Stabilus SE (STM) Earnings Call Transcript

Good morning, ladies and gentlemen, and welcome to the Stabilus S.A. conference call regarding the Stabilus financial results in the third quarter of the fiscal year 2022. [Operator Instructions] Let me now turn the floor over to your host, Dr. Michael Büchsner.

Ladies and gentlemen, hello, and welcome to our quarter 3 earnings call of the Stabilus S.A. also from the side of the management. You have our CFO, Stefan Bauerreis; our former CFO, Mark Wilhelms; and also [ Mike Retnisher ] in the call today. We saw a very good number to report, and that's why I suggest we come directly into the details. And on the operational update, you find the key messages and key highlights for the third quarter against double-digit revenue growth despite of all the headwinds we had with the Ukraine war, the inflation, the shortages of components, we nevertheless had a double-digit growth compared to the prior year, 18.5%. So this is also why we could increase the guidance for the current year, up to EUR 1.17 billion. Yes, strong Powerise growth in Asia. That's one of the key drivers of this success. We had 53% year-over-year growth and extremely good growth in particularly Asia with 100%, 140% year-over-year. Asia specific automotive growth out of the Automotive division, it was exactly the right decision to do the investments in 2020, in the Pinghu plant. It's fully up and running, will be loaded until 2024, as you know. And we see a very steep increase in Powerise demand also going forward to very solid pavement to success on our Asia Pacific business. So we also have a strong revenue growth in Americas, by the way, almost 30% year-over-year and 15% organic, some favorable fixed exchange rates from the U.S. dollar to the euro helps us especially as well. However, on the Automotive side, we've been growing a lot, it's 6% in the Gas Spring side, almost 30% on the Powerise side and on the Industrial side close to 10% year-over-year. Also here a great achievement. And we also have good numbers to report in terms of our profitability, the third quarter profitability in this year is good because of very stringent cost management and increase in sales price. Over the past weeks and months, we've been explaining and talking a lot about how we manage this cost situation and how we increase sales prices to our customers, and you see here the success. So this results in a good profitability. We have stringent measures in place, and they also positively impact the fourth quarter of this year. By the way, a topic which results out of the Ukraine war inflation shortages for sure for us currently in the business, the contingency planning. Here, despite of all these headwinds, we have stringent plans in place to secure our supply chain, also to deal with the shortages out there. And most overarching topic for sure, the natural gas shortage, which we found a way to deal with in terms of expanding our activity to the supply base and also reducing our needs in the company. So we have a good and solid plan to also fight this topic in the overarching economic phase right now. However, for the rest of the year, even if it's only 2 and a bit more months to go for the year, there is some uncertainty still in terms of cost inflation, Ukraine war and supply chain, just we mentioned, on top of the COVID-19 situation. Luckily, now we're in a better position in China, as you all know. In China, they lockdown hopefully is over, forever. And however, we've been dealing with this situation, a very strange and a good way and are confident for the next week and months to come, that also here in the Asia Pacific region, we have very solid numbers to show. So this is it from -- in terms of key highlights for today. And now I'm happy to hand over to our new CFO, Stefan Bauerreis for his introduction, and then he'll also share some slides with Mark again. Thank you. Stefan?

