Elringklinger Ag

Ladies and gentlemen, I welcome you to our earnings call in the second quarter of 2023. We have already published preliminary quarterly figures on July 11th via an ad hoc announcement, and with today's publication, we confirm them. Over this earnings call, I aim at providing a more detailed look into the results from the second quarter. And first, I will start with some headlines on the second quarter, then discuss the financial figures and close with a few forward-looking remarks on the current financial year. At the end, you will have the opportunity to ask questions and I am pleased to answer them. First of all, the second quarter saw improvement in important macroeconomic conditions when compared with the situation a year ago. Global GDP was slightly in the black, mainly driven by China and India. However, macro challenges such as inflation and restrictive monetary policy cut the economy in other regions such as Europe. Inflation generally lost some of its dynamics in the first half of 2023, but it is still above the 2% target of the ECB. Last week, the ECB and the Fed each implemented yet another interest rate hike. At the same time, supply chains are more stable than one year ago, We are also seeing a stabilization on the raw material side. And when it comes to market price developments of several key raw materials that we are using in production, in addition, energy costs are down on the prior year, which is also visible in our margins. Both international vehicle sales markets and global vehicle production saw a marked upturn in Q2 compared to the previous year. Light vehicle production benefited from improved supply-related factors as well as the low prior year base. Production recovery in the key regions like Europe and North America and Asia-Pacific was reflected in the double-digit percentage growth rates. In China, production output picked up significantly after manufacturing activities there had been severely affected by lockdowns due to the pandemic in the previous year. As with our successful start into this year with the Q1 figures, we're able to improve sales and earnings performance visibly in the second quarter of 2023. Sales revenues increased to 467 million euro. That is an increase of 9% compared to the second quarter of 2022. Given that global light vehicle production rose by 11.2% in the first half, organic group sales were on market level in the first six months of 2023. Adjusted EBIT came in at 24.8 million euro. Adjusted EBIT margin for the group was 5.3% in the second quarter of 2023, which is a strong improvement compared to the 0.4% adjusted EBIT margin in the prior year Q2. With the sales growth, the working capital level was also elevated on the previous year while the net working capital related to sales remained flat at 28% on Q1 and the second quarter of 2022. Operating free cash flow was in positive territory at 3.7 million euro as in the prior year Q2. With net financial debt at 380 million euro, the ratio of net financial debt to EBITDA improved visibly compared to the end of June 2022. And given the good first half of 2023, we confirmed the outlook for fiscal year 2023 as well as our midterm outlook. The second quarter was also a successful one for Erwin Klinger in terms of nominations. We received significant orders that were also disclosed via official announcements, starting with the classical business areas we received new business in areas resulting from a strong market position. For example, an order for a valve cover for a global OEM, including a volume in the double-digit million-euro range. Second, transformation is continuing as originally classical business units use the know-how for e-mobility products, and they generate substantial new business. For example, we have just announced last week an order for metal battery housings to be used in commercial vehicles and city bus applications. This order will be executed by the Metal Forming and Assembly Technology Business Unit, formerly Shielding Technology. Additionally, we have received a serious production order for battery housing components from a major global battery manufacturer. Third, there are new mobility products to be supplied by our e-mobility business, Driving Transformation, of the group. For example, we received a high volume order for cell contacting systems for the BMW group's new class. This order has a term of several years and will ramp up from 2025. And orders in 2023 also included a large volume series production order for the supply of bipolar plates by Elwin Klinger Plastic Omnium EKPO. These orders confirm the path of transformation chosen by Erwin Klinger and be sure there's more to come. On slide number four, you can see that nominations like these move us forward on the path of transformation. In total, the nominations which we have received since 2021 for applications in the new drive technologies amount to a total volume of around 2.5 billion euros. Nearly two-thirds of the nomination volume relate to our e-mobility business, which includes the units drivetrain, battery technology, and fuel cell technology. In these units, we offer future mobility products like fuel cell stacks, bipolar