Bossard Holding AG

Welcome to our annual Financial Analyst and Media Conference 2025. We are streaming this event and will make it available later this afternoon. Stefan Zender, our CFO, and I would like to guide you through the following agenda. I will start with the Business Review 2024. Stefan Zender will then navigate you through the financials. I will continue with some highlights and of our strategy 200 development, namely an update on our strategic services, our ERP system rollouts and our activities around artificial intelligence before I will close with our focus areas for this year. So let me start with the business review 2024. After two years of double digit sales growth in 2021 and 2022 and the single digit contraction in 2023, we faced a decline in sales of 7.7% last year, mainly caused by a global demand normalization. An incredible effort by our employees in all regions, functions and hierarchies looked for growth pockets in sales and cost reduction potential in our operations, namely in the supply chain to secure our gross profit, which increased over the year. The further recessive trends in the second half of 2024 were countered with global cost reduction programs to ensure a decent profitability. All these activities resulted in an EBIT of 100 million Swiss francs and an EBIT margin of 10.2% in a difficult year with lots of geopolitical distortions and economic uncertainties. Part of our growth strategy is mergers and acquisitions, and we concluded three acquisitions in the course of the year. With Deon Fastening in Antwerp in Belgium, we added a manufacturer of a high-quality brand in blind rivet nuts, Tuptara for those who are familiar, and is a distributor of fasteners with a total of 70 employees and 15 million Euro annual sales. Deont strengthens our customer base in the electric vehicle, railway, and aerospace industries, and enhances our market presence in Europe. The acquisition of Aero Negos in Béziers near Toulouse, France, A fastener distributor with 33 employees and 25 million euro annual sales enforces our market presence in the fast-growing aerospace segment. Aeronegos will enable us to serve tier suppliers to aircraft OEMs in the region, but also in the USA and in Asia. With Ferdinand Gross, we acquired a 160 year old well-established and successful fastener distributor in Southern Germany. The strong customer base in railway and railway maintenance, as well as the expertise of 260 new colleagues and 80 million Euro additional sales will strengthen our market presence in Germany, but also in Poland and in Hungary. This acquisition was signed in 2024, but only closed in January 2025. Therefore, it did not have any financial impact last year. Now, what else did we achieve besides the acquisitions? We delivered on our strategy 200, the sales engine, the operations engine, the cultural and sustainability initiatives. For those that are not too familiar with BossArt, strategy 200 defines our strategic ambition towards 2031 when BossArt turns 200 years old. The strategy and its initiatives are also described in detail in our investors manual available online. On the sales side, we did not lose any major accounts, in contrary, And with the support of our digital lead generation initiatives, we won new customers and projects in sunrise industries. For example, in aerospace, railway, and electronics. We strengthened our customer base through our services, namely smart factory logistics, smart factory assembly, and ATE, assembly technology expert, our engineering services. And as mentioned before, we pursued three strategic M&A opportunities. On the operation side, we successfully introduced our new ERP system, Microsoft Dynamics 365, in nine additional business units. This was not a walk in the park. Hundreds of colleagues and external partners across the globe did a fantastic job in ensuring the rollouts were planned and executed smoothly. Within the area of artificial intelligence, we select the tools, conduct the trainings, and define use cases to increase global internal efficiency, for example, for document processing, or improve customer experience, for example, with automated quoting tools. In order to avoid shutdowns from cyber attacks, we invested in security software and in a global team. In our supply chain, we conducted a proactive cost reduction program to optimize cost. Within our cultural and sustainability initiatives, we followed our long-term plans to introduce systems and programs to improve our HR processes, leadership and learning programs, as well as to enable us to execute on our CO2 reduction promises, scope one and two, and to comply with the global corporate sustainability requirements reporting directives CSRD. So despite the difficult economic environment in 2024, we achieved a decent result and we executed and delivered on our strategy 200 initiatives. Stefan Zehnder, our CFO, will now navigate you through the financial review. Stefan, please.

