Mtu Aero Engines Hldgs Ag

Good morning, ladies and gentlemen. Welcome to our conference call for MTU's preliminary full-year results 2024. As usual, we will start with a review presented by Lars. Peter will give you the financial overview, a comparison to our initial guidance, as well as a more detailed look into our OEM and MRO segment. Following that, Lars will walk you through the updated guidance for 2025. This will end the presentation part, and we will open the call for questions. Let me now hand over to Lars for the review.

All right. Thank you, Thomas, and welcome from my side to all. Let me start with some words on the market environment. The market environment remains favorable for the A&D sector. We expect to see robust passenger and cargo traffic throughout 2025. IATA forecasts passenger traffic to grow by 8% and cargo traffic by 6%. While demand for new aircraft remains very high, the level of new aircraft deliveries is still lagging following ongoing supply chain challenges. This allowed the delivery and sale of more spare and lease engines. Further, it led airlines to expand the services to extend the service life of older aircraft beyond their original plans, leading to increased demand for maintenance and spare parts. The already limited MRO capacities are facing an environment with high demand and supply chain constraints. This opened pricing opportunities for MRO services and lease equipment. MTU is well positioned in all of these areas and has benefited accordingly in 2024. We witnessed limited growth in new aircraft deliveries, allowing an increase in spare and lease engine deliveries. And additionally, we saw solid MRO demand for mature engine programs like the V25, GenX, GE90, or CF34. The spare parts business performed quite well in 2024, particularly for narrowbody and mature widebody engine platforms. Moreover, our MRO business benefited nicely from the strong results of our engine lease and asset management business in Amsterdam. With these market trends and MTU's strategic positioning, we are confident to continue our success story in 2025. Let me now focus on the GTF fleet management plan. Firstly, I'd like to emphasize that it is no longer an emergency or crisis plan. It has evolved into a well-structured set of measures that are being executed accordingly. Notably, we have seen a significant increase in powder metal output by RTX. As mentioned before, on-time spare parts availability is a key. and allows us to reduce turnaround time well below 100 days. However, we will continue to feel the effects of this plan in 2025 and 2026, both in terms of operational impact in our shops and financially on our free cash flow. Anyway, we do see the available capacity to increase and with that the ability to support our customers. The market confidence in the GTF engine is evident through the strong orders placed in 2024, including over 220 GTF engine orders at the Farnborough International Airshow. And from the operations side, we reached a milestone with the delivery of the 1,000th GTF engine assembled at MTU here in Munich. The GTF Advantage program is on track to receive its final FAA certification in H1 2025 with first deliveries expected within the year. Additionally, the first A321XLR with PW 11000G engines is expected to be handed over to Wistair in Q1 2025. Let me switch to some highlights from our business segments. In the commercial MRO sector, we secured contract wins totaling 5.6 billion US dollars, mainly for narrowbody and mature widebody engines in 2024. With over 45 years of experience, we have completed over 25,000 shop visits, demonstrating our expertise. To meet growing demand, we expand our global MRO capacities, including a new shop in China dedicated to V-25 and GTF engines. In our military business, we have important projects on the agenda. Very favorable environment for the Eurofighter aircraft, with Spain and Italy ordering 49 Eurofighters. Germany is expected to follow with an order for 20 Eurofighters. Further interest from various export countries could lead to further Eurofighter engine orders. Beyond that, we are concentrating on the Phase 1B development work for the new generation fighter engine. Negotiations for Phase 2 demonstrator work are expected in 2025, with flight demonstrator work to start in 2026. Additionally, we established the Jura joint venture for Europe's next military helicopter generation with Zafron helicopter engines. Our industry is actively pursuing improvements towards more sustainable flight with the ultimate goal of emission-free flying. In 2024, we made good progress in the development work for both, further improvements on gas turbine technology as well on the flying fuel cell. The latter includes successful tests on the liquid hydrogen fuel system or the establishment of a new test facility for the flying fuel cell at our Munich site. The flying fuel cell is also the focus of the EU technology program called HEROF. Let me say some words on our upcoming management change in 2025. Already in our Q3 call, I elaborated on my personal decision of leaving my professional home, MTU, and taking on a new role at Airbus. In the meantime, our supervisory board nominated Dr. Johannes Busmann as my successor at the helm of MTU. Johannes is an esteemed aviation expert with extensive high-level management experience. He has been a trusted companion for MTU over many years. in his former role at Lufthansa Technik, as well as a member of our supervisory board. We know, respect and appreciate each other and will ensure a smooth transition between us. However, time of this transition is still work in progress. Johannes will assume his role as CEO at MTU in the course of 2025. A specific date is not yet fixed. The reason is that currently Johannes serves as CEO of a certification specialist TÜV Süd AG and the company is currently in the process of finding a successor for him. Independently from my decision, Peter has also decided not to extend his contract, which expires by the end of this year. After over 25 years at MTU, including eight successful years as CFO, he wants to move on to the next phase in his career. In the future, he plans to focus more on supervisory board mandates. In January, the supervisory board chose Katja Garcia-Vila, a SIG successor, as our CFO. Katja joined the aerospace world after a long track record in the automotive industry. She served 27 years in various functions at Continental AG, including the role as CFO. She will join MTU already in April 1st and take over as CFO on July 1st, 2025 after an intense transition period with Peter. I know this is more change on board level than MTU had in the past. Nevertheless, MTU is an outstanding company and our successors deserve your full support. I'm speaking also on the behalf of Peter when I express our full commitment to ensure a smooth transition to Katja and Johannes. Both of them can rely on a stable, very capable and performing organization. We are sure that they will continue to enhance MTU's operational and financial performance on the path of profitable growth. In the remaining time, Peter and I will continue to drive MTU forward working together with our colleagues to set the course for a positive, constructive and value-based future. Let me now hand over to Peter for the financials.