Michael, thank you very much. So also from my side, a very warm welcome to our Q3 investor call to all our stakeholders now in the call. So before going more in detail about the figures that Mike presented already that we are on a very good level. Please allow me to revert to presenting myself, first of all, as this is the first time that I'm doing this call for you for our stakeholders. So after my degree in business administration that I made in Germany, I started my professional career in 1998 at Mannesmann, in the Mannesmann Internal Audit, GMBH, which was the kind of internal audit and consulting company of the former Mannesmann group. I was there doing a lot of international global projects during these 2 years, and then joined in the year 2000, the Schaeffler Group, where I say, the most, the biggest part of my professional career until now, first of all, in a corporate area in as chief accountant of the Schaeffler Group in corporate accounting. Then after some years, I moved to develop the new established region in Germany as the CFO. And last but not least, since 2014, then I was responsible for all finance activities in the region Europe, including not only would we know normally as geographically, Europe but also for Africa, for the Arabic world and for some years India, I was responsible to develop the finance organization and all these things like that. I'm truly first, that I joined at the Stabilus Group as the new CFO, and they are absolutely am happy, having Mark still onboard here and being able to have a very good and very cooperative handover in that way. So that's a little bit from my background that you know me a little bit better for the future. And now let's jump directly in the next topics that we have. And also there, there are 2 topics I would like to draw your attention before we're go in into the financials, first of all. As you know, we have our Extraordinary General Meetings now in the next day to come. As Mark and Michael announced also during the last Q2 call, where they pointed out that this is the first time that they -- that we presented not anymore the Stabilus S.A., but now transferred into Stabilus S.E. We are now in the next step, and we are, let's call it, we are approaching our final destination that will mean the relocation to Germany. This is also the point why we need you and all our shareholders to be there present on those extraordinary general meetings, which are only done obviously due to COVID-19 by written resolution. And at the end, what we asked for is to reapproval for the authorized capital up to 10% of our total shares. But we already had in past but now has to be reauthorized once again. And obviously, also the relocation of our registered office from Luxembourg to Germany, which then will be then the final step, let's call it like that, in that project to become and to get back as a German entity there. So therefore, the deadline for the receipt of the attestation was already -- is August 5. And therefore, please take all this information. And I think that is already deeply explained and vote for the relocation for the registered office to Germany. I think that is an important step for the further development of our group of Stabilus S.A. As I already mentioned, we are currently in the process or I'm currently in the process to take over the CFO activities and functions from Mark Wilhelms. So also, Mark, please allow me also to thank you very much for the very, very good cooperation over the last weeks and even the weeks when I was not already here in the group, we were in good contact. And including also thank you very much for the -- also that you transferring to me and the CFO position and entity in the group, which is not only from the operational point but also from the financing point of view, in a very good shape. And this one thing which is really showing that is the refinancing activity, which was done under your leadership, and that's Mark the floor is yours. And thank you very much for the good cooperation of the handover up to now.

Yes. Thank you, Stefan, to the audience here. This is my last and final call in the Stabilus earnings call, the departure is planned -- the structural plan that I developed awhile back with Stefan [indiscernible] to allow me to refocus my life. Nevertheless, letting go is always the problem. So bear with me that I'm still staying with my heart in Stabilus. For sure, I need to now push over to Stefan, the honor of pushing the company over EUR 1 billion sales turnover and pretty soon, hopefully, to also make it to the end. Now let's turn to the recent refinancing of the group. It's on Slide #8. The 2 top boxes, the yellow box, it's a RCF facility currently undrawn but fully committed. And in light blue, EUR 100 million syndicated loan facility. With those financings, we are secured for the most of it through to middle 2029. So clearly, it's a long-term financing. The setup with the EUR 350 million revolver was chosen to ensure the management team has a lot of flexibility in terms of M&A, which allows us to develop the company further. As I said, with a lot of flexibility because with the RCF one can breathe in and out and probably reuse the funds a couple of time. Interest rates are, in my opinion, really good reconfirming the confidence that the banks have in Stabilus. The rates are between 50 and 150 basis points, which should ensure that access to cheap capital gives us a lot of options going forward. With this, we come to the slide financial results and I hand over to the incumbent management team, and here it is Stefan Bauerreis taking you to Slide #10 now.

