Schaeffler Ag Ord

Ladies and gentlemen, I'm very happy to welcome you to our today's call on the financial results, Q1 2025. The press release, the following presentation, and our interim statement have been published today at 8 a.m. CET on our investor relations homepage. And for sure, we will provide a recording and a transcript of this webcast after the call on our website. I would like to apologize for the small delay. but we don't want to lose more time. That's why I would basically ask you to take notice of our well-known disclaimer, but I will not go through. And if we take a short look at our agenda, today, Klaus Rosenfeld, our CEO, and Klaus Bauer, our CFO, they both have joined the conference call to guide you through the key information in our presentation. And of course, afterwards, both gentlemen will be available for our Q&A session. And now, without further ado, let me hand over to our CEO.

Thank you very much, Heiko. Ladies and gentlemen, thanks for joining the call. As you have seen from the deck that we provided to you, we have slightly changed the structure, incorporating your feedback that you want to have more time for Q&A and also less overlap between the different sections. So I will start with overview and business performance, and then Klaus will continue with the financial performance. You have also seen that we have, after now, Vitesco is fully consolidated, and after you have received the performer results for each quarter 2024, decided to focus a little bit more on the new structure and give you more insight on the four divisions. Last comment I would like to make, I would assume that most of you have somehow received my speech at the annual general meeting where I laid out the concept of the three hedges. We also had that in meetings in London and as you will see from the presentation, the idea of this Three hedges plus is also the guiding principle for the business performance section that I will outline in a moment. Let me start on page four, ladies and gentlemen, Q1 summary. I think the headline says it, good start into the year with a little softer growth after a strong Q1 2024. The EBIT margin in particular is, from my point of view, The proof point for that statement, 4.7%, is definitely at the upper end of the spectrum of our guidance. And while e-mobility is improving, all the three other business divisions delivered EBIT margins at the upper end or above the divisional guidance. I think what is on the positive here to note is that BIS is definitely back on track with a EBIT margin before special items of above 10%. We will, and I will also focus on gross margins. You all know that that's the health indicator of the business. And here you should note that the number for Q1 2024 that you see on the slide four is an adjusted number. We had a strong one-off effect at Schaeffler in Q1 2024. that we for comparison reasons reduced here. So you see a significant improvement from 19.2 to 21.5 that I will also explain in a moment in more detail. I think on the positive side as well, free cash flow better than in the previous year, quarter with minus 155 typical seasonal pattern. We improved on a quarter over a quarter basis. EPS just here for completeness purpose. We want to focus in future after now the integration is settling more and more, not only on top line and on adjusted EBIT numbers, but also on EPS. The number is 0.09, so slightly positive, and this is on an unadjusted basis. Let me go into the business performance and start with page six. Here you see the breakdown that some of you remember. from previous presentations for the four divisions and our four regions. Two or three things I would like to bring across here. Those of you that remember this from the past for Schaeffler standalone, remember that the share of China was typically above 20%, more or less at the same level like America's. With Vitesco now, the mix has changed a little bit. There is now a 23% share of America's. Greater China is only 17%, but therefore the Asian Pacific share has increased. So if you take that together, you see that 31% of our business from a top-line perspective comes from the Greater China and Asia Pacific regions. You also see the four divisions. Once again, remarkable growth in vehicle lifetime solutions, while the other areas were softer. You'll also see on this page the logic of the hedges. We are one of the automotive suppliers that has a really strong offering across the board for all the different powertrain alternatives. So if you basically think about e-mobility and powertrain and chassis as two divisions that more or less are one business, that's the automotive OEM powertrain business. That is the first hedge. The second hedge is build versus repair. In difficult times, people typically tend to repair their cars and don't buy new ones. That's exactly what's happening at the moment, and you see that in another quarter, strong proof point how important that vehicle lifetime solution business is for us. Then bearing and industrial solutions, as you all know, is not just only industrial anymore. It is bearings. Also, the automotive bearings sit there. but it is constituting