the year with strong results. Let me start with the key statements for Q1. First, we achieved the mid single digit net sales growth despite one working day less. And second, We kept operating margins stable on all levels of the P&L, excluding one-time costs for the closure of our ceramics plant in Wesel, announced in January this year. We booked in the first quarter 14 million Swiss francs one-time costs for this site closure, 12 million on OPEX and 2 million on depreciation level. Let me now comment on our net sales development in more detail. Net sales grew by 5%, both in Swiss franc and local currencies, to 878 million Swiss francs. This growth was fully driven by volume and a slightly negative price effect on net sales price level. The small negative price effect on net sales level was caused by two factors. First, the technical reason. We increased sales prices as of April as announced. However, we increased customer bonuses already as of January this year as this is regular market practice. This difference in timing led to a slight negative price effect on net sales level in Q1. Secondly, we selectively adjusted prices for selected product categories in Switzerland this year due to the appreciation of the Swiss rank over the last years. The strong volume growth in Q1 was driven by a the strong development of new products and b pre-buying by wholesalers in anticipation of the April sales price increase. We come now to the regional development. All growth figures refer to growth in local currencies. In Europe, net sales increased by 5%. Net sales increased in all sub-regions except Western Europe, which was negatively affected by a marked decline in France. In Middle East Africa, net sales increased by 15%, driven by Turkey and South Africa. In America, net sales increased by 4%. Net sales in Far East Pacific declined by minus 1%, driven by declines in China, almost fully offset by strong growth in India. Let me now comment on the sales development per product area, which all showed a similar sales dynamic last quarter. Installation and flossing systems grew by 6%, while piping systems and bathroom systems increased by 5%. I will now comment on the operating and financial results. I'll start with the ABTA development. ABTA in Swiss francs and local currencies increased by 1% to 277 million Swiss francs. The ABTA margin reached 31.5%, decreasing by 130 basis points, which can be fully attributed to already mentioned one-time operating expenses of 12 million Swiss francs, related to the site closure in Wehl. Excluding this one-time effect, the ABDA margin in Swiss Franc reached exactly previous year's levels. The positive effect from the operating leverage was offset by mainly two factors. First, a 3% wage inflation and second, 36% higher energy prices. Direct material prices were basically on previous year's level and did not have a material impact on the margins. EBIT margin reached 27.1%, a decrease of 150 basis points, also fully driven by the planned closure in VETL, which amounted to 14 million Swiss francs on EBIT level. Excluding these one-time charges, the EBIT margin would have reached exactly previous year's level. Also, the net income margin would have reached exactly previous year's level of 22.7%, excluding the one-time closure costs. Earnings per share reached 5 Swiss francs 69. Excluding the effect of the closure-related charges, EPS would have reached 6 Swiss francs 05, an increase of 6% in Swiss francs. We also continued our share buyback program in the first quarter. In the first three months, 71,000 shares were bought back for a total amount of 37 million Swiss francs. Let me now comment on our outlook, which does not differ from our market outlook given at our four-year analyst conference in March. In Europe, We still expect a slight decline in new-build activity, with building permits in Europe down minus 2% in the full year 2024. This decline is offset by a positive renovation market, as indicated by several indicators, for example increased real estate transactions. In sum, we continue to expect overall building construction demand in Europe to stabilize in the course of 2025. Outside Europe, we expect a mixed picture for the building construction industry. We expect in several markets, for example in India or the Gulf region, a strong demand. Other markets, for example China, will be in a decline, mainly driven by the residential sector. On the direct material side, we expect prices in Q2 to be on the level of Q1. In terms of operating expenses, We expect further charges related to the basal plant closure, related to the social plan, retention, transfer costs and depreciation in 2025 and also 2026. Let me finish our outlook with a trading update for April. Net sales were like for like mid single digit above previous year's level, supported by order deliveries from Q1. Please also keep in mind that Q2 this year has one working day less than Q2 last year. Let me now briefly comment on the GEPRIT priorities this year. We will continue to have a strong focus on new products this year. For example, the new Duofix installation elements, but also important new products introduced over the last years, like FloFix, Maples Therm, and the new Shower Toilet Alba. Other important initiatives this year are dedicated sales activities outside Europe and in the area of IT and digitalization. We will continue to invest in our four dedicated sales initiatives in emerging markets, namely in India, Egypt, Saudi Arabia and Vietnam, by strengthening the respective local sales organizations with additional headcounts and targeted marketing efforts. Secondly, we will further invest into IT and digitalization specifically into AI initiatives and digital marketing efforts. In total, we are increasing our operational expenditures by 20 million Swiss francs this year for these initiatives. These expenses are ramping up in the course of the year. Let me close our introduction with a short summary and our key messages. GIBRID delivered strong results in the first quarter. with a mid-single-digit net sales growth driven by a strong development of new products and pre-buying of wholesalers in anticipation of the April price increase. Operating margins were constant on all levels of the P&L, excluding the one-time costs related to the vehicle plant closure. This means that earnings per share, excluding these one-time charges, grew in line with top line. For 2025, we continue to expect stabilizing market demand in Europe and a mixed environment overseas. AG is well prepared to continue its outperformance in this environment, as already demonstrated several times in the past and also last year. Our confidence is based on the fundamental need for our products, our resilient strategy and business model, and our long-term focus and track record. Thank you for your attention. We are now ready to answer your questions.

