Dürr Aktiengesellschaft (DUE) Earnings Call Transcript & Summary

Welcome to the Durr Conference Call. Dr. Jochen Weyrauch, CEO; and Dietmar Heinrich, CFO of Durr AG, will present details on the acquisition of BBS Automation, followed by a Q&A session. I will now hand over to Mathias Christen to begin.

Ladies and gentlemen, good afternoon or good morning for those of you who joined us in North America. My name is Mathias Christen. Don't worry. I will come you instead of Andreas Shaver, who is traveling to see investors in the United States for the moment. So somewhere in the air. From last night, Present of [indiscernible] releases, you could see that to entered into a major M&A transaction, acquiring 100% of the shares in Germany-based BBS automation. Our CEO, Jochen Weyrauch, will now explain to you the details and the strategic rationale of this acquisition. Jochen is also joining us from the U.S. today, but that shouldn't be a problem. I'm now handing over to him. Johan please go ahead.

Yes. Thanks, Mathias. Let's see whether it becomes a problem on not. Yes, welcome you from Chicago. Actually, a good place to be right now because one of the subsidiaries of BBS Automation is also placed in the area here. Very interesting to see that we have a nice bead of participants today from analysts to investors, banks and even customers. So glad that you all made it. And happy to explain you why we believe that this is the right move forward at the right time. If we look at our chart #2 that we have distributed or published. I'm going to give you some of the reasons why BBS is the right player for our company. And by doing the acquisition, we're actually creating one of the global players in high-growth automation business. This is a highly fragmented market, but there is a bit more than a handful of very relevant players. And that's why we are glad that one of those has become available to us and that we've been successful in signing the necessary documents last night. And we've already also said that we intend to close the deal somewhere in the third quarter, beginning of fourth quarter probably. So BBS Automation is expected EUR 300 million business for this year. By doing this acquisition, we more than double our current business after we started basically our automation journey in '21 by acquiring Teamtechnik and consequently, Hekuma. Those business is adding about EUR 200 million with the EUR 300 million of BBS. We're forming a 500 million player, which is one of the leading companies globally. And having said that, by doing this, we are reaching also the target that we've published latest during our last Capital Markets Day last fall by saying that we wanted to form an automation business of EUR 500 million in 2030. So we've already reached that today with the opportunity of having signed an agreement with the sellers of BBS. What we see is and what we expect is significant efficiency gains, BBS has highly efficient engineering and production facilities, not only in Asia, yes, with a strong focus on Asia but also in Europe and North America. And what we, of course, also do is that we leverage our customer base with this acquisition, and I'll come back to that a few times later in the presentation. And what we do is we broaden our portfolio in high-growth sectors, especially during the last Capital Markets Day and also during the general assembly, we said that we wanted to give more focus on distances that not only offer higher growth potential, but also offer more potential in terms of increasing our overall profitability. And with this acquisition, we actually achieved critical mass, too. So all this follows our, I believe, well-established M&A strategy. So this page is a teaser, if you will. If we then look at the fundamentals on Page 4, the transaction summary. The enterprise value will be EUR 440 million to EUR 480 million, depending on an earn-out, which is related to the final outcome of the year. Consequently, the pro forma leverage, as currently Durr is more or less debt-free. The combined businesses will then generate a net debt of around 1.3x of EBITDA for the year or actually for NTM March '23, which we believe is still within a conservative range. We show attractive synergized the forward-looking multiple of 8.5x to 9x EBITDA for the year '23 based on the synergies that you see on the right side of overall about EUR 10 million that we want to achieve latest in the next 2 to 3 years. Estimated closing, I mentioned that before, either end of Q3 or beginning of Q4. And we have, meanwhile, due diligence already organized financing. We have committed line of the number that you can see by a number of banks, so fully committed as we wanted to be safe for the bridge facility, which then at a later stage will be transferred in a long [indiscernible] and I'm happy to comment the questions regarding this. So I mentioned already substantial cost synergies and the additional revenue potential. I shouldn't say this is still a bit vegan, but I believe this is a significant number, but this is definitely trust to GE. And part of the synergies is the full rate -- full run rate synergies in terms of revenues, which we believe, again, the EUR 50 million is not a too aggressive number, which we have built in the plan. If you look at about the EUR 500 million business, 10%, I believe, is a fair number, especially when looking at this very complementary picture between geographies and customers that we can use to leverage the business going forward. Financial targets for '26, revenues of EUR 400 million to EUR 450 million and an EBITDA margin of 13% to 15% where the 13% already today is pretty much in the ballpark. Financial impact, there will not be much for '23. However, for '24 going to be EPS accretive and obviously, revenue margin partially accretive today already. If you look at Page 5, what are the highlights? I was partially touching them already. We are creating a global assembly and testing automation player with a strong footprint now across Europe, Asia and North America. With Teamtechnik and Hekuma, we had pretty much a strong position already in Europe. But now with BBS being much stronger in North America, I will see this later today. but also especially in Asia with a strong footprint, especially in China, we have really now a well-balanced player where we can play many more cards than before. and the high efficiency due to global engineering and production, again, so far, we're well-established players in Europe with high share of the employees being based in Europe, we can now very well balance the business through different regions and obviously, different cost levels. Very similar actually to the way we've been successfully running the traditional Durr business as well where we're leveraging engineering resources and production resources around the world. The company is founded in 2013 by [Joseph Vilcober ] founded in 2013 doesn't mean the company started from scratch. But it started basically as a buyout organized by [ Joseph Vilcober ] [indiscernible] the former expantion business from the [indiscernible] Group in Switzerland. Already in 2013 with a relatively strong base. Companies currently headquartered in the suburbs of Munich in Garching, pretty close to the Munich Airport. And as I said before, we're expecting around EUR 300 million of revenues for '23, and definitely double-digit EBITDA margin. for the year. The company, meanwhile, employees actually status off end of last year. So there's a few more meanwhile, but end of last year was about 1,012, employees and focuses on high-quality tailored solutions, but on defined modular approaches. And full operations capabilities and service support, especially in e-mobility and medtech. Mobility, of course, with strong opportunities right now. And Medtech already strengthening together with our existing business, Medtech, which we see as the longer-term strong growth opportunity. If you look at Page 6, you see the footprint. If we start in the West Chicago. You see the darker blue dots is the facilities from BBS. The lighter blue dots is our existing facilities through either Teamtechnik or Hekuma. Chicago is one is the center for North America for BBS and we already have a smaller, a much smaller facility through Teamtechnik in Lawrenceville, which is close to Atlanta. Then there's also a facility in Guadalajara in Mexico, and we are about to expand that significantly now with a lot of business, especially in e-mobility starting up with OEMs or Tier 1s in Mexico. Then we have a number of facilities in Europe, not touching them all in detail. But what you see is that we also have already with Hekuma facility in Hallbergmoos, which is closed also to the Munich Airport. And then there is the 2 acquisitions that BBS had made in the last number of years. One is Poggibonsi for the winding business and Caravaggio (Kahle), especially in the Medtech area that also was acquired like 3 to 4 years ago. If you move to Asia. So far, Teamtechnik and Hekuma only had a small facility in to through the acquisition of PPS, where more than half of the workforce is in the area, we have a strong footprint now in Kunshan to choose both, if you will, suburbs of Shanghai. We also have a facility now in Penang, which serves the local Southeast Asia market but also serves as a , if you will, extended work bench for some of the components that are used in BBS systems. And then there is a further facility in Pune, not so large yet, but also with the potential to follow the development of the Indian market. On Page 7, you can see the distribution of the business by industry and by geography, again, as we were touching geographies already. Let's first look at the bottom. And you see that DBS has a strong position in APAC, 45%. 2/3 of this roughly is in China. So strong relationship to Western OEMs, Western Tier 1s in China, but also, and that's very important also to Chinese OEMs using, especially, and you can see them up in the pie chart, the potential in mobility, but not only. Then further, in terms of distribution around the world, Europe makes up for about 30% of the business of PBS in North America, 20% with a growing trend. If we look at the industries, E-mobility has become very much important. You see the ease in brackets because not all is purely electric. But of, if you will, the mobility business, about 2/3 is really regarding e-mobility, be it components on the battery side like inverters or complete e-drives. And then there's also components that are related to the production of vehicles, but which are not related to any ICE components, which is relevant. So there is no substitution risk. But we also produce, for example, we built systems that produce components for seats, for example, or chassis components or air conditioning. And relevant to mention also more and more for centers that are used in the vehicle or in terms of user experience. Those new dashboards, curve displays, et cetera, which are not directly connected to e-mobility, but are part of this trend regarding e-mobility/user experience, and we see this further as a big growth driver. On the Medtech business, especially strengthened with the acquisition of Kahle, who are, for example, involved in safety syringe assemblies and other components for the med tech industry and like dry powder inhalers, et cetera, surgical devices, business that still, as you can see here, is 20%. But we believe that especially in the longer run, that offers strong growth potential. I'll get back to that in some of the following charts. I think that's the main relevant part here on Page 7. If we move to Page 8, is basically the reason why we've decided to open up the new arena for Durr. As we were looking at various markets, the where to play discussions and decided that we wanted to be in automation, is because the end markets will continue to grow in the next future and give some arguments, which you can already read on the right side. We have tested -- we've done a very extensive market survey before we acquired Teamtechnik and even though the seller provided some market information during due diligence, we have done our own update. And could simply confirm that the market will continue to grow in the high single-digit numbers, if not low double-digit numbers for the years to come. And why is this? Because we all see, and I think all of you in your businesses already see labor shortages in many areas which increases cost and consequently drives automation. Also in countries like China, by the way, we see more and more automation because of either labor shortage or consequently, labor cost increasing. In addition, what we also see is maybe especially in the medical area, is near and onshoring to develop nation for various number of reasons. Be it geopolitical, be it logistics, and that further supports the trend overall for automation. If we then look further in, for example, into mobility, we see -- we continue to see massive tailwinds by the trend to electromobility. And if you just imagine that last year, there has been about EUR 6.5 million battery electric vehicles. This is still less than around 10% of the global production. You see how much potential is still out there. Interesting enough, more than half of the EUR 6.5 million are currently produced in China. And this is why China is so much of a driver and such an important driver also for us going forward. So you might say, yes, but it's already more than -- or around 50% of the production there is mobility where is the growth potential. Growth potential is actually, as there will be more cars produced in China. Whereas in the rest of the world, the overall production rate might not go up so significantly there, the rate of battery electric vehicles is still relatively low. And this overall makes us believe that we will have many years to come for increased capacities. And then, of course, there will be [indiscernible] business, et cetera. Then also a main driver for automation business is Medtech, purely