the third hedge automotive sector versus non-automotive and that includes all the other nine sectors that we have. Let me go from there into a page that we discussed quite intensively whether we should share that with you or not. We think we should. This is a breakdown of our OEM automotive powertrain sales. And what is OEM powertrain? automotive powertrain sales. That is basically the sales of immobility division plus the sales of powertrain and chassis minus those activities that are not powertrain related, in particular chassis, and minus everything that is not cars and LCV, for example, the truck business. And that is more or less constituting what is called the hedge number one. If you now accept that the divisions e-mobility is not equal like our best business and not equal like our half business, but that both divisions contribute to the different powertrain types in different ways. Then it's very important from my point of view that you appreciate this page because we want to show over time for this OEM automotive powertrain sales figure, where is the growth coming from? Are we outperforming the market or are we not outperforming the market? And on that basis, we are using here S&P numbers to describe what's happening with the different powertrain types across the two divisions. And the second number that is also new here is order intake by powertrain type. That should give you a forward-looking idea. Will we grow in the future? What's our book to build? And how is that supported and how is that linked with the outperformance logic? We're using these numbers also internally. So the big step here is that we're trying to build a consistent bridge between what we're looking at internally and what you get externally. For sure there are more information that you would like to have. And for sure we have more insight internally. But ladies and gentlemen, please accept that's what we want to give you. We need to be consistent with this. We'll do this quarter by quarter, ideally on a last 12 months rolling basis. For today, we can't deliver that because our performer figures are only available for Q1 until Q4 2024 and not for 2023. Hopefully, that gives you the right insight to follow whether we are on track or not. And what you can read from this first slide time that we are doing this is that we outperformed the market in the best powertrain area. In half, we didn't outperform. We were even on the other side. I see that as a temporary issue. It certainly has to do with that one quarter and also with the question, are we on the right platforms In that quarter what is growing? What is not growing is something phasing out? So you shouldn't see the twelve point six percent here as our Ambition you should see it as this first quarter result and there are some specific reasons for this I see Where certainly our ambition is also to grow in line with the market It's a slight Output under performance, but I think that will go away over time and That leads me to the second part of the page. You see strong order intake for the two divisions in automotive OEM powertrain, $5.6 billion. That's a lot. You see the split here, and you see the bulk is in half. There's several attractive new orders in there, in particular a big one in the United States that gives you a book to build in this area of 3.1 times. And that clearly indicates that going forward, we are optimistic that we have a chance to outperform on the F side, what is very consistent with our competence and technology offering. So with that page, and we clearly would appreciate feedback from you, whether that helps you to assess our business. I would go into page number eight. We have now created for the Four divisions, a page that concentrates on the business KPIs, and that's always sales growth and order intake, book-to-bill, and the gross margin figure. Also here, same logic applies. This is what I look at as the CEO of the company when we discuss businesses in our board meeting. E-mobility growth of nearly 10%. Clearly on the positive, strong order intake for the division, $3 billion book-to-bill for the division, 2.6 times, and a gross margin improvement of 6.5 percentage points. That's all positive. You see one example that is an outstanding technology example that is now successfully ramping up for Hyundai. We have also made good progress in a dual inverter and BD controls of e-mobility and see significant interest in what we're doing. The key aspects, the only one I would like to mention is clearly that the environment in Q1 was challenging. Volatility is not helpful, but all in all, we think we are definitely on track with e-mobility, and I see some positive signs, in particular in Europe, when it comes to further growth and volume. In powertrain and chassis, the situation is slightly different. Minus 10.7% sales growth, but also here, good order intake, 2.8, booked to bill 1.2 times. Again, don't get confused here. Powertrain and chassis does not mean that this is only internal combustion engine business. A significant part of what we deliver into hybrid technology comes from this division. What is important here, and Klaus will explain that, that we