Schaeffler Ag Ord

Ladies and gentlemen, welcome to the Schaeffler AGQ1-2026 earnings call. I am Sergan, the callers call operator. I would like to remind you that all participants will be in a listen-only mode at the conference being recorded. The presentation will be followed by a Q&A session. You can register for questions at any time by pressing star and 1 on your telephone. For operator assistance, please press star and 0. The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Heiko Eber, Head of Investor Relations. Please go ahead, sir.

Thank you very much. Ladies and gentlemen, I'm very happy to welcome you to today's call on Scheffler's Financial Results Q1 2026. 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 as always, we will provide the recording and the transcript of this webcast after the call. I am sure that you have all taken notice of our by now well-known disclaimer. As always, Klaus Rosenfeld, our CEO, and Christoph Haneke, our CFO, have joined the conference call to guide you through the key information in our presentation. And afterwards, those gentlemen will be available for our Q&A session. And now let me hand over to our CEO, Christoph.

Michael, thank you very much. Ladies and gentlemen, welcome to our Q1 earnings call. You all received the presentation that Christoph and myself will share in the next minutes. Please follow me on page number three with the quick overview. I think you saw the numbers and from our point of view, a good summary to say we started well into the year in an environment that is certainly challenging and in some areas unpredictable. Sales growth, ethics adjusted 1% up. We'll share the details in a moment. The gross profit margin is at 21.6, so more or less the same margin like Q1 2025, clearly driven by operational gains in e-mobility, VLS and VIS, with a slightly negative development in TTC. That should not come as a surprise. Average margin at 5%, clearly an improvement in e-mobility. While PTC, VLS, and DIS contributed strongly to the EBIT, also supported by lower R&D cost. Free cash flow seasonally negative with minus 209. You know that. In Q1, it was 155. Christoph is going to give you more detail. This also includes higher restructuring cash out. and some advanced customer payments in the prior year. And yes, EPS is slightly positive, also impacted by the financial result. Page four gives you the breakdown of where we grew, where we not grew, 6% growth in immobility in the first quarter, is certainly pointing in the right direction. Power train chassis, as I said before, slightly down, and then moderate growth in DRS. And DRS certainly also driven by the environment. The strongest growth came out of region Asia Pacific. However, that still has the impact that we explained several quarters now embedded with a switch from a bigger project from China to Korea. More important, page five, if you look at the also powertrain OEM business, and that spans across e-mobility and PTC, breakdown by powertrain type. Quite interesting picture here. Scheffler outperformed in all these three different powertrain types. 4% outperformance in the VEV segments. 16% versus market growth of 12% have also an outperformance of 1.5%. And even in IPE where our sales drop was not as big as the market, that is exactly what I hope for, that I can show you these pictures continuously for the next quarter, but that all points in the right direction. Order intake, again, by powertrain type. We'll come back to the numbers per division. Also shows that in the important best sector, we are showing a book-to-fill of bigger than one, while in the other sectors, in this quarter, order intake was lower than the relevant sales levels. Page six, e-mobility. As I said, order intake for the whole division is certainly bigger than just for a best powertrain solution. It's 1.2 billion, what leads to a book-to-bill of 1.0 times. You may question why that. We showed you in the last quarter that we have an order book by end of the year 2025 of more than 40 billion. We are adjusting also volume assumptions constantly, and we are sure that with that order book we have at the moment enough to do to deliver this, so we are a little bit more selective on order intake. 