EuroGroup Laminations S.p.A. (EGLA) Earnings Call Transcript & Summary

Good morning, everyone, and welcome to EuroGroup Laminations Full Year 2024 Financial Results Presentation. Before I hand over to your host today, please be advised there will be an opportunity to ask questions at the end of the presentation.[Operator Instructions] I have now a pleasure handing over to Ilaria Candotti, Head of Investor Relations. Please go ahead, Ilaria.

Good morning, everyone, and thank you for being here today at our conference call on EGLA Full Year 2024 results and the strategic plan for the period 2025-2028. I would like to remind you that, as always, both the presentation and the press release are available on the EGLA Group website under the Investor Relations section. I'm here today with Sergio Iori, Chairman of EGLA; Marco Arduini, CEO; Isidoro Guardala, Deputy CEO; and Matteo Perna, our CFO. Today's agenda will be structured as follows: Marco Arduini will open the presentation with the 2024 highlights. Then Matteo Perna will follow with a description of the financials for the year. Afterwards, Marco will introduce the new plan with the current market scenario and the strategic guidance for the midterm period. Matteo Perna will then conclude with the 2024 outlook and the 2025-2028 financial guidelines. At the end, we will open the usual Q&A section. At this point, I'm pleased to leave the floor to Marco. Please, Marco, the floor is yours.

Thank you, Ilaria. Thank you to everyone to be part of this day. We can start with the highlights. So for us, 2024 remains a positive year with robust results. The driver of this robust results is for sure, the EV & Automotive growth that was very strong in China and allowed us as well to increase our market share in both North America and Europe. The Industrial business was impacted by a negative price effect due to the raw material and the European market remained a weak market. The profitability is resilient, thanks to the contribution of the EV & Automotive EBITDA and thanks to the flexibility that we were capable to introduce in our cost base. So the total revenues of the year were EUR 869 million and the EBITDA adjusted results was EUR 106 million. Moving to the most important part in terms of outlook. We still have a robust and strong order book. The order book is now for EUR 5.3 billion and the pipeline is EUR 4.8 billion. These 2 data are reflecting the increase of the automotive electrification that is remaining firm for the future, where China is, of course, the leader. And we see as well in the short term in Europe and North America, a readjustment. The strong focus that we have in our next future is concentrated in the Chinese OEM that are leading, let's say, the market in China, but as well the automotive evolution in the rest of the world. With regards to the strategic initiative, we have, of course, already started many activities that are Asia-centric. So we have closed the deal and executed the deal related to our Indian project with Kumar Precision Stamping, and we acquired the control. And now we are as well moving in the assessment for the Indian mobility market. In addition to this, we have as well finalized the acquisition of the 50% of the minorities that we have in our joint venture in China. And this is preparing us for new partnership opportunity in the Chinese market. I now pass the word to Matteo so that he can enter in the financial highlights.

