Jost Werke Se

Thank you very much. Good morning from Neu-Isenburg and a warm welcome to the Yoast Q3 2022 Investors and Analysts Conference. We're very happy, Christian and I, to report to you the numbers for Q3 and I would like to start directly with the highlights of the third quarter of 2022. Yoast could increase its sales by almost 30% to 327 million in the third quarter. with strong growth both in the transport business line with almost 29% growth and the agricultural business line with 33% growth. We could also grow our adjusted EBIT by 25% to 30 million in one quarter. That calculates to an adjusted EBIT margin of 9.3%. In this quarter, we benefited once again from our global footprint The very strong development we had in North America and also APA could somewhat offset the weaker but still growing environment that we had in Europe. Also in Q3, the visibility improved because some of the supply chain issues that our customers were having mainly, they eased and the demand, especially for trucks, remained very robust despite the macro concerns that we have with inflation and the Russia-Ukraine conflict and others. So based on that positive development so far, we have raised our guidance for sales and for adjusted EBIT for the fiscal year 2022. So let's have a brief look at the markets, how they developed compared to the previous year. In Q3, as I already mentioned, the truck markets, especially in Europe, could recover because some of the supply chain issues were resolved. There's still some concerns in Europe, obviously due to the conflict and other items, but supply chain situation for the truck customer has improved considerably. And with that, we have the 23% growth in the truck industry. In traders, 1% growth. There we had a strong market already in the last year, so it continues to be on a high level. The tractor markets contracted by 8%. mainly impacted due to uncertainties of energy and rising costs and also some supply chain issues. In that environment, JOST had an 18% growth, benefiting mainly from the recovering in the truck market and good performance also in the other market segments. North America, exceptional development in North America, especially in trucks with plus 33%, also driven by the resolution of some supply chain constraints that they've had in the past. The trailer market also grew by 8% and also the tractor market grew by 9%. For Joss, that means an increase of 58% driven on a very good market penetration, but also increase in prices and also a considerable FX effect that Christian will explain in more detail. Asia Pacific Africa, a minus 13 you see here for the truck market. That's a combination of a very weak Chinese market that has in numbers a big weight, but also a good market development in India, in Australia, in South Africa and in other regions. So it calculates to minus 13 the impact for yours and also for Australia. Many others I would think is less because China in numbers has a high impact, but in turnover and in margin doesn't have that big of an impact. And that's why you will see the numbers not go down as much as you can see with the 28% at the bottom. Trader markets in Asia growing by 9% and our performance, as I mentioned, 28%, mainly driven by the other countries outside of China where we had a very good development. With that, let's come to more detailed numbers that Christian will explain to you.