1.2 billion is a good result, and it's also driven by the right project. Now, let me go from there to Powertrain and Chassis, also there. An oil intake of 1.4 billion gross, slightly below last year, was driven by phase-out and also by market development. And as I said before, here the gross margin has suffered a bit. It is also impacted by one of the impacts that we can discuss in the Q&A. Session vehicle lifetime solutions with a 1% growth that is less than before but a further improved gross margin that then also leads to a superior EBIT margin. Here we can say that, as you see in the highlights, that our platform business in particular in China is growing, serving an increasing number of retail partners, and we're also proud to say that we won the sustainability award for the e-axle repair tool, what again demonstrates that ULS is not just a PTC business, but also very active in the new powertrain solutions. And then last, but not least, bearings in industrial solutions. a good development, 1.6, good outperformance, and also a growing book-to-bill ratio with certainly a different time horizon of the order books. There, just to mention one thing that also points to the new businesses. We are proud that we were part of the Artemis II launch, one of the most spectacular space activities in the last weeks, and were represented here with some high-performance turbopump spinning bearings, bearings that have sort of highest quality and offer a sort of industrial solutions as you see from the rocket is definitely moving in the right direction in its repositioning and performance drive. And one page on new growth, we have selected here again the humanoid because that is what we, from all the questions we get, obviously the one that is most interesting to you. Three points, just to put this in perspective and give you a little bit more This is a business that is in a situation where we are building the business. We are engaging today with 45 different customers. And engaging means active conversations, of which 30 prototype orders have resulted. And from these 30 prototype orders, five contracts have been secured. I cannot mention here the names, but I can tell you that from the five, these are prominent names, both from China and the US and from Europe. And we are in ongoing negotiations to further build the order book. If I look at what we have today and put our more conservative assumptions of a million robots in 2030 behind it. Our best estimate at the moment is that this order book in total order intake from the five customer contracts included has a value of somewhere in a mid-size three-digit million range. For sure, there's this further building and we'll give you, as soon as these numbers are more solid, we will give you more information how that develops. That's what I can say at the moment for one customer side last point here. We will see first SOP from these customer contracts in Q2 26, and then also have scheduled further SOPs for Q3 and Q4 2026. So you see the business is building. It is growing. We are part of the companies that is here at the forefront of development and the number of inquiries also from German OEMs. is interestingly increasing. What helped us was also the recognition for our products. As some of you heard, we won the prestigious Hammers Award at the Hannover Fair. You see a small picture here that recognizes our rotary actuator platform in multiple sizes, in multiple... nanometers and other functions. That's a positive thing. And as you all know, we will continue to expand our automotive know-how into this area. Last point is on manufacturing. We are investing into that business, not only for building the business, but also for making sure that we can scale what we need to scale. I finish on page 11 with my last page before I hand over to Christoph. Capital allocation continues to be driven by a very disciplined approach. capital employed has been further reduced. Also, through the project that we explained to you in the Q4 results, we had capex in Q1 of 237, more or less in line with previous year. The investment rate stands at 0.5 times, and the capital employed at the end of the first quarter was $12 billion. From an average point of view, Q1 over the last 12 months, this is a reduction of $974 million. You see where we spent the money, and I can assure you again, we are disciplined but also able to invest into the new growth businesses based on our strong cash costs. Thank you Klaas, good morning everyone.