So thank you very much, Marco. So a snapshot on 2024 full year results. Revenues at EUR 869 million, which is implying a 4% increase compared to 2023 is the result of the different evolution of the 2 segments. So EV & Automotive growth was in the range of approximately 18%, whilst the Industrial business decrease was 14%. EBITDA adjusted in line as per 2023, implying a margin of 13.3%. The total amount of adjustments is approximately EUR 5.7 million. EBIT, EUR 66 million. The evolution of the EBIT, of course, impacted by the evolution of the D&A. So D&A have increased by approximately EUR 11 million compared to 2023. Net working capital, EUR 233 million, including EUR 14 million related to the consolidation of Kumar as of the end of December. CapEx EUR 86 million, which 80% is the part related to EV & Automotive. And finally, net debt, EUR 226 million, including as well approximately EUR 28 million impact related to the acquisition of Kumar and as well the consolidation of the net debt. The net leverage ratio based on adjusted EBITDA is in the range of 1.9x. If we move to the next slide, please. So you see the total amount of revenues for the EV & Automotive business in 2024 was EUR 562 million, so 18% increase compared to 2023, whilst the Industrial business was EUR 307 million. Over the last quarter, we have generated approximately EUR 220 million total revenues, of which EUR 147 million was the part related to the EV & Automotive, whilst EUR 74 million was the part related to the Industrial business. In terms of business mix, you see that now EV & Automotive representing approximately 65% of the total amount of revenues. Just to let you know that Industrial was more than 60% as of the end of 2022. We have sold approximately 3.8 million motor cores over 2024. And I have to say that we have as well increased our market share in both Europe and North America. If we move now to the next slide, you see the contribution of the EBITDA adjusted by segment. So EV & Automotive, total adjusted EBITDA was EUR 80 million, implying a 14.2% EBITDA adjusted margin over revenues, whilst the margin expressed by the Industrial business unit were almost in line as per 2022. So we are in the range of 11.8%. So we've already spoken about the increase of the D&A, which is the result of the execution of the CapEx plan that we are executing, and we have made approximately EUR 86 million CapEx in 2024. And therefore, we can move to the next slide, please. So in terms of net debt evolution, you see as of the end of December, we started our net debt with EUR 111 million. This is based on EUR 51 million related to the financial lease liabilities, so the IFRS 16 effect, whilst the EUR 59 million was the part not related to IFRS 16. In this bridge, we are showing to you a simplified evolution of our cash flow. And you see that the vast majority of the cash was absorbed by the execution of the CapEx, EUR 86 million. EUR 54 million was the part related to the change in net trade working capital. And again, this is as well including the part related to the consolidation of Kumar. And finally, we have as well highlighted the part of the net debt impacted by the Kumar acquisition, the consolidation of Kumar net financial position and as well the completion of the buyback program, which was completed as of the end of June 2024 and as well as the dividend distribution that we made in 2024. Over approximately 65% of the total long-term debt is hedged. And the higher financial costs were mainly related to the increase of our long-term financial debt. I think that we can move to the next section.

