Stabilus Se

Thank you very much and welcome to our full year 2025 call. My name is Michael Büchsen, I'm the CEO of the Stabilus Group. And today you have as always with me Andreas Schröder in West relation, but this time around first time also in the discussion Andreas Jaeger, our new CFO. I'll introduce him at a later stage, and then he for sure will also take part actively of the discussion. He will lead us through the financial portions, so the details by region, business unit, and other factors he'll talk about a bit. And then he will also talk about a little bit PEPX, expenditures we did, networking capital, so all the finance-related points he'll touch upon. And I'm really happy to have him as part of the Stabilus group now. But before we go that route, let me confirm the 2025 preliminary results. You all know it's a very challenging environment we're in. And we did release our preliminary results already on November 10th. And here we confirm all these numbers. We've been a very stable process to close the year. and also in a very, very stable financial position as a group because in a very challenging environment, We achieved 1.3 billion in terms of sales and then adjusted EBIT margin of 11%, which is outstanding given the market circumstances. And it leaves us with a free cash flow of 119 million for the year. And that leads to a net leverage ratio of roundabout 3 to 2.96, which we've been talking before about. And we should actually spot on with our prognosis we gave in August. Also, the overarching topic for us, and we saw it in the last call and talked about it also in numerous meetings, is our transformation program. Throughout the session, I will also give an update on the transformation program, which greatly reduces personal and operating costs to make us long-term sustainable as a group. So, on the next page, I would like to again welcome our new CFO, Andreas Jäger. born in 1972 in Switzerland, so he's a Swiss citizen. And in terms of a professional background, it's very important to us not only that he has a broad background in terms of financial, but he also has a very profound background in terms of industry around the globe. Global businesses like Fouabou, he used to be a CFO there, and then also the CEO, intelligence-wise. Geberit, also a very well-known company, dedicated on different areas on the planet and also very focused on industrial business and sales channels, sales channel management, selling businesses to very challenging markets as well. And this actually helps us as a group because, as you know, our big aim and target is to expand our industrial business. And Andreas Jäger, therefore, is actually the perfect fit to our organization to basically strive with us for this target, enriching our industrial business, taking the most out of our industrial footprint, our sales teams, aside of the well-positioned automotive business, we are anyways, as an organization, taking well care of. So in terms of the professional path and education, bachelor degree in business administration, and this is basically along with his broad experience as an executive master in European and international law, a profound education to basically backfill also the needs of the Stablos Group in terms of the technical knowledge of this position. So I'd like again to welcome Andreas, welcome aboard. We're really happy to have you with us. And as I said, you will lead us through the financial portion then later on. And for sure, you will jump in right away in our Q&A session. So welcome. Good. So we go ahead and I would like to talk about the main points of our business as we stand. And the things we're currently working on to continuously improve our business to where it is and where we want to be at 2030. that the organizational transformation is going on, but we actually are basically halfway through, I would say. We took all the necessary decisions in terms of how to streamline down the organization, where to streamline it down, We've been talking to our people, and now in the rollout phase, half of the people basically at the end of the day have been talked with. Half of them agreed already to all the actions we're taking. We're taking personal related measures because we know, all of us know, that this is a good time basically to streamline down the organization. As you all know, we started two years ago with streamlining down our operations, predominantly focusing on the area of Koblenz, with the next step in terms of automation, the next step in terms of getting more efficient on the operational side. And with these measures we're taking now, and we've been announcing them, a couple of months ago, we are taking out 6% of the global workforce, also on the overhead side, because we need to streamline down the organization to become more effective, basically to focus on the right things in business, to right-size our overhead structure with given circumstances. And for sure, with that, we confirm our Start2030 strategy and thus striving for EBIT margin targets and this initiative greatly helps us with that. So we also talk about the different locations. You know that the discussions in terms of streamlining down our footprint are things which we always have on the radar. Just to mention, we do consolidate some German footprints here in the US. We moved the Singapore operations and sales offices into Thailand. Just as a few example on how we work on a daily basis to optimize our organization. So on the next page, some more details on that. And I just want to repeat things because, you know, it's very important to know how on the financial side we are performing in terms of our dreamlining program, our efficiency program, our restructuring and reorganization program. As you know, we started it in September. We announced late September that we would accrue some money. We did accrue 18 million. So that means that effect on the net profit is already in the numbers in the financial year 2025. In 2026, we will for sure see a cash outflow along the line as we basically pay severance payments. However, the big chunk of net profits or the net profit number was already basically stated by end of September with this impact of the 18 billion. So the payback is less than a year. We start this ramp-up phase as we speak. So the first five, six months of the year, as I said, we are halfway through with our reorganization, reshaping, restructuring activities. The activities go over the path of the first five, six months of the year. Then we see the effects for the second half of the year. So we should see that back and loaded in the year. and then a full effect of 19 million cost savings in 2027. Starting 2028 there will be 32 million reoccurring annual cost savings because that's when we backfill also all the savings out of the operational activities we've been doing alongside. So to make the long story short again the net profitability numbers or the was already stated as of September, so the profits are back in the oldest numbers. The cash outflow will be this year because we accrued that severance money for the 450 employees and the payback is less than a year, which will materialize in the second half of the year 2026 for us. So on the next page, I would also like to highlight in technical terms some initial and additional activities we are doing. You know we are a technical company. We are very proud as the Stabilus Group that we invest even in challenging times in the future. So we invest in