Yes, thanks Lars. 2024 was indeed another exceptional year for MTU. We achieved for the first time an EBIT exceeding 1 billion euros one year earlier than anticipated. I will provide you with the driving factors in a few moments. This impressive performance, combined with our positive outlook for 2025, was also reflected in our share price, which reached a new all-time high of almost €350 at the end of January. As part of our 2025 outlook, we announced our dividend proposal for the fiscal year 2024. We intend to propose a dividend of €2.20 per share at the upcoming AGM on May 8, 2025. This represents a 20 cent increase compared to last year's dividend. It is important to note that our dividend proposal for this year strikes a thoughtful balance between the financial obligations associated with the GTF Fleet Management Plan and the promising outlook for MTU. Furthermore, in September, we successfully launched our largest corporate bond in history, raising 750 million euros. The bond carries a coupon of 3.875% and has a seven-year term. These funds will be utilized to refinance MQ's existing corporate bond and for general corporate financing. Additionally, in April, we secured a promissory note of 300 million euros. Now let's move on to the key financials of 2024. And let's kick off with a comparison of our full year 24 numbers versus our initial guidance for the year. Adjusted revenues came in at the higher end of our guidance range, showing the robust growth across all of our business segments. With EBIT adjusted slightly exceeding €1 billion, we have already achieved our mid-term target one year earlier ahead of schedule. The corresponding EBIT margin stood at 14%. A free cash flow adjusted of €183 million met our full-year expectation. It was primarily influenced by payments for the GTF fleet management plan and the volatile supply chain, leading to a higher level of working capital. In addition to that, we see an impact of higher receivables on the GTF program. They are built on our balance sheet when shop visits are performed earlier than initially anticipated, triggering payment at a later point in time. The cash conversion rate stood at 24%. Turning the page and comparing adjusted figures 2024 with those of 2023. Total adjusted revenue showed an 18% increase in both euros and US dollars, reaching a new record high of approximately 7.5 billion euros. This growth was driven by all of our business segments. EBIT adjusted saw a 29% increase to 1.05 billion euros, resulting in an EBIT adjusted margin of 14%. This positive performance was supported by a favorable business mix across all segments. Net income adjusted grew as expected in line with EBITDA adjusted and improved by 29% to 764 million euros. Entry cash flow adjusted, as mentioned, stood at 183 million euros, down 48% as expected, impacted by the effects mentioned earlier. So now let's move on to the business segment and starting with our OEM segment. Total OEM revenue saw a 14% increase to more than 2.5 billion euros. In military, revenues grew 14% to 612 million euros in line with our full year guidance. The main drivers behind this growth were the increases in funded development work for the next generation fighter engine, as well as higher volumes for the TP400 and EJ200 engines. Commercial business revenues in euros and dollars rose by 15% to 1.9 billion euros. And within that, organic OE revenues in dollars increased in the low 20% range in line with our guidance. The main growth drivers were higher GTF engine deliveries and a healthy mix of spare and used engines. On a quarterly basis, OE sales also grew in the low 20% range. Organic spare part sales in dollars increased in the low teens. Main growth drivers were mature wide-body platforms and narrow-body engines. On a quarterly basis, spare part sales experienced high teen growth. EBIT adjusted benefited from the favorable business mix mentioned earlier, resulting in a 26% increase to 612 million euros. The corresponding EBIT margin improved to 24.2%. Moving on to the MO segment. MRO revenues experienced a 20% increase, reaching nearly 5.1 billion euros. We saw solid demand across all engine platforms. Main drivers of revenue growth in our core MRO business were the G90, the V25, the GenX, as well as our leasing and asset management business in Amsterdam. The share of GTS MRO revenues accounted for approximately 31%, slightly below our fully expectation of 35%. Throughout 2024, we experienced lower material intensity, while the number of shop visits was in line with expectations. EBITDA adjusted showed a strong growth of 33% to 438 million euros, resulting in a margin of 8.7%. The higher image margin was supported by the robust leasing and asset management business, and in addition, a better contract mix in the independent MRO business, as well as a lower share and material intensity, as mentioned, of the GTF MRO. That resulted in further upside. At this point, I would like to hand back to Lars for some insights on our guidance for 2025.

