Krones Ag Adr

Okay, good. Good afternoon and welcome to the conference call of Cronus. Cronus significantly improves revenue and profitability in the first three quarters 24. This was the headline of the press release we published today morning. Now we would like to present you all the figures and give further details about this first nine months of the year 24. after the presentation by christoph clank and utah anders you will have the opportunity to ask questions i think you also know how the q a session works please use the function raise your hand in teams or send me just a short email and then i will hand over to you additionally please be reminded that this meeting will not be recorded and that is also not allowed to record the meeting please also deactivate any functions of recording at teams so i would say let's start with the presentation so i hand over to christoph clank christoph the floor is yours thanks a lot yeah warm welcome today good morning and good afternoon to the audience buddha and myself are happy to have you here today and are happy to present the q3 numbers of crowns um as always

We jump immediately into the presentation because the summary you anyway have seen already and we go in any detail by the next slides to come. Here are the major numbers of Q3. And here we jump into the order intake. And first of all, we are quite happy where we are. The 1.3 billion order intake in Q3 was in line with our expectations. And it's on the same level as the previous year. where we are very happy about. And if you look to the nine months we have as order intake with the four point one billion, we are as well in line with what we have expected and predicted after Q2. The book to bill ratio is above one, which is important in those times. I think we will most probably discuss about that more. I can say the markets and this is said with all the considerations we have made over the last weeks and with discussions we had with our customers our markets are still robust that's the important message i want to send and the investments of our customer continues and this is based on what we see in the inquiries and thus what we have in the pipeline and is based on the discussions we had with the big key accounts to understand their investment schemes they are putting up for the next month and for the next year. I think all the rest we can most probably discuss later on in the Q&A if there are deeper questions to the order intake you might have. If we jump then to the order backlog we have, which has further increased slightly. I mean, if you compare to last year, it's up by six percent. However, I can say that the mix has changed a bit of the backlog because we have executed, let me say, machines built here in-house and they delivered x work so we have a bigger proportion now on the services to be executed to install those lines and that they are commissioned so there's a bit of a change and that's the reason why we are have decreased our x works delivery if you look to we have we are coming from 70 weeks in the past and we are down to 50 weeks 52 sometimes, sometimes a bit less. But this is the average we have right now at the 50 weeks, which was very important for us that we get competitive in the market because some of our competition had shorter delivery times. So that's an important achievement. Once was, of course, with the, let me say, optimized and with better processes executed in new machines that we got more through. without significantly increasing the capacity, without increasing significantly the capacity. And on the other hand, it's a bit of a shift into, let me say, aftermarket and installation. So that's important message. Second important message was the order backlog, which we have is we have from today's perspective until the end of 2025. a capacity utilization and this is very important if we look to next year that we have already a quite good view on how we can drive 2025 forward for crowns and have a for the today's situation a very good planning security how we see 2025 um next slide is about the split through the markets no significant change from what you have seen nothing in particular to explain i mean two things i want to highlight here number one is the eastern europe central asia number we have right now it's seven percent which um historically might be the highest we ever had those markets from let me say from eastern europe and it's going into kazakhstan um It's not including the Southeast Asia area, but all the rest in the middle. below Russia. I mean, this was working quite well. We are quite happy where we are with that. So those areas are at the moment really performing well. That's maybe one highlight. And then, of course, we have to look to North America and Central America. And we are all waiting what the outcome of the election will be, which we will see hopefully the next couple of days. We have played through, let me say, the possible outcomes of that. Nevertheless, I mean, we can't foresee everything, but as I said, we have played through most of it and are hopefully well prepared. So that's for the time being, in a nutshell, overview of order intake and order backlog and the split of revenue we have right now and then over to Uta.