new products, we invest in new processes, and we invest in capacities because many of these businesses, predominantly on the automotive side, are already booked. And this is what we take care of with our CapEx number. Andreas will talk about that at a later stage in this presentation. And I would like to highlight, first of all, a technical product. And then I will also go a little bit into the sales channel management in this presentation to tell you also what's new on that area. So first of all, we introduced a new e-gripper family. Why is this important? You know, in the industry trend, we see that the companies are moving away from pneumatics towards electrification. Electrification is all over the place because it's more reliable, it's less energy consuming, and also it gives the feedback it is needed for smart production. Because it tells you the position of the grippers. It tells you the force you're gripping with. It tells you the distances and measures out of the process, which is important for quality measures. That's why our customers, they're also very keen on getting a new product like that, the electric gripper. We developed that over the course of the last 12 months. And it's now pushed into the market with three different sizes even. So it's a perfect tool for robotics. And, you know, robotics is all over the place. It's not only in industry areas. It's also in consumer goods productions and wherever. In the terms of logistics, there are logistics providers who are big customers of ours with these new gripper series. And I wanted to highlight that because it's groundbreaking in terms of new products for our growth in the future. How do we sell this whole thing? We'll talk about it next page, please. Because at the end of the day, we started also the Stabilus for Automation initiative. You know that years back, we did harmonize our sales teams around the globe. We also did the same thing over the course of the last 12 months with Desteco. And now we are in a very good stage of harmonizing our sales teams and bringing both companies even closer together, also in terms of selling the different brands. So we have the right products on hand. We did develop the right products to begin with. And we started the initiative Stabilus for Automation, which basically leveraged our combined strengths. The expertise in motion control, the good brand portfolio, and the multi-industry portfolio in, at the end of the day, bringing together the best of both. So the positioning and handling, which now both companies sell and do, world-class automation and clamping, which will combine the forces of Stabilus and Destaco to begin with, and with a stronger market position now in the U.S. So combining and harmonizing these two initiatives into status for automation brings us a step forward in terms of how we appear at the customer, how we sell products. For example, the e-gripper, but also many other products in the automation space. So if we now jump ahead one page, I would like to go into the financial numbers. So in a nutshell, just to summarize what we've been talking about on the first pages is, Strong result of the last year in a very challenging business environment, as you all know. We actually doing the right steps in terms of technology and sales management to boost sales. And then also we have a strong financial performance to begin with, with our initiatives for sales and pushing our products into the different market segments. Yeah, in terms of our financial position, and here you see the quarter four numbers, I'd like to highlight a couple of points. You see us performing with 316 million sales in the last quarter of the year. EBIT margin was basically in the range of the company's margin for the whole year, in the range of 11%. And the profitability was at this point impacted in the fourth quarter by this accrual we did of 18 million for our reorganization restructuring measures. This is why you see here this narrative impact. So as I said before, we did accrue this money last year, so it was profit relevant in terms of cash. We'll see the impact this year as we basically pay severance payments. Last year's cash performance was very good with a free cash flow in the quarter of almost 60 million. We basically got to a full year number of 190 million, which we'll see on the next page. So the full year numbers basically as stated at the beginning show 1.3 billion in terms of sales, adjusted EBIT margin of 11%. As I said, profitability was impacted predominantly by the transformation money we did accrue. And then the cash position is, in terms of free cash flow, 119 million. And for sure, Andreas will go into deeper detail in a second on these numbers. But in the given circumstances, in the given market, this is a very stable result. And also, it did allow us to pay back some debts on top of the very successful refinancing we did to further stabilize and build the right foundation for our company to start with. So, this is in terms of quarterly number and full year number. On the next page you also see that visualized. There are two more pages coming from my side before I hand over to Andreas. So you see the business development in the fourth quarter. You see us being impacted in America by lower sales, but predominantly in Asia-Pacific. So what happened there, I mean, in numerous meetings we talked about that. The bigger point in Asia-Pacific was that exactly in the fourth quarter of the established business year, the Trump administration announced a 100% tariff. At the meanwhile, they found an agreement, but this was a shock to the Asia Pacific, predominantly China organization for sure, which did cause that products like automation equipment, but also general industry equipment, which was kind of prior to that announcement, sourced in China and shipped to the U.S., basically came to an end instantly because of these high tariffs, because all the manufacturing equipment transfers have been burdened with 100% impact on tariffs to the US, so that's why US companies stopped basically or deferred ordering. I want to highlight it's deferred ordering, there was no cancellation, so now things are coming up a bit again. But there is some cautiousness in predominantly China because of this unstable geopolitical situation and also the unrest in terms of tariff situation. So in the full year, that means we saw this impact in Asia Pacific, which is all driven by China. with 12% year-over-year decline, as I said, predominantly driven by that all the exports out of China of equipment to the US came to a stall. But also, there was a secondary impact because a lot of the consumers in China were basically left with uncertainty. And so the consumer indices also went down, as you all know. And this had an impact on our business to begin with. One more point, which you also see in the numbers when it comes to the EBIT margin, but also Andreas will talk a bit about this, is we had a transfer pricing adjustment, which was driven by a distaco-related problem. move of some of the profits from the Americas to EMEA. And this is something which impacted us in the fourth quarter. But at the end of the day, for the complete year, I'd say Americas and EMEA, solid, stable with a slight upward trend. Asia Pacific impacted by the tariff situation to begin with. So with that, Andreas, I will hand over to you. First meeting for you. Welcome again. and I leave it with you to talk about the regions a little more in depth.