We will now begin the question and answer session. Anyone who wishes to ask a question or make a comment 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. Participants are requested to disable the loudspeaker mode while asking a question. Anyone who has a question may press star and 1 at this time. Our first question comes from Elodie Rahl from JP Morgan. Please go ahead.

Hi, good morning. Thanks for taking my questions. So, first of all, I was wondering if you could give us a bit of color about how much you think you are outperforming your underlying markets, in particular thanks to the push through of your new products. And if you think that the trend that you have reported so far, including April, is what you think you can deliver for the full year. And second, you said margin was flat, excluding the one-offs. Is that also something that you think is sustainable for the full year? Thanks very much.

Thank you for your question. With regards to the market outperformance, one quarter is always too short to assess or to get evidence how much we have outperformed the market. But I would refer to last year, where we have been growing with 2.5%, while the market was clearly down, especially in Europe, mid single digit. And I think one of the main reasons last year were new products, why we were able to outperform, and I would assume without having number evidence for the first quarter, this was also true this year in the first three months. Second question, Tobias, please start.

To the margin, like always at that moment in the year, we're not giving yet an indication of the fully margin expectations.

The next question comes from Ilaria Buricelli from Goldman Sachs. Please, go ahead.

Hi, good morning. It's actually Daniela here. Thank you for taking the questions. I have three quick questions. First, I wanted to clarify on April, on your comment. Was that a volume or an organic growth comment, meaning is the price increase over and above the mid-single digits? I'll ask them one at a time, so I'll ask the others after.

April includes now the price increase, but keep in mind that part of the April sales were driven by deliveries from Q1. with still old prices, so it's kind of a mixture of old prices and new prices in April. But the predominant part obviously was volumes.

Okay, got it. And then you've mentioned sort of in one queue that energy prices were increasing. I know you commented raw materials, you gave a guidance for two queues, but what are you seeing on energy prices for the rest of the year?

For the rest of the year it's very difficult to say Just short term, we expect that there is certain downward pressure on energy prices. Already in March, they were a little bit lower than in February. We also expect April to be a bit lower. But keep in mind that we have still a low base from last year. So compared to Q2 last year, energy prices most probably will be still above last year Q2.

Thank you. And then just a question in terms of the level of customer bonuses. Can you comment on how this has trended over recent quarters and as it increased is the same sort of give us a bit of an idea given this was one of the reasons of the net price in the bridge this quarter?