Good afternoon, ladies and gentlemen. While one is hopeful that we will see some improvement in the economic environment in the second half of the year, 2024 has proved to be another challenging year. Despite the sometimes subdued moods in the industry, I'm pleased to share some highlights that reflect our resilience, strategic focus, and financial stability. We were able to sustain a well-maintained gross profit margin, further demonstrating the resilience of our core business. In a challenging environment, our profitability has remained solid, reflecting the strength of our operations and disciplined approach to cost management. Coupled with this, we generate a strong cash flow, reinforcing our ability to fund growth initiatives while maintaining financial flexibility. Even with the two acquisitions during the year, we managed to maintain stable net debt levels. This underlines our prudent financial strategy and our commitment to balancing growth with financial stability. And we successfully placed our first bond of 200 million Swiss franc with a terms of five years and the coupon of 1.25%, which was used to refinance current credit facilities. This achievement not only demonstrates the confidence the financial markets have in our business, but also provides us with a solid foundation for future investments. The Bossa Group achieved sales of 986 million Swiss francs in 2024, a decrease of 7.7% compared to the prior year, whereas 1.9% were attributable to the depreciation of the appreciation of the Swiss franc. Due to the weak economic environment in 2024, the trend of customers reducing their inventory continued. This further impacted the demand globally, resulting in a negative organic growth of 7%. However, there were signs of stabilization in the second half of the year, notably in Asia and Europe. Despite another year with headwind from the appreciation of the Swiss franc, Bossert achieved satisfactory results thanks to stable demand in several of our growth industries, such as railway, aerospace, and some semiconductor related electronics. Thanks to the gratifying performance of smart factory services, Bossert was still able to strengthen its market position in all three market regions. The acquisition of Dayant Fasting in Belgium and Aeronegos International in France contributed 1.2% to the group's sales performance in 2024. The slowdown in demand impacted the results negatively. EBIT decreased by 13 million Swiss francs to 100.1 million. The EBIT margin declined from prior year's level of 10.6% to a solid 10.2%. A closer look at the income statement shows that regardless of the challenging market conditions, we were able to expand our gross profit margin from 31.7% in the prior year to 33.1%. This improvement particularly mitigated the lower gross profit contribution resulting from weaker sales. The margin expansion was achieved largely through disciplined pricing strategies which were maintained even amidst of a competitive landscape and further supported by a favorable regional and product mix. Compared to the prior year, selling expenses decreased by 3.8% to 139.1 million Swiss francs, driven by several factors. Among other costs, reduced variable compensation, lower travel and marketing activities were the key contributors to the reduction. These measures reflect a more streamlined approach to managing operational costs in response to the market conditions. In contrast, administrative expenses increased by 7.4% to 87.5 million Swiss francs. primarily due to the significant investment in the rollout of the new ERP system in nine business units in 2024. This included higher license fees to accommodate the greater number of system users and expanded commercial support required during the implementation phase. These additional expenses underscore our commitment to enhance operational efficiency, and to support future business growth through improved system capabilities. In addition, we continued our targeted investment inter-digitalization initiatives in the course of our strategy 200. Noticeably is also the significant decrease in the financial result, which amounted to 5.5 million compared to 12.7 million CHF in the prior year. On the one hand, this decline results from lower interest expenses of around 2 million Swiss francs. On the other hand, a positive contribution of 1.5 million Swiss franc resulted from foreign currency valuation in contrary to 2023 when we experienced the negative currency impact. Compared to prior year, net income decreased from 76 0.8 million to 75.3 million Swiss franc, whereas net profit margin increased from 7.2 to 7.6%. The look at the sales development in the individual market regions shows a diverse picture. In America, sales in the financial year 2024 declined by 21.9% to 235.6 million Swiss franc. and in local currency by minus 20.1%. The slowdown in demand mainly driven by the decline in orders from the electromobility and agriculture sector continued throughout the year. The appreciation of the Swiss franc had an additional negative impact on the sales development. In Europe, Overall demand levels remained low over the course of the year, resulting in a drop in sales of 3.2% to 567.5 million Swiss francs. In local currency, the decline was 1.9%. Despite the environment characterized by the economic