Thank you, Michael, and to all participants also a very warm welcome from my side. Following the introduction on group level, I will now go deeper into the region, the market segments, and then I round up my part of the presentation with some more information on the investments before I then hand back to Michael for the outlook. so starting with the americas in americas we saw a grow of 2.5 percent in the top line in the revenue we had two major impacts in there on one hand we had the first full year consolidation of this taco and you remember in 2024 this taco was included as of april the first so we had six months of the results of this taco in our accounts Whereas in 2025, the stock was included for the whole financial year. On the other hand, we had a significant negative impact from foreign exchange. The US dollar weakened and we present our accounts in Euro. So there we saw an impact of minus 7%, which is more than 30 million Euros only in 2025. In America, the stock grew, so they contributed positively to the minus 1.2%. The major negative impact we saw came from automotive and in automotive from power rise. In a competitive environment in America, we had to adjust our prices, so the bigger impact came from prices more than from the volumes. If we then look at the EBIT, we also have two major impacts on the EBIT of the period. We included Destaco, as I mentioned before, adding 21.2%. But on the other hand, we have this harmonization of the transfer pricing policy following the consolidation of Destaco. There we added almost 8 million euro of cost into the region. Important to note is this has a significant impact on Americas, but on group level, this is neutral. And also looking then on the margin, we had last year a margin of 10.2% in the EBIT. This year, 7.9. About half of it came from the change in the transfer pricing. Moving then on to Europe. In Europe, we saw a growth of 3.2%. And also here, we had the first consolidation of the stock that added about 5% to the whole revenue. In Europe, the FX impact was minor. Most of the operations are in Euro, so this was a lesser extent. When we look at the segment where this minus 1.4% came from, it's mainly the negative impact from automotive gas springs. Positive signs we saw from automotive power rise and industrial component, the whole pricing was a lesser issue in Europe. Looking then on the EBIT, we saw a plus of 20.6%. Here you see now the positive impact, so the backswing from the harmonization of the transfer pricing policy. Here it added 9.6 million. And on the other hand, the big impact, positive impact, came from the first consolidation of the stock, with plus 9.1%. In Asia Pacific, the top line was reduced by 12.4%. Here, we had a minor impact from the first consolidation of the stock. That was positive. On the other hand, we had a minor negative impact from the FX in Asia Pacific. Almost all of the minus 12.4% are driven by China. In China, we really see a reduction on one hand on the volume, but also pricing-wise, in the competitive pricing environment, we have to adjust our prices. We still grew in the industrial components that we saw an organic growth. The major negative impact was China and in China it was an automotive and within automotive more from power rise than from our gas springs. Moving on to the EBIT, the EBIT went down with 29.3%. This was obviously heavily impacted by the lower volume and the lower prices. But if you then look at the margin, and we had a margin of 17.5% last year and this year 14.1%, so you see even with the decline organically of 13.6% in the token, we could maintain a solid EBIT margin of 14.1% and that demonstrates our ability to adjust or to flexibilize our fixed costs in order to maintain a profitable business. On the next two slides, I would like to go into the details on the development by market segment. Here just highlight the two most important drivers in here. That's only Q4, basically automotive, minus 10%. Please also note here, we also had a negative currency impact. And then where you see a solid growth of 9% is our third biggest segment, is the distributor at the independent of the market. The full nearby market segment, I just would highlight the first two lines, automotive, similar picture as in the quarter with minus 10%. Also here, this line clearly impacted by the negative currency exchange impact. Industry, machinery and automation, where Destaco builds, the major part of it was positive with 61%. This is the first consolidation, but in the footnote you also see that Destaco as a business had an organic growth of 5.8% year over year. Our net leverage situation you can see on the following slide. We did reduce our net financial debt by 36 million, so here you see a positive development. The net leverage went slightly up and the reason being is the result, the EBITDA, but our goal remains and we are committed to bring down our net leverage ratio in the next three years down to below the 2%. Our long-term target also remains unchanged, the target and that leverage ratio of 1%. Looking at the networking capital position, also the networking capital position, we could reduce by 23 million. And we introduced the new ABS factoring. And also going forward, the networking capital and the development of the networking capital will be a priority on my desk. We want to further roll out the ABS program. and we also want to optimize our networking capital in general and particularly the inventory level. Our investment pattern you can see on the next page. This year we invested $88.5 million in our company. And I think this is a clear demonstration that we are committed to our long-term growth path. Also, in a challenging environment, we maintain our strategic investments and we invest in our company. On the next slide, you see that the split, I think that's the even more interesting part, a significant part, 30.8 million or 35% of our investment goes into R&D. We need to develop innovative products in order to secure our long-term profitable growth. That's then also the second biggest portion of our COPEX that goes into growth COPEX is 34%. And then its maintenance, we need to maintain and keep our plants and machinery in order to have an efficient production process. And then the third part, 13.5 million goes into optimization. Yeah, with this, I hand back to Michael for the outlook.

