Heidelberger Druckmaschinen Aktiengesellschaft (HDD) Earnings Call Transcript

Ladies and gentlemen, I'd like to welcome you to our call on the occasion of this morning's publication of our key figures for the first 9 months of fiscal year 2020/'21. Together with my colleague and CFO, Marcus Wassenberg, I will, as usual, present the most important developments at Heidelberg, and the quarterly and 9-month figures. Afterwards, we will be happy to answer your questions. Today's call is clearly under the motto, confidence is rising. On one hand, this relates to the economic revival of our industry, which is gradually becoming apparent in Europe as well, having already been the case in China for several months. However, there is also a lot of positive news regarding the transformation of Heidelberg, which we are bringing forward with great consistency and at a fast pace. Even though we cannot yet give the all clear signal for the global economy in operational terms, our figures for the first 9 months and especially for the third quarter confirm the positive trend. Before we get into the facts, figures and data in detail, let me highlight 4 points that are particularly important to me today. First, our financial figures show steady improvement. Second, our transformation program is successful. We are already achieving significant savings. Third, we are continuing our operational upward trend, December was better than the previous year. And fourth, we are acting with foresight in the challenging COVID-19 environment and are adapting to it with our measures. We are raising our return target for the current fiscal year 2020/'21. I come to my point number one, financial figures. Having already communicated in the second quarter that we have bottomed out in our core businesses, the upward trend strengthened further in the months October to December. In North and South America, the markets continued to be restrained. However, in China, Eastern Europe and increasingly also in the European union in the markets of particular importance to us, we are seeing clear signs of recovery in the machinery business. The further increases in sales in the third quarter, increasing savings from the transformation program and this deconsolidation income led overall to an improvement in operating profit. A small profit after taxes was thus achieved. Overall, the third quarter gives us the confidence for the coming months. Point two, successful transformation program. The major success of our transformation program made a significant contribution to our clearly positive result in addition to the options we have used for short time working and flexible working hours. We kept up the pace in the program and realized further important milestones in Q3. Among other things, we successfully implemented the socially responsible reduction of around 1,600 jobs worldwide by 2023, including almost 1,000 in this fiscal year, agreed with the employee representatives. As part of our site and structural optimization program, we sold around 130,000 square meters of nonoperating space in Wiesloch-Walldorf in December. The economic effect of this transaction, we expect a cash inflow in the middle -- mid-double-digit million range, have not yet been booked in the third quarter, but are expected in Q4. Even more important, in the future, we will be able to save on maintenance and operating costs through more efficient use of our space, further increasing our profitability in our core business. Also, in December, we divested our Belgian site for printing chemicals. This included in this quarter's financial statements. In addition, we have already given the go ahead for our production joint venture with our partner, a Chinese company, Masterwork, which opens up great potential in Asia and significantly improve cost efficiency. In January, we were able to complete the long-planned sale of a property in Heidelberg, the Print Media Academy, from which the last employees have moved to the Wiesloch-Walldorf plant last year, was sold to an investor. And at the end of 2020, we have discontinued the operations of our portfolio loss makers, which have so far impacted earnings of around EUR 50 million per year. For the fourth quarter of 2020/'21 financial year, however, we anticipate a further significant burden on contribution margins due to downstream effects from the delivery of the most recently produced machines. Only the planned sale of our subsidiary, Gallus, could not be completed as planned. We reported on this at the end of January. We would have liked the Gallus transaction to have taken place as planned at the end of December, and we had to assume that it would until the very end. All requirements were met. However, the buyer did not pay the purchase price. We do not wish to comment on the reasons giving for this. But they don't justify not fulfilling the contract, and that's why we are now asserting our rights. It's now clear that Gallus will remain with Heidelberg and continue on the path it has already taken. Gallus will continue to focus systematically on the market and customers, reduce structural costs and concentrate on increasing profitability. And Gallus has our full backing for this. For the sake of understanding, Gallus was unable to exploit economic potential within the structures of the Heidelberg Group. Gallus operates in a specific market with flexographic printing,in a completely different customer base than Heidelberg's