achieved a margin of more than 12% on the EBIT side, and the gross margin improvement here contributed to this. So we are, despite the lower growth, positive on division number two. Then vehicle lifetime solutions, once again, the shining star. Here, clearly different indicators. Sales growth 10.7%, as I said. Even on that level, further improvement of the gross profit margin. And then for outperformance, we benchmark ourselves against car park growth. Car park grew by 2.3%. That means an outperformance of 8.4%. And as you all know, there is no book to build in this business, so we're giving you here The car park age as a further indicator, and that has grown a little bit. It's still in the sweet spot where we think repair becomes an important element. So all green in this division, and we are very proud of what has been achieved here over the last quarters on a consistent basis. Business performance page number 11 on bearings and industrial solutions. Here, sales grows slightly softer, a function clearly of market decline in Europe, whereas China and Asia Pacific were growing. Outperformance here is measured not only against the industrial production volumes, but against a blended mix of industrial production and light vehicle production from S&P, basically 60-40%. And then the different indicators, we have not outgrown that indicator, but we're slightly behind. Book to bill is available here, but on a different timing. It's the last three months that play a role here. And on the gross margin side, we have to consider a slight development in the wrong direction. 25.9% is not a bad gross profit margin. But again, from a business point of view, I would like to see if the business, that the businesses all, you know, try to improve or at least stabilize their margins, even if sales are slightly coming down. Clearly on the positive side, and Klaus will explain that, the EBIT margin in bearings and industrial solution improved quite a bit. compared to the fourth quarter. When you read the business performance, you also have to acknowledge that Q1 2024 for bearings and industrial solutions was positive. Twelve is then a page that is very important for me personally because at the end of the day, it's all about capital allocation. What you see here are the following messages. We invested $250 million. That is less than in the previous year quarter, 317. So we were cautious certainly with our spending. The CapEx was allocated to those areas that will grow or that we expect to grow in the future. We measure that by reinvestment rate, EMOP one times, and PTC where the growth will be slower or stable, only 0.5. So this simple logic that you know from the past is also now applied to the combined Scheffler and Bitesco group. And reinvestment rate in Q1 of 0.6 on average is slightly below what we typically expect. The reinvestment rate says nothing else than depreciation was higher than capex. That typically reduces the capital employed, but there was capital employed buildup through the working capital, also very normal. All in all, we can say that capital employed stayed stable. And that is important for me because we want to, at the end of the day, being measured by the returns we achieve on our capital employed. So steering the capital employed in a consistent and disciplined manner is very important for you and also for me. And you see same logic here. These are the pages we're using internally to make sure that we are investing Now, let me finalize my part with page 13, tariff situation. Very briefly, you will appreciate that we're not giving you a full-fledged number. What's the current impact? Simply because of the situation that is so volatile and dynamic. It changes all the time. Every day there are some new information, so my statements are only directional. The first thing I would like to make, we are benefiting from the fact that we have since years localizing our businesses and activities, and that local for local approach helps to mitigate direct tariff impact. Second statement, our exposure in terms of tariffs is geared towards the U.S. Our trade flows from Europe are more or less going into the U.S. There's little in the other direction to China. and that helps us to focus our mitigation action on the U.S. customers and on America. There's little exposure to China, and that makes it more variable. In the U.S., we are benefiting from USMCA. As long as we are in a situation where this remains in place and we are compliant, then a significant part of our product is not affected by tariffs. or not that deeply affected for sure. And that's my last point. We are in constructive discussions with our customers to pass, um, on the tariff cost, um, on that basis. And again, I have to, um, make that caveat here because it changes dramatically here and there. We think that the impact is manageable. That's also why we have not changed our guidance. Um, in when we set up the guidance liberation, there was not, um, expected, but we think also with a good start into the year, we can manage and also absorb that impact from what we know today. With that, I hand over to Klaus for the financial performance. Thank you very much.