As explained by Klaas, very solid first quarter for 2026. So taking a step back and walking you through a couple of slides on sales and gross profit and EBIT. We see on slide number 12 the slight growth year-over-year, 1% of growth, effects adjusted. Demonstrates the confirmed scale-up of our immobility activities. The slight erosion as planned from TDC, especially as we disposed of some activities at Yellow Plast here. Slight slow start from VLS, but nothing to worry about on the year to go. This is mainly driven by some negotiations with some of our key customers that impacted a little bit the sales at the beginning of the year. We'll catch up and no issues whatsoever on the year to go for VLS. Last but not least, BINS also having an encouraging start at the beginning of the year for Q of our gross profit bridge, going from 21.7 to 21.6, so more or less stable. You see a strong contribution from price. A little bit of that is linked to compensating for the US-related see mainly for us within VLS and BNIS. The volume slightly decreased there, as I mentioned before, mostly related to PTC and its response to decisions we took at the end of last year. The one that I would like to draw your attention to is the 67 million of improved production year-over-year as the restructuring programs pay off, as we continue to drive efficiencies in our plants, and also I'm happy to report a significant part of it is related to our purchasing performance and the evolution of our raw material prices and our purchasing performance. In general, on the other cost of sales, some impact from the U.S. tariffs, about 20 million in there, and then a not very helpful comparison to last year from an inventory revaluation standpoint where we had a very strong quarter last year. We changed the method this year in order to smoothen this out a little bit and take it But we take the comparison on a full year basis, this disappears and hopefully also give us a more streamlined earnings and EBIT profile for 2026. I will finish on this slide by pointing out that the FX impact on our gross profit line is still negative, maybe driven by the US dollar, the RMB. which is impacting us quite a bit. On the next page, you see the EV network increasing by 0.3 points year over year. I already mentioned the most profit evolution, which is very favorable for us. The other interesting news on there is the progress on R&D expenses, which is both increased efficiency in the way we conduct our development programs, as well as some of the benefits of some of the restructuring that we've been doing in this field. Again, the SG&A is suffering a little bit from the comparison with last year. There's some timing impact in there, and there's also the impact of higher costs this year related to our S4ANA rollout and the fact that we are heavily investing in digitalization and AI deployment within the organization. Our inflation mostly offset by our performance programs, which is what I like to see in the P&L. You see that at the EBIT level, FX switches back This is due to two main aspects. The first one is there is a natural hedge within the group between the different lines of our PLL, depending on where we sell and where we spend. They are paying us favorably in protecting us against the erosion. Again, it's only 5% of EBIT, which puts us in a good shape. I will go very quickly through the different slides, but the e-mobility, clearly the scale of paying off, both in terms of production efficiency as well as the R&D R&D fees driven, the growth on the top line driven mostly this time for this quarter by controls. part of the business, but overall unfolding as we had forecasted for 2026. On the PTC side, Again, sales decline, which is known, planned, and accounted for. The EBIT level remains very, very strong in the double-digit range. The 12.7% from Q1 2025 was a very, very, very high comp, but the 11.5% from Q1, again, clearly in line with what we were expecting. And when you think about, again, our guidance on the right, the good side of the guidance approaching the top end of it. On vehicle and lifetime solutions, 0.9% of growth year-over-year, not completely what we're used to. The LS normally grows stronger and stronger than this, and will grow stronger than this on a four-year basis. This is just a slow start for Q1, but no warning, no alerts, no reason worry. On the year to go, the volume piece will catch up. Despite this, an extremely strong over 60% worth of events, driven, as I mentioned before, by also a strong pricing policy. The other encouraging point, I think already mentioned by Klaas, is the expansion of our platform business on a global basis, which means that we are successfully diversifying out of Europe and out of the traditional repair and maintenance solution activities. On the Barrington industrial side, we're not getting bored of saying this every time, but it's a very, very interesting combination of both growth and restructuring and operational performance. driving a very very solid first quarter at the 9% EBIT. The 10% last year, again, very hard to beat the comparison, which was mainly driven by the inventory valuation topic mentioned before, and which was followed by a complicated or weaker Q2 in 2025. The change in method takes us away from that. And the 9%, again, very much on the progress path for the INIS, for various industrial solutions that we highlighted during the capital market days. It is paying off and they are executing properly. Free cash flow. seasonally impacted, as usual, within the group. Clance already mentioned the slightly higher restructuring payments that you find in the others category. Networking capital impacted by a conscious decision to raise our inventory levels and buffers in order to ensure that our customers are protected and safeguarded in the very volatile supply and demand. We will work it out throughout the year as the situation stabilizes and hopefully resolves itself. But the decision was made to invest a little bit in working capital to protect our customers. CapEx has planned in line with the investment plan for this year with a quarter one that is where we expected it to be. If I move on to the next page, you see again a not very surprising evolution or lack of evolution of our leverage ratio in the 2.1, 2.2, 2.2 range. Our maturity profile remains extremely well balanced. with the upcoming maturities already pre-funded and we will continue to work on this as opportunities arise. Then that takes us back to the FOIA guidance, which I will hand back to Klaus.