customer base. That's why we separated Gallus from the group structures in the spring of 2020, in order to be able to operate independent and as an agile, medium-sized company. Gallus has made good progress on its journey over the past year. We have great respect what the team in Gallus has achieved. And I would also like to make it quite clear that with a clear profile and a sustainable profitable position, Gallus has a very group in our -- a very good future in our group. The prerequisites for this are there. Gallus is well positioned in a growing packaging market, and the pipeline is well filled. Gallus has geared its offering even more clearly to customers with new innovative products. Gallus' customers will be able to see this new high-performance offering for themselves at the first Gallus High Performance Day, a virtual customer event on March 3 and 4, 2021. By the way, you don't just realize an event like this overnight on the snap of a finger. It was all prepared well in advance, and shows that Gallus has been consistently and optimally managed during the sales process and has focus on the markets and the customers. Gallus has further potential for improving profitability. Like everywhere else, in the Heidelberg group, we are currently examining what options exist here. Local management is also sharpening the strategy and will further strengthen the Gallus brand. I come to point three. Trends -- upward trends of the business. The upward trend has just been confirmed by the German engineering federation, VDMA, in a service -- survey of more than 500 member companies in the mechanical and planned engineering sector. The print volume of Heidelberg customers has almost returned to the previous year's level with packaging printing even exceeding it. Our top line continues to pick up. Both sales and order intake in the third quarter continued the positive development of the previous months. December was our strongest month in the fiscal year-to-date. And for the first time, we even recorded a year-on-year increase. Our order situation picked up accordingly in the reporting quarter. Although we are still below previous year's level, the shortfall has again decreased significantly compared to the first half of the year. This gives us hope for the final quarter. We are benefiting not only from recovery trends in Heidelberg across market, but also from the very focused market offensive that our newly formed product management and sales service team have been driven forward in recent months. Point four, measures in still challenging COVID-19 environment. The good quarterly results, the success achieved in our transformation and the recovery of the top line allows us to look to the future with confidence. Generally, the start of the fourth quarter of our current fiscal year was as expected. Overall, we expect the fourth quarter to be the strongest quarter again, as was always the case before corona. However, from today's perspective, the development of earnings in the final quarter, among other things, due to a disadvantaged sales mix with a high proportion of large-format presses will be not at the level of previous years. I said in the beginning, confidence is rising. Overall, however, it's too early to sound the all clear. As a result of COVID-19, we have to expect sales losses of around EUR 450 million to EUR 500 million in the fiscal year 2020/'21 as a whole. This means that the pandemic has set us back a year in our transformation. Or to put it positively, it has paid off, that we turned the company upside down theoretically before the pandemic hit. At the same time, we have to note uncertainties in the global economy persists. In order to make up for this lost year and because entrepreneurial prudence demands it, we will continue to implement our transformation program swiftly and systematically, and have already begun to adjust our measures accordingly. Nevertheless, despite the massive burdens from COVID-19, we can raise the return target for the full year 2020/'21 to an EBITDA margin, excluding restructuring results, of around 7%. Previously, we had assumed an operating return on sales only at the previous year's level of around 4.3%. This is possible not only because we are gaining ground in the market, albeit we are below the level of the previous year. At the same time, we have continued to work systematically on our cost and on our financial stability. Following the successes of this fiscal year, the coming fiscal year 2021 will be a year of proof for us, as we aim to replace the numerous earnings we have been able to generate through portfolio streamlining, our structural adjustments with sustainable operating profits. Our clear goal is to lead Heidelberg back to a sustainable profitable growth. To this end, we remain optimistic because we will further strengthen our core business and our leading innovative excellence. We will strengthen growth areas such as packaging, printing, expand on contract business on the Wallbox and built on our strong Chinese position. We will strengthen our financial power, and we will further increase our cost efficiency. Against this background, our medium-term target remains an operating EBITDA margin of over 10%. This will also enable us to sustainably improve our unsatisfactory equity situation. With that, I hand over to my colleague, our CFO, Marcus Wassenberg, who will give you the details of the 9-month figures. Marcus, please?