Thank you very much, Andreas. And yes, over the course of the next four pages, we'll talk a little bit more about financial numbers for next year. Before I summarize then, we'll have a Q&A session. So in terms of where we stand, you all know it's 1.3 billion, 11% EBIT margin and a fantastic cash flow of 119 million. For next year, our forecast range is between 1.1 and 1.3 billion. An EBIT margin of 10 to 12% EBIT margin on the adjusted side and 80 to 110 million in terms of free cash flow. So that are basically our numbers, which we see for next year in terms of the forecast. And on the next couple of pages, I'd like to talk a little bit about the details which are behind that plan, because I think this really matters and should allow you also to feed your charts and simulate and make your assumptions as well. So you all know that our numbers are to begin with based on GDP growth and likelihood of production. GDP growth should be positive 3% next year in 26 over 25, and this is something which we take as a baseline, for sure with some cautiousness, because nobody knows how the geopolitical unrest and also the tariff situation at the end of the day for the next year impacts our numbers. in the same way than the economy, and you saw there were some quite significant impacts in the year 2025 to begin with. Now the light vehicle production growth re-assumes 91 million produced vehicles. which is slightly less than this year, about 2-3%. And this is something which we also see for next year. Pretty stable Europe and North America, but also on the lower side with negative 2% in Asia. probably down 3%. So that's the numbers in terms of GDP and light vehicle production. You know, these two numbers impact our business the most, because GDP is on the industrial side, our measure, and light vehicle production for sure, with whatever is automated, automotive related on the component side. Yeah, cost inflation, at the end of the day, material expenses, we see kind of stable, right? We are wrestling every day with our suppliers, also to get some savings out of our supply base. However, you know, in uncertain times with quite stable sales, their abilities are also reaching a floor. So that means we see no inflation, big scale, but also no deflation. So we see the slight degrees of our material rates for next year, but in a ballpark number of half a percentage point. Labor cost inflation, it's in the end of the day, it's in the range of 6%, right? Western world a little less, but we still see, for example, in Romania, but also in Mexico and China, predominantly in the lower cost areas, an inflation which is above average, we would assume, in the Western world. So we've been calculating with about 6% year over year next year. Important is also the FX rates, for sure, 1.2 US dollar to the Euro, and 8.5 Chinese Yuan to Euro. So that's what we plan for. On the next page, we see that coming down to the regions, and I've been touching on that a little beforehand. The yellow circle, you see the complete year, complete company, the Stadelus Group, so then followed by Americas, EMEA, and Asia Pacific. We see 400 million to 460 million. We see basically 9% to 11% EBIT margin in that range. Similar scale in EMEA, 500 to 570 million and 10% to 11.5% EBIT margins. So these two regions fairly stable at the end of the day. And as I said, this is why the stake also was a great move for us. Not only that we are stronger in the industrial side, we also put more focus on the America side, which you know these days is a good thing to do. It delivers stability, and it makes sure that we have good stakes in both America's and EMEA region to begin with. Asia-Pacific for us, for sure, that's predominantly China, 200 to 270 million in terms of sales. 12% to 14.5% EBIT margin. That's the target for next year. And as I said, you see that on the bottom line, GDP growth is in America 2%, in America 1.5%, China 4% growth. So there should be some growth coming on the GDP side. Light vehicle production, however, there are 12% on the sky still, right? Uncertain electromobility growth. bearish situation, consumer sentiment low, and this is why actually GDP, so S&P numbers show America's in the near down 2% and Asia Pacific down 3%. So these are the fundaments of our basis planning. also for the region in EMEA and Asia Pacific to begin with. We still see some pricing pressures. We always see the automotive side. This year we can deal with majority of it. You know that we saw last year some price deteriorations in China and in America because of high competitive