Andritz AG (ANDR) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen, and welcome to our Capital Markets Day 2024 of Andritz. We are delighted to see so many of you here today with us in Leipzig and also online. Thank you for joining us today. I'm Susan Trust, the group -- the Head of Group Communications and Marketing, and it's my pleasure to serve as your moderator today. Today, we are looking forward sharing our company strategy, the new financial targets and the steps we are taking to shape the future of our industry. Joachim Schönbeck, President and CEO of Andritz will start the day with his group presentation followed by 4 business area presentations and a financial presentation. There will be a Q&A after each business area presentation and the financial presentation. We will conclude today with concluding remarks from our CEO. And after that, there will be a final Q&A with the entire Executive Board on the stage. As we will be making forward-looking statements, please pay attention to the disclaimer. And now without further ado, I would like to welcome Joachim Schönbeck to the stage.

Thank you, Susan, for the kind introduction. Good morning to everybody here in Leipzig and to everybody joining us online from hopefully around the world, but presumably mainly from Europe. So a big thanks to all of you here in the room who took the hardship to travel to Leipzig, to the German out lands with an even more painful journey as we have another strike of the Deutsche Bahn, which makes travel more difficult, but the people who come from the U.K. might remember that 40 years ago, it was the same there. So maybe we go through the same cycle. I believe that some of you, it would be the first time here in Leipzig. We do it here because we will, in the afternoon, visit Porsche press shop in Halle, where you can see our press is working in a real impressive --in an impressive manner. And for everybody who has not been in Leipzig before, who might be the first time it's not only a beautiful city. But it's a city where the German unification started on September 4,1889. They made what they call the Monday demonstrations. And this led at the end to a peaceful unification of Germany. So I believe we are living and enjoying the free world to these people, starting that movement here, which was unreal when it happened 35 years ago and which is even more unreal today when we look at the world around us. So thinking about that, I think we would like to start. We have collected the entire Executive Board here, not only Norbert and myself, who you usually see in the quarterly calls. We moved a bit into diversification, not on gender, but on nationality. We have 5 people for different nationalities, bring at least some fresh perspectives. So starting with what we do think it might be good to remove that because we refer so much to the industries we are working in, not to lose sight what we are doing. We do large-scale engineering business, medium, small, medium and very large projects. We do it with our own technologies. These are different in the various industries, but we deliver best available technologies. And then we are supporting our customers through the entire lifetime of that equipment with a credit to grave services, 24/7. More and more, what we deliver empowers our customers to make their green transition successfully. That's what we want to do, and this is basically what is about what we are going to tell you. We have, however, organized our business in 4 business areas. Of which pulp and paper is the largest, representing almost 50% of the business volume. And the others, metals, hydropower and environment and energy, floating around 20% each, depending a bit how the markets are in the various industries. We have the 3 business areas, pulp and paper, metals and hydropower. They are organized as what we call industry verticals, where we deliver the -- basically the core technology for the production processes of our clients in these 3 industries. While in Environment and Energy, we have bundled certain technologies we have for environment, energy, but also chemical, mining, food and beverage, where we have particular technology that is applicable in various industries. So there is a bit of a different setup, but we believe combining that type of business in one business area with a lot of overlapping customers is more customer oriented and we believe, enables better growth. In all business areas, we're trying to -- we will increase our service share. We are between, at the moment, between 25% service share in metals, up to 47% service and environment and industry. that is, for sure, something we will need to look into. In all 4 business areas, we have a solid market position. We, and also others, consider ourselves as #1 in pulp. We are in paper. We are #3 with quite a big gap to our competitors. In all other areas, we enjoy good positions between 1 and 2 being having a relevant market position is one of the key parameters we are looking into if we make a portfolio review because if we do not have a relevant position on a global scale, then that is definitely questionable whether we want to stay in that business. A few words you might have read the announcement, a few words to the new business area, Environment and Energy. As I said, we have organized it specific technologies available for multiple industries with a clear focus on environment and energy. We have 5 divisions in this business area, the separation feed in biofuel and pump divisions and now also moving in the Clean Air technology, which includes the carbon capture technology and the green hydrogen, which also includes the renewable fuel activities and the Power-to-X project. So in total, if you look to the financials, it is not too big changes. So on the order intake, we moved EUR 200 million from pulp and paper and from metals. Pulp and paper was the home of Clean Air Solutions and metals for the home of the green hydrogen. And on the revenue, as you probably are aware, the green hydrogen is just starting up. So basically no revenue had to be shifted over. So we believe the impact on the -- on these business areas on the on the [ fiber ] side is not too big. However, we believe that we will have quite a big impact on the market, and we have much better situation positions to grow these businesses, in particular, the green hydrogen and carbon capture and Dietmar will elaborate on that in more detail when he is on stage. A few words on the business model we are following. We have -- we are serving several industries with one conclusive business model. We do the engineering business combined with the life cycle service. We -- if we do large and complex projects for our customers, it requires a strong balance sheet as the customers need to be aware that we will be around during the execution of the project, but also that we will be around until the end of lifetime of the equipment that we have delivered because they can rely on our expertise and services to develop the assets further. We have, as a risk containment on our side. We are in different industry cycles. If we look to metals, pulp and paper and hydropower, which constrains risk and also helps us in our adaptability to these changes, as we know, and this is also built in and what we do. We know there are cycles. We know there are years with huge projects. There will be years without huge projects, and we need to adapt. Our organization is set up for that and also that is sometimes the fear when these big orders are coming, we report huge order intakes. But a lot of that is also extended work bench because we do not have the full value add in these large projects like we have, for example, in the service business. We also can take synergies. We have the Metris platform and our digital services, project management expertise for sure, but also regional expertise and proximity. We can exchange between the business areas. And you'll see we are -- we have distributed our 30,000 people across the globe in 280 locations with in over 80 countries. Ensuring and giving confidence to our customers that wherever they want to move to -- with new projects to invest that we -- it will not be far to reach the next Andritz location. We -- our 30,000 people around the world. We have the largest country is Germany, 17%. And then we have very nicely balanced distribution of our workforce, Austria, North America, South America, China. This gives us a good setup on the one side to concentrate our know-how where we have it, but to be as close to the customers as possible and have the value add very close to the customer. We have 46% white collar and the 36% blue color and more than 33% are working in engineering, technology or project management, so a very high educated workforce. We are very proud that our solid manufacturing strategy really bears fruits. You can see that we have had a continuous increase in manufacturing hours in emerging markets and we basically have no growth or a slight decrease in high-cost countries. That is very important, as I said, moving on the local-for-local not to ship too many items around the world, but also to be sure that we are very cost competitive. So since 2022, we have more manufacturing hours in emerging markets. The trend is increasing, and this trend definitely will not be stopped. I'm very, very happy to inform you that we have extremely good progress in our ESG program in all 3 areas. We are -- we are moving ahead and some of the '25 targets already have been achieved. We would highlight 3 of these goals. The one of the most important for us as a company, for sure, is that we want to increase the share of our revenue with sustainable products and solutions above 50%. We are currently at 45%. We will reach -- or we want to reach the 50% in 2025. And for sure, we will not stop there. And you see that our innovation pipeline is full of new ideas and the large share of that is organized around this renewable and sustainable solutions and products. To increase the share of the workforce of women is a particular area where we are focusing on. It is not easy to reach this 20% considering the amount of female engineering students we can see around the world and considering that 36% of our workforce is blue collar, where also the ratio of female is much lower than in average. But we have this target. I'm not 100% confident we will reach the 20% by 2025. On the governance side, as you also read in the papers that control of the supply chain becoming more and more important, we are happy to report that we already have 82% of our suppliers audited, and we are confident to reach the 85% by end of next year. We are -- we have expanded our portfolio in all business areas through acquisitions, and we will continue to do so. We made 76 acquisitions since 2002. And since the last Capital Market Day, the acquisitions, I would like to highlight is that the Dan-Web, our move into molded fiber technology. The Skytech service and R&D think tank accelerating our development for cellulosic textile fibers. And then in '22, we acquired the Sovema Group technology to manufacture batteries, and we are joining that competence together with Schuler's competence to deliver large and complex projects to the automotive industry to set ourselves up to supply the Giga factories that are needed for the e-mobility worldwide. We -- as I said, we had 76 acquisitions, successful acquisitions since 2002. We invested EUR 2.1 billion in total with a total earnings of EUR 3.6 billion and a total value creation of EUR 8.4 million. So we believe that there's a good track record. We want to continue on that. Why are we particularly successful in the acquisitions. I can tell you, we have a few strategic cornerstones that we usually obey that is we want to acquire complementary business in our areas. So a business that fits on the value chain of our customers. We usually retain the management because we do not have anybody in Andritz who can run the business better than they can do and we give them the resources we have. And the freedom we have in our management system that they can develop further. And we usually do not acquire competitors because that is a very bloody business as 1 plus 1 usually is much less than 2. So following that leads to successful acquisition, and we can promise you that we will keep track there. Looking to our markets. they're all growing, which is good. You might not be too impressed by the numbers you see, but this is the -- these are large markets, and there are particular niches in each market, which grow much more than this underlying market growth. And my colleagues will explain this in more detail to you later on, and we are well positioned to go into these niches. We have special opportunities, and we are prepared for that in pulp and paper, there's paper machines. I already mentioned to you that we are #3 in the market share. And the gap to the 2 leading competitors there is quite large. So we will definitely close that. We move into molded fiber moving into cellulosic textile fibers and also into textile recycling, all areas which will have significant growth the next time. Metals. The e-mobility, battery business, silicon steel, lightweight vehicles are particular driving forces where we are well positioned in hydropower on top of the traditional business, which will increase as the demand is increasing, we are prepared for grid services like pump storage, synchronous condensers and hybrid solutions and Environment and Energy. I already mentioned, we have the green hydrogen. We have the carbon capture, the Power-to-X and alternative proteins which offer particular growth potential. So looking to our to our strategy, we have, on a group level, we have a quite easy to comprehend strategy that's based on decarbonization, on digitalization and on customer service. That should lead to the long-term profitable growth we see, and we want to grow revenue profitability and the service share. That's the target and all the activities are directed to reach these ambitions. In the decarbonization, we believe that we are a leader, and we should lead the industry in certain areas as we have the knowledge, the resources, the teams and also the customer access to make new technologies viable. We will develop these technologies and we have to develop these technologies that they are economically viable because any of these technologies we use for decarbonization, if they need subsidies to prevail, then at the end, it will not be applicable around the world. Maybe rich countries can use it. But as what we see in a political discussion at the moment in Europe and in Germany, we see that even the rich countries do not like to spend that money. So our target is develop technologies and develop economically feasible technologies. Therefore, we need the innovation. We do a lot for that. Almost EUR 140 million were spent last year on R&D. Yielding 370 new patent applications in that year with the total patent protection rights of 6,500, which is quite impressive. In 2018, we already started to enable what we call fast track innovation through our venture program because we could see and we invite the start-ups a bit for their speed and agility. So we try to create something similar inside our organization. I would say, even though I personally was skeptical when we started that, we can call it overwhelmingly successful if you see what came out of that. And you see, these are the new technologies we commercialized from our in-house developments and the majority of that was a result of this venture program. I would say I'm really impressed and proud what our teams did. Without going through all of that, I think last year with the first order for alkaline green hydrogen electrolyzer was a huge market success. The carbon capture, we already have 2 plants in operation. We -- on the textile recycling, we have more than 20 mechanical textile recycling centers already operating around the world. Chemical is under construction. On the battery side, we have lab and pilot lines in operation. We have [ eager ] factories contracted for us last year which is good. And biomethanol, we have one plant in operation, I think now since 4 or 5 years, we have another big one under construction. And the sulfur loop, we have 2 plants already in operation and another one under construction. And what you see here on the lower part of this table, coming out of the circle to 0. That's basically -- these were the first innovations that came through our venture program. So digitalization, we started that journey quite early. I have to say, we started already with the first applications in 2007. We launched the Metris platform already in 2017 with a target to lead whatever we deliver to an autonomous operation, and you will see impressive testimonies of autonomous operation, especially in the presentation from [indiscernible] in Pulp and Paper. The idea is to establish a vendor-neutral middleware digital platform, what we call Metris that can talk and connect to all legacy automation system the customer might have and will have. So we don't lock them into a cage of being bound to only one supplier and then do what they really need to do to optimize the asset to optimize their processes and enable their plant management. And that is really successful. We already have more than 200 references with customers. And I think we still can keep it that nobody who went into these OPP contracts have ever stopped using that because they are so powerful and to optimize their own processes. All of that comes with the required cybersecurity as cybersecurity for OT. So for operational assets is a challenge. We have as we did not find a suitable solution, we have established a joint venture with experts on that, developing our software ourselves, and we see a very good success in that. Last but not least, our customer service. As I said, we are committed to provide service from credit to grade for whatever we deliver 24/7, part service, repairs modernization, you name it, operation and maintenance. We have more than 1,300 people in operation and maintenance at the plants of our customers. We are ensuring high product quality, high output and high uptime through, I would say, very quick response times and through our cost competitive solutions. Having said that, we can also see that on the volume side, we see a very nice growth of our service business throughout the last 10 years. The service share of the business increased very nicely from 28% to 39% and compound annual growth rate is almost 10%. What is good for the customer that we bring. The lot of service is also good for the company, and we believe also good for the investors. We have a very high service level and a very close customer proximity. This ensures stable and recurring revenues, and that definitely balances very well with the fluctuation of the large project business. And as the profitability in the service business is also higher than on the capital side, it also evens out the earnings and also the cash flow. So summarizing, if we do all that, we will see a bright future for Andritz, and we believe that we can that we can increase the business volume of Andritz above EUR 10 billion for the period ahead of us, '24 to '26. We want to increase the EBITDA margin above 9%. The net income would increase above 6% and the M&A strategy will continue, and we will put a special focus this time on service and digitalization because as you learned, these are 2 main growth areas, and we want to achieve -- we want to overachieve the ESG targets. Looking back to the last couple of years, we have reached the targets we had announced to you on the last Capital Market Day despite quite a challenging environment regarding COVID, the war, several supply chain restrictions. And so we can proudly report that our teams got stronger through this crisis. They are confident that they could manage that, and they are very confident and we are confident that we can also deliver these new targets. Thank you very much. So thank you. Now I have to -- I ask Jarno Nymark to the stage. Our new -- our new board member for Pulp and Paper has been taken this responsibility in October last year, but having served for Andritz and in pulp and paper for 20 years. So he knows everything. He was part of the success of pulp and paper in the past and will be even more successful in the future. Jarno stage is yours.