because we're all getting much older and less healthy. This will all drive the need for more medical devices, those medical devices will follow stronger regulations. And some of those regulations can only be fulfilled through an automated production because with manual production, you cannot increase the quality hygienic requirements, et cetera. So just as a few arguments why we believe that this is the right horse to ride. On Page 9, why do we believe this to be the perfect fit for our automation strategy. This means, of course, BBS, because we get a significantly improved growth opportunity in markets with strong fundamentals. I think I've given you a few examples, especially when it comes to North America and APAC. We see a number of synergies. I'll explore on that also on the following page. Our footprint significantly increases global reach, highly efficient operations, through the footprint, especially in China. Sales increased product offering and a much stronger customer access. Also there, I'll give you a few more examples. Supply chain, of course, we expect through the acquisition of DPS for BBS, but also for Teamtechnik and with the support from Durr economies of scale in the supply chain and efficient manufacturing footprint, especially driven by BBS will help our automation business. But again, and that hutches then what we call in the lower part of the chart, know-how transfer. There's still a number of elements and tools that Durr can provide. For example, project management. We're very used through our larger projects to handle and execute larger projects in a very efficient way. Whilst it's important, we see in automation the projects become bigger and bigger. In the past, especially, for example, when you were looking at a project in e-mobility, those were low single-digit million projects. Meanwhile, most of those projects are double digit and not just low double-digit numbers, but higher double-digit numbers. This is why it's so important to have the tools available to make sure that those projects are efficiently managed and this is where I believe Durr can also provide some support. Let me also -- let me just touch on the last one on the page. Digital Factory, as you know, Durr is -- has been a driver for digitization for many, many years. And this is why we believe that we can further support our automation business to gain speed. And if we just use one example, our MES business, we're one of the leading providers of software for manufacturing execution systems, and this is element that we expect to use also in our automation business. A bit more of a deep dive in the same direction. E-mobility leverage of a complementary customer base and synergetic capabilities, just 2 examples without mentioning names. But when we looked at our customer base for both Teamtechnik and BBS, we figured out that interesting enough that customer base is very complementary. So this offers us the chance, obviously, for cross-selling, in terms of customers especially when it comes, for example, to customers in -- for Teamtechnik in China, where China has not been so strong yet for Teamtechnik, but BBS is very strong there. The opposite is probably true for Germany. And if we then look at complementarity technology, Teamtechnik is today, very, very strong when it comes to, for example, end-of-line testing of electric drivetrains. And today, BBS is one of the leading player for the assembly of the electric drivetrains. And also there, you can probably understand where we believe that there is also synergies on the technology side. The medtech business, especially with a focus on the U.S., why the U.S. -- the U.S. is today, by far, the largest med tech market, here, BBS is, I would say, okayish in the business. But now with the rollout, especially of the product portfolio of Kahle, we will gain much more momentum. Also, Teamtechnik and Hekuma have had their first wins in North America, but it's always a bit limited because some of the customers of Medtech are huge, and they want to work with suppliers that are not too small. And that's been limiting some of our potential in the past. And we believe that we will gain much more momentum, especially in the U.S. around Medtech. So I think that's the 2 main ones here. On the cost synergy side, of course, through all the functions, we believe that we will have some cost synergies not necessarily means that we would have to adjust the capacity, but we believe that we can grow with the existing capacities much more than we could have had without this acquisition. So then I would move to Page 11, to just reconfirm that we consequently follow the strategy that we have published also during our last Capital Markets Day, where a high-performance automation was 1 of the 3 main growth areas. So we've made significantly move forward by already reaching this year the target in terms of size that we have set ourselves for 2023. Not touching the other areas today as we're focusing on automation today. See that in a simple chart again that we will be 3x to 4x the size, if we compare this year, if we compare the business to where we were in '21. Then on Page 13, to round up. What is this acquisition for us. It actually moves the needle. It is in terms of EUR 300 million compared to our, say, EUR 1 billion for the group is less than 10%. But it's a significant move in terms of moving this company on a different profitability level. And especially, of course, for automation, it really moves the needle because it's more on top than we had before. It become one of the leading global assembly and testing automation players. We believe, especially when we discuss with customers they say that they want more and more reliable, larger global players. When we've done the survey, for example, that consultancy firm confirmed us that some of the players that are just in the high double-digit million turnover or low triple-digit million, are not so much considered anymore by customers because customers now giving projects that are in the mid double-digit million number or even higher. I believe that those suppliers are just not strong enough to perform such projects. And we will be, at the end of the day, one of a handful players who can play the piano globally. I hope I could give some examples why I believe that this is a highly synergetic transaction together with Teamtechnik and Hekuma and we now really have an automation platform to leverage new technologies around the world. Like I was mentioning, bringing our testing capabilities from Teamtechnik to China or the Medtech technology from Europe to the [indiscernible] and all of this based on a much more attractive cost base than we had before. So then of course, improved access to the high-growth markets with the momentum that we have now. And consequently, for the whole group, a positive contribution for our revenue dynamics and our profitability targets. So that's what I wanted to give us a number of statements. And obviously, we're happy to receive any questions.

