Dürr Aktiengesellschaft ($DUE)

Welcome to the Dürr conference call for the first quarter of 2026. I will now hand over to Bjorn Voss, Head of Investor Relations of Dürr AG.

Yes. Good afternoon, ladies and gentlemen, and welcome to today's call. My name is Bjorn Voss, and I assumed the position of Dürr's Head of Investor Relations on April 1. Many of today's participants probably know me, so only provide a small introduction of myself. I spent 20 years in the capital markets, first as a sell-side analyst for automotive and industrials. Then I switched into portfolio and asset management at Warburg. And in the last 6 years, I worked as Head of Investor Relations and M&A at Bertrandt AG. You might have noticed 3 little changes in today's reporting. First, we try to streamline the quarterly statement with a reduced number of pages, but with the full content we need. Second, the reporting package was online at 7:00 a.m. this morning, just to give you an appropriate amount of time to review the material. Of course, this will continue. Thirdly, all documents on our IR website section can be printed again. Of course, we hope that helps you as well. And feedback is, of course, welcome. Anyway, I'm really looking forward to getting in personal touch with all of you soon, and if you wish, already after this call to discuss more details on Q1. For now, I would like to hand over to our CEO, Jochen Weyrauch, and to our CFO, Dietmar Heinrich. Jochen will start on Page 3. Jochen, the mic is yours.