Thank you, Christoph. Good afternoon also from my side. As usual, I will continue with revenue development. And as you can see, we had a strong third quarter with a bit more than €1.3 billion order intake, which brings us then to close to €3.9 billion revenue after nine months. And I mean, as you can see, 11.2% growth. And you remember that we have said in Q1 and Q2 call that our growth throughout the fiscal year will increase and we are showing that this is the case. Talking about net style, I mean, net style has been included in quarter two and quarter three, close to 100 million euro revenue for the two quarters. And if you look at the growth, 11.2 percent net style contributes here with about a little bit more than two percentage points. With our 11.2, we are within our guidance. Remember, we had said net style is part of our guidance. And we are also confirming our guidance of 9 to 13 percent growth. I mean, with the 11.2 and with the outlook we have right now for Q4, we believe that we will be rather at the upper end of the guidance. Coming now to EBITDA. Also here we had a strong quarter, 134.9 million. The quarter itself was a 10.2% margin and comparing it also to the last, to the Q3 of 2023, significant change from 9.5 to 10.2%. And now looking at the overall numbers, as you can see, 391.1 million EBITDA, which was an increase by close to 18%, and from a margin perspective, 10.1%. And as you can see, 0.6 percentage points increase compared to last year. And that is despite of the fact that we had higher new machine sales share in our revenue, and also despite of the fact that net style has some dilutive effect, which is about 0.1 percentage points. And as we have also said in previous calls, the price increases which we have done in 2021 and 2022 cover all the cost increases which we had in the past, but which we will also have going forward in particular for payroll. And we also confirm here our guidance of 9.8 to 10.3% EBITDA margin. Continuing on with EBT, Also here, strong quarter with 89.9 million and compared to quarter three last year, 15.6 million in addition, 0.4 percentage points, bringing us to 275.6 for the nine months and the 7.1% margin, so above 7%, which some of you may remember from previous times also. And also in the numbers are included farm quarter 2 still 4.5 million won of farmer taking into income and earn out obligation which we had. And also here, our margin is in line with our expectations for 2024. Yeah, and now coming to personal cost and material cost as the major components of our cost base. I mean, personal cost, as you can see, significant increase from an overall perspective by 133 million, 1.168 million. billion personal expense as you know we always say being at around or below 30 percent is important for us here and we are here at 30.0 percent we had been after q2 at 30.3 so a slight decrease also coming just from performance and looking at material material cost um 146 million in addition compared to last year, but also here 49.1 percent ratio. And that's despite of the fact, as already mentioned, that we have a higher new machine share in our revenue base. Employees, yeah, as you can see, we have We have broken the threshold of 20,000 employees in September. So Coons as of September employs 20,025 people, which is a little bit more than 1,500 in addition compared to end of December 2023. If I look at the additions, half of it comes from NetStyle plus additional service engineers plus digital community. So that makes up half of the increase. And the other half comes just from recognizing our order backlog and just recognizing the higher business volume, which we have. Looking at the breakdown, Germany compared to West or outside of Germany, I mean, it's the same breakdown as we had in quarter two and compared to end of last year, the change is that we have now a smaller share in Germany because of the acquisition of Netzteil. But all in all, no change to compare what we had also for quarter two. Now coming to the segments, first of all, filling and packaging technology as our major segment. And of course, it follows group development overall, looking at revenue 3.277 billion after nine months, 13.8% growth, EBITDA margin or EBITDA 342, significant increase in absolute numbers compared to last year from volume. But you can also see that with our 10.4%, we have 0.1 percentage point higher margin compared to last year. And also here we have a dilutive effect from NetStyle included 0.2 percentage points approximately. And also here we want to mention that in general we have a higher new machine share in these numbers. We confirm our guidance here, which is 9 to 13 percent in revenue growth. Given the fact that we are at 13.8, we will be rather at the upper end and for EBITDE 10.3 to 10.8. Continuing on with Polaris' technology, as you can see, 378 million euro revenue, which is an increase by 40 million, 11.7%. And we have in mind that last year, AMCO was only included four months. Now we have nine months included. Coming to the EBITDE, 36.4, 9.6 percentage point margin. You can see that we have quite a significant increase coming from volume, first of all, but also then coming from margin. And this is not only coming from AMCO. Also without AMCO, the contribution or the EBITDE margin of the... segment would have been much higher than last year. And looking at the guidance, 15% to 20% is our revenue guidance. We will be rather at the upper end there with all what we know right now. For EBITDA, we believe that we will be rather at the lower end for revenue at the lower end and for EBITDA margin on the upper end. Intralogistics, last but not least, 220 million Euro revenue, so a decrease by 46 million. Here we had quite strong first nine months last year, but we expect then to have a very strong fourth quarter, then also coming to our guidance. And on the margin, you can see 12.4, 5.6 percentage points. So it's to remark here that despite of the fact that we had much lower revenue, we were still able to increase the margin by 0.6 percentage points, confirming all the measures we have taken in the last years. Looking at the guidance, 5% to 10% is ambitious for us, and EBITDA margin 6% to 7%, we will achieve that. So far for earnings, now let's come to cash and liquidity. I mean, as you can see, very strong and stable cash position and overall liquidity position, 305 million euro cash we were holding as of end of September and bringing us to 1.159 liquidity reserve. And then coming to equity, I mean, as you can see, we have increased equity by 120 million. in the first nine months, which is, of course, to a major extent driven by net income, a little bit more than 200 million, then paying out the dividend and then a very small contribution negative just from neutral effects going into equity. All in all, you can see that the over-proportional equity increase by 120 million and the under-proportional increase of our total assets and liabilities, they stayed more or less at 4.5 billion. After nine months, we were able now to increase significantly our equity ratio to 40.5%. Working capital also here stable development 17.1 percent compared to last year 17.3. If I look at the overall numbers we will see that later on the free cash flow statement we have increased throughout the fiscal year working capital by 188 million and looking at the different components of working capital you can see also in these numbers that we are executing our backlog. So that means we are also utilizing the down payments we had on the liability side and now netting them, if you want to say that technically, with the asset side. That was the reason that our balance sheet sum didn't change a lot. But that's also the reason, looking at our receiver with POC, that we are now at 37.1%. Overall number didn't change a lot compared to end of December. Payable is also here. I mean, overall total number didn't change a lot. And of course, with higher revenue and average, payable share decreased to 14.2%. Inventory, you may remember that we had said that this is a focus point for us to make sure that the safety stock we had built up is now on a stable level and with further potential for reduction. Overall, the absolute number is more or less the same and with revenue increasing, the share decreases. And received free payments, actually here we have The highest change, they are lower by 120 million, and that bringing the share to 18 million. And one more time, change in working capital, 180 million, which you also see here now in the cash flow statement. Looking first of all at the first nine months, I mean, you can see earnings contribution other non-cash changes, depreciation, then you see the change in working capital. Cash flow from operating activities, very strong. CapEx being a little bit under-proportionate, as we always have it in the first nine months. And then coming to free cash flow without M&E, 145 million. And then M&E activities, that is mainly net style and including then financing activities, others, which is mainly the dividend, bringing us then to a net change in cash. of 140 million and cash at the end of the period, 305 million. Just a short comparison to the nine months period of last year. I mean, the major change comes from change in working capital because you can see that there is 160 million difference between the two years. And the other major change, of course, comes from the earnings before taxes. Free cash flow, looking at the multi-year period, as you have seen from us over the last periods already, I mean, you see our 145 million. And we had said in all calls of 2024 that our expectation for 2024 is a free cash flow before M&E of about 200 million. So we expect another strong fourth quarter. And we are also confirming the 200 million. Return on capital employed, I mean, as always, it's a result of EBIT development and average capital employed development. Overproportional EBIT development brings us to a capital employed of 18.3%. And so also within our guidance given of 17 to 19%, and which we are also confirming. Then continuing on to the outlook.

