ElringKlinger AG ($ZIL2)

Ladies and gentlemen, welcome to the Analyst Conference Full year 2025. I'm Lorenzo, the Chorus Call operator. [Operator Instructions] And the conference is being recorded. [Operator Instructions] The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Thomas Jessulat, CEO. Please go ahead, sir.

Ladies and gentlemen, good afternoon, and welcome. We appreciate your participation in today's analyst conference, which we are hosting virtually. It is my pleasure to open our conference call on the final and audited results for the fiscal year 2025. I'm joined today by our CFO, Isabelle Damen. Let me begin by outlining the key developments of the 2025 fiscal year before Isabelle will walk you through the full financial results. Afterwards, I will provide you with a look on the market development and give you an outlook of the current year as well as for the medium term. Finally, as always, we look forward to your questions. Let me start with some highlights on 2025 fiscal year and their strategic background. The company concluded the fiscal year against the backdrop of ongoing uncertainty and elevated market volatility. At the same time, the group continued to lay the groundwork for the next stage of this transformation supported by substantial investments to advance new series projects in the area of cell contacting systems in particular. Despite these significant upfront expenditures, the year-end results were robust. Operating free cash flow amounted to 2.0% of sales. The ramp-up of every related projects continued to gain momentum, contributing to strong revenue growth within the e-mobility business unit. In parallel, the group drove forward its streamlined program, achieving a lasting reduction in personnel expenses. All in all, the company delivered on its major full year targets and in several areas even slightly outperformed its initial guidance. Let us now take a look on our group strategy. This slide outlines the organization's overarching strategic framework presenting its purpose, vision and mission. The purpose highlights our commitment to pioneering innovative technologies that contribute to a sustainable future. Our vision emphasizes becoming the preferred partner in driving technological innovation. For realizing this vision, we have identified 5 success factors that will enable us to reach our full potential. On the next Slide #6, we highlight the 2 complementary pillars of our SHAPE30 strategy, growth and efficiency. Both are essential parts of the same strategic story. On the growth side, we are continuing to expand our e-mobility activities across all major automotive regions. At the same time, we are leveraging our strong position in the traditional business, especially in phases for the pace of transformation temporarily slows. Another key driver is the consistent optimization of working capital, which allows us to secure a sustained and healthy cash flow. On the efficiency side, we are returning to a disciplined level of capital expenditure now that the investment cycle for recent order ramp-ups is largely completed. We're also focusing on optimizing personnel and structural costs and counteracting external pressures such as tariffs or raw material price development. In addition, we are streamlining our portfolio by phasing out underperforming product groups and locations, both dimensions, growth and efficiency directly support our strategic targets, enhancing profitability, particularly in the OE segment, and generating a sustainably strong cash flow. Together, they form the financial core of our SHAPE30 road map in order to sustainably strengthen the group competitiveness. Let's now take a closer look at the growth dimension of our SHAPE30 strategy and how they contribute to improving our margin and key performance indicators. On the left, you can see the strong development of our e-mobility sales. After completing the first major ramp-up that started in 2024, we are continuing this momentum with further ramp-ups in 2025 and beyond. And this creates a solid basis for scaling our e-mobility business profitably over the coming years. We expect 2025 sales of this business unit to be doubled by the end of 2028. In the center, we highlight the profitability of our OE business. This classical business of this segment remains the financial backbone for the group during the transformation. If you exclude the business with start-up characteristics, the e-mobility business unit, we see that the classical business within that segment delivers quite a robust margin of 5.6% in the 2025 fiscal year, and we expect a continued improvement in the profitability of the reported segment figure once the difference between the dotted line and the solid line is eliminated by the further ramp-up of e-mobility orders. On the right, we emphasize the importance of optimizing working capital as a key driver of sustained