uncertainty, the railway and aerospace sectors achieved encouraging growth rates, outgrowing the rest of the industries. Adjusted for acquisitions, the sales decline in local currency was 3.9% for the full year, while sales stabilized in the second half of the year. The acquisitions in Belgium and France, with Day on Fastening and Aeronegos International, laid the foundation for further growth in a new market and in the aerospace industry. In contrary, sales in Asia increased by 1.2% to 183.3 million, and in local currency, the growth amounted to 5.2%. Business developments in the regions were still mixed, but increasingly positive over the course of the year. In China, the first signs of growth became evident, and demand in most of the other business units was likewise satisfactory. In India, both have benefited from the Make in India initiative and in Malaysia from nearshoring trends that had in particular positive impact on the semiconductor and electronic industries. Turning to the balance sheet, total assets increased by 4.5% to 844 million Swiss franc, which is mainly attributable to the acquisitions made in 2024. In contrast, the normalization in the supply chains, as well as a slowdown in demand, had an offsetting effect on capital employed. This is reflected in particular in lower inventories, which had a positive impact on our cash flow. Thanks to a continued solid profitability, the equity ratio of 46.5% remained slightly above prior year. The operating net working capital increased slightly year-on-year by 1.3% to 470 million Swiss franc, though was under proportionate considering the two acquisitions made. In relation to net sales, the operating net working capital increased from 43.4% in the prior year to 47.6%. Adjusted for acquisitions, The operating net working capital in percentage of net sales was at 46.4%. As a result of the still solid profitability and in spite of the two acquisitions in the amount of 62 million, net debt increased only slightly from 241 million in 2023 to 245 million Swiss francs. The successful placement of our first bond of 200 million Swiss franc was used to refinance existing credit facilities and will have a positive impact on our future interest expense. The gearing net debt measured against equity was with 0.6 at prior year's level. Net debt in relation to EBDA increased to 1.9 times after 1.7 times in the prior year. thereby also continues to have solid balance sheet ratios, which are within the range of the long term funding targets of a gearing of less than 1.3 and then at that EVDA ratio of less than two times. This underlines the group's continued solid financial position and its ability for further investments. We have continued also in 2024 to invest in various areas in line with our operational and strategic goals. In total, we invested 35.8 million Swiss franc, which is slightly less compared to prior year. Thereof, 3.7 million Swiss francs were spent for office and warehouse maintenance and investments related to ESG initiatives. We invested 4.4 million into smart devices, which we installed at our customer premises as part of our smart factory logistic solutions. 10.6 million were spent for replacement investments in ongoing operations. And we invested a significant amount of 17.1 million Swiss franc in digitalization. The biggest share of this investment was dedicated to the rollout of our new group-wide ERP systems. Looking at the cash flow statement, it can be noted that the lower sales and profit had a negative impact on our cash flow from operating activities before changes of networking capital, which decreased from 104.2 million in the prior year to 99.8 million Swiss francs. The cash flow from operating activities after changes in networking capital decreased markedly from 157.7 million in the prior year to 126.8 million. This is mainly due to the less pronounced decrease in operating networking capital compared to the previous year. Cashflow from investing activities increased from 36.3 to 95.6 million Swiss franc, which largely resulted from the outflow of funds for the two acquisitions. Investments in property, planted equipment, and intangible assets were lower overall in 2024, as noted earlier. Mainly driven by continued solid profitability and the further decrease in operating network and capital, Bossert recorded still a positive free cash flow of 31.2 million Swiss francs in 2024, after 121.4 million in the prior year. Without considering the cash out for acquisitions, the free cash flow amounted to 93.2 million. Given the current economic uncertainties and geopolitical tension, this will influence also our business behavior in 2025. This means we will continue to focus on a solid balance sheet, a robust profitability, and therefore financial stability to maintain our flexibility to invest further into the future. As always, a final word on the dividend. As you know, our dividend policy provides a 40% payout of net income. Accordingly, the board of directors will propose a gross dividend of 3 Swiss franc 90 per registered A share at the 2025 annual general meeting of shareholders after 4 Swiss franc in the prior year. Ladies and gentlemen, with this brief review, I conclude my comments on the financial year 2024. Thank you very much for your attention. Back to you, Daniel. Thank you.

