Saf Holland Se

Good morning, everyone, and welcome to our conference call on our Q1 2026 results. Turning to the financial highlights for the first quarter in this year on page three, please. Here you can see that group sales reached around 452 million euro, representing an organic growth of 5.6% year over year and benefited from the recovery trend in EMEA as well as in APEC. However, the Americas region continued its weak momentum in both truck and trailer segments. As a result, this caused a negative regional mix effect in the first quarter, and overall profitability was nearly on par with the previous year, and the quarter closed with a solid adjusted EBIT margin of 9.4%, and the adjusted EBITDA margin was 13%. The operating free cash flow came in strongly with around €45 million, reflecting strict working capital management and, as said before, a solid organic growth. Leverage further improved to 2.2 times, mainly due to the strong cash performance. And in a nutshell, Q126 represents a solid start to the year and gives us confidence for the months ahead. On page four, you can see the development of group sales and adjusted EBIT development. During the first quarter, SF Holland benefited from the ongoing recovery in the European OE market, while APEC markets also recorded a clear sequential improvement. Against this backdrop, the group delivered solid organic revenue growth of 5.6%, demonstrating the strength of its regional and business mix. The aftermarket business continued to perform at a high and resilient level, providing stable support to overall revenues. While the foreign exchange effects created a headwind of around 5%, group sales reached 451.7 million euros in the first three months of the year, slightly exceeding the prior year level. And now turning to profitability, as of Holland achieved a solid adjusted EBIT margin of 9.4%. And this performance reflects continued strict cost discipline, mainly within SG&A, as a result of the first positive contributions from the efficiency program in indirect functions. So overall, the group's resilient margin development once again highlights the robustness and scalability of SF Holland's operating model, even in a mixed market environment. Moving on to the sales split by region and customer category on the next page, please. Here you can see that in the first quarter of 26, EMEA further strengthened its position, with the region increasing to around 52% of group sales now. This development was driven by the ongoing recovery in European trailer and truck OE demand. In North America, commercial vehicle production levels remain subdued. However, the market is providing early signs of stabilization. By contrast, APEC delivered a strong performance, supported by solid demand growth in India and Australia, and as a result, revenues in the region grew by almost 9%. with APAC contributing 13% to group sales now. Looking at the performance by customer segment, the recovery momentum in Europe and APAC translated into meaningful increase in trailer OE sales, which grew by around 6% and accounted for now 52% of group sales. Truck OE sales now representing 11% of the group's top line, reflecting the still cautious market environment in North America and mainly in the U.S. And once again, the aftermarket business demonstrated its resilience and strategic importance, contributing a solid 37% of total group sales. Let's speak about EMEA on the next page, please. With OE demand improving across the trailer and truck segments, EMEA delivered strong organic sales growth of 8%, in the first quarter of 26. And this performance was further supported by a stable and resilient aftermarket business, providing an additional pillar of strength. Geopolitical developments, including the conflict in the Middle East, have so far not had any material impact on the group's order book, which gives us confidence for the upcoming month. And despite a slightly adverse mixed effect resulting from the higher share of the growing OE business, Adjusted EBIT increased by around 16% compared to the prior year. This improvement was primarily driven by the positive scale effects and continued strict cost management, reflecting the benefits of the efficiency program implemented in the indirect area, which we started already last year. So overall, EMEA delivered a solid performance in the first quarter of this year. Speaking of miracles of the next Next slide, please. Here you can see that in the first quarter of 26, demand in the OE business remained subdued across our truck and trailer segments, reflecting an ongoing uncertainty around the U.S. tariff policy, as well as the potential industry discussions related to EPA 27. At the same time, our aftermarket business once again demonstrated also its resilience and was able to partially offset the softer OE environment. supporting the overall sales development. Against a still comparatively strong prior year with still solid truck demand, organic sales were moderately lower by 2.5%. FX developments remained a headwind with a negative impact of 8.5% on reported sales. And following the successful implementation of retroactive price adjustments in the fourth quarter of 2025, To fully offset additional tariff-related costs, the first quarter of 26 showed a stable overall pricing and cost position. The year-over-year development in adjusted EBIT mainly reflects lower fixed cost absorption in a softer volume environment. This effect was substantially mitigated by continued strict cost discipline, mainly also here within SG&A. Overall, the America segment demonstrated its resilience, delivering a solid double-digit margin despite ongoing market weaknesses, mainly in the U.S. Last but not least, on the next slide, we speak about our APEC region. And here in APEC, the overall demand continued to improve during the first quarter, and the region benefited from the ongoing recovery in the Indian trailer market, as well as a solid demand in Australia and New Zealand. While exports from India to Asian markets remained subdued due to tariff frameworks, this had only a limited impact on the overall regional development. FX effects continued to represent a heavy headwind with a negative impact of 13.4% on reported sales. The adjusted EBIT increased by around 8% in line with sales growth, resulting in a stable profitability level year over year. And at the same time, The SF Hond operation in China showed a strong operational recovery driven by improved capacity utilization as well as a targeted efficiency program. Overall, APEC delivered a solid and increasingly balanced performance with improving end markets and continued progress on the operational side. And having said this, I hand over to Frank for the key financials for the first quarter.