pressure. This basically this year, we still see some of it, but we can overcompensate that or compensate that with the activities we do on the technical side and on the purchasing side and efficiency side. High inflation, Romania, Mexico, I mentioned here, but that's what we also see for China. But in China, it depends on pretty much how also the general business development is, because we all know when the general business development is either solved Then you also, it's easier to negotiate with labor representatives, the tariff increases in the different regions, and this is something where we think China could be okay, Romania and Mexico is more difficult to discuss with, where we see still a labor cost inflation. So on the next page, And also some more numbers, right? The PPA, 13 million for 26, 16, that is the STACO PPA, this is reduced, 29 to 26 million, there are 16 million STACO. CapEx is important to know, Andreas talked about it. We invest majorly in the development of new products and processes and equipment to produce. This is mainly concentrating also on the automotive side, on the areas of door actuation, where we see good growth in the years coming. We got really fantastic awards, we are market leader in that segment. A market leader with currently 40% market share on the direct relation. There we have very firm contracts for the years to come. They'll kick in starting end of next year. And then we also invest, for sure, on the industrial side in electrification, smartification of products. Andreas mentioned that, and this is, for sure, the biggest bucket of our investments. It's probably two-thirds of the investments. For sure, we do some base maintenance. But it should... Why things off the table, like there were some questions we always got under investment of the Steko. That's not the case. The Steko is well invested. It's reinvest, and this is why we also wanted to highlight that. a lot in new technologies and also a lot in operational capacities for years to come. And less in maintenance, we invest in maintenance, what we need in maintenance to do, but it's not overly excessive in that area. So that's why I think the pie chart is very good. Transformation program, to keep it short, we talked about it, 18 million, we did a crew, 19 million is a full year cash. benefits to us, or full year cost benefits in 2027, going up to 30 million during 2028 even. Net working capital, I think it's a really good number to be between 17 and 20%. That's something which we saw on the graph. I think that's a good rate. The group tax rate will be anywhere between 25 and 30%, currently we're in the range of 27, that is in the mid part of it. And yeah, dividend, And you saw that in the note we distributed, we also stick to our commitments we gave to our investors. We know some of the investors are less interested, others are way more, I tell you, in terms of dividend, because some of our membership, they finance their activities, their offices with dividends. We did cut it down. to a lower dividend than in years before, still being in the range of 40%. So this time around, it's 35 cents, which we suggest for the AGM. And I think that's a good number. And on one hand side, it should show our membership who take care of dividend policy that even difficult times, we let people participate on the net profits the company makes. And on the other hand side, there is good cash still remaining to do other activities for capital allocation, like we discussed them beforehand. Yeah, and with that, I would like to summarize for you 2025. For sure, we've been impacted like everybody else in the industry out there, but we did do a very fantastic job in terms of EBIT margin and cash generation to begin with. And the AGM 26, we proposed 35 cents per share. total dividend of close to 9 million, which is coming, yeah, 37, closer to 40% of our net profits, as we always promised. And then, for sure, given the current circumstances and difficulties in the market, we see this as a transitional year, being in the range of 1.1 to 1.3 billion sales with an EBIT margin of 11 to 12% and 10 to 12%, sorry, and a free cash flow of 80 to 110 million. For sure, with whatever we do, and you saw that with the investments we do on the long run, right, two-thirds of the capital expenditures we do is in new technologies and capacities for contracts we won for the next two to five years. We invest in the right things and very committed to our Start 2030 strategy, and we will give full push to reach our numbers. And with that, I would like to open the Q&A session.