cash flow. After improving our working capital performance in 2025, we aim to maintain a disciplined optimization going forward ensuring that cash generation remains strong and predictable. Together, these elements show how growth across e-mobility or core OE business and working capital discipline supports both our margin development and our financial strength. Alongside growth, the second dimension of our SHAPE30 strategy is efficiency. We are structurally reducing our cost base to strengthen our long-term positioning. On the left, you can see our development in capital expenditure after completing the investment cycle for major order ramp-ups. We are now returning to a disciplined CapEx approach targeting around 4% to 6% of sales from 2026 onwards. This enables us to maintain the necessary investment discipline without compromising future growth. And at the same time, we're optimizing our overall cost level. Over the midterm, we expect EUR 50 million in cost savings and ramp-up contributions on the basis of the adjusted EBIT margin of 5.4% that we have achieved in 2025. Improving efficiency and contributing to margin by ramping up the major orders are crucial levers for reaching our medium-term profitability targets. On the right, we show another key element of our efficiency approach, systematically addressing underperforming activities, by phasing out nonprofitable product groups and locations and concentrating on areas with a sustainable contribution, we sharpen our portfolio and enhance overall performance. Together, these efficiency measures form a crucial part of our SHAPE30 framework, driving a leaner cost base supporting our profitability targets and helping us position the group for long-term resilience. Let us now come to Slide #9. This slide provides an overview of the major milestones along our SHAPE30 road map and shows how our strategic initiatives unfold over time. In 2024, we have started to shape the profile of the group, strengthening our foundation through targeted measures in cost structures and portfolio alignment. These steps were essential to prepare the organization for the next stages of SHAPE30. By 2026, we aim to realize growth. This includes scaling our e-mobility activities, leveraging our strong position in the classical business and driving improvements across our operational and financial caveats. Along with doubling e-mobility sales by 2028, we expect the e-mobility business unit to show a full clean breakeven year in 2028, marking a key milestone on our transformation journey with doubled e-mobility sales, growth, profitability and cash flow will increasingly reinforce each other. And finally, by 2030, we expect to have reached our midterm targets. This includes sustainable improvements in profitability, a robust cash flow profile and a strong strategic position for the decade ahead. Overall, the road map illustrates how SHAPE30 combines near-term measures with a long-term ambition guiding ElringKlinger step-by-step toward a more resilient and robust group. Let us now have a quick look on the markets on Slide #10. All in all, we noticed global growth in light vehicle production, mainly driven by China. Looking further ahead, industry projections indicate a profound realignment. By 2030, all major automotive regions are anticipated to significantly intensify their transition towards fully electric drive trends. Forecast suggests especially rapid growth in battery electric vehicles in Europe and China, while North America is also expected to see a notable rise as the decade concludes. In essence, while regional powertrain profile still vary widely today, the global trend is unmistakable. By 2030, all electric mobility is set to become one of the dominant trajectory across all major market regions in a global market of growth. Let us now take a closer look at the segment of all electric mobility as this will be the core market for our solutions, including cell contacting systems, rotor stator components and other products from our comprehensive e-mobility portfolio. Across all major automotive regions, China, Europe and North America, the transition to electric mobility is gaining strong momentum with dynamic growth expected through 2030. When you consider our large-scale customer programs, it becomes clear that we have represented a substantial portion of future electric vehicles particularly in Europe and North America. China remains at the forefront of the global shift towards electric vehicles and is developing differently from Western markets driven by the increasing strength and influence of purely domestic manufacturers. Nonetheless, the market for all electric vehicles is expanding across all major regions and significant growth is anticipated over the coming years. The move toward electric mobility is well advanced and continues to accelerate. With all of that, I will now hand over to Isabelle.

