Stabilus SE (STM) Earnings Call Transcript

Good morning, ladies and gentlemen, and welcome to the Stabilus S.A. conference call regarding the Stabilus preliminary financial results in fiscal year 2020. [Operator Instructions] Let me now turn the floor over to CFO, Mark Wilhelms. Please go ahead.

Yes. Hello, and welcome to our call of the preliminary final results for the Stabilus numbers for the business year '19/'20. From the Stabilus side, you've got Michael Büchsner, our CEO here; Andreas Schröder, Investor Relations; and myself. The final numbers will be issued with the audit report on December 11 this year, as you know, from the invitation, preliminary still subject to the audit confirmation. With this, I hand over to Michael, who will take you through the pages of the presentation.

Thank you very much, Mark. Yes. Also from my side, hello, and welcome to our call today. I would directly jump into the topic on page #5, which shows the first page of our presentation, framing our road to sustainable success. So what you see on this chart shows our kind of leading principles of our company, which we are laying out here kind of as a kick off for the next year, and the outlook and also our long-term plan in terms of what we want to achieve at Stabilus. These are kind of our guiding principles here for the company. And they started at the end of the day, for sure, with our vision, being the leader in motion control, equally important to us is the Automotive business and the Industrial business for sure, which is still in the top section of this pyramid. Then important as well are our goals for sure. Our goals are sustainable growth, globalization, excellence, innovation and One Stabilus. So throughout this presentation, throughout next year, we'll give you a frequent update on where we stand and what our tasks here are in order to achieve our vision in being the leader in motion control. And it starts with the 5 themes you see on the bottom of this chart, our strategic direction. We are working on our motion control innovations part of the business, which kind of, equally important, frames the future technologies we are striving for as well as the M&A acquisition part of the business, which further strengthened our portfolio. Then there's strategical transformation. We saw within the last months, especially during the Corona times, and you all know that there is a tendency towards web shop-based selling of features, more digitalization, more Industry 4.0, which is a relevant point for us. So we've put that here also as a strategic direction out there in the same way than being a sustainable company. Sustainable company, that's kind of a manifold topic. However, basically framing also sustainability in terms of the environmental impact of our footprint, and that's what we want to take care of because equally important to all other measures, the economic and also the environmental footprint is framed nowadays. It's key for success for winning business. It's key for success to getting new talents on board. That's why it's kind of in the sense of our gravity as we speak as well. Attractive employer is the base for success. Only with the right membership here in the company, you can be successful. And whatever we do, and that's the fifth pillar here on this chart, all on the right bottom, excellence, excellence in whatever we do in order to shape our business towards our vision being leader in motion control. So this chart, you will see quite some times during the next road shows, presentations, whatsoever because, as I said, it is the road to sustainable success at Stabilus, it was kind of worked out and worked on with the management in the company, and it's kind of our guiding framework for the next coming years. With that, I go over to next page, Page #6 in your presentation, which gives you an operational outlook after this visionary outlook on Page #5. Page #6 frames the here and now. So we have sporadic COVID-19 cases in our company as probably everybody has now out there. What made us different through this complete corona crisis times was always how stringent we did handle the cases and the isolation of those cases, which kind of was a good differentiator in the past months to ensure that we could concentrate after this downturn at the beginning of the year, right away on our strategic topics as well as profit recovery actions, and that's what you, at the end of the day, see as a result -- as the good result we present today for the past year. So our corporate action for sure is to continue that part of ensuring