Good morning, ladies and gentlemen, and also from my side, a warm welcome to our Q3 investors and analysts conference. As Joachim already pointed out, that was yet another very successful quarter for Joost. We were very happy with the development, both top line and bottom line, but I'll come to the group at a later stage. Let's quickly go through the regions as you already are very familiar with, starting with Europe, our biggest region. Here you can see that we even outpaced the growth that we had enjoyed in Q2, where we were 17.1% higher organically. This quarter, we were already 19.6 percentage points or percentage percent higher than the same quarter a year before. So a very positive development here, even though we did encounter some FX headwinds, especially coming from the Swedish Corona. The main reason for the higher growth is especially the fact that we were able to pass on some of the input cost increases to our customers. Unfortunately, not all of them have yet been passed on, but basically we are in process to do so more. But this quarter was severely impacted by higher energy prices, still some material increases. but especially energy due to the Ukraine war had had an impact on our ability to grow further. And when it comes to adjusted EBIT, you see as well a slight decline here coming from 10.4 million in the Q3 2021 to 7 million in Q3 2022. And that is a decrease of roughly 32.6%. Again, this is mainly due to input cost increasing. And also here we did have significant foreign exchange headwinds again from the Swedish Krona, which devalued especially against the RMB plus also the US dollar. And that had a very negative impact in the quarter alone of minus 2.7 million and minus 8 million in the full year to date numbers. Overall, we will continue to try to pass on the majority of the input cost increases to our customers and are very confident we will be able to do so in the long run. I would like to mention that Europe, this is something that those of you who have been with us and following us for some period of time know that, but for all the others, just again to reiterate, Europe bears the blunt of the headquarter cost and these are not passed on to the other regions. So with that, I would like to come to the next region, which is North America. North America enjoyed a very, very strong growth again. And going to the next slide, please. We are seeing a growth here in North America of 57.7%. This is organically 35.4%, where you can see, again, Joe's grew both in agriculture and in the transport business line. And despite strong FX tailwinds of 22.3%, it's now another record quarter with 106 million in sales in a single quarter in North America. The adjusted EBIT grew more than 64% to 10.5 million, and therefore the margin also improved to 9.9% in quarter three. That is a 64% growth compared to the same quarter a year before, and the margin improved from... from 9.5% to 9.9% or also compared to Q2 an even better margin where in Q2 we enjoyed a 9.7% EBIT margin. This is also boosted significantly by much higher aftermarket sales in the region where we are now at 31% compared also to the last quarter where we had only slightly below 30%. So coming to Asia Pacific Africa, a very interesting turning point because compared to Q2, where we were below last year's sales and EBIT, we are now above last year's sales and EBIT. And you can really see that sales have grown to uh 49 million uh compared to the 38 million we've we've enjoyed in q3 2021 and the margin is uh has a or the ebit has improved from 6.2 to 11.1 million euros for q3 so overall a turning point because uh you you've all been very familiar with the sharp decline of the chinese market where at the end of Q2 2021, the Chinese market for trucks contracted dramatically because a new emissions regulation was going into effect and the pre-buy effects that we'd enjoyed before have veined. And therefore now, the markets in China are recovering or stabilizing and we are now in China better than we were a year before. But overall, the impact of China on our business in the Asia Pacific Africa region is unusually low. It continues to be unusually low while for instance in 21 we had year-to-date about a 50% market share of China within Asia Pacific Africa. We're this year down to 28%. So there's tremendous potential for the Chinese market to recover and we are very much looking forward to seeing that in the months to come. So overall, we have had a better utilization rate, especially for the Chinese production plants. And as we've seen all year long, all the other countries in the APAR region, which is specifically India, Australia, South Africa, and also our Southeast Asian companies served out of Singapore, they have always had traditionally higher EBIT margins because we simply sell much more heavy duty and off-road couplings, which come at a much, much higher rate. EBIT margin. So summing it up and coming to the group numbers, we will, we will see here. Now you see the breakdown also in growth by business line. You see that the agricultural business line grew by 33% to 83 million in sales and the transport business line grew by 29%. So overall we are now at roughly 30%. unorganically reported or 24% organically. That is that is a significantly higher growth than we've also had in Q2. Basically, as I've said before, we are trying to pass on all the input factor increases to our customers and are somewhat successful there or quite successful, I should say. Obviously, if you pass on those input factors and you just increase the price for your product by the increase in material costs, This leads to a margin decline and that is also what you're seeing here this quarter. We are down from 9.6% in 21 to 9.3% in 22. And that's just a mathematical effect. However, and this is the very important fact, this is now the third consecutive quarter where we enjoyed more than 300 million in sales. And also we are now above 30 million in adjusted EBIT. And if you compare it to the nine month figure, you'll see that we are for adjusted EBIT, we're at 96.9 million. So also there we've enjoyed three consecutive quarters above 30 million in profit. And that is something the group has never had before. So we were very, very happy to use the opportunity to increase our guidance for the full year. And you've seen the numbers that is basically in line with what you're already seeing here for year to date numbers. Overall, the impact of rising input factor cost remains. This is something that we will see definitely throughout Q4, and we will need to see what will happen in the year to come. So it's going to be an interesting year to come as well. With that, I would just quickly guide you through our net income development. And here you can see that from a reported net income of 51 million, we grow to EBIT of 72 million and an adjusted EBIT of 97 million, what I just mentioned. And the good thing is what you can see here is, first of all, our taxes are extremely stable, 5 million per quarter, also in Q3. The finance result is very similar to what we've seen before with 6 million for the year-to-date numbers or roughly 2 million per quarter. And then the two adjustment items, depreciation of purchase price allocations as well as other exceptionals is absolutely stable and in line with prior year where we were also recording 21 million and 4 million other exceptionals. Last year, we had a one-time effect and that was the sale of our hydraulics business in the UK that led to an additional adjustment in Q2 2021. But overall, basically, the message I'm trying to convey is that the development outside of our reported figures is totally stable. And another very positive thing is that we continue to have a much lower tax rate than we have to use as a performer tax rate. So with the 15 million year to date in taxes, we are significantly below the 27 million that you also see here as a performer tax rate of 30%. So we are enjoying a much, much better tax rate than we have to report in our adjusted numbers. So the adjusted net income is 64 million and therefore much better than last year where we recorded 55 million. That also means that our adjusted earnings per share rose by 15% to €4.28 per share, and that is also better than the 3.72 that we recorded a year before. Now let's go to some balance sheet and balance sheet KPIs. The ROSI fortunately increased to 17% and that is 0.6 percentage points better than in Q2. Very happy about that. Equity ratio now almost at 35%. very much driven by the operating results. However, also some positive development because of the rising interest rates, which means a lower number for our pension obligations. But overall, 35%, I believe, is a quite stable and very positive development for the equity ratio. And then net debt, we're down below 1.5 times EBITDA leverage. And that's, of course, quite positive. As you had seen before, we were above, but this is now an improvement of minus 0.15 times EBITDA. And also net debt is down by 11 million and therefore very happy to show that. If we then look at working capital and cash flow, also here another positive development we are positive in operating cash flow we are positive in free cash flow and the cash conversion rate increased by 0.3 times 2.07 at 0.7 and this is again we we are focusing on trying to bring down our working capital and uh we'll do so uh we'll do so also for uh further and In the meantime, we are not neglecting any investments and that is also something you see here. We've invested 9.1 million euros and this is converts to 2.8% of sales in the quarter alone. Year to date, we're roughly at 2% of sales. So we will stay within the guided range of 2.5%. And a vast majority of those new investments is going towards a new plant in India that we're building for the agricultural business. The networking capital is still elevated at 21.2% of sales, but we are on target to achieve the 20 or below percent of sales at year end. So also there, we see some positive developments and hopefully we will achieve the 20%. So with that all, I think overall a quite successful quarter with record sales, record profits year to date and within the quarter. Very happy to report that for the group and I would like to hand it back over to Joachim for the outlook for the year.