Thank you. Ladies and gentlemen, if you would like to ask a question, please press 9 and star on your telephone keypad. In case you wish to withdraw a question, press 3 and star on your telephone keypad. And the first question is from Akshay J.P. Morgan. Please go ahead with your question.

Good morning, Michael, and welcome. Andreas Akshay from J.P. Morgan. I have three questions, please. The first one around the full year 2026 outlook. Obviously, of course, she's tied at this point of the year and the range is definitely wider than what we have seen in your previous outlooks. So could you just give us more details? And I think starting with business divisions and then going into different geographies. So if you could just talk about overall business development expectations across PowerRise industrial components and industrial automation, those three segments going into next year. What are the key growth drivers or where do you see risks across those business divisions? And the second part, as I said, on the regional outlook, you are clearly expecting sharp declines of 10% to 15% at the midpoint of the guide, specifically in APAC and numericals. So could you just give us more details on what exactly is going on in those geographies? The second question is on the transformation program. And I see that you're talking about 32 million of gross savings by 2028. But you're also talking about a higher than expected cost inflation in Mexico and Romania. Along with other moving parts that you mentioned, materials and energy. So could you help us put all of that in context and talk about the expectations around net savings, if possible, by 2027 and 2028? How do you expect overall inflation elements to balance out on the P&L, please? And the last one is probably some kind of guidance on the first quarter to help us put this guide for the full year into perspective. You could just share some more details on how the first quarter of FY26 has been progressing on a sales or adjusted EBIT level. Thank you so much.

Absolutely. Thank you very much, Akshat. So I will begin with answering these, in essence, four questions you're having, and then for sure I will also turn it over to Andreas, if there is any further comment from his side. But to begin with, you said 26 is a cautious guidance, wider range than in the years before. What are the growth drivers by region? That is, in essence, your first question. And for the year 2026, it's our aim to have robust guidance. So this is what we wanted to start with, right? So that means, if you remember back in last year, the range was basically similar in terms of EBIT margin, for example. At that time, we've been between 11% and 13%, so a bandwidth of 2%. And this time around, it's also a bandwidth of 2%. So that means our target is always we build up a plan on the financial basis of S&P and GDP. So how it works is we take the GDP numbers, which next year show a positive of 3%, and we take the S&P number, which show anywhere between 2% and 3% decline for next year. And then we put that into the relation of we have 55% automotive business, 45% industry business, and then this is how the fundamentals come together for our business plan. So what does this mean in terms of growth drivers? We took the 3% of GDP growth for the industrial sector and basically did plan that straight through. to our numbers. There's some upsides and downsides. You know, there's always also on the industrial side some pressure, which we think we can overcompensate with some initiatives we do to increase our cost position. So on the industrial side, that's straightforward. On the industrial side, there's also another impacting factor. which is the tariff situation, a couple of percentage points focusing on the North American business in terms of headwinds, which we also think that to 90% roundabout we can push towards our customers. So that's basically when it comes for growth drivers, the business of industry business. How does this growth drivers of the industry business materialize over the regions? Europe and North America, basically stable growth there of the 3% and probably a little better growth in China, but there is the big question mark for sure of how the region in Asia-Pacific in a primary and secondary impact deal with the geopolitical unrest, predominantly also the pressure of uncertainty of tariffs. This is what we saw this year, there was basically a roller coaster and that's why we saw a down but also on the industrial side in China. So when it comes then to the automotive business, we also took the numbers of S&P. We've been taking the numbers which show a decline of 2% in the area of Europe and North America and a decline of 3% in China. We took that across the board. for all gas springs and power-rise systems. Then we added back some relief because of door actuation, which should kick in starting next June. Because next June, July, there is the ramp-up of Xiaomi Auto, which is adding back for a full year effect 15 million sales on door actuation. But this starts in June. And then we see towards August, September, so after the summer shutdown, that for the model, all X series of BMW, the sales of door actuation keep going for BMW. So that means we took on GDP side what we have on hand from GDP and on the light vehicle production, we took the light vehicle production, baked it into all power lines and gas springs and then added back volumes on the door actuation starting June, July, August with Mi Auto and also with the business of Model X of BMW. So this is with our firm contracts and that's why we invested in the past year in the capex side predominantly in developing these products alongside with capacities to build these vehicles. So this is how, in a nutshell, the gross drivers are performing. In the same way you asked about the regional split, Americas and Asia Pacific, how do sales develop here? In America, we see some cautiousness in terms of vehicle propellant, minus 2%, but on the other hand, 3% GDP growth on the industrial side. Yes, there is some pricing pressure, but we think we can offset this pricing pressure in America with technical changes. There is standard pressure. left in Asia-Pacific, you know, there is a very strong local competition there with predominantly Injin. This is something where there might be a gap of one or two percent, but also here we try to close this gap of price deterioration. So in terms of price deterioration in general terms, we dip back into the numbers, half a percent price inflation for gas springs in the range of two to 3% of standard power rise systems in China. We think that the price inflation will be in the range of 5%. We will offset majority of this, but there is still more pressure in Asia than in other regions. But we think in the vast majority next year, we will offset this pricing pressure. Then you said transformation, 32 million, and sorry for the long answer, because you basically asked for... basically complete P&L with your questions, but in the transformation part, right, there is 32 million 2028, that's absolutely right, there is still some inflation on the Mexican and Romanian side, which is more than average inflation you'd see, but this is something which we learn to deal with. Mexico and Romania, there will be in the range of 6 to 7% inflation, but they also bring to the table in measures and we counterbalance them with automation, so we drive and continue to drive automation in Mexico and in Romania to offset this six to seven percent labor inflation in that regions to begin with. So and then in terms of guidance, quarter one, basically it's too early to state because we now are in the closing phase of So I would say out of the fourth quarter we see some year end effects. Typically the fourth quarter is very strong for us. So July, August and September with the $316 million. There you're missing probably half a month in December to begin with in terms of sales. So this is something to acknowledge so that there is only half a month in December, which actually that basically brings us to a slightly softer quarter than in the fourth quarter, per definition, because you're suffering this half of month in December, and then something also to consider is for sure the ongoing uncertainty in the market and the unrest in terms of tariff situation. In terms of regional development, we see in average the regions developing like we saw them over the course of the last three to six months. So Europe and North America are rather stable. Asia Pacific is still a roller coaster driven by the tariff situation and some unstable basically outlook for the economy there, which is coming back to that point. You saw that our motive industry will be down according to S&P numbers in China next year 3%. There might be or at least a positive level on GDP, but in general terms, the Chinese people, they see this uncertainty and this is also something which we see in the numbers. So I hope that I answered your questions. There were plenty of them touching on a complete P&L in forecasting principle, but I hope that answers the question.