Thank you Christophe. Very briefly, we confirm our guidance. We are, from our point of view also, is what we see in EPCO on track here. Certainly, the impacts from the geopolitical and macroeconomic environment were not known when we approved this. So that we will not change it and do what is necessary to stay within the range. The five percentage points, 5% EBIT margin is steady at the point into the upper end here. Need to see what the second quarter is bringing. You know that our business is seasonable, but what I can say here is we confirm these main KPIs. Let me finish by a quick look at the financial calendar. The colleagues will go on virtual, but also to the conferences. We see a lot of interest at the moment from U.S. investors, but also from Asia. So you see that the schedule, we try to be as responsive as possible. And we thank you for your attention and interest in Shepard. With that, I hand back to Michael.

Thank you very much, Klaus. Thank you very much, Christoph. As already mentioned, if there are further needs, if you see further need for discussion tomorrow, the virtual roadshow organized by JP Morgan. So if you have interest, please let us know. And with this, I would say that we directly jump into our Q&A session and I will hand back to our operator.

Thank you very much, Mr. Eber. Ladies and gentlemen, we will now begin the question and answer session. Anyone who wishes to ask a question may press star and on on their telephone. You will hear a tone to confirm that you have entered the queue. If you wish to remove yourself from the question queue, you may press star and 2. Questioners on the phone are requested to save the loudspeaker mode and eventually turn off the volume from the webcast while asking a question. Anyone who has a question may press the dial at this time. And we have the first question coming from Christoph Lascavi from Deutsche Bank. Please go ahead.

Good morning. Thank you for taking my questions. The first one will be on the humanoid SOPs that you've highlighted. Now that you are moving into series production, I was wondering if you could comment in a bit more detail on the expected revenue contribution in 26 and 27. Is it fair to assume that in 26... It's probably closer to low double-digit Euro million amounts and in 27 more towards the mid to high double-digit range as a first question. And then you called it out earlier that the environment is tricky currently and in some cases unpredictable. Do you see any changes of customer behavior currently from the OEMs, any changes in call-offs also on the industrial side? And with that in mind, should we expect Q2 to roughly trend in line with Q1? Any color that you could share there would be appreciated. Thank you.

Well, let me start with the second one. Again, we have four different businesses, and I start with BIS. Masha just came back from China, and we see that there, although the The macroeconomic situation sounds a little bit subdued. There is a growing interest to work with us. We don't look at the industrial business by call-outs. That's more an automotive concept. And everything we saw in April doesn't look like a dramatic change. It's maybe a little softer than what we expected at the beginning of the year, but it seems to be quite resilient. When you see the news, when you see what's going on in the world, this is to some extent a surprise, but the numbers speak rather for a little bit of a softer development in the next months, but it's not a dramatic change in direction. So let's see how this is going to unfold and how the second quarter will look like. We don't expect a dramatic change to our Q1, but certainly Q2 is typically not as strong in terms of growth as the first quarter. The more important question is how will this unfold? Let me give you a little bit of a logic how we do this when we now estimate what's coming. You basically, in these contracts that we have, and I said five customer contracts, where you will understand I cannot mention the names. I can also not mention what kind of products the customers order. But for sure, these are the ones that we have also communicated and shown at fairs. We typically look at the number of bots, we look at the pieces per bot, and we look at the price per piece. That's the simple logic that is behind this. Now, SOPs will start in Q2. There's another customer that will then come in Q3, and another one in Q4. But this is the simple mix. So don't expect miracles in 2026. This is not a full year. At the start of the year, again, this is all estimated at the moment, we have no reason to believe that these SOPs are not happening, because for sure, the bigger players want to get ready for their first generation. A really interesting question, how does it scale then, and how many more pieces are we going to expect then in 2027? Also there, what I see, and you just mentioned indicative numbers, going through 2030, Revenues, I think, have a chance to go up above the three-digit million mark, but the ramp-up curve is premature. Again, 2026 will be also impacted by this timing aspect that I said. If everything works well, 2027 is more a two-digit million number, and then it will, however the development in terms of the numbers is, will go up to something in the three-digit million that's related in 2030. From a revenue point of view, order book is certainly already bigger than a one-year number. That's, again, my best estimate at the moment. We have told all of you also in the individual conversations that we will give indication today that you have a little bit of a sense of what's going. Regular reporting about order books, order intakes, revenues will need a little bit more time. Christopher and myself, we're 100% certain that we should only come out with numbers that are solid. And we are building this business. There's a lot going on here. I could spend most of my time on this, but I can't. So give us a little bit, be a little bit more patient. Give us a little bit more time. We'll come up certainly during this year with more figures here that you can also follow what we're doing.