the safety of our employees, membership and company in total. And that's what we do with our stringent COVID-19 measures, isolating the cases in case there are some and having our business under control. That's the path we continue. Sure on the status quo, also to mention is that the fourth quarter numbers improved. You all know that forefront, the Automotive sector did improve in the past month. We hope that continues as everybody else does. For the here and now, year-over-year, we've been only down 3.5% in the light vehicle production versus a darker picture, we saw originally in quarter 3 this year for us, this 43%. However, in terms of actions we derive, also the cost flexing and EBIT recovery program, which we've been setting up in the early days of this crisis is still on. And we pursue that path stronger than before -- stronger than ever before because we have the strong belief that only with these stringent actions as we did them in the past months, we can get out of this crisis better, stronger and faster than everybody else. And that's for sure our target. In general, also, the customer demand did recover, by the way, noticeably in all areas. For sure, there are small exceptions like the Brazil business we have in the industrial business, it's the aerospace, which is, as you know, out of the economy, the global economy, kind of a concern, both are, fortunately, smaller areas in our business for the time being. So we don't suffer too much, but concentrated on it in a very thoughtful way as well also to bring our costs here down and to work on our EBIT recovery measures. A very good signal out of the market was perceived from the Powerise side of our business. It significantly outperformed the global light vehicle production to certain share because higher fitment rates but also higher production rates, higher fitment rates because as people and companies, OEMs try to boost their sales. They offer different features, comfort features, luxury features, which, to a certain share, also extends to our Powerise business, mainly -- in all regions. However, forefront also here, Asia, which is a good sign as well because Asia growth is key for our success here, now and in the future. So in terms of flexibility, how do we deal with all these actions? We kind of, at this point in time, are in the fortunate position to need an expansion of our capacities in the past fourth quarter. So we saw good results. We had to kind of work with overtime, especially in Asia, to deal with the recovery of the market on the automotive side. We did the same in Europe, in North America and basically forefront in in Asia. So we increased the production to deal with the demand. However, having in mind that the situation in the close future probably is also kind of uncertain, and that's why we roll out this EBIT recovery program, including measures to be highly flexible in our business. So that's the here and now after the first glance strategic directions with our strategy rocket, and now I move to Page #8, with at the end of the day, shows on one page, our financial results, and they were pretty good. We had revenues of EUR 822 million for the complete year, which is down of 13% year-over-year, driven by the pandemics. However, the EBIT margin was exceeding the initial guidance we gave in the last forecast, we ended up with 11.8% for the full year and are confident that we continue this path of success in the coming years. In terms of pure profit, EUR 30 million, for sure is less than in the last year, where we had EUR 80 million driven by the pandemics. However, it includes 80 -- EUR 18 million net impact from impairments we did, particularly on the aerospace side, as the volume outlook, as you all know, in the -- our aerospace side is cloudy. In terms of free cash flow, we ended up at EUR 62.3 million, which is a reduction of 30% year-over-year. Also in terms of free cash flow at the end of the day, a good picture for the given circumstances of the year. Net leverage ratio remains in the same area than last year with this year, 1.2x. Net financial debt, EUR 172.3 million. The outlook, and I think that's the important thing, on a midterm, so meaningful full year 2021, we see a range of EUR 850 million to EUR 900 million sales with an adjusted EBIT margin in the range of 12% to 13%. Why that is in the range? I'll explain you later because, for sure, that's also driven by the effect of the pandemics and the clouded situation we're all in. But before I get there, I will hand over back to Mark to talk a bit more about the key figures.