Thanks, Luthar. I mean, just to summarize all of that, it's two months to go into the year and of course would be quite surprising case we would have other numbers than those here and being confirmed. So we confirmed the revenue growth. Uta said that by the end of the year, EBITDA will be within the range. You see, we have delivered after nine months quite consistent results and ROSI as a result of that will go in the right direction. If you look to the segments, I mean, even that is already said. So we are in filling and packaging on track to our targets and the guidance we have. The same is true for processing technology. The only one where we have to make a statement is inter-logistics. Uta said that that would be very ambitious to get to the 5% growth. um this has to do with postponed projects not from us from the customer where revenue is missing however we have a quite ambitious q4 and are still working on getting to it or close to it and for the profitability you saw that before we are at 5.7 percent for the time being and with the high revenue we do expect in the last quarter we definitely confirm the six to seven percent here on this slide Yeah, and all in all, the long-term targets, we should never forget about them. So we know it's ambitious in those times to talk about an organic growth in the direction of 7 billion. Of course, some acquisitions might be included, but some. And even the, let me say, the ambitious targets on EBDA and EBT are in those times really challenging, no doubt. But we believe with the position we have in the market, and let me say the measures we have taken and it's all listed up here, there is a reasonable chance to get there and as a result to be with the ROSI above the 20%. Having that in a nutshell, we are quite happy where we are. Important for us is to say our markets are robust. And I think with the Q&A, I would assume we come to that more in detail. um we are happy with the order backlog which we have that we have a quite big certainty on the planning for next year and can anticipate quite good where we are with that profitability is okay and in the right direction so we are happy with that and even free cash flow is targeting in the right direction last but not least um net style is going very well i can say i mean we have worked already before the acquisition long together already. So we knew each other, but it's like they have been already a long time with us. So it's very easy that we are a team now together with Netstar and getting momentum into the market, which is the target. So even that one works very good and is closing what is for us very important, the recycling loop for pet that we are the first company having let me say all technologies in our hand and with that all the improvement possibilities for the future to make the circular economy really happening with pet yeah and again targets are confirmed so with that we are going over to q a

