Dürr Aktiengesellschaft (DUE) Earnings Call Transcript & Summary

So good morning, everybody. Ladies and gentlemen, I hope you had a good rest after the evening program of yesterday, the visit to Teamtechnik and the dinner that we had. Since not everybody can be with us today in person, we are also streaming the presentations and the Q&A session by on. So also, welcome to everybody who is following us today via the Zoom meeting. My name is Andreas Schaller. I'm the Head of Corporate Communication and Investor Relations at Dürr, and I will guide you through the program of today. Before we start, let me make some organizational announcement. Please be aware of our disclaimer. I assume that you are familiar with the language. In case you are not, please take the time to read through it. You can also find our Capital Market Day presentation in the Internet. And those of you here in the room, you should have a USB stick received by now or in front of you. And there, the presentation is also available. Now you also have the chance to ask questions to the management Board today, after each presentation slot actually. And to do so here in the room, you have these microphone boxes in front of you. Please press the right button just before and after you ask your questions, and I will call you in order to make this in an organized way. We will also take questions from the Zoom meeting. And my colleague, Mathias Christen, he is here in the back. And looking at the Zoom chat and also at the participants here. So if you want to ask a question via Zoom, please raise your virtual hand and wait until your name is called. Then unmute yourself and ask your question. [Operator Instructions] Now let's look at today's agenda. We have actually 4 presentation slots for you. The last one, including then a summary. As mentioned, you have the possibility to ask questions after each presentation slot -- after the second presentation slot, we will also do a short break. And after the presentations, we will then move on to the lunch. And now without further ado, it's my pleasure to hand over to our first speaker today, our CEO, Dr. Jochen Weyrauch, Jochen, the stage is yours.