Yes. Thank you, Michael. I'm now talking to the Q4 results. Michael gave you an overview of the full year results, Q4, which is on page -- Slide #9. Revenue-wise, we are 4.6% organically behind last year. In terms of EBIT, EBIT margin, we came out in the fourth quarter of 13.4%, which compares to 15.9% we had a year before. Profit at EUR 11.9 million versus last year's EUR 23.6 million. So there, you clearly see still the pressure from the current economic COVID-related crisis. In terms of cash flow, we did pretty well. Last year, we delivered in the fourth quarter a cash flow of almost EUR 40 million. This year, we are a good EUR 8 million higher, doing EUR 47.5 million. And those of you who have taken a glance at the balance sheet, they will have realized we have not achieved this by paying suppliers late. In fact, we are looking at a very, very low level of payables to our suppliers. The good news, the cash flow positive ones came from increasing reserves that have not yet resulted in cash out cost in reducing the receivables by putting hard work into attacking overdue receivables with customers that have resulted in extra cash in and also some form of inventory adjustment. Going forward, we show the full year results of the business year '19/'20, in essence, replicating what Michael has informed you in a graphical form. Let me therefore, just talk to the highlights here. Revenue-wise, 13.2% and on an organic basis below last year's 13.6% at [ incurred ] level. Margin-wise, 15% we had last year. This year, we are at 11.8%. And looking at the bottom right-hand side, the cash flow, you see the reduction in cash flow from EUR 90 million, precisely EUR 89.9 million, down to EUR 62.3 million, which is EUR 28-ish million less. This compares favorably to the profit changes. Going forward, talking to the EMEA page. European sales, European profit data. Let me walk you through the comments you also see on the right-hand side. In terms of vehicle production, Europe has seen a dramatic reduction of 22.6% versus last year, at the same time, combined with very, very different quarters. Again, to remember -- to remind us all, April, May, June was dramatically down versus last year whereas the time July, August, September was, compared to the quarter before, pretty good. Impacted by the pandemic, our revenue is down in Europe by 14.7% or 16.6% organically. And a good strong share of our revenue, 52% was generated in the Industrial business. Underlying, this year is that as the crisis hits us, the industry initially suffers a bit less, and due to the various points in the economic cycle where our Industrial business sits, it will also, in a catch-up phase, come out a bit slower. In terms of organic decline in the Gas Spring business, we are down 23.2%, which is in line with what vehicle market did. Powerise, on the other hand, is only down 12.5%. There you see what Michael had mentioned beforehand strong interest in those comfort features across all car manufacturers across most car lines, most vehicle segments. EBIT margin at 10.3% versus 14.2% we had last year, clearly showing the impact of short time work of unutilized capacity of the company that clearly was working hard to mirror the revenue reduction also on the cost side. Going forward, we come to our Americas section. This now also includes Brazil. So when you compare Americas to our beginning we had a few years back, you will see that since the early part of this business here with old Brazil into the Americas definition as well as our tiny business in Argentina. Light vehicle production in Americas is down 23.7% during our business year. Our revenue is down 18% or adjusting effect, et cetera, it's only 14.9%. And when we then look at the business segments, the industrial business is down by 7.3%, clearly, again, as we've seen in Europe, doing better than the Automotive business. The share of the Industrial business increased from 31% to 35%. We also see that eventually on the full group impact of a stronger share of industrial business, which also underline, helps us a bit due to the mix effect on the margin side. Organic revenue decline in Gas Spring is minus 23.1%, so slightly better than the car production and Powerise down with 13.8%, which is visibly doing better than car production. The EBIT margin came out at 13.5%, which compares to last year's 16.9%. Last region, I'm talking to is APAC on the following slide. APAC vehicle production is down 13.5% and at an absolute level of 40.2 million vehicles. Our revenue, in fact, is up by 7.8% or 9% organically, which is pretty interesting to see, and it clearly underlines that the actions we've taken in the last years are working out. Organic revenue development, Automotive Gas Spring, plus 2.5%, compare that to the vehicle production, which is down 13.5%, you clearly see some overperformance there. And looking even better is Powerise with a plus of 44.4%. Huge increase. Remember, we've opened our new Powerise factory in the Pinghu, which is in the larger Shanghai area. We are now moving out Powerise into a separate dedicated building plant as we have done or as we are doing in Mexico and Romania. And in Powerise, we've benefited from a couple of vehicle programs. Here we've listed down Ford, specifically GM. But worthwhile to note, our Powerise business in Asia is not just with the imported or with the western car brands, it also rests on a good footing with local manufacturers in China, in Korea and will increase to do so in the years to come. Industrial revenue in Asia Pacific in fact suffered a bit, 5.8%, it is doing a little bit less than last year. Margin-wise, we've benefited from the significantly better loaded plant, taking us to 12.6% EBIT margin versus 12.2% last year. Going forward, this -- the next slide takes us to the revenue by business unit. On a global scale, vehicle production came out at 73.6 million, for the time October '19 through to September '20, which is 18.2% less than the year before. In entry, all business units were impacted by COVID-19 crisis and also related shutdowns, hiccups, disasters, problems everybody had, everybody heard of. We've seen that various parts of the world are hitted differently, but all clearly it has impacted negatively by this. Our Industrial business on a global scale is down by 8.9%. Thus, the share of the Industrial business increased to 41%, as you see in the cake diagram at the bottom of the slide. Automotive Powerise, down on a global scale by 8.8%, compare that to the car production, doing 10% better than car production. And Gas Spring came out at minus 17.9%, which is not a surprise for a company that has our sort of market share in the business. Last quarter of the financial year clearly saw a very strong Powerise business with very strong organic growth year-over-year and some weakness in the Industrial segment as alluded to that on -- early on. And specifically, subsegments like commercial vehicles and machinery with European German machinery being an important customer for us. Michael Büchsner will now take you through the following slides where we shed some more on the important industrial business.