Thank you, Stefan. Besides quantitative achievements, I'd like to deep dive on three qualitative developments within our strategy 200. First, on our strategic services. Second, on our ERP system implementation roadmap. And third, on our artificial intelligence or AI initiatives. The majority of our revenue comes from product solution sales, traditionally offered and sold to purchasing. Our smart factory and assembly technology expert services add additional value to customers. For example, by reducing cost through logistics automation, or by analyzing and optimizing assortments and reducing product complexity. These services are sold to production and logistics, to design and development specialists, or to the C-level, the P&L owners and overall decision makers at the customer. The actual revenue of these services are minor. about 1.5% of our total sales, but they do create value and loyalty and are usually a good entry point to acquire new business or a new customer. Smart factory logistics services support customers to automate their C parts management through our smart bins, our digital scale and label systems, where fasteners are weighed through scales and orders are triggered automatically and delivered as needed. Stock levels are displayed on electronic labels to create real-time and on-site transparency. With this, customers can avoid stock outs and reduce inventory costs significantly. In 2024, with one software platform called ARIMS, and after 30 years of experience with 250 smart factory logistics field experts, We served 1,150 global customers, processed a bit more than 250 million Swiss franc of annual product sales through smart factory logistics systems with almost half a million installed devices, scales or labels, which represented a year on year growth of 5.1%. Smart factory assembly services support customers with digital work instructions at their points of assembly. The services enable customers to ensure high quality assembly, avoiding mistakes and increasing efficiency, particularly in the onboarding of new assembly staff. We have started to develop this service four years ago. It is based on a proprietary software platform called Elam, not Elon. With 16 global field experts today, we have acquired over 90 customers and installed over 200 systems. So it is small but proven and the number of installed system is growing 51% in 2024. Overall, we see an increasing demand for automation solutions from our customers globally merely due to the scarcity of resources, inflationary trends and pressure for cost reduction. Assembly Technology Expert or ATE services support customers to avoid costs by being engaged early in the new product designs, by optimizing existing designs, or by providing trainings on new innovative fastening technology so customers can optimize assortments, improve quality, and reduce total cost. Very often, ATE services are a door opener for new business. with new and existing customers. The examples shown on the chart are customer projects from around the globe that were won from engineering projects by solving a problem or designing in fasteners in a customer product. The values represent the amount of product sales won through this particular consulting service. And more often than not, this is an entry ticket to explore the full customer potential. Today, we are operating 16 tech labs globally. Our long-term experience in fastening technology in various industries allowed us to charge over 1 million Swiss franc in consulting fees in 2024 through more than 120 technical experts. With 300 customers globally, we created a significant amount of revenue opportunities. So we consider assembly technology services to be a true value driver, a door opener and product sales generator. The backbone and foundation of running our business is our global IT platform. Since 2022, we have been developing and rolling out a new ERP system, Microsoft Dynamics 365. As per end of 2024, 14 business units were live. This represents about 36% of our group sales on the new system. In 2025, we're planning on another seven rollouts and in 2026 on another two. By then, in total, we should have 67% of our revenue on the new system. After this, we will be continuing with the rollouts in acquired business units currently running on other systems. The new platform will provide global transparency and higher efficiency in our operations. Overall, it supports to achieve our midterm EBIT targets. Complementary to our new ERP system, we have been reviewing the opportunities of artificial intelligence and its potential impact on our business. Our approach was the following. We first looked at commonly available tools such as Microsoft Copilot, as well as several other large language model applications. And we conducted trainings with interested key users in various functions within the organization. We then created a global team under the leadership of our head of AI, which is the master of all our office applications globally. Together with an AI council, He is evaluating use cases from a technical, ethical and profitability perspective before a team of seven AI developers are programming the applications. Finally, the local AI ambassadors are in charge of scaling the best benchmark use cases globally. It was and still is very important to us that we only follow use cases which provide a significant return on investment in either improving internal efficiency such as, for example, automated document processing, saving hours, days of an administrator in sales, purchasing legal, et cetera, or in creating a better customer experience, for example, by automating quoting processes for special products and responding to customers in minutes instead of days or weeks. So after the deep dive on these three qualitative developments within our strategy, I'd like to elaborate on our focus areas for 2025. Following our strategy 200 initiatives, we are planning to grow above market average by focusing on growth units and sunrise industries. Now, given the current geopolitical and economic distortions, this is definitely a moving target. Therefore, the lightning symbol in the picture. So we need to stay agile and focus on the right growth pockets. But Bossart is well equipped to find them and explore, given the global setup and broad existing business in various customer verticals. Besides above average sales growth, we set further ambitious targets on scaling our smart factory and assembly technology expert services as a driver for new product sales. We'll continue with our ERP system rollouts in 2025. We'll generate and scale AI applications to create efficiency and a better customer experience. We'll continue to invest and improve on cybersecurity to ensure no shutdowns. And very important, we set targets to optimize our supply chain cost. From a cultural perspective, we continue our system and program development journey. But most important, we foster local, regional, and global collaboration within our organization. With 3,000 colleagues around the globe, we want to leverage our internal knowledge. And last not least, we'll follow the implementation of regional CO2 reduction initiatives to reach our target of minus 50% CO2 reduction by 2031, scope one and two. Besides, CSRD will continue to be on our compliance agenda. Closing out, I'd like to reiterate our mid-term financial targets. Organic sales growth above 5%, EBIT margin of 12% to 15%, equity ratio above 40%, and dividend payout ratio not in absolute terms, but 40% of net income stable. With this, I'd like to close my elaboration on the current developments, and thank you very much for being here. Stefan Zehnder and I will now gladly take your questions. Thank you.