Thank you, Andreas, and good morning. Hope you all enjoyed last night. I think apart from the good red wine, the meeting at Teamtechnik hopefully was quite interesting for you because different from what we have typically done before, but a significant part of our future. Andreas already mentioned, a couple of topics today. I'll present the first 3 ones. Dietmar will cover finance. For all the Q&A sessions, we'll be on stage together. And I can only ask you to focus on the Q&A challenges. We'll tell you what we know, rather than making this just 1 directional presentation today. Actually, Andreas put a big challenge on me. It's just too many slides for the time that was allocated to me. So I will just touch on a few topics. I will leave some out on purpose. And again, if there's something that's missing for you, please ask during the Q&A. So let's jump into it. Next steps. Again, the next steps as a couple of subtopics. First of all, introduction. I'm new on stage, at least in my new role. What's the new leadership approach. I was asked last night, I think it was Mr. Esler, -- why are you trusted 2-tier board? And will you continue like this? Let's see, but there's many more relevant people on the first leadership level than just Dietmar and myself and will explain how we work together. Then what OneDürrGroup means. Why is, as we believe, the sum of the parts not bigger than the total value of the group. And then how do we intend to build value by growing margins and returns as well as growth. And to some extent, resilience focus was another topic we discussed last night. Dürr Group just make quite an okay profit, but it never lasted too long. So what we are telling you today and the margin targets we are confirming today are ones where we say we want to build them in a resilient way. Then mid- to long-term growth potential. And last but not least, as a summary, Dürr Group strategy for profitable growth. Just on me as a person, almost looks like I'm doing an interview today with a CV here. But again, just the main topics. I'm in the automotive industry for a number of decades. It's always a love and hate relationship to be in automotive. The love is that you are part of a very dynamic development, the hate sometimes is that it is a challenging environment and how we want to cope with it going forward. I'll explain. Then have to kind of a sneak into the construction business at the time with Turbo-Lufttechnik. And then my first round with Dürr, if you will, in the early 2000s, which didn't last very long. It was just 2 years or a bit more than 2 years because at the end of 2005, I did a management buyout with half of Carl Schenck AG, those days being directly responsible for Schenck Process. And ran as you can see, in the next step, that business for the next 9 years, through various private equity rounds, which was as an engineer quite interesting. Because once you understand the dynamics of private equity, you can apply them yourself. That's what I did thereafter for the next 3 years, invested myself, a company private equity firms. And during my time with Schenck Process, but also thereafter, what I learned is building value is not just being a technology leader that in itself doesn't really have a value. But to use this in order to build value through expanding margins, et cetera, et cetera, is really what's relevant. Since 2017, with Dürr, I've once mentioned in an interview, that I have gone through an extended training program with Dürr, which is pretty much true. In fact when I first joined, there was no division head for CTS. I was a division head for CTS. Then in parallel, I took over Schenck. Then the division had for PFS left. This is where I got involved into the business on a day-to-day basis, too. So I made my round through the company always during the 5.5 years also being responsible for corporate development, M&A, but also in various operational roles. And then, as I mentioned, from the beginning of this year in my new role as CEO. So what's the Dürr Group today? If you look at it from an end customer point of view, again, we had a lot of discussions also with Teamtechnik yesterday, we are not producing goods. We produce the machines that produce goods. And you see a number of those goods here. And then you automatically asked the question, why are you involved in all of those businesses. And a big purpose of this presentation today is that there's good reasons why, with a set of technologies, know-how, processes, we use that knowledge in order to make our avenue into different industries and end markets. But what we provide to the market has a lot of commonalities. The Dürr Group, if you look back 20 years, the Dürr Group was basically automotive. It was 90% automotive, was a EUR 1.2 billion company. And meanwhile, we will touch at least in terms of order intake, the EUR 5 billion. And the business has completely changed or changed in a big time where automotive meanwhile, is less than half of our business. You'll see through the acquisition of HOMAG 6 years ago, 7 years ago, of course, the furniture and the house building has become relevant, but also through acquisitions but also organic growth, those other business like the medical devices business that you've seen yesterday or the battery business that came in through the acquisition of MEGTEC 4 years ago. And in essence, we've still been growing by 6%. So on average, because that's also a discussion we had, so far, we've had our strategy presentation kind of [ growing ] 2% to 3%. And if you look at the past, we've already proven to do the 6% that we also anticipate now going forward. The team was touching on this. The only thing I discovered here is we have to work on our diversity actually. It's a lot of old white men, so maybe that's a topic we'll have to cover in the next few years, but I'm sure there will be chances. Nevertheless, you see Dietmar and myself as the management board. But from the very beginning of the year, when we had our first strategy meeting with the gentleman that you see here on this picture, we decided that we want to run this company in what we now call the Dürr Management board. And that doesn't only consist of us, it also consists of the 5 division heads. You see here, Bruno for PFS, Lars for APT, Ken for CTS, et cetera, Jorg for MPS and Daniel for HOMAG. Plus the 2 CFOs of the larger sub-holdings, which is Jaro for Dürr Systems and Rainer for HOMAG. This team does the real management meetings. Dietmar and myself, we have weekly we call shop-floor meetings where we go through what's actually relevant, but all the relevant decisions for the company, especially the strategic decisions are taken by the management board. We meet once a month. Every quarter, we have at least one, in most cases 2 days of an off-site meeting where we really go through all the strategic topics and everybody has a say. I told the team from the very beginning I'm not ready to take the stretch between the outside markets, the capital market. And what we do inside, we want -- or I want to have consistency from what we communicate and what we do, and what we do and what we communicate. And so far, I think we've made quite good progress, and everybody in this team has a say on everything. So it's not just Lars talking about APT and then he has to shut up. He has a good right also to criticize when necessary, what Bruno does in PFS. So in terms of governance, that's very, very important. So now first touch on why is this One Group? And again, I'm not touching all the points. Especially if we look at recent days, joint purchasing, we meanwhile have a momentum on the purchasing side that is relevant those days. I mean I'm personally involved with calls say, Siemens or other main suppliers fighting for the supplies of products and equipment. And so far, with all the hiccups that we had this year compared to many other companies, we've been quite successful in completing our projects in getting still components right on time. And that's why -- and that's because we meanwhile have as a group a certain momentum to negotiate in the market. Then software, just to mention one other thing. We have, meanwhile, if you go through the company, about 800 software engineers, so we are really a software house. And those people are coordinating in all their, for example, artificial intelligence models that we apply. The same way in a paint shop that to some extent also in HOMAG and vice versa with a strong exchange. It's a business when you add all together, that's more than EUR 100 million. And there, you can only be successful if you have a critical mass. If we -- each of the divisions on a stand-alone basis could not afford the spending that we make in digitization and definitely could not be so successful. Project management skills. I was asked last night, say, look, I mean, of course, you have bought HOMAG and it was a lucky partnership because you bought it for an okay price, and now it has developed fair, well taken. Nevertheless, the margin development that we've seen recently at HOMAG would not have been possible without Dürr. If you would not have used the project management skills, we've been training for decades in the paint job business in this rough automotive environment, and it would not have applied those to HOMAG. HOMAG would not be where HOMAG is today. So just to give you a few teasers where it really makes sense to be together as one group and use the momentum that we can generate together. As a consequence or derived from that, that's the strategy. You can read it. There's a couple of topics that are very relevant for us. For example, improving processes to have more time for value adding. I'll show you in the next chart the activities that we have. We want to automate, improve, standardize processes in the back office as much as we can in order to free up capacities where real value-adding is happening. And it's all based on a harmonized and standardized IT. We are, at the moment, running the biggest transformation program in this company in terms of processes and supporting IT this company has ever seen. You see all of the -- that's the core processes in the company, starting with One HR, harmonized modern HR. Today, we are still in the old fashion approach by 1 HR person that covers the complete needs of an employee, from the hiring to the consulting, to the contract management, et cetera. And we will do this on the basis of modern processes where you organize the back office and shared services, where you have the business partners dealing with the internal customers. You have the hiring separately. And this is all in transformation based on a complete new system. We are just, as we speak, launching our new CRM system. We've been working on Microsoft Dynamics at Dürr Systems and HOMAG in the past. We will now shift in the next few weeks in the first step, the Dürr Systems group into Salesforce as a new CRM, which will give us a lot of functions in order to get closer to the market. We are about to select our partner for the OneSRM supplier relationship management and so forth. And all of this, of course, will go -- will be steered via a central OneERP, which been one of the first industrial SAP users, our 3 users in the industry, and we are now about to shift that will be the first transition next year to [ S/4 HANA ]. So a lot of programs that we're running right now, which is, again, as we speak, that the biggest transformation program in history in order to make this group much more efficient. Now looking forward, what's the main areas to drive profitable growth? Maybe not so surprising, of course. In the end, profit is a product of margin and volume. And again, the discussion we had in a number of meetings with analysts, investors is how do we improve the resilience of this company. In good years, we've, as I mentioned, we've been doing okay returns. We've doing -- we've been doing good cash flows, but we have not delivered in a consistent way. And this is what is really relevant for us, that's why we've mentioned this as a separate topic here in our areas for future profitability. So what does that mean by division? Most of the pictures are known to you. We had already set in APT. So on the left side, to make it simple. On the left side is our machinery business. In all of those businesses, we are by far market leaders. We have a world market share in HOMAG, 30-plus percent. We have an application technology when it comes down to paint robots, we have a world market share of more than 50%. And -- very much the same is true at Schenck, which is Measuring and Process Systems. For balancing equipment, we have in the arena where we play a world market share also of more than 30%. This is machinery business including potential for service and spare parts, and those are businesses that have to achieve 10 or more percent in returns. Actually, APT and Measuring and Process Systems have historically shown this. Some of you accompanied the company for a longer time, they know that MPS has been doing 15%, 13% on returns on sales. Now we've added another small business with a little bit of lower profitability, but still this business is at least good for 10-plus percent APT, the same. Historically, APT has delivered that performance. And what we now want is to achieve it again. And if you look at the profitability that we achieved, for example, this year in HOMAG, but -- and also in application technology, somewhere between 8% and 9%. And if you add the anomalies that we have to cope with this year, actually, we're not really away from that. Again, we have to start delivering in a consistent way. Then we have the more construction-type business, the system business, where we said the target margin has to be above 6%. Actually, Clean Technology Systems has delivered that or at least close to it. You see it in 2019. And we've been affected big time this year by material prices. And we have started to manage it, and we'll talk about this later. So 6% there, that does not even take the wild card of the battery business into account is also good for more than 6%. PFS, actually, this is how should I say, that's a personal issue for me because I've been driving this myself. I spent a lot of time this year in negotiating with automotive OEMs on prices, on price escalation clauses. And we have seen this year good orders coming in. Actually, in terms of balancing the overall margin mix, we were even trying to slow this business down as it has been extremely successful. But the good news is we have booked and we still book until the end of the year, very attractive orders with a different margin perspective than we had before, and I'll get back to that later. So -- and looking forward, especially on the machine building side, we have a lot of future potential in service and spare parts. HOMAG alone, we hired 100 service engineers this year in order to cover the market because we get a lot of complaints from customers for good reasons that we are not there, that we don't support them well enough. And of course, that's good news. So a couple of examples. PFS. We have, in a very silent way, reduced the capacity in Europe by more than 30% in the last 3 years. We have closed 4 shops. So we've even closed, how should I say, a very traditional shop near Cologne, which was one of the first production facilities in Dürr. And I think that was very relevant to go this step in order to show the organization that we cannot continue like we did, which means we cannot have a big beast that needs to be fed in order to avoid under-absorption. Now we've reduced capacity by 30%, which now gives us the chance to become much more picky when it comes to new orders. Then -- and we have formalized this in a new strategy, value before volume, as we have analyzed, it was a very interesting if not very smart, but needed to be done exercise. We went back 10 years by customer, by region, by project and analyzed the margins that we achieved. And there was a very clear pattern of where we were successful, where we even improved margins throughout the course of a project and where actually we didn't. And we used this pattern to define our bid/no-bid strategy. So this year, we have, I would say, for the first time, in Dürr, in PFS, neglected a number of requests for quotations because we simply told the customers we will not be going for those projects. In our case, if we bid, for example, a big paint shop value, say, EUR 200 million, often have proposal costs that is EUR 1 million or more, because it's not just a proposal. We have to do all the pre-engineering in order to have the costing for the project, and we simply don't do that anymore. And I have a lot and still have today a lot of discussions with OEMs and where I simply say we're not going for this anymore. And this is, of course, maybe at least as difficult of an exercise internally as it is externally because, of course, salespeople were used to bidding everything to satisfying the customers. And this is really now a real change of direction and it works. And we will see probably more next year with a little lower order intake. This year, we've still been very successful. And you see we've been improving the order intake margin in a difficult year already by almost 5%. HOMAG, see many topics here. And we have, I would say, made 30% to 50% of the journey of all those improvement measures. And some of them really, as I mentioned before, have come with the support of Dürr Group. If you look at for example, number three, streamline value chain, that's what we call internally the project smart, we see smart value chain. That's something that's actually driven by the former Division Head of APT because he has a lot of knowledge from the supply chain from the setup that we have in APT, has retired, he now helps HOMAG, a big movement forward. Building the service business, you can read it there, material cost optimization, standard up. That's a big time. And we have too many machines in our catalogs at HOMAG. And we've already reduced significantly our amount of machines that we offer to the market. Plus, of course, as a separate, a whole separate thing is the potential that we have from the construction elements business. And that all together makes us confident that we achieve next year, the 9% actually. Again, if we look at where we stand today, you see the 7.7%, 9 months, if you add inefficiencies, actually we would have been double digit this year. So this year, it would have been a fantastic year. And looking at -- and I'm complementing actually the team because reaching roughly 8% in this environment where we had all sorts of issues, I think, is a real achievement. And it really shows that our targets going forward are feasible. Then example on the PFS. I was touching on that already a little bit, price escalation clauses. We have not done any larger project year without price escalation clauses because we simply told customers, we cannot take the risk either. You pay so much more that we are on the safe side in any case, or renegotiate with you price escalation clause. And I can assure you, we have customers who said at the beginning of the year that their purchasing processes don't foresee that because they need to know a maximum price. We said, look, -- then we don't bid. And then in some cases, we didn't bid and customers came back. And that's, for example, with 1 very big German customer who is building a new facility in Mexico, we've had exactly the same thing. And finally, we now have a formula that includes labor costs, purchase parts, raw material, exactly following the scope of supply, which partially comes from Germany, which, to a large extent, comes from Mexico with a very clear formula. And each quarter, we calculate the differences of prices and indices versus what we sold basically. Then HOMAG maximizing capacity utilization where, for example, using Teamtechnik, you've seen Teamtechnik yesterday as an overflow facility for our wood working business from WEINMANN. So we are not intending to extend the capacity easily at WEINMANN, but we use existing machine building capacity at Teamtechnik to support WEINMANN and there is many more examples like that. Then again, Teamtechnik and Hekuma, Stefan last night signed the acquisition of his business and consequently Hekuma with one the first large order in North America, I forget the name, [ Thermo Fisher ], which is a double-digit million order. That's about half of the order intake that Hekuma had the previous year and why has the customer awarded us? First of all, the customer has awarded us because Hekuma with Teamtechnik together can build the whole plant. Because in the -- in the production process of the customer, typically, Hekuma comes in the earlier part of the process. In many cases, seen those self devices yesterday. They are typically -- it's a plastic device. So the frame is plastic, then you have springs, then you have different pieces inside that need to be assembled. The first step typically is the de-loading of an injection molding machine. And Hekuma are specialists in de-loading high speed. We're talking less than 1 second, de-loading of material from injection molding machines and then bringing them into the first process steps. And after that directly comes Teamtechnik with the completion of the assembly. And we've won this order together because we can offer the process. Not only that, we've won the order because Teamtechnik has a local footprint in North America, which Hekuma didn't have. And third, Thermo would not have awarded neither 1 of the 2 without the balance sheet and the background that we provide for such a large order. And I think that's a perfect example for sales synergies from such an acquisition. So in a bit broader perspective, again, just touching on a few points. On our growth strategy altogether, you see there is many possibilities really to move forward, especially when we talk about, again, PFS, and Final Assembly, e-mobility is a big driver. We'll see a few pictures later in terms of, first, the capacity buildup. But second, at least as -- excuse me, as important, the second point, the sustainable decarbonization of production. This means most of the production facilities for automobiles will have to be touched in the next 10 years. There is, for example, 700 paint shops on this planet, and many of them have been built by Dürr. And all the referred work that will come, and again you will see a few examples later, will generate distance for us. So we'll move away, especially in Europe, more from the greenfield business more into the brownfield business, which offers much better margins as we are basically touching the equipment we had built before. Furniture and housebuilding. We're talking a lot about the creation now. The furniture industry slowing down, which is the case. If you look at the business, order intake has slowed down to some extent. And nevertheless, the scenario is intact. What we will see and what makes us confident for the next years is that we will need much more automation in the furniture industry, starting from a lack of skilled workforce, starting from cost pressure, et cetera. We will see more of what we've seen before, small carpenters with simple machines will close. The business will consolidate. I'm not saying everything will end up with IKEA, but it will be larger customers with different demands. And in the end, a place into our pocket. And on the woodworking, on the construction elements business, I'll touch later. The battery business for us is a wild card. Again, I'll touch on that later. We have not too much factored that in our perspectives going forward because, how should I say, it's almost digital because the size of this project is so huge. If you start adding too many of those that gives a picture where we say, let's be a bit more cautious. Automation, Medtech, we're sitting on the right driver. I mean, with the aging population, more health care needed, more automation needed again in order to provide cheaper health care, we're sitting on the right trend. Environmental, I think that story is there for quite some time and will continue to be there. We benefit from tightening emission standards going forward. Balancing, which is basically Schenck, we've been suffering in the last couple of years with the shift from the internal combustion engine to e-mobility because we've had market shares of 70%, 80% in turbochargers, in crank shafts, in camshafts, or drive train. Everything that's really related to internal combustion engine. It took us a little while to change, but we meanwhile see that our equipment, for example, for electrical motors, et cetera, of course, now creates demand and we are convinced that we are through the trough going forward. So now touching on some examples prefabrication of wooden construction elements. Also, we were discussing this yesterday. We believe that from today until 2030, you see there is huge potential, because we are just at the beginning of a transformation that we see right now, meaning the industrialization of wooden houses. So far, wooden houses, in many places, in most of the cases have been built by carpenters on site. That doesn't work anymore in the future. There is not the labor anymore. The cost is too high. It takes too long. And what we are now seeing is the first giga factories coming up. If you, for example, Google, NOKERA that's a company that's basically a start-up for the production, preproduction elements for multiunit houses. We've built the facility. I was relating to the contract before. Weinmann, our company who have delivered that before, had a turnover of say, EUR 50 million to EUR 60 million, this order alone was the annual turnover. And this was the first of a kind, and this was for 7,500 units a year. And if you just follow only Germany, the discussions that we have by our famous chancellor that we need in a social way, 400,000 units a year. And if you -- it's been in the news that a large piece of this should be in sustainable cheap living, which means wooden living, then it gives you a little bit of a feeling of the dimension that's out there for this business. Medtech, I touched on it. Then electrode coating, you will see a film later that's the cooperation with Grob and Manz. I'll touch on this a bit, where we believe that the time is right for European supply chain to compete with what comes from Asia for good reasons. We believe there is a number of angles where we can do things differently and definitely better for -- compared to what's coming from Asia. And again, that -- that is exactly where we are a bit cautious in the volume, because just one idea -- just one number, a typical giga factory is 10 gigawatts. 10 gigawatts for battery cells is an investment of typically EUR 1 billion without building any auxiliaries. Now if this 10% to 15% is the potential that we can cover with our coating dry and solvent recovery equipment. And that shows you can reach the volume relatively easy. Nevertheless, it's a market where we still have to prove that we are able to deliver large-scale equipment. That's why we're a bit cautious at the moment, but I think we can only be positively surprised. So all in all, that gives us the perspective that we have published earlier yesterday. CAGR of 5% to 6% historically proven with. Going forward, I would say, an even more resilient set of businesses putting together our volume. You see -- we assume that the -- especially that's the main thing here, that the automotive business will be around 1/3 compared to a bit less than half today. Final, that's our strategy house with the targets that you see on the right, and I'm talking too much about EBIT. In the end, the return on capital employed is also relevant. That's, by the way, why PFS also -- if PFS does 6% to 7% return on sales with return on capital employed above the 25%. It is, I would say, a respected business within our portfolio. All right. That is -- I've even taken too much time, I see. Then let's shift to the first Q&A.

Thank you very much, Jochen. And then I ask Dietmar to get on stage for the Q&A. And yes, I -- actually, in my introduction, I forgot one thing to mention. I mean you have heard a lot of interesting topics already, and you wonder whether it's possible maybe to watch that again afterwards. And it's possible this session this morning session is recorded and we will provide the recording on our Internet pages tomorrow morning before noon. Now let's start with the Q&A session. Mr. Rothenaicher.

Yes. As a clarification in your chart here, you have in the midterm, does this mean explicitly 2024?

When we refer to the 8%, Definitely, yes. And of course, the -- I would assume that until 2024, we have the chance to deliver the CAGR. The CAGR is moment as an average until 2030. But you see here the 8% and the ROCE is specifically for '24, yes.

And also for the divisional margin targets?

For the -- yes, absolutely. The picture with machinery and systems business, yes.