Thank you, Michael. I'm sorry for the long questions. Just a very quick follow-up. So when I think about the first question and your outlook, when I'm understanding what you're saying in terms of overall market development on GDP and LVP, your expectations around outperformance, your expectations around offsetting pricing pressure. It sounds to me like you are comfortable between the mid to high end of the revenue guide as of now when you're thinking about the overall business. Because the lower end of the guide basically talks about 10% to 15% decline.

Yes. In a nutshell, I know we always have this discussion, guidance and midpoint and where we see it. You know, over the course of the last two years, we saw a lot of things driving in, right, through and alongside the year. So we always start in the first quarter with October, November, December, and then typically, like this year, the election of Trump and his first couple of months being the president, Oh, it was really a shaky situation through the complete economy, right? So that means there is a lot of things we should be dealing with starting this February, right, with the new administration. Then remember back when three years ago the Ukraine war kicked in, along with massive inflations, this also was always early the year. So we have basically we are bringing out a guidance towards the end of the calendar year, not knowing what happens in January and February. This is a slight disadvantage for us. So, yes, you could reformulate that and say they rather would like to, yes, be between the midpoint and the upper point of the guidance. However, the uncertainty is really what we need to consider also in our business because we also get feedback. Hey, guys, we want you to have a realistic but matchable and achievable guidance for the year. And we for sure don't know what we don't know starting next January, which things pop up, right, on the global scale. And I think there are many things. things like war, tariff situation, inflation, also things about geopolitics in the flow, and nobody really knows how that turns out. And this is also something which you shaped in your first question. saying the guidance is rather wide. We have a debit margin range of this year 10 to 12%. It's in the similar range, size of a range like we gave before. But yes, the issue is we don't know what happens in the start of the new year. And this is something which we try to formulating the guidance. And this is why, yes, we have a certain range of guidance. And yes, if you look onto the activities we are doing in terms of shaping our profits throughout the year, this will be a back and loaded year because we start with all the efforts on restructuring and this kicks in in the second half of the year. That's also something to basically reflect. And then it remains that we all are strong in terms of believing that some of these positive signs we see in the economy really materialize, and then we should see that in the second half of the year. Hope that helps.

Thank you so much, Michael. Very helpful.

Thank you.

At the moment, there seem to be no further questions. If you would like to ask a question, please press 9 and start now.

So many people were scared because it took us now quite some time to answer the first question. If there are any further questions, really happy to answer them. As a side note, you also for sure see the full pack of the numbers, including the details of last year on our homepage. And we value you as our... investors for sure, so that means we also can have one-on-ones afterwards, and I'm happy to answer your questions then.

We have now another question from Jasmine Steinberg. Please go ahead with your question.

Hello, good morning, and welcome, Andreas. Many thanks for taking my question. I have two follow-ups, if I may. on the guidance, so have you already received some indications by your customer in China that the price erosion is slowing down to the level of 5% which you have indicated? Or is it kind of this part of the guide which is still kind of, yeah, uncertain? Any indications on this would be very helpful. And the next question, you also mentioned that you're currently still leading on direct ration assistance based on the RFQs. Can you share your view on the competitive landscape? Is there any risk that India might also take an aggressive approach on pricing here again to gain market share?