All right, Peter, thank you.

The results of the year 2024 demonstrated that MTU is well positioned in the market and will accordingly benefit from the ongoing market trends. This gives us confidence in the outlook for 2025. Compared to the numbers we issued in late November of last year, we can confirm the organic growth rates and basic assumptions while we adjust the guidance to the changed FX environment. we're now guiding based on a US dollar FX rate of 1.05 compared with 1.10 before. Therefore, we expect group revenues to grow stronger to a value between 8.7 and 8.9 billion euros. Within that, we expect the military business to grow in the mid to high single digit percentage range, mainly driven by increasing deliveries of the EJ200 and T408 engines, as well as by growth in funded development work for the new generation fighter engine. The commercial new engine business is expected to be up in the mid-teens percentage range, mainly due to higher production volumes for the GTF engines, Gen X and the delivery of the first G9X engines. Compared to 2024, we expect a normalized ratio of spare and lease engines compared to installed engines. The commercial spare parts business is expected to grow in the low-teens percentage range, benefiting from strong demand for narrow-body engines. Especially the V25 engine will benefit from robust market demand and higher utilization. Commercial MRO will experience growth in the low- to mid-teens percentage, driven by increased GTF MRO work, high demand for freighter engines, and strong contributions from our engine lease and asset management business. Overall, this should reside in a mid-teens percentage increase in adjusted EBIT in absolute numbers compared to 2024. We expect some normalization in the delivery of spare and lease engines, as well as some slowdown in the asset management contribution from MLS in Amsterdam. Adjusted net income will grow in line with adjusted EBIT. And the free cash flow for 2025 will be significantly influenced by payments for the GTF fleet management plan and the volatile supply chain. Therefore, we guide again for a low triple-digit million euro number, but we're aiming at the upper end of this range as the underlying business is growing profitably. Thank you very much for your attention and we're ready now to answer your question.

Thank you very much. We will now begin the question and answer session. If you'd like to ask a question, please press star 1 1 on your touch tone telephone. The operator will announce your name when it's your turn to ask a question. In case you wish to cancel your request, please press star 1 1 again. We will take our first question. David Perry from JP Morgan. May we have your question?

Yeah, hi. Good morning, Peter, Lars, and Thomas. Hope you're all well. You're going to hate me starting the Q&A like this. I apologize. There's just a few accounting things I'm a bit confused by this morning. So I'd like to start with three questions. Maybe they're all for you, Peter. Apologies, Lars. The first one is, can you just on slide 21, your free cash flow, the 96 million, the acquisition payments in program shares, could you just clarify what that relates to, please? The next one is the slide 23, I think it is, with your net debt. There's a few numbers there that came out quite differently to what I expected. So in particular, the payments due to program participations. I see also the financial lease liabilities went up, if you could just comment on that. But I think those three things I've just asked about seem to lead to a net financial debt a lot higher than certainly I expected, maybe bad housekeeping by me. And then just the third one, on the other side of the balance sheet on page 24, can you just explain the big jump in receivables, please. Thank you very much.