Okay, Mr. Maichl.

Stefan Maichl from LBBW. Is the 5% to 6% growth with the pure organic growth rate? Or do you have factored in some M&A?

I would say some normal M&A. I'm not factoring in the, I would say, the HOMAG 2.0, but normal M&A, yes, we would say that's in there. And hopefully, that might bring us to a slightly higher number. But I would not say 5% to 6% is explicitly just organic.

Just to clarify on the new price negotiation you've done with the auto OEMs. If you look since January, could you maybe quantify a bit the price impact on the PFS. Is it more low single digit, mid-single digit?

I can only generically answer the question because it's not a product business. We quote each project in itself and do the cost and then we apply a margin. However, comparing similar paint shops, I would say, price increases were between 10% and 20%. And some of the -- and that also is very much in line with the renegotiations that I've done on some of the products that we already had on our books. They also go in that direction.

Okay. And if I may ask a second question. On the M&A you want to develop in the Medtech and automation, are you more looking at target specifics in the Medtech business or more into the automation processes?

The combination of the 2, Medtech and automation. So we've done the first steps in Germany, the 2 acquisitions where the piece of Teamtechnik is Medtech and the biggest piece of Hekuma is Medtech. And if you look at the world, the biggest med tech market by far, is sitting in North America. So the ideal target would definitely also in North America to expand the business. We've been successful on some orders in North America, but we know that we could be much more successful if we had a much better local footprint.

The next question comes from Martin Schachel.

Maybe one on your margin targets. And for the APT and MPS, you were saying they've already reached margins 8% -- 10% in the past. But I think in reality, it was really very mix picture with some business units within those areas making mid-single-digit margins, others making double-digit margins and also APT, some activities being loss-making, others really double digits. So going forward, as your margin target also imply that the pressures on each business unit to be double digit? Or is it rather a mix and the assumption is that's going to be a mix where you tolerate lower-margin portfolio elements in each division?

Yes, thanks for the question. It is, as we described, and look, when I was saying we did reach profitabilities in the past already, I was specifically mentioning the divisions. And if I take Schenck or Measuring and Process Systems, actually, if you go back for 3, 4 years, and from there, you go back 5 years, MPS has consistently delivered more than 10%. And this is what we want to go for again. And this is feasible. So that's what I meant when I said that. PFS, picture is different. Yes, PFS, I think in 1 year, once had like 10 years back, 9% or so in the peak after, I think that was after the treatment prices when we've then booked big orders. What we now really want to achieve is consistent profitability. And the target -- actually, we were saying more than 6%. We're building a business plan for '24, which goes in the direction of 7% internally. And this is what we want to defend. We rather -- in this business, it's not about size. And the way we now may be more now than in the past, Dietmar, I look at the business in almost like a portfolio management. We say, look, Dear PFS, we have the 8% target, and we have to build those together in the right way. if you grow too much without being at the profitability level, you're distorting our targets. And this is why we rather keep this business not small. I mean it's big, still, but we don't want to grow the business in case it does not significantly increase the profitability.

Can I follow up with one on the HOMAG margin target? I think you clarified it's a 2024 target of [ investment ].

Yes.

I think you said you are at 10% already excluding inefficiencies this year. Can you tell us under what volume assumption is 10% should be achievable. I guess, volumes might be slightly lower, and that's compensated with more and more.

The 10% -- and let me answer generically, the 10% is not expected to be there peak volumes, which we might achieve next year, depending on how the story goes. But on a, on a -- whatever a normal volume will be. I mean we end up this year like EUR 1.7 billion.

Roughly EUR 1.6 billion in sales.

EUR 1.6 billion. So even if you take EUR 100 million off in terms of making it simple, we still have to be there. It's not that -- that's why we say we want to deliver in a resilient way, yes. might be a challenge just in some extent. But on the other hand, it's not that we say we are now shooting for the 8% as a onetime event in '24, and then we relax and then we go back to the old days. No. We want to form a group that consistently delivers.

Okay. Let's -- we have another question.

Yes. Actually, I have 2 questions. So first, your prospective top line growth with the CAGR of 6% is roughly in line with what you have shown in the past since 1999. But looking back, this was a period of decreasing and very low interest rates. Now we have a changing environment. And as a capital good supply, you're actually exposed to interest rates. So what is your view on that? And how do you want to make up headwind from rising interest rates, which are affecting your customers, how you are going to make up to achieve the same kind of growth? So that's question number one. Question number two, talking about resilience. What I'm actually missing is the resilience when it comes to China we're talking a lot about these days. So what is your view on that.

Yes, thank you. First, on the interest rates. Let me start with automotive. The picture that we see in automotive, I would say is, to a large extent, independent from interest rates. Because the investment pattern of our customers for the next 10 years will be not driven necessarily by capacity expansions, it will be driven by the decarbonization of their production chain. We are, today, "we", meaning like paint shops. And if you add with it final assembly, this is more than 50% of the footprint of an automotive facility. Today, all those facilities, should you take a paint shop, are gas-heated. In 10 years, they can't do in order to achieve their Scope 1 emission target, they have to walk away from gas. They have independent of the cost of gas, so that's not the issue. In order to achieve that ability and I'll show that later when I talk about the next chapter, they have to convert all those facilities into electrical heat and let a long life, the business plus many other areas in that respect. So we don't depend -- to a very large extent, we don't on capacity increases, but on the version of industry. In the Woodworking business, it will be a bit closer to the end markets. Yes, do we see insecurity and the customers may be buying less kitchen at the moment, et cetera? Might all be. Nevertheless, there is a number of markets that are about to develop. We are -- the one we take we often do, "we Germans" some of us are, that we focus too much on what's happening here. The pattern, I'm not concerned about the U.S. Really, I'm not. I'm not concerned about India. I'm not concerned about many other markets where we play. So let's widen the view a bit away from Germany. That's maybe a few comments on interest rates. On China. Yes, China is an issue. We are currently overall well prepared. we have seen that during the pandemic. Our -- especially our automotive businesses to use the word is very much decoupled from here. We built complete big paint shops. We have just done a new paint shop for Tesla. We've built all the German OEM paint shops and extended them pandemic. We're building as we speak, facilities for those new Chinese EV startups. All of this done by Chinese staff. So one business where not impacted by the disruptions here. So what will happen with China you need to make a guess. I'm not as pessimistic as some are because still I believe that the interdependencies are of so huge that neither side bring it to really a fine escalation. My guess, yours might be different. On the other hand, if I put myself into your shoes, most of the businesses in our sector that are successful have a China exposure. And we have to deal with it. It is something that we look at. How do we look at CapEx. We might be more careful than we've been in the past. How do we look at the amount of cash that sits in China, we're probably more careful than we've been in the past. But in general, yes, it is -- it is, to some extent, a concern. But again, I'm not -- for me, the most realistic scenario is not the catastrophic one, China invading Taiwan, et cetera. If that happens, everybody has an issue anyways.

Okay. I think, Mr. Hauenstein.

Yes. Can you give us an update, please, about the PFS split between established OEMs on the auto side and new OEMs, how it is today and how it might develop over the coming years until 2030, please?

Yes. The -- what -- I think it's in one of the charts I'll show you later. We roughly do 40% of the business with EV customers -- pure EV customers. And I would say, if you deduct from that, another 15%/20%, which are established players, you are there with maybe 1 quarter, 20% to 1 quarter, I would guess, is the new kids on the block, be it in North America or in Asia. And some actually in the EMEA Asia. We just inaugurated the Paint Shop and Final Assembly Systems for [ Turk ] in Turkey, which is kind of an interesting project.

Okay. Yes, for many years, Dürr's performance was very often also influenced by competition. So you have not talked about competition at all because, in the end, you can plan a lot. But if the market environment is different, then it could come out differently.

Yes. Talking about the competitive environment would take us 2 days. But I can give a few impressions. Also following some the discussions, I had last night, there was one statement saying, look, I mean, your life in Europe should be easy as Eisenmann has gone bankrupt, which was in Europe, our biggest competitor. Short term, -- that was a little bit true because we finished 2 or 3 of unfinished projects for Eisenmann, which were, I wouldn't say extremely profitable, but were profitable projects, but we completed them, that's done. And in Europe, actually, we would have preferred to a -- very simple -- Eisenmann in old days, which was a very respected competitor, that was an intact competitive environment. We won, they won, others sometimes won. Now we have a few, I would say, knuckle biters from this company. There has been deriving a few smaller companies. They're sometimes dealer service orders. So that's not always fun. But that's just one piece in Europe. If we -- in Europe today, yes, we are maybe the only real turnkey provider for turnkey paint shops. The competitive environment in other regions looks completely different. In the U.S., for example, we are #3. We're not #1 because there are 2 established players in North America who work mainly with the big 3. There, we are gaining strength. Actually, we've booked the single largest order this year, was with 1 traditional American OEM, which we now book in pieces, but it will be -- I've been talking about the one order in Mexico earlier, this will be double the size. In Asia, we are a big player in China, we're market leaders, definitely. But with a strong competition, there's 2 other very strong players in China, local Chinese companies, and we have to cope with it. Now if we look at HOMAG, we are, again, by far, the largest player. Our single largest competitor is less than half of our size, yes. So what does that mean? We are in most of the markets. Number one, there's a few markets, for example, Italy, we're not #1, or in India at this point. And what is changing there? I think if we look at the past years, we've been gaining market share for good reasons. And I don't see this changing economies of scale in this industry is relevant because you can afford the footprint, you can afford the investments, you can afford the investments in digitization. That's why I'm quite confident for HOMAG also, going forward. I would say, that covers 80% of the business. So if we talk about [ change ] again, it's totally different if we talk about our filling equipment. So we have many, many competitors, different competitors by business and by geography. Overall, I would say, many businesses respected competitors, but nothing that I see as a disruption. The only disruption that we currently see is in our favor. It is an Application Technology where we are about to see the shift away from the traditional overspray painting that we've been seeing for many years into what we call overspray-free applications. We will actually, as we speak, I've been inaugurating a facility in Eastern Germany with the first real high-volume industrial application of basically it's printing. Rather than spraying, the future is printing. And this is the first application where high-volume production, the two-tone roof will not be overspray painted anymore, but it will be printed, which offers huge benefits because today, if you want, for example, if you buy a mini, in many cases, you have a black roof and a white car or red car whatsoever, this body has to go through the paint [ job ] twice. So 1 body costs the capacity of 2 bodies, plus you have to master the car like in stone age. You have your red, which you paint for the whole body. After that, you use masking, foil, tape, really manual process that takes ages and then you run the same body for the second time. In this facility, you don't need that anymore. In an in-line production, you do the red and then you do the black roof and the body is done. And we are the only company who can do that today years away from any competitor. So -- and this is where we believe, in some cases, we really through comp -- and I'll show that later, through technology, we have competitive edges. I hope that answers a little bit your question.

I would also like to have a look at the Zoom meeting. Do we have questions coming in from the Zoom meeting?

Currently, no questions from the Zoom people. But if there is -- if there are questions in the virtual auditory, so raise your hands. There's a first one from [ Michael ] [indiscernible]. So please go ahead.

My question is about assumptions behind your 5% to 6% CAGR. How much is it volume-driven, how much price driven? And what is your [ core ] CPI assumption? Because we have now elevated inflation, some economics [ stay ] in part for longer. So take into account higher inflation, it doesn't look good [indiscernible].

That's actually a midterm to long-term view. So until 2030. And I think we are all aware that in the near term, it's also supported by inflation in a stronger way. But at the very end, we do expect that inflation will go down, and there will be more momentum for the growth. And as Jochen mentioned, there will also be a contribution in a reasonable manner, not in a transformation way then coming from our M&A activities.