Thanks, Rainer. And hi, everybody. Warm welcome from my side. Rainer's already emphasized with our successful transformation program, we've been able to counter the effects of the COVID-19 crisis to date. We've created the base for Heidelberg to achieve attractive profitability with a double-digit margin in midterm. And actually, our key figures prove this. In terms of order intake and sales, yes, we are still around the quarter below the previous year. But however, EBITDA, excluding the restructuring result, was around the quarter higher actually than in the previous year. In our third quarter, there were clear signs of recovery in our markets and order intake and sales, again significantly narrowed the gap to the previous year. The backlog increased accordingly. And with our short term effects, we have so far succeeded in compensating for the missing margin from the lower volume. However, substantial sustainable savings have already been realized from the cost reduction. For the [ latter, ] provisions of around EUR 38 million were made. For the year as a whole, we expect it to be roundabout EUR 50 million to EUR 60 million as planned. The bottom line after 9 months shows a small profit, as Rainer told you, of EUR 3 million compared to a EUR 10 million loss in the previous year. As a result of the liquidation of securities and the sale of assets and the reduction in net working capital, free cash flow improved significantly compared with previous year, and is now only slightly negative at minus EUR 10 million. At 1.0, the leverage ratio is historically good for Heidelberg, and at a very low level. Now a look at the balance sheet shows how the program has stabilized the asset and financial situation. Noncurrent assets decreased mainly as a result of the company's disposals and the reclassification of noncurrent assets as assets held for sales in the case of plant disposals, such as land in Wiesloch-Walldorf, the Print Media Academy, and actually Gallus was included here due to the planned sale of Gallus in Q3, then the deal, as you know, was postponed until Jan, and then didn't happen. A colleague just made the comments to this. Pension accruals continued to rise due to the further successive decline of the discount rate. This again had a significant negative effect on the group's equity. And the burden from this, only this accounting treatment has already added up to almost EUR 130 million in the current fiscal year. Although the small profit after taxes was reported after 9 months, the group's equity ratio was only 3%. The aim of our profitability measures was to bring the ratio back into the region of 20% in the midterm. Incidentally, the equity of the parent company, which prepares its account in accordance with the commercial law is at a [ buffer cylinder ] with an equity ratio of around 26%. We're adequately equipped here, so there's no cause for concern. Let us briefly turn to debt. As a result of the reduction of net working capital, the early repayment of the high-yield and reorganization of our company's pension plan, net financial debt after 9 months is at a low level of EUR 127 million. Growth reduced by more than EUR 260 million compared with previous year's figures. Now looking at the individual quarters, we can see that the COVID-19-related decline has roughly halved from quarter-to-quarter. First quarter, the order intake was more than 40%, down year-on-year. In Q2, we get narrow to 20%. And in the third quarter, we are still just over 10% down year-on-year. Our customers seem to increasingly coming to terms with new situation, are investing again despite the current tightening of the corona measures. We achieved our best month-to-date at the end of this calendar year. As Rainer has already said, December gained on order intake that was just above previous year level. In addition to other markets, demand developed positively, particularly in the most important single market of China and in Europe. Our excellent positioning in China with local production and a strong sales and service team enabled us to benefit significantly from the rapid market recovery. Only North America is currently stagnating at a relatively low level, but this could actually even be an opportunity in disguise for us going forward. COVID-19 has so far cost us a significant 3-digit million euro amount and set us back at least a year on the way to achieving our original goals. But we have ourselves firmly set on these targets and applying the levers in the right places with our program to achieve them. At EUR 147 million, our EBITDA for the first 9 months of the year was significantly higher than the previous year with EUR 117 million. Our program made a major contribution to this positive result. With the measures implemented, we succeeded in offsetting the massive corona-related drop in earnings, which actually accounts for EUR 180 million, largely through cost savings from the program amounting to EUR 60 million, reorganization of the German occupational retention system, with an effect of roundabout EUR 73 million, sale of non collectivities with an income of around EUR 19 million, and additionally, short-term countermeasures such as short-term working and compared with international programs of around EUR 85 million, out of which EUR 78 million are in Germany and roundabout EUR 7 million are abroad. Let's take now a very brief look at the implementation status of our transformation program. We are right on track with our measures. And actually, we are exceeding our saving targets in the long term. By fiscal '22/'23, we aim to achieve savings of at least EUR 140 million. With the measures already implemented and planned amounting to over EUR 170 million, we plan to significantly exceed this target. In fiscal 2021, we will already exceed our targets for this year with savings of around EUR 80 million. As reported, EUR 60 million of these have been already [ realized. ] More than 2/3 of these cost reductions in the fiscal year are sustainable, meaning we will save this cost annually in our run rate. In the next 2 fiscal years, we will gradually increase this share. According to current planning, more than 90% of the measures will be sustainable in fiscal '22/'23. A large part of this is saving in personnel costs. In the current year, the job cuts already amounted to around 1,000 positions. Actually in Jan, they were even higher. This year, we will earn more money much earlier in the future. The operating breakeven point for EBIT is expected to fall around EUR 1.9 billion in fiscal '22/'23 with Gallus' sales actually already included. We are thus optimally positioned to benefit from a recovery in the market and to rapidly and significantly increase our profitability. So much for my remarks on the current status. And with that, I hand it back to you, Rainer.