Okay, then let's start with acquisition of the cash flow statement. So we made, in Q4, we made an investment in, let's say, further business opportunities where we cannot really talk about. So we will disclose that in the coming weeks and months, maybe in Q1 2025. So that's nothing to communicate at the current point of time, but these are positive investments into further business opportunities. I don't know if you want to add anything last. Okay, then on the next step page, so going to financial lease liabilities, you know in Amsterdam in some cases we buy engines or use engines and in some cases We also lease in the used engines, so we lease in a lot of the engines at MLS and under IFRS 16 you know what you have to do when you lease in a lease engine. You have to capitalize the value of use on the asset side of the balance sheet. And the net present value of all of these payments of the future, you have to account for on a net debt. So it has not an impact on cash flow. It's just an accounting issue, as you said. Regarding... Pardon me? Yeah, that's right. We had that, I think, also one year ago. We have agreed with Pratt on a long-term payment plan for certain payments we have to do. We are a program partner in the GDF engine and have to contribute 18% of all costs And in some cases, when you contribute only, let's say, 50% or 60% of manufacturing costs, you have to compensate the consortium for the shortfall of manufacturing costs. And in the past, they were part of working capital. But when you agree on a long-term payment plan, which goes beyond 12 months, you have to account for that as a financial liability. Also, just an accounting issue, it's not part of... working capital anymore, it's part of a financial liability, so it's a pure reclassification of their respective liability. And then receivables, so we have, I mean, you cannot only look on receivables here, you have to look on the net value of receivables and liabilities. But what we saw is, I mean, we had a very, very strong Q4. That's the one thing. So when you have a very strong, let's say December revenue, everything you book in December, you find it in receivables. Then we have obviously ethics impact, so the US dollar moved significantly in December, so going from to 103 at the end, so receivables were valued upwards. And the receivables also reflect the high workload in our MO shops, it's not part of Inventories, if you have an unfinished engine in the shop, it's part of receivables. So these are so-called percentage of completion receivables. And so we have also a lot of, let's say, GTF shop visits where the payment comes at a later point of time, as I said in my statement. So the work is pulled forward and the payment in these fleet management plans come at a later point of time. That is reflected as a high receivable on the balance sheet.

Okay. Thank you for being so patient explaining all that. If I can just be greedy and ask two follow-ons. Should we assume some of these issues like the receivables could reverse then in 2025? I mean, the guidance is the same on free cash flow, a low triple-digit figure. I would say... Better in 2025 than 2024?

There will be some reverse effect, yes. I mean, as Lars mentioned, our target for 2025 free cash flow is rather at the upper end of the low triple-digit range. So significantly better than the 2024 free cash flow, yes. Good with that. So we have an unlucky combination of different factors, especially in Q4, as I just mentioned.

Thank you so much. Thanks, David.

Thank you. We will take our next question. Ian Douglas Pennant from UBS. May we have your question?

Hi, it's Ian Douglas at UBS. I hope you can hear me. My line's been a bit crackly. I've got two questions, please. The first on management turnover. I'm very sorry to see both of you leave in quick succession. Obviously a blow for your investors. Are you able to speak on behalf of the board what criteria were prioritized in the search for your replacements, and I guess especially I'm thinking of Peter here, given that that was more recent news, and how long this transition has been planned for, please, at least at the supervisory board level. The second question, I'm afraid I'm going to go back to David's question, because I think it's important. There's been a lot of accounting-style questions in the engine space recently on both sides of the Atlantic, so I think it's important to get on top of this. Can you help us understand why exactly there's lots of GTF shop visits happening today where the payment comes later? Maybe you could just go in a little bit more detail on exactly how that mechanism works. Thank you.

I mean, the pull forward of shop visits is predominantly triggered by the GDS fleet management plan, so that you do the work today when you get the engine in the shop, but the payment comes at a later point of time. That is not a regular shop visit, and so that leads to a buildup of receivables. So you do the work, and the payment comes at a later point of time.

And that work that you're doing then is not captured within the six to seven billion program provision that was taken?

The program provision for our share, the $1 billion we built up, we booked in Q3 2023, that's purely the support payments to airlines. So that has nothing to do with the shop visit work. So the material, the labor, transportation costs, and so on. So the physical work we do on the engine. So the payments for the fleet management plan are purely the support payments to airlines for their AOG situation.

Thank you. And sorry, what were the support payments made in 2024? Can you disclose that for us, please, against that $1 billion?