Do we have further questions from the Zoom at the moment? .

No further questions from the Zoom. Are there any questions? So please raise your hand.

I think then we can maybe take a last follow-up here in the room before we continue with the presentations.

How much does the strong U.S. dollar influence your targets?

Actually, this year, the impact on sales but also on order intake is in the range of around 4% to 5%. And in the third quarter, it was on the upper side at 5%. And for the next year, we are basically having in our planning also being close to parity between euro and USD.

Would it be that you got some of your orders in the U.S. because of just strong U.S. dollar and you were more competitive because of that?

Partially, that's true? Yes. Take that order, the large order I was referring to, there is -- the biggest piece comes local because we use our local facility, and we have to, for some union agreements, et cetera. And there is some piece that comes from Europe. But I must say, that piece that comes from Europe, competition was also not quoting this on -- basically from the dollar region, they would have shipped that from either China or Japan, I think Japan. So yes and no.

Okay then, thank you very much for your questions. In this first round, we have more Q&A sessions coming up, and then I would suggest that we continue with our second presentation. Thank you very much for answering the questions.

So now we'll be touching on e-mobility already. Three topics I have to offer in that topic. New EV players who we've been touching on this, the question was there already, how much of the business comes from there. Then e-mobility in general, opening up different opportunities and then hopefully, a topic that's interesting for you, the battery manufacturing. So new EV players, see just some examples. And if you look -- and actually, let me just check. They're all customers of ours. Worldwide production volume of BEVs, if the target is fulfilled, which we anticipate at the moment that roughly 30% of the production by 2030 will be BEVs. And if you take the annual production, which will be in the range of 90 million to 100 million, likely also the number that comes up that [ assumes ] how much potential there is in [ OEM ]. Why do you see so many players because, of course, the shift from internal combustion engine to BEVs is the chance for new entrants because battery electric vehicle is much simpler than the old car with a combustion engine and a drivetrain. And it puts some of traditional OEMs in trouble -- would be maybe too much, but with a heavy balance sheet. So comprising all the assets, new engines have this maybe as a once-in-a-lifetime chance to enter the auto industry. So this is the number that we booked in [ EVs ]. I was saying that roughly 40% of our order intake, although this year roughly is -- comes from EV-related orders, coming from the new players, as I mentioned, but also from e-vehicle related investment from traditional OEMs. So what are the characteristics that drive demand to our favor? We have built a position with new start-ups, where we are number -- by far #1 supplier. Why? Those new startups, they have little knowledge. We have to deal, in some cases, with customers who have not even a handful of people with know-how in the respective areas that we supply. Those customers depend on a supplier who can do turnkey, who can easily adapt to their needs, who is globally available. And this has helped us to build our position. And in fact, we like to deal with those customers because they are receptive to proposals. Whereas when you deal with the traditional OEMs, they have specifications this thick, very complicated, very challenging, in some cases, challenging our processes because they're not always logic. So we really like to deal with those new EV players, and that's what has helped us to build a reputation. I'll show a picture later why paint becomes irrelevant with EVs. Doesn't sound logic, but when we look at it, I believe it becomes. Two-tone painting also very relevant in the EV arena. Why? The architecture of EV cars with a big underbody in order to make them look nicer from a design perspective. In many cases, they have two-tone applications. On the bottom of the vehicle, on the top of vehicle, black roof, for example, and that, of course, drives business for us. Then reinforcement of conveyor systems. Battery electric vehicles on average are 300 to 500 kilograms heavier than internal combustion engine vehicles. In many cases, the existing Final Assembly systems, especially the conveyor systems, do not support this additional weight. That creates a lot of brownfield work, for example. The automation of Final Assembly, I'll show also a picture, Final Assembly is different with e-vehicles. As you can imagine, you don't have the traditional marriage anymore of body and the chassis with the old engine, but you have an electric marriage from the battery with the body. And that's different. And there, we've built quite a strong position. The automation itself in Final Assembly will become -- is becoming different. Actually, the plan is for many of those players that a car basically, once it's assembled with wheels, runs itself through the Final Assembly because the electric engine works, et cetera, just as one idea. Then the ones of you who have been at Teamtechnik yesterday, you've seen that 100% of the vehicles globally of this ex-Californian car producer are tested on Teamtechnik equipment. And of course, we're using the global footprint of Durr to expand their business. And then last but not least, our wildcard of battery manufacturing. So why is color so relevant? Actually, we've had -- it was very interesting to see an agile company producing the vehicles that you see here. This is the first car that has an up to 30-layer paint. Why so many layers? You can guess it a little bit. When you look at the red car, on the top it's one color. But depending on how you look at it, it can be from a light red up to most black, depending on the angles, and gives the car a totally different appearance, an appearance whether you like it or not, but a very different appearance and appearance of quality and at least of differentiation. We've been running here test, very interesting. We've been running here tests for this company, for example, on a Friday, painting doors and making basically samples. Those samples were sent to California on the weekend. And from that one single person many people speak of currently, we got the response which red he wanted, and that red was then locked in. Very quick decision process. And this is the Greenhide facility of Tesla in Berlin, is the first facility of that kind. And we will see much more of that. I've been driving a Tesla before, and I could choose between 5 rubbish colors. Andreas knows it, he had Tesla for some time, too. So now it's a totally different approach. And the differentiation where you don't have to sound of a 6-cylinder, 8-cylinder, 10- or 12-cylinder engine anymore to differentiate, other elements become relevant. It's the UX in the car. There, we don't have to offer anything, but the paint, we do. Here is our applicator for that process. I could have brought [indiscernible] everything, but that would have completely spoiled the presentation. The thing here to keep in mind, this new EcoBell 4 is a complete new generation. All the elements of the robot are equipped with RFID chips. Why is that relevant? We can track the life of each component of a robot, very interesting. More interesting is customer, you see that [ bell cup ] just where you have the -- that creates the spray, the metal is here. This is a proprietary spare part. This is really our jewel, if you will, and we've seen many other companies trying to copy this. Now with an RFID chip, the robot doesn't work anymore if it's not our own [ Bell ]. Two-tone painting I was referring to, you see just one example. We can -- today, we paint roofs easily, but you see also a little bit already there that soon, we would be in a position to paint the outer body completely, the outer body of a vehicle. That is in painting a revolution. Was talking about Final Assembly, reinforcement of conveyor systems. Here, what you see here is a piece of an automatic battery marriage. Those batteries, those large heavy batteries, there are sometimes 500, 600 kilograms, they are bolted, in many cases, bolted include at the same time, in the underbody of a vehicle, and you have sometimes 80, 90 screws that need to be assembled, and we are specialists to do this reliable and fast. Then that's team testing from yesterday, testing of e-drivetrains. Battery manufacturing, that's the coating. Here, you see an electrode that's used in order to produce cells for batteries. And we are the only company today with a unique process where you see that foil here, the electrodes, material, it's either copper or aluminum, and then you have either carbon- or [ lithium ]-based material that needs to be put on as a slurry in very, very tight tolerances. And we are the only company that can coat from the top and from the bottom at the very same time. And that, of course, reduces cost, reduces the footprint and improves the quality. And that's why we supplied already some of the systems. For example, there is 4 of those systems standing with [ BARTA ] here, not so far away. We've now inaugurated the first facility with Cellforce, where actually we have been renting out to Cellforce the facility just next door, and they build their production there until they have the final facility near [indiscernible]. So potential there. Challenge here is the scaling up. We produce today machines at about 700 millimeters. That's too small for giga-factories. That's good enough for high-performance, small production or pilot facilities, not big enough for giga-factories. And this is what we, in terms of development will accomplish by the first quarter of next year. Here, I was referring to that. We've been announcing this battery alliance. It is a nonexclusive, non-equity-involved cooperation in order to be fast, in order to not have issues on an antitrust basis. Why? Because the 3 companies together can perfectly cover the whole production chain of a battery. On the top, you can see the inauguration of Cellforce, in the middle there is Mr. Steiner, the Porsche Head of Development. So a lot of momentum in that business. We're sorting the arena at the moment. And actually, that's the alliance I was talking about. The electrode production would basically be or is our responsibility. The cell assembly is months and the battery package [ corp ]. So as a nice coincidence, the 3 companies together in a very complementary way can cover the whole production chain. Will all the OEMs order whole thing from us? No. That's also not the purpose. If it happens, fine. But what we are now doing as 3 partners, we develop a much more efficient production process, including digitization, which we will do for batteries. Currently, you have from the Asian manufacturers for battery cells, for example, you have about 30% waste. And this is all very expensive material. So if you can only reduce or improve the first-time yield by 10%, this is millions. And this is what we believe we can differentiate and offer the market an alternative. I'll jump over that for the sake of time. So I've touched on some of them already why do we believe that a European partner to European OEMs can make a difference. First of all, one thing that's completely undervalued at the moment and where some of the OEMs, as we speak, do a hard landing is compliance with EU standards. You've all heard about CE certification. Many of those players struggle. Many of those players cannot adapt to the processes required by the German OEs. I'm not discrediting Asian suppliers. I'm just saying, there is a place for European solution. And you see some of the arguments here, all those systems are a -- battery production is highly fragile. You have to be close, spare parts have to be available. You have to be on site very quickly. So just building a facility is just one thing. Optimizing the facility is where the money typically comes. So just as a snapshot here. Why do we believe there's a market? It's very simple. If you look at the needed cell production capacity in Europe, it will be exploding. But in the next 7, 8 years, we will need a production capacity of -- you see the numbers, so many gigawatts. And I mean, if that number is online, it has to be ordered the latest by 26%. So it's very, very close, very close. And they will not -- and let me make one point. We're focusing, of course, big time on giga-factories. But there will be so many projects outside of the giga-factories, all the construction equipment will be electrified, stationary batteries that you've seen yesterday. So giga factories, of course, are the lighthouse, and we're also shooting for this. But already today, with the projects that we've done for [ BARTA ], for Cellforce, for an Italian forklift producer, there is a market besides that, which we already today can touch with our equipment. This is how the equipment looks like. It has 3 elements: the real coating piece itself, then the drying because it's a slurry that's wet with a solvent, very expensive and toxic solvent in there. And that solvent has to be recovered because it's very expensive and toxic, as I said, and it is recycled and we brought in the process again. And the systems that we supply recover more than 99% of the solvent that's used in the process. And I think we have a film thereafter, right? How can we start that? Just keep it on time. Okay. Here we go. [Presentation]

So that gives you a little bit of a flavor for our, if you will, main driver for growth, which is e-mobility. Then to the next Q&A section, actually. Dietmar, may I ask you to come on stage. So Mr. Schachel?

I have two questions from myself.Firstly, on the profitability of the e-mobility business. You spoke a lot about preference for profitability over just volumes. But on battery coating, can you clarify what your minimum margin in emission is there? Are you willing to invest more in growth by accepting lower margins? Or should it be mid-single digit, too?

That business definitely has to be double digit in the end. We're investing still a lot of money. We see from the margins that we can achieve from previous projects already and that if you take the margin, allocate an average overhead to it, that the profitability is quite good. That business is not generating money at the moment for us because we're heavily investing into R&D and in pilot plans. But the projects that we have delivered, they are already today profitable.

And on competitive landscape, you already spoke a lot about competition in various areas. I think you did not yet mention Final Assembly. And I think the question would be, I mean you're very successful with very big order wins. But in certain ways, it sounds reminiscent of what you had in China a decade ago, where you were the first mover, the OEMs appreciated that you were the one that lead in the growth potential, and we had a very early and big presence. Then a few years later, your competitors followed. Is it a similar pattern right now that you're winning because you have a 2-, 3-year lead in 3 years, your big competitors will have caught up? Or do you think you can sustain the current lead?