Thank you. Very helpful.

You're welcome.

The next question comes from Jose Azumendi from JPMorgan. Please go ahead. Thank you.

A couple of questions, please. On the other backlog on humanoids, can you maybe just give some color, maybe how broadly is it split by region, the geographical split, if possible? Second, do you foresee, as you think about a one or two year view, some expansion of plant of the footprint either in the U.S. or in Asia to support the humanoid ramp up. And can you talk a bit about also your, I believe you've got your, it's like an R&D lab that you have next to Shanghai. when do you expect to open up that center for investors to visit it? And then second, on e-mobility, can you talk a bit about how you reuse some of the capacity, existing capacity you have to adapt to the different power train trends we have globally so we can make the best use of, you can make the best use of fixed cost investments? Thank you.

So let me start with the first question. In what I told you again with the five customer contracts, I can say, again, there's a development that still needs to be more solidified. It's more that's equally balanced between China, the US, and Europe. It depends a little bit how you define it, whether you define it by the the humanoid builder or where the end demand is coming from. But if I just look at the big partner in the US and the big partner in China, and that is together with The other one is more evenly spread at the moment. So it's not China or the US, it's at the moment both China and the US plus a positive outlook on the humanoid players that have more a European base. You wrote about Hexagon, that's the latest one where we entered into a cooperation. That's certainly a positive that this is not a just one country or one region. The humanoid factory in China is open. So if someone is interested to visit it, you just need to organize it. We have seen significant interest there. Maybe we need to organize a little bit of a tour. But it's certainly something that we would open up and show you what's going on there. It's quite fascinating also the speed, how the Chinese colleagues build it up. footprints to support the ramp-up. At the moment we have not decided on any plans to change the footprint. What we have in particular in Germany is for the time being sufficient, but we need to follow the development very carefully. It's a function of the ramp-up speed. If this goes very fast, we will react. If it goes more slowly, it's a different story. But we do this, as I normally say, with our eyes on the road and the hands upon the wheels, and we'll be very pragmatic to organize the necessary capacity. At the moment, it looks like that we can more or less handle what we have without bigger footprint investments. For sure, the cumulative total investment for the next year will be another interesting figure for you. And don't forget, we also spend money not only for plants or machines, but also for R&D and for people. When I say this, my biggest challenge at the moment is to add the relevant people here to the team. This is a startup. very different environment. We have super engineers, super product developers, all of that. But if we want to build this as a global business, we also need to support David and his team that is a global team with more talent. And that's where we're focusing on. So the next years will not only be looked at from a CapEx point of view, but also from the build-up of the right talent to drive this new market. Don't forget there is a very important angle to physical AI and industrial AI. This whole ecosystem is not just mechanics, it's the interface between software and hardware. And if you really want to play there, you need to understand the AI angle very carefully. Also, Christos said this, see it in a broader context. Then the last question was on Emob. Again, here it's not so much capacity in the plant, it's more how do we optimize the fixed cost portion. We certainly have a way to go in terms of R&D. That's something that we certainly address under our existing performance program. whether that's enough we need to see. In general, I can say with the improvement in Q1 2026, we'll say over Q1 2025, if you remember this little formula that we developed, is it possible to bring e-mobility across the line in 2026, that delta of nearly five and a half basis points But the delta from Q1-26 to Q1-25 is five and a half to six basis points. If you consider that immobility is a seasonal business with a stronger force order, that shift is, if we can maintain that shift over the next quarters, that really points in the right direction, even if revenues come in lower than what we expected when we had our capital market stay. So let's see how Q2 goes, and let's see that we are able to put the right measures in place. It's not a CapEx question so much. It's more a question of reallocating resources within the group and reducing also the R&D impacts from headcount here in Germany. Thank you very much. You're welcome.