Okay, well thank you Christian and let me give you what we expect for the remainder of the year. From a market, you can say that the fundamentals of the market are still very strong in both in transport and in agriculture. For trucks in Europe, we expect a slight growth because we see that the supply chain issues are being resolved and our customers are able to produce more than they were last year. On trailers, still on a very high level, some slight decline, but 2021 has been a very strong year already for the trailer business, and 2022 will continue to be a strong year. And also in tractors, you see a very slight decline. You know, there's some customers that are a bit concerned about energy prices, fertilizer prices, and interest rates going up. So that is... bringing the expectation down a little bit on the agricultural sector, but still at a very solid and very high level. North America continues to be very strong. So we will end up between 10 and 15% higher in truck production as well as trailer production and also tractors in North America continue to grow. Fortunately, also the high horsepower tractors and not so much the the low horsepower tractors and the high horsepower tractors they have bigger loaders and therefore are a more profitable business for us than the compact loaders the compact loaders on the compact tractors so APA here as I said you have to take it with a grain of salt because the Chinese numbers are dominant in that more dominant in this market view than they are in our in our actual results but the Chinese truck markets continue to be slow so if this year there's no further improvement expected everybody's hoping for next year for the recovery but the other markets are doing fine and they're doing actually quite well and those are as Christian already mentioned the more profitable margins markets because that's where the heavy duty equipment is being sold And also for trailer, the markets outside of China are doing well. And in China, we see a bit of a decline. But overall, you can say considering all the factors with rising interest rates, with the Ukraine-Russia conflict and other global factors. It's amazing how resilient this market environment is and how fundamentally strong transport and agriculture are in these times. And we expect therefore to have a very strong remainder and a very strong year for 2022. That's why we were able to raise our guidance. We are very happy to do so. Sales we used to guide in middle single digit growth. We now expect a low double digit growth and we will exceed the 1.2 billion mark first time in the history of JOST. Also adjusted EBIT will grow with high single digits. So also here more than the initial mid single digit growth. Of course, sales growing faster than EBITS calculates to a slight decline in the margin where we had 10% last year. So here we, despite higher numbers on both ends, we expect a slight decline. And CapEx, Christian mentioned already, we continue to invest into our future and we will stay in the 2.5% of sales CapEx ratio for 2022. So let's summarize the situation until today. The third consecutive quarter in JOST history exceeding 300 million in sales. So we're really having a run here in terms of sales and in terms of adjusted EBIT, where we have 30 million in adjusted EBIT in the third quarter consecutive and more than 90 million in the year-to-date numbers. We are able to leverage and continue to be leveraged our good position in North America to grow and to benefit from the strong demand for our products in agriculture and also in transport. Both business line transport and agriculture were the growth drivers in Q3 and we ended up proving the strong underlying fundamentals of these sectors. Our order book has been expanding and it goes into 2023, especially the order book from our customers. So every discussion that we have with them, they have still very strong order books and it shows a sustainable demand despite the slowdown of the global economy and the macroeconomic concerns that I've already mentioned. So we therefore raised our guidance for the fiscal year 2022 and we will be beyond the 1.2 billion mark for the first time in JOST's history. So that's the summary. Thank you very much for your attention and we're looking forward to your questions.