Ladies and gentlemen, if you have a question, please press star and one. Once again, if you have a question or comment, please press star and one. The first question comes from the line of Fabian Piasta from Jefferies. Please go ahead.

Good afternoon, gentlemen. Congrats for the print. I would have one question regarding end markets. So in January, we've seen an uptick in euro manufacturing PMI data, still at low base, but at least going in the right direction. Do you see some recovery of demand across Europe or a change sentiment on the back of that PMI print? Or is that unchanged that or unchanged blurred? That's for me now.

Thanks. It'll be rather down for at least this year, hopefully coming back next year, maybe from mid of next year. EVs depends on the producers. Also for USA, we don't expect a big growth this year. For Europe, we expect things to remain rather flat, except for railway and aerospace. And in Asia, we see that India is booming, making India is growing. We had quite a nice double-digit growth the last year and even the year before. So India is booming, Malaysia is booming. China is flat, is coming back. We're moving a lot into local businesses. So international business in China is going out of the country, but we can serve local businesses in the country in China. So it really depends on the regions. If you ask me globally, we're still very, very careful for this year.

Thank you. Welcome. If you want to ask a question, please press star and one. Ladies and gentlemen, there are no further questions. I would now like to turn the conference back over to Daniel Bossart, CEO, for any closing remarks. We continue.

Questions? Thank you. That was a robot.

Is it on? Yes. Sorry. Regarding smart factory logistics, you made some interesting points about it. for 2024, but the kind of way we talk a little bit longer term, midterm, what is, what's the upside here? What can we expect from it?

Well, in general, as we always said, we regard our logistic services as a shoehorn to generate product sales and it creates loyalty. It creates value. So it's a, it's a door opener to win new business. Definitely also today. So it's not price, but it's service. And whenever we have a customer, it creates a strong loyalty. So I think in that sense, it's a strong glue. It's a strong bond for our customers. And again, it's a shoehorn to win a new business. Then that's going to continue to be that way. Will we ever make, let's say 20% of sales through services? Probably not. I know we had this question in this community earlier. Why is it not 30% or 50% of our total sales? would be a different strategy. So far, the strategy is to use it as a shoehorn and as a great value driver to win business and to keep loyal customers.

Okay. Maybe if I can ask the question a bit different. So what is the level of penetration of your customer base that use smart factor logistics?

Today, we serve out of, what is it, 47,000 customers. But of course, here you have an 80-20 relation. It's 1,150 customers and 250 million Swiss francs goes through the system. So a quarter of our total business goes through smart factory logistics systems. So it's a quarter.

Thanks. So I had a question for Mr. Zender. What is the CapEx guidance for this year?

Um, it's about 43 million total year. And, uh, it always depends though. That's kind of, uh, the investments which we had ahead, but we always pay as a goal. So we are rather calm, um, you know, keeping back a bit on the investment and the second half to see how it goes. Uh, but definitely the biggest share of the investment again, it has, it's with the IT implementation. Um, then you always have ongoing, um, uh, replacements of the operations. Uh, we also gonna have, uh, uh, quite a good amount, uh, for ESC initiatives, which goes more in line. We have to maintain certain buildings, but we use the maintenance of the building at the same time to save energy. And then of course, as many, uh, scales selling on smart devices as possible, because that's always a good, a good sign. And there's a payback, uh, also in terms of product sales. So right now, the plan is about 43 million.

Okay, thank you.

I hate to ask the obvious question, but what would the potential tariffs be, the impact of potential tariffs be on your business, especially, I guess, in the US?