So welcome, everybody, also on my behalf, and thank you for coming here to Leipzig, and thank you for joining online. And thank you for the kind words, Joachim. I'm not the expert. I have a team, and we are the experts together. And I would like to start in presenting and getting us all on the same page who we are and what we do within the Pulp and Paper business area. In the beginning of this year, we have reorganized our organization. So we have grouped ourselves into various 4 business area segments. We also have a common pulp and paper leadership team that covers the regions and also our global functions. And really, the aim and target for us is to become more -- even strengthen our customer focus and really focus on the complete life cycle of our customers. If we look at the first segment, service, which is our largest segment with 40% of the revenues in '22. We have a wide assortment. We serve all of the capital business segments and serve all the installed base available starting from the spare parts, starting from the wear products and especially these production consumables very much determine the end quality of customers' products. And then doing the rebuilds, upgrades, modernizations, but then the field service and the full maintenance support as well, spending the 24/7 at our customer sites. Then if we go into our Pulp and Power business, which is a market of EUR 4 billion. And as mentioned by Joachim, we're extremely proud to be the #1 in the pulp business, on the -- both on the greenfield projects, but also on the brownfield projects. And this business area segment covers our complete chemical pulp technologies and then also the biomass and waste-to-energy boilers. Then we have another capital segment, which is our paper and textile. This is also a EUR 4 billion market. And here, we cover our board and tissue machine technologies, then also the various fiber preparations to these technologies, be it recycled fiber, be it virgin pulp or be it mechanical pulp in this area. And then we also have our nonwovens in the business in this plus all the textiles. And I will show some example of the nonwovens and the textile industry later. And then we have a business area segment for the automation and digitalization. In this area, we cover the traditional AE and iScope, automation, electrification, instrumentation but then also building on our Metris platform, the smart products, the digitalized solutions with advanced process controls with our simulations, with the digital twins. And we wanted to keep this as a separate focus area for us, as mentioned by Joachim as well, this is an area for us to further grow. And if we look where we are, we are 14,000 global experts. So I'm not the only expert and I have more colleagues with me. And we are approximately 33% of us in emerging markets and 67% in developed markets. Our largest base of employees and are -- is in EMEA. And this is where we have the majority of our product home technology centers are based in Europe. And if we look at 55% of our employees are within the service business area segment. And here, we are very widely spread close to our customers, giving the support in the local language, the local dialects, even understanding the local culture and this, together with the combination of our service centers that we have in each of the markets and also our wear parts manufacturing that we produce machine clothing, the role service, refiner plates, screen baskets as well in this segment. And if we look at on the right side, the share of the business in the last 3 years, where we have, if we focus on the service, we have a majority over 60% is coming from what we call the mature markets in EMEA and North America, where there is an old, let's say, older installed base. But then also continuously growing in South America and in China, Asia, where we have a younger installed base. So it takes a certain time before the installed base becomes and you start doing the bigger repairs, the rebuilds, et cetera. In the beginning, it's more the consumables, the spare part business that you have. And if we look at our capital side, we have been extremely successful the last years in South America. So -- and China and Asia, especially on pulp side, the southern hemisphere, we have been very strong. So this, of course, with the growing installed base gives opportunities for us in the service as well. Then on the paper and textile strong in Europe, but also in Asia and China and this as well giving the base for our future to grow in the service in these regions. Then if we continue with our sustainable products, or what I would like to also say solutions because we are quite much a solution provider, not only a product supplier. And the biggest impact that we can do within the pulp and paper is that we support our customers to reach their targets in their sustainability targets. And sustainability, and this is very much in the DNA of everything what we do in all of the R&D in all of the innovations. We continuously focus on how can we make more from less. We want to reduce the water consumption, reduce the energy consumptions. We want to have higher yields with our technology. So this is something that we're continuously developing in the technologies and especially with -- together with our customers because this is where we can have the biggest impact. And just some highlights that we have in this area, the biomass, the multi-fuel boilers, for green heat and power. We have -- looking at alternative fuels for our -- to energize -- the processes, looking at, for example, bark gasification for the Lime Kilns -- wood dust burning even lignin for the Lime Kiln and the same alternative fuels on the paper and drying of the paper side. Then as Joachim mentioned, we have the circle to 0, where we look at the side streams, and I will highlight this a little bit more later. And of course, we're looking at the side streams also becomes one of the main streams for our customers and additional revenue. And then the cellulosic fibers and cellulosic man-made cellulosic fibers and then also the cellulosic nonwovens as well. Textile recycling will be highlighted a bit. But of course, all of this that it's not only for the new mills, it's -- we can implement these also into existing brownfield mills. And this is then with the continued support of our service and automation and digitalization. We can improve the performance and increase energy and environmental efficiency because especially with the -- through the automation and digitalization, the more smooth we have our customer run their process the much less variations we have, and we can save on the chemicals, the waters and so on. Then looking back, what has been promised before in the area of pulp and paper. I think we have delivered on our promises. And on the financial side, we have reached the target that we have set at that time, being it revenue, profitability and also the service growth. Then we have made the circle to 0 into a business for us. We have several plants in operations, and we have several projects ongoing in this area as well. We're continuously developing on the treat to textile area. Of course, here, we are strong with the mechanical textile recycling, but then continues on the chemical but also like to highlight that we have started -- we have in this time, also started up the largest dissolving pulp mill with continuous operation as well to support this initiative. And we're continuously pushing for the autonomous mill operations. We have projects ongoing where we are implementing these technologies. We have started up and, for example, autonomous log yard and this will be -- I will show a short video from this. And then we have started up our [indiscernible] facility in China. So I think that we have delivered on the promises that we have made, and this is for sure something that we will continue doing also in the future. Then if we look at the market and frame conditions that we have in the pulp and paper area, I mean, we are benefiting from the global mega trends, be it urbanization, e-commerce, replacement of plastics because these -- all of these areas will give us additional growth opportunities as well. And if you look at the underlying midterm growth, we're looking at 2% to 3% in each of the areas. But of course, there are regional differences where we see for certain segments that the growth, I mean, for us in service, it is global. We still have global opportunities the pulp and power very much related on the pulp with the Southern Hemisphere with eucalyptus plantation pulp, short fiber. Then on the paper and textile, we have North and South America. North America is an extremely old installed base, but now it looks like that there are activities that our customers have. Have announced and have done projects, and they also have announced that future installation, especially in the board area. And then also in South America, we have seen also lately that our customers have instead of shipping the pulp, but also generate more value with tissue and more production as well in South America. And digitalization, I mean the North and South America, South America, together with our new installation, North America with silver to name and the know-how, I think they need to work on this. And in each of the areas, we have set up special growth opportunities where we see growth for the future. On the service side, definitely to cover the installed base that is being built and has just recently started up with long-term service agreement and making sure that we cover from the beginning to the end and support our customers in the pulp and power. In the pulp and power area with the decarbonization of the industry, and here also with waste boilers. Then on the paper and textile side, the textile recycling man-made cellulosic fibers, dry molded, but also in the area of the machine as well as Joachim mentioned, I mean, this is an area for us definitely on the tissue machine area but then also on the board machine with the growth of packaging and the e-commerce. There are opportunities also in this area for machine conversions or then new high-grade board applications as well. Then on the automation and digitalization side with our smart products, the control valves and in general, with the complete autonomous operation that required advanced process controls, the simulations and in this. Then if we look at the market development in the areas -- in the end market areas that we are active. If we look at the paper demand, looking backwards in the mirror, it looks quite flat if you only look at the top of the curve but I think here is worth to mention that there has been continuously growth in the packaging, in the tissue area. The drop in general is coming from the decline of the graphic papers and printing and writing grades. And going forward, the statistics shows that we have reached the bottom of this, and we will see also then a stable growth all over going forward. And then the same follows on the chemical pulping side but here, of course, we see the growth going forward with the -- we need the furnish for the board and tissue production. And here, we see both the growth in the craft, in the bleach grade, the white grades for the hygiene -- major for the hygiene papers and then the unbleached for the packaging but as well as the dissolving pulp, which is then required to produce the man-made cellulosic fibers, be it viscose, be it lyocell going forward. So in all of the areas, there is growth where we are active in all the markets. Then if you look at the capital market shares and the competitive landscape that we have, as we mentioned, if you still remember from the -- one of the first slides, I mean, we are #1 in pulp. We are 2 to 3 on the boilers -- on the biomass boilers. So if we look at the complete segment, pulp & power, we have a market share of 31%. And here, we are the #1, but it's a fragmented market, mainly coming from the boiler side on this. And then on the paper and textile, we are #3 on the paper side, but then looking at the complete, I mean, on the fiber preparation and the textile where we have a strong position. But here, we have a market of 70%. And as Joachim also mentioned, this is an area for us to grow in this. Then if we go into the strategic directions, and of course, we want to continue with our profitable growth. And we want to support our customers in their sustainability targets. We focus on our R&D and really offer the complete ANDRITZ life cycle over the complete mill and from the beginning to the end. And some of the actions that we look at to grow especially on the service side, grow the share of wallet with our key customers and then also take a leading position in digitalizing and plant autonomy in our industries. So I would leave this really the 2 major topics for the growth are, grow the service and grow in the area of digitalization and automation. Of course, we need to stay competitive and defend especially the position -- the #1 position we have in the pulp area but also come up continuously with new solutions for our customers like the CircleToZero and these type of solutions. And of course, then also to grow in the waste-to-energy area and maintain also the business that we have on the biomass boilers. Growth in the paper and textile area here mentioned on the board and tissue machines and then also expand offerings in that field but also then work with the complete nonwoven and producing more sustainable products for example, of the molded fibers but also into wipes, into tissue applications as well. And we will continue the complementary mergers and acquisition. And also as mentioned here, for us, the focus to grow our service business but then also the automation and digitalization. And of course, to all of the initiatives that we have set in each of the business area segments give us strong support and allow us to develop those technologies to create new businesses for us as well. As we want to grow profitably, of course, we need to make sure that we also keep our cost structure and cost under control. So of course, this is something relentlessly focused on operational excellence. This is something that is continuously that we're working on, looking at our complete supply chain and project execution. And also looking at the engineering and the location where we are doing certain engineering. And we want to keep a flexible cost structure because as you all know, there is some fluctuation in the Pulp & Paper, especially when we have these large orders. And I also see that with the new organization that we have in place, one common Pulp & Paper management team, we also have the possibilities to optimize and become a bit more efficient with our resources going forward. And also looking at that when we want to grow the share of the service and definitely improve that -- the profitability when we have additional service. Currently, we are in the range of 40%, 41% of the service. Of course, this is a share that we want to continuously grow. Then if we look on some of the growth initiatives that we have. And if you look at -- start with the textile recycling. And here, we have an EU directive coming 2025 that textile waste cannot be -- it needs to be collected separately and cannot be sent to landfill. So we see an opportunity for here to create additional value from the recycled textiles. And -- so we have a full suit in this area. So be it mechanical recycled be it then chemical textile recycling. And I would like to mention here that in November last year, we just opened up together with our partner, a complete sorting facility in France, where we can sort the textile, tear the textile, prepare it for the next stage. Does it go to spinning or would it go into nonwoven felt in the future. So we would -- we have the technologies available and this is an area where we see potential for future growth. Then if we continue in a bit on the nonwoven side, which was mentioned, the acquisition of Dan-Web. And this is a leading supplier in a wide range of technologies for the production of airlaid, nonwovens. And these are products like baby, feminine and health care products and biodegradable wipes. But of course, through this acquisition, it also gives us a fast forward in getting into the market of dry molded pulp packaging and parts. So getting away from the single-use plastics, so entering into that business as well with for example, lids, coffee cup lids et cetera, in that. Then another highlight is our CircleToZero with going towards zero emission and zero waste and as I have mentioned here, we have projects running. We have technologies running at our customers, plus we have also more in project execution. And here, really, the idea for us is to reduce, so really reduce the consumption of water, energy and chemicals. If we cannot reduce, I mean, then also reuse within the process itself. And then if we cannot reduce and reuse also then to refine and for new side streams. And these are also new revenues for our customers. And here, we have products like SulfoLoop, which is sulfuric acid production within the mill, Kraftanol is biomethanol purification and lignin recovery. And these are products and technologies that can be implemented into existing mills. When we have looked at the installed base, there's approximately 100 mills that we see that could utilize these technologies and there is a strong interest from our customer in this area, and we are continuously looking at developing also new processes in -- that fits to our CircleToZero program. Then a highlight on autonomous operation, and this is an autonomous logyard crane that has started up in northern part of Finland. The video is taking still in September. So there's no snow yet in the videos but it is in northern part of Finland. And this is a crane, a crane itself has very many benefits that it causes zero CO2 emissions. It is running on electricity. He has now reduced emissions and reduced the noise pollution because this is typically an area where you have mobile loaders emptying the trucks, emptying the trains and feeding either to the storage or to the debarking drum itself, a lot of movements. And of course, with the crane, it's also a big safety improvement that we can control all of this. We are in the ramp-up phase of this project but I would like to show you a short video of the movements and how the long yard looks like. [Presentation]