Mark, thank you very much. So I will continue with an overview about the Q3 numbers of this financial year. So from the revenue side, if we start like that, so we were able to achieve a revenue of about EUR 271 million, which is, at the end of the day, a very strong increase compared to the Q3 of last year of EUR 42.4 million and 18.5%. Even when we accepting that we had some support about the currency effect, mainly from the U.S. dollar, that is still a very huge and substantial organic growth that we were able to achieve in all this in that quarter in spite of some weeks of lockdown in China would be always half to half in mind. So that was really a great achievement in terms of revenue. Going down to the adjusted EBIT. Also here, we are even growing at a higher percentage level than the sales side. And we can -- also, we commit that this was -- this is the first quarter of this fiscal year, where we even were able to achieve from the structural point of view, a better EBIT in percent of sales than in the last year. So the recovery of price inflation, our strict cost discipline, as Michael mentioned in the general overview at the beginning that what -- pays back and brings us all the good results that we are able to show to you also here. On the profit side, we are at EUR 24.3 million, also here, a significant growth compared to last year. You may ask why it is so significantly higher with the 2.8%. So also there, we have to say that there are also some mark-to-market valuations, which are positive due to FX impact in there. So that's the reason why we are also on the profit level side quite significantly above what we achieved in the former quarter. The adjusted free cash flow. Then we have to say that there is no real adjustment in there because there was no acquisition, things like that. Here, we are a little bit lower. This is, let's say, is the result of, I would call it, a proactive management that we also make you on the one side with the higher working capital and the higher working capital is the result of higher receivables mainly coming from China with higher payment terms, which are normal there in the market, but also due to some higher inventories that we really managed to reduce with the higher inventories on raw materials in the component side, the dependency on the availability of products. So that is also one reason why we are on the inventory side higher than perhaps somebody expected, but this was the result of proactive management to reduce their orders. Overall, we also started in this fiscal year to spend more money for CapEx compared to last year. I think that's also a good sign and a good development, going forward. And this is important also to shape the future in the way and creating the basis for the future growth that we have. Net leverage ratio remains more or less unchanged with the 0.6 -- for -- in terms of EBITDA. So there, we really have to say that we are on a very positive financial situation and really are able to really see which opportunities we will get then over the next couple of weeks. So as Michael already mentioned, the outlook, we will increase our sales number, and we will cross this year the magic line, I call it like that, of EUR 1 billion sales. So it's about EUR 1.07 billion. And we will be on an adjusted EBIT side, which is still in the guidance but which is obviously at the -- around and at the level of 14%. So the revenues will be significantly higher than what we promised until now in our guidance due to very good and positive operational performance. You may ask why the -- on the EBIT side, we are there on the lower side of our guidance. But I think there are a good explanation. Also Stabilus, even when we have a good growth, we have to accept that the material prices, electricity, credit costs, et cetera, are going up and the recovery of all those topics are coming over the next couple of weeks, over the next couple of months and quarters. So that I think it's a good sign, even keeping the guidance and remaining there where we are. If we then go to the next Slide 11, then you can see the key figures, once again, the split between the different regions. And what I told you and explained in terms of the revenue growth, you can see here exactly that the biggest growth that we have, obviously, is the result of Norwegian APAC and there mainly also China, where we have a significant growth rate. Michael already mentioned that. And on the other side, EMEA, where we have -- where we are suffering the most impact on the Ukraine war, prices, there we have the lowest growth rate, but this is not only a Stabilus issue, that is from the market perspective, the most critical situation where we are there. On Americas side, operationally, we are quite good. But also there, we have to admit that there is a slight support as well in terms of FX impact. But nevertheless, with a 36% sales increase from the last quarter -- from the third quarter last year to this year. So this is really a good operational performance that we are able to show here. On the -- if we go on the right side then with that split of revenues. We are coming to the adjusted EBIT area, which are -- which is increasing about 22.7% overall. So it's a structural improvement because we are growing faster than our revenues, which is always a very good sign. And this is mainly due to the fact that the region, Asia Pacific plays a more and more important role for us. And therefore, we are able to achieve good results here. Profit side, back to the left side, downwards. You know that here, the development of the 52.8%. This is mainly the result of some mark-to-market valuations for our cash positions in U.S. dollar that we have in the different legal entities. And apart from that, on financing and in other topics, there is no real surprise to mention here on the profit side below the EBIT number. Adjusted for free cash flow, I just repeat there what I already explained in the prior slides, -- so higher working capital, the main topic there is China, that is not that we have a really worsening [indiscernible] report of our receivables. That's really from an operational side, but we get the higher inventories that we have and also starting compared to last year required CapEx. So these are the reasons while we are at this time compared to the third quarter of last year, lower than what we have there. But I think good arguments, which also shows that we are investing the money on the right level also to shape the future. When we then go to the Page 12, where we have the key figures also for the 9-month results. Also here, you can see obviously that the growth rates are somehow smaller. So for us, the third quarter was a really good quarter and also was expected that we are growing more on that level. We have -- we are now in the adjusted EBIT, not growing on a 9-month basis so much done in the third quarter. The reason