[Operator Instructions] The first question comes from the line of Sven Weier from UBS.

The first one is on the revenue growth that you outlined, Dr. Weyrauch. I can see that the EUR 300 million is a doubling in 2 years. I can see 1/3 of that is potentially coming from the Carla acquisition or 2/3 organic. So it's a big number. Just wondering what specifically has driven that in the last 2 years, I can see in the filings of BBS that they are dependent on some single clients, they say at least. Or is it special OEM accounts that have been behind the organic growth? Or can you elaborate a little bit more on that? That's the first one.

Thank you, Sven. Yes, First of all, also like some other businesses, BBS is coming out of the pandemic trough, if you will. So the business has I would say half of what the growth is this year in rough terms, has been the downside of the corona pandemic. It sounds impressive, and it is impressive how this company grows for the year, and we can clearly see this from the backlog already. But it's a significant growth, but it's not like it looks like if you just compare the 2 years. And it is actually an overall growth. There is a nice business in North America, but especially there is very good business from the APAC region especially also in China. I've been seeing the Chinese facilities 3 weeks ago. And I was really impressed to see how many projects we have not only for the Western OEMs or Tier 1 but especially also for the Chinese players who, as we can all see, gain significant momentum. And actually, we continue to see this moving forward. So it's a mix. But I would say with a key -- with a stronger focus currently on the potential around e-mobility, be it from the electric drivetrain, but also from the battery side.

And I was just also wondering because you talked about the complementary deal with regard to the Teamtechnik clients. But how is it maybe also with a paint shop right? I mean, how does maybe the overlap with the OEM client on the paint shop side? Is the similar mix that BBS says?

It's a similar mix. What, of course, helps, and we've been seeing this with teams. For example, we've had in the last couple of months, the first successes with North American OEMs, 14 testing where Teamtechnik never really had with one example with one exception, significant business. And there, of course, the momentum that we have to do and our proximity to customers typically at a relatively high level, that helps, and we believe this will help as well. Also in China, where I must say in China, BBS is well established. But still, I mean, we have customers that data, we do have customers that BBS doesn't have but also in other regions. I mean there is regions, if you talk about India, if we talk about other parts of the Americas, there I really assume additional synergies, definitely.