So going forward, in the start-up. So the autonomy, the AI will empty the trains. We will empty the trucks load automatically and store on the logyard. And with this also, you can get better transparency where certain logs are located in the log yard so you can have a complete transparency all the way to the final pulp from whose forest the wood has been cut, so that complete transparency on this. This is just 1 example of autonomy. We have multiple areas, for example, in the recovery boiler where we work with a lot of robots and the recovery boiler. Even if it's the heart of the pulp mill, it's one of the most dangerous places in the pulp mill. But here, we are working a lot with robotics and autonomy in order to increase the safety of those -- that operation. Then going to the financials. As here, you can see our order intake since 2018 to the last 4 quarters this year. And you can see that we have fluctuations on the order intake depends when we have booked these large greenfield projects. But if we look at the dark blue, we look at our service business. Here, we have had a very stable growth starting at EUR 911 million. Then in 2019, we had the acquisition of Xerium that bumped up the order intake. But then in 2020, we have a drop due to the COVID, but then quite a quick rebound back and then to the level of the last 4 quarters of EUR 1.6 billion. And if you remember on the graph that I showed on the market, you could see that there was a slight drop in the demand in '23. So we have seen this on the operational levels on the machines and this has a direct impact on our order intake for our production, consumables and wear products. And then you see the fluctuation from our capital business. And the last 4 quarters, we have not lost any greenfield project, there has not been decided any greenfield project in the last 4 quarters. Then looking at -- on the revenue. Here, we have had a good and steady growth from EUR 2.1 million in 2018 to a record of EUR 3.9 billion in the last 4 quarters with an EBITDA of EUR 420 million and EBITDA percentage of 10.6%. And here, we can see that in the last 4 quarters, 41% has come from our service business. And region-wise, we are quite in the last 4 quarters, evenly split between Europe, South America and China, Asia and then slightly smaller in North America. But looking at the targets and ambitions that we have on the Pulp & Paper side. We want to continue the growth. We want to continue growing with above 5% compound average growth rates, and we see our markets are growing. The additional -- the green transition is giving further opportunities for us to grow. We see areas where we can grow also on the market share. And as we want to grow on the share of service business and automation and digitalization. We have also increased our profitability targets to 11% to 13% going forward. The last -- looking back the last 3 years, we have from 11.4% to 10.6% in the last 4 quarters. And then last slide to finalize a little bit on outlook and how we're going to achieve these targets that we have set. I mean we have a strong position and strong presence in all of the growing markets and also in all the growing segments that we are in. We have a large and stable profitable growing service business. This is an area where we continue to invest in. It did the investment in resources, investment in manufacturing, investment in service center capabilities. And I see also with the new organization that we have in place, that being more united and focusing on our customers in our larger customer segments. We will be successful and we have the solutions and together with our metrics applications and simulation topics to further grow in the automation and digitalization area. And we have a proven track record in project execution, even in the times of volatility with COVID, et cetera, I think our references that we have speak for themselves. I think it's from the operational performance and the environmental performance of our references. And we will continue to focus on the mergers and acquisitions. And I think that especially we can utilize, we can leverage the good global standing and the reach we have within Andritz with -- when acquiring new companies. Thank you.

Thank you, [ Jake ], for the deep dive in the business area of Pulp & Paper. Now it's the time for our first Q&A session. Ladies and gentlemen, the floor is open for questions. I'm happy to see already the hands of raising. So yes, please raise your hand, and we will hand you the microphone.