Yeah, thank you very much, Klaus. Warm welcome, ladies and gentlemen. Also, from my side, we will dive a little bit deeper into the financial performance starting on page 15. We heard already slight lower sales year over year. However, if you look at a little bit more history, then you will realize that Q1 2025 was on par with the second half of 2024. It's more interesting when we look at the cross-profit bridge on the top right side. I start out with explaining the volume. Volume added six additional million euros to our cross-profit. It looks unremarkable at that level, but if you dive down onto a divisional level, then you will see that the decrease in sales and therefore also gross profit contribution from powertrain and chassis that Klaus already explained is completely offset by the strong sales growth in e-mobility and the vehicle lifetime solutions. The biggest contributor to the improved gross profit margin of 21.5% is, as you see, In the waterfall chart, indeed, the production cost improvement we enjoyed after a rather difficult second half of last year. Now the benefit of our corrective actions on the shop floor and can report that we had an overall good plant performance in that regard. On the next page 16, we go a little bit further down in the P&L to the EBIT. The EBIT margin was held stable with the pro forma adjusted last year first quarter margin of 4.7%. This is a strong statement because if you look at our restated numbers quarter by quarter for last year, then you realize that the first quarter of last year was our strongest quarter. And therefore, I think we can say it's a good accomplishment to stay at the same level, even if the sales level is slightly reduced. Also here, we provide you a waterfall chart to explain the walk from last year's first quarter to this year's first quarter. Of course, in absolute terms, it's likely decreased because the sales also decreased. But the biggest contribution comes from the cross-profit side, as explained in the prior slide. but also the SG&A expenses and its improvement significantly contributed to the strong EBIT performance and offset somewhat higher R&D expenses, which have been expected based on the ramp-up in e-mobility, higher project costs there, And also for this quarter, there's a little bit of a volatility in that number. It always depends a little bit what we are spending R&D expenses for and how much of that really then goes onto the balance sheet based on the accounting standards, IS38 and IFS15. So, therefore, development in R&D as expected and as I explained offset by the other positive cost drivers. Let's now quickly go through the divisions and add the EBIT observation to what Klaus already said from a business performance standpoint. We start with e-mobility on page 17. And there you see the strong EBIT improvement, still, of course, significantly negative as we already anticipated, and hopefully we were transparent to you with our prior calls. But on the volume effect, almost 10% higher volumes, margin significantly improved by almost 70%. percentage points on an EBIT level. The strong sales, as you see in the business division split, strong sales growth comes from the business division electric drives. That is everything from mild hybrid to e-axles, and especially mild hybrid and e-axles have enjoyed a very strong growth in this quarter. and especially in Europe, Americas, and Asia Pacific. The business division mechatronics and modules shows negative sales development year over year. That is owed to the fact that you're looking really only on a quarter-by-quarter basis, so you have some volatility based on the impact of the ramp up or ramp down of single projects here. We have especially the thermal management modules and also CVT elements and components in there that had experienced project related or program related ramp downs in this quarter. nothing systemic and will be a firm contributor to the ongoing sales growth going forward. On the next slide, number 18, we then go into powertrain and chassis. Really everything is mentioned in the headline. Significant sales decline, mainly related to the European business, but on the other side, maintaining a very strong EBIT margin almost on prior year's level of 12.4%. The EBIT margin is, if we dive a little bit deeper, and you see that in the second bullet point of the key aspects, is impacted by higher R&D expenses. But on the other side, significantly improved production cost despite the lower volumes and lower fixed cost absorption in that area, which is a very strong message and performance here. On page 19, we come to our division vehicle lifetime solutions. Vehicle lifetime solutions are really important. can keep it at deadline, continued strong growth, and the stable AVID margin at high level of over 15%. Maybe allow me one