plates, and other fuel cell components. We have the joint venture EKPO fuel cell technologies, battery systems, battery modules, and battery components like the cell contacting systems, and Last but not least, electric drive units and components. In addition to our e-mobility business unit, the originally classical business units have also won significant orders for e-mobility products as outlined before. All in all, you see that Elring Klinger is successfully pursuing the process of transformation. Coming now to the financial figures. starting with orders and sales on slide number five. Considering the recent large-scale nominations in battery and fuel cell technology, it should be noted that order intake and backlog only comprise the order book recording the short-term orders by customers placed as part of their scheduling arrangements, not the nomination volume over the respective remaining contract periods that is yet to be executed. Looking at the recent development of order intake and backlog, the order situation returns to normal levels. After the order intake showing pent-up demand related to the coronavirus pandemic in previous quarters, the order intake in the first half of 2023 was roughly on par with the pre-COVID levels. Currency effects only had a slight impact on order intake in the second quarter of 2023. Against the backdrop of relatively high revenue and low order intake, order backlog also changed. Order backlog stood at 1.35 billion euro, and this was below the high level of the previous year, but above the average of the past years, and also significantly above the pre-COVID figure at the end of 2019. Sales performance was significantly improved. We increased sales in Q2 by 8.8% to 469 million euro. Given currency headwinds of 8.8 million euro in the second quarter, there is organic growth of 10.9%. Looking at the first half of 2023, revenues amounted to 956 million euro, up by 91 million euro, or 10.5%. Aaron Klinger Group recorded organic sales growth of 11.5% in the first six months, which is on par with the development of global light vehicle production over that period. On slide number seven, we see the sales performance of the different segments and business units. The original equipment segment is on track for growth, with nearly all business units increasing revenues in the second quarter of 2023. Lightweighting elastomer technology, being the largest business unit, increased sales to €149.3 million. Metal sealing systems and drivetrain components as well as metal forming and assembly technology were able to report higher revenues than in prior year's second quarter, now amounting to €126.4 million and €73 million respectively. The e-mobility business unit reported sales of 10.9 million euros in Q2, which is up against the figure of the first quarter of 2023, but lower than the 14.1 million euro in Q2 2022. Coming now to slide number eight. In the second quarter of 2023, the group expanded revenues in all regions. Let me elaborate on the three main regions. The rest of Europe, being the region generating the highest revenue within the group, recorded the strongest growth with revenues that increased by 16.4 million euro or 12.7% to 145.8 million euro. Adjusted for currency effects, the increase was even pronounced at 14.6%. In Germany, revenues were up 6.5 million euro or 7.4%. Sales in the Asia Pacific region amounted to 83.9 million euro, that equals around 18% of group sales. And adjusted for foreign exchange effects, revenues in this region were up 12.3% in the second quarter. In the region comprising North America, revenue grew by 8.3% to 120 million euro in the second quarter of 2023, Foreign exchange effects on revenue in North America were only marginal. Let us now have a look at the earnings on slide number eight. After a second quarter last year that was primarily influenced by energy and material cost inflation, the effects eased in the quarter just ended. And therefore, we could record a significantly improved EBITDA for the group, amounting to 46.8 million euro after 26.7 million euro one year before. Adjusted EBIT in Q2 2023 amounted to 24.8 million euro with an adjusted EBIT margin of 5.3%, markedly better than last year's Q2 with 1.8 million euro and a margin of only 0.4%. Growth in the group sales, again translated into visible earnings growth. And in terms of adjusted EBIT, the positive effect of operating leverage was €13 million compared to Q2 of 2022. Concerning raw materials, the positive effect of €11 million is now a big step towards the cost level from 2021 and first and foremost to the effective negotiation results of our sales teams. For energy and logistics, the purchasing situation was better than in 2022 as I have previously mentioned. Further, ramp-up costs of the strategic future area of fuel cell technology, as well as in a new plant in North America, totaling €2 million, affecting the adjusted EBIT in Q2. Net finance costs in the second quarter was minus €5.3 million. And given the hike seen in market interest rates, interest expenses were higher than a year ago, resulting in higher net interest expense. In addition and contrary to Q2 2022, exchange rate