So we didn't do any special new customer bonus increases which we didn't do in the past. A normal behavior that at the beginning of the year you increase the bonus and then you increase lift prices per April and the net effect is then that's what we already talked about the net sales price increase. However, we did not obviously increase sales prices last year. We did also not increase bonuses last year. So this is the reason why this year we have an effect of these normally increased bonuses as of January, which led to a slight negative price effect on net sales level in Q1.

Got it. Thank you very much. The next question comes from Martin Huisler from ZKB. Please go ahead.

Good morning, thank you. I have three questions actually. First of all, would you say that the good dynamic that you saw in piping systems, which was more or less in line with overall sales, can be seen as an improving situation in new construction? Maybe I ask this one by one.

Difficult question or difficult to answer I think for us the main driver in piping at the moment is not maybe a Slight change of the underlying market is still the main driver is our new products because we have seen strong sales in the first quarter again for Flowfit and also Malpess Term, a new metal supply piping system introduced last year. I think this is the more important driver for our sales development than a gradual improvement of the new build market, which is underlying.

Okay, thank you. then the second question is referring to your raw material cost guidance for the second quarter however it looks like if I have a look at the red line it's clearly or the trend is going down am I missing here something or why should it did it change in April for example or yeah what's the reason for that

Well, we simply flexed flat for the next quarter, and that's not much more to add to that. Also, one thing to take into consideration on that page is the scale. It starts at 120, so these are really very small changes you're on here. We on purpose did that to exemplify the changes, but take the scale into consideration when analyzing the picture.

Maybe a more important question on the sentiment in Germany. Obviously, I think we saw a certain bottoming out and I think at the ISH at least the companies that I met or the different installers and so forth they were a bit more optimistic in March for the trend of the year. Has this continued according to your view that let's say not maybe in numbers building permits are still very weak but sentiment wise there is a certain improvement in the market going on. What's your view on that?

We agree on that view. The sentiment has improved in Germany. I would also say on the number side you see one or two positive signs. Building permits in January and February this year for the first time did not decline anymore on the residential side so they were stable. Also, if we look at the latest number, which we have from the backlog for plumbers, which has been stable, it's at 550.4 weeks at the moment, which is a stable level compared to Q1 last year. So it's the first time that we didn't see a decline for two and a half years, also on the backlog side. So I would say this positive sentiment, which you were talking about, is even underpinned with one or two numbers and facts.

Okay, thank you.

The next question comes from Yacine Touhari from Onfield Investment Research. Please go ahead.

Yes, good morning very much. Thank you very much for taking my question. You're talking about the mid-single-digit organic growth in April, but I understand it includes some sales from the first quarter when clients bought in advance of the price increase. So my question is, when you're looking at your order book, do you see a slowdown in May and June? as you don't have the pre-buying effect. And also, when you are talking about the negative working day impact, is it in May or June?

Unfortunately, our order book is very short-term. We don't have an order book for June. Our order book is only around two weeks. That's a challenge. Therefore, I can't answer your question. We don't have so much looking ahead into the market.

And the working day impact, is it in May or June?

I'm sorry they're working a bit so that the mid-single-digit growth is like-for-like this means it's adjusted for currencies and it's adjusted for working days technically we had a working day left in April but the like-for-like growth means currency adjusted and for working day adjusted this was a mid-single-digit growth in April and the last question would be on the foreign exchange I think the Swiss front has been very strong what kind of FX impact do you see for the second quarter is it

a mid-single-digit decline in currency. Is it something that seems reasonable to you?

We're not making currency forecasts. I mean, that's probably the most difficult question you can ask anybody. And also, you know... Yeah, go ahead.

When you're looking at the current level of currency, I'm not asking you to do forecasts.

Well, clearly that has a big impact on the top line and on the absolute figures. However, in terms of margin, like always, we have an almost perfect edge, so it should not affect margins.

Thank you very much.

The next question comes from Martin Flueckiger from Kepler Fibro. Please go ahead.