Ladies and gentlemen, at this time, we will begin the question and answer session. Anyone who wishes to ask a question may click the Q&A button on the left side of your screen and then raise your hand. If you are connected via phone, please press star followed by one on your telephone keypad. If you wish to remove yourself from the question queue, you may press star followed by two or please lower your hand. For written questions, please click the Q&A and then the Write a Question button. One moment for the first question, please. And our first question is from the line of Jorge González-Sarroñeda from Haug & Aufheuser. Please go ahead.

Hello, good morning. Can you hear me? Yes, perfectly. Perfect. Well, first of all, congratulations on the very strong results. I have two questions. First one is about next year. I know that you don't have the crystal ball, but it will be quite useful if you can give us your view a little bit on the different markets for truck, trailer and tractor, please. And then regarding the targets for this year, I was wondering what is preventing you to not achieve a growth of 10% for instance in adjusted EBIT taking into account how strong are the markets of North America and Asia. I understand that the EBIT margin Uh, it could be below 10%, uh, taking into account the, the, that the European market is always, uh, always have a lower margin, uh, in the fourth quarter. Um, but, but, uh, yeah, it will be interesting if you can give us also your view on the last quarter, what are the dynamics and if there is any one off that we should take into account. Thank you.

Okay. Thank you for your question. Outlook for next year, of course, very, very difficult. And we will do a formal guidance then when we have the numbers of the complete year. But as I mentioned already, the order book is looking quite solid. Our customers are still planning with very high volumes, especially in truck. I think we have globally, or at least in North America and Europe, a real pent-up demand. The truck industry hasn't been able to produce at the level they were planning to in 2020 because of COVID, in 2021 because of semiconductors, and 2022 because of impact from the Russia-Ukraine conflict, mainly in Europe, but also rising input costs. So trucks... did continue to drive all through these three years and the replacement did not happen in the way it should have happened. So there's a real pent-up demand and I believe the stories that we hear from our customers that they're planning at the very solid production for 2023 and they're convinced, despite the higher prices that they have now in the market, that they will be able to sell at more or less the same level than this year. For traders, it's a bit more cautious, I would say, because they did not have the constraints in production as much as the truck industry. So they were better able to follow the real market demand. But especially in North America, there is a situation where there is very old trailers running today. The replacement came in the past also from China that is stopped due to the regulations and therefore there is a higher demand and the trailer industry is trying to increase the capacity in order to fulfill that demand. But especially in North America, I do believe that there is still a pent-up demand that needs to be fulfilled. In Europe, I would be a bit more cautious. They're all very happy with the order books they're having, but I don't think the situation will be as strong as it is in trucks. And tractors, right now, everybody's trying to sort the situation. The farmers, they have been benefiting from very high crops prices this year, so they had a good income. But the energy cost and the cost for seeds and for fertilizers to plant the new harvest has gone up quite a bit and therefore they are a bit cautious in making new investments. Things that need to be replaced, like all the implements that we sell for our loaders, that business will continue to grow on because they have to be replaced as they are used. With tractors, it's a mixed bag between tractors that were not available due to supply strain constraints that the OEMs actually could not produce and deliver, but also a bit of a concern with the final customer. So I would think that it will continue to be at a fairly high level, but maybe a bit softer than we've seen this year. So this is what we get as feedback from the customers right now. As I said, the formal guidance we will then issue when we have the final numbers of 2022. For the other question, I would give it to Christian.