developments led to a lower net foreign exchange rate result, and taking net finance costs into account, earnings before taxes in Q2 amounted to 11.4 million euro. After deducting tax expenses and taking into account known controlling interests, the share of the net income attributable to our shareholders amounted to €2.4 million. Therefore, earnings per share amounted to €0.04 in Q2. On slide number 11, we take a close look at CapEx networking capital and operating free cash flow. At €17.4 million, capital expenditure on property, plant and equipment was up from prior year Q2. Among others, CapEx flows were directed at manufacturing facilities for new SOP ramp-ups planned within the global production network. In addition, CapEx included projects aimed at aligning the product portfolio with the e-mobility market as part of the transformation. The investment ratio stood at 3.7% in the first quarter of 2023 after 3.2% in the first quarter of the previous year. Given the strong sales growth and the period under review, accounts receivables expanded year on year in view of cost inflation, as well as the tense situation seen for some raw materials, inventory was adjusted accordingly. Irrespective of this, inventory levels also expanded in view of the group sound order situation. Networking capital totaled €529 million at the end of Q2, expressed as a percentage of revenue for that 12-month period, its share was 28%, slightly up from 27.9% a year earlier and flat on the Q1 2023 figure. Regarding operating free cash flow, less capital was required for inventories and trade receivables than in the preceding quarter, and therefore operating free cash flow was a positive territory at 3.7 million euro, comparable to the prior year Q2. Slide number 12 now shows the net debt. The group was able to reduce net financial debt by 2.4% or 10 million euro year-on-year to now 380 million euro, despite the higher funding requirements for the group's operating business, in terms of net working capital. The net debt to EBITDA ratio was 1.9 as of June 30th, 2023, markedly reduced from 2.5 one year earlier. Let me now turn to slide number 13, showing the performance of our segments in terms of sales and adjusted EBIT margin. As mentioned before, the OE segment continues its growth path, both sales and earnings were improved compared to the prior year Q2. And this mainly reflects the fact that the group was better able to absorb negative cyclical and sectoral factors such as elevated energy and material costs in the second quarter. The adjusted EBIT on the OE segment was positive at 3.4 million euro. Sales were up 6% compared to Q2 of the previous year. The aftermarket segment successfully continued its growth strategy in a very strong business cycle and delivered again an outstanding EBIT result. Already from a high revenue base, the segment managed to expand earnings compared to the same quarter of the previous year, now amounting to 75.6 million euro. The aftermarket business generated an adjusted EBIT of €19 million and an adjusted EBIT margin of 25.1% in the second quarter. The engineered plastic segment was able to expand revenues by 2.5% to €32.7 million in Q2. As regards to earnings, a combination of higher staff, material and energy costs exerted pressure on the segment performance compared to the same period last year. Adjusted EBIT amounted to 2.5 million Euro from April to June 2023. Having said this, let me provide some remarks on the market in the current financial year. As I have already outlined in the beginning, the car market and thus light vehicle production is influenced by several geopolitical and macroeconomic factors. economy is expected to see weaker growth of 3% in the current year, according to the latest estimates of the IMF. Despite an improvement in the first half of the year, strict borrowing terms, inflation, and supply-side conditions that are not yet considered entirely stable, together with geopolitical uncertainties, continue to pose considerable risks for the automotive sector. According to recent projections, by S&P Global Mobility. The global light vehicle production is expected to grow by 5.3% to 86.7 million vehicles this year, still below the pre-COVID figure of 89 million vehicles produced in 2019. While the projections were lifted compared to the April projections, the most significant increase in production is likely to have occurred in the first half that just ended. The second half of the year is expanded to trend sideways on a global scale after a strong first six months of 2023. Against the backdrop of the general uncertainty and volatility still evident in the economy, Erring Klinger confirms the guidance for 2023 on the basis of its first half results in current market assessment. Accordingly, We continue to expect its organic revenue growth in 2023 as a whole to be significantly above the rate of change in global light vehicle production. As for an adjusted EBIT in 2023 as a whole, the group expects a margin of around 5%. The outlook for the remaining key indicators is also confirmed as well for the medium-term targets. Now, having said all this, I'm happy to take your questions. Thank you very much.