Thanks. Morning, gentlemen. Three questions, if I may. Firstly, on bathroom systems, 5%, that's quite an unusually high number. Is that driven by the pre-purchases, or how do you explain that solid performance? That's my first question. I'll take one at a time.

Two drivers. One is pre-buying for the other two products as well, ahead of the price increase of April. And secondly, a very strong development of our shower toilet album.

Okay, makes a lot of sense. Thanks. And then on your EBITDA margin bridge, I was surprised to see that the so-called other cost effect was only 100 bps. That seems unusually low. Is there a particular reason for that?

No, we've cited the two main reasons that are included in there, which are the energy prices and the wage inflation. A minor effect also then comes from the 20 million additional costs that Christian mentioned in the call and already mentioned that the full year results. But these are only ramping up, so there was a minor effect. So no, I think it's the absence of anything else that makes it such a low figure.

Okay, third one. Talking about one-off costs, can you provide a little bit more granularity on how you expect these to pan out over the coming quarters and into 2026, please?

So in terms of yearly development, that's still a bit difficult to tell right now. But I can give you some hints. So on the APTI impacting costs, so above the line, there's still the ongoing negotiation with the social partners, their retention costs, and these are clearly accruing over time on a linear basis. This product and machine transfer cost, these will rather incur in 2026. And then other factory and site closing costs, which are then as well rather towards the end of the period, so 2026. Overall, 25 and 26, we still expect around the 25 million euros we laid out. So roughly said, all which is social costs and first part of machine and transfer costs this year, the rest then mostly product and machine transfer costs then next year.

Okay, and in terms of numbers, because we need to run spreadsheets, I'm afraid, can you give some guidance on what that means in terms of total one-off costs, 25 and 26?

Yeah, no, the splits between this year and next year, I think we can provide with the half-year results.

Okay, thanks.

The next question comes from Patrick Reifert from UBS. Please go ahead.

Thanks, good morning everybody. I also have three questions. The first would be a follow-up on the net pricing effects in Q1. You already talked about the customer bonuses, but can you also add a bit more color on the Swiss price adjustments, especially which product categories were impacted?

They were very selective, I don't want to go into too much detail, also due to competitive reasons, but they were mainly related to products obviously which are manufactured outside Switzerland. One example is an important product category which is fully manufactured in the Euro area in Germany, and that was the main reason why we selectively adjusted prices, because we have been taking into account the appreciation for Swiss francs. over the last years to avoid cross-border business. So it was very selectively, but I don't want to go into too many details which kind of categories we decreased prices.

And would you say these two effects, customer bonuses and Swiss price adjustments, were more or less equal contributors to the net pricing effect?

To be honest, I don't even know. I don't know. Okay. Okay, okay.

Then the second question would be on the America performance. Because you talked about the pre-buying ahead of price increases in Europe. Was there any pre-buying ahead of tariff uncertainty in Americas that helped?

To the extent that we are aware of, I would say no. because we did a regular price increase in the US, a usual one which was not tariff based so far. That might change in the course of the year, but the price increase so far was a normal one, so there was no extraordinary tariff-induced pre-buying so far in the US.

Okay, great. And then the last question would be a follow-up on the one-offs. I think what you described in Martin's questions earlier was mostly on the OPEC side. I think the original indication was also for the 15 million of write-downs, which could occur in H1 potentially. In Q1, we only had about 3 million. So is that the larger number than in Q2? Or is that also hard to say at this point?

We don't expect in Q2, we don't expect a significant figure on the depreciation. That figure actually in impairment could be lower than the announced 15 million for potentially two reasons. One is if we're transferring more machines to other plants and that is an investigation which is ongoing but will take the rest of the year and as long as that is not clear the impairment also is not done. And the other one is if the expected land sale can be netted with the impairment need which is possible that would also then reduce the 15 million as that was a gross figure originally. This as well, more detailed then with the H1 figures.