Thanks to Uta and Christoph for the presentation of the figures and the additional information. Yeah, let's start the Q&A session. So you have the possibility to raise your hand in the team functions or you send me an email. And this is what Sven Weiher has done. He sent me an email more or less at the beginning of this conference call that he wants to have or to give us questions. So Sven Weiher, it's up to you. Your questions, please.

Yeah, good afternoon and thanks for taking my questions.

The first

Yeah, good afternoon. Good to see you. Just wanted to follow up on your order intake guidance, right? Because you said you expect a slight positive book to build, but you will probably understand that I can't get you off the hook. not reminding you about the 5.6 billion you mentioned in q2 i know it was roughly 5.6 but is that still a number in the ballpark or have things developed a bit softer so any color on this would be appreciated thank you yeah sure yeah yeah i appreciate it because i was i was assuming the question uh in those times that this might be most probably the most important question um

I mean, as you repeated it quite well, I said it roughly around 5.6 billion. And if you would ask me as of today, and I said that earlier, we have in the pipeline enough orders to be negotiated and taken on board to reach our targets. And I come to that in a minute. This is the statement I wanted to make. So the activity of our customer is allowing to be around that number. And if we qualify things now reasonably, for the time being because I have been personally at customers the last couple of weeks and talking to them. We have two big exhibitions going on for the time being, and we had almost every second day a qualification where we are by the end of the year. I would say for the time being, we would judge the Q4 at around 1.4 billion. And very rough mathematics, this would lead to 5.5. This would lead then to still book to build ratio bigger than one is there a chance to get to the 5.6 let's see because that's depending and it's difficult to say right now because we have a couple of certain stances around the world one is happening today and the outcome we know most probably not before the next two weeks which might shape the things a little bit and when i say the there are enough orders in the pipeline then i have to make two howevers one however is we need to win it And the customer should not postpone it, because what we have seen is that customers didn't cancel, let me say, their ambition to order, but they have postponed it to a certain extent. And the second, however, is, of course, how does the world turn out after the election in the US? How does Iran, Israel continue? And we have in Africa a couple of conflicts where we are looking a bit concerned to it. So this might be, let me say, the disclaimer I put on it. But I would say the 1.4, for the Q4 are reasonable. Give that color.

Yeah, I think that's good. And I think also 1.4 would be good outcome in these days, I guess, relative to other cap goods companies. Maybe I can just follow up on two things. First of all, In the last couple of years, Q1 was always extremely strong. Do you still see that seasonality? I know next year is a drink tech year. And the other one I had was just on, I think on intra logistics, you said the order intake is quite good. I was just wondering if you could put any numbers behind that.

Yeah. First to the Q1, would that be very strong next year? That's really a good question. I mean, if you look, I mean, usually we have a visibility of the orders in the pipeline of four to six months, and it's still the case. And for us, it's a bit of a question, how do the customers react by the end of the year? Some are, we know, waiting about the elections and the outcome of the elections, particularly when they are in South and North America based. And to what would that lead? Would that then lead their order in December already, or would they postpone to January? So for the time being, we have talked a lot about that, but we can't really say where the bigger proportion might be. We are, and I would put it this way, we have still an ambitious order intake planning for next year. It's not out of the frame, but at least I would say it's not that we are losing all our optimism, but I would call it this way. I would say it's realistic optimism and realistic means we take in consideration how the world economy ticks around the world and what triggering events we might have like the elections like iran israel um so this is my first statement to that i can't qualify really quite well how q1 would be um then the the second question to give a more light on into logistics how that worked um the number we had last year after i have to think about after 12 months is around 400 million a bit above and this year we have after nine months 350 million we had a good q3 in order intake um and we we have been quite happy already in october so a bit of q4 we know already and i would believe that q4 would if if not anything goes south q4 would be good for into logistics as well so i would say we are on track to manage a backlog which allows for the crows in the future um and again We had a bit of a problem in executing the orders, which you have seen today in the numbers in inter-logistics. But that has mainly to do that customers have been not finishing their facilities that we could move in and further execute. That's the issue. But it's not a lack of backlog and it's not an issue of order intake for this year. And again, I mean, I would see inter-logistics quite good growing for