now quite simple because we suffered at the beginning of the year, first of all, all our cost inflation that we got not only in material but also on energy and freight side. And now the recovery that we get from the customer also is a little bit postponed because it's obvious that also some of our customers really want to see some proof of those additional costs we see. And that's why the first 2 quarters are not as good in the EBIT than the third quarter. I would have liked to say that this is due to the new CFO, but in fact, I have to say it isn't. It is the result of good management in the prior month and in the full year of this year. Profits, I already explained mark-to-market valuation as well, while it's here in the 9 months figures and also from the free cash flow side, the same argument is valid, as I showed already, and I explained to you for the third quarter itself. Then going to the results by the different operating segments, starting with EMEA. We have to say that we lost on the one side, some sales due to the Ukraine war. It's not so significant, but it's on the industry side at least, let's say, we would have had a growth of 1.8% and the industry sales higher than what we currently are seeing because these are sales that we lost. We also have seen some smaller allocations in other regions. But at the end of the day, we still were able to grow with 0.9% overall. And this in an environment that our light vehicle production was compared to last year's reduced by 3.9%. And I think that is a good message. The growth is mainly also driven here by Powerise, obviously, but also on the level of the Automotive Gas Spring, we were able to grow with a little bit higher than the market than the light vehicle production there so, therefore, I think that's also a good sign. But we have to say, not only in Europe, but you will see that also later then the other regions. The strategy of the Powerise products and our -- how we are in the market present. This is fully paying back, and this is our good development also going forward. The adjusted EBIT also been reduced in an a common structural perspective by 23.6%. We have stable overhead costs, also knowing that the yield we have the corporate areas for the group available. And therefore, we have to say that really is the biggest pressures coming from the market and the pricing in terms of material expense and energy costs in Europe. If we then go to the next slide, Page 15. So there we are starting getting to the very positive development also in our growth rate. As we already mentioned, we have a good growth in Americas, obviously supported by some FX impact. But nevertheless, with the light vehicle production of plus 11.9% we even were able to grow to get an organic growth, excluding FX, of 15.2%. So also that's a very good sign that we were able to overachieve the market growth deal in that level. At the end, I think, and this is important when you have a look then on the adjusted EBIT side, Americas really takes profit out of an improved mix. Industry business is growing significantly. Powerise is growing significantly, and therefore, are also there an over proportional growth in Powerise because also there in the U.S., like in oil either the customers are requiring a higher comfort in the car, and this is helping us. Nevertheless, also there the Gas Spring in Q3 was with a good growth. Having in mind that also somehow the customers, if they prefer the Powerise system that this has been a negative impact for the Gas Spring because that would be then the alternative technology. And having that in mind to grow even there with the 6.7%, I think that is a very good sign as well as on the industrial revenue, where we were growing on an organic level with 9.3%. This also shows our strong footprint and also our initiatives just talking about the industrial aftermarket that we're doing there that is really great. Last but not least, when we're talking about the regions in the Page 16, I just will give you some additional insights for the region. APAC, everybody knows that APAC for us is -- for a good part of that is China. And here, really, we can say what is already valid for the other regions. In fact, for APAC, this is as well very much valid that the Powerise strategy in terms of product and in terms of footprint as well in China, to have their own production [indiscernible] in China really pays back, and this is an important asset for us to really shape the future and to manage the growth that we can see there. So the light vehicle production, if you can see there in Q3 2022 was slightly below the same quarter of last year. You remember that this is mainly impacted by the COVID-19 prices that we suffered in that quarter. This having said, it's really much amazing that we were able to grow with such a growth rate of 53.1%. And you can see on the left side, it's mainly coming from the Powerise business, where we have an extraordinary growth, not only with new products but also with the existing lines and the existing programs, which are growing significantly after the lockdown is over. That is also the reason why, for us, it's really important that the lockdown keeps away from us, and we don't get back to that. Finally, EBIT adjusted also increasing by 100%. And there, we have to know that the region APAC, obviously, is not as much impacted by higher energy costs than Europe, and that's one of those reasons why we were able to really with very good fixed cost absorption to get all these very good results. On Page 17, as a kind of summary, the revenue by business units. You can see a very nice growth rate that we had. And in just some small words, the Powerise strategy pays back. We are really in good shape. The share of our industry business remain on a high level, but currently, the share of the Automotive is increasing to Powerise and due to China. But also on the apex side, in industry, we will see there are also some good growth over the next years. So therefore, don't forget our industry business, it will be remaining a very high and a very good percentage in terms of our sales that we have for the group. So this having said, I hand over back to Michael, and I'm happy that I was able to show you such good figures for this quarter.