Thank you, Alex. And hello to everybody on the line. Let me start with a short overview on the EBIT to adjusted EBIT reconciliation for the group on page 10. During the first three months of 2026, reported EBIT increased slightly by 2.8% year-over-year to 36.9 million euro reported by our overall strict cost management. Moreover, depreciation and amortization from purchase price allocations were adjusted as usual and declined by 1.2 million Euro compared to the prior year, mainly due to expiring amortization related to the IMS acquisition. Our adjustments remained at low level of only 0.9 million Euro and were largely coming from legal and transaction-related expenses. As a result, Saar-Vorland achieved an almost stable adjusted EBIT and a solid adjusted EBIT margin of 9.4 percent in the first quarter, 2026. The adjusted EBITDA margin remained broadly stable at robust 13%, underlining the continued resilience of the group's earnings profile. Moving on to page 11, where you see the bridge from EBIT to basic earnings per share. As mentioned earlier, reported EBIT for the first quarter amounted to €36.9 million. At the same time, we made further progress in actively managing below-the-line items. The financial result improved by €10.1 million to a level of minus €5.2 million. This improvement was mainly driven by lower unrealized FX effects. Following the adjustments to our intercompany financing structure, we were able to further reduce our overall FX exposure. The remaining exposure was positively influenced by favorable currency movements, particularly to the US dollar. As a result, while the prior year period was still burdened by negative FX effects of 5.8 million Euro, the first quarter of this year benefited from a positive FX contribution. In addition, and even more important, we further optimized our external financing structure and interest expenses, declined by 1.1 million Euro, or almost 9% year over year. Income taxes remained broadly stable compared to the previous year, with an effective tax rate of 35.3%. Tax rate continues to be mainly influenced by non-capitalized deferred assets related to interest and loss carry forwards. For the full year 26, we continue to expect a tax rate of around 35%. Overall, the improved finance results, together with an improved EBIT, translated into a strong earnings performance. Reported EPS increased by 57% year-over-year to €0.45. Hence, also the adjusted EPS increased by almost 38% to €0.61. Adjusting all the unrealized FX effects according to our dividend definition, the EPS improved by 4.2% versus previous year, what is highlighting the resilience and profitability of the group despite the still challenging market environment. Moving to page 12, where you see the development of the equity ratio. Compared with the year-end 2025, equity rose by 4.9% or €24.2 million to €516.2 million, mainly driven by the positive result for the period. At the same time, the balance sheet total grew by 5.8%, compared to year-end 2025, primarily reflecting the seasonal buildup of working capital in the first quarter. As a result, the equity ratio stood at a solid 29.3% at the end of March 26, and therefore almost reached the year-end 2025 level. Turning to page 13, I would like to speak about net working capital development. Networking capital at March 2026 was influenced by several factors. First, it reflects the usual seasonal build-up at the beginning of the year, which was further supported by continued top-line growth. At the same time, trade payables developed very favorably, benefiting from extended payment terms versus our suppliers and providing significant positive contribution to working capital. In addition, development was further supported by strict inventory management, which remains a key focus area for the remainder of the year. In contrast, trade receivables increased mainly due to a structurally different customer mix that was partly compensated by higher factoring volumes of plus 8 million euro. Overall, these developments resulted in an improvement in networking capital of 4.2% to 17.1% of sales and therefore comfortably in our target corridor of 16% to 18%. And now let me address the cash flow development on page 14. Net cash flow from operating activities developed very strongly in the first quarter, reaching €44.8 million. This performance reflects not only the solid operating result, but also a favorable development in working capital. As mentioned earlier, networking capital benefited from targeted measures, including improved payment terms and a general strict inventory management. In addition, tax payments decreased slightly in line with the underlying business development of previous years. The upper line amounting to 5 million euro primarily relates to changes in deferred tax assets. Investments in property, plant and equipment and intangible assets totaled €5.1 million, corresponding to 1.1% of group sales. As typical for the first quarter, investment activity remained at a comparatively moderate level, fully in line with our full-year guidance of up to 3% of sales. Overall, investments were focused on further automation and modernization of production processes alongside targeted equipment additions in line with our Drive 2030 ambition to grow our business to more than 3 billion until 2020-2030. Moving on to an overview of the leverage development on page 15. Net debt to EBITDA ratio stood at 2.2 times at the end of March 26, slightly below the level at year end 2025, and benefited in particular from an improved net debt. Cost debt increased moderately and was influenced by the issuance of a 100 million Euro promissory note loan. This transaction further strengthened the maturity profile and was mainly used to refinance around 93 million Euro of outstanding maturities, mainly due in March 2027. At the same time, our cash and cash equivalents increased by approximately €34 million. This improvement was achieved despite the ongoing share buyback program, under which €6.2 million were deployed during the quarter. In addition, we further strengthened our financing profile by extending our revolving credit facility by €75 million to €325 million, which was undrawn by the end of March 26. Altogether, we see solid headroom to target on mid-size M&A projects without additional financing. Excluding the IFRS 16 effect, our leverage would have amounted to a significantly lower level of 1.9 times at the end of March 26. And now I hand back to Alex.