It's Akash from JPMorgan. I have 2 questions, please. The first one is on flexible cost structure. I think when we look at the pulp order intake, it has been quite volatile, and you were talking about this flexible cost structure. Can you provide a bit more detail on what do you really mean by that? Like what are the options? Can you lay off people for time being? Or can you relocate their engineering hours where you basically give them more holidays in 1 year than the other. Or maybe it's like you can send them to other segments where there are growth they can be utilized there. So the first one is on a flexible cost structure. The second one is on the trajectory of growth because you see more than 5% growth on -- at a CAGR basis through 2026. But when we look at your book-to-bill, it's down this year quite a lot. And therefore, the question is how do you see the trajectory of this 5% or more than 5% CAGR from here, like the revenues? Would they need to go down first before they go up? Or can this still go up?

Thank you for the question. And regarding -- related to the capacities. Of course, now as we are in 1 complete Pulp & Paper business, area, and we have a complete team -- leadership team. Of course, we are flexible with shifting capacities where we see areas where we have growth. And we're not only looking at shifting where we can utilize capacities within 1 business area but we have the complete Andritz, all the business area segments that where we can support each other because as Joachim mentioned, there are -- the cycles are at different times and this is definitely something that we are currently already doing and utilizing. And then also within the Pulp & Paper area, we have also a lot of engineering resources in India, where we can, for example, flexibly use in for other business and segments as well. Then regarding the 5% growth target that we have set. Yes, we have the volatility on the capital side. But we see that we still have the potential to grow in the other segments, areas of segments on the service, automation, digitalization. We cannot, of course, comment when is the next large greenfield project being booked. We don't -- that is -- our customers are making those decisions. But there are projects that are being discussed and -- but cannot comment and know when they will be decided.

[Operator Instructions] And now we can take the next question from the audience.

Lars Vom-Cleff, Deutsche Bank. I mean, you showed the order intake, and it also follows what you just said. I understood. You don't know when the next greenfield project will be announced. But would you say we've reached the trough when it comes to the order intake in Pulp & Paper or could it be even lower or become lower from here?

The market -- market is growing. We see the demand is there. There is growth on that. I would say that if we if it look at that history, there are 2 years that there has not -- in the past, I think it was 2016 to '17, there was no big projects decided. Cannot say that have we reached the bottom or not, but we see that the market is growing.

Perfect. I see the CFO is already looking at me, so I'll stop asking order intake questions. Then the second one, I mean you also spoke about textile recycling and the business opportunities there and completely understood. But I have the pleasure to cover Lenzing for which the textile recycling business is still relatively small then there is [ renew ] cell with serious trouble when it comes to textile recycling. So when do you expect the business to finally lift off? Does it take until '25 until we see the EU directive or could it happen earlier?

I think that we have already seen it, and we see it on the mechanical textile recycling side, so desorting and the mechanical, of course -- those customers that you announced, of course, they are in the chemical recycling process. And this is also an area where we are continuously working with 2 of our partners but still are in the pilot scale. And when it will take off, I cannot -- and this is a discussion maybe to have it with our customers.

So maybe to complement the mechanical and chemical recycling is reality. We have, I would say, around 20 centers around the world, equipped with our machines. They are doing mechanical recycling of clothes and they produce new yards from that. So that is done and that is done on a surprisingly low-cost level. In particular, if you compare it to whatever is at the moment under development on the chemical side. So there is that reality, and I would say technology is ready for 2025. It's only 23 months away. So who has not planned what to do will not be ready by 2025. We know how Europe works half a year before, everybody will say, we need more time, then we will have a more transient time. But there is business and there is solutions. I think that is clear, and they are surprisingly good. We have opened a technology center in France in November where we can do an automatic sorting of the textiles and that is a precondition for everything. Mechanical or chemical recycling, if you cannot thought automatically, if you -- everything needs to be done by hands, it will never fly. And I think it's quite an impressive installation. In 3 sorting step, a textile is separated to 95%, 98% into its individual yarns that are included. So I would say we're on a good track. That's one of the areas where we see growth.

Okay. Then let's take our next question from the online participants, [ Sven Weier ], please.

Yes. I hope you can hear me. The first question -- the first question is on the group targets where you're aiming for revenues of above EUR 10 billion. And I think in the financial part, you say that is before any major acquisitions. So does that mean that you also aim to get close to EUR 10 billion organically? And the second question is, if I take the divisional guidances that you've kindly given and take the margin ranges, I would get to a group margin range of 9% to 11%. If I take the low end and the high end but rather a midpoint of 10%. Maybe you can also comment on that calculation?

So I would relieve [ Jake ] from commenting on the group targets. So we believe that we can reach the EUR 10 billion and that is based, and the rough idea is that we have a growth of approximately [ EUR 500 million ] coming from the normal growth of the services. And then we have about EUR 1 billion we expect from these particular growth areas that I mentioned like the electrolyzer, green hydrogen, carbon capture batteries. So that would be in a rough idea how we believe it can be done.

Thank you, Joachim. Do we have more questions from the audience in live [indiscernible]?

Daniel Lion, Erste Research. I would like to follow up on the number crunching. Can you provide maybe a reference or a comparison of the revenue share that you expect by '26 compared to '22, '24, '23 in terms of Capital business versus Service business, what would you expect? What are the basic assumptions of the 5% CAGR then by '26. Will this -- will the share change of services massively? Or do you expect it to remain more or less stable, so the market coming back by '25?

Yes. So the -- we do not -- unfortunately, we will not see a significant increase in the share. We are at the moment, I think it in total [ 40 ], yes. The new technologies we are investing in, they basically come without service in the first years. We get an order intake delivery time, we are talking 12 to 24 months. So then it's in start-up. And I would say a serious Service business can be established after 3 or 4 years, yes. So over that period, due to the much more new projects and new technologies. I would say the share will not increase. But in absolute numbers, it will increase. And in the -- and what we say the legacy business, the share will increase, yes.

So this implies also that we will see a cap rebound in the market by '25 or somewhere during '25, right? Otherwise, this might get difficult.

Yes. We see in all areas, there is the need to invest and we believe that we can take certain shares. We know there are cycles. And we cannot time it on a quarter, yes but we know it will come.

Thank you. Then I think we will try to take the next caller from online audience. There is a person from Germany who has called in but has not typed in his name. So the person online who recognizes him or herself from this description. So please go ahead with your question.

Christoph Blieffert from BNP. I have a couple of questions on Pulp & Paper, please. With the rising service share, you have been able to generate an EBITA margin of some 10% plus over the last couple of years. Could you please explain what brings the margin above 11% in the years to come?

Years to come. I think it's the increase in our Service business, and we continue with our continuous development on the operational side with our supply chain and also on the engineering side. I think this is the areas for us.

Okay. Can you please disclose your target of Service shares for 2026?

It will grow from 41%.

To 41% plus, yes. And can you help me understanding the margin difference of new -- on the new equipment side, if we compare [ $1 billion-plus ] greenfield project versus a smaller order.

I see our CFO would like to...

Because this question comes all the time, we are well prepared to answer that, Mr. Blieffert. It something in the -- something around 10% as a margin difference, I explained this very often already. And you can assume for the future, it's targeted to stay in that range because as well as in services also in capital, we want to try to improve the margins.

Okay. Can you give us some indication about the revenue base you have already generated with your textile business and what we can expect in 2026?

This on -- detailed figures on this, what we have generated on the -- especially on the Laroche -- on the mechanical textile, I will need to come back. I don't have that on top of my head on this.

Okay. And that's the last question. Could you please help us understanding what amount of which percentage of price increases you have embedded into your 2026 guidance?

Price increases, I think.

For Pulp & Paper.

I mean, of course -- I mean, we work on the cost structure that we have continuously and naturally, of course, always try to improve our margins through our costing and also through pricing.

[Operator Instructions] And now the next question from the audience, if we have one. Yes.

It's Akash, again. So a couple of questions. The first one is on Pulp. You have gained market share in the last 10 years, and that's driven by technology where I think your technology was a bit more superior than your key competitor. The question I have is that, where do you stand on the technology, like is it still the gap versus #2 in terms of the yield or whichever way to define the higher productivity is still there? Or are they catching up? Because as you have ambition in paper, I'm sure, they must be having similar ambition in pulp.

I cannot comment what our competitors are doing in this area. But definitely, I think that we have the technology answers -- technology advantage. And I think that we have proven this with operational references what we have and the achievements that we have. And of course, we continuously develop. I mean we know that we are #1, and we will defend this position, and we will defend it also from developing further our technologies, achieving faster start-up curves that reducing the chemical assumption. This is for us a normal day-to-day that we will continue developing our technologies to even become better and better.

And then the follow-up I had was on the underlying midterm market growth that was on Slide 10. So you show service sales will grow 2% to 3%, and I guess everything is growing 2% to 3%. So is this underlying volumes? And then, let's say, if there is continued inflation than we should be adding on top or this is in euro term or?

It is the volumes.

Then we still have time for 1 final question, and that question goes to [ Sven Weier ].

Follow-up question. And that was again regarding the group margin targets, which I asked previously because if I do the calculation, I get to a group margin target of 9% to 11% in the high and the low end. So that's the first one. If you can comment on that. And the second one is a Pulp & Paper question. I mean if I understand you correctly, you're also targeting more the board machine markets? And if that was true, I was just wondering where you see your edge? I mean, Valmet and [indiscernible] are extremely dominant in that market. And was just wondering how you intend to take share there.

So I would have been surprised if your calculation is wrong and you're absolutely right. And this is why we are giving the -- our ambition and the target above 9%. And of course, this depends a bit also on the volume in which business area. And therefore, yes, we can confirm what you have calculated.

And then on the board machine comments, as we know that we are #3 in the market but we see the opportunity also for us to tackle in that. And we have successfully already done machine conversions from printing and writing to packaging. We have supplied new machines in the area of MG paper. And of course, we will utilize the strength that we have. I mean, we will be selective in these projects where we go and where we can create the value. And I do see here as well. I mean especially on the market share that we have gained and the project execution capabilities we have within our group is a strong value-add asset for us also in this area.

Thank you for all the good questions. Now it's time to move on to our next presentation and we will take a deep dive into hydropower. I'm pleased to invite Executive Board member, Frederic Sauze to the stage.