more comment in the sales split by business division, and that's the platform business. We explained that to you in the past, the platform business. is e-commerce solutions in India and China. It has had the most significant growth with over 60%. You also see from a sales portion of total sales with 5% still fairly low weight. But again, please consider also in your models going forward as this business grows significantly in the range that it also grew for this quarter, there will be some level of margin dilution based on that because that business comes with a much lower margin than the 15.7% that we are showing for this quarter. But again, there's a positive contribution, obviously, and a positive EBIT, but not at that level. And the margin delusion effect will grow over time as this business ramps up significantly. Last but not least, on page 20, we come to bearings and industrial solutions. Sales slightly declined, however, double-digit EBIT margin, as Klaus already indicated, with 10.1% a strong recovery of what we have seen in Q4 of last year. I want to lead your attention in that regard to the third key aspect on the bottom right. have seen, especially in January, some sort of a counter effect to what we experienced in December. And I think also explained to you in detail in December, we had closing days in December. We had demand shifts from customers from December into January. So there is some sort of a counter effect in the Q1 2025 number. And as you also will see or already read in our press release with maintaining our guidance also for this division, you should rather expect performance approaching our guidance corridor going forward. For sure, hopefully at the upper end, not the lower end, but not continue to expect double-digit margins here based on this. counter effect to what we have seen in December. Good news is that our programs in regard of cost improvements on the shop floor and also in the SG&A space are taking effect, not completely yet, as you can appreciate, especially with our Europe-centered a profit improvement program that is also related to footprint consolidation, but definitely showing first effects on that result as well. Let's come to the free cash flow on page 21. Klaus already hinted that, of course, Cash flow for the first quarter is seasonally impacted by working capital increase, mainly driven by receivables. Receivables on a seasonal pattern go down in December and then ramp up to a normal level again in Q1. You'll see that reflected in the bridge on the upper right with minus 417. million euros impact in that regard. But Klaus already indicated the capex number with minus 250, which is the result of a very conscious and also reactive management of our spending in that regard. It's not meaning that we underspend in sacrificing our future. It's rather meaning that we very agile, in a very agile manner, react to the circumstances. And if projects are ramping up slower than expected or there is a delay in the start of production, then we immediately react also on the CAPEX side, which then obviously protects the free cash flow. Last but not least, let's look at our debt profile on page 22. There's one number that might be slightly surprising to you, and that's already mentioned in the headline. We are on a pro forma restated basis. That means we now have included really last 12 months of the VTESCO EVDA in the formula. We are now standing at 2.2%. times leverage ratio in that regard, again, on a performer-restated basis. If you look to the data to the left and at the four quarters of last year, you see the numbers as reported and the decline from 2.5 in the first quarter of last year to 2.2, with the exception of a slight impact by the negative cash flow for the first quarter, is this restatement effect. Let me end with confirming to you that our financing going forward is robust. As you most likely know, we are completed with our refinancing campaign for 2025. In the maturity profile on the top, you see 917 million of debt that will mature in 2025. The main portion is coming from a bond of 750 million that matures in October. That is refinanced with our dual-trend zero. bond emission in end of March in the amount of total $1.15 billion at acceptable conditions. And again, right now we are standing with that emission at a liquidity position that is greater than $5 billion. that will reduce by this $917 million as we will repay this $917 million later this year, but continued strong liquidity, continued strong financing profile. And if you allow me one last comment, you see the refinancing need for next year with a little bit above $500 million. is doable and is definitely providing for opportunities to even improve opportunistically our financing and maturity profile at the long end. With that, last comment back to you.