Thank you, Bjorn, and good afternoon to all participants on the call. The war in the Middle East created a lot of additional political and economic uncertainty. In this challenging environment, Q1 actuals basically met our own expectations. Especially our 2 large divisions, Automotive and Woodworking, did relatively well and demonstrated resilience with robust incoming orders and profitability. Our third division, Industrial Automation, developed heterogeneously, with Sank balancing business performing well, while DBS Automation fell short of expectations, prompting us to develop far-reaching efficiency measures in the automotive business. I'll come back to this topic later on. The book-to-bill ratio was slightly above 1. Sales showed a muted start to the year, but will improve in the further course. On the earnings side, we continued on our improvement path. The EBIT margin before extraordinaries climbed to 4.2%, mainly backed by a good start to the year in automotive, profitability gains in the service business, successful admin cost cutting, and strongly reduced corporate center expenses for the One Dürr Group program. Net profit additionally benefited from an improved financial result and lower extraordinaries and was up 22%. Free cash flow was clearly positive at EUR 29 million, supported by further improvement in net working capital. Looking at the sales channel, we expect higher net working capital needs in the next few quarters, accompanied by cash outs for tax issues and for the admin adjustments. We are confirming the group outlook for 2026, given in early March. However, the divisional forecast for Industrial Automation is under review after the muted Q1 at BBS Automation. A quick update on the CFO position. We will announce Dietmar's successor soon. There are only a few details to be finalized, but the decision itself has been made. Next is Slide 4. The 11% drop in order intake was partly driven by the low level of new orders in BBS Automation's mobility business. Woodworking order intake at EUR 370 million was above last year's quarterly average. In Automotive, we see a solid investment pipeline for the next quarter. There are enough projects out there. The question is whether they will be awarded within the expected time frame, given the uncertainty in the market. Sales amounted to EUR 940 million and were marked by some customer-induced delays in automotive as well as by the low order intake at the height of the tariff uncertainties in Q2 and Q3 in 2025. However, we foresee higher quarterly sales to come. As I've already explained the drivers for the improvement in earnings and free cash flow, I would like to jump to Slide 5. The reduction in order intake versus Q4 was expected as Q4 included 3 very large orders and was extraordinarily strong. The comparison with Q2 and Q3 2025 shows that the impact of the war in the Middle East on order intake was less severe than the dampening effects arising from the tariff conflict last year. Our customers seem to have gotten used to the macro volatility and can cope better with it. Slide 6 shows the regional split of order intake. I would like to highlight 2 things here. First, we won several larger orders in China in Q1 against local players, which underlines our competitive edge there. And second, despite low order intake in the Americas in Q1, we see a promising pipeline in the U.S.A. as customers are planning more investments there in order to localize and evade taxes. Slide 7 deals with our Middle East exposure. As mentioned, the direct impact of the Iran conflict on order intake has been limited so far. However, lasting energy price hikes, rising interest rates, and supply chain disruptions could affect our customers' investment behavior. On the other hand, the strain on energy prices underlines the risks our customers are facing when operating their plants with oil and gas. This triggers additional awareness for Dürr's energy-efficient and non-fossil production technologies and their advantages regarding security of supply and efficiency. In April, the Automotive division organized an amazing virtual trade fair, mainly focusing on innovations for energy-efficient and the electrification of plant shops. I was watching the performance together with customers and can assure you they have really been thrilled. In terms of energy and transportation costs, we are not too much worried. Our business is not energy-intensive, and logistics costs are under control. In many cases, there are price escalation clauses in place. Our sales exposure in the Middle East amounts to around EUR 150 million, of which more than 80% is attributable to Saudi Arabia. We are currently executing 2 major projects near Jeddah in the West. So far, there have been no major impediments caused by the conflict. Another topic from the political sphere is that we have requested the refund of IEEPA tariffs paid, as these were declared unlawful by the U.S. courts. However, it's still too early to assess the outcome. Let's continue with a view of our divisions, starting on Page 9. I've already commented on Automotive's order intake in Q1 and the solid pipeline with new investment projects. The sales channel indicates higher revenues in the further course of the year, and this should go in line with increasing net working capital needs, which will be mainly reflected in higher contract assets. As you know, there's a seasonal pattern in the division sales and margin development. That's why the 6% in Q1 is a solid start and a good basis for reaching the full year target of 7% to 8%. Please note that the lithium-ion battery business unit that formerly belonged to the Industrial Automation business has been part of the Automotive division since January 2026. Next is Industrial Automation on Slide 10. The division's two business units performed heterogeneously in Q1. Schenck Shen's balancing of technology achieved significant increases in order intake and earnings. On the other hand, BBS Automation's performance was not satisfactory, which led to decreases in most relevant key figures on a divisional level. As you know, there is a new management in place at BBS Automation that is tackling the challenges systematically, especially the soft automotive business and improvements in the operating business. The first measure was initiated in early April with the consolidation of BBS Automation's China business at the Kunshan site, whereas the neighboring Suzhou site will be closed. China has already performed solidly, but this will further improve our business there. We're working on further efficiency measures in other parts of the world, and we'll present them to you in due course. Last but not least, please note that the figures shown for 2026 and 2025 no longer include the lithium-ion battery business that was shifted to automotive and the BENZ Tooling business that has been part of woodworking since the beginning of the year. We know that a change in reporting structures causes hassle on your side. However, the new organization is helping to simplify the group structure and to become more efficient, and we do not intend to change anything else for the time being. Page 11 shows that the Woodworking division's order intake in Q1 clearly surpassed last year's quarterly average of EUR 352 million. While business with the furniture industry remains subdued, the positive trend in timber house production technology continues. Sales were affected by the muted order intake following the tariff conflict in Q2 and Q3 2025, but should gain traction in the further course of the year. The margin was impacted by the sales reduction, higher R&D spending, and initial one-offs for an ERP transition, but should also increase looking down the road. An important optimization measure is the ramp-up of HOMAG's new factory in Poland later this year that will generate further efficiency gains from 2027 on. A quick view of the service business on Slide 12. While the service share of group revenue was stable, the gross margin developed nicely on the back of a higher spare parts portion. The continuous development of the service business has always been high on our agenda as it balances out the volatility of new equipment orders. Consequently, profitable service growth was included in this year's STI target for the Management Board and the entire executive team. I'm now pleased to hand over to Dietmar, who will take you through the financials.