And then on the EV, the 440 to 480, the KPIs at the high end, the low end depend on. Is that consistent then also with the revenue range you see for BBS for the next 3 years? -- Depending on the high and the low end of that? Or how should we think about the earn-out behind the range?

The earn-out is more related to the outcome of the year rather than the next 2 or 3 years because it will be due with the year-end closing then somewhere next year.

The next question comes from the line of Nicolai Kempf from Deutsche Bank.

It's Nicolas Kempf speaking from Deutsche Bank. My first question would be actually on the revenue exposure of BBS. I mean you did mention the last indeed to look more into names which are less automotive gear. But actually, 55% of PPS are given to automotive. I do understand it's mobility and a bit of other components and like batteries, but still, it seems a high share of automotive. Can you just elaborate what's the reason behind this? Or should this decline as well over next years?

Thanks, Nicolai, for the question. Yes, we've looked at this, of course. And -- the acquisition is not the end of the story potentially when it comes to medtech. However, why are we positive because it really is e-mobility and it is very -- it is some extent, opportunity-driven. It's quite interesting without mentioning a name, BBS has one significant other player in the market, a competitor who traditionally was stronger in med tech and by definition or as a decision has now moved more in e-mobollity because e-mobility will be a driver where we believe that with the lack of enough capacity of good players, there will be a profitability potential that you normally don't see so much in automotive. This is what makes us confident, even though for BPS, the share of automotive business, is slightly higher than -- or to some extent, higher than it is for Durr. It is an area that growth for the number of years and that offers the profitability. And this is what we said, despite the fact that technically, we wanted to reduce our exposure in automotive. On the overall scheme, it doesn't really make much of a difference in terms of percentage. On the one hand and on the other hand, it offers us significantly growth and profitability potential. And this is why also I was saying earlier in the presentation, in the long run, we believe that Medtech then will start catching up because this is the longer-term stronger trend. Not saying that e-mobility is over in 5 years. But medtech will then kick in stronger potentially than e-mobility.

Understood. And my second 1 is more a housekeeping question. Do you already know in which division you will consolidate BBS?

Yes, that's a good one. For the moment, we will do as it was before in PFS -- and I don't expect that we changed this shortly. However, once we've cleared the arena here, of course, we will make this business in a way, much more visible to investors and analysts and set it up that way.

Next question comes from the line of Felix Barak from Amundi.

I just wanted to ask, I mean, to what extent does the acquisition impact your midterm targets that you presented at the Capital Markets Day last year, the margins that you seem to -- I mean, which we seem to be in place already now and the margin target that you set for 2026. I mean, they're above the midterm target for the group level and especially for the PFS segment. So I was wondering whether we could expect any update there? And my second question would be on the financing of the Durr, how this deal will be impacting your net cash position.

Thanks, Felix for asking the question. At this point, we don't see any reason to adjust the midterm targets. We've said our midterm targets would and could include acquisitions. Now we've made one, we'll have to clearly figure out what it means in detail. But I don't see, at this point, a reason to adjust those targets. And as it says on the call as well, Dietmar, you want to comment on financing and net debt, et cetera?

Yes, of course, I can do. Felix in that regard. As you're aware, we have a quite good net cash position so far. And at the time when the closing is expected to be done latest, later on then with the final refinancing is done we will not only look to how do we be financing, but we will also have a look into our cash position, possibly use some of the cash position also for the acquisition. So that's how it's currently set up with the bridge financing.

The next question comes from the line of Alexandra Hubner from Thomson Reuters.

I've got just one question on your plans to refinance the acquisition you have been talking about your debt level is rising. Would you rule out a capital increase for this acquisition? Or could this also be part of a later refinancing?

Basically, we look at all capital market instruments that are available, but you could see that we did successfully transactions at the beginning of the year on the debt capital market side. potentially, we will be more on debt side of the refinancing.

Yes, if I may add, we don't see any capital increase yes.

The next question comes from the line of Sven Weier from UBS.

Yes. I have 2 follow-up questions, please. The first one, if you could just elaborate who you see as the most important direct competitors in the individual business lines of BBS?

Yes, there is a company, for example, called ATS, Canadian company larger and similar footprint. There is, for example, a company called JR, they've been acquired by Hitachi as much as we know for a much higher multiple. There is, for example, a company Pia, in China. And then there's also a number of smaller players like, for example, a company called Micron in Switzerland.