Okay, that's very helpful. Thank you very much.

The next question comes from Arnaud Lehmann from Bank of America. Please go ahead.

Thank you very much. Good morning, gentlemen. A couple of questions, please, remaining on the competitive environment. I mean, obviously, you're doing very well with innovation and you mentioned your outperformance. We are also seeing some of your competitors being quite proactive with innovation. I'm thinking in particular of Lixil slash Grohe, who's been launching a few new products. So can you please qualitatively comment on the competition? Do you think you're gaining share? Do you think that their innovations are weaker than yours? Anything you can say to help us understand. And the second question, which is slightly related, uh Grohe has been talking more and more about the repeat business they can get from cartridges uh so systems like for example in water purification that needs to be uh that needs to be renewed regularly is it something that you already have in your product range or is it something that you're thinking of expanding going forward thank you very much so i think

logical and by nature that also competition innovates and this is good for the market this is good for the industry we are innovating if I take the ISH this was the fair where this is the most important fair for sanitary products took place in march a global fair, and if I would try to summarize feedback from customers, I think we don't have to hide ourselves if it comes to the question who is the most innovative company. I don't want to go into detail comparisons with other competitors, but we feel very confident with the new products we have launched recently, the last one, two years, and also the ones we have launched this year, and we also feel confident with our innovation pipeline. if we have looked at our competitors at this fair in Frankfurt. So I think we are well prepared and we can claim, it's a bit of a difficult word, but I think we can claim we are clearly innovation leaders. Number two, we a kind of a repeatable business we don't have in our portfolio products or elements of products which you need to replace after a certain point so there is no replacement business when we sell a product it's installed hopefully for decades and then maybe in a renovation case then you renovate and then you replace the product but we have no products which are based on the business model of a selling replacements or rechargeables. There's a small, small exception if it comes to shower toilets where we have some consumables which we are selling, but this is a very, very low share and this is not a part of our business model.

Very clear. Thank you very much.

The next question comes from Christian Arnold from OdoBHF. Please go ahead.

Good morning, gentlemen. On the extraordinary costs, I mean in March you were guiding for a total amount of 14 million, thereof 15 million write-off. That has not changed as a total figure, right?

That is correct, that has not changed. What I hinted at before is that the depreciation parts of the 15 million could come lower than that. for two reasons one is more machine transfer potentially and the second one is if we are able from an accounting point of view to net the expected gain from the land sale with the other depreciation that as well we should have more clarity in the course of the year okay and comparing that with the 14 million you booked in q1 I mean then

It looks like that this 14 million is actually quite a big number. I mean, thinking about the two years process. So for the quarters to come, we can clearly calculate with a lower negative impact.

Yes, obviously, it's not ramping up. The only thing that ramps up gradually are the retention costs. which you accrue with every month. The bulk of what has been booked, so the 12 million, the bulk of these 12 million are the first part of the social plan, and that one is booked as a one-off, and you need to book that at the moment that it's decided and announced, which we fulfill. So according to IFRS, we have to fully book our expectation at that stage on that moment, and that was therefore reflected in Q1.

Okay. Then on the shower toilets, you were mentioning the very strong development of Alba. So that means that you are clearly growing double-digit again in that product line, right?

We are growing double-digit on sales level and we are growing significantly double-digit on volume level in shower toilets driven by Alba.

okay and this double digit there's no one as a first digit I assume double digits means there are two figures exactly so there's no there's no one as a first digit number right

You mean that the volume growth, I can tell you, is not a 1. No, it's not a 1. The first digit, yes. Correct. It's significant double digits.

High double digits.

But maybe if I may add, Mr. Arnold, if I may add a comment. What is also important, if you look at the ALBA volumes now, quarter by quarter, and starting with the third quarter last year, that was the first normal quarter after the introductions. We see also a very nice growth now only for ALBA over these three quarters. So also the dynamic of ALBA is increasing.