Thank you, Jochen. Ladies and gentlemen, a warm welcome from my side as well. As Page 14 basically presents figures Jochen already touched, I would just like to point out two developments. Despite lower sales, the gross margin rose by 60 basis points in Q1. This was driven by improved utilization at HOMAG after the preceding capacity cuts as well as by higher service margin and reduced D&A. On the EBIT level, we additionally benefited from a reduction of the admin cost share of sales from 6.4% to 5.6%, reflecting our adjustments in the administrative sector and lower expenses for the group program that was completed to a vast extent in 2025. Slide 15 contains information on the quarterly and regional sales split, which might be helpful for your follow-up analysis. For now, I would like to directly jump to earnings on Page 16. The improved EBIT margin before extraordinary effects benefited from the better gross margin as well as a 6% reduction of functional costs despite higher R&D expenses. The reported EBIT improved by 13% as PPA-related expenses halved to EUR 4.3 million, and there were no extraordinary burden anymore from the sale of Environmental Technology. Slide 17, please. The higher free cash flow was supported by a further net working capital reduction to EUR 291 million. This development seems to contrast with our full year guidance of minus EUR 150 million to EUR 0 million. But please keep in mind the higher net working capital needs in tandem with the sales acceleration we foresee for the next quarters. This is also true for the Automotive division that was again able to improve net working capital in Q1. Moreover, the free cash flow performance will be impacted by tax payments related to the sale of Environmental Technology and the tax in Germany that we consider as unjustified and that we will have examined by court. And finally, the payment for the admin restructuring will be due in the course of the year. Page 18 shows where the improvement in net working capital came from. While higher inventories were roughly offset by lower receivables, we saw not much of a change in contract assets and trade payables, but benefited from a further increase in prepayments that are included in contract liabilities. Given the foreseeable sales channel and the fact that more large projects will enter the construction phase, we expect contract assets to arrive in the further course of the year. Next to Slide 19. The positive free cash flow caused a further decline in net financial debt to EUR 47 million. Total liquidity, including cash on hand and term deposits is still at a high level, but was down almost EUR 150 million due to the repayment of our convertible in January, which is also reflected in the lower level of gross debt. As more funds will be funneled into order execution, net financial debt will increase during the next quarters, but remain well under control. Larger acquisitions are not planned for this year as our focus is on increasing efficiency in the existing business, especially at BBS Automation.  Slide 20 shows that we are well-positioned for the current phase of political and economic uncertainty with ample available funds. After having repaid the convertible in January, we paid off the EUR 100 million Schuldschein in April. This Schuldschein maturity is still shown in the diagram, reflecting the status on March 31. But from today's perspective, there are no maturities left in 2026. Ladies and gentlemen, thanks for listening. I now hand back to Jochen for the Outlook section, starting on Page 22.

Thank you, Dietmar. We are confirming the group's outlook given on March 5. With the margin improvement in Q1, we laid the foundation for an increase also in the full year. The main drivers for the targeted margin expansion are further earnings potential at Woodworking, cost savings in the admin sector, as well as a reduction of Weir Group expenses and of the losses in the lithium-ion battery business. For sales, we are expecting higher dynamics in the quarters to come based on the sales channel and the project mix in automotive.  With regards to order intake, we see a better pipeline in automotive than last year. But please keep in mind that the timing of contract awards is difficult to predict given the high degree of macro uncertainty.  Next is Page 23. We're also confirming the outlook for the Automotive and Woodworking divisions, while the guidance for Industrial Automation is under review after the muted development of BBS Automation in Q1. If we should decide to adjust the guidance for Industrial Automation, this would have no effect on the group outlook, as we are talking about our smallest division, and the Schenck balancing business within Industrial Automation performs well.  As things stand today, group KPIs developed fully in line with the forecasted guidance corridors. Please also note the information on the smaller effects from shifting the lithium-ion battery and Ben tooling business to automotive and woodworking, respectively.  Ladies and gentlemen, please find the summary on Slide 24. Q1 basically met our expectations. We had a solid start to the year in terms of order intake, earnings, and cash flow. Despite macro headwinds, we continued on our profit-oriented course by improving the EBIT margin before extraordinaries and, even more clearly, net profit. These improvements are largely based on the successful execution of self-help measures that we have been implementing continuously, such as the fixed cost reductions in administration in the lithium-ion battery business and at HOMAG.  The resilient performance of the Automotive and Woodworking divisions testify the effectiveness of our self-help measures. Both divisions are in good shape and well prepared for both to cope with macro challenges and to benefit from a market recovery. With regard to Industrial Automation, you can expect us to take determined action in order to lift the division to the same level of resilience and operating strength as Automotive and Woodworking.  This more precisely applies to BBS Automation, while Schenck's balancing business is stable and performs at high margins. BBS Automation is the next unit within our own portfolio that will be systematically optimized. We already started in China, and we'll be extending our measures.  Moreover, we put full focus on accelerating order intake, sales, and earnings in the forthcoming quarters. We are confident that Dürr will reach its full-year guidance despite the challenging environment. Ladies and gentlemen, that concludes our presentation. Dietmar and I are now happy to answer your questions.

[Operator Instructions]  The first one is from Nikita Papaccio, Deutsche Bank.

I would have 3. The first one is on HOMAG. Having booked now EUR 370 million of orders in HOMAG in Q1, how do you think about H2 in this division in light of your guidance? Will this support the lower or rather the upper end of the revenue range?  The second question is on your battery business. If I remember correctly, you mentioned in your last conference call that it's roughly 70 basis points of dilution on margins. Is it the same magnitude in Q1? Or was it higher or lower?  And the third question is thinking about the full year now. How should we think about profitability in the next quarter? Are there any seasonalities or bigger projects that are executed now you want to highlight here?