So thank you very much, Yasmin, for your questions. The first one in terms of guidance when it comes to price erosions in China. From our perspective, the price erosion is way softer this year than it used to be last year. Just as a reminder, last year we had in the range of 8% to 9%. price deterioration on some of the PowerRise products. However, we saw, and this is the main competitor, Injin, also now as they materialize the first products and projects, that they see that kind of things are apparently more difficult than they thought, so that this basically leads to the point that the price war basically on that end becomes softer. This is why we think it's in the range of 5, 6% maybe, and this is something we can deal with to an extent of 4%, so there might be 1 or 2% left which we basically at the end of the day can deal with and we reflected that in the guidance. So, the China market is a very dynamic one in both directions. So, that means in many cases it's more dynamic than in North America and in Europe. So, that means also pricing requests typically come up then with basically a heads up of only three to six months. And this is basically what we fight with and against. This is something we see that the competitor landscape is, however, stable. And we also have first victories, right? The engine business is very strong in a spoiler business. So, you know, at the end of the car, on the tailgate, on the tail side, there are some spoilers for sports cars. It's apparently a good market in China. We're pushing it now with our first product to counterbalance. And this is where we are a challenger of engine now. And this is something where we won first businesses. And this is something where we also are counterbalancing and fight this local competition successfully. And by the way, just to point that out again, there's also in China, the main competitors are still Brose and Etcher and Magna. At the end of the day, they are winning companies. or having more difficulties as we speak, so we are the one which is the real competitor to Injin and we can match their prices. We don't want to do that at all lengths, we don't want to do that with all businesses because we don't want to kill our pricings for sure and jeopardize our profits, so we always go only to the extent that we keep some business then yes, we might give some business to the competitors, gaining back some. Now we're challenging them on the spoiler business. So this is a constant battle we are driving to keep our profitability on a maximum, and that's apparently the outcome. So bring it to a nutshell, 5% to 6% this year, I think with majority of that we can deal with in China. And then the second question was in terms of direct trader. A direct trader, it's the known competitor landscape, it's Brose, Echa and Magna. as a Western world competitors. And then, yes, there will be Chinese competition. At this point in time, Injin developed a new product. They were not successful in the market. So we have some positive momentum there in gaining further business. But, you know, it would be an illusion to think that the Chinese would be on the long run not capable to deal with this technology. Now it's about using this head length We are ahead of the competition to secure business, to stable and foster our position and to make it a success. And that's what we are in the midst with, because not only that we won business with Xiaomi, with Mi Auto, but also we won good business with Sherry, with Great Wall. They will come further. I was talking about those who launch next year. There will be in the out years more business coming. As I said, we have a market share of 40% currently. And this is why we invested so much in the past years to develop this new technology to begin with on the R&D side and also to push the equipment into our plants. We have now in all three main regions our door actuation lines sitting. They are not generating sales yet because in the automotive industry, you need to be ready six to nine months before SOP for the first dry runs with the new products. That's just a given in the market, as you all know. This for sure is a little challenge, this ramp-up curve in the automotive industry, but it's basically a given, and it should secure and it will secure. a good business position on the door actuation side. So I hope this answers your question, Leslie.

Yes, very clear. Thanks very much. I'll step back into the line.

Thank you.

And the last question is from Klaus Rieger of the VHS. Please go ahead with your question.

Yeah, hi. Good morning, gentlemen, and thanks for taking my questions. I actually have two and would like to take them one by one. Well, the first one being, yeah, your view on the pathway of your net debt EBITDA leverage in the next quarters. You know, there's some areas of big attention on this multiple, and the question would be if we will go south from this 2.96 at the end or due to this cash out, so restructuring and maybe also payment of dividend, we could see it, yeah, going up a bit still before it will go down. So very, would be very interested to hear your thoughts here. That's the first question. Thank you.

So, in terms of the first question, yes, we are below three. Below three was our target. It's also something which is extremely irrelevant for us to pay back our debts. We were very successful last year to refinance, which gives stability, and also in the same way with refinancing, we've been opening up our covenant to four, as you know, and now we are at three. So we have enough headroom to be successful. We think that the net leverage will go up slightly above three in the next two quarters and then coming down and towards the end of the year that will be below three. This is basically our current planning. Okay.

Thank you for that. And the second one would be clarification on the impact of this transfer pricing on the margins. That's a one-off, or will we see continuous impact in the next couple of quarters?

This is a shift of 1% between the region of Europe and North America out of the transfer pricing, which is baked in our forecast numbers by region. And basically, it's something which was basically corrected in terms of price. of transfer prices driven by allocations. And this is something which materializes 1% less in North America, 1% higher in Europe. And this will basically continue to be the new baseline. Okay, thanks so much and have a good day. Thank you very much for your question.

And if this was the last question, I would like to have

Yeah, thank you very much again for your trust and thank you very much for being part of the presentation today. Again, I think we are very strongly set up with our current stable financial result from last year. I think we're doing absolutely the right steps in terms of growing our business with new technologies and invest where it really matters to solidify the numbers for the next year and also continue our past success with new technologies. And with that, I would like to thank you. And as we probably for most of you don't have the time to talk about a talk this year, I wish you a happy year ending and all the best for the year 2026. Thank you very much and have a great day and week.