you for and for the whole year i hope that gives you light on your questions sounds good uh thank you maybe the final one is just a housekeeping on i saw that obviously depreciation amortization went up by 5 million sequentially and i would have thought that maybe the net style ppa was already fully baked in in q2 So I was just wondering if you could comment on the DNA line, what caused that 5 million higher and where you would guide us maybe also for the full year on that line.

Yeah, I think it's a combination of different things. I mean, major thing actually increased capex activity in general. I mean, you remember that we have said that also in the capital market day and no special effect. I mean, as you said, PPE was included in Q2 already. So just general higher activity in that quarter. And we expect actually for 2024 or for the fourth quarter, a similar amount as we had it in Q3. So another 45 million approximately.

And you mentioned CapEx. Are you still guiding for the 4% of revenues?

Not in 2024. In 2024, the 4% was going forward then.

Okay. Thank you very much. I go back in line.

Thank you. Thanks to Sven for the questions. I see also that Sebastian Grobe from BNB Paribas have some questions. Sebastian, next for you.

Yeah, that's correct. Hi, everybody. Hi, Olaf. Hi, Ms. Anders. Hi, Mr. Klink. Yeah, good afternoon to you as well. So the first one was around the growth outlook. You confirmed the fiscal 24 guide for internal logistics. If I get that correctly, then this means 140 million in the fourth quarter, which is almost double the revenue level as in the prior quarter. three quarters. So how is that simply possible to start with and to what extent has that eventually also weighed on working capital because you have been preparing eventually to just kind of ship that equipment on the last minute in a way? If we could stop there please.

First, how is the Q4 possible? I mean this is a combination of everything. I mean usually you tend to look only to the new machine production but that's a proportion of it and we said it earlier that the processes are working quite better because we have not the shortage of components and have been returning to regular processes and and on the other side we have worked on more automation we have invested in in milling machine and in lace machines that that we get parts faster manufactured we have some support from suppliers which we use so this is the combination we use and of course we have some people more on board but on the other side we have to look that um some of the contribution comes even q4 from intro logistics where actually they have a quite good supplier network, which we can use to have an extended workbench. Then the growth comes from processing in addition, which is quite well distributed around the world. And we had some smaller facilities all in all together. This brings then a bigger proportion to it. So it's a combination of everything. And don't forget lifecycle, which has developed over the years as well quite well, where it's more on people. And we have hired quite significantly service technicians, which each service technicians once he's clarified, is actually generating revenue. So when you look to that, this is the reason why it is possible. And it's not only, I have to emphasize that it's not only production. So that's the first remark I have to make. Is that answering your question?

It's even going beyond my expectation because I specifically asked for inter-logistics. For inter-logistics, yeah.

there because obviously it's so much sorry sorry for that one but i explained already into logistics and now we need to go to the working capital exactly i mean working capital if you look at intro logistics specifically yeah through the increased revenue we will have a lower proportion there we don't disclose that looking at the group level there will not be a major effect just coming from inter logistics does that answer your question

Yeah, yeah, it does. The second question then, I have surround top line growth in a more structural way. So as of the second quarter, we have seen now double digit growth rates on the top line. The same would then apply apparently also to the quarter four. So the question I simply have is, how do you feel about growth continuing at double digit levels? You pointed really to, it's good that you're laughing, but at the same time, I think you have been pointing to this very good factory utilization. Thanks to the order backlog, you could plan and I think a great advance for those volumes picking up over time. So I know it's not a call here to discuss 25 guidance, but if you could at least qualitatively address the question, that would be much appreciated.

Yeah, we were laughing because in case we would continue, let me say on that growth level, that would be of a miracle, I have to say. I mean, we are growing next year. Definitely. That's that's the plan. But we have it's too early to really say on on what level it is. It it will. I mean, it will be reasonable. And it's obvious we have a quite good backlog. We want to reduce delivery times further. So you see something coming out of that. And we do assume that our aftermarket business works quite well in addition. And I said it earlier, service technicians, they come on board, they help to generate revenue. But I would say with the real numbers, we come with the guidance once we give that for 2025. It's too early.