Not much. Since we're globally positioned and A on the sourcing side, we usually source local for local. Of course, in Europe, we import quite a bit from China, but that has been on the plate all the time with anti-dumping taxes. So we're aware of this. What's really new is the US-Europe and US-China relation. And there we have sourced about 95% of products for US in US. So it's kind of not that of a problem really. Uh, yes, we do have operations in Canada and Mexico, and we do have parts shipped from us to Canada and then for surface treatment back to us, back to Canada, back to the customer in us. So these things we would have to analyze. It's not the majority of the business and we can handle this. So I think it's not really a big distortion. And secondly, if tariffs apply and will come to place. And we heard from 12th of March, by the way, our head of supply chains, it's just back there. Andy, can you stand up quickly? So this is Andy Bertaccia, our head of supply chain. So he can correct me if I tell you something wrong here. Thanks for coming. We will. charge this on our prices and we will add these costs and pass it on to customers. Same as we did with anti-dumping taxes coming from China, like 89% for steel products from China, we will add it on. And now there's a new tax coming from the European Union into US of 25% for aluminum and steel fasteners. But as I said before, we only import very few. So we will just pass that on to customers and put it on the product price. So Actually, increasing prices is not a bad thing. So, well, okay. You shouldn't say that too loud.

I have a question on your gross margin development. I mean, it doesn't seem to be a nature's law that with decreasing sales, you have an increase in gross margin, right? So you said it was coming from the supply chains. It seems like quite an effort. So did you have a tough grip on negotiations or was it mix related or on your customer side or how did you achieve this significant improvement?

Basically two sides. One is on the supply side definitely that we have seen the average cost prices coming down over the years. So they were high and constantly going down and we also kept on purchasing at lower prices. which then after six, 12 months came into our stock and we were able to sell on the other side. And this was a great effort by procurement to continuously renegotiate and make sure we get the best prices. By the way, we have price levels statistics back to the 80s and our people already know quite well when certain categories are high and low and can navigate and also use that for negotiation. So that's the supply side. On the sales side, it's been quite an effort and alerting our people to say, don't give anything away because we knew that the average cost price would be going down. And of course, sales tends to give it away. If the prices get lower, they say, yeah, but then I can make the customer happy. But we said, nope, we want to keep it. And we had some training programs on that to say, if you reduce the price by 1%, how much additional sales do you need to generate in order to create the same profit? And that's not just 1%, that's maybe 10% more sales. shy the sales a bit off say oh okay so i better keep the price so it's not that easy but we had trainings program training programs on this to ensure that we keep the price levels and that was managed quite well and i can say that there was quite an effort on that side so overall we saw lower average cost prices and stable sales prices and that helped to increase the margin thank you um last year

At the same event, you said that the visibility was just one month. So my first question is, what is the visibility now? And secondly, you said you're cautious for the first six months. Now we all know that you made some acquisitions and acquired, according to my calculations, some 11% of sales. So are you bold enough to... give some, let's be more specific. So can we expect positive top line growth for the first six months in light of the acquisitions?

There is definitely an acquisition, a small acquisition effect. No, there isn't an acquisition effect for sure. What we don't know, and the visibility hasn't changed by the way, it's still one month. So I would say it's going to be rather flat if I had to make a judgment, um, because we simply don't know what's happening now in the next couple of months. If anybody can tell me what happens in the US in the next two months, please tell me. We don't know. So it hasn't changed. It's still not very easy to make a judgment in that sense. We also were very cautious and we would say, okay, if anything, we would rather see a flat development, even with the acquisitions. But we don't know. We simply don't know because the visibility is still very short.

You have a long-term leverage aim to be below two times net debt to ABTA. Then you had it at 1.9 times end of last year. The closing happened in January, so you're clearly overshooting that aim. The question is, what is your speed on deleveraging?

Depends on the economy. Of course, we're looking back on 2024. And, uh, the goal is to, to, to keep as soon as possible. We can, again, the, uh, the, the two times, uh, EBDA that, that EBDA, I think at the end of the day, it's managing the balance sheet. So you have said enough water under the keel. I think we're doing well of not leverage too much, the balance sheet. And, uh, of course, especially the business goes at a higher cashflow ways as soon as we can pay down the debts, but it's definitely the long-term guidance to get again. to the two times EBA, which I think it's a conservative approach from that perspective, but that's how we manage the balance sheet.