Thank you, Nikita, let's try to answer your questions together. For HOMAG, at this point, we are confident to be well within the guidance. Note, we've only now covered 3 months of the year, so still hard to say. But at this point, there is no new view on the year than it was when we published the guidance earlier this year. If I understood you right, on the battery business, your question was whether there is higher or lower dilution effects over the course of the quarters in the year.  Also, looking at DMA, I don't see that. I would say you can assume kind of an equal distribution, as we are currently also executing a relatively large order that POCs through the year basically.  On special effects in terms of a different seasonality, also here, I don't see any specialties as you've always seen for good or bad, we always have the seasonality, a relatively weak first quarter and then performance increases during the course of the year as project execution accelerates and there's somewhat also increased activity on the service side as well. Also here, I don't see any special effects to be expected.

The next question is from Philippe Lorrain, Bernstein.

So the first one would be on automotive. So in the slide pack, you mentioned customer-induced project delays, which are weighing a little bit on sales. Could you shed some more light here?

What light should we? Look, we have a number, as you know, we have a pretty solid backlog. And what we're seeing is for some of the projects, especially, let me try to mentally allocate them. There is somewhat a few things in Europe, a bit of Middle East, a little bit of North America. And I think that would roughly do the mix, if that helps.

That's good on the geography, but I was meaning like do you know what are the reasons behind that, whether that's just cautiousness from the clients or whether that's other suppliers, et cetera?

Yes, the reasons mainly are, in a few cases, are approvals as well as some customers who have modified, for example, layouts at a late stage, and we have to adapt engineering, so things like that.

So more technical delays than basically sentiment shifting delays or whatever?

Absolutely. Yes.

Then the second question I had was on the refunds that you are seeking in the U.S. Could you quantify that? And as well, I guess, the guidance doesn't really reflect, for instance, that exceptional income because timing is uncertain.

Yes. So it is, I would say, a lower double-digit number. And you always have to keep in mind that we cannot fully assume that this money, if it is ever paid, will end up on our P&L it's completely because some of this would be money theoretically also belonging to our customers. So it's because we have a mix of who's paid the taxes, et cetera. So that would be the answer to that. And of course, timing, we don't know.

Okay. So it's not in the guidance?

No, no, no. There's nothing in the guidance.

And the third question would be on the ERP transition at HOMAG. Something like EUR 10 million of one-off costs that are basically part of the adjusted EBIT or impacting the adjusted EBIT for this year. Can you quantify as well the impact that you had maybe on Q1 and what we should expect on a sequential basis to put that a little bit better in our spreadsheet for RAG?

Basically in the first quarter, there was a very limited impact of a couple of hundred thousand of euro. The full year impact together with the relocation in Poland is amounting to close to EUR 10 million. The project in regards to ERP stretches over 2 years. Go live will be beginning of 2028, and we expect total project costs of around EUR 10 million to EUR.

15, sorry, is that correct?

10 to 15 yes. So EUR 10 million to EUR 15 million...

And for the EUR 10 million that you for this year, you say that it's basically more like H2? Or should we expect like a bigger impact already on Q2 after you had, clearly not much in Q1?

I think it's basically stretched the quarters go live in the first quarter of 2028. So now the 8 quarters that are basically bed starting with Q2. And the other impact was the start of the production in the new plant in Poland, we are currently transfer production now in May basically and then will be the ramp.

The next question is from Adrian Pehl, ODDO BHF.

Actually, on the automotive pipeline, I was just wondering if you could give a little bit more of color on what kind of projects are around there in the funnel. I mean I'm referring to because you said year-end, for example, last year, we see a couple of larger contracts and you saw a higher probability to actually strike those deals. I was just wondering what kind of project funnel is out there and probably in which regions? And then on the order intake that you booked in the first quarter, should we assume that you have had the opportunity to increase your pricing a bit in light of increasing input costs? Or how is the general pricing environment there?  And the third one is on HOMAG again. I mean you said  as an answer to your question before that you don't have a new view on what's going on, on the order intake side there. But I was just wondering if there are any signs of increased activity from your clients on quotes or any kind of pre-indicators that at some point, we will reach a turning point on the furniture side this year?