Thanks for handing over Thomas. Let us now take a closer look at our financial figures. Our group strategy, SHAPE30 is built on a clear and powerful foundation. It centers on 4 essential performance indicators: sales, earnings, cash and net debt. These metrics guide our decisions, drive our ambitions and ensure that we stay on a sustainable path towards long-term growth. With SHAPE30, we are shaping our future with focus, discipline and a strong commitment to financial excellence. Let us take a quick look on our last year's guidance. In the fiscal year 2025, we achieved, and in some areas even exceeded our targets across all 4 categories, sales, earnings, cash and net debt, each developed strong as expected, reflecting both our operational discipline and the successful execution of our strategic priorities. These results confirm that SHAPE30 is not only the right strategy, but one that's already delivering first measurable impact. Let me first come to Slide #15. We have generated sales revenue of EUR 1.6 billion, which is a decrease compared to the previous year figure on a reported level. However, there have been M&A effects from the divestments of our entities in Sevelen, Buford, and in the U.K., amounting in total to EUR 160 million. In addition, we've been faced with headwinds from exchange rates of EUR 40 million. Excluding these effects, we achieved an organic sales growth of 2.3% which exceeded our guidance given in March 2025. Coming to the sales mix on Slide #16. ElringKlinger has a balanced distribution of sales amongst the business units. While our original equipment segment makes up 68% of the group's total or EUR 1.1 billion of external sales. In the financial year, segmental revenue declined compared to previous year, reflecting the challenging market conditions mentioned earlier. Additionally, the decrease was influenced by the divestment of 3 entities and a discontinuation of several locations. Within the OE segment, e-mobility revenue increased from around EUR 103 million to EUR 144 million due to a ramp-up of large-scale series order of cell-contacting system. Additionally, the aftermarket segment once again performed strongly and increased sales by 12% to EUR 378 million. This makes up 23% of the group's total external sales. In regional terms, Asia Pacific, Rest of Europe as well as South America and Rest of World recorded growth, while revenues in Germany and North America contracted year-on-year. Beyond the impact of currency fluctuations, the main factor behind this trend was the divestment of entities, the discontinuation of locations and a weak market environment. Coming now to the broadly diversified customer base on Slide #17. ElringKlinger operates on a broad and well-diversified customer base, ensuring that the company is not reliant on any single client, the largest customer accounts for only 6% of total revenue. In addition, the steadily rising contribution from the aftermarket business highlights its growing importance for the ElringKlinger business model. Coming to the earnings on Slide 18. Adjusted EBITDA stood at EUR 178 million in 2025, which corresponded to a robust adjusted EBITDA margin of 10.9%, including one-off items. ElringKlinger recorded a reported EBITDA of EUR 140 million. The group recorded adjusted EBIT of EUR 89 million in the financial year under review, slightly above the prior year level, but with lower sales. Therefore, the adjusted EBIT margin increased by 50 basis points to 5.4%, which was above the target level of approximately 5%. These adjustments are made to enable a comparison of the company's operating profitability across different periods. In 2025, they totaled EUR 69 million. Thereof, EUR 32 million for impairment of noncurrent assets, including the discontinuation of locations and termination of unprofitable groups of projects. EUR 26 million for restructuring measures, including the streamlined program and EUR 11 million for other nonoperating items, including the divestment of the British entity and the insolvency of a customer. On the right side, you see the factors with influenced earnings on EBIT adjusted basis compared to last year. There are positive impacts by our structural measures and the higher contribution of our Aftermarket and Engineered Plastics business. They were offset by the ramp-up of the e-mobility orders and tariffs. All in all, we've noticed an increase of the adjusted EBIT margin. At minus EUR 0.10 reported earnings per share are in a negative territory due to the impairment losses associated with the package of measures outlined above. However, excluding these exceptional factors, adjusted earnings per share amounts to EUR 0.88. In view of this positive development and expected improvement of profitability in the coming years, we, the management board, in consultation with the supervisory board were proposed to the Annual General Meeting that the dividend of EUR 0.15 per share, unchanged year-on-year be paid out to our shareholders. Another key performance indicator for the group is return on capital employed on an adjusted basis, dividing EBIT adjusted by capital employed. Here, we see a positive development. ROCE adjusted stood at 7.7% at the end of 2025 financial year after 6.7% in the previous year. ElringKlinger Group expanded its research and development expenses to a ratio of 5.5%, which is within the 2025 target quarter of around 4% to 6% of group revenue. In absolute terms, R&D expenses decreased from EUR 95 million to EUR 90 million. Net working capital stood at EUR 289 million at the end of 2025 compared to EUR 347 million a year earlier. Also, the share of net working capital in the group revenue was significantly lower at 17.6%. The guidance of net working capital ratio of below 25% of group revenue was therefore clearly met. CapEx in the 2025 financial year mainly related to property, plant and equipment amounted to EUR 143 million. The increase reflects the preparation for the ramp-up of several large-scale orders. After the investment cycle now to be ended, CapEx will be reduced to a lower range of sales again. In the financial year 2025, operating free cash flow stood at EUR 33 million and met the guidance of around 1% to 3% of group revenue. The net debt-to-EBIT ratio was 2.0 at the end of the financial year, which is slightly above the figure 1 year earlier. If EBITDA adjusted for nonrecurring items used for the calculation, the adjusted net debt-to-EBITDA ratio stands at 1.6%. Additionally, the equity ratio decreased to 35% moderately below our guidance due to structural measures. Coming to the segment performance on Slide 22. Overall, the OE segment generated sales of around EUR 1.1 billion in the financial year 2025. The decrease in sales 2025 is mainly attributable to the 2 entities invested in '24. Within this segment, we continue to see solid ICE business as well as the ongoing ramp-up in the Mobility business unit are still strongly increased. The Aftermarket segment successfully continued its growth strategy and saw a further increase in revenue. Sales amounted to EUR 378 million in the financial year 2025. Adjusted EBIT margin amounted to slightly above 20%. In the 2025 financial year, the Engineered Plastics segment performed strongly supported, in particular, by diversified industry exposure, with revenue totaling EUR 144 million, this segment performed better than in the previous year. We remain fully committed to our SHAPE30 group strategy. It continues to provide a strategic framework that guides our decisions and ensures that ElringKlinger is well positioned for the future. We are confident that SHAPE30 equips with the right priorities to navigate market dynamics while strengthening our long-term competitiveness. We will grow in sales, enhance our profitability, generate sustained cash flow and maintain a low debt level for being always able to act. With SHAPE30, we are confident that we are on the right path today and for the years ahead. Having said this, I will now hand back to Thomas.