So long-term guidance means you want to be in that range within two years? Is that what long-term means?

Again, it depends. It really depends. I mean, you have seen On the last two years, we had a strong cash flow, which helped definitely. It showed also now in the comments, looking back, that we were quite flat. Even we had a 62 payout million. And one needs to consider, that's a schematic in our business. As soon as we get headwind, tailwind, we're going to refinance the networking capitals. So that might be a certain pressure, but that turns into cash flow again. But I think from a business model perspective, I cannot say within two years it's down. But definitely, we always try to balance it and make the right and cautious decision to not put the company at the spot.

Okay. Then you showed the regional differences in the growth rate. But I was wondering, can you elaborate on the differences in the profitability? So if one region is growing much faster, what is the effect on the EBIT margin?

Yes. There is a certain regional effect that is the case. We don't disclose the regionals from that perspective. But we also give a guideline in saying, OK, Europe is always above the group. Asia, it depends a bit on the cycle at and above the group. And the US, we had made quite step ahead. Now we got a bit of setback, of course, sales drop, we're still managing it. But that's usually where we get close to a double digit. So that's a bit the mix. So and that's also one of the reasons why we always say, you know, there is a range of profit margins, because, of course, if

a positive effect in this in the profit mix at the end of the day in the in the even margin mix thomas from cam can you please talk a little bit about the us development has been very weak probably you needed to take out costs in the region but at the end the trick will be to really bring this regional sustainable growth pulse. May you share a bit your plans, how you can grow in the region and maybe even the current situation with tariffs, taxes can even open up new accounts?

Yes, thanks for the question. So in US, we have started a review of our customer approach and the organization already a couple of years ago. We also had a change in management some years ago with the new Dave Jones coming from SICA. Some, what is it now? Four years, three years ago. with exactly the intention to de-risk a bit the large accounts to review the focus on the customer segments and also the region. So we moved away from Midwest companies, very strong cost focus to more east-west coast, more, I would say, high-tech related customers, EV being some of them. At that time, we had projects with about 20 EV customers. By now, it's about 15. still working with startup companies. And we removed some of the low profitability customers in that we basically increased prices and then they left. So we kind of made this segregation. And we also reorganized sales to be much more focused on the growth, on the growth segments. But this also takes time. And if you still have some large accounts and you know those two, Um, then of course you don't want to get rid of them, uh, especially as long as it works well. And, um, but at the same time, we're building up new accounts and make sure we can create some momentum. We also look into M&A activities in us. I would say over the next two years, this is definitely also focused to, um, to see a higher, uh, to see higher growth. Um, knowing that us still being the biggest economy in the world. Well, Donald Trump always says it, but actually it's still true when we look at the GBT GDP numbers. Um, and there's, is a great potential also, by the way, in aerospace, um, we are not so strong in us right now. Um, we haven't served Boeing, for example, we do serve, uh, Airbus, Airbus, uh, sub suppliers, um, in Europe and we know we can do it. So probably. would be great through an acquisition in US in that sense as well. Tariffs, as mentioned before, were not impacted that much. It's a bit of a, it's on, it's off game all the time. And we have to look at Canada, Mexico transfers of goods, as I mentioned before, that makes it a bit difficult. But when I talked to Dave Jones, our area manager there, He doesn't really know. I mean, he he says he sits in Michigan, you know, Detroit area as well. You know, I don't know what's going on, really. So they all wait a bit and see, you know, is it going to stabilize? What's going to change? And for sure, short term, there will be more investments locally in the US. So I guess there's a lot of European companies investing more in the US. Which we can benefit from. I think this is a good thing actually for us. Short to midterm, I guess we will benefit. Prices will definitely go up. Inflation will happen. And then, as I said, if we pay more for the goods, we will try to pass it on to the customer. But midterm, longterm, I don't expect this to be a great economic policy, of course, because I guess lesson one in economics is, yeah, Don't shut down your borders. I mean, it doesn't make you more competitive and your products better. So personally, I don't think it's a good idea, but I think we will short-term benefit from it. And mid to long-term, we will see what impact that will have on the consumer sentiment. So I hope that gave you some answers. Any other? then i can do my famous final comments okay if there is no more questions in this forum we're definitely here for another hour or so happy to exchange bilaterally thanks a lot for coming thanks for your support and i wish you a great year ahead thank you very much