Jorge, good to see you again. So for your question, why we didn't raise our EBIT guidance beyond the 10% mark, quite simple. First of all, we are seeing the traditional seasonality in our earnings. So highest quarter and highest earnings and margins in Q1, and then slightly declining quarter after quarter. And this is also true. I mean, we have no reason to believe that this would not happen in Q4. So while we achieved in Q3 already a 9.3% margin and year to date 10.1, and that is probably the reason why this will also be slightly below the 10% at year end. What I need to mention is North America enjoyed a very, very positive Q3 with 9.9% EBIT margin. But even if we achieved the 9.9% again, and also North America has a lot of holidays in Q4 like Thanksgiving and Christmas. uh even if we achieved that margin uh it would drag us down beyond below the 10 percent so uh so we we are not saying it's impossible we will we will uh watch it carefully but right now we are as you know us we're we're more cautious uh and uh we will we will wait and see what will happen but but overall we are still quite happy and and rest uh and also Bear in mind with the mathematical effect that if you pass on factor price increases one-to-one to your customers, and it's very difficult to ask even for a margin on those factor price increases, then you have a mathematical effect that the margins will go down. And that is something that we've seen all year long. So the margins have been slightly weaker, but the overall absolute figures have been very, very positive and much higher than they have been a year before or ever been. So this is the main reason why we were a little bit more cautious on the EBIT guidance than on the sales guides.

Okay, so it is possible, no? I mean, you are not including it in the target. And maybe, Joachim, a follow-up on the trends. Thank you very much. It's very useful. Have you seen prices... below the levels we are seeing now? I mean for next year apart from the different dynamics on trailer and tracks, should we expect prices even to go higher compared to now with your knowledge about the steel prices and alloys and other raw materials? So it's difficult to say at this point.

Let me follow up on Christian. Our main focus is on the absolute EBIT. We're trying to improve the absolute EBIT. We pay our salaries and our dividends derived from the absolute numbers that we have. So that's the focus. If we need higher sales for that and that calculates to a delusion in the margin, then that's a mathematical effect that we're trying to optimize, but that we cannot fully control. So it's always the absolute numbers that that we have in focus and that's what we're trying to optimize. On prices of our customers in the market and our prices to our customers, we will probably have an effect where steel prices will go down in Europe and in North America. but energy prices will probably go up because we have not seen the full impact of the energy crisis in the input cost of the companies or the private households. So I don't expect the total to go up and have more price effect in our products or in the products of our customers, but I expect that it will also not go down with the effect that you would expect from, for example, over steel prices.

Thank you, very interesting. And maybe two very last questions from my side. Can you give us more detail on this new factory in India for tractors? I think it's quite interesting if you can give us at some figure about the output that you're expecting from that factory and the end markets. And that one, if you can answer it before, please.

Yeah, maybe just two comments on that factory. It's focused on the agricultural business right now. It will be located in Chennai. We have started construction. Actually, the hull is already finalized. The first business that we will have in that plant is business for export out of India to existing markets in North America and Europe. And so it's mainly a production site for agriculture at this point in time, which is a very competitive site. But it has the potential also to start to have a basis for the Indian agricultural market and maybe also to complement our existing transport business where we already have one factory in the north of India. So you will see that factory in production in about a year or so, maybe a bit more, but it will start. with products for export from India to North America and Europe. And then we will see if we can build up more market in India for agriculture and if we can fill the factory with other useful products for the Indian markets, maybe also in transport.

Okay, thank you. And the last question is a technical question. So is there any difference for you if the trailer market is stronger for specialties than for a standard trailer? I mean, do you sell more landing gears or more trailer equipment for one or the other? Or is not really a difference for you?

Of course, the standard trailer is a much higher volume. That's where we have the landing gears, the kingpins and some of the axles and that is the business that we depend on a lot. But we also, if that goes down, the specialties where we have our steering systems, the Tridec, the whole Tridec portfolio. That is a very solid business and that's usually longer term and a different cycle. And I think that's where your question comes from. So that will fill up some of what we could be losing due to a lower market in standard trailers.

Thank you very much. Very useful. I go back to the queue.

Thank you. Thank you.

Ladies and gentlemen, as a reminder, if you would like to ask a question, please click the Q&A button and raise your hand or press star followed by one at this time. We have another question from Miro Zusak from JMS Invest. Please go ahead.