Isabelle, thank you. Let us now take a look at market expectations and our next steps at ElringKlinger. The market environment is expected to be sluggish in 2026, as it will decrease in all major regions with a different degree. As a result, the global automotive market is projected to slightly decline in 2026. Let me now conclude with the outlook on the current fiscal year. The geopolitical and freight policy landscape remains challenging. The wall shifts away from a multipolar rules-based order compounded by the proliferation of conflicts and wars in trouble hotspots. Moreover, tariffs are widely used as political instruments, uncertainty and volatility are intensifying further. Most recently, the situation has culminated in the escalation of the Iranian conflict. The implications for energy prices and the security of supply chains are as difficult to predict as the impact on the global economic situation, particularly in a cross-border sectors such as the automotive industry. ElringKlinger is affected by the lack of market dynamics but sees compensating effects from the large-scale orders and the good aftermarket business. Overall, the group expects sales slightly above previous year's level in organic terms. In view of a complex framework of multiple factors, we expect an adjusted EBIT margin of around 6% to 7% overall. As a result of our measures, and revenue contributions, we expect a range of around 8% in the medium term. Operating free cash flow will be slightly positive in 2026. In the medium term, we expect to increase the time range to around 2% to 4% of sales, also in the light of revenue growth. Taken together, resulted in our short-term and midterm ambitions underscore that we're moving in the right direction with our SHAPE30 strategy. ElringKlinger is in a robust financial and strategic position and a solid foundation that enables us to further enhance the group profitability and generate sustainable cash flow. Yes. Finally, I would like to mention a few points from our corporate calendar. In May, we'll present our Q1 results and hold our Annual General Meeting in a virtual format. This will be followed by the publication of our Q2 results in August and our Q3 results in November. So having said all this, we're now ready to answer your questions.