Yeah, thank you, Frank. I'm on page 17 showing the 2026 forecast. for the trailer and truck markets. And as mentioned earlier, European and Asia-Pacific markets showed encouraging signs of recovery at the start of the year. And in contrast, North America continues to be shaped by a more cautious demand environment, primarily driven by ongoing uncertainty surrounding the upcoming EPA 27 regulations, but also due to the USMCA discussions going on. Looking ahead, we expect the trailer and truck markets in North America in 26 to benefit from improving freight rates and increasing regulatory clarity over the course of the year, supporting a gradual normalization of demand. Therefore, we continue to expect a largely stable development in North American trailer market, and at the same time, we have upgraded our outlook for the Class 8 truck market and now expect growth in range of 0 to 10% plus. In the Brazilian CV market, which remained below expectations and against the backdrop of a persistently high interest rate environment, we currently see a market decline in the range of 5 to 10% for 26. For EMEA, we continue to see a steady to moderately positive development in trailer markets, while the heavy drug market is expected to show a somewhat stronger growth profile with increases of up to 10%. Also, our market expectations for the APEC region were moderately updated post the strong development in Q1. Having said that, let me briefly come to our guidance for 26 on page 18. and here we confirm our guidance unchanged across all key performance indicators. At the same time, the current geopolitical environment, particularly developments related to the conflict in the Middle East and the potential implications for the broader economic situation of our end markets remain difficult to assess with a high degree of uncertainty. That said, based on what we see today, we feel confident in the resilience of our business model, which positions us well to respond flexibly to potential demand and cost dynamics. So from today's perspective, we do not see any material impact on SAF Holland and therefore remain comfortably with our current outlook. And last but not least, let me briefly summarize the key takeaways for the first quarter on the next slide. First of all, we have seen a solid start into the year with demand normalization in Europe and Asia Pacific clearly gaining traction and translating into an improved top-line performance. This underlines that our regional diversification is paying off. At the same time, we continue to demonstrate the resilience of our earnings profile With an adjusted EBIT margin of 9.4%, we are essentially on par with last year's level, supported by disciplined cost management and a solid contribution across our three regions. Cash generation was very strong in the first quarter, with an operating free cash flow of nearly 45 million euro, reflecting our continued focus on efficient working capital management across the organization. So overall, Q1 was an encouraging start into 26 and gives us confidence that we are well-positioned to navigate a volatile macro and geopolitical environment. Ladies and gentlemen, this concludes the presentation. Thank you for listening. And we now can start with our questions. Operator, the first question, please.

We will now begin the question and answer session. Anyone who wishes to ask a question may press star and 1 on the 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 disable the loudspeaker mode while asking the question. Anyone who has a question may press star and 1 at this time. The first question comes from the line of Holger Schmidt from DZ Bank AG. Please go ahead.

Good morning, everyone. I have a question on the aftermarket business. We haven't seen growth for a longer period. The revenues are down by about 14% as compared to the second quarter in 24. What is driving that? Is it purely the volume? Have you not been able to push price increases? And when do we expect the business to come back to positive growth again?