Are you with Final Assembly or the...

Final Assembly.

Okay. Final Assembly, we're working selectively already today. So we have all the means to do complete Final Assembly lines. And we've put together a strategy that's called NEXT.assembly, where we offer differentiation. Nevertheless, in many cases, we've been talking about conveyor for example. Conveying the most competitive piece. Already in Germany, you find easily a dozen of competitors. We can easily let that out and focus on the key areas where we are competitive for many years, which is, for example, the filling equipment, double-digit EBIT rate for 20 years. The Final Assembly marriage systems, which we do, where we are specialized. In marriage and end-of-line testing of vehicles, there, we're very successful, close to double-digit returns on EBIT. All this goes into our Final Assembly business. And there, we become more selective on the conveying side only where we can make a difference. That is a very competitive business. But again, here, it's not size, it's again profitability and different to paint where not so much promoting the turnkey approach in order to protect profitability. Mr. Kempf.

Yes. My question would be on the new kids on the block. They have had some issues this year because of higher interest rates. How do you make sure they're still paying your bills? And has there been a slowdown in the order intake over the last month?

No, that's -- you touched on a very good point. Actually, we've paid a bill already, and we can admit there's one player in China, where -- which -- and that's a while ago. That's a couple of years back. And if you carefully look into our P&L -- when, last year? Anyway, it doesn't matter. Yes, we've also paid our lesson there. We have internally -- in our risk management, we watch on an ongoing basis. We have classification for all those new players in our risk opportunity checklist. And during the course of the project, we track all those projects. And those 2 layers. First of all, we have to be cash positive for the whole project, but we also watch at our supply obligation. So it's not good enough to just make sure that you're cash neutral on a project because you also have already supply obligations in there, where suppliers, which at some point, you will have to pay. And this is what we're monitoring. Actually, we are currently, again, as we speak, having the discussion with the Chinese [ MD ] because we have a certain limit. And then once this limit is reached for business with start-up EVs, we're discussing whether we accept the project or we don't. And we just have the case where we say, no, we're not going to take this project because it might increase our exposure too much. So this is something that ends up on Dietmar's and my level, is on a monthly basis, a risk report about those customers after we paid the bill.

Okay. Do we have further questions, maybe also from the Zoom meeting?

No, there are no Zoom questions at the moment.

I think we have a question over there.

Is dry electrode something that is threatening your position in the coating arena? I understand it's still very much a start-up technology. But companies like Tesla and others are working on it. There are alliances out there. Fraunhofer is putting effort in. So is that something you're looking at as well?

Yes. Theoretically, it's a threat because once electrodes, it will start with a cathode, theoretically. The Tesla facility doesn't work. So it simply doesn't -- so far what they have, they acquired a company called Maxwell, who are specialists. To my knowledge, it doesn't work. We don't see anything in the market. And I can assure you we're carefully watching it. We're also in touch with Fraunhofer. This is a potential substitution, not now, maybe in 10 years. And I think it will come, and this is why we're watching it. Our assumption at the moment is that we will not develop it ourselves, but this would have to happen through an acquisition. But the technology is still far away from happening. And looking at the arena, you have to differentiate, if you're interested in there, between a solid-state battery and dry coating. Solid-state might come faster, but that's not a threat for us. Because there only the electrolyte will be solid. But the coating of the electrodes will still be the same. Next step would be the dry coating. There are some companies even we find here [indiscernible] for example, who are trying to do this and a few others. So far, none of the companies are successful, but we are very close to the topic.

Okay. I think there are no further questions at this stage. And then I thank you very much for your questions and for the answers. And we take a 15-minute break and be back at 11:00. Thank you very much. [Break]

Okay, ladies and gentlemen, welcome back to the second part of our Capital Market Days. We now talk about sustainability and also about the finance management. And without further ado, I would like to ask Jochen to get back on stage for next session.

Thank you, Andreas. Actually, my favorite topic, sustainability. Maybe as a short intro, we have, I would say, 3 years back, decided that we wanted to be at the forefront of sustainability. And if you look at our reporting, just one example, taxonomy, we are 1 out of 4 companies in the DAX universe who have not reported only aligned but also -- not only eligible but also aligned our relevant business in that respect. And why are we doing this? Of course, to satisfy the financing side, and we could talk about ours. Mr. [indiscernible] is here today, I think. Can I see him? I don't see him anyways, there. Okay. Doing for quite some time, I think really inventions around green or sustainable financing. We started with a sustainable supply chain. So lots of activities. Why? The big benefit that we have, and that's the reason why even when I was not CEO, I was responsible as an operational Board member for ESG because for us, it's a business model. We said from the -- right from the beginning, for us, this is a differentiator. This is where we will make money in the future. So -- and on the next slide, I want to tease you a little bit in terms of what that means for us. So in general, sustainability benefiting from a secular trend. I'll show a chart, then example around or examples around automotive, woodworking and environmental technology. So first of all, and I've pushed this a number of times already during my presentations, decarbonization is the main thing that's happening in the industry in many aspects at the forefront, automotive, but also in other sectors. All major OEMs need to become carbon neutral. They've set themselves targets somewhere between 2035, 2039. And I can assure you, NGOs will watch OEMs very closely. So if they fail in order to accomplish their targets, they would be in trouble. And actually, we see it now, for example, one project for an OEM, who will build or build as we speak, a new car plant, a car plant that we built in Hungary for pure electric vehicles, has now invested in a very green paint shop. Because already today, if somebody watches what the customer is doing selling green vehicles, green vehicles have to come from a green facility. And this is why decarbonization will happen. So we can speak about how quickly will things pick up, but it's definitely something that's going to happen. What it means for us, I'll show on some of the following slides. In general, resources and the consumption of resources will have to be reduced because of availability and cost. That has driven business for us already today with the sensitivity of customers around gas, et cetera. So in all -- all in, our customers will have to reduce the Scope 1 emissions significantly and even down to zero in the next decade. So looking at the paint shop as we speak, I've said that before, a paint shop is almost half of the carbon footprint of a facility. More than 60% of the paint shops are older than 15 to 20 years. And today, a shop you see that here or the -- 1 car body consumes about 1 to 1.5 megawatt hours for the paint -- for the paint process. A perfect paint shop that we, for example, sold one to the Middle East now is less than 400. So the consumption is 1/3 or 1/4 of current paint shops and even more, those paint shops that we can build can be fired by electricity and consequently, leading us to a carbon-neutral paint shop. On the right just a few examples, what is state-of-the-art in paint shops, what has happened in the last 15 to 20 years. And that doesn't mean that this is all established. Paint shops that we sell today already consume 2/3 less energy than before. And this is not even the end of the spectrum. In previous paint shops, the separation process of the overspray was in the waterborne process. Nowadays, paint shops are not using water anymore. Most of new paint shops, there's still a lot running, not using water anymore to take away the paint particles from the air because that creates a lot of waste, toxic waste, that creates a lot of necessity for the conditioning of a paint shop because if you bring air as a separation media into a paint shop or paint booth, you need to constantly heat the paint shop, you need to recirculate the air, condition the air, again, consuming a lot of energy. So just to touch on that quickly, automotive OEMs need to reduce their carbon footprint and reduce their Scope 1 emissions to zero in the next decade or so. And the paint shop is about half of their footprint today, which means they have to touch our equipment. So I was touching on a CO2-neutral paint shop already, not going into all the details for the sake of time. We have a lot of equipment that is especially also relevant for electric vehicles. You see one example here, our EcoInCure. This is the only dryer of bodies after the paint is applied that runs through the paint shop in basically 90 degrees direction. Normally, cars follow in line through a dryer. Why do we do -- why do we turn the vehicles 90 degrees and run them through the dryer? Because we need or we want to heat the body from insight. Electric vehicles have very stiff bumpers with a lot of material, a lot of metal in the bottom and a normal body in the top. So you have a lot of difference in thickness of the material with the risk of heating very inhomogenous the body when you dry it. A way to get around this is to dry the body from inside with our way of doing it. We use the inlet of the not-yet mounted windscreen, we bring the hot air into the car body and heat the body from inside, much better quality, the right system for e-vehicles. So a lot of specific solutions. Plus with our solutions, and I have brought an example here, of converting paint shops by taking out the gas, bringing in electricity, that creates a lot of brownfield business. I was touching on it. And just to take a small example, meaning if you replace the heating for ovens from gas by electric, that is the examples you see here, what it might generate as brownfield business. In a simple case, where you have, I would say, almost a modern paint shop, dry separation, that is brownfield value of EUR 10 million just for the conversion from gas to electricity. If you have the old wet separation, it's EUR 30 million. But that, again, is only a fraction of the paint shop. And again, take the 700 paint shops, say, I don't know, 1/3, 1/4 applies to Durr, but the potential is basically all of the paint shops. Most of them have to be touched. You can find a figure of somewhere between and 10 and 100 million, depending on the necessity of refurbishment or change. And that gives you kind of a brownfield potential going forward. This is what will drive our business first in Europe, second, in the Americas. Actually paint shops are much less efficient in North America because they mostly use that separation today. And then comes Asia. Asia, probably with the way they run the equipment, I would see maybe equipment being run down after 10 to 15 years. So I see more potential for new paint shops in the old world, there will be a lot of brownfield activity. Woodworking. You see here on the bottom what Tier 2 emissions are for 1 tonne of bricks. You see 1.35 tonnes of CO2. Reinforced concrete, about the same, aluminum higher. And solid wood 1.55 tonnes but negative because wood conserves CO2. And this is what drives actually the business around sustainability in solid wood because it conserves the CO2, it does not meet CO2 during production. See here, the global furniture market. And you see on the bottom, the share of wooden single-family houses in 2021. Actually, we were surprised when we saw the number, then 1 out of 3 houses here in Baden Wurttemberg is already based on solid wood elements. You see Lower Saxony, for example, with a smaller rate. Germany is averaged 20%. If you read documentations and the regulation that we'll be kicking in, in, for example, some European countries, France but also Spain, there will be mandatory levels of wooden houses to be used for public buildings. And in a second step, we assume also for private buildings, and that will drive the business. This is a sustainable way to build houses. So again, the market for -- as we differentiate between the furniture business and the construction elements business, you see, we also expect a little bit -- and this is sales, not order intake, in '24 to come down somewhat in terms of the complete market. On the other hand, you see that the wooden construction market will go up with a much higher CAGR. So why is construction elements so interesting for the future? First of all, the example I've given, in terms of storage of CO2, it will more and more replace concrete. Then, I've also given the example earlier today of [indiscernible], where the shift goes into prefabricated building elements. If you just look at the picture on the top with the manual work involved, the workforce needed, the time needed to build houses in the old-fashioned way, and you look at the bottom, elements that are produced on HOMAG machines, where you have prefabricated walls ceilings, floors, the time on site is much faster, production cost is much lower because you can industrialize the process. And this, I think, is a clear argument in that direction. And what's happening now, we will see more and more high-rise buildings. I think there's a couple announced now. One is in Hamburg, I think 70, 80 meters. So a couple of buildings where -- now [ house ] also used them for multi-storey buildings. So we believe that this is the solution to help in terms of sustainability around, especially, the building of social living room, but also in other places. Again, I mentioned earlier, the 400,000 units confirmed in Germany per year as new social living, affordable living. And we believe, again, this is the right answer to it. You see the comment from the EU Commission, all that plays into our pocket. And you see here on the top, 90% reduction compared to traditional methods in -- for construction, et cetera, et cetera, 80 tonnes bound in wooden house of CO2. And of course, there's a big debate, is there enough wood available? At the moment, we don't see scarcity. Definitely something needs to be discussed, but we don't see this to be really the stumbling block going forward. So then as basically a summary, strong drivers for the building with wood renewable, climate friendly, et cetera. And the bottom one is really important, urban redensification, what we've seen in a number of projects meanwhile, where urban redensification happens that on an existing concrete building, you build another 1, 2 or even 3 floors of wooden houses because the construction of the building supports another floor or 2 of wooden construction, where it would not support a concrete additional floor. See here, the one example I was referring to, first giga-factories built in Germany. And it's a much faster time for the construction of a house, all in all, much shorter time -- shorter time on site. So how do we want to grow the business further? Globalization, I mentioned last night in the discussions that we don't only have the first orders from Europe, which we have for quite some time, but we also have the first orders from North America because the market, which has been wooden house for a long time already, but again, in a very manual way, now starts to shift again into industrializing the production. This is where we want to benefit. We have the footprint. We will localize the business. Then innovation in product portfolio, we've done 2 acquisitions in the last 2 years. We've acquired a company [ Kallesoe ]. They do high-frequency presses for the production of cross-laminated timber, so where you do really the construction elements. And a company called System TM who will out imperfections from wooden pieces. Meaning in a piece of wood, you typically have -- how is it called an -- what is asked in English, does somebody know? Branch -- okay, holds from branches, and we have equipment that analyzes in a quick way by running through of the element where is the imperfection and has a high-speed saw that cuts out before the imperfection, after the imperfection, and then by finger jointing, creates a very stable construction element. So this is where we've gone up one step, if you will, in the value chain in order to expand in that area. And I can only say, that business develops quite well. Nevertheless, we also want to work on the operational side by reducing product complexity. We're coming still -- [indiscernible] is coming from not an old world, but it's a single machine purpose producer. And we're now also applying our own processes, standardization, et cetera, to the company. That's where we believe we can also further reduce the cost while expanding. See here a picture for the CLT production market. And you can clearly see that Europe is at the forefront, but North America will catch up very quickly in a significant way, nice CAGRs. Last, but not least, in that respect, most of you will go to HOMAG this afternoon. We were talking last night. You can easily say where the money goes because we have CapEx programs not only in Schopfloch for our logistics center, which you will see in construction, but in a later stage also our new customer center. As we speak, we are also expanding in other places, see China coming in later, but in many other places in order to cope up with the demand and to reduce cost especially -- and use potential in the service business. The customers -- the logistics center that you will see in Schopfloch is meant to become much better, much faster on our spare parts delivery, supporting our approach to better covering our installed base. Last, but not least on this one here, environmental technology. That's a business we've been in for a very long time. It's a business that once started with the air purification of paint shops. Meanwhile, after the acquisition of our largest competitor, MEGTEC in the U.S. about 4 years ago, that business is the automotive piece, and that business is less than 10%. The rest is wood industries, is glass, petrochemical, is pharmaceutical, is food, chemical, et cetera. And this business is driven, of course, by emission standards. Those emission standards are tightening, and that drives our business. But also here, and you will see it in the film on the next slide, it is very important to become much more sustainable in the past. Also here, our air purification systems were gas heated. And also there, we have to walk away from that. And the following film will show you what it means. [Presentation]