Okay. And the other question I had was just regarding legacy issues because I could see in the filings of BBS that there was an issue with software in 2021, where that was probably related to certain programming languages that had to be using by the owner. That was almost a EUR 20 million charge. I was just wondering if those software issues have all been sorted out in the meantime and if you're buying this from a kind of a clean base?

Yes. It's a good question. Yes, we've obviously looked at this in detail before and during the due diligence. There is 2 or 3 projects that are at the very end of being sorted out. So there -- we've seen -- we've had minimal activity this year and things are basically over. And consequently, we don't see any impact on this anymore. It's been a huge number of projects sorted out. Just a few remaining reworks that are basically done. And that's why we consider this story over, but we've looked at this, as you can imagine, from the magnitude in detail.

And is there an opportunity given your software competence for you to have synergies on the software side?

Yes, absolutely, Sven. We don't see this so much on this controlled software. I'm not going too much into detail what they've been doing. But we would, in that respect, not -- never have gone into a proprietary solution as it is controlled software that you were just mentioning. However, where we see the synergies is really when it comes to overall digitization of of the equipment like through MES systems, manufacturing execution systems, where we have a company called [ ETAK ] who are very prominent in the market, and we will use those competence is obviously also for BBS.

[Operator Instructions] And the next question comes from the line of Holger Schmidt from DZ Bank.

The first question is on the transaction cost. Could you give us an indication on the underlying transaction growth that you expect for the current year? And then secondly, with regard to your synergy target, it's about EUR 10 million per year. If I align that with the underlying cost base of PPS of around EUR 350 million to EUR 360 million by 2026. This corresponds to only about 3% of synergies. I think that's relatively low. What is the reason behind this conservatism?

Good question, Holger. Transaction costs to answer that first, we expect in the mid-single digit million number, roughly all in. On the synergies, the EUR 10 million, I was saying I see this with Serbian company, I'm not from Serbia. So the EUR 10 million is, yes, could be seen as conservative. However, what we've also factored in to be, if you will, say, is some dissynergies, like we factored in for Germany, the potential of labor cost increases and a few other things that were -- and the net number that we've put in for the moment, is the EUR 10 million.

And could you also share a number around the expected integration costs?

Yes, also this has been factored in, in the run rate of the synergies. We might have more. Yes, also this -- what we were assuming is maybe a number in the mid-single-digit area. But if you put all together in , we believe that the synergies that we mentioned. We have that factored in. And to start with, maybe if you call this extraordinary cost or whatever, that would be a number in the mid single digits again.

The next question comes from the line of Christian Cohrs from Warburg Research.

Sorry, I was muted. Now you have actually 3 automation subsidiaries team Will you actually integrate and rebrand your automation activities -- and so that there will be 1 entity actually in the lead. Although you will keep actually multiple brands and they will operate separately from each other but with a modified and unified approach. And secondly, have you been able or will you be able to keep the local management team or the local management teams of BBS and is this also contractually agreed?

Thanks, Christian. On your first question regarding integration and branding. Let me differentiate between the 2, please. I don't expect us to give up the brands. And because they all have their position in the market Teamtechnik, Hekuma, BBS and even BBS not only is 1 brand at this point. For example, we have, as I was mentioning in the call, a very strong brand in the medical business called Kahle or Kahle, however you pronounce it. And we will carefully play with those brands because to many customers, they have a meaning. In terms of integration, of course, wherever possible, we will use the ways of integrating businesses in the back end and create also cost synergies in that respect. We'll do this, I shouldn't say carefully, but well thought through. Most of this will more happen towards the beginning of next year as we're still about to close for part of the remainder of the year. But there, we will, of course, look at our potential. In terms of the local management teams, we've had the chance to talk to them, to meet with them. We have very good impression from all the teams and we currently expect and hope, but there is good reasons to expect and to hope that those teams will stay on board because we're really very positive with the teams that we've met.

There are no further questions in the queue. So I will now turn the call back over to your hosts for some closing remarks.

So Mathias, do you want to close or shall I close?

I can do the closing, and I actually start. Okay. I'll use it again. Sorry for that. Okay. Thanks a lot for your questions, ladies and gentlemen, and the discussion. We showed that BBS Automation will be an important driver for this targeted growth in the automation technology business. If you have further questions after this call, please don't hesitate to contact Andreas or me. And one last remark, our next regular call will then be on August 3 when we will be publishing the half year figures. Until then, we wish you a good time and take care, and goodbye.

Thank you for joining today's call. You may now disconnect your lines.