Thank you very much, Marcus. Before I move to the outlook, I would like to briefly share information that relates to the capacity utilization of our customers. Corona naturally also had a serious impact on our customers' business, both in the packaging sector and in the commercial printing. With the former experience something of a boom as a result of the pandemic, print volumes at commercial printers initially dropped significantly during the pandemic. And as you know, we have been regularly evaluating capacity utilization in our installed base since the beginning of the pandemic. Towards the end of the year, we can state that global print volume have almost returned to the pre-crisis level, both in packaging printing and in commercial printing. The latter seems ostensibly surprising, but on a closer inspection, it's a direct consequence of the explosion in e-commerce sales in the retail sector. People are currently consuming a lot online, and almost every order also drops a flyer or a coupon out of the box. And this is driving our customers' business enormously at the moment. In addition to the recovery in our core business, you could also read other positive surprises in the recent past with regards to our end markets. In this case, I'm referring to our growing e-mobility business, in particular, the manufacture and sale of so-called Wallboxes. In recent years, Heidelberg has become one of the leading suppliers of charging electronics and Wallboxes. Our estimated market share in Germany is around 20%. With sales of -- current sales of currently around EUR 50 million, the business is still relatively small. But the underlying momentum is only just beginning, and we are benefiting from enormous increase in demand. After achieving excellent ratings in various test magazines and even receiving a KfW subsidy for our latest model, our current production capacity can no longer cope with the demand. Therefore, we have initiated the doubling of the capacity, which will be in full operation from March onwards. In the long term, even this will be too little if demand continues to rise, and it will rise. But capacity is not the bottleneck, we can manage that. The next step will be for us to detach the Heidelberg Wallbox area from the core business and give them the room to develop and grow. We are open to partnerships, strategic investors who offer complementary products, for example, in billing or other technologies related to the home ecosystem or even operating the systems would be interesting. Now let's move on to the outlook. As far as the future is concerned, we see ourselves well positioned, both in our core businesses and the new business areas. I have already stressed several times today, we're looking ahead with confidence. The improved order situation shows that our core markets are clearly defined and fundamentally sound. The operating results shows that our program is working. We have planned the detailed measures up to 2023 and will implement them successfully. Corona has left deep scars and will continue to occupy us for some time. We, therefore, expect a decline in sales of around EUR 450 million to EUR 500 million in the current fiscal year. Nevertheless, we are raising the outlook for the current financial year in terms of operating profit, measured by EBITDA, excluding restructuring results. Previously, we had targeted an EBITDA margin of at least previous year's level of 4.3%. We are now targeting a margin of around 7%. Our medium-term targets are thus becoming increasingly tangible. We want to generate an attractive return on investment again with an EBITDA margin of over 10%, and drive sustainable profits and improve our equity. Thank you for your attention. Time for questions now, please.