Okay, then I apologize for my next question. It's the last question. It's just a quick follow up to the earlier answer that you gave to Sven's question when he asked for the quarter 125 order intake. You then said apparently that you are having some ambitious expectations when it comes to that quarter one. You made some comments before on the pipeline that it's generally speaking in a good shape, etc. Would you feel comfortable at this juncture with all the uncertainties that we have to also see another year with a book to build of one or even higher? Or is this really way too early to talk about it?

I would say it's really too early to talk about because we have not yet talked about the real number of growths. And of course, this would set the target for the order intake. But I said it earlier, we have reasonable and reasonable is defined as we see the circumstances around the world on one side, but we see on the other side, the pipeline which we have in the inquiries and let me say the ambitions of our customers. um and we see that our markets are robust and based on that and our positioning in the market and based on that i would say we have this realistic optimism even for order intake next year and i wouldn't see the point coming where we are away from a book to be a ratio of one at least in a in a bigger nutshell we have not finalized our numbers yet and are not here today to have really a qualified answer on that but i would say we have a reasonable few on it and we we still believe with a realistic optimism that we can drive things even next year forward okay great and then the very very last one because it just fits to it on pricing if you could comment on what you're currently seeing so is this kind of stable ish are you seeing

competitors of yours acting a bit more rationally eventually or is everybody still pretty well filled and for that reason simply there is no need to kind of go down the route of price cuts or so?

Yeah. I mean, we lost tonight an order, a quite big one. Then it's difficult to be reasonable today. No, just joking. No, we don't see that at the moment. We don't see unreasonable behavior. I would say we have sometimes a bit of a disadvantage because of the long delivery times where we are working on and getting things okay. But I would say pricing in the market, as I said last time, is an issue because every customer is pushing for it. But it has less to do with competition. I think it's more customer driven rather than competition driven. And I would say for the time being, the observation we have, it's reasonable. And I'm careful with that because this this might come more under pressure when things are getting in the market more south, which for the time being we do not anticipate.

So it's encouraging then. Thank you very much and see you next week in Paris or the week after, sorry. Bye-bye.

Yeah. Thanks, Sebastian, for the questions. I see the next question is coming from Lars von Kleff from Deutsche Bank. Lars, your questions, please.

Thank you very much. Good afternoon. Thanks for taking my question. First of all, seamlessly following Sebastian's question, you already talked about the competitive situation, competitors behaving reasonably or reasonable. I think in the last call you mentioned China stepping up. I guess that is still the case. So not expecting... harsh fights at the moment, but competitors becoming more active. That is still the case, correct?

Yeah, sure. I mean, there's no, I would say, short-term change in that environment we have right now. We see them in the cases we have even seen for three months ago, and there's no significant change in the competitive landscape, nor on those being there, nor on

how aggressive they are nor on the pricing so i would say that has been this is something which change um slowly there is no no fast action in the market perfect thank you and i take it given how you asked sebastian's question um pricing pressure for you not too high currently but at the same stage or at the same point in time you're also not able to increase prices or ask for market price increases uh i i think

I mean, we have not lost the concept on how we build up the pricing for our, let me say, investment good equipment. When we said, we explained that in the last conference calls we had that we are looking every six months up how the cost structure would be in the future. I would say at the moment we see that quite stable, and that's the reason why we don't see a need of price increases for the time being, because those rises we see on the personal cost, we can compensate to a certain extent on the material cost, so we see it quite flat. And the pressure on price increases is not yet given. So that's my first statement to it. If you would ask us, there is no price pressure for us, I would see it different. Of course, there is price pressure, and I would say we are losing because of price in particular when they're coming from China or from Italy. So we are losing orders. but not in a bigger magnitude than we have doing that before. And if you would have our SAIS colleague here on the board, he would say, oh, I'm under pressure because I have to be much more selective and have to fight much harder than before. But we are capable of doing that and maintaining the levels we have right now.

Understood. Many thanks. And then looking at your lead times, 50 weeks now, if I'm not mistaken, you want to go down to 40, 45 weeks. And I assume that capacity utilization is currently relatively high, maybe 95% or so. Against this background, I guess you're also not planning any or you don't see the need for capacity additions. You're happy with the capacity you have.