[Operator Instructions] The first question comes from the line of Michael Punzet from DZ Bank.

Michael Punzet. I have two questions. First one is mainly related to the e-mobility business. you mentioned a loss of roughly EUR 61 million in the last fiscal year. Can you give us a split what is related to ongoing business and what is, let's say, sometime onetime effects? And the second one is, when I look to your margin guidance, of 6% to 7% in the running fiscal year. What will be the main driver for that? Will that be the increase or the better profitability in e-mobility or some other factors where we have to focus on? And what is the main risk to that guidance that you may miss this guidance?

Yes, Mr. Punzet. Thank you for your questions. I will answer your first question on e-mobility. So of the EUR 61 million losses in e-mobility around EUR 21 million are related to one-off effects and the remainder is recurring related to the ramp-up of our new business, new projects.

Yes. Mr. Punzet, thank you for your question. Your second question here on the margin guidance. I will answer as following. In our SHAPE30 framework, we have already adjusted footprint. We sold the U.S. and the Swiss plant. We closed plants, other plants in the U.S. and Germany. We last year, executed streamlined and reduced the number of employees from 2024 to 2025 so far by 473. And we have, of course, a particular focus here on overhead costs. We have ended -- to full extent, we have to say unsuccessful product groups and reduced overall number of product groups that are not successful, and they would represent a burden in the future. And of course, the EUR 50 million that we want to achieve in terms of cost reduction, that's going to be fully effective in 2027, streamline is part of that, but also some other activities here on other costs. And in addition to that, and I think this is a very important partner. We are in the beginning of our growth cycle here on e-mobility. And we expect the doubling of sales, as we mentioned, from the current EUR 144 million to around EUR 300 million in 2028. And there's, of course, also associated contribution margins that we would expect in the run-up. So if I take everything into account, we can say we have done already a lot to improve structure and also to reduce cost, but not all of that was effective in 2025, but some will be effective in 2026. Now our program is designed so that we should have some robustness here in meeting our guidance. And if you ask me for the main risks, we have factored in an amount based on current developments here on the Iran conflict to a large extent of a single-digit -- mid-single-digit figure. Now this is all factored in here when we give this guidance. If things intensify and conflicts escalate. Then, of course, that would pose the risk to the run-up. But when I look at, for example, the status of the programs, the dates for the start-up phase and those things, then we are pretty firm here in the run up. There's no further delays that we would expect. So really tariff, conflict, that would be the main risk factors here for us in meeting the guidance from today's perspective.

[Operator Instructions] The next question comes from the line of Miro Zuzak from JMS Invest.

I have a couple of smaller questions regarding the model, if I may. The first one is the FX impact due to weak currencies, mainly the U.S. dollar, but also other currencies, there was a significant move in the last couple of months. Maybe you can or tell me what is the impact that you expect on your revenues and also the EBIT line? And is your sales guidance already including this impact or not.

Yes, thank you for your question. So the sales guidance includes our budgeted expectations and the plan rates we make on the other hand, it's very difficult to predict how the exchanges will develop in a very uncertain environment range. So we guess we planned with -- and we also do some hedging to offset the risk.

Okay. So you -- basically you already -- there is some contingency for if the FX rate would stay as it is today or is it based on the year-end FX rates? Do you understand my question. I can't predict FX, but I know where they are today, right? So I can look at the euro versus the dollar, that can then calculate the impact on every quarter and the year, given basically assuming that the FX rate is on the current level.

Yes. Thank you. So there's not a huge risk at this moment in time with the current status of the exchange rates.

Okay. Then I have a question on the individual cost line, the OpEx cost line, if I may. So we've seen that the selling cost was down in Q4 versus the other quarters. This is not really typical so in the past, they can really go back many years back, it was always the case that Q4 had the highest sell cost. Now what -- and you mentioned the efficiency measures that you have taken. Is this an underlying improvement? Can we assume that because for selling will be lower going forward on a quarterly basis? And if yes, by how much roughly?

So they are somewhat lower, and we expect them to maintain a bit lower due to the streamlined effect mid-single digits.

To mid-single digit lower, like 5% or EUR 1 million lower, for example, per quarter roughly.

Mid-single digit.

Euros million or percentage point?

Euros.

Euros. Mid-single digit. So EUR 5 million lower. Oh, that's a lot. Well done. And also in G&A, basically the seasonal pattern persisted in Q4 was lower again. Have you also improved there a couple of million?