[Operator Instructions] We will now take the first question from Stefan Augustin from Warburg Research.

Stefan Augustin here, and I have 2 sets of questions, actually. The first one is on the fourth quarter development. So I understand you had a very good Q3. And if I strip out the nonrecurring items, the disposal gains, you more or less doubled the operational EBITDA despite lower sales. And while it wasn't normal in all the past years that Q4 was actually, with respect to the profitability, the best quarter, and the one with the highest sales. This time, the one with the highest sales, but if I do my math correctly, you expect something around breakeven to a slight loss in that quarter in the adjusted EBITDA, and that should even include a small one-off gain from the disposal of the Wiesloch real estate. So you mentioned that part of that is that you sell some, let's say, loss-making very large format machines. But in my math, this is more than EUR 40 million quarter-on-quarter EBITDA swing. And if you can shed some light on how we judge this development from the idea of -- you actually progress with the savings, but now we have a coming up quarter that is -- will not likely show this kind of development. So how can we tackle the situation a bit?

Okay. Thanks for your question, Mr. Augustin. Here's the way I look at it. First of all, that's nothing that we didn't expect. That's basically in line with our guidance and we basically accounted for that. Secondly, despite any technicalities that -- right now maybe it's not the time to dive into, but the way I look at it, and Rainer looks at it, we have basically substituted good margin sales against low-margin sales. That's one effect. Second effect is we need a lot of people to produce it since we're producing more units actually. So basically short-term work that we until so far have employed sort of balance under capacity, now we cannot utilize anymore to that degree. So that effect is out. And basically, I mean we have already said that with -- in the course of '22/'23, we will -- '21/'22, we will have the company right-sized to the level of EUR 1.9 billion in terms of breakeven. Right now we are not there. And what you see is basically, we're aiming for that level. Basically now not fully utilizing the company, using a lot of capacity though, but still being under -- in under capacity and then producing units that actually have low margin, and that's the effect you see. That's the way we look at it. That's not something we will not manage in long term or midterm, but that is hitting us in this quarter.

When I look then in the first quarter of the next fiscal year, for example, is this -- I'd say, will this situation that you cannot make use of the short-term work and have less favorable mix product. Is this 1 quarter wonder, or let's say, 1 quarter effect and will it increasingly jump back in Q1 next fiscal year? Or if it is something that will likely persist for some time in '21/'22 as well?

See, this is a game of marathon. We're in for the long run. This is nothing that you can switch overnight. And yes, we have been very successful, basically combining strategic measures with short-term measures. We have been ahead of the curve in terms of strategic measures, and this has helped us quite significantly. We have actually utilized to the max, I would say, short-term work -- measures. As I said, right now, we're talking about EUR 85 million -- EUR 84 million, until so far EUR 78 million of which came from Germany. That has helped us to compensate for a lack of sales amounting to EUR 450 million to EUR 500 million of fund adjustment. That's a lot. That's a lot. So basically, what you see right now is step-by-step-by-step, we will part from jobs. And actually, I can tell you that by Jan, we have actually over exceeded what we promised to deliver this year because we promised some 1,000 jobs this year, and we're right now at 1,400. So basically, you will see that this reduction will continue, and we're absolutely sure that this will happen since we signed more than 1,800 contracts so far. So that means that we know we have achieved the cost saving target in personnel. So the only question for us is, how is the development of revenue. And we have been very prudent in sort of forecasting this. But obviously, historically, our first quarter was never the best. I cannot give you guidance right now, but we're working on it as we speak. But basically, you should be able to expect that we deliver on our midterm plan. This is our long goal, and this is what we will do. And this is the commitment we can give you until such time.

Okay. The next set of questions is a bit on Gallus. If I'm correct, then your partner, where you wished to sell Gallus to benpac, has already taken on some of the production plans -- plants of Gallus. So when -- now, let's say, Gallus stays on board with you and it remains, let's say -- the first question would be will it definitely remain within the Heidelberg Group? Or would you be willing to also, let's say, try to sell it to somebody else, if it is not an exact strategic fit? And -- or is that due to the prior sale of plant to benpac not really possible? And what would be, let's say -- do you want to pursue all the products going forward? Or will you make some additional restructuring thinkings on Gallus and -- which are not part of the yet communicated restructuring program. So is there something possibly coming on top?

Yes. Mr. Augustin, thank you for the question. First of all, after the sale wasn't completed, Gallus will remain in the Heidelberg Group. However, we will continue what we started already a year ago, giving Gallus more freedom to run their business and concentrate the Heidelberg people on the Heidelberg core business. The one is web and the other is sheetfed. And the customer base is different as well. So it makes a lot of sense to give Gallus the necessary freedom to act as an agile, more mittelstand company, which suits much better for this business. So we have not changed anything, just to continue or maybe to a certain extent to return to the strategy we already started. And that answers also the question with the plant. We had already last year, around this time, or even a little earlier, decided to move the last product from St. Gallen to our much less expensive plant in Langgöns. And in that process, that's where we actually met the potential buyer. We basically handed over the workforce to benpac in order to avoid roundabout EUR 2 million in costs -- restructuring costs, layoffs and everything. So what we will do is we will very quickly finish this relocation and close basically all manufacturing activities in St. Gallen and concentrate them completely in significantly more cost-efficient Langgöns plant. So we simply continue with the restructuring or the new structuring of Gallus. What we have done, and will finish, is, of course, to give Gallus more independence in the area of sales, service and R&D as well as manufacturing. And it looks already quite good. We are moving forward with that business at a much lower cost as when they are integrated in the Heidelberg Group, and I'm very confident that we can achieve in midterm with Gallus a very prospering growing company, which contributes nicely to the Heidelberg Group. But because it's not core business, it is interesting business. It's actually packaging -- label -- is packaging, but it is a different customer base, it's different technology. That's why we keep it separate from the core business. And by the way, we also will separate the Wallboxes out of the Heidelberg core business. Heidelberg core business is printing on sheets from the data from the customer of our customers to the ramp where the produced product is being picked up with all the processes needed in between, with all the services and consumables needed, with all the software systems needed. And this, of course, in all suitable business models from classical, transactional, product against cash, or if you do the more progress one, as subscription pay-per-use. So that's the Heidelberg core business. And in that, neither Gallen fits in nor the Wallbox fits in the e-mobility business. Does that answer your question, Mr. Augustin?