Good afternoon, everybody. My name is Frederic Sauze. So I'm an Executive Board member of Andritz since end of March last year. I was -- I'm a European, born in France, also holding a Mexican passport. I have a bit more than 30 years of experience in the power industry. And I've been joining Andritz 10 years ago, where previously I was holding operation in Americas. So I will take you through this exciting journey of hydropower, which is one of the oldest renewable energy in the world. So as you can see here, we are officially in charge of supplying electromechanical for hydro power plants, and I will develop that a bit further. And this journey has started decades ago, century ago at the end of the 19th century. So you could see -- you could say it's an old technology, providing less opportunity for change, for innovation but it comes back at the heart of what is today's decarbonization policies. Andritz with 470 gigawatt installed worldwide represent 1/3 of the total worldwide fleet. So it's an impressive background or different trademark starting with a service, general electric and so on during the history of the company. So we provide innovative solutions, as I mentioned, from very small hydropower to very -- to the largest power plants in the world. We have digital solution that I will develop initiated mid of the 2010s. And we are very active in servicing our customers and some additional activities. So what do we do? The large Hydro segment is our largest segment where division -- where we host our capital projects for greenfield, and I will develop that but also for the very complex large brownfield modernization. The Compact Hydro segment is serving power plants with capacity by units below 30 megawatts. It's quite small one, river flow with a lot of orientation to environmental protection, sustainability through oil-free solutions, fish-friendly solutions. This is how we deal with this segment. The service and rehab is very important as is explained through our Group strategy, and I will show that to you. In the Other segment. This is a bolt-on segment coming from our technology. We master generate technology. So we use our technology from hydro to serve other industry segments like the thermal applications. So we sell turbo generators mainly to open gas cycle suppliers. So this is how we are organized within hydro. In most of the segments, as you see here, we have either #1 or #2 position, oscillating with some of our peers, but this has been always a leadership position. Compact Hydro is a much more dissolved division with many competitors. Here we have made the choice some years ago to prefer profit to volume, and this is where we are positioned in terms of sites. Our employees are, for half of them, based in Europe, serving the EMEA markets, but also serving as competent centers supporting our rest of operation worldwide. So this is important because we have four-eyes principle of most our processes to mitigate risk, and this is going through our base employees in Europe. You see from the revenue perspective, we have a pretty good share of representation of our employees worldwide, mainly through the service approach, but also through capital approach, to be as close to our customers as possible, either at their headquarters, a lot of them are based in Asia or in Americas, but mostly also at their sites, construction sites. So what do we do physically? You have this schematic cut of typical reservoir with the powerhouse. So we are not active on civil engineering. We normally see and attend separated packages on the market, the civil construction being attended separately. Sometimes we join forces with civil construction companies. And we cover all the rest of the electro and mechanical equipment between the water intake up to the main substation. We call that water to wire. And this is our strategy through turbines. As you can see on the left, gates to regulate the water intake in the powerhouse. Generator, the blue circle at the bottom, you see a cut of a powerhouse where turbine generator are stacked and closed. And the electronic portion of the control of the power plants, to be able to regulate the energy supply to the grid. So our products and solutions are obviously sustainable. I explain it. The first power plant worldwide were delivered at the end of the 19th century. And since then, this is completely an emission-free environment. And in terms of sustainability, as I said, we work on avoiding contamination through oil, protecting nature through these fish-friendly solutions. What is very important is hydro and the renewal of interest of hydro is actually the booster or the only green enabler for more wind and solar. So everybody is betting on wind and solar, rightly, but wind and solar, due to the intermittent power and energy supplies to the grid, is not sustainable in such. It requires grid regulation to ensure grid stability. This can be done through oil and gas solutions. And this is one of the reasons where we see our turbo generator business growing because we sell a lot of open gas cycle solution, which are flexible to regulate the grids. However, this is contaminating. Hydro is, in terms of base power and storage power, the regulator, the natural green regulator, acting as a large battery. So this is one of the most important driver of the renewed interest in the hydro power industry and what should drive our growth, profitable growth, in the short and medium run. So since the Paris Agreement and recently renewed at the COP 28 in Dubai, there is clearly this commitment to triple renewable capacity by 2030. So this will mainly happen through wind and solar PV. But as I explained before, with the direct impact in hydro. We will also see the fact that hydropower as a renewable source, massive source, of energy will be an enabler as well of the strategies regarding green hydrogen. So the growth of the business, the base growth, as we see it, as we plan for it, is quite limited. It's a continuous growth of project. However, we've seen special growth those new interests for pumped storage, in the storage and availability of power environment, and for synchronous condenser, which are natural technological solution to regulate grid stabilities. So the synchronous condenser are also a derivative of our generator technology, which is basically a generator producing reactive power. And therefore, we can offer that, and we have started to offer that in the past years. We will continue and attempt the growth of this short, medium-term market. In Compact, we are seeing more and more complex, larger compact project. This will be our main area of interest as we can provide more efficient technology and better margin. Service will grow through digitalization, operation and maintenance automation. I will come back to that. So the picture of the market over the last few years, we are seeing, in gray, a decline of the fossil energies to lease space, in blue, to the renewable energy. You all know that. This is a tremendous increase, mainly driven by wind and solar. We see that on the middle chart where the investments have been significant over the last years. Although the hydro investment is low, this is an additional capacity because we have seen a downturn in traditional countries like Canada, like Brazil, with less new power plant, but this has opened the door for modernization to extend life cycle up to 40 years, but also to change the operating modes of the power plants. Because those plants were used to be used on continuous basis, river flow or through dams. They are now really served to regulate the grid and the systems. And therefore, they are more stop and start. So a different -- completely different mode requiring different design of the components. In Generation, hydro remains the largest renewable energy use, either on base power, mainly for this river flow operation, a lot of reserve power, as I explained. But in gigawatt hours -- terawatt hours, this is much higher than even solar or wind. So what we are doing, we are cautiously planning the growth, as I explained. And those project of pumped storage, some mega projects of synchronous condenser, some big projects in Asia or in Africa, are not planned in our figures. We try to cautiously plan that, because they are digital, so sometimes we win them, sometimes not. And we are dealing with them separately. But what you can see on this left chart is a renewed growth over the last few years with a major number of those projects. We got one 2 years ago in Mexico, a large rehabilitation project, close to EUR 1 billion, just below EUR 1 billion. We got one this year in Asia, a project of around EUR 500 million. So there are a few of those projects, and we have a few in the pipeline. Obviously, we are striving at getting them in our order intake. In positioning on the market, on the right side, Andritz has been holding, as I said, a position between #1 and #2. The average over the last few years shows a clear position #1. This is a combination of capital project and service activity, we are from far #1. So what are our strategic directions? To serve this market and to enable profitable growth. Greenfield first. So this is -- this was probably a dream a couple of years ago to talk about greenfield, but we are seeing, mainly through this pumped storage approach, a renewed interest, as I mentioned. This, coupled with the development of Africa where we are seeing more feasibility of the mega project, the big known projects in Africa for base load power, we believe that this greenfield segment will start to grow again and to provide significant order intake. For that, we are looking at getting closer to our customers to share risks on the project. In the typical contracting mode that you know from the market where the projects are tendered and we win on fixed price; we win projects sometime up to 6 years, 8 years, and we face all the risks. We've mentioned in the introduction the risk of supply chain that, due to COVID and then to the political unrest worldwide, have really been struggling. All of those risks, I would say, or most of those risks were with us as technology provider, for raw material, for logistics and so on. So this -- our market, our customers are recognizing that. And rather than going through this typical buyer and supplier relationship, they are looking through competitive approach to select and preselect partners to codevelop the projects. And to progress phases by phases through the engineering development, the supply chain, the installation, and share the risk and revalidate the costs step by step, which is an approach which eventually enable the timely delivery of the projects on the market, which is important for them and obviously important for us. Pumped storage, I will develop it a little bit more. And as I said, conventional projects, a lot in Asia and some apparent growth in Africa. So regarding the split of projects. The conventional hydro project, big projects still dominates through what I just said in Asia, Africa. But we are seeing this important growth, on the right, of pumped storage, representing roughly 25% of the future installed capacity, with a majority in Asia, China, India, but also very importantly in the rest of the world as we see projects running. We have projects in our backlog, not only in the Americas but also in Europe where the interest and, more than the interest, the need is there. So you see on this map that worldwide, we have a pretty balance of our offers between those conventional projects: the rehab modernization project, the pumped storage or the large compact hydro that I mentioned. So developing a little bit the need, the innovations and the evolution. This is quite a heavy slide. But IEA is classifying countries' grid by phases. And the phases is the share of variable renewable energy on the grid. So you are seeing that, this is no surprise, most of the countries, which a few years ago were in Phases 1 and 2, are now reaching Phase 3 and above. Phase 3 and above, that requires grid stability solutions to enable quality supply of energy. If not, you will have breakdowns of substations, you will have power cuts, because of the intermittency provided mainly by wind and solar. So what are the solutions to those intermittent impact on the grid? They are -- the 3 of them in our portfolio in Andritz hydropower. The first one is pumped storage. Pumped storage at the contrary of battery or complementary to battery responds to medium-term storage, a medium-term response. Battery will be enabled to respond in terms of seconds, in terms of minutes, probably a few hours. Hydro is complementary. We start at a few hours, but we can provide energy for weeks, even months, depending on the storage capacity. So we will see in the last -- I jumped to the last leg, which is this hybrid solution. A lot of combination both on storage between battery and hydro pumped storage, at grid level, at development level of new infrastructure, but also in the terms of operation, because we are combining in operation ourselves, or together with our customers, solar power, wind power, hydropower with pumped storage to provide this stable quality energy to the grid. So this is a clear trend in the market, and we are already -- we have in our backlog project like that. I will show you a few. And we are planning to get more of those projects over the coming years. The synchronous condenser, I've explained before, I'll come back to the details, is obviously the other leg -- important leg to secure the stability of the grid. So pumped storage, what are they? Basically, it's the same as a turbine, but the turbine work sometime in generating energy, sometime in pumping water to the upper reservoir of 2 reservoirs in order to have the storage. So this is regulation between either pumping or generating. Different modes. Obviously, watching the electricity prices, but more and more responding to some specific compensation from the market regarding those storage capacities. They are sometimes segregated, between pumps and turbine. And we do offer those 2 solutions in our Andritz portfolio. The synchronous condensers, I will not enter in too many details, but this is providing several needs in the grid. What is important, with the retirement of old oil and carbon solutions with boilers, we are losing inertia from the grid. The inertia was given by this kind of application compared to wind and solar which doesn't provide inertia. Our hydro synchronous condenser are bringing, in addition to other factors like voltage support or reactive power, bringing this inertia to the grid. So this is something which is required in the long run, that in an evolution with more wind and power will require this technology, which is a transition technology to support this inertia requirement of the green. The short circuit power is also a long-term need because you can have failures in your substation and you need to absorb suddenly in excess of voltage on the grid. And therefore, you need this kind of solution to absorb that and avoid grid disruptions. So this is, in a nutshell, not a very efficient solution in such, but a necessary solution needed for grid stability. We see that in some countries where the regulators are imposing to the big wind farm or solar farm to include in their substation synchronous condensers to provide this quality energy to the grid. So we have projects in Brazil, in the U.S., in Australia, because the regulators or the operators themselves recognizes these needs and invest in this kind of equipment. For hybrid, it's an example of one of our running projects, Kidston in Australia. So it's a combination of, sorry, yes, a solar PV farm that you see in the background of the picture, and a pumped storage in the front part. Pumped storage between 2 reservoirs, you pump up to the upper reservoir, you generate on the lower one, and this is like a closed cycle. We have a number of those projects running worldwide, including in Europe, which is a tremendous change of the market over the last 2 years. You see in the graph the natural combination of both. You have solar power during the day. You don't need so much of wind or whatever you have as base wind, which is the green bottom line. And you only use hydro generation when you don't have that wind or solar available. And the rest of the time, you pump hydro or generate depending on those trade-offs and regulations. The second strategic leg is brownfield. As I said, this has been the reason of the survival of hydro with the downturn of mega capital projects over the last few years, mainly in Europe first, then in North America, Latin America, because of the reason I explained before. This modernization needs extension of lifetime and flexibility needed in different operating modes. We are seeing that the share, in gray, of brownfield projects, modernization projects, are continuously increasing. The power plants are aging and the need for stop-and-start operation at lower load, higher load is needed from our suppliers. All of these triggers these kind of big projects and profitable projects. The other leg of our strategy is our digitalization approach. We have 2 solutions running. One is what we call Metris DIOMera in this matrix approach that the Group has developed. We started that more than 7 years ago in development. So what is it? It's a strategy to enable better operation and maintenance of the power plants through digitalization. So we are -- we have developed product by product, turbine, generator gates, everything you saw on the pictures, solutions, which enables remote control of those equipment, a little bit as the airplane engine suppliers are doing with their engines, on behalf of our customers. So we do that alone if we get such a contract, or we do that through the customer, if he doesn't want to disclose some of the data, because obviously, as input, we need their operation data, and importantly, we couple that with our design data. So the mix provides a unique solution, which is much better than only the operation data, because we can move into predictive maintenance from the traditional preventive maintenance approach. So we are running that in a number of projects. And for the last few years now, we are making a 2-digit million order intake per year. This is coupled with maintenance programs. The other important leg, which is not new, it's all the automation part. So we regulate the use of our power plant. Most of our medium -- small, medium-sized solutions are remotely operated, not in the power plant. And this is through control systems, protection systems, excitation system, all the electronics needed to operate the regulation of those power plants. And we have integrated, as most as we do in our Andritz solutions from cyber protection, in-house solutions in all our equipments. And finally, the last leg -- if it comes. Yes, sorry. Last leg of our strategic axis is service. Probably hydro compared to the other products and solutions we are offering that you will see -- you have seen in pulp and paper, you will see the rest of the day, is a bit less oriented -- not less oriented. We have less service opportunities. We have less wear parts and so on. But anyhow, we manage the typical service attention through spare parts, training, troubleshooting, diagnostics, and a significant portion of what we call system rehab. So when we modernize a power plant, this is a large hydro project, as I explained, when we only modernize one system like a turbine, like an electronic system, we do that from a service perspective. It's quite short-term projects, close to customers. And those are impressive increase. We will see that in the financial, due to our proximity to the market and to our customers. We also enjoy a nicely spread worldwide service network based off offices, service workshop, with the concept to be 2 to 4 hours away from our customers. So on reactive demand, we can intervene and we can visit them and be close to them whenever they need. So this has been one of the secret of Andritz being successful in service. So what does it mean in terms of financials? In order intake, the market downturn that I was referring to, you know, you'll see the market figures, we had exceptional years beginning of 2010s, and since 2014 we have seen a real downturn. This is changing back because we are seeing in '22, over the last 4 quarters, a rebound of projects enabling us to come back to the previous volumes that we were seeing in the 2000. Two important things here to mention when you look at the graph. Obviously, in the downturn, to remain profitable, and we have, compared to our peers in the market, remain profitable, we had to do a lot of restructuring. We focused energy trying to preserve the technological knowledge of the company in engineering, in R&D, at site, all those critical competencies which are needed in our projects. And this has been the right choice because those are quite limited resources worldwide. In terms of -- the next message is the expectation from our customers. Obviously, they want us to run the projects on time, as I said, and everybody is saying, okay, fine, we have big plans. Canada has -- Hydro-Quebec has renovation plans of tens of units over the coming 15 years. Same for other Canadian customers like OPG. You go down to the U.S., go to Brazil, come to Europe, go to Asia. There are a lot of plans. All of this requires resources. So their concern is, how are you going to address this market growth with enough resources, taking into account that we need some customers, you need some, your peers need some and your suppliers needs as well, in the context of quite significant retirement period and so on? So as I said, this consciousness was developed in Andritz through the restructuring program several years ago. We maintained the base workforce. And we started at that time knowledge transfer programs through apprenticeship programs, through graduate programs, trying to attract more people to the industry. So we are in that journey, not only our sales, the industry is in that journey to be able to face and sustain those important growth that we are seeing in the market, and we believe we are ready. So order intake I have mentioned. This is -- the rebound is enabling us to refurbish or replenish, sorry, the backlog. So we are seeing a backlog in excess of around 2 years of revenues or sales which is very good. You understand, one, in hydro, most of our projects are long-term projects, so the time between order intake and revenue is phased out a little bit. So we are seeing a gradual transfer into revenue. And therefore, this is moving to a continuous growth that we will see in the objective slides. In terms of EBITDA, as I said, we managed to preserve positive EBITDA over the crisis years, the last 6 to 8 years. However, we believe we can grow that. We have launched, obviously, through restructuring a lot of improvement projects in our operation, cost optimization, in our projects, in our labor force and so on. And we are looking now at putting -- in mitigating risks in the market, enabling better margin to come into our projects. So the combination of both of those actions, together with the renewed volume on the market will drive our profitability up. The share of service is important. But as I mentioned, there is a fairly big size of capital kind of projects in this service activity when we look at system refurbishment. And the spread, as you can see here, is well balanced between the different worldwide macro regions. So we are not seeing one dominating regions like Asia, as it has been the case at one stage, or South America. It's well balanced between the different continents. Most of our activities are in large hydro, in service, as I mentioned. Compact Hydro, we made that choice to prefer profit than volume. But we are now able to gradually grow again through digitalization and environmental-friendly solutions. So this is the base of our targets, where in terms of backlog, we will secure this growth of around above 5% per year in the coming 3 years. And we will strive to increase that further. And in profitability, even if we are still suffering from older legacy projects, the new projects are coming with better margin with stronger processes, as I mentioned. So we will reach this window of 7% to 9% profitability. So in a nutshell, I hope you understood the message. Although being the oldest renewable energy source, hydro is in an innovation boom, in a development boom. So we are seeing big projects coming back. We are prepared to face those big projects. We are prepared through capacity adjustment to face them. We are -- we have the right digitalization and service approach to help our customers and team up with our customers wherever needed. So these are the good base for our profitable growth. Thank you.