So another example of sustainability actually was still debating whether the product name Oxi.X RV is really easy. I am not on the supportive side, but the team has decided, but it did not prevent the success of the equipment. Again, another example how sustainable products that can help to make production cleaner. All right. That would cover the sustainability section. And again, happy to answer any question you might have.

Okay. Thank you very much, Jochen. And then we come to the next Q&A session, and we start with Marianne.

Could you maybe provide us the split of the sales in terms of services, brownfield and greenfield as of now? And how you see it moving forward in the future, maybe on your midterm targets?

So the business is, let's make it very simple, almost EUR 400 million turnover CTS. Is that about the figure?

Yes.

Of that, currently, 15% is e-mobility. Of the rest, we're roughly at 20% service, 20%, 25% a bit more and the rest is the equipment.

And going forward?

Going forward, of course, the e-mobility piece will significantly grow, that's the picture we painted earlier. So that can be EUR 300 million or EUR 500 million at some point. The rest of the business will grow at GDP plus, I would say, also in the range of maybe 5%, 6%. That's what it has traditionally done. And that's what we expect also going forward.

Okay. And another question, I'm not sure if it's exactly your area of expertise. But on the wood construction, so you talked about availability as a risk. What about other risks in terms of fire, water damage? Do you think this could -- maybe impact the construction demand in the future?

No. We've -- the discussion, of course, is a lot -- the natural concern about fire. The way we have seen wooden construction, it is wood interesting enough when treated the right way is extremely fire-resistant. We've seen it for some public buildings where wood is used in a big way, fulfilling all those, what is it, [ F90 ], whatever requirements. And that doesn't seem to be a real issue of concern. And you see a lot of old wooden houses, I mean, I was in Poland last week at the HOMAG facility, and the people were showing the expansion plans and also the trend in Poland towards wood and houses. And they were showing pictures of wooden house of 500 years ago, which still are there. So wood is always perceived as something that will rotten quickly, but it's not the case.

Mr. Schachel?

You spoke about various upgrade potential in terms of the gas to electric switch and also maybe the VOC removal. Can you talk about how your client appetite for those projects has changed in the last few months, maybe it's easier to justify a bigger plant shutdown or maybe also the gas price and pressure is a bit lower?

There is very big demand. That product with this special we can't even supply enough following the demand at the moment. This is the key for the reduction also of CO2 emissions in many industrial processes, especially also in automotive. And what we are seeing in general, not only for CTS, but for the automotive business overall, I would say in the last 18 if not maybe 24 months, but maybe more 18 months, a complete shift in the discussion that we have with customers. Before the discussion was always on a return on investment basis. This is what prevented the decisions for many years, especially when energy prices were down. Now what we see is customers applying budgets for sustainability and asking us for the biggest bang for the buck. So we are sitting together with the OEMs who say, "I have a backset of so many millions in order to reduce the CO2 emissions in our facility, where should we first start." So where do we get the biggest reduction per million invested. And that's a completely different discussion to what we had a few years back. And this is the beginning, executive, the discussion I was trying to point out earlier that they now slowly understand the targets they've given themselves following the 1.5 degrees agreements will bring them under a lot of pressure. So that is changing as we speak.

Sorry for condensing the very important topic of sustainability in the very simple analyst metrics like EBIT margins. In the past, you have told us a bit about the price premium you charge for the EcoDryScrubber and other things. Now when we look at the PFS order intake margin being up 450 basis points, as you said, I mean do you have any internal perspective? Or how much of that might be driven by reemergence of a green product premium and customers willing to pay premium for big solutions?

Oh, that's a tough one. Anything I would say would not be, I would say, academic enough. There is a piece of that, but it's not -- it's currently not yet the main part of the story. That part will come as the brownfield business starts to kick in stronger and where we have, if you will, proprietary advantages because equipment supplied by us. Of course, it's much easier for us to upgrade the equipment than it is for others. Of course, it's the same way competitors installed equipment. It's easier for them, but the beauty is we have a large installed base. I would say that element is not yet the relevant element in the increase of the margin.

Another question?

Speaking of wood as a sustainable element of construction, what does Durr and HOMAG may be doing for the development of sustainable materials in that field, especially for wood? Do you have any initiatives you're supporting?

No, other than having all sorts of initiatives supported the -- however, the cultivation of 17,500 square meters of wood. So all sorts of things like that, that comes from sustainable activities. We are dealing with our clients, who were supporting our clients and new materials. For example, a different arena from furniture business. IKEA, for example, in terms of making their furniture more sustainable changing. I mean, we are all victims of IKEA and we -- in screwing bolts and things not working. What they are doing is now, they're going away from screws into clips and that has a big impact on our business because you have to create special inlets into the pieces of the furniture to make those clips or to have those clips being clicked and make the furniture stable. But when you change to another place that you can disassemble the furniture, and that's their approach to sustainability. So -- but it means from a different angle, we're working closely with our customers, but we're not the product developer, we're supporting our customers, who are the product developers with our equipment.

[indiscernible] J. Heimbuerger. You mentioned on Slide 49, the big savings that you're able to deliver for paint shops in those energy paint water is versus the last 15 to 20 years. Is there anything you can talk about in terms of relative to your competitors, like what -- how the savings look relative to them today?

So that was 49. If we look at the electrification, our competitors, in many cases, are not there yet. So in order to -- nobody else can build a CO2-neutral paint shop as we speak because we're the only ones who have already converted all the equipment away from gas into electricity. Will competitors also offer changes from the old fashioned way, the 1 megawatt to 1.5 megawatt, yes, because also other competitors have different paint booth already today. But in the sum of parts, I would say nobody can perfectly compete. But I'm not disgrading competitors, some do dryers, some do paint booth. But as a complete paint shop and with the management, I mean, we're talking about elements in the paint shop right now, but there's a significant piece of digitization, manufacturing exclusion system on top that is relevant to make an overall production efficient. For example, in a production, production not always happens in a car plant homogeneous. Sometimes, there's maybe 10 minutes where there is no car bodies coming either because there's a break or there's a shortage. Then what we do is our systems already predict from a much earlier process, what's coming, and they let the dryer go cooler in order to save energy. This altogether, nobody else can do. And actually, we are just having a new digital product, DXQenergy.management that we will have certified by an external body in order to give our customers a tool to in a certified way, track their own footprint. And that's things nobody else at the moment can do.

Checking for questions maybe on the Zoom also before we take another question from the floor.

No questions from the Zoom currently.

Then Mr. [indiscernible], please go ahead with your question.

[indiscernible] from MainFirst. May we get just 2 examples of business lines where you get hit by sustainability because the new world is hurting you?

Oh, yes. On the supply chain, [indiscernible] assets. So we have -- I don't know how many people we will have to hire in the next 12 months to satisfy -- all that creates stuff that's coming from Brussels. Means very simple. We are -- for example, on the EU taxonomy, which will be expanded, we have changed our auditor. It's going to be the next [indiscernible]. If we talk to our auditors and say, "Look, this is the packaging [indiscernible] they don't know, they don't know. So there's a lot of administrative useless stuff to say so, coming over us that will create a lot of cost.

And the second example?

Second, I thought I would get away with that. On sustainability...

It's under MPS, internal combustion engine.

Internal combustion engine, yes, we've almost through the transition, yes.

And that's an impact that we had on the MPS division. There was a sales amounting to around EUR 70 million caused by the internal combustion engine business off balancing and over the next basically 10 years it's going down towards zero. So we are replacing this step by step with electromobility solutions for balancing, but Jochen mentioned the various moving turning parts, whether it's [indiscernible], whether it's the [indiscernible] control other areas in the gearbox much more of the profit [indiscernible] seen in an electric application that you could see last night on the team seismic side, how small electric motor including gearboxes today when you open up your car, its a different view that you're having.

If you're lucky, you have a frank instead.

Can we take your market outlook for the wood processing machinery for '24 as a blueprint for your sales development at HOMAG in this year?

Honestly, very difficult to say at the moment because you have seen the draft in '24. And in our numbers, it will not perfectly look like that, I assume, because we currently have almost an annual turnover on our books, which is quite unusual for . And this to some extent, already today leads into '24. And of course, we're not stopping bookings in the next 12 months. So our assumption is, yes, business might -- we might guide the business somewhat lower, but we don't anticipate it to be as much as it is shown in the figures at the moment.

Maybe a follow-up, that would imply that your competitors will lose more than you because you are part of that market?

On one side, yes, but we're also changing the characteristic of the business. You could see what we are doing on the solid wood side. We are expecting growth there and all of our competitors or only some are covering this area as well. So it's the balance of the portfolio that we're having between furniture, construction elements and it's the service where we are clearly targeting then from today's 25% of service to move towards 30% what we are having on a group level as a target as well where we are actually at.