At this time, we will begin the question and answer session. Anyone who wishes to ask a question may press star and one or the touchstone telephone. If you wish to remove yourself from question queue, you may press star and two. If you are using speaker equipment today, please lift the handset before making your selections. Anyone who has a question may press star followed by one at this time.

Our first question comes from Akshat Khaker from JPM.

Please go ahead.

Thank you. Good afternoon. Akshat from JPMorgan. Three from my side, please. The first one on outperformance and growth over market. I want to ask specifically on the auto OE division. I think in the first half of the year, auto OE revenues have underperformed auto production slightly. So just want to check what your expectations are here for the second half. as S&P now expects production to be roughly flattish year-on-year in the second half. So if you could comment on our performance on that division, please, that would be great. The second one on the auto OE margins. First half result was better than break-even. Could you just talk about what you expect for the second half as labor inflation now picks up in Q3? but you also get probably higher compensation from the OEMs going into Q4. So just how you expect second half to develop versus the first half result. And the last one on aftermarket. Can you just talk about inventories in distribution right now? Do you see the strong sales numbers of the last few quarters holding up or are we entering into a period of destocking now in aftermarket? Thank you.

Yeah, thank you for your question. I'll start with question number one. The outperformance in the second half, the expectation here, and the expectation is that the market is going to be flat based on S&P and also based on observations. So market is going to be flat. We'll have some projects running up from an OE side. and will also have continued, and this reflects a little bit on your question number three, will have also continued good performance in our expectation in the aftermarket. And therefore, from an overall perspective, we think that we can outperform in the second half the market that is going to be flat, as you said. The auto OE margin, Your question is here, how is the expectation on the second half? And here, some of the elements you said, I share the same. On the risk side, we have higher costs in some areas. For example, in Germany, the increase in personnel costs based on the increases here, there were no negotiated energy costs. levels are to some extent a little bit on a higher level, even though that some of the commodities here in the energy area came back significantly. And from a commodity side, we see generally a relief in the markets, I assume based on the reduced outlook of some industries, but On the chemical side and on some plastic materials, we see some increases still. So on the chance side, there is the customer compensations and there is the expectation that overall we have a situation that is not as significant as last year. We talked about very much significant compensations that were required in the inflation cycle of 2022 that essentially started in 2021. But the figure, you know, the risk figure for 2023 is lower. But at the end of the day, you know, those increases still need to be compensated. And, you know, there is also some risk in regard to that. So overall, we think that we'll be able to compensate the risk with those compensations. Therefore, we think that we can confirm the outlook that we had given at the beginning of the year. Your third question was related to the aftermarket. The aftermarket, it seems like, has a strong cycle that will last. There are two elements to that. On the one side, it's a strong cycle that obviously people like to repair. rather than to buy their vehicles or new vehicles. And on the other side, we have a good performance here in particular in the North American market where we started along with also China to go into those markets and realize chances that we see. And in particular in North America, we make good progress in regard to that. So the second element of this is really that we have a good situation here in terms of parts availability to support that growth for the additional demand from new customers. On the other hand, when we take a look at inventory, inventory in the OE segment remains flat, and the increases in inventory here, that is associated to the most extent with our increase in business activity and aftermarket. Aftermarket, we can only realize growth when we have parts available, when we can satisfy immediately what the customers request and need from us. And therefore, we have increased inventory levels in order to support that growth. I hope that all answers your questions.

Thank you so much. Just one quick follow-up on the AutoOE result this year. Are you expecting the second half to look very different from the first half?

I would not expect it significantly different, but I have to say this. This is my expectation, but there is a risk also in regard to that in terms of okay, how some of the cost elements are developing in the second half. This is one item. And then on the second part, of course, to what extent we are able to compensate by customer compensations.

Understood.

Very detailed. Thank you so much.

The next question comes from Mark Renetton from Warbook Research. Please go ahead.

Yes, good afternoon. Thank you for taking my questions. It would mainly be around e-mobility and e-KPO. I think we've seen, and we can take this number, I think, from the minorities line, that since the fourth quarter of last year, you have, let's say, more than 2 million, let's say, in basically losses attributable to other shareholders, which are kind of corrected here, which, as I understand correctly, are mainly attributable to the ramp-up costs, which you have at EKPO. But you could give us some indication of what you are expecting here, perhaps in the quarters ahead and also in the years ahead, on how we should look at this number, and when we perhaps can think about a break-even in this segment. Secondly, also referring to your earnings bridge, which you provide, thankfully, in your presentation, where do we see those eKPO losses here, particularly in the year-on-year comparison? Is it in the volume effect, which is operating leverage, where you include those effects? Thirdly, also related to e-mobility, I think in the second half you have the ramp-up of battery circular contract with a global battery manufacturer to give some indication of how we should think about, let's say, revenue generation for the e-mobility segment in this quarter. I think Q2 was, let's say, already a bit better than Q1. Third question would be with regard to the financial result. I think when calculated correctly, interest costs you currently have are around 5% now when looking at your gross debt on an annual basis. Is this level what you also expect for the second half year, or should we assume any further increases in financing costs for the second half? And then thirdly, looking at the tax rate, I think presumably also has to do a bit with these losses at EKPO, but also the regional differences in your profit generation. How should we look at this number for the full year from your perspective? Thank you.