Thank you, Adrian, for your questions. On the auto pipeline, in terms of the regions, we see a little more or less the same trend continuing for the remainder of the year that there would be more orders coming from outside Germany, if not outside Europe. So more Asia, more North America, which doesn't rule out that there is also a pipeline in Europe.  So yes, more well balanced with maybe a focus on Asia and North America. Regarding the pricing in automotive, honestly, we don't see real effects yet probably on the supply chain side in terms of the pricing. Of course, we always want to negotiate the best prices that we can. And I think we've proven quite well that we've been successful in the future. But there is not an extra need, if you will, from the supply chain. We don't know what's going to happen in the second half of the year. Potentially, some of what's happening now will create the effect only later this year. But so far, on our supply chain side, we don't really have constraints or any increased pricing in a significant way. On HOMAG, now, unfortunately, I cannot predict the turning point. We run at the low level currently from quarter-to-quarter. We had a very solid construction elements business last year as we had reported. Let's see how that continues. But on the furniture side from today's perspective, hopefully, we can be a bit more optimistic later this year and give some ideas. But at this point, nothing has changed to a quarter ago.

Two quick follow-ups on my question. First of all, on the construction side of things, you don't see any signs of weakening on that business? And secondly, on the automotive funnel again, what does it do to your margin profile if you sell more or get more orders from the U.S. and Asia? Is there any difference? Or does it depend on what kind of project it is? Just to get a sense on do we talk about when we speak about the funnel here about, let's say, I don't know, just putting numbers to it a handful of triple-digit million projects? Or is it kind of more upgrade projects? Or how should we see it?

In terms of the construction elements business, as we had said. Last year was a record year. We've done more than EUR 200 million on the construction element side, wooden houses side. Let's see how this year continues, whether we get close to that number or whatever. But so far, the first quarter has been relatively solid also in that respect. The auto funnel, the margins, no, there is not so much a correlation necessarily by region. It really depends on the nature of the projects more than that. How are the projects that we see? There are a few bigger ones out there. We've also booked quite nice orders in the first quarter, which you have seen on the auto side. I would say it's rather mix. I don't expect the high, high triple-digit number projects this year. So more, yes, of course, triple digit is part of it, but more also the midsized projects and some really also upgrades.

The next question goes to Holger Schmidt, DZ Bank

I have a question on your R&D spending. I think it's up almost 50% as compared to last year. What is behind that? What kind of innovations can we expect going forward? And is this more a onetime effect? Or how should we think about the future run rate for your R&D spending? That's the first question.

Yes, we are focusing Holger innovation for the organic growth. But the other side, especially on the wood side that we already talked about ERP change in that regard. We have to work on the CAD design as well and that causing additional efforts. So that's why we have more spending, especially on the woodworking in that regard.

And then a question on your service business. I mean it's on par in relation to revenues, about 28% of total revenues comes from the service business, but it's down in absolute terms. So it's down by about 6% versus last year. Is there anything specific to read into that? Or is it just lower utilization of the installed base at your customer side? Or how should we think about the future trajectory of the service business?

Yes. Thank you, Holger. I'll take that one. Our service business consists of spare parts, some services, which is man hours and then also smaller rebuild projects. On the spare parts side, that's also the reason why the margin has developed quite well. We don't see a shortfall. What we had a little less in the first quarter than compared to the average of last year and also different to what we expect, we really expect a pickup is on those smaller brownfield projects. And we expect those to kick in a bit more in the course of the year than this was in the first quarter, and that will accelerate the volume. On the spare parts side itself, we don't see really much of a change compared to last year.

Maybe a follow-up to this spare part situation here. Are you able to foster price increases year-by-year for the spare part because that would mean that the volume has been down also the spare part business.

Yes, absolutely. I mean we increase spare parts prices every year, sometimes even twice a year because there is fixed spare parts list and the prices accordingly. And we announced that to our customers. And some of them, we also negotiate some of them are given. But yes, there's always spare part price increases of a few percent every year.

So my last question is on the development so far in the current quarter. So we are almost 6 weeks into the second quarter. And how would you the fundamental development so far as compared to the first quarter? What has changed since the 1st of April?

So we're doing the Q2 call already today. We don't see any significant effects in any way. So as we said, our expectation, of course, is to accelerate somewhat in the second quarter as we typically do with the seasonality given. And I don't see anything different this year than we had, for example, also last year. At this point, I don't see surprises on the operational side.

The next question is from Christian Cohrs, Warburg Research.