And in terms of countries, maybe? I mean, is it a German-Swiss theme, this ALBA, or you have a broader footprint here?

No, I would say that's really across Europe. Obviously, the numbers are higher in the German-speaking countries, but if you look at growth compared to what we have already, what we already have in terms of shower toilet sales in these countries, it's a very broad growth across Europe.

Okay. And maybe the last question, I'm thinking about I mean, what you mentioned about the selectively reduced prices in Switzerland and the customer bonus increase, which also had a negative impact on pricing in Q1. So that means your volume growth in Q1 was actually at 6%, 7%, right?

Correct. And please also keep in mind we had one working day less. So if you had the missing working day, you are at number 7% around, I would say, volume growth test.

Thank you.

The next question comes from Remo Rosenau from Helvetische Bank. Please go ahead.

Thank you. Just one question left here. Coming back on the selective price decreases in Switzerland, does this also mean that you did not implement any price increases as of April in Switzerland or did you still do that in other product categories?

That's a very good question. We did some sales price increases in some other categories. In some, we kept the prices stable, and in some selected, we decreased. So it was a mixed picture of price changes in Switzerland, depending mainly on the origin of manufacturing.

Okay, great. That's all from both sides.

Thank you. You're welcome.

The next question comes from Charlie Fehrenbach from AWP. Please go ahead.

Good morning, gentlemen. I'm not sure if I missed your wage inflation guidance you usually do for the full year. Thank you.

We remain at 3% to 4%.

Thanks a lot. Welcome.

The next question comes from from Bernstein. Please go ahead.

Hi. Thanks for taking my question. So I have a couple. So in terms of the wage inflation, you mentioned you were at 3% for Q1, and you are confirming 3% to 4% for the full year. And my second question is on US tariffs. I think you alluded to it previously. How much of your... US sales do you actually import so what would be the direct impact of any tariffs any potential tariffs on your sales and actually a third one if I may in terms of your costs so please can you remind us of your hedging policies on energy and your raw materials thank you I start with question number two Tobias will answer question number one and number three

We have, as you know, a share of CIS around 3% in the US, and out of these around 100 million Swiss-ranked CIS, the vast majority is locally manufactured. We have two plants in the US, so it's a very small part, basically the concealed cistern, our core product, which we import from Europe. So it's a very low share of import products. in the US. And question number one.

On wage inflation, as you correctly noted, around 3% in Q1 and higher, 3% to 4% for the full year. The reason is that the wage inflation in Germany this year has only been implemented as of 1st of April, whereas last year was implemented 1st of January. Therefore, that's a slight difference between Q1 and the full year. When it comes to hedging policy on... energy in general, we're not hedging to a very large extent, we're buying spot.

And raw materials?

Raw material, same thing. We sometimes simply do some pre-buying, so we fill our stock for a certain duration, but for your consideration, I would consider that stock spot buying.

Okay, thank you.

Welcome.

The next question comes from Axel Stasse from Northern Stanley. Please, go ahead.

Yeah, good morning, everyone. Thanks for taking my question. I have one remaining. Just on the order intake in April, based on the previous comments, is it fair to assume the order intake was a low single digit up versus last year in April?

Sorry, it was difficult to understand. Can you repeat your question? Sorry?

Yeah, sorry. Can you hear me?

Yes, but it was... Try again, yeah?

Sure. Yeah, sure, sure. So I was just asking about the order intake in April. Based on the previous comment that you provided, is it fair to assume that the order intake was up low single digit versus last year in April?

We only commented on sales, net sales in April. We didn't do any comment on order intakes and we will also not comment now on order intake in April because we just don't know.

Okay, thank you. You're welcome.

As a reminder, if you wish to register for a question, please press star followed by one. We have a follow-up question for Martin Huesler from ZKB. Please go ahead.

Yes, thank you. I have two follow-ups actually. So you mentioned Turkey and South Africa as drivers, let's say, outside Europe. However, you have dedicated growth strategies in Vietnam, Saudi Arabia, and Egypt, among others. So does this mean that those three countries or regions didn't grow as you would have expected? Not at all.