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

Yes, morning. Thanks very much. It's Ross McDonald at City. I have three questions. I'll again ask on the human rights given there's so much client interest here. Klaus, just to help us back out, let's say, a potential content per vehicle to Schaeffler from these activities, I understand you're guiding around mid-three-digit million revenue potential on the current five contracts, assuming a global market of one million humanoids in 2030. It would be good to just confirm that specific point. But then within that, what is the market share that you're assuming on that sort of revenue ambition, let's call it? I'm aware for 2035 you'd be comfortable or happy even with a 10% market share. So, you know, on that math, is that the 10% market share assumed that is driving a mid-three-digit million top time? That would be my first question. Thank you.

Well, what I... Well, again, we are working in a market that is emerging and that certainly needs, to some extent, a scenario approach. Our sort of conservative scenario is a million humanoids to be produced globally by 2030. And I can also tell you, this is startup territory. We here at Scheffler, we don't like hypes. We don't want to see something where we are putting too much out. We want to be conservative. I think the million humanoids, as it looks today, is a conservative number. It could increase, but we need to see. It's also a question, where are they applied? And there are still very different views on this. So let's build on the one million and make sure that we make that and seize the upside if possible. The second cornerstone of our calculations is also nothing new to all of you. Andreas has said this also a year ago. When we look at the bill of material of an average luminoid bill for different purposes, we're talking about a 50% addressable market for Schaeffler. And if I now say if we aspire to get 10% market share of that addressable market for us, then that's basically the logic that we have in mind. You all know that this is then a function of how costs are increasing and how this is progressing, and certainly whether you can sell your products and your development competencies to the right partners. That is, from my point of view, from a CEO perspective, the most important thing. It's the same like in an auto market. There are so many humanoid players around, so many people that claim that they can do this and this and this. For us, as one of the sort of leading suppliers in this space, we want to do business with the right partners. And I can say, and you will hopefully understand that I cannot disclose names, but the names are prominent names. We want to be selective in the ones that we bet on. And that's what I see at the moment gives me a good sort of positive feeling that we have the right contracts to start with. This is a start. It's not the situation we can say we've already achieved everything we want to achieve. It will continue in 2026. And this concept of offering partnerships in terms of we can supply our parts and we offer people the ability to utilize their robots and learn together in a context where this is very much AI-driven, where the industrial metaverse is placeable, that is, from my point of view, the driver for success. I'll leave it here, but I'll leave you the rest of the calculation. At the end of the day, what counts is really what comes out in the bottom line.

That's helpful. Thank you. Maybe I will fire two more quick questions for Christoph actually. Christoph, maybe on the second quarter trading, if I look at 2025, there was quite a large set down in margin from Q1 to Q2. So you went from 4.7% to 3.5%. How should we think about the seasonality within Schaeffler this year? Would you be hoping for a less extreme margin pullback in the second quarter? How would you think about Q2 within the current guidance range? And then a second question, just specifically on the other division, noting that was around about €30 million loss per quarter on average last year. It has stepped up significantly to minus 15 million euro loss in Q1. How should we think about modeling that specific division going forward? And maybe you can give us some color on what drove that 20 million delta in Q1 versus Q4? Thank you.