A couple of questions from my side. First of all, what are your thoughts about Daifuku acquiring Eisenmann? Do you expect that this could have an impact on the competitive landscape in the midterm? Secondly, coming to the Industrial Automation business or BBS in particular, taking the last 12 months or 4 quarters, you've had roughly EUR 570 million order intake for the division as a whole, which looks quite soft. So is this the result of a soft market? Is this the result of a wrong portfolio or a wrong go-to-market approach? So is it more or less a top line issue? And you mentioned strategic repositioning also in your presentation? Or is it an OpEx issue? And should we expect some rightsizing measures down the road and also costs for rightsizing? And lastly, income from investment has gone up in Q1. It was above the level of the preceding quarters. Actually, is this a reflection of your new 25% stake in your former Environmental Technologies activities?

Thank you, Christian. On Daifuku Eisenmann, of course, we are always watching when there is developments at our competitors. And obviously, Daifuku is a relatively large company, not really much involved in that type of business yet, might give financial strength. But also when you look at Eisenmann, Eisenmann is not the one that you're probably used to like 4, 5 years ago. It's a part of it. And let's see. I mean, we're used, if you are in automotive and I've been in automotive basically all my life, your customers always are very active in making sure that there is enough competition. So we're used to it. And whether it is Eisenmann today or any other company tomorrow, we have to be competitive, and we have to differentiate on the innovation side, which I think we do. And let's see what it leads to. So we're watching it. We're not concerned in a humble, I mean, not being in an arrogant way, but we do what we do, and we watch the competitive environment and see what's happening. On BBS, as we had already stated in our comments earlier, on the one hand, yes, on the automotive side, especially the mobility side, as we can all see, the market has come down significantly, which we also see in our bookings. On the other hand, having said that, the way we've built the group, we are in a difficult market environment, we even got orders that the companies on a stand-alone basis would have never received in automotive, but especially on the MedTech side. We have started a program. We have consolidated the locations in China, and we will further work on efficiency measures, which we will talk about more once they are precise. And there might be some one-off costs, or there will be some one-off costs associated with that. In terms of our own positioning, we will sharpen our go-to-market, and we will make more benefits from further integrating the activities in the group, but the current challenge on the order intake side is driven by the market. On the interest side? Dietmar?

Yes, regarding the investment profit that is not related to the environmental technology coming from another company that we are accounting for.

[Operator Instructions].

Next question is from Sven Weier, UBS. Two questions, please. The first one is on e-mobility-related order because, if I understood you correctly, the weakness in BBS that's behind it. I was just wondering on the automotive side, is there a more favorable situation with regard to e-mobility OEMs? Or do you see the same kind of weakness also in automotive? That's the first one.

Thank you, Sven. In automotive, I'm just reflecting on what orders we're executing right now. We see more activities actually on at least the facilities that produce hybrid cars. Having said that, there is, I mean, we're currently still executing 2 orders in Saudi Arabia, which are purely e-mobility. We've awarded them quite a while ago. We've also finished or almost finished a big rebuild in the U.S. for an e-mobility customer. There are still a few projects for some of the customers that are purely e-mobility customers, mostly extensions. So we see the trend more again to internal combustion engine or hybrid facilities if they are purely internal combustion engine hybrid, because more and more of our customers have the capability to produce all 3 approaches, internal combustion hybrid, and battery electric in one facility. So we see some activity still there. But if you go back 2 or 3 years ago, when most of the projects were e-mobility driven, that has changed.

And so there's also no specific relation between maybe BBS leading the orders of automotive or the other way around. That's kind of not connected.

Of course, we're using our sales network around the world also for everything that we do, of course. And BBS automotive activities are, at least from an exchange point of view, getting support from automotive, where we have a strong network around the world, but it's a separate setup.

The other question I had was just when you look at the project pipeline on automotive, you said it's quite mixed between large, small, and mid-sized orders. I mean, how do you see pricing at the moment? Are you happy with the pricing on the orders? Or is there more pressure because of the environment?

No, I don't see much of a change at this point. We always work in this arena between cost and price, as our projects are typically calculated on a gross margin basis, simply because those projects are always only to an extent comparable to each other. What we don't see is an erosion on the gross margin side.

Partially also driven, of course, by constant cost reductions also on the product side.

At the moment, there are no further questions in the queue. [Operator Instructions] There seem to be no more questions to be incoming. Thank you very much, dear ladies and gentlemen. With that, we are closing the Q&A session, and I hand the call back over to the host.

Yes. Thank you very much to all of you. And if you have further or additional follow-up questions, please don't hesitate to call Mathias or me. And otherwise, I will be looking forward to seeing all of you soon. Thank you very much. Bye.