Yes, hello, gentlemen. Can you hear me? Yes. Perfectly. Okay, thank you. I take the questions one by one, if I may. The first one, if I look at the European segment a bit from the helicopter perspective, I think you made this acquisition of Allure back in 2019, first in consolidation in 2020, if I'm not mistaken. That would have been roughly 20 million in EBITDA. If I look at your level this year, I mean, given your guidance, you're probably ending up somewhere between 14-45 million in Europe, which is comparable to the numbers we see back in 2015 to 20. If I just put the 20 million on top of your historical level, I would end up with, you know, like rather 65 than 45. Are we still... You know, like way below a proper COVID recovery and you expect this number to go up at 60 plus in the coming years? Or have I overlooked other aspects of integration and is your profitability lower like from a structural point of view going forward?

Yeah. Mio, let me take that question. So first answer is ALU or the ag business line obviously is not only present in Europe, but also in North America to a very large extent. So significant portions of their profits are coming from North America. And no, to answer that question also, again, the ALU acquisition is not disappointing, quite the opposite. We're very happy with the development right now. We have one negative aspect this year, and that is especially the foreign exchange rates of the Swedish Krona. The Swedish Krona particular has devalued against against the Chinese RMB. That is important for us because we purchased quite a few pre-assembled products from China, from our factory in China. And it also has devalued against the US dollar and the Euro, but more so against the US dollar. And as I just said, a significant portions of the sales are also realized in US dollars. So that is a hopefully one-time negative effect this year that should go away. But overall, operationally, the acquisition is fully integrated. And it's also, as I said, we're quite happy with the development. So that is all good. What we are seeing in Europe specifically, and that is to your point, is that we are suffering more in Europe from the rising input factor costs. So especially steel, but now again, it's energy, it's alloys, it's transportation costs. And all of those are having a very negative impact in Europe more than it has an impact in Asia Pacific and or in North America. So I think this is the main reason for the development that you're currently seeing. But with the integration, we're done and happy. The teams have done an excellent job. The company has been integrated basically since the middle of 2020, despite COVID. And so there is nothing negative to be said about the ALO acquisition.

And I think if I understood your question right, if you take the pre-consolidation numbers, you cannot add them to the Europe numbers because ALO is active in North America and in Europe. So you would have to split that and add it to the North American and the European numbers.

Okay, cool. Thank you. This answers my question. The second one would be regarding the Q4 profitability. Just accounting for your guidance of high single digit growth in EBIT adjusted. If I try to move, put this strong decrease from Q3, and allocate the decrease to the three divisions, it's very hard to get these numbers actually without becoming negative in one or the other division. I mean, can you just also confirm that all three divisions are going to remain positive in Q4 and also, you know, that there is like probably some upside to your guidance because otherwise, you know, like you really have to assume a very strong decrease in more or less all the three divisions. which if I listen to your comments, I really don't see at the moment happening, and you would already see that, right? We are already in the middle of November, shortly before Christmas, basically. You would probably see that if this happened, and it doesn't appear to my ears at least that you see that right now. Could you please comment on that? It is just a very conservative cautious guidance, or are you expecting in Europe, as you mentioned, higher costs, cost headwinds than probably we see from the analyst stack, so to speak.

Okay, let me take that question again. If you look, and we have it here already on the screen, if you look at page 18 of our investors presentation that's in the backups, you do see once again the very typical seasonality that I already pointed out during my speech. In Q4, the margins are traditionally the weakest because we simply have a lot less working days in our plans and therefore margins are declining. We have a weaker fixed cost absorption and this is why we are expecting a weaker margin in Q4. However, this should and will go away in Q1 next year. But to your point, yes, it's conservative. I mean, we always try to be somewhat conservative in terms of our guidance and we're not ruling out anything, but I still believe it is possible that we will see that development. And as I said, Europe is currently the region that is strongest under pressure, especially when it comes to energy prices. And you've seen those ups and downs both on the natural gas markets, but also on the electricity markets. And this is something we were trying to incorporate into our guidance. Maybe we've been too conservative, but we will see. Right now, we feel confident with our guidance and we will see if we can surpass that.

Okay, cool. But maybe just one little question. Your R&D expense was significantly lower compared to the first two quarters. Was there any structural change in those? So it's just like the new flight level or was there like a one-off effect somehow in this quarter?

You have to check, but I don't remember them being low. I think we're on a very good plan with our R&D.