Well, if I understand your question correctly, Mr. Schmidt, you were asking about a decline of aftermarket sales.

That's right.

Which I cannot confirm. First of all, we are not displaying our aftermarket sales. And I can report that the aftermarket is very stable in both major regions, which is Europe or EMEA, and also North America. Specifically in North America, that was the driver that we could keep our profitability. So there is no decline of aftermarket business.

Looking at the figures, if I'm right, you published 167 million in aftermarket revenues in the first quarter.

You are referring to the 37% share of our aftermarket business in total group sales.

That's right. It's what you are. Yeah.

Yeah.

And this is down as compared to the second quarter in 2024, so about two years ago, by around 14%, which means we haven't seen growth in the aftermarket business, effectively a decline in the aftermarket business over a longer period of time. And I'm asking, what are the drivers behind it? Is it purely the volume? Have you not been able to push price increases? What drives the decline in the aftermarket business since the second quarter of 2024?

So maybe I take this to ask again. You are jumping back two years, going to 2024. That's right. It's a good question. There might be a slight reduction, but aftermarket business, as you know, is really depending on driven miles. And we have seen, especially in the big market in Europe, a reduction in industry transportation due to the decline in the automotive industry. So reduced driven miles are a little bit impacting our volumes in aftermarket business. what will recover as soon as we come back to normal industry levels in this region. But it's not a big topic. If you add then the big portion of the US, of our America's business, we are strong in aftermarket. You have to add again another 10% to 15% reduction from FX because we are reporting in Euro and the sales is coming in US dollars. So overall, if we take the volume in aftermarket, we do have a little bit reduction in EMEA, but it's partially even offset by our higher population. We have generated the last five years, but we also have a huge FX impact from the depreciation of the U.S. dollar in the top line. There is no issue in margin, and even on the price side, as we mentioned already in last year's course, even the tariff topics we could offset in the U.S. in aftermarket as we do usually in our market. So from the business performance we don't see any negative impact in the aftermarket. The key topic is FX, taking the 2024 US dollar rate to the current rate. And the second is a little bit in Europe, the lower driven miles from reduced industry transportation that we even partially offset with higher population. So performance-wise, no doubt in our aftermarket.

Okay, that's very helpful. Thank you very much. So my second question is on technology. on your M&A ambitions. I mean, back at your Capital Markets Day last year, you highlighted the M&A ambitions. I think you mentioned an M&A capacity of up to 1.5 billion euros with a focus on entering into adjacent markets. We haven't seen any major activity so far. Can you give us an update where you stand here?

I take this question again. First of all, the 1.5 billion, I can confirm we do see firepower to do really reasonable M&As. Second is a topic that strategy is drive 2030. So this does not mean that only six or 12 months after publishing it, we go and buy something. We are really, really selective. We are investigating a lot of companies, visiting companies, but our target is to create value for the company. And this is leading us into the topic that we have to really do a good analysis and look for a really perfect fit target. And I have to admit this takes some time. We have a good short list where we are discussing and as well in our communication on the share buyback program as we see that The activity, we take us the time to really find a good target. We put some money on the share buyback program to invest it in parallel for the time being until we find the right target. As soon as we have it, you will get to know.

And we don't want to overpay, of course, for targets. This is why we are really selective. And we take our time to get good targets. And as Frank said, once we are ready, we will get to know it.

Yeah, that's helpful as well. Take your time. Makes sense. The third question is on the APEC business. I was a bit surprised about the 9% top-line growth. It was quite remarkable after an extended period of declining revenues. I mean, it was driven by India and Australia. Do you think this is the start of a new cycle? And what is the potential for APEC in 2026 as a whole and for the next three years?