Yes. It does.

We will now take the next question from Michael Yohannes from Commerzbank.

First is on your current trading environment so far. So I mean are you currently seeing any worsening impact on the demand in Europe. For instance, as a result of the renewed lockdown rules that came into force in January here. And the second thing is, do you see any kind of signs here that orders might have been pulled forward into Q3, given the, I'd say, exceptional well e-commerce shopping season that has driven up print production volumes?

Mr. Yohannes, thank you for the question. We have a completely different behavior of our customers in the current lockdown than the previous one. In spring, nobody knew what was in front of us, nobody had a clue. And even our packaging customers who were quite busy, didn't let anybody even in because they were afraid that the virus would shutdown their operation, so they postponed a lot of investment. And that, of course, is driving the business at the moment, and will drive also for the next quarters that there is a pent-up demand, which needs to be satisfied. So they started basically slowly, but surely in summer and then with increasing speed to leave their reluctance to let us in and then finally to order the machines, which they desperately need to serve this increasing demand on the packaging side. That's the one side. And the other side, on the commercial customers, of course, they were almost -- in the many parts of the world, they came this spring almost to a total stop. This has also changed. The commercial printers are astonishingly busy, and they have to do all of the service online printing. Now -- and this will continue also because many of our customers see now kind of the end of the tunnel, and that's also true increasingly for Europe. We haven't seen that to this extent in Eastern Europe. And as I mentioned, China has already recovered in summer and is back on the growth path. So yes, we see some impact, but it is much, much smaller than it used to be. And I'm sure that as soon as it's clear that the vaccination will release the lockdowns and the business will open up, we will see probably a significant pent-up demand coming, maybe a small boom even also for the commercial printers. The orders pulled forward? No, just the opposite, some were made up because they were postponed in summer. And we see also looking forward, the pipeline -- Mr. Yohannes, as I said, for me, always one of the major criteria, how is the pipeline? Are there projects? And there are many projects because there's also a old rule in sales, where's no project, is no order, because nobody invests in a major investment like we sell from now to next week. That is the preparation usually of 6 to 12 months. So from that point of view, we're looking forward with quite some confidence. Does that answer the question, Mr. Yohannes?

Yes, fully, comprehensively. And another question I have is on the change in inventory. So I mean, since you continue to guide us for a negative net result for the full year. I mean, which ballpark figure do you actually expect for the change in inventories in Q4 here?

We expect something like minus 10%, something like that, in that ballpark figure, I guess. But I struggle -- but basically, what we're trying to guide at as a result is basically driven by the provision for the redundancies. That's basically it. That's the driver. That's what we're talking about here. I mean, in January, if you look at the numbers, then basically what's driving the profit situation for this financial year is basically materially it's the provision for the redundancies [indiscernible] figure EUR 50 million to EUR 60 million. That's what you would expect to see as a loss. And we've always said so. That's basically what determines the situation. Otherwise, it's almost breakeven.

Okay. Got it. And then about your -- I see here -- I mean, with regards to your Wallbox charging stations, just a little bit curious about what revenue figure you achieved in Q3 compared to the last year? And then what you wrote in your statements is you wrote that you launched a new product variant along for the simultaneous charging of up to 16 vehicles. I mean, how does your solution here differentiate against the competition? This would be helpful.

Mr. Yohannes, could you come again? We didn't really get the question.

Revenue number, EUR 6 million. Just for Q3.

Okay. EUR 6 million in Q3. And I...

And then the question, what's basically I would differentiate in terms of solution as compared to competition.

Yes. Yes. Yes. So I'd like to ask your solution has any significant edges against the competition? Because you wrote in your statements, you could charge up to 16 vehicles at the same time with your Wallbox solution, so I guess, with 1 solution -- with 1 equipment, 1 unit.