Expenditure so so crystal is checking while we're taking that I think 3.9 versus 4.7 and 4.6 before

Q3 with 3.9 versus 4.1 in the quarter 2021. And with the 4 million, yes, we are slightly below the year-to-date average. A lot of the R&D expenses are also dependent on whether or not we have to capitalize certain projects. So it may have been that in Q3 we've capitalized a few more projects, but these are following strict rules of the IFRS accounting standards. So, yeah, what I can say and what we need to say is that we are not slowing down any kind of R&D activity, quite to the contrary. we are pushing through and we are also expecting that come year end we will see again higher numbers so there is no stop in development or in projects everything is going according to plan and it may just be that for a unusual coincidence this quarter we had a higher capitalization rate than we had the periods before there could be timing or capitalization issue but we're running

Very well with our R&D projects, all projects. And you've seen, if you were at the IAA show, you've seen some of the new developments that we are doing in terms of digitalization and automated products. So we're very happy with the development there. And we're doing it with reasonable R&D money, but we should be spending over the course of the year more than we have in the in the last years and if in q3 for timing issues or or um or since we put it on the balance sheet that could be um could be an issue delay because of that but other than that we we are actually increasing our efforts in preparing ourselves for a more digital and a more automated uh product in the future

Okay, and then maybe a last one, if I may. In the US, basically, we have seen from several, you know, like mega companies, we have seen actions now being taken to basically reduce the cost base, laying off people and so on. Among them also, Amazon, there was some news that, you know, like the volumes, they are down at Amazon in the US recently. single stay I think wasn't that well perceived in Asia now I think the last weekend and you know regarding your client base how much of your North American sales is coming from those you know like these large logistics operators and do you see any signs of you know like weakness coming from as a consequence of the management of these people basically being on the brake paddles for at least for the moment.

Yeah. Maybe the how should I say, the weight of the parcel shipment will go down a little bit when Amazon and the others are struggling. But when they're struggling, it doesn't mean that they're not growing. It just means they're not growing at the same pace that they have been in the past. And you're right, Miro. They have been a driver of new ideas in logistics and partially also of new equipment. that we were able to support with our products. But in North America, for example, it ended up being the same traditional equipment. They've had various studies of how they could transport their parcels more effectively, but they ended up with the same trailer and truck combinations that were already in the market. So as long as the consumption will continue and Amazon, it's not that they will go away. It's just that they're not growing as fast as they have been in the past. But as long as the consumption will continue, it will not impact our customers and there will not impact us immediately as long as there is consumption going on. And if people go to Walmart and buy there or if they get parcels delivered to their home. It does make a difference because there's more transport involved obviously when you bring it to your home, but it's not a huge impact to our business. And in terms of, if I may understand your question in the way we have planned to lay off people in that regard, always had to be very flexible. Flexibility in production has always been the core value for us, and we are able to fluctuate with the markets. Of course, we have a certain amount of fixed costs and fixed functions, but also there we have been very stable over the last years. So I think we have a setup so that we will be able to balance that out with our staff. So I don't expect us to follow the lead here of Amazon and others and have such radical adjustments. We are continuously adjusting our operational flexibility up and down because that's what we had to do in the market over decades. And it's part of our business model.

Okay. And just to follow up on this, So you basically don't see any signs of weakness in your pipeline with these kinds of costs. They're still basically ordering and projecting increasing numbers.

As I mentioned earlier, on trucks, I think we have a very solid pipeline and all the logic behind it makes a lot of sense to me. So I expect that the truck market will continue to be stable at a high level. In trailers, it's a bit more of a mixed picture. The input from our customers is that they have a very solid order bank. And they are running still at very good numbers, but they are a bit more cautious because they have been able to follow the demand. So there's not as much pent-up demand. And if now demand eases, then of course their volume will go down. So on trailers, I think we have to expect to be a bit more flexible also downwards if needed than in the truck business.

Very clear. Thank you very much. And all the best for the final quarter of the year.

So there are no further questions at this time. And I hand back to you, Achim Duer, for closing comments.

With that, thank you very much for your interest. As we've pointed out, we are quite happy with the development for the year so far, considering it's a year with a lot of uncertainties and a lot of fluctuations and threats in the market. We expect to have a successful 2022 and would like to thank you for your attention and for your interest in Yoast. And we don't hear ourselves already. Happy holidays when they come closer. Usually I wait until December before I do these wishes, but since we will probably not meet in this course, so I expect, I hope all of you will also have A very nice closure of a year full of work, but also hopefully full of successes. And looking forward to talk to you next year. Thank you very much. Bye-bye. Thank you.