Yeah, we are happy with the capacity we have. And I would say we are between 95 and 100%. And as I said earlier, we have even used supply chains, even in supporting us building machines, not for the entire machine, but at least for components. The plant in China works quite well, where we are serving the Chinese market, which helps a lot. So I would say in the plant in Hungary, which was for quite a long period, a kind of a headache is performing well and giving good support. And we can even get there some efficiency increases. So all in all, we do not need to increase capacity for, let me say, for a revenue we plan as in Q4.

Okay, glad to hear that. And then the last one, let me quickly tackle the elephant in the room when it comes to cap goods companies and the upcoming US presidential election. I mean, independent from who will win, America first will definitely play a role. Do you have any view on the potential impact of potential US import tariffs that you're faced with? Or is it largely you producing locally anyhow already?

Now, I mean, let me say this is a quite complex matter for Crohn's. And what what have we assumed? We have assumed that regardless what outcome the elections will have, we might face a increase of import taxes of 10 percent. And if you look now to the picture Crohn's has is that still with the 10 percent import tax we have and this we have played through all over the years, we have advantages here in producing here in Germany. Why is that? Because we have the major competition for our core segment sitting here in Europe. That's a very important factor, which is important when we view on that. So there's nobody who, at Braumach, which is American-based, can to a certain extent maybe benefit out of it. But in North America, they have anyway a higher cost structure. Second, processing is totally different. In processing, we are totally localized. because the competition sits in North America and we have North American facilities doing, let me say, 85% to 90% of what the North American market requires in processing in North America. And the same is true for inter-logistics. We have just expanded our plant in Arden in North Carolina just because of that reason. It's going right now into production. It will be open next week. and we will have then the ability to serve in into logistics let me say 90 out of the u.s market in the u.s so that's a different picture beyond that we have not thought yet because we don't know the details and maybe i should add even in north america we've built a part of our labeling technology it's a small proportion but for us it was important all the time um to maintain their know-how how to build machines and have the processes in place because the learnings in china in in hungary was it's more difficult to get the processes there and the i.t systems rather than to build the machines and this we have done in the north americas this we started already quite a while ago over the last three years we have prepared for it and we have at least a backup scenario in case we would have to shift quickly production to north america which we do not expect for the time being I hope that answers your question. Quite complex, but.

It does indeed. Many things much appreciated. And I'll go back into the line. Yep.

Thanks a lot. The questions I got next question are from the through the emails. It's Benjamin Tima from there. Benjamin, your questions, please.

Yeah, good afternoon. Um, and maybe I have only one question left. Actually. Um, it would be on intro logistics as well. Mr. Klink, you already mentioned that you see some order postponements from your customers for that division and I'm just wondering what do you expect or when do you expect them to basically come back? How do your conversations with customers look like? Is it more like they're postponing it and you expect revenues to come back in 2025 or is it more like customers are postponing it and let's see when they are coming back? So I tried to get a little bit of a feeling. how intralogistics could do over the next 12 months.

Yeah, I mean, we do expect for next year, and I can say that a good growth for intralogistics in terms of revenue, because when I talk about projects being postponed, then they are unfortunately postponed by the end of their project execution and not at the beginning. Once the building is not finished, we have maybe 60 to 65% of the work finished already, and then it's holding up. It's only by months, it's not by years or that they change completely. The buildings are under the way, they have not finished and this might swap then the last 30% of the revenue into the next year. So if we look to next year, and that's quite sound when I say that we look to a really good growth of indoor logistics and based on discussions with customers to make sure that they are really executing and the best proof of it because in I would say 85% of the cases in intro logistics, the civil works goes before and all those civil works are on the way. So I have no doubt that those projects will be executed and we will see a good growth in intro logistics next year.

Okay, perfect. That was actually already everything from my side. Thank you. Yeah, thank you.

Thanks, Ben, for your questions. I see also Jorge Gonzalez from Alcor, sorry, Alcor has some questions. Jorge?

Hello. Yes, only one question from my side. Hello, Christof and Uta. For the process technology division, Q3 has been quite flat and I was wondering which levers do you see for the division to accelerate the growth for the Q4? and to be able to reach the lower end of the guidance. What are you seeing at this point for the revenues to improve going forward?