Well, our biggest portion of the whole, let's say, Asia business for us is our Indian market. Having more than 50% market share in trailer axles and trailer suspensions, we would like to grow that. We also have the capacity to further increase our output. That's a good sign. As a reminder, we just moved like two or three years ago into a totally new facility with upgraded robots and automation, and it's a good thing. India had a decline of markets the last two years. I can confirm that. This year we had a really good start. We don't see huge impacts with the shortage of gas and electricity in India at the moment due to the Middle East conflict. The export specifically to the US is still subdued due to the establish situation. So we have to see how that develops. But clearly I have to say with a share of 12%, 13% of the overall group sales. This is not sufficient. We reported that we at least would like to have 20%, 25% share in Asia until 2030 to more balance the different regions. So if we had a 40% for America, 40% for EMEA, and 20% at least for the epic regions, that would be a target for the years to come. We are driving that. We also put together the management teams in China. We have two teams, one for Haldex, one for SF. We put that together under one roof now. This is gaining traction. We are increasing our sales, but also profitability is going up in China as one of the big markets or the biggest market in Asia. And as you said rightfully, also in the US. In Oceania, speaking of Australia, but also New Zealand, we have high market shares with growth rates which are sufficient and good. So overall, to summarize what I just said, we would like to increase the overall portion of the business in Asia, not only in India, but also in China and the other regions like in Indonesia, Malaysia, Thailand, Southeast Asia in total, Japan, to be more in the ballpark of 20% to 25% of group sales in the years to come.

Sounds good. I go back into the line. Thank you very much.

As a reminder, if you wish to register for a question, please press star and one on your telephone. The next question comes from the line of Jasmin Steilen from Berenberg. Please go ahead.

Hello. Many thanks for taking my questions. I have three, if I may, and I will also take them one by one. So the first one on the U.S. truck and trailer market, you became more optimistic on the U.S. truck market. Is it already visible in your current business? So is it fair to assume or to expect a flattish development in Americas in Q2? And then the recovery in the second half? That's my first question.

Yeah, I can confirm that the order intake and also what we invoiced in the first quarter was some kind of, let's say, slightly promising, okay? It's not overall a super wow, I have to say. It's slightly improving. Order intake is also coming specifically for the truck OE, which is one of the biggest portions of our overall US business or North American business. The oil intake for the second quarter is also okay, I have to say. It's increasing. We think that after we have more clarity on the EPA 27 USMCA, there's still some more discussions going on. Now new tariff regulations are coming in, or talks are going on, and we still have the Middle East conflict, which drives massively the gasoline prices. Again, now in Michigan, it's like $5.25 a gallon. In California, six to seven. This really hurts our industry, I have to say, because all the diesel prices jumped and that drives inflation in our transportation. But everybody in the market expects that the second half of this year, it's going to be much better than last year, but also better than the first quarter and the second quarter to be. So we are positively optimistic here that the second half would be better.

Okay, perfect. Following up on this, so with regard to EBIT margin seasonality, do you expect the usual quarterly EBIT margin development, or should we see a different pattern from the recovery of the U.S. truck and trailer market in the second half?

Basically, we do not guide EBIT by quarters. We refer to our guidance, 9% to 10%. We had a good start in the year of 9.4, almost in the middle of the guidance, and there will be usual seasonality, but nothing special.

Okay. And then the last one on working capital and the supply chain. So with Middle East conflict, do you experience any tightness in your supply chain, and how should we think about the networking capital ratio in this context for the remainder year, and also assuming the recovery of the U.S. market in the second half?

Overall, we have a quite solid local-for-local supply chain and also dual sourcing or free sources as well. So we don't see big impacts in terms of shortages on the supply chain. Energy cost is also not a big issue for us. We have less than 1% energy cost in our P&L. So we don't see shortages in delivery and interruptions. Everybody has to monitor the energy supply in India. But as Alex mentioned, also this is still working good. And hopefully this conflict will be solved in the next weeks easily. So we don't see a big issue in that. On the networking capital, as I have mentioned, we could manage, especially in inventory, not a big jump in the first quarter as we have normally in the season. What is good and is also one of the reasons for our good networking capital and cash performance in the first quarter, also the improvement of accounts payable, improvement of payment terms. We placed a really solid program last year for sustainable improvement. This will remain, and the remainder is the accounts receivable customer mix, but I don't see any big impact on the networking capital ratio as well. The corridor, 16% to 18%. It's a solid corridor and this structure of business with 35% to 38% aftermarket ratio. So also Q1 is a good implication for the remainder.

And mainly also add on from my side, we just had a leadership update one hour ago with our EMEA team and APEC team. We had the same question coming here. And what I replied is well done for the first quarter, but there is still room for improvement. when you see the last couple of years. So we are working very hard, mainly on inventory management, but also on getting our money from our customers in.

Perfect. All very clear. I'll step back into the line. Thank you. Thank you.

We now have a question from the line of Nikolai Kempf from Deutsche Bank. Please go ahead.