Yes. Thank you, Matteo. And we want to, of course, introduce our strategic plan 2025 and 2028. It's important to underline that the need for this strategic plan is coming from the market evolution that we experienced in the last time. We saw in the last 2 years, a major shift from West to East, where China emerged as a global technological hub, not only for the automotives, but as well for all the new technologies that are key for the future of technology. We experienced as well a major shift in the ability to supply electrical steel production. So North America and Europe did not make the same investment that were made in Asia and in the rest of the world. And the Russian supply chain has been disrupted. We have as well noted an increase of competition from Chinese and Korean players that entered in Europe and North America. And the inflationary pressure that was created in experience in Europe and North America as well in -- create a larger gap of competitiveness between this region and Asia. In addition to this, all the volatility and uncertainty that was as well created in geopolitical changes and as well in the shift in the regulatory frameworks created differences that have to be considered and have to be as well accepted as the basis for our plan. What we want to confirm is our commitment because the energy transition and the world electrification is a clear direction supported by all the macro economical trends. And our strategic plan wants to reflect this shift with the objective to maintain this leadership. If you move to the next page. So the first consideration is about our business model. Our business model has to be updated, improved based on the fact that we have a new focus. A new focus for the businesses EV & Automotive is, of course, remaining a clear trend. But when we approach a new region, we have to enlarge and extend this concept to the e-Mobility solution. Just as an example, when we go to India, India is a market where the 2, 3-wheelers are dominating the market and it is important to be capable to support and to take the opportunity of this market. So the extension of this focus is bringing us to define the e-Mobility solution. Another important focus is related to infrastructure. And this is covering a new segment that is the power and distribution transformer. With regards to the geographical focus on top to the 3 regions that we covered already in our previous strategic plan in this plan, we want as well to concentrate in India, and we want as well to concentrate in the upgrade that we want to make in China. Next page, please. What is important is to remind the potential markets in which we operate. And it's important to restate that the penetration of electrification in the automotive industry is progressing and is progressing at a different rate in all the regions. So in Europe by 22%, in North America by 26% and in Greater China by 11%. Of course, the actual size is different in China and the number that China is covering are almost superior to the combination between Europe and North America. And you see as well the market share that electrification is reaching in 2028 in Europe, in North America and in Greater China. When we relate to electrification, we consider not only the BEV, but as well the plug-in and the full hybrid. So 49% in Europe in 2028 versus 23% that was last year, 46% in North America versus 18% and in Greater China from 42% to 66%. So this is an important element for our strategy plan. Next page is concentrated here in as well the rest of the Home & Industrial segment, including transformer. And you see that as well in all these segments, the market is foreseen to have a growth that is, let's say, less sexy than in the EV & Automotives, but it is related, again, to the energy transition that is a driver for the West economies and as well in the emerging market. It's important to say that we are capable to monitor and to follow very carefully all these segments across all the region. Next page, please. So based on this consideration that are related to the market, we see 3 activities that are done that are the strategic direction that we want to follow in the development of our world. First of all is to be capable to be close to the market and unlock any opportunity of growth covering the region and the segments. And we want as well to increase our diversification in order to be capable across region and segments to reduce all the risk and with the ability to develop solution to the customer that are increasing our added value and as well preserving our marginality. A last point of activity is this step-up in China operation that we have already, let's say, announced and that we are implementing. With regards to the activity that are internal in this strategic plan, we want to continue to invest in our technological leadership by investing our resourcing in new solution and new developments in all R&D and innovation activities. In addition to this, we have a clear focus to improve our efficiency in our operation and as well maximizing the flexibility and the standardization and the saturation of our asset. Last point that is extremely important for all of us is, of course, to maximize our cash flow efficiency. And this has 2 main focus is, of course, to secure the right return in the right investment and of course, optimize our working capital. If we move to the next page, we have created this strategic framework image that want to summarize the focus and the guideline that we are following in the next years. So we plan to grow in the e-Mobility business and maintaining our market position and following the development of the market in Europe and North America, in China in the next years, we want to exploit the penetration in this market. And of course, we are preparing our launch and development for the Indian market. With regards to the Home & Industrial Solution, in EMENA, we are, of course, optimizing all our activity commercially and as well operationally. While in North America, we see the opportunity to preserve our ability to grow. And of course, the big opportunity are again, in China and in India, where we see the possibility to grow in the next year. With regards to this new business focus that is part of the Home & Industrial segment, we have, of course, a very strong plan that is supporting our expansion in the transformer business, thanks to our Chinese operation, as well our Indian operation, but as well to use this operation in order to grow our volume in North America and in Europe. So this is, of course -- these are all the activity related to the market. And at corporate level, following the strategic guideline that we mentioned, we want to -- the key words are strengthened, organize, streamline and innovate. And speed is as well another word that we have and want to lead our future. So at this point, I'll pass to Matteo the last page.

Yes. Thank you, Marco. So we're on the basis of the updated strategy and all the job that we have made to support our new business plan we do think that there are 4 key strategic pillars underlying our guidance for both '25 and for the midterm. One, growth. Growth is still embedded in our plan. It's a double-digit growth, so approximately 10% expected for 2025 and between 10% and 15% over the midterm. Two, we have to secure as well our margin. So in light of the pressure that we are feeling, especially in Europe and as well in light of the uncertainty in the, let's say, current market scenario, we decided to remain very cautious on 2025. And therefore, we do think that our margin adjusted will be in the range of 12%, whilst we confirm our 14% over the midterm. CapEx we are now, let's say, in the tail of the CapEx plan that we started in 2022, which was aimed to basically more than triple the installed capacity. CapEx this year will be in the range of EUR 17 million. Whilst going forward, we do think that in light of our current installed capacity and as well the experience that we have made in increasing the flexibility of our installed capacity between 4% and 5% in terms of CapEx intensity will be the amount of CapEx that we will execute going forward. The last point, it's as well very important is with respect to the cash generation. So we do think that in 2025, our operating free cash flow will be above 0. So we will be positive and of course, this is the result of the execution of our top line, but as well all the actions that we are taking to optimize our net working capital, which is an essential part of our budget for this year and as well for the new business plan. And again, for the target that we are considering for the midterm outlook, our objective is to have ROCE of taxes in the range between 15% and 20%. Of course, will be the result of an increased EBIT and therefore, more selective approach on CapEx, reducing as well the part to the fixed asset. And finally, the execution of our optimization of the working capital program, which will be focused mostly in Europe and in North America. So on the basis of this, we have defined the set of guidance that we are now presenting to the market. Thank you, Matteo. So I think now...