Thank you very much, Stefan, and I'll lead you through some Industrial revenue by market segment numbers. On Page #18. So overall, on the Industrial side, last quarter, we achieved revenues higher than EUR 100 million, so up 6.6% year-over-year. Just leading you through the segments with some more details here. On the top left of the pie chart, you see our sector of energy, construction and machinery, industrial machinery here, particularly the industrial machinery was helping us a lot. You know that as we saw shortages all over the place. We all know that capacities of the equipment is on its end. And here, we see global scale, good numbers and demand coming in, in terms of industrial supplies, industrial demand of our products, shock absorber gas spring, but also rubber mounting the rubber elements are increasingly important to retrofit than the equipment on the industrial side. Also here, quite stable and good growth rates on the independent aftermarket. As car supplies are still not on the level and before this supply crisis -- on the independent aftermarket, people are still retrofitting and changing parts on their cars, the gas springs predominantly, and that's why we see also very solid numbers on the independent aftermarket in the here and now and also in the future. Last not least, the mobility sector, the mobility sector, also good growth numbers here. You all know and feel, the congestion on the roads. So traffic is increasing all over the place and the result for sure is that our business sector in terms of trucks, cars, planes and whatsoever is increasing. And this is also what we see, by the way, in all these segments being very strong in the fourth quarter of this year. So as a result, we see good growth rates in all these areas and see also steady growth in the coming weeks and months and the order books for the next month are kind of full. With that, we would go to the outlook page. So Page #20. And as I said, and we said at the beginning of this call, we increased the revenue outlook for the year to EUR 1.07 billion because of -- yes, just over proportion of good growth in all these business segments we have, as already stated, predominantly in Asia, both in Powerise in general terms and industries, and we refine our EBIT margin to 14%. And this in the light of all these turbulences in the market, and as we said at the beginning as well, the outlook for the rest of the year is also, knock on wood, quite stable for us. So light vehicle production is on the same level than announced before in the range of EUR 80 million. And so no big movement here. We, at the end of the day, refined our target here with 14% EBIT margin and EUR 1.07 billion sales despite of, for sure, still pursuing our long-term plan to be at the CAGR of 6% in the year '20-'25 and the EBIT margin of 15%. Formally, the guidance was kind of a broader range of EUR 940 million to EUR 990 million in sales and 14% to 15% EBIT margin. So as I said at the beginning, very positive news on our side. Business turns out to be stable and robust in difficult times. We've been proving again in this quarter that we have a stable business model on the start, and we continue this journey of success. Finally, I also don't want to miss from my side, especially also in the name of the Stabilus S.A. to thank Mark again for his outstanding contribution to the success over the past years and the -- decade, at least, right? All the best from our side. And thank you very much. So with that and with this positive outlook for the rest of the year, I would turn it back to our facilitator to lead us through the Q&A session. Please.

[Operator Instructions] And the first question comes from Akshat Kacker.

Akshat here from JPMorgan. Firstly, I would also like to thank Mark for all the collaboration over these years and many fruitful discussions that we have had and also a very warm welcome to Stefan, wishing both of you all the best going forward. I have 3 questions, please. The first one on cost inflation. Can you just talk about the gross impact on the P&L that you're seeing in 2022 in terms of both raw material inflation as well as energy inflation? Is it possible to quantify both those elements, please? And the second part of that question is, how do you expect this to evolve going into 2023 as material prices are starting to come down, but we have sustained energy and labor inflation. That is the first question. The second question is on Powerise capacity in China. You just mentioned that you are seeing very, very strong demand going into next year as well, from China. So can you talk about the capacity utilization of the plant in Pinghu as of today? And what is the current production or shift structure? And are you putting in more lines to further expand capacity. The last question I have is on capital allocation. I think you clearly laid out how you think about the balance sheet and cash on hand in the last quarterly call. Can I just ask between M&A and share buybacks. In this current environment, do you have a few M&A targets that are increasingly becoming more feasible? Or looking at the share price, you think a share buyback could also be an option going forward.