Thank you, Frederic, for the deep dive into hydro power. And now we will open the floor again for questions. And before we start, I would like to remind the online audience again that follow the instructions on the screen and remember to press # 5 to enter the queue. And yes, now get started with the questions. Do we have a question from the audience here.

It's Akash here from JPMorgan. I have 2 questions, please. The first one is on your market outlook. Like again, when I look at that, it's low single digit you are talking about despite you are sounding a bit more optimistic or bullish on greenfield. There's a growing momentum on pulp -- pumped storage. And I mean, if you look at other renewable technologies since passage of -- or since Paris Accord, we have seen how the outlook for wind and solar has revised up. And again, there is some momentum in hydro as well. So the first question is about 2% to 3% growth, that how do you come up with that low growth number? And then the second one is on margin. If you look at your margins on the last 12 months and then you have a 7% to 9% target, can you tell us what are the drivers to get to 7%? How much of this is internal versus external? Thank you.

Very good. So on the growth itself, 2% to 3% is, by extrapolation, what we have seen from the market up to now. So that's how, we have been planning cautiously, being cautious to make sure that those big projects in the market are coming. But as I said, in addition to this 2% to 3% growth, we have those exceptional growth lines that we saw through synchronous condensers. You are talking of projects in 2 digits millions or some groupment of synchronous condenser which can go to the EUR 100 million. You have some additional pumped storage where, in addition to what we naturally plan in our 2% to 3%, we are striving to get more. So this will enable us to get, in order intake, more surely above the 2% to 3% growth. In the profitability line, I think it's a balance between both the internal and the external impact. Internal, it's the obvious process improvement. We are looking at more digitalization, we are looking at more efficiency on our processes, the normal approach, but this has been significant in engineering and at site mainly. Supply chain, we have, through the crisis, really developed macro regional supply chain by localizing in China with Chinese standards, in India with the Indian standard, in Brazil with Brazilian or South American standard, and obviously, in Europe, the stable supply chain we had from the past. So we can respond, depending on customer needs, through different supply chain modes. If a customer prefers a local supply chain like in North America, in Canada, we can do that, or Europe. If customer prefers price or cost, low cost, we can implement in our supply chains some low-cost countries supply in combination with European or North American supply. So this has been a lot of improvement on the internal side to make sure that our costs are right, rightly calculated, and flexible enough to answer and maintain the profitability. The increase of volume from the market, and this more cooperative approach between our customers and us in sharing risk, is the external enabler, which will definitely enable us to come back to this 7% to 9% profitability.

Do we have more questions? Yes, please.

Teresa Schinwald from Raiffeisen. 2 questions. First, on hydro as a renewables technology. So PV and solar, they had this amazing learning curve and cost reduction versus hydropower, and hydro has been losing out on that. Do you see a potential to improve on that, on the learning curve, on the standardization in the whole industry? That's the first one. And as a part-time utilities analyst, I find the synchronous condensators pretty exciting. I also know the regulators and the obstacles they might pose. So what's your time line for a takeoff in the developed markets like North America and EU for this technology to really make a difference also in revenues?