Thank you. If you move on to page 24, you have the guidance, and I think I've said everything that is on this page. So I would not go into all detail we confirm the guidance on all metrics And you know that we are dealing with tariffs and trade conflict. I think the impact can be absorbed within the guidance range so summarizing again this this presentation here Again, you now have proper Performer numbers the new structure called a new structure. We are giving you not only division of guidance, but also a our internal business KPIs, and they hopefully show our ambition to outperform. I think that's key here for you to understand that we have the fighting spirit and the ambition to be better than the market. That needs to be demonstrated over the next quarter. And the only thing that is missing on page 25, Our midterm targets, they will be shared with you in the Capital Markets Day that is now on September 16th. And with that, I would close it here and leave a little bit of time for your questions. Thank you very much, and back to the operator.

We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the touch-tone telephone. You will hear a tone to confirm that you have entered a queue. If you wish to remove yourself from the question queue, you may press star and two. Questioners on the phone are requested to disable the loudspeaker mode and eventually turn off the volume of the webcast while asking a question. Anyone who has a question may press star and one at this time. Our first question comes from Christoph Laskwani from Deutsche Bank. Please go ahead.

Good morning. Thank you for taking my questions. I'd like to start with a couple of questions on the Q1 organic growth numbers that you've shared. Could you comment a bit more in detail on the power training chassis number in Europe and the immobility number in China? Those are down quite substantially. What were the key reasons for that and also how we should think about that in the quarters ahead? And then following that, could you comment on the Q2 run rates that you see by region so far in autos? any volatility that is significantly different from Q1 as a result of the tariffs or any effects there that you could highlight? And then lastly, on the bearings and industrial solutions margin, you already said Q1 obviously supported a bit by reversal effects. Is this then for Q2 and following basically a step down that we should expect in a relatively flat development or back to the usual seasonality that you've shown in the past? Thank you.

Chris, all questions vary more than legitimate. Let me start with page six and the sales performance. There are some unusual things. If you look at that table, you see that China immobility was down by minus 19.7%. That's a big number. At the same time, Asia Pacific was up 17.3%. And these two numbers have to do with each other because there's one big project that runs off in China. That's the EMR-3 project that's now part of Scheffler Group through Vitesco. At the same time, we are ramping up EMR-4 in Asia Pacific. And that is why these two numbers have been looked at together. The rest of the negative growth in e-mobility and also in powertrain trustee is just the softness in China. For sure, the competition there is still tough on price, but also on technology that impacts both ICE, but to some extent certainly also the best area. You know that we have, as a consolidated group now, a little lower share with Chinese OEMs that are growing faster than the others. So we need to catch up there. And for sure, that's challenging. But with the order intake you have seen, we are quite optimistic that we can continue our 30-year history in China as one of the major suppliers that has a strong local base. Run rate on autos, tariffs impact. Again, that's one of the crystal ball questions. What I would guide you to is S&P. After Liberation Day, we've seen the largest monthly correction in S&P numbers, with S&P taking off 1.2 or 3 million cars, predominantly, by the way, in the U.S. So as the auto business is a consumer business, What we look at at the moment is very much how consumer behavior, consumer spending changes. And there is, as you know, consistent conversation or talk about what China is going to do to support their consumer growth. So I would not just extrapolate growth figures there. Let's be careful on Q2 at the moment and see how that unfolds. I can't give you at the moment more than this directional statement. The real problem with tariffs is not so much the direct impact, as I explained to you, where we are, to some extent, blessed by the localization rates we have and the USMCA situation. It's more the indirect impact that remains to be seen. If sort of the negotiations on maybe even lowering tariffs overall are successful and the more we have indication that the U.S. talks to China, the better for us. But let's be a little bit cautious on Q2 due to these external impacts. Once again, in terms of order intake, we are for our auto business positives. $3 billion e-mobility is what we normally had for a Scheffler in a full year. Now we're making that in a quarter. And BIS margin in Q1 strong. Yes, Klaus explained the reason. There is a little bit of impact also from Q4 2024. But you also saw that in Q1 2024, the margin was high. Gross profit margin was high. I would not just sit here and say it's going to continue on that level. But when you look at the guidance ranges, we said 5% to 7%. We confirmed that for this time. Let's see how the second quarter goes. With 10.1%, we are definitely above the guidance. And I think there is a good chance here to end up the year at the upper end, if not above. at least we can say that April doesn't look like a reversal. It looks okay. Forecasting these days is difficult, but I'm optimistic for our BIS business, not only on the profitability side, but also on the sales growth side.

Thank you. Very helpful. Just one follow-up just on the power train and chassis growth in Europe. If you could shed some light on that.

Sorry for that. There is a specific situation there. Hold on. That Matthias explained. It has to do with also a little bit of portfolio changes. We have some of the activities are running down. That has not been compensated here, but that explains some of the larger portion here. We need to come back to you in more detail. So there's a little bit of a structural impact, but there's also weakness in the classical business due to market weakness as well. Thank you. You're welcome.