Well, let me step in here. We have communicated last year that the streamline effect now that we are aiming to achieve EUR 30 million in overall personnel cost reduction, yes, EUR 30 million in a good way. Not all of it, as I said before, not all of it, as I said, is accounted for in 2025 not because there is if you release it's a voluntary program, but if employees enter into this, there's a liability or there is a provision for that. And then at a later point, the provision is dissolved. And then employee is exiting and cash payment is done, right? So what you see here, and this is the reason why I have to say, it's not that easy to go from a 2025 Q4 to a run rate because you see the provision effects throughout the year from streamlined on the one side, you'll see some items here in terms of dissolving effects because employees leave ElringKlinger in Q4 and what you have to take into consideration when you look at the model, then it's the ambition that we have communicated with a really full impact in 2027 and a partial impact in 2026 of the EUR 30 million in terms of personnel costs. And that is distributed between different functional layers of the P&L, okay? There you find part of it in the gross margin. You find part of it in SG&A, and you find also part of it in R&D, but the full amount, distribution, we cannot really say at this point, but the full amount that you would have to take into account is EUR 30 million, part of it in 2026. All of it in 2027 forward, okay?

Okay. That makes sense. The next question, if I may. And then I step back in the queue. I don't want to take too much time from other analysts wanting to ask question. But there's a lot of talk about the advances in AI. You've certainly -- also, you said already internally for various tasks and experimenting with it. Typically, the predictions are that there is a huge improvement in productivity, especially for white label -- white collar, sorry, the white collar workforce. And looking at your almost EUR 80 million in F&D -- R&D, sorry, and also looking at almost EUR 100 million G&A, EUR 150 million selling that has predominantly personnel costs. In addition to the EUR 30 million and loan maybe a bit post the 2026 year, what additional efficiency gain are you assuming? Have you tried to quantify the effect? And have you tried to plan for these improvements. Maybe you can give some anecdotal evidence, but also some numbers there?

Yes. This is a great question. It is, in fact, the case that AI application is step-by-step entering the different areas of activities of ElringKlinger. And we talk on the one side analysis work if production equipment, and this is the case for the new lines that we have installed that they are part of a digital network here with our ERP system, and we're using AI to find trends within large amounts of data. Okay. If we look at R&D, then AI in the first place is supporting us in reaching shorter cycles for customer responses, and then, of course, when we look at other functions here, there is some potential going forward, but there is an important principle for us here now. We think that, along with the use of ERP system and a centralized system that efficiency gains are going to be reached going forward, but we are also experimenting. But we do not do individual steps with isolated AI systems and expect huge gains in the short term. So what I'm saying is, this is a longer term and is too uncertain that I say to the EUR 30 million that we wanted to achieve that there is in the foreseeable future, a significant amount there. It's too early to do that, but I can confirm that we here at ElringKlinger, we are looking in the different areas into this. We are, as part of our digitization we prepare for this cycle so that we are ready to make use of the applications, but it's really too early to give you a figure.

The next question comes from the line of Tobias Willems from LBBW.

First, congrats on the figures. I have three questions. Question one would be about whether a statement can be made on the current situation in Iran and the possibility of impact on the ElringKlinger International business with the focus on the oil-heavy automotive industry? And my second question would be whether our guidance can also be given when it comes to the tax rate for 2026 and maybe for 2027. And my last question would be regarding the ramp-up of high-volume series orders and e-mobility. What exactly can be expected for the further years because on order intake of around EUR 1.6 billion, was reported for 2025 versus EUR 1.65 billion in 2024 so a little bit less. And the question would be here, are there further major creation with the OEMs? Or what exactly can you expect when it comes to the year 2026 or even the years ahead?