So the first question I touched on in doing some of my comments Q1 was Overly impacted by inventory revaluations in 2025, some of it which resolved itself in Q2 and led to the performance that you saw. It's not only driven by the business itself, it's more the way we essentially take our standard cost variances to inventory. As I mentioned, we have switched some of our methodology on this one, so I expect a smoother quarter-over-quarter evolution in this one. The division that's primarily impacted by this one, especially last year, was BNS, so very good industrial solutions, first and foremost, and then PTC was probably the second strongest impact. We'll see how Q2 unfolds, but if we did it right, we should have a much smoother quarter-over-quarter evolution. Now, we do have a seasonal business where plant loading is important to us, and efficiencies are driven by the loading of our plants. We should not expect Q1 and Q4 to be directly comparable. If I put aside some of the the R&D and the customer negotiations impact, but from a purely operational standpoint, Q1 and Q4, despite that I've said before, will not be directly and indirectly comparable, but again, smoother quarter over quarter is what we would like to see and what we're driving for in 2026. I'm also a big believer that a better load, a better operational steering of our plants throughout the year drives higher efficiencies and higher performance overall. But again, I'm on the optimistic side on this one. Division orders, as you know, it's a mix for us of activities we're ramping up, ramping down. So the humanoid pieces in there, our defense efforts are in there. Hydrogen is in there, so are some of the businesses that we're disposing of. So the comparison year over year is a little bit tricky, but if you use what you're seeing right now, you probably will not be too far from what we should see in 2026. But that one is especially tricky, I guess, for you to model from the outside.

And it's a task for us to think about maybe for next year whether we guide something on this or how we best do this, but as you said, it's a mixed bag of things that are ramping up and ramping down, and we understand the point, but for the time being, I think you have the guidance that you saw, and it needs to add up to the group guidance.

That's great. Thank you very much.

You're welcome.

There are no more questions at this time. I would now like to turn the conference back over to Heiko Eber for any closing remarks. We have a last-minute registration from Klaus Ringer from Odo VHS.

Yeah, good morning. Can you hear me? Morning, Klaus. Hi. Thanks for taking my question. I wanted to ask on the auto business. I mean, it was quite nice to see the outperformance this quarter across different powertrains. And I would be interested in your view, looking ahead, if we can expect to see such a nice outperformance or if you would expect also some seasonality in here. Thank you.

Oh, Charles, it's a good question, but I don't have a crystal ball, to be honest. With this environment, it's really difficult to mention that, to answer that question. What is quite interesting from my point of view, if you follow what's at the moment happening on e-mobility, not only in Europe, but also in the US, you see what comes a little bit as a surprise to us, that in particular in the US, people are buying e-cars, although the production side is more going in the other direction. That may have to do with the fact that, you know, People look for fuel economy in a situation where gasoline becomes more important. We don't know yet. The trend is not stable. We also saw what happened here in Germany, what happened in France with more mobility support. There are the obstacles with the loading infrastructure. For me, what is really most important is that we have this hedge across the three different types and that we can play these corresponding cubes well. So I can't tell you what Q2 is going to look like. What I can tell you is our focus on, you know, playing in this space from e-mobility to PTC in a clever and smart way to utilize the opportunities that are there quarter by quarter. That's the game plan. And for sure, our biggest challenge is to deliver on our e-mobility promise And there, if our performance helps there, I would expect that we probably see a continuation during the year. Hours and falls, quarter by quarter, remains to be seen. A critical element would be the China angle of this. And maybe I can leave you with the following information. My colleague, one of our colleagues from Australia, is spending more time in China than any other colleague that we have.

That's so cool. Thank you.

Ladies and gentlemen, that was the last question. I would now like to turn the conference back over to Heiko Eber for any closing remarks.

Thank you very much. So, first of all, thanks to our speakers, thanks to my CEO, my CEO. Thanks to all of you for your continued interest, and as always, a big thank you to the team for the preparation. If there are more questions, please feel free to give us a call. Happy to help. And with this, thank you very much. Have a good rest of the day and talk to you soon.

Ladies and gentlemen, the conference is now over and you may now disconnect your lines. Goodbye.