The next question comes from Ross McDonald from Citi. Please go ahead.

Yes. Hi there. Thank you for taking my questions. You've actually just this moment answered my first question on bearings and industrial solutions, so I'll tweak it slightly. But as Christophe mentioned, if I look at the Q4 and Q1 margins combined, given there's some payback in the first quarter, you're averaging around 7.2% for that business, which is above the 25 guidance range. So Clearly, Klaus, you mentioned you expect that to be at the top end of the guidance range, maybe even above now. When I look at the other divisions, I guess then, are you ready to make any comments at this point around where within the guidance range we may expect to see full year numbers lie? Obviously, that support from bearings and industrials could support the group margin. I'd be curious if you think we should be looking at EBIT margins for 2025 starting with a 4% maybe getting up towards the 5% level given that strong Q1. And then the second question, obviously on the back of the Shanghai Auto Show, it seems like the technology in China is broadening out somewhat. We see some interesting EREV or range extenders gaining traction. Just be curious within your powertrain order bank if that is a technology you have exposure to or whether you see range extenders as an opportunity for the business. Thank you.

Let me start with the last one. For sure, the range-extended technology is something that we are looking at. We are perfectly set up to develop this for customers, given our strength both in ICE and in the whole electrified powertrain industry. There are projects, and we know that at the moment, in particular, business consultants think that that is the new technology that will really prevail. It's still early days, but we're clearly looking at that and discussing with customers what can we do, by the way, not only with Chinese ones, but also with European ones and U.S. ones. It's a core technology technology. somewhere in the middle between ICE and pure BASF, so very interesting for us. In terms of more guidance on margin, you know, if these would be normal times where things are predictable, I would be more outspoken, but this environment where every week something new happens, you know, you saw what happened here politically yesterday, hopefully the new government now is up, And and gets its work done on structural reforms You saw what happens in India. There's so much uncertainty that I would simply say at the moment we confirm the guidance We had as you said a good start into the year with three businesses being at the upper end if not above We think in particular that this hedge logic that I explained is very helpful here and And maybe back to what Christoph just said, if you have in powertrain and chassis in Europe a minus 19%, you also have a plus 21.9% in e-mobility, and that shows this hedge logic. So hedge number one, ICE versus BEV, we should participate whatever happens. Build versus repair is a, you know, hedge that works very well. And now the auto versus non-auto, where there is significant growth opportunity also outside the automotive space, That's the logic that makes us more resilient. And if that comes through with continuous delivery now on our programs with, you know, not one quarter being exceptional, but every quarter now being in line, that's what I would like to see. We want to see consistency. We want to see outperformance. We want to see a midterm delivery that meets your expectations. That's what we're up to. This quarter was strong. Let's see what the second quarter brings. The most important thing is that we deliver what we promise in a consistent and sustainable manner.

Thank you very much.

You're welcome.

As a reminder, if you wish to register for a question, please press star followed by one. The next question comes from Eduardo Spina from HSBC. Please go ahead.

Good morning. I have just two questions. First one is on the growth in China. for the foreseeable future. I just wanted to ask how much does that depend on the market share of the car makers or how much of the success of their current and new models? I think there was some... Edo, you're very hard to hear. Okay, let me... Do you hear me better? Much better. Much better. Okay. Yeah, sorry. First question on China. Quickly, the growth in China

Excuse me, this is the operator speaking.

Mr. Spina, your audio quality is really bad.

Can you hear me? Operator.

Yes, sir. I will remove Mr. Spina from the question to you, okay?

I will call him back afterward. Thank you.

Okay. Thank you, sir. So, Father, I know for the questions.

Very good. So since there are no further questions, I would like to thank you all for your time and your interest in our company. As always, if there are more questions coming up afterwards, feel free to reach out to our IR team. And with this, I would like to say thank you to our two speakers today, and I would like to say thank you to the team for the excellent preparation. Thank you very much. Have a good day, and talk to you soon. Thank you.