On your first, we have analyzed the Iran situation for us here and we have identified as risk factors here. Number one is energy cost in terms of oil and gas. And I think we see that. And I can say that we have long-term contracts, we have for production and heating. We have usage of gas here at ElringKlinger, but we are using long-term contracts. So there is nothing -- not much short term to be expected. Freight and logistics was adjusted fairly soon in terms of routes that we use. So from there, there is really maybe a little but not much. And then most maybe is on the direct materials. There is some materials that we use where it is not so easy to conclude long-term contracts. And there is some oil elements in there in terms of costing that may have an impact. For now, I mentioned that earlier, we have identified a sort of mid-single digits, EUR 1 million in terms of risk that we see now, yes, and this is factored in already, but now we have to see because sometimes there's shortages of secondary or tertiary effects in the supply chains, but it's not something that we see as of today. but it may be the case, and that is a risk factor that I mentioned before, okay? So on the second question here on the tax rate, it is such that the expectation is that tax rate is going to be normalizing along with the reduction of losses in e-mobility. But as long as we have some entities here with start-up losses, then we'll see some effects here that have a negative effect on the tax rate. It's going to be normalizing that I can guide but I cannot say really from an exact perspective, we will be able to do that going forward. But now there is some uncertainty in regard to that. And then your last question here, your third question, on the ramp-up and order intake for more projects, we have to say. There were over the years 2024 and '25, significant investments made into new technologies here for e-mobility, cell contacting systems mostly but not all of it, also other products here for e-mobility. And for now, our line is that we'll reduce CapEx to a lower amount as our guidance shows here. And that we will focus on the execution side because there's a lot of built-in growth by the investments that we have done. So for the foreseeable future, we are not so much focusing on very large contracts that we have here industrialized in the last 2 years. So we'll focus on execution of those new orders, of course, we'll do more business, but on a normalized level of CapEx. And like we say, we'll focus very much on the bottom line quality on the one side and also on free cash flow quality on the other side. So right now, nothing to be very huge, what we would take in because it's not the right time to do that, okay?

We have a follow-up question from the line of Michael Punzet.

Yes, Michael Punzet for a follow-up question. Can you give us any kind of guidance what we should expect for adjustment in the running fiscal year from today's point of view?

Yes, we have had adjustments, significant adjustments through all of those measures that I have explained throughout 2024 and 2025, we are not finished with a program, but I can say that most of the amounts from restructuring, impairments of immaterial and material assets, most of it is accounted for, yes, but we're not fully finished here with the global network of ours on the one side and with some adjustments we'll make to the group. Expectation is not that it's going to be very significant amounts. I would right now estimate maybe low double digits as impairment amount is an estimation, but that really depends, but this is as much as I can say, based on that.

We have a follow-up question from the line of Miro Zuzak.

I have a question regarding the new parts business and the corresponding EBIT. We have seen a continuous downtrend in both the top line and the bottom line there. Is this -- I mean, given your guidance, which implies an uptick in the margin, is this business going to be positive again in 2026 EBIT-wise? What is the current projection? Or what shall we model in for this business in 2026?

What we have said, we have said that the e-mobility business unit, the 2025 had EUR 61 million in losses right in this hydrogen and battery business. And we said also that based on the EUR 144 million on e-mobility sales in '25, it's going to be doubling to around EUR 300 million in 2028. And we're going to be having a full breakeven year in 2028, yes? Until then, we realized some of the savings that we have mentioned in the year 2026. We expect a full impact here in 2027, talking personnel costs, structure or cost reductions, structural elements there and the EUR 50 million cost reductions effectively. And along the way from 2026 to 2028, if it's going to be a gradual improvement there from this loss-making situation. This is what I can tell you. And of course, it depends on quantities and how fast we can reduce cost on the one or other side, but this is overall the line that we have communicated.

Okay. So I'm not sure if I got it correctly, but must be further loss-making by quite a large amount, in this case, in 2026 just looking into the current year basically. Okay.

There is some loss making in 2026, I can confirm that.

And the EUR 60 million losses to EUR 61 million in e-mobility, was there any one-off elements involved there? Or is it just due to the ramp-up. This is just the ramp-up situation, but not -- you believe you didn't book any adjustment for this in terms of onetime losses?

Yes, Mr. Zuzak, we booked about EUR 20 million one-off items of the EUR 61 million.

Ladies and gentlemen, that was the last question. I would now like to turn the conference back over to Thomas Jessulat for any closing remarks.

Yes, ladies and gentlemen, this brings us to the end of the conference call on the full year figures of the 2025 financial year. Thank you very much for attending. If you have further questions, please feel free to contact our IR department. And as mentioned earlier, the upcoming events are the release of our Q1 results on May 7 and our Annual General Meeting in a virtual format on the 12th of May. And yes, we would appreciate if you would attend. Until then, I wish you all the best. Thank you very much, and you have a good day. Thank you.

Good bye.

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