Open the Q&A section.

Thank you to the management team we now have an opportunity to ask questions. Our first question today comes from Mr. Gegra.

Can you hear me?

Yes, indeed.

So my first question is on the 2025 guidance. How much is the perimeter effect? And without M&A, can you tell us what should we expect in the automotive and in the industrial segment? Then your top line seems to me a bit conservative compared to what you showed us as the current market expectation for the EV market. So it seems that you are going to underperform the market, if you can comment on that. Last, on 2025 margin, if you can give us more color on the moving parts that lead to the 12% margins in 2025.

Thanks, Alberto. So on M&A impact in 2025, we are considering more than EUR 50 million of revenues deriving from Kumar and therefore, the rest, it's organic and 100% is in the Industrial business. Then on our top line estimate for 2025, I have to say that our estimate is considering a robust growth both in China and in USMCA, whilst a reduction in Europe. And this is based on the latest visibility that we have on the market plus as well the prudence that we have as well embedded in our guidance. Then on margin, yes, 12% is basically the result of -- if we divide between volume and the price effect, the volume are accounting approximately EUR 14 million compared to the part of the EBITDA lower to the consensus, whilst approximately EUR 11 million is the part related to the price and the mix. We have to say that, again, in light of the current market scenario and the current volatility, we have been very cautious in the definition as well as the prices for the European market, and this is well made to secure our market share in light of increased competitive landscape in Europe, and we can, let's say, some color on this. But on the other side, I have to say that we have as well embedded certain additional costs, which can be incurred in case of potential impact arising from the tariff.

Next question comes from Mr. Emanuele Negri.

Can you hear me?

Yes, we can.

I have a couple of questions. The first one is on your CapEx plan. You said that you are in the tail of your CapEx cycle. What should we think about the focus of the investment for 2025 and the years ahead? And the second one is more of a strategic question. Your new focus will be more and more on China. So do you have any update on the memorandum understanding you signed last summer?

Yes. So let's get started on the second question. We are in the full execution of the program that we have defined to penetrate the Chinese market. So a few days ago, we announced the signing of the buyback of the total 31% stake in both Euro-Misi Tech and Euro-Misi Laminations so the 2 Chinese companies, one, Euro-Misi Tech related to the automotive business that was the other focus on the industrial business. And that was, let's say, an essential part in order to fully deploy the possibility to secure as well the local partnership with the partners that we have already, let's say, disclosed to the market. So we are proceeding, let's say, consistently to our plan, and we are moving forward as well now in the definition of the next step of such programs. Emanuele, the other part was on CapEx. Yes. So this year, we are considering approximately EUR 70 million of CapEx, of which more than EUR 20 million will be executed in Europe. And again, this is related to 2 main new SOP product in Europe, which are expected to start in the last quarter of this year. And I have to say that following the execution of these 2 CapEx, we are fine with the target installed capacity that we have currently in Europe. Then we have as well slightly less than EUR 20 million in Mexico, and this is related to the new important ramp-up and new projects that we are considering for this year and as well for '26 in USMCA. And finally, the rest is China. Of course, China as well moving forward will be, say, the only geography which will have a significant amount of growth CapEx consistently with expected market penetration that we are targeting as well in our plan.

Maybe just to add to the point related to China, we reiterate that we are progressing our plan to upgrade our ecosystem in China. So all the moves that we are doing are a step in this direction. So the latest information that was disclosed was about the share that we bought by our Japanese partner. And as underlined in my highlights, this is unlocking the possibility for potential partnership in China.

Okay. Just a clarification on this. The EUR 70 million CapEx target you gave for 2025, does this include the cash out for the minorities in China or these are on top?

No, no. These are on top. So these are not included in EUR 70 million. And just to let you know that the cash out is in the range of EUR 13 million.