Yeah, thank you for your questions. When we take a look at the, in particular, but not only e-mobility, let's say e-mobility and lightweight, then we have on an annual basis, we have double-digit loss on a full year, like I said, in mainly battery and fuel cell in the group. And you see this, of course, in the losses that are associated here with other shareholders in the reporting as one part of it, but it's not all of it. And second, we have startup plans. We have a startup situation here in Texas. related to lightweight products and also we have a start-up plant, a new plant here. This is our center for e-mobility here in Neufen that we have recently just opened where we will produce here a lot of e-mobility contracts. So based on this, it's right from an observation that we have here still in 2023, significant startup losses. An expectation is that starting with a one cell contacting system that will start in the second half of this year, most likely towards Q4, there's going to be some activity in Q3 that will start revenue cycle in the battery business here, really going into the higher revenue figures. And this is a starting point and I said that my expectation would be somewhere around 25 will have a significantly different situation here in terms of the operating leverage in the business units and also in the group based on the revenue cycle and revenues in those business areas and also in those new plans. Now, I come to your last question here in regard to taxes. The taxes that we see here is a relative high tax rate. So the loss situation is distributed in the group so that on the one side we have taxable gains and on the other side we have losses in some of the areas in those examples that I mentioned. And this balance, so to say, over group entities, this leads to unusual high tax rates, generally speaking. In regard to the financial result, the interest rate, that is right. We see here, when I take a look at the net interest, I think it's around 7.3 million for the quarter. there is interest in the interest expense. And let me say this, there is from our hedging positions, there is 2 million interest in their coming out of hedging, and there is 1.5 million coming out of pensions. So this high interest So interest expense would need to be corrected, so to say, by around 3.5 million when you compare it to other quarters. And those effects are based on interest effects, based on the interest cycle. that we have gone through and they lead for Q2 here to more significant interest expenses. Now in regard to the question here in terms of the earnings bridge, could you please repeat that because I did not get that question?

It's also a bit when we look at the P&L number for minorities in Q2 2022, I was going to say basically, I think it was almost zero. And we have this 2.8 million, which we have this year, which indicates that there must have been, let's say, a pretty steep deterioration at earnings at EKP or probably preparing for the contract you have won. And where would we see this deterioration in the earnings bridge, which you provide here on the page number number number number nine slide number nine is it included in sales growth these these deterioration earnings yeah it's essentially you know in ramp up costs is one portion of that and

There is another portion in others. And there is one topic also, and this is an offsetting of startup situation here at EKPO. If you pick this example, also with improved situations in other areas here. So there is also a little bit of offsetting. regard to that so you will not see this full amount as you know and let's say entity related topic now because we have also some other developments here that offset this what you observe there yeah

I don't know whether you have considered this or just as a remark, but I think in the past, there were some years in which you mentioned some results for e-mobility specifically, and perhaps it would be an idea to be more, let's say, direct and numbers for that, because I think basically the figures that you stated are kind of understating on how successful you actually were, particularly in the OE segment, I think. So perhaps this is an idea for the future to provide.

The point is, the battery here starting from this year will be front running in terms of sales growth. And again, it's an early time to look at that. But the basic mechanism is that the revenue cycle and operating leverage towards 2025 in the new business areas will get us in a different situation from an entity perspective, but also from a group perspective. Okay, I hope I answered all your questions. Thank you very much. Thank you.

The next question comes from Frank Miller from LBBW. Please go ahead.

Yes, hello. Thanks for taking my question. It's actually two. The one is on this engineered plastic here. The margin nearly was halved here. Maybe you can elaborate on that, what happened here and what could we expect here for the whole year? Should it stay in the single digit range or returning to the double digit range? The other question on net debt and free cash flow target. So when assuming free cash flow in the range of last year, so is it fair to assume a net debt in the range of about 350 million?

Yeah, let me start with your first question. You know, right now we are at 380 million with, I think, free cash flow minus 16, you know, 350 would be a 30 million move. You know, I'd say this would be on the high side. It's not impossible, but it would be on a high side. I think, you know, it would be, yeah, somewhere around three, let me think, 350, 360, I think it's reasonable. We see a little bit of the same cycle that we have seen last year. the free cash flow so i expect here an improvement in the second year but there's one point of course that is different comparable to last year and this is the the development here in aftermarket yeah expectation is from now on inventory levels are going to be flattish and towards the end of the year getting lower yeah in bringing us to to this sort of of net debt yeah on the on the first question here. Yeah, engineered plastics that has different exposures here from a sales perspective as well as from a cost perspective because there's like I mentioned here on the commodity side the engineered plastics business is affected by cost increases here in regard to the used materials and material mixtures. And here also it is the same mechanism relative to the OE segment. There is going to be compensation that I would expect towards the second half, but there is still some uncertainty. So at least I would see, you know, a comparable level. But if we are successful in regard to compensations, then it could be a little bit higher. Thank you.