Sure, it was in the high $300 million range, so $380 million, $390 million. So that's, I mean, Raytheon said on their call $1.1 billion, and you can say they have roughly 51% program share of E18, so you can scale it down, it's more or less the same amount. So 390, that is the number for MTU. The majority happened in the fourth quarter of 2024. That's why the cash flow in the fourth quarter is slightly negative.

And then the other question on the priorities of the board, if you were able to comment, please.

Not really. I mean, the transition we have named, Katja is coming in on the 1st of April, transitioning with Peter for three months, and then the change of responsibility will happen on 1st of July. And the board needs to speak for itself, but obviously we were looking for an experienced CFO, both on the financial but also on the IT environment. That is the responsibility that Peter currently holds, and we believe we have found a decent successor, if that is ever possible.

Indeed. Big shoes to fill. Thank you for having me on. I appreciate it. Thank you.

Thank you. We will take our next question. Robert Stallard from Vertical Research. May we have your question?

Thanks so much. Good morning. Good morning. A couple from me. First of all, on the leasing business, I was wondering how much EBIT or cash flow is generated in 2024, ballpark number, if you could provide that. How much capital is tied up in this business and where do you expect a normal level to be? Because that's what you've included in your 25 guidance. And then secondly, on the GTF fleet management plan, can you give us an update of your latest expectations on what the cash payments will be on this program during 2025 and 2026? Thank you.

So, I mean, we don't split that really down. What we say on MLS, so our asset and leasing management business, is that business contributes roughly 500 million of revenues in 2024 and roughly 100 million euros of EBIT. So that's the contribution and that's all part of the consolidated MRO revenue and EBIT figures. And that is a very, let's say, opportunistic business. You scan several hundreds of engines every year, and you do transactions on a very limited number. So it's a very opportunistic business. So in part, we buy the engines. In part, we lease them in. In part, we trade engines to buy it and sell it more or less immediately and so on. But what we can say is that we really want to invest into the business because it's a very good business, and we want to grow the business significantly in the coming years. Regarding TTF's fleet management plan, I just said that we had an impact of 390 million US dollars roughly in 2024. That's the pre-tax number, I have to say. And we expect a similar impact in 2025 and some spillover, so the remaining portion then in 2026. So the impact in 2026 will be far lower compared to the 2025 impact, unchanged to previous guidance. Exactly, unchanged to our previous guidance.

Peter, just a quick follow-up on the leasing business. You said you expected a normal level of activity in the guidance. What is a normal level? Is it half what you did last year? Just some ballpark there.

I believe with normal, Peter, I mean that the rates are normalizing because we used to have a very good favorable rate for the engine after COVID. The business itself It's growing top line, but the rates, the leasing rates, and this will be normalizing over the years. We've seen that already in 24 starting. Okay. Thank you very much.

Thank you. We will take our next question. Chloe Lamarie from Jefferies. May we have your question?

Yes, good morning. I actually had a follow-up from David's question. If I look at your free cash flow, the CapEx was quite higher than what I expected, but a relatively large chunk of it was retreated out of your free cash flow in Q4. Could you confirm that this this were entry fees that you paid? And I guess we'll need to wait further disclosure to know which program it is. Is that really the driver or anything else you can share with us to kind of understand what drove that? And then a second question would be on the evolution of turnaround times in your shop. If you can update us on what you saw into the end of the year, that would be great. Thank you.

Chloe, first question, entry fees. Yes, I can confirm that. So we paid roughly 100 million US dollars in Q4 2024 for, as just mentioned, different business opportunities. So you find it in the line net investments in intangible assets. That's the jump from 80 to 181. And it's adjusted according to our policy, which we also describe in our annual report. it's adjusted for calculating the free cash flow. So that's the story.

Turnaround times. In the GTF, we see continuous decrease of turnaround times. We are well below an average, below 100 days, and it all depends on material availability. But as we have communicated previously, 70-day-plus turnaround time is also possible if material is available.

Very clear. Thank you.

Thank you. We will take our next question. Ben Healan from Bank of America. May we have your question?