Thank you very much, Mark. Yes, as discussed the last time, we also give you with this chart #16, some more insights in our Industrial revenue split by market. In the past year, full year 2020, we, in a total had with our industrial business, EUR 337.1 million sales. And thereof, 30% business with distributors, independent aftermarket, E-commerce, 26% in the sector of mobility, 21% in terms of health care, recreation and furniture. And finally, about 20% energy, construction and then industrial machinery and automation. And here are some details in terms of how these businesses were performing. For sure, all the sectors were impacted by the corona crisis driven by time frame, March to June. However, there are also positive signs, and we could use the time efficiently also to do some organizational changes and setup changes to enter a successful future. So first of all, if we talk about the revenue on the market segment, distributors, independent aftermarket and so on and so forth, there was a decline driven on some distributors. However, in terms of E-commerce, we had positive development, as I said at the beginning, in the strategic rocket. Important for us is the point of digitalization, which also includes E-commerce and, thereby, the independent aftermarket with a new framing and setup of our E-commerce and E and web shops, we could achieve a good improvement in terms of sales there and despite of the difficult market. In the same way, we integrated our aftermarket sales now in-house. So formally, we've been distributing in North America via a distribution channel, we could set us up internally and kept there by the margin in-house and have a better touch point as we discussed in meetings before with you, a better touch point with the final customers out there. So in the mobility application sector like trucks and buses was a decline of 12% year-over-year. And also some impact on construction and industrial machinery, driven by the early days of the crisis when just people decided, company decided not to invest in new equipment. However, we also see the positive signs going forward. A topic for us, which, at the end of the day, performed well was health care, recreation and furniture segments, which at the end of the day, we grew a bit year-over-year, driven, for sure, by also special situation that equipment for hospitals and ambulances are growing along the line. So that are some information concerning the different market segments we have. We've been putting them together in a different bucketing in a way that, going forward, we can manage them closely and can grow them individually and can, for sure, individually take care of the needs of these segments in terms of striving for excellence here. Also very important is that you know that this is all underlined by the rollout of our initiative of sales channel management in all areas with a special focus on Asia, but also Europe and North America to grow our business according to our vision. So with that, I would like to jump over to Page #19, which talks a bit more about the outlook. The guidance for the full year '21, as I said, at the first page, is EUR 850 million to EUR 900 million in terms of revenue, and the EBIT margin forecast and guidance for the full year 2021 is in the range of 12% to 13%. So why did we define a range this year? And it's one of the rare occasions that we define a range. For sure, that's at the end of the day, driven by the corona pandemic. As a consequence of this corona pandemic, there is an uncertainty still out in the market. Yes, we see some positive signs in the here and now, but nobody really knows how this pandemic turns out in the coming months, especially in the winter months, as we see in the current numbers of infections all over the place in the world. So that's why we defined the range for the time being. The basis for this range is the light vehicle production, which is looking into the IHS numbers, 14% increase in '21 versus '20. So meaning from EUR 73.6 million, up to EUR 83.6 million. However, this growth of 14% is, from our perspective, very optimistic. That's why our guidance is based on some more caution. And we define, thereby, a range, assuming a growth of 10% or less in these numbers because we all saw how the corona crisis did impact us early this year. And that's why we are defining a range for the coming year with this precaution of not knowing what happens in the coming months with COVID-19. So that's the only impact we see in there. That also walks us to the next part of the business, which is GDP assumptions for our underlying numbers. We had a negative growth for sure, as you know, in GDP of minus 4.4% in the calendar year 2020, January-December. However, 5.2% is basis for this planning for the coming year, calendar year 2021. It's, for sure, in line with IMF World Economic Outlook based on October 2020. So also here, important to mention is that according to our office, our long-term vision and our long-term goals are still on. CAGR is assumed with 2020 to '25 of 6% and an EBIT margin of 15%. So that's still on. Our One Stabilus along with the strategic rocket is on, and we fully commit as management team to that success. With that, we conclude the presentation, we will be open for your questions.