Thank you.

The next question comes from Christian Klover from Hochhauser Investing Banking. Please go ahead.

Yeah, hi there. I just have two questions left basically. My first one again is on your aftermarket business. Can you please provide what's that growth being made up in terms of price and volume? My second question is with regard to the most recent orders and immobility, which you have announced, how much of that is already reflected in your order intake? Or another way to put it, what's the auto order intake business development piece in Q2 and the first half year?

Yeah. Thank you for your questions. On your second question, the new orders, they are not reflected in the order intake. The order intake, as Erling Klinger measures it, is based on the actual releases from customers, and there is different release horizons. And the new projects that we have announced here, they are not part of those, let's say, operating communications from the customers to us. On the aftermarket, I haven't gotten really an exact figure on that. I would say, you know, very roughly speaking, it's half and half because the volume increase is happening in Europe and is happening in North America. And there's factual significant development there. I can look that up. Roughly speaking, no, I'd say it's maybe half and half.

and the out-of-business OE standalone order intake, is that similar to group development or is there a big deviation?

The development in OE segments in terms of the order intake and also the order stock situation, that has two components. The one component is general market development, which is in line and this is Where I said, you know, this is also based, you know, a flat market based on our expectations here. This is reflected in there. And we have also a little bit of product mix because there are some customers that have very long horizons in terms of their scheduling and some a little bit shorter. And here we have some, let's say, short-term developments that affect that on the negative side. But essentially, that's out of our hands. But those two factors go essentially into the OE order stock situation.

That's very clear. One follow-up, if I may, please. You are guiding for a capex ratio of 5% to 7% for the four-year. You stand at about 4% in the first half year. That 5% to 7%, is that sustainable looking forward with regard to the ramp-ups in new mobility, or is it even possible to lower that capex ratio looking forward? than below this ratio of 5%.

Yeah, we are on a very low CapEx rate right now. It is certainly the lower end of this guidance. We are going to be moving up with those projects and the degree, the intensity of CapEx really depends on what the project is. There is deep value added. There is more like assembly type. But my expectation is that step-by-step will go into, from a working capital perspective, into a better situation and generating here a better free cash flow, but on the other side will have also a higher level of capex going forward. Not necessarily in the short term, But when we look into 2024, 2025, my expectation is that CapEx is going to be going up. EBITDA right now runs at roughly 200 million euro. So, you know, from an earnings perspective, Group is prepared for that as long as we have the working capital in check. So we will see some higher levels there.

That's very clear. Thank you.

Thank you. As a reminder, if you wish to register for a question, you may press star and 1.

Our last question comes from Michael Punset from DZ Bank.

Please go ahead, sir.

Yes, Michael Punset. Good afternoon. I have one question with regard to your adjustments. Can you split up the adjustments you have booked in Q2? And can you give us any kind of guidance whether we should expect some additional restructuring provisions or something like that in the second half of this year?

Yeah, thank you for your question. We have in total, I think around 8 million, 8.1 million booked and CEO departure of that is 4.4 million. And then we have 3.7 million Euro related to restructuring and impairments. For the second half of the year, I would expect a little bit more in terms of restructuring and impairment because we have some activity here in regard to Langenzen on the one side and, you know, consolidation efforts in the group, yeah. But would we be seeing a higher number relative to Q2 in the upcoming quarters, I don't think so. So yes, there is gonna be more restructuring as we do consolidations, but this Q2 figure is high.

And there's no additional PPA expected in the coming quarters or is that only so minor that you have not included it in the guidance? No impairment, you know, when we look at Q2. I mean purchase price allocations.

No, typically purchase price allocation is associated with M&A activity and right now we don't have any of that. We haven't acquired anything, so there is no. Okay, thank you. Thank you.

There are no further questions at this time. I hand back over to Tomas Jesulat for closing comments.

Yeah, thank you very much for attending this call. Thank you for your questions. And I'm looking forward to talking to you on our next call. And that's going to be November 7th this year, where we will be discussing Q3 figures. Thank you very much. Best wishes to you and talk to you soon. Bye-bye.