Yes. Morning, guys. Thank you for taking the question. I've got a few follow-ups on some of the questions already asked as well, unfortunately. So on the program acquisition costs, Can you confirm whether or not this is actually a new engine program or is this a payment associated with a program like the GTF? Because my understanding is there are still payments that are due on the GTF Advantage. I think some of your peers are paying payments on that over the next couple of years. And when we think about this program acquisition cost, Can you talk about what this line is going to look like in the next two to three years and what we should be adding in? Because it was definitely a step up versus what I was assuming. Secondly, on kind of your PPE capex, it was also a decent amount higher than what I was expecting. So if there's any color that you can give us around that as well. And then a third, just quickly again, sorry, on these receivables to kind of labor the point. I mean, you've talked about some payments for GTF shop visits coming in late or later this year. than the work being done because of the GTF program. But how late is it going to be for these payments to be received, right? Is this something that you will receive in 2027, 2028? Or do you think actually the catch-up effect that you talked about with David, is that going to be something that happens in 2025 and 2026? Just any color you can give us that will be helpful. Thank you.

I'll start with your latest question. That is a difficult interval because that's a mixture between, let's say, 60, 70 different fleet hour contracts with different airlines. The point of payment is very different, so the distance between payment and actual performance of the shop is very different in each and every fleet hour agreement. So I would rather expect over the next one or two years a slight moving up of that receivable position. You get payments, but you do also additional work. And as the number of shop visits increases, so the position will rather increase slightly over the next one or two years, and then it will rather go down. So that is the rough shape of that receivable curve. Then you refer, I think, to the NetDebt page, the compensation payments due to program participation. That has nothing to do with the payment for GTFA or a new program. especially for the GTF program, as I said. We are an 18% program partner and maybe deliver only 15 or 16% of the manufacturing costs. And so that is the compensation therefore. And that line will be paid over the next two, three years. So that will go down over the next year. But the payment term is longer than 12 months. That's why it's technically part of NetDebt.

Yeah, so I was kind of talking more, Peter, sorry, about the 96 million euro payments on program shares. Over the next two to three years, what does that line look like?

There will be additional payments, but later.

later in the decade.

Okay, do you have any view around how... It's not the GTFA, so it's definitely not the GTFA.

Okay.

We are already programmed part of the GTFA, so there are no more for the entry fees.

Okay, and just quickly on the kind of PPE capex costs, which stepped up?

A good chunk comes from acquisition of lease engine at MLS. So the case where we buy engines ourselves and have it on the balance sheet.

Okay. Okay, cool. All right. Awesome. All right. Thank you, Peter. Thank you.

Thank you. Once again, as a reminder, If you would like to ask a question, please press star 1 1 on your touch tone telephone. We will take our next question. Christophe Manard from Deutsche Bank. May we have your question?

Yes, good afternoon. Thank you for taking my question. I have three quick ones. The first one is on turnaround times. One of your clients complained about turnaround times above 300 days recently, filed something in the U.S. I mean, it comes a little bit in contrast to what you said, so just wanted to have your view on this. And I heard you on turnaround times being down, so my question is also, does it mean that we could have a reduction in the cash payment versus the initial expectation because you're reducing the turnaround time? It means that the engines are less grounded than they initially thought. The second question is, several times on the call you mentioned a volatile supply chain. Can you just explain a little bit more what it is because it seems to be impacting your working cap? And the last question is just for better understanding. You say your free cash flow guidance, low triple digit million, and you are more at the high end of this. What does it mean? Does it mean 300 million or 400 million? Just trying to understand the English here. Thank you.

So maybe, Christoph, on the first one, yes, the shop turnaround time at MTU and other shops is averaged below 100 days. We always talk about the wing-to-wing turnaround time, which will be higher because of ongoing capacity increase over these three years. So that means that there's a longer time above these 100 days that the engine is going back and forth between the customer and our shop. So that is the natural data. And some of them, as the customer said, we need to expect that this is a proper timing. And while there is still wing-to-wing time higher, we don't see any reason now why we should decrease the charge, so we are in line with our expectations.

Supply chain, I think predominantly in our MO business, we see across the board higher turnaround times compared to, let's say, the pre-corona level. but also the performance of our outside vendor network is not as it should be. And that drives working capital upwards. So the turnaround time in our shop is maybe 30, 40% higher compared to pre-corona levels.

And that means higher work in progress in all of our MO shops.

So you carry excess working capital on the balance sheet. Free cash flow guidance, I mean, what is low triple digit? Low triple digit, I would consider something between 100 and 300 million euros. And the upper end, this is then somewhere between 250 and 300 or so.

Thank you. Thank you very much.

Thank you. This concludes today's question and answer session. I'll now hand back for closing remarks.

Yes, thank you, Heidi, and thank you all participants. Thank you, Lars. Thank you, Peter. For further questions, as usual, reach out to us, and yeah, see you soon. Bye-bye.