[Operator Instructions] The first question comes from Sabrina Reeh from UBS.

So I have a couple of questions related to your full year guidance. Maybe you could provide us with a bit more color on, first of all, the sales guidance that you've given kind of your assumptions for the underlying market for both Autos and Industrials, which is helpful, but could you maybe also give us some more details on what you expect regarding the outperformance in Autos division and Outperformance Industrial -- your Industrial division versus the GDP? So do we take assumptions like we've had in the past GDP versus what you achieve in Industrial division? And then for the margins, I'd also be curious to kind of find out what you're thinking is here after 12% EBIT margin in 2020, the guide -- or almost 12%, the guidance of 12% to 13% appears quite conservative, also, could you explain maybe your thinking behind that? And could you remind us how much of the impact of the cost savings you saw this year was temporary? So what are we not seeing next year? And is that a reason for a bit more cautious guidance on the margin side? And my second question would be on the free cash flow for the fourth quarter, how much of the impact -- how much was impacted by the short-term work? I mean, if I remember correctly, you guided us in the last call that you would be getting the government subsidies in the fourth quarter. So maybe you could give us details on how much that was approximately? And my third and last question would be on the midterm targets. I'd also appreciate some more color on the thinking behind that, like how do we get to the 6% CAGR? And how -- like how does that put up between Autos and Industrials? And also on the margin, I mean, when will we be seeing the 15% again because it's relatively vague saying between 2020 and 2025?

Thank you very much for all these questions. I'll just kind of start with the first 2 questions, and then I would also hand over to Mark to give some more to answer the financials. Your first question was on the sales guidance, right? So...

Yes.

The sales guidance -- as always, the underlying principle of our sales planning and sales guidance also in this year is, for sure, IHS and GDP. The IHS number, as we all know, frames a recovery for next year of 14%. Underlying assumption for us is less than 10%, slightly less than 10% for our planning, as we also hear kind of in this whole situation, some clouded voices, especially from analysts, which comment recently also on the uncertainty of the European auto market and how this goes along with also the transformation to e-mobility. And that's why we say the guidance, which was given by IHS with 14% is very optimistic. We are more cautious. That's why we've been assuming slightly less than 10% for the sales in the Automotive space. Positive signs, we continue to see in terms of Powerise, especially also in the region of Asia in the automotive sector. You know that with the market share we have on the Gas Spring side, we are in the range of growing equally to the market with our Gas Spring side, a -- pretty much depending on fitment rates and regional split. We are forefront on the Powerise side. And here, we see some positive signs, which, for sure, in these days, help us and also did help us a lot in the fourth quarter of our financial year 2020. And if you come to the Industry sector, we've been planning with the GDP recovery of 5.2% in the next year. So this should give a good glance on where we stand and what the next numbers -- or the next year brings in terms of numbers. So it's on the Auto side, slightly less than 10% in terms of growth. In the Industry side, assuming the 5.2% GDP and outperformance, you've been asking about that, the signs and signals we get from the market on the Powerise side are positive in all regions, however, forefront in Asia. Your second question was in terms of margin, yes. 12% guidance we gave. Here I'm coming back to the range definition. You're pointing out the 12%, but we defined a range. If you look on the here and now, we ended the year with EUR 822 million and achieved 11.8%. If you then take the lower end of the guidance with EUR 850 million, then the 12% kick in, for sure, as we’re in a volume business, the closer you get to the EUR 900 million, then the upper range of the guidance also here in terms of the margin count. We've been doing a lot of actions in order to improve, and Mark will talk a bit about these recovery actions in a minute, and which costs are taken out here structurally. However, if you talk about the margin in general terms, this margin we've been achieving this year was driven by a very good crisis management, which we'll continue to do. And for sure, we've been cautious in terms of this guidance range. And this guidance range is driven purely by the impact of this corona crisis and that nobody here in our room and on the other line -- end of the line knows how the winter months perform. There are, we fully agree with that, some positive signs for the rest of the year. However, also, there is some cautiousness in the market starting next year, you all know that. Nobody really knows how January, February and March goes, how incentive programs for car buyers will go, how the governments will support the, hopefully, last phase of this pandemic in the industry, and this adds some cautiousness. And to us, it's just at this point in time, too early to say, a concrete number. That's why we decided to open a range, which is pretty much tied to the numbers of growth of 5.2% GDP and less than 10% for auto than like I stated before. So the question number 3 was kind of in terms of cost management and scaling in the cash flow, I would hand over to Mark for some comments in that angle.