And this will, to some extent, overcompensate because I tried to mention it before, we see significant additional potential on the service side, which is today about EUR 350 million at HOMAG, that can go up a significant way in the next 2 years. Also almost naturally with the installed base that we have generated meanwhile.

Mr. Kempf.

One follow-up on the service business. You mentioned earlier that one of your competitors try to sneak in and steal the service contract. How do you make sure that something like that does not happen again? And do you sell the machine plus that free of a service contract. And yes, I think that's just it.

This is ongoing competition. It's not just one. The example I was giving was from this [indiscernible] insolvency, where it's been you cut the dragon's head and there is a number of small dragons coming up. This is what we have to fight every day. And this is what we're discussing big time. Actually, I was sitting together with the head of our paint shop service business just yesterday. And we will have a very good year this year. Because, obviously, many of the customers after some maybe not so good experiences have come back to us. We had a number of cases where those small competitors with the little balance sheet on some projects also miscalculated, because they are accepting orders typically relatively easily and then try to manage themselves up during the project, which hasn't happened. So I would say, overall, that has played more into our favor this year than it was creating additional competition.

Can you just give some color? If you sale machine, how long do you also sale your service contract with it in common years?

What we typically do is, we not always get a real service contract on the -- especially on the automotive side. What we normally do is that we supply with the original equipment with a plan, a set of spare parts. And they use -- they consume those spare parts until they have to buy new ones. But what we have installed over time is in many of the car plants -- the bigger car plants, we are so-called antennas. We have 2 or 3 service people embedded in the facility, and they more than pay for themselves because they always find business with customers. And that's the approach. Customers in not many cases, subscribe to long-term service contracts in our business.

Currently, I see no further questions. Any questions on the Zoom?

No.

Okay. Then thank you very much for questions and thanks Jochen for the presentation. And then Dietmar will take over now for the final session on finance.

Good morning so officially now from my side, giving an insight in regard to the finance management areas that I would like to cover is our digital finance transformation. So how we are changing the way we are working. It didn't of course -- it's about the financial metrics. It's about the cash conversion and it's about how do we maintain a broad financial policy? And what is the policy? You will get some insight in the press release is just out right now as well regarding our green finance or sustainable finance framework and, of course, as an investor it's always important, what are we going to do with the cash that we are generating, and how do we do capital allocation. So giving you some insights in that regard. Yes, first of all, Jochen mentioned regarding the OneDürrGroup program, you could see there that OneFinance is also one of these programs. And what we are targeting basically is fixed with these 5 strategic targets and it focuses on how do we enable to steer the operation, our business in a better way. And to me, that's a matter of resilience as well. Then that we provide better insight in a more timely matter and as such operational responsible managers can, at the very end to better business decision and can improve the business continuously. Nevertheless, for us is as well important then to increase our efficiency, increase our value add, but also making sure, and this is in ESG to assure that we have governance are above our business and Jochen mentioned the example of how do we actually handle exposure towards the new kits on the block, the new entrants to the EV markets? And how do we make sure that risks and opportunities are balanced. So that at the very end, we continue to develop the business in a profitable manner. And of course, it's also about making sure that we get the right people on board that we keep the right people on board. So even in the surrounding of [indiscernible], where we have other nice companies, and you could see this morning, the sales companies head office just in front of the [indiscernible], then that we find the right people actually do the business together with us. And as mentioned with the headline, it's also about how do we use the new opportunity is coming from the digitalization as well to further improve our area. So that's the overall finance strategic targets. But now let's look into financial metrics, and let's start first of all with the cash conversion. And you can see on the upper left side of the chart, actually, that our cash conversion was fluctuating basically over the years. We had periods where we had strong initial payments from our customers, and we could see the intention and budget constraints coming up on their side and then reducing the initial payments. Now in conjunction with our risk management, we are basically targeting the big projects with 5 to 8 milestones payments during the process, then to balance and to be cash neutral. So having a more stable operation and during the last 2 years, we managed actually to deliver a bit over EUR 100 million in cash in 2020, 2021. Right now, after 9 months, we are at EUR 69 million you might recall our guidance that we are targeting EUR 50 million to EUR 100 million. And of course, it's the ambition of the CFO getting closer to the figure of the last year, the year before, again. And that's what we want to do when we move forward. The key levers in that regard is at the very end that we need to consider. We mentioned the EUR 200 million CapEx program on the HOMAG side that actually will have an influence in the future. But in regard to the contribution right now, of course, EBIT is the source for the cash flow generation. It's the stabilization and the structural improvement of the net working capital and the HOMAG program already mentioned. What we are targeting is actually that we should achieve a cash conversion of 80% of the net income in a consistent manner or even higher. And you could see that during the last years. And now also after the first 9 months of this year, we are above that level, and that's based on the policies we want to continue this development. Now we're looking into various angles, then, CapEx already mentioned is one of these areas. Typically, we did around EUR 80 million to EUR 100 million in CapEx each year. This year, we are at EUR 98 million after 9 months already, and it's in relation to the HOMAG CapEx expansion program, and you will see this later this afternoon when we visit the shop floor side. We focus on improving logistics. We focus on improving efficiency and productivity, then by applying and implementing new principles of how we are assembling our machinery, and we have good pilot cases really outstanding light houses in that regard. So we will see higher investment this year, but also for the next 2 years, especially being driven by the program, but in medium-term perspective, we target to be below 3% CapEx in percent of sales, like you can see on the lower life side the last years as well. So it's a specific program to do catch up to improve, as mentioned, the operation of HOMAG, and then we will get down to a level of 3% afterwards again. In the next area that actually I would like to touch is the net working capital development. You can see that like 7, 8 years back, we have been operating in areas of around EUR 200 million net capital. Now it increased towards the peak of EUR 0.5 billion in 2019, basically during the COVID pandemic. And now afterwards, we're operating with a level of around EUR 400 million. And what we are striving for is to balance on one side the exposure to our customers, day sales outstanding with actually our liabilities to our suppliers. We work on inventory optimization. When you look into our balance sheet, you can see that during the last 12 to 18 months, we built up significant inventory to assure that the supply chain keeps running and that we can run the factory. This was important and necessary to be done in this volatile situation with a lot of interruptions in the supply chain, but we do see first improvement areas, and we will then again balance the inventory safety levels to actually fit to the market situation. We operate with net working capital of 40 to 50 days. You can also see that in the past, we have below 40 days. And one of the area for next year will especially to look into optimization further in and, let's say, focused way and then see no defined target today that we need to evaluate, and we also need to see how the supply chain situation further improves. But then the target, from my point of view, should be in a reasonable manner to be below 40 days or somewhere around 40 days when moving forward. Yes. And all this finally is reflected in our financial policy. We talked about resilience to some extent today already to me, that's important that -- and you also challenged us in regard to is Durr able to deliver 8% EBIT margin in a sustainable manner. It's a matter of the resilience that we are able to cope with these kind of situations. Jochen mentioned, how much friction is HOMAG's results this year, then redundancy, waste of efforts because we cannot build a machine as we would like to do it going through in one way basically. And that will improve in the future. But important is, and there will always be uncertainty. There will be interruptions. We do see the world became much more volatile, and we are preparing ourselves to deliver in a sustainable and consistent manner also in this difficult situation, and I think the profitability this year already is highlighting that we are making progress in that regard. Solid balance sheet and cash flow is important for our operation, already talked about this. We are not rated today. Nevertheless, our underlying -- or underlying to our activities is that we want to be perceived as an investment-grade rated company. So actually, this means a leverage of being below 2 and all the other areas in that region. So that helps us also to do the refinancing, we'll get back to this with the next shot, then also in a proper manner. And we talked about sustainability. We talked about ESG, that's important to us. We had our Sustainability Council meeting yesterday morning. It was a long discussion, and we will intensify this for the future. And to me, it's not because everything needs to be ESG and needs to be green. ESG helps us to improve our operation the way we run to assess there is probably opportunities, and it helps at the very end to make again the company more resilient and more stable even in volatile and changing environments. Yes. Then at the very end, cash flow on one side, what is available in order to grow our business further. We have currently available funds of around EUR 1.4 billion, the majority, around EUR 850 million to EUR 900 million is really cash and money market that is available. And then we have a revolving credit line of EUR 0.5 billion that is currently not drawn that can be used if needed. You can see that we managed with the activities that we did back in 2019 and '20 for the refining to have a better balanced maturity profile. And the peak is in 2026 with the convertible and the only maturity coming up next year is Schuldschein loan amounting to EUR 50 million. So we will then see how we manage this. From today's point of view, we could manage it with cash. But on the other side, it's important to be active in the debt capital market continuously and also, of course, to see how in this changing interest environment perceived. And that's why I mentioned that the investment-grade perception is important to us. and then we see how we develop further in that regard. Nevertheless, overall, and this is not a comparison back to 2019, on one side with the available that then despite not being drawn down. On the other side with the cash position, we basically operate with close to zero net debt, which gives us a good degree of freedom to do the M&A transactions like we did with Teamtechnik, with System TM and with Kallesoe to enter into new business areas, but also to strengthen existing business areas. And that's basically what you want to manage then here to be close to net-zero. The other way around, just already mentioned is basically the target is a leverage below factor of 2 when moving forward then as well. And in that conjunction, you can -- and you might remember, I'm sure you remember actually Dürr get all refinancing since 2019, and Christian was especially person driving all these efforts with sustainability-linked, ESG-linked components being based on the EcoVadis rating. And from our point of view, it's now time to enhance that program to move forward to new market standards. So to shift away from purely sustainability-linked finance also to align with the new market standards. And we just released a framework that was prepared over the last months, one side by the treasury team. But on the other side, with the sustainability or corporate social responsibility team and release it now and it underscores again our position as being a leader also in that regard. And what we are focusing on is basically 2 areas. On one side, it's the green finance in regard to the use of proceeds that the money that we are using is dedicated, then to improving, then the contribution from our side is helping our customers with our solutions to achieve their climate strategy, but it's also to continue with the sustainable linked finance. But being more going beyond just the EcoVadis rating, now we also have clear 3 targets that are embedded in there. It's our emissions, Scope 1 and 2. It's the Scope 3 emissions of our customers. And it's where we believe it's a higher requirement, it's more demanding also the ISS ESG rating that is behind. And the improvements that we expect there should also be expression of our contribution, but also our continuous improvement that we achieved. So I think we are -- from today's point of view, with this framework, really well prepared for future financing activities. Actually, as I said, you might not see immediately some of them, but getting to the next point, how are we growing the business? You could see yesterday examples on one side with M&A activities. On the other side with the strong development with the organic growth, but we already talked about our M&A activities during the last years. And actually, we want to further expand in the MEGTEC, in the life science market in a wider framework with the production automation. We believe it's one of the drivers, and Jochen explained this as well for the future with the lack of people being available on construction sites, for doing the wooden houses, and we see certain areas. We will not go into adventures. We will do this in very diligent, very considered ways. Then our M&A types are having in focus basically the cross-divisional technology like IT, like digitalization, bolt-on to actually get further market access. Or as Jochen mentioned, in regard to lithium or the battery development, maybe the also new technologies that might play a role for the future, where we can then, with such acquisitions, can accelerate the development, but also with complementary business that is opening new market opportunities to us. And at the very end, of course, all of this shall help to increase our return to the shareholders. Of course, the stock price development is important, but it's also about the return that we are paying via our dividend. We have a clear policy of 30% to 40% of the net income being paid to our shareholders. And you can see our track record is in line with this, basically with the good development during the last years being at the upper end than in a peak, paying EUR 1.10 per dividend. It's not yet on that level, but of course, it's an ambition as well with the growth in the business, in the profitability, in the net income at the very end with the defined target range, then to provide returns to our shareholders in that regard as well. Yes, that's a little bit of insight from the finance area. And with this, maybe Jochen to you for a few closing charts and then of course, we are available again for Q&A.