Okay. So yes, so I'll start with the synchronous condenser. It has started. Our first project were won in Brazil already a couple of years ago, in the middle of COVID, through a local regulation. Surprisingly, because Brazil is a heavy hydro supplied market, but the growth of intermittent has been significant. And in specific area of the country, they need those over-energy absorption solution. So we have sold already a couple of projects. We are in the third project execution there. The U.S. regulator already have included in their needs for big farms, so this is mainly offshore wind farms. They imposed to the investor the quality supply from the grid. So they have to put in their onshore substation a synchronous condenser for the benefits I have explained there. So we have a project running in the U.S. In Australia, we already -- it's already our second project in the backlog. This is starting. The announced plan for Australia are big, because, as you know, Australia is mainly dominated intermittent power country with big plans of growth. And they have put that in their regulation to our customers, who are the generation companies or the grid companies, are investing on that. So it has started. We are just planning now for the increase of volume based on market input. As you know, Europe has started somehow and have big plans in the key intermittent countries like Spain, like Germany and so on. So this is -- those are the markets we are attending, with a unique solution, which is based on our [ salient pool ] technology, providing not only this reactive power but all these things I've explained in inertia, in short circuit contribution and so on. So the -- just to remind me the first question because I lost track.

It's about standardization in hydro.

Yes. In our electromechanical world, this is, let's say, a standard approach. I've mentioned the use of local standard in India, in China. We are always striving to make our cost as optimized as possible. So we are, let's say, we are -- we have been doing a lot. We can still do a lot. The further cost reductions will happen mainly in our supply chain, working closely to our suppliers, and at site, which are those, let's say, more risk exposed area. Most of the difficulties you have mentioned, on the standardization and the cost compared to solar and wind, is coming for the development of big projects, either through reservoirs or sometime on river flow. Obviously, there are country regulation enabling that to happen more easily. We are obviously, through trade associations, trying to explain that to the market, to the different regulators. But what I'm recently hearing, and you were hearing that from Europe, which is a very strong market in that respect with a lot of experience, but also with a lot of expectations and requirements, there is this push. We see it in Spain, we see it in France, we see it in the Nordics. So there's really this push for pumped storage and for potentially additional hydro capacity. So I think on the civil side and on the permitting side, this is where we need to see some additional improvement. And we're obviously supporting our customers and our partners on that.

Okay. Then we take one more question here from the audience before we go online.

Lars Vom-Cleff from Deutsche Bank. 2 quick questions, if I may. You've shown us your envisaged growth by region or by continent. I'm not sure you want to share the details with us, but at least it's worth a try. Would you be -- are there margin differences between the regions? Would a shift more business in Asia with regards to the portfolio help -- be a headwind or a tailwind for your margin? And then the second one, you also showed that there's kind of a ratio order backlog to revenue of around 2x mas or minus. Do you expect that to stay the same, or shall we forecast rather a growing order book given the current client demand and the attractiveness of renewable energy and power? And then you work down the order backlog over the next couple of years?

There are worldwide difference of key markets. I can develop an example for China. The Chinese market is highly competitive, difficult to access for non-Chinese companies like us in technology, but margins are extremely low. So we prefer in Asia to attempt non-Chinese projects. In order to get there, the answer to the rest of your question, what we see, a pretty much equal market value. Our investors are, most of them, worldwide oriented, so they know the prices and the costs in the different region of the world. As I said, sometimes they will impose or request some specificities in the supply chain, which can be cost-bearing a little bit. But in terms of margin, they are pretty much the same in most of the other projects. We try as a company taking into account this increased level of demand to be a bit more selective and prefer profitable projects. So -- but anyhow, on the other projects we work closely with the customers to try to drive through those cooperation agreement, early contractor involvement, some ideas how we can make the project profitable, mitigating our risk and enabling our margin, as I mentioned.

Okay. So Sven Weier, if you are really quick, so we have time for your one question before we go to break. Please, Sven.

Yes. I supposed it'd be brief. Just on the growth outlook, I was just wondering if you could comment on the positive impact from the IRA in the U.S. And also talk a little bit about Africa, because, as we know, the greatest untapped hydropower potential is in Africa. Last year, it hasn't gone because of political instability. Do you see that change? .

Yes. Thanks. So IRA is Infrastructure Act in North America, in the U.S., is mainly used by our customers to develop their projects. So a lot in innovative areas, synchronous condenser can be one area for us, obviously, all these green hydrogen environment and so on. But also for innovative pumped storage solutions, we are seeing a huge mobilization of our customers, most of them being government-owned, trying to use this IRA financing and support to develop their projects. That's how we are actively using it and incorporate it. So this is what I meant by seeing in the U.S., in addition to Canada for North America, growing significantly in the kind of projects I've mentioned before. For Africa, the projects in Africa are existing. Political unrest and stability is obviously one threat. But we are seeing a lot of interest from the traditional utilities combined with oil and gas utilities interested to, let's say, to diversify, teaming up with electricity utilities, really pushing through governments -- government relationship. So this is Europe, this is China, this is different governments worldwide, to develop those projects again. And here, we are well positioned on some of those projects with the innovative technology. So this is where we can cautiously but surely over the coming years plan some megaprojects growth.

Thank you for all the good questions. And as mentioned, so now we will have our half an hour break. During the break, there will be some light lunch served in the [ floor here ]. The program will continue 1:45, and I look forward to seeing you all back then.

Thank you. [ Break ]

I hope you are all are feeling refreshed and ready to continue our journey through the dynamic world of Andritz. We will start our afternoon session together with Metals business area. And I'm happy to welcome Joachim back to the stage after the video. [Presentation]