Yes. Thank you. Yes. In terms of cash flow, cost management, what are sticky savings? What are non sticky savings? When you look at the things we've done, many companies in Germany have been doing, are doing is using the short-time work. That in itself, to me is a reasonably sticky saving because the program has been extended by the government till the end of '21. So there's another 12, 13 months to go. And what does this short-time work subsidy do? It basically takes over the labor cost of people that are not working. And different to companies, other German companies, big companies that top up the government subsidy. We, up to now, are not really topping up the government subsidy with company funds. Stabilus is with Koblenz located in an area of reasonably of lower cost of living than companies that are in Stuttgart or Munich, where high cost of living increase the pressure on the working population for stable income. Here, there is, therefore, sufficiently flexibility in the cost of living management of the people. That allows us to get by without topping up the short-time work. So that is clearly sticky savings. In the U.S., in Mexico, in Romania, there were various government programs, but they also revolved around in the U.S., the furlough system, where you basically take people off payroll and the people have to sort it out themselves. Those things are clearly not something you want to do as a company too often too long because there is an increased risk of losing talent. Other actions we did, for example, in Koblenz, we lost around 100 workers, which in terms of direct workforce is like 10% without any expensive loud programs, actions of the unions, et cetera. Because it was achieved by reducing the number of leased employees, reducing the number of temporary employees and on a selected pay-basis, helping people for an early retirement for [ komna ]. We've also worked on bringing down the design cost of the product by redesigning specific parts, especially in the Powerise that one being a fairly young product. There are still many ideas around to make the product cheaper. We've moved in Romania, Mexico to some more level of automation. That will, on an ongoing basis, reduce the cost there. And last but not least, what we've talked about several times is, we've worked on the terms with our suppliers. We are paying them relatively early, getting early settlement discounts with half of the European suppliers, which is like a quarter on a global scale, and we are rolling that out to other locations to ensure we benefit on the EBIT margin there from smarter payment terms that make use of our current capital structure. Specifically, in terms of cash flow Q4, you asked what happened with short-time work. Yes, as announced, as communicated in Q3, during the Q3 numbers, we were missing like EUR 3 million, EUR 4 million short-time work subsidy, which has consequently come in, in the current quarter. So that is the quarter-to-quarter variance, we need to keep in mind when you do some sort of analysis. Hope that takes care of those questions.

Yes. Thank you very much for the detailed answers. Just one part of the question I think is what's still missing around the medium-term targets. I also asked whether you could provide some color on how we get to the 6% sales CAGR and how that splits up between Autos and Industrials? But also on the margin, when will we be seeing that 15% target again because you just said the range is 2020 to 2025? We didn't cover that part yet.

Yes. On the midterm guidance, we see positive signs with our portfolio. So we did a lot of actions in the past year. We used, as I said, the crisis times very well. So what did we do? Following also our strategic rocket, we have been working on our innovations in terms of new products. We have a strong pipeline of innovations when it comes to our traditional products, like the Powerise, the Gas Spring. But also when it comes to new products, we, in the industry side, we are forefront with those developments. In the same way, getting off the part of components and products, we have been working on sales channel, sales channel management and unification of the sales team. So in both angles, a lot of activities have been done in the last 6 months. This guides us to the assumption that we will grow stronger than many other companies and the market, which is then the basis for our assumption for the time being that the 6% are still on. In the same way, then also this positive outlook in terms of our growth in general is still on. So we see positive signs in the market for, traditionally, the car production, especially, as I said at the beginning, the Powerise side, on the Powerise side, the Asia footprint. So both positive topics along with our sales channel management lead us to the 6% of growth on a midterm, sure, also this growth outlook is kind of in the cloud in this corona COVID-19 cloud. And that's what has been leading to this 6% on the one hand side. And then also answering your question in terms of the 15%, you know this 15% was with a short-term sales volume. And the closer we get to the sales volume, the closer we get to our guidance of the 15% of the past years. Because one thing is for sure, we have a volume business on hand, so the more volume, the better, which also then impacts the bottom line in a massive way, right? With the given sales numbers of the past year, the EUR 822 million, is just in terms of economies of scale, not possible to get to the 15%, but the closer the volume gets back to where it was, the better in terms of the margin development. That's for sure. Then you also said, how is the split between auto and industry. You cannot -- for your prognosis or for your calculations, consider a starting point like I've been framing it of 5.2% GDP development for the next year and the growth of slightly less than the 10% for the Auto market. And if you see then our business split as it is, then you kind of have a good prognosis model for the future with these 3 numbers, right? The business definition by GDP, by our cautious assumption for Automotive, and then the split between Automotive and Industry, these 3 indicators should give you a good framework of how the future will be then split between automotive and industry.

The next question comes from Marc-René Tonn from Warburg Research.