Thank you very much for this question. Thank you. I will start talking a bit about the first 2 questions, and then Stefan will talk about the third question, very predominantly goes around the M&A topic and also share buyback philosophy. So yes, the cost inflation for sure, it does this year. As you all know, our products are heavy weight towards steel and plastic components. Steel did increase over the course of the second and the third quarter, but mainly in the second quarter this year, which is January to March, our financial terms, in the range of 15% to 20%. So if you multiply that with our bill of material, then you would get into a range of a price increase of anywhere between 2% to 3% in terms of steel and the same impact at the end of the day in terms of resin, hitting us on the side of plastic components. So 2% to 3% is the impact on our product pricing in terms of raw material impact. On the energy side, it's in the range of 1%. So 1% increase on the product we see in terms of the energy side. We could mitigate that for sure because we have a supply chain on the start, which uses less energy than we do. Some of their processes, for example, for [ Pittenhots ] are done with electricity rather than gas because gas was growing the most, as we all know. And in total, I would say, on the product side, it's anywhere in the range between 3% and 4% increases. And this, at the end of the day, and Stefan was touching on that, this 3% to 4%, we did pass on to a vast majority to the OEMs. Here, we've been in lengthy discussions, as you know, over months with our OEMs on the Automotive side. On the Automotive side, as you all know, it's a little more tricky than on the Industrial side to get these reimbursements approved from the customers. We did a pretty good job here in the first and in the second quarter of this year. So now this is materializing, that also the numbers in the third quarter are very decent in terms of the profitability, and we could regain that from the OEMs to a vast majority. So this is overall in the range of 4%, 4% to 5%. We've been talking to the OEM about the -- and the Industrial side is quite different because on the Industrial side, at the end of the day, it's more sensitive and you need to, with a certain sensitivity, watch out what the rest of the crowd is doing. And here, we could, at the end of the day, have 3 rounds of smaller price increases, and there even up to 10% on certain components where we use a lot of rubber, plastics and steel content, we could increase those prices. Also to the extent of the costs did increase in our P&L. So bottom line, coming back to your question. There are material prices on the product increased 2% to 3%, the energy price, 1% impact. And this effect, which is in total 3% to 4% we could to [indiscernible] maturity offset by price increases. So the second part of your first question was about the outlook for 2023. If you look into the indices, the material prices are settling on high levels. And some materials are even going back. If you see copper lately and the high-value materials they are kind of going down. At this point in time, also, a lot of our suppliers come along and again, try to stabilize the prices on a high level with the argument that energy costs are kicking in now. Here, we are in active and lengthy negotiations for sure with the supply base to harvest the fruits here. Your question was the year 2023. And for sure, that's a difficult question for us because all this here political happenings of the last 12 months indicates that the situation now this is very volatile. So it's at the end of the day, I guess, I'm giving. However, if we see -- look into the macroeconomic happening, then we would say that, yes, we stay on the level where we are, probably prices are going down a couple of percent, but they are reaching a ceiling now with this inflation. For sure, this is a very cautious answer because nobody knows from our side, but our current planning says that we continue on this level for the next 12 months. And this is also what we reflect a certain share into our budget that we don't see a big relief, but we also see the prices, not necessarily going up further. So that's in terms of the inflation and the inflation reimbursement from the customers. And the second question was on the Powerise side in China. If you look into our numbers of this call, we've been selling on the Powerise side, and thanks to the complete team we did this wise investment in Pinghu a couple of years back, which we have it from now. We've had sales of EUR 28 million in this quarter. And the EUR 28 million at the end of the day, they reach out to a little more than EUR 100 million over the year. If you calculate that. And our current shift structure and utilization of the plant is in the range of 40% to 50% utilization. So that means if you do the math, the outlook suggests that you could very well calculate with above EUR 200 million sales if this plant is fully loaded, which we plan with until the year 2020 more around about. So end of 2024, our plan at this time is that this plant is fully loaded within the range of and capacities provide the flexibility above EUR 200 million sales. So these are the first 2 questions. And yes, the third question goes pretty much into a chart, which we already provided last time. Yes, we are working a lot on M&A activities and have a short list. For sure, we are also here in that term kind of picky because our M&A targets, they need to be margin accretive and not dilutive for sure. And we are searching and having discussions with companies in the right side. On one hand side. And then if numbers provide according to the investment chart, which we were showing last time, the capital allocation. We also on a path towards buying shares back in case capitals are not needed. But some more information about that from Stefan.

Yes. Thank you, Michael. Please allow me to add some comments on this capital allocation point. So first of all, what we made over the last weeks is in order to finalize the refinancing. We also paid back one of the -- those existing former loans and reduced there our cash balance on hand by around EUR 100 million, which obviously has on the net leverage effect, not an impact because there you see always the net impact. So here, we are still keeping with the 0.6 multiple with EBITDA. So that is a great and quite low value. I absolutely also understand the question you're coming from. Here, obviously, I have to say I would not be a good CFO coming to a new company and saying, yes, the share buyback, that's the best option we can do. So I think we have, first of all, a lot of different investment initiatives in terms of M&A, but also to shape and to support our future growth. So if you see what we had in growth in China, but not only there, this also will require in the next years some significant investments. And when we say that the plant in Powerise will be fully loaded in 2024. So you can understand that it's absolutely now then the right moment to think about new investments that we have to do to be able to shape the future over there. So that -- these are, on the one side, supporting all our internal growth that we see the organic growth, which is a very good situation where we are. Second, yes, the value of our shares is continuously going up. So hopefully, after this call, you are even more convinced and you can offer and you can recommend to all your customers and yourself to further invest in shares of Stabilus to really keep on with the good development of our share price. But the main focus currently is still on the level of looking M&A looking for growing initiatives that we have. And this would be then, from our perspective, the way going forward for the next couple of months.