It's just in these regions, quarterly numbers are very much driven by projects. And sometimes you have, in the case of South Africa, just a good quarter because of projects. The same was, by the way, true in Turkey. So that has nothing to do with these initiatives overall. Also, by the way, India, for example, one of these initiatives had a very strong quarter. So don't read too much into that in quarterly numbers in these emerging markets. Too volatile.

Okay, thank you. And then two housekeeping. Am I right to assume that most of the cost incurred as one-off above EBTA was personnel cost or were there any other cost P&L items hit?

No, it's fully personnel cost in Q1. Thank you.

And maybe last one you won't answer, but what were the direct costs for your present at the ISH? Is this like a single to mid-digit million number?

So, the honest answer is expensive. But it was a, I don't know, it was seven-digit for sure. It was seven-digit for sure. But we don't go too much into the details here.

Okay, thank you.

Welcome.

Also, the next question is a follow-up from Elodie Raul from JP Morgan. Please go ahead.

Yeah, hi, thanks for taking my follow-up. So just coming back on the sales development, my first follow-up question is on Q2 comps. Clearly last year, you had said at this time of the year that April was slightly up like for late, but you delivered a 5% organic growth for Q2. So first of all, do you see tougher comps in May and June?

So Q2 last year is a bit stronger compared to Q1 last year. I agree on that. And one of the reasons is that in Q2 we saw some restocking of wholesalers last year.

Okay, then the follow-up is obviously we're trying to figure out how much of the mid-single-digit sales growth you've seen in Q1 and April. is due to pull forward demand and how is it developing given the comps getting harder in the end use?

We would be very happy if we would know the answer to these questions, but we don't know. So that's always the issue that the wholesalers don't tell us how much of their orders was now driven. by technical build-up of stocks or build-up of stocks because of low prices in advance price increases so we only have qualitative feedback truly surely a driver but we can't quantify it because we don't know it okay okay thanks very much you're welcome the next question comes from Martin from Kepler Chevrolet please go ahead

Sorry, I was muted. Just two follow-ups please. Regarding the restocking opportunity going forward, what are your expectations today with regards to the outlook for the next three quarters? I understood your comment from earlier on, but once the price increase impact on the restocking is behind us, which it should be by now or close to, as of May and going forward, do you expect wholesalers to start restocking based on your market outlook this year? That would be my first question.

So in general, I think wholesalers also take into account what will happen in the market going forward because they need to ensure the availability of the product at best cost. So if wholesalers on a broader range believe the market should go up or will go up, I would assume they started to build up their inventories to a certain extent, and the same they did and they will do if the market were to go down. If we talk to our wholesalers, coming back to the fair in March, important wholesalers, for example, in Germany, they have a similar view on the market than we have, that we might expect, especially in Germany, a stabilization of the market in the course of the year.

Okay, that's interesting. And then my second follow-up question is on your pricing comment. You guys have only talked about slight negative price decrease. I was just wondering whether we could quantify that a little bit because from an earlier question, it seemed like it could be larger than minus 1%, which I thought it wasn't. So we're talking about less or more than 1%.

No, it was less than minus 1%, around minus 0.5%. Both effects, the technical effects from bonuses versus sales price increase and the selected price increase in Switzerland, they both together had an effect of maybe around minus 0.5%. So relatively small.

Perfect. Thank you so much.

We have another follow-up question from Yassine Touari from Onfield Investment Research. Please go ahead.

Just a follow-up question on China. Could you give us an order of magnitude of your purchase from China? And as China cannot export to the US, do you see any potential decline in raw material costs from Chinese raw material?

So the biggest share of products or components we buy in China is for China. So we have a very low share of sourcing in China for markets in Europe and also in the US. So that's the reason why we also, from a global perspective, we don't expect any major impact of this tariff war.