Yeah. Hi, good morning. It's Nikolai from Deutsche Bank. Good start to Q1, so well done. I'm a bit surprised about your comments on the U.S. market, just because, and I'm just referring to Truxy, I know traders may be a bit different, but I mean, the orders we've seen in Q1 are very strong, and I mean, yesterday the U.S. class 8 market leader reported Q1 numbers as well, and they pointed to a 50% unit set increase from Q2 versus Q1? So my question is a bit, if you also like assume that Q2 and so on will be stronger, I think first of all, this could maybe make your top line guidance appear a little cautious. And my second question is, would you expect any mix shift? And how would this impact visibility? So having more OE business and that's aftermarket business.

Thank you. Well, starting first with your last comment about the big shifts, I don't see that because typically this is not linked to each other. You have a running population in North America, mainly in the US of trucks and they need repair. I don't see a big drop of aftermarket or a shift from the aftermarket to OE. I can also confirm what you said that the order intake specifically for the month of February and March was very good and very promising. You know, there is one thing. We have to stay cautious here because with the Middle East war going on, with the petrol, the gallon prices jumping to $6, $7 per liter, the fleets are very cautious. And then you have another discussion, new tariffs coming in. So the government, in my point of view, does everything to put uncertainty in the whole environment and the market. So our fleets are very cautious to really further invest. Let's hope that the order being placed in February and March also will be delivered in the second quarter and the third quarter. We stay a little bit more cautious. Let's hope for the best, but we do our planning, and the planning is not over-optimistic in that regard.

Okay. Let me clarify. Maybe one more.

Yeah, because I get it. I wanted to add regarding to your mix effect. Higher OE is also coming in with higher economy of scale. So this natural product mix effect, I can confirm what Alex said, is not coming. But we have better utilization of our equipment. And on the order book, we also need to admit that Q2 last year was a quarter with still high sales looking into a declining market. They have usually low order book. Now we look into... lower delivered sales compared to last year, but looking into an improving margin. So it's, for me, from the comparison, it's fully clear that we have this difference in order intake compared to previous quarter we see at Daimler Truck when they published. But as Alex mentioned, it delivered finally.

Yeah, maybe just, yeah, I think you answered the question. My question was about the mix shift in probability because the aftermarket is much more profitable so e-business and so then if you have a higher share of eoe with aftermarket could this impact your your margins but um you've answered that and maybe just one quick one on on europe um also here rather positive signals from the truck manufacturers um i know germany is slowly coming back not as strong as hoped for and what do you see here in the market

Well, we see the positive development. We were quite happy with the first quarter, not super happy like in 2022 or 2023, I have to admit. We are running two shifts in all the plans, so this is good output, which then also creates more population for the aftermarket for the years to come. Order intake is okay, also for the second quarter, so also here we are positive looking into the future. As I said, it's not like it was in 2023 when the markets were booming and Germany is still, let's say, a question mark, I have to say. People are hesitant still. And sitting on the money, there's money available. Interest is not too high in Germany or in Western Europe. They're willing to invest. But now what happened just six weeks ago with the new, let's say, Middle East crisis, the damped a little bit the overall positive signs in the first quarter we have seen. But the second quarter is also the order intake. It's quite promising, I have to say.

Okay, understood. Thank you.

Once again, to ask a question, please press star and one on your telephone. The next question comes from the line of Werner Friedman from ACE and ICE. Please go ahead.

Yeah, well, good morning, gentlemen. It's only one question from my side. It's on the APEC region where you had shown a very, very strong organic growth of 22%. And usually with such kind of growth, the EBIT margin would react positively too. This has not happened in that case. And I've also seen that the number of employees in the APEC region was up very strongly in Maybe if you could elaborate on what is happening there.

Yeah, that's an easy one. That's mainly coming from India. In India, unfortunately, the share of aftermarket and OE is not like 70 to 30, 70% OE and 30% aftermarket. It's mainly driven by OE business, so 90% plus. And the increase in sales was coming from the OE business. And the OE business, the margins are stable This is why the margins did not jump heavily, I have to say.

We have really good cost flexibility. You even could not see last year when sales declined in impact on margins, so we have really a flexible cost structure, and that's why margin goes basically stable along with sales up and down.

Okay, understood. Thanks a lot. Thank you, Mr. Friedman.

Ladies and gentlemen, there are no more questions at this time. I would now like to turn the conference back over to Mr. Lorenz Dietz for any closing remarks.

Thank you everyone for your questions. Our investor relations team is available in case you have any follow-up questions. We will be, as usual, on the road attending conferences in the coming weeks and months and look forward to seeing you there. Have a good day and goodbye. Thank you.