Well, I mean, for Q4 in terms of revenue, I mean, it's pretty much set already because we can't do anything on where we are right now. So as Uta said, we are at the lower end of the revenue growth, which anyway was a quite tough growth. profitability will go OK. And if you look, because we spoke a lot about auto intake, if you would ask me, processing was one of the issues where we had a big headache. And this has to do with two things. Bigger projects are slower executed in processing. I would say the need of our customers might be not as high as in other areas of having new equipment. And this has a bit to do with breweries, I have really to admit. And on the second point, there was the US market, which was low for us, maybe for others better, because that's a relatively young market for inter-logistics for Crohn's. And I would say we have been, in terms of our sales force, not the strongest there. This is something we are changing right now, because if you would ask me, the way forward is getting a stronger sales force for processing in place. in particular in certain markets and harvest on the products we have on board in all regions because some of the products are quite regional still with the know-how we have. And what we are doing is now spreading the know-how around the world and having a dedicated or more dedicated sales force for processing that we get along with the growth. So that's the targets we have and that's where we are with processing.

Okay, thank you very much. I go back to the... You're welcome.

Thanks to Jorge. I see also questions coming from Peter Roteneicher from Baader Bank. Peter, your questions, please.

Yes, hello, Uta. Hello, Christoph. One question regarding M&A. So now we have the situation, as you see, with the valuation of the growth share, but also other cap good stocks. Valuations look momentarily relatively attractive. Does this have any impact or opportunities for M&A? How do you see here the pipeline and what can we expect?

Yeah, I mean, for this year, nothing else than what we have done already, because we still focus on next time. It's less on how we actually approach the market. It's more about, I mean, we said that we might take two or three years to get the profitability up. So that's that's the focus we have right now. How can we fix that and how do we go in that direction? If you look, would ask us about the opportunities we have. I mean, if you look to stock market and share prices yes that would be attractive but on the other side if you look to targets on let me say revenue levels between 30 million and let me say 300 million there's a lot of private owned companies and the expectations on multiples on ebda are still extremely high so i'm i'm not um seeing that there is already some opportunities which might be attractive in terms of the multiples we see, in particular when we search for acquisitions having profitability, because we don't want to have further dilutive effects. We want to maintain the levels we have, and you know, we have quite ambitious targets out there. So we need to look for acquisitions which deliver profitability. And saying that, I would say there is still a limitation on it. Nevertheless, we continue and we are working on it.

it's but it's too early to say more about it sure uh perhaps and also on net style uh can you characterize uh their business development currently uh what what is demand doing uh with their products i think uh with injection molding we we had uh in in this environment uh also some some challenging um how how is it developing currently yeah

First of all, I have to say the injection molding market as such is very challenging. I mean, you have seen certainly the big ones, the competition, how much everybody is under pressure because in particular the automotive industry is missing in the injection molding market. Now, NETSTAR has been never in that area, but that leads to the fact that injection molding machine manufacturers who have been historically in other areas have been a sudden focusing on areas where net style is in. So it's quite competitive landscape. Nevertheless, we managed a quite good order intake and are happy with where we are. We made already together with Crohn's some momentum in the beverage market, which is our core focus. But nevertheless, we see good order intake on medical equipment in the injection molding, which is driven by some of the very large pharmaceutical companies. and we see the cap business because they do injection molding machines for caps for bottles and and for cartons so this is still okay that was a boom two years before it's now cooling down a bit but it's still a constant level so the three areas preforms camps and medical devices are quite stable packaging which is a smaller proportion of net style is i would say suffering the most because there have been a lot of uncertainty because of packaging legislation where everybody was waiting how this would be turned out and what that would mean for plastic packaging like next time machines are doing so i would say in the four categories three are working quite stable of course with the support of crowns in the beverage industry and as we have introduced on the capital market days the first two machines of the new kind where we block injection molding with blow molding are going early next year into the market which will certainly create a let me say further impact so we are quite happy how things are really developing okay thank you very much yeah

Thanks to Peter. So I have to check my email folder. I didn't see any questions. And also the Teams channel. No further questions. Nope, not at all.

All right, then. Thanks a lot for listening today. Thanks for the questions. And we are looking forward to finish off 2024 as expected. So that's the plan. And then let's see how we manage 2025. Thanks a lot. All the best. And let's hope that the outcome of the elections are a bit reasonable, right? That's our new word, reasonable. Yeah. Thanks a lot. Bye.

Good afternoon. Thanks a lot. Bye.

Thank you.