Thank you, Dietmar. So hope we could convince you on a few things, especially on our focus, achieving the midterm targets for EBIT and ROCE. We had interesting discussions last night on the ambition and ambition level. We hope we could convince you that those levels for us, yes, they have work to do. On the other hand, they're equally realistic. We will maybe a bit different to the past in terms of pretty much in portfolio management, allocate the resources and the money where we see the growth opportunities and the margin opportunities. Also important, and that's been a point of discussion in the past. Also, I mentioned that a number of times during the presentation. As much as we want to achieve, of course, margins the margins we talk about, we want to achieve them in a resilient way, and that can only be done by also strengthening the resilience of our business. Then Dietmar very much focusing on it. Margin is one thing, but cash conversion is another one and consequently also our ambition to achieve investment grade, which then would -- will offer the right financing approaches, if you will. Key takeaways. We hope that you take those home with you that with our leadership approach and a view on a structured portfolio this management. And when I say this management, I'm not just talking about my myself, but the team that you've seen before, and obviously, their colleagues are the right team to work with. Focus on EBIT and returns resilience and revenue growth with the 5% to 6% that we've announced, and we've confirmed. And then hopefully, we've given you enough and the right examples from our portfolio where there is growth opportunities, mainly driven by the 2 main drivers we were presenting today which are sustainability and e-mobility and then also the element, the growing element of automation, not only MEGTEC, but also in other areas. But the 2 main topics that drive our business forward our sustainability and e-mobility. And again, we want to deliver numbers, not only from a P&L, but also from balance sheet point of view that give us enough headroom to show the cash conversion of the 80% on EBIT, right? Not on EBITDA?

Net income.

Net income, oh. Okay. That's why I'm not the CFO, on net income. And that would close the point from our end. But again, I'm grateful for the discussions that we had on the other agenda items and happy to continue the discussion now together with Dietmar.

Okay. Thank you very much. And then we come to the final Q&A session for today and start with Mr. Cohrs.

I have a question -- 2 questions regarding M&A and portfolio management. So portfolio management can be buy and hold or it could also be buy, hold and sell? So what are your underperformers or potential underperformance? Or what are the criteria to define underperformers? And secondly, with regards to M&A, can you maybe share with us main KPIs or what are the downs or what are the must have's in financial terms, so I think more of a CFO question, EPS accretion in year 1, year 2 or whatsoever maybe you can share without the financial ideas?

On the M&A side, of course, sale is part of M&A. I mean, it would not be complete to not have the sell in there. Our ideal scenario, if you will, is that we would first do some smaller or maybe also a significant acquisition. And then we think, to some extent, the portfolio, which also could include a call option. We have different scenarios and definitely, that's part of the discussion that we have. When we have the portfolio discussion in the management team. It's mainly about the portfolio consisting of growth opportunity and competitive positioning. This is how we cluster the business. And when I say that, we don't cluster the divisions, we cluster the business units below the divisions. That's about [ 40 ] businesses that we constantly watch and where we're discussing with the team on development possibilities. And based on this, we allocate resources. You can imagine that's interesting discussions with sometimes diverging ways to look at it. But at least it's a good way for professional discussions and decision-making.

And in regard to the contribution, what we are targeting with our M&A activities is to deliver into above-average growth, but also to deliver into above-average profitability. So at this very end, it should be accretive that we are seeing more benefits coming from our M&A acquisition or from margins.

Yes. If I may add one sentence to that. Interesting piece, if we talk about the 8% in '24, of course, that has an impact on our view on M&A as well. Where in the past, if you take, for example, MEGTEC, we were, of course, buying MEGTEC at a margin below the 8%. If we're now looking at acquisitions, we, of course, have a focus on the one hand, generating value by margin expansion going forward, but we're looking at businesses that already would support, to some extent, our margin. And we don't want to purely achieve it by that or not the majority of it, don't get me wrong, but it has an impact, which will be quite interesting discussion with stakeholders as companies that have a higher than average margin, at least comparing with us, also have certain valuations.

First, we take Mr. Schachel, and then Mr. [ Eisler ].

The first question would be on your cash flow ambition, I think 80% from 2025. Can you talk a bit more about the next 2 years, you probably have a bigger reset of contract liabilities, which might come in the next 2 years. We've got HOMAG OpEx, so what's really the ambition level that you communicate to your team for the next 2 years? Does it remain positive on cash flow? Or the next 2 years don't matter, it's all about '25?

Guidance will come out end of February next year. So that's a few days still to go. But overall, the situation is, as you said, we have a high level of contract liabilities. Right now, we do see that especially with a weaker order intake that we anticipate on the HOMAG side there and also are working into the projects will actually consume of these contract liabilities. On the other side, we have the high inventory levels where we do see opportunities now to start with the adjustments, with the stabilization in the supply chain. So overall, from my point of you, the EUR 50 million to EUR 100 million that we are having today, and as I said, not yet finalizing the guidance for next year. I think that from our point of view, framework that we want to maintain also now for the next shorter period of time where we have in conjunction with the CapEx program, higher spending on CapEx.

And maybe can you clarify your remarks on the solid balance sheet and investment-grade metrics. So when I was -- regarding to the Capital Markets Day I was thinking that you would talk about solid balance sheet, but I was thinking you would talk about you being close to net cash. Now suddenly [indiscernible] 2x number if you that bullish on the M&A pipeline, if you need to prepare us for a scenario of 2x leverage, which would give you high triple-digit headroom for deals?

That -- so if you do a bigger M&A transaction that might or that would have any impact. So that also we for a certain period of time, it probably would not be below the 2x, but the target would be again coming back into that area. And of course, with [indiscernible] transaction, we would also align then what are the returns finally, so that we are able to manage this again into that direction.

Next question Mr. [ Eisler ].

Listening to your most recent comments about what is an attractive business for you why not selling some of the not growing firms? And why not going to 100% in HOMAG, which all the prospects and potentially you are describing to us?

Let's start with the latter one, it might be easier. I mean, there are shareholders involved. There's agreements, I think, are this the agreement topic...

Pool agreement is public.

And pool agreement is public, and I think that describes the situation, of course. There is the ambition to do it. On the other hand, I mean, at the moment, the downside of not having all the shares that's limited. So yes, of course, it would complete the transaction in a way. On the other hand, with the agreements in place, the domination agreement, et cetera, and the pool agreement, there is no disadvantage if I can say, though. So on selling the businesses, of course, we're looking at everything and you could start with the lowest return on sales, how can I best answer it. One of the businesses is maybe not totally interwoven with the company another then there's another one. And one other, not extremely performing business at the moment is part of the DNA in a way that it's very difficult to carve it out, if I may put it that way. We make an attractive business, which I think is the easy option than trying to carve it out.

But the very first one, that's quite obvious candidate to get a nice price for it?

Which is -- your first one or my first one?

Yours.

My first one, yes, it could be. It could be. But we're not here to say we're not thinking in that direction.

But if I may just make one recommendation, taking a 5- to 8-year view, and you were talking already about 2030, you can have much higher margins if you really adjust and refine your portfolio.

Yes, and something will happen anyways.

So it's been already a long morning. I currently don't see further -- oh, yes, I see another question from Mr. [indiscernible]

In a high risk -- a higher interest rate, isn't there a risk that your automotive clients might be more reluctant in terms of down payments in the future?

There might be a reluctance in that regard, but we're looking to the risk management at the very end to balance our exposure in that regard with the initial payments and the continuous payments coming from our customer side. And we feel it's important. And to the very end they're still financing it cheaper than we are doing.

Just a follow-up on M&A ticket size because you said your M&A approach might have evolved it. You're looking for a higher margin, more established businesses. What are the implications for the, say, ticket size we should expect because for the last almost a decade ago that you acquired HOMAG as a billion-euro ticket, so to speak, since then it was more bolt-on, more double digit, I mean it's now the time right for another bigger deal?

Yes. Thanks for the question. Now that you ask, I might have not answered your last question completely because I think there was an element of why we are shooting at, right? So I might put that together in one...

You are [indiscernible] correct, but I was surprised in last question that you mentioned the 2x proactively. So yes, I was also wondering about the signal that you [indiscernible].

Look, we would, and we are always looking at targets. I mean we're looking at many, many targets. We have meanwhile a very professional corporate development department with a strong database. We have more than 200 company profiles meanwhile and the companies that we're constantly watching on the development. We were talking about the Teamtechnik case yesterday where this acquisition didn't just fall from heaven. That was like 2 years of intense work, building relationships, et cetera, this is what we do right now. So why did we not announce anything significant because in terms of availability, price perspective, there was nothing yet where we said we will completely shoot for it. Are we looking at acquisitions of a magnitude of EUR 500 million or even more? Yes, we do. But again, we will only move maybe even if I'm not coming from this region, there we have kind of a [ Swabian ] behavior, yes. We're careful. We look for the right moment. We look for the right angle, and we're typically not going for very big public auctions, because then building value from there is maybe -- is more difficult. But we are not. And with the debt levels or that multiples that Dietmar was mentioning, this would give us headroom for larger acquisitions, and we're not shying away from it. I mean I've been in private equity, and I've seen that multiples, of course, everybody here would run away. So I'm not saying we're going in this direction, but we're not shy, especially now, I mean, yes, high interest rates. But the interesting element to that is that the interloper universe in potential acquisitions is changing. You're not seeing, for example, so many private equities at the moment because they don't finance those deals at the moment. So now might even be an interesting time. I'm used from my past of doing acquisitions, not when it's just everything looks easy because that's probably the time where you don't do the best acquisitions. So that part. Other part, what we're [indiscernible] for. Of course, in an ideal world, we would do acquisitions that further reduce our automotive exposure. We will do acquisitions that are rather in machine building area than in construction, meaning businesses that give a long life cycle resilience in a way and businesses that in their DNA fit our business. And that's what we're looking for still at the moment. We have businesses where we've shown already that we want to expand those who want to further expand, look at solid wood, look at industrial automation, everything that's related to sustainability is interesting. So there's a couple of cards to play and let's see when we're successful.

Okay. Any further questions from the room? And I think there are no questions also on the Zoom meeting. So this would be then the last call basically. Okay, Mr. [indiscernible] last one.

Could you state that your preconditions for share buyback program, which might be on your again agenda now?

Good one.

Currently, it's not in stand-offs, yes, right. We don't have an authorization to do so far. So this is something we are targeting in next year's Annual General Meeting to reset basically the opportunities to raise capital and also to move into the other direction, but you could see our ambition is in growing the business, and we will need funds for that. So we want to be prepared to be able to act in the future again if needed, but basically, we are focusing on investing into the right targets that at a very end provide higher returns.

But at some point, and I'm not a fan of buying back shares in general. But at some point this year, we were regretting the fact that we were not able to do it because with confidence in the business, that could have been a nice sign to the market. But as Dietmar mentioned, we -- I could almost say we missed out on the shareholders' meeting to get approval.

Thank you very much for answering all the questions, and thank you for the interest and for asking the questions. Thanks also to all the participants at the Zoom meeting. We are now coming to the end of our Capital Markets Day. Thanks a lot, once again, for being here with us physically or for attending the Zoom meeting. And we're looking forward to do this now regularly and more often in the future in a physical way and hope that we will see also a good attendance like we did today. Thank you very much, and have a good day.