So welcome back, everybody. I hope that everybody online had an as good lunch as we had. We managed to import apfelstrudel to Leipzig that you could at least get the feeling of Austrian or an Austrian company. And I see that it was, apparently it's quite good because many people chose it. So going to the serious business and moving into Metals. We have a -- in Metals we are -- we have organized our business into what we call business area segments, The one we call Metals Processing and the other we call Metals Forming. And I already excuse myself for maybe a disturbing language. The majority of Metals Forming is Schuler and sometimes, because I'm so familiar in my talks with the customers, sometimes I refer to Metals Forming as Schuler, which I should not. So I will try to stay. But if I do, then you have to do the connection and the thinking accordingly. So that's for that. What we are doing in the Metals area, we have a complete value chain for the processing of cold rolled strips, from cold rolling, the processing of that cold rolled strip through pickling, annealing, galvanizing, finishing, whatever you need. And we do that all for carbon steel, for stainless steel and for aluminum. Then once this strip is finished, it can be processed into something else. One of the main applications for sure is automotive industry, outer panel parts, inner body parts, white goods and so on and so forth. The main technology that is then used is pressing, cold pressing, of sheet metal. That is the main part of the business in what we call the Metals Forming, representing about almost 40% of the entire business area matters. Then we have hot forming that is basically forging, open die forging, closed die forging that -- and the associated heating [ antitreatment ] equipment that stands for approximately 10%. And then we have the battery lines, our new hope for the future, huge growth potential, which at the moment represents about 7% of our sales. And then we have underlying, of course, the service business, where we provide all services from OEM parts, local support, repairs, upgrades, service agreement, on-site maintenance and so on and so forth. In total, we have about 6,000 employees worldwide. And majority -- not majority, 50% of them are in Germany, and we are striving to increase the internationalization of that to move more -- to move more of the -- of our employees closer to our customers. As you know, local for local is one of our main strategies. With the acquisition of our -- of a Chinese press manufacturer -- press supplier, Yadong, we have nicely grown China now to above 20%. And also here, the tendency is definitely increasing. Then we are quite well balanced. We have Brazil and U.S., almost 10% each, quite important as Brazil basically serves as the manufacturing hub for North America. And with the investment -- the significant investments which are going on now in North America, it is quite important to really reinforce this access. We have in across the Metals business, we have a strong demand and good development of our metal solutions. And that is for these asset optimization, process optimization solutions that we already went into a bit in my first discussion, also [indiscernible] elaborated on that for Pulp & Paper. We have in the special application, what we call for process performance is the visual die protection that ensures that the press is ready to go down. As you might imagine if you -- if there is a part in such kind of press in between, especially if we talk about cold -- cold sheet forming, then the press is at least at risk, and the tool on the die is definitely damaged. So we have camera systems and very high efficiency systems there. Track & Trace, we are now going the way that we are -- that we can connect the properties of the workpiece from the steel history, but also the geometrical properties with the physical location of these parts in the supply chain, which is of great help and taking out a lot of cost in the supply chain and in the car manufacturing, respectively, in the final assembly. We have -- we have worked over the past 3 years intensively to also increase the amount of sustainable products and solutions in metals. That's in -- for the Metals Processing part, we are focused on, in particular, silicon steel for grain-oriented, nongrain-oriented applications for electromobility. And of course, what is called AHSS steel. So advanced high-strength steel, which still is the main driver to bring the weight down of the vehicles. Regardless whether it's battery electrical vehicle or internal combustion engines, the weight of the body is still the main driver of what can be done. On the steel processing, we -- main focus is on the green steel applications. And also here, we have -- we have these green steel galvanizing lines as well as that we connected several new applications with hydrogen burners, basically developing that technology. And at the moment, a lot of pilot installations are going on, waiting for the economically availability of green hydrogen for these lines. And then you see on the battery lines are definitely our main product here in the Metals business for the future and for the future growth potential. So a quick review since the last Capital Market Day. On the Metals Forming side, I think we can happily announce that the restructuring is done, is successfully done. A lot of work has been achieved. We analyzed the portfolio. We got rid of certain products, which did not really fit and were hurting our profitability. The organization has been streamlined. The breakeven point of the organization in Metals Forming has been lowered by roughly EUR 200 million. We have closed certain locations, and we definitely put a lot of work into improving the processes, in particular, the project management process as we had to avoid the cost overruns in the large projects in order to regain the profitability. You could see that the personnel reduction, the headcount reduction basically happened in Germany, and it was reduced by 1,600 people within 3 years, seen quite an impressive achievement. Bearing in mind that during that time, we had ongoing orders. We had ongoing supply chains. We had commitments. So all these supply chains had to be relocated and shifted. We delivered -- we continue to deliver in time and within budget. And I would say it was really successful and now with the cost position lowered significantly, we are ready to grow and innovate. On the Metals Processing side, we had a restructuring ongoing that was not as much associated with capacity reduction, but it was more associated to improved project performance, improve the project management and make sure that various highly valued competence centers we had could work together as a team towards the customer. And that definitely has been done. On the cost side, we moved a lot of engineering out of Germany towards the markets of our customers in Asia, but also in South America. The growth was mainly done in carbon steel, where we had, I would say, a lower market position than in stainless steel, which we kind of were leading. And you see what is not achieved is our service initiative. The target is high, 400 million service we want to reach by 2030. That is ongoing, and it takes all efforts from our side. I would say a real successful achievement milestone for us was -- is the development of this new monoblock rolling mill, which increased our markets for stainless steel and silicon steel rolling mill by the factor of 3, which is quite significant, and we are the only supplier worldwide who can supply a monoblock and a rolling mill in the split housing concept. That might not mean a lot to you because you don't know the difference, but it is very important because it is like the Roman Catholics, all the reformists, you have 1 religion. And if you can serve both, you're usually in a better -- in a better position. So market development, how do the markets look like. The -- while the underlying midterm growth in the automotive industry is rather small with the 2% we have with e-mobility and battery, we have exceptional market growth, and we are well positioned in both of these markets. And if we look through the e-mobility first, you can see on the left-hand side, the global vehicle production growing with a compound annual growth rate of 2% until 2030. That's the expectation, while the battery electric vehicle growth was 16%. So we have to be there. We are there. We are, I would say, a solid supplier to all Western electric car manufacturers, be them from the Europe, Germany or from the United States. We do have -- we are still struggling to get into the Chinese electric vehicle suppliers. It is quite challenging. And we have not really -- we had picked up small orders, but not really have not managed to really deliver a press line to them. So there is some work to do, but we see it rather as an opportunity. But with the fast-growing Western suppliers, we are in a good position. An even higher market growth we see in the -- on the battery side, this is the annual growth rate in gigawatt hours of to-be-installed capacity. That's all based on an assumed demand of electrical vehicles in the world. And even if it's only -- even if the assumptions are wrong and the growth is only half, it is still a lot of business that we can and we want to address. I told you before that we have -- that we have acquired the Italian company Sovema, providing that technology for battery manufacturing, and we are marrying that with the capabilities of Schuler to deliver large-scale projects to the automotive industry. And we believe that with this combination, we can make a solid offering to the industry, who is actually not asking but would appreciate if they have an alternative, which is non-Chinese because that market is dominated by Chinese competitors. Who -- and this is kind of the first time we are envisaging that -- who are leading in technology and are leading in costs and are leading in price. So it's -- it is something we have to address. They have all their factories already set up in China, and we will go up for that. We have made successful milestones in that, achieved with the battery division in 2023. There are 3 important orders I think worth mentioning to you. The first comes from Fraunhofer FFB. That's, I would say, worldwide, the largest -- maybe not worldwide, but definitely in the Western world, the largest research center for battery manufacturing. And we got an order for a cell assembly pilot line in October. This is now already almost finished and under delivery. Then we have -- from a German OEM, we received an order for a pilot line for a cell assembly pilot line for their all solid-state battery. We believe that this battery is the battery of the future of electromobility as it combines so many advantages compared with the traditional lithium ion battery that -- many of the questions we have today on electromobility will vanish once that technology is available. So the weight-to-power ratio is about double as what it is with conventional cells, which means the distance you can bridge is about double the size or the weight of the car is reduced by that, then distance with 1 charging of 1,000 or 1,200 kilometers is not a problem anymore, which would remove many obstacles. Then the charging time is significantly lower than in conventional batteries. And the third, and not to forget part is that this all solid-state battery cannot burn. And whoever has seen one of these burning electrical cars understands that that's also is a benefit in itself. So we are providing that pilot line, the customer uses that pilot line to really develop the technology for the mass production, and we believe that we are then in a good position also to deliver the real production lines. In November, we received an order for the first giga project for a conventional lithium-ion battery line from a German battery cell manufacturer, 2 gigawatt hours per year. And we believe with these 3, we can say the first milestones on our journey to a battery line supplier have been taken, and we are ready to address the market. And I believe we are well positioned for that. Metals Processing, the midterm market growth is, I would say, goes along with the GDP growth in the various areas of the world. What is driving, for sure, is the electrical steel, green steel H2 burners. And of course, the further call for lightweight cars, the further reduction of weight will be paramount and our technologies for that will be asked. So looking into Metals Forming, what's the strategy looking forward. The strategy has been -- the restructuring has been executed. We have the execution of the strategy in full swing, and we are ready to grow and innovate. We have 5 important factors that we are following in that area. Improve the profitability, you definitely have noticed that the profitability in the metals area is the lowest of all our areas and need to be worked on. We will particularly take benefit of further digitalization supported by AI. We will focus on improving the traditional business and also exploring the new markets. And we definitely need to attract the right people to be successful in what we have in mind. The improving the profitability is local for local, so bringing more value-add from Germany to the parts of the world where our customers are sitting, where our -- finally, our lines are ending up. And of course, increasing the service share, which is very important. And with the 25% that we have overall, you see there is a huge room to increase that. On the traditional business, we will go on with further modular design with new innovations and focus, in particular, on the new opportunities we see from this battery, where we are really excited about what that can bring to us. The order intake, we came down from a deep depression -- or we came up from a deep depression we had in 2020, the COVID year. We have been -- last 4 quarters, we are -- we are above 2 billion, which is a good -- which is a good way, and we are trying to keep that going. You see that the profitability has been increased steadily. Are we happy with that? Yes. Are we -- are we content? We are not. So we believe much more should be done and will be done. So the 4.7 we have in the last 4 quarters is only 1 step on the way where we want to end to. Our growth ambition -- and frankly speaking, this is -- this is supported by our -- by our targets for the battery business and by increasing the service, we would assume that everything else is probably leveraging out against each other, but we have a clear ambition to grow in average above this 5% for the next years to come. And that would also enable us to reach the profitability target we have set at 6% to 8% EBITA margin. Looking forward, we see that we have a strong market position. We have identified the growth drivers in our markets that enable us to deliver. We have improved the cost structure -- we will further go on doing so. The standardization is a never ending story, and it will -- it is as long with us as we are building machines. And all of that, we can work for our long-term profitable growth, which we believe we can deliver in that business. Thank you very much for your attention, and we are ready for questions.

Thank you, Joachim, for your comprehensive update on the Metals business area. And ladies and gentlemen, we are open for your questions. Who wants to have the first one?

Akash is not the first one.

No. I guess, Akash will follow afterwards. Three quick ones, if I may. Lars Vom-Cleff, Deutsche Bank. The first one, I know it's quite late to ask the question, but can you remind us why a change of management of the division was necessary? And then, shall we go one by one? Or -- yes.

We go one by one. So the Domenico Iacovelli, he decided that he has better chances to develop himself as a manager outside Andritz, which actually we could not -- we could not believe that there is. But it's a free country, and the Board of Andritz is not a prison. So therefore, I have to take it over now. And -- but we are looking for a permanent solution. This will not be the permanent solution.

So nothing for us to read into that. Understood.

No, no, nothing. And we departed on good terms. Yes.

Okay. Perfect. And then Metals Forming, you had a slide with the global market outlook by division with e-mobility, for example. Is it also possible to split the Metal Formings revenue by end customer group so that we not only get a feeling about which sector is supposed to grow by how much -- how many percent, but also how much you can participate from then?

I have to think -- I have to look into that.

Okay. Perfect. And then lastly, the automotive industry. I mean, independent from whether we look at combustion engines or electric vehicles, there is a challenging -- another challenging year ahead of us, I would say. Our volumes might be stable. But definitely, there is a lot of pricing pressure independent from the engine type. Are your major customers against that background continuously willing to invest?

I mean they are, for sure, I'm not willing to invest, but they have to invest if they want to survive. They rather like not to spend money to keep it, we can be sure about that. And we also can be sure that they use all their power to push their price pressure down the supply chain, yes? So -- but investments will be done. The -- good for us, the idea that the electric vehicles and the internal combustion vehicles will be pressed on the same line, this basically does not happen. So they have dedicated lines, which is good, which will continue in the future, which, for us, as a press manufacturer is good. Our exposure to the powertrain is very small. So we are not really affected by that. And it's the industry we are in. Yes, we can't help it. We believe the underlying trend of individual mobility will not stop. It is since people living on earth, it's the way and it will continue like that regardless which engine they choose. So -- and the higher professional approach of the automotive industry is also good and healthy for our organization because they keep you fit, yes. And you have an area where they really help also yourself to develop.

Yes, please?

Akash here from JPMorgan. Two, please. And I'll also ask one by one. The first one is on profitability split between Metal Forming and Metal Processing. So maybe if you can help us understand what sort of margins are currently between the 2 segments?

Differences are small and fluctuating. So there is no big -- there would be no big surprise, yes. So it's about the same level.

And then the second one is on Metal Forming. That business has historically been a margin drag on Andritz Group for quite some time. Can this business generate enough growth and margins to be part of Andritz in the longer term?

That is what we are working for. We have not given up that idea. But for sure, you -- your question is right. I think the restructuring is done. We have a bet out for this -- with this battery. If we get that up, I think we are in a good position. And if you look long enough back, then you also see that we had years with margins from the Metals Forming business, which had been in the target range. Same is true for the Metals Processing. So we believe there is -- there is a lot of hope to do so. Because we know that we can do, I can remind the people who are longer with us that we had for many years, it was not me. It was my predecessor, Wolfgang Leitner, who was always asked about the separation business area that this makes no money and that we should get rid of it. And I think we also managed to turn that around. We are in a -- in a company, 172 years old, and we believe that we can do that, and we also believe that in the metals area.

[Operator Instructions] Yes. And then we have 1 person online who would like to ask for questions, and that is Sven Weier, please.

Yes. The first one is just -- I was just wondering on where you are on the giga press technology. I mean we obviously saw Tesla adopting it. We're hearing that some of the Chinese are adopting it. So I would like to get an update where you stand on giga presses? And the second question is just to get a better understanding on the battery side on what you compete for. So with this new Northvolt battery plant in Germany be something you're competing for?

So the giga press, I'm not 100% sure I know what you referred to. There are ideas in Tesla to make huge parts of the front and the back part of the car out of inject -- not injection [indiscernible], die casting from aluminum or magnesium. If that is what you're referring to, then I can tell you that we have no production technology for that at the moment. Yes. So -- also no business growth. We are technically discussing these topics with Tesla, as they would like to have our opinion on that, but we don't have real production -- real production assets there. On the -- it's -- we cannot comment on specific projects, but you can trust that we are quoting for all relevant projects that are on the market.

Yes, please, in the audience.

Daniel Lion, Erste. I'd like to follow up on the giga presses. You mentioned that you are in discussion with Tesla about it, and he's asking for your opinion. What is your opinion on these prices?