Currently, we do not have any questions queued. So we will wait just a few moments to give everyone the opportunity to raise their hands. [Operator Instructions] We do have a follow-up question from Mr. Gegra.

Yes. So I have a few additional questions. On the India on e-Mobility market that you mentioned at the beginning of the presentation, should we expect an acquisition? And if so, which kind of size are you looking at? Or it could be more another JV, something similar to Chinese operation? Then on cash generation in 2025, if you can better give us a sense of what could be the improvement on your working capital in particular and its moving part. And then the final question, if you can provide some comments on the start to the year because we are seeing, for example, very weak data from Tesla. On the other side, registration of EV in Europe are doing quite well. So what are you seeing in this first quarter so far in the automotive and maybe also some comments by end market for the industrial.

Okay. So let's get started on the India e-Mobility. You want to go ahead, please?

Yes. So for the Indian e-Mobility, we want to go in a direction of a joint venture with a local partner because Indian market is a very let's say unique market that requires strong presence, strong heritage. And so the view is to go through a JV and not through an acquisition. And this is the first point. Then I can add to the outlook in the first month. Of course, the news and the information are visible to everyone. We have to say that what we have seen in this month is in line with our budget. Of course, the situation in North America is as well in some way impacted by this tariff discussion that is creating on the operational level, some concern problem to the customer. And this is, of course, requiring the right level of prudence as Matteo underlined before. So we are following every day the evolution of the market that in terms of medium, long term remain clear. But of course, this kind of volatility that we see in the market in this months are taken in consideration in our guidance for 2025.

Well, on the cash flow side, I have to say you have to consider the EBITDA that we as well declared. In terms of tax rate, the tax rate was in the range of 22%. So we are considering as well a tax range in the range of 23% for 2025 in light as well of the evolution of our earnings before taxes due to the consolidation of Kumar and as well, let's say, the full part related to the Chinese operation. Then in terms of net working capital, we are targeting a net working capital which is below EUR 200 million, and you have to compare it to the current EUR 233 million. And the vast majority of the reduction will be derived by the inventory. So the inventory is expected to be optimized compared to 2024 and as well in the evolution that we are having a discussion with certain key suppliers.

Next question comes from Mr. Renato.

Can you hear me?

Yes, we can indeed.

Okay. Perfect. Yes. I have a question on China. You started production for your first Chinese OEM in the last quarter of last year. Could you give us an indication about how much of your projected annual sales this year or if you want your midterm targets could be generated by local Chinese OEMs? Also in terms of order book, if you can give us any indication about the weight of Chinese customers and when these orders could translate into revenues for you? Related to this question, in terms of condition of the contracts, for example, in terms of payment terms or profitability, do you see any major difference between the Chinese customers versus your European ones? Then second, more general question on the macro outlook. In your outlook, you were referring to clearly also to the European regulation. What impact do you expect in Europe from the proposed change in the regulation on CO2 emissions with targets for carmakers to be achieved over a 3 year period or for any potential new incentive schemes on BEVs? And on U.S. tariffs, if you can remind us if you have, let's say, a material direct exposure or that is mainly indirect in terms of volumes for your customers?

Okay. So many questions. So let's get started from China. On China, you're right. So we started in the last quarter of 2024, the first production for so-called COEM, so a Chinese OEM. Just to let you know the total amount of revenues that we generated for the traction business, such customer represented less than 1%. And we do expect Chinese OEMs to represent approximately 4% in 2025 budget. On the order book side, China, is representing approximately EUR 1 billion of the total EUR 5.3 billion that we have in the order book. And on the other side, I have to say that over the pipeline, we have seen a decrease both in North America and in Europe, whilst on the other side, I have to say that the evolution of the pipeline in China has been very strong over the last weeks. There was as well a question on the tariff and Marco, I don't know if you want to add a word on this.

Well, the tariff in North America are not impacting us directly, but are impacting directly the customer that is importing the material that is produced in Mexico, in USA. So this is totally on the customer side. And with regards to...

Yes. Maybe if we go back to China, there is one question on the condition that we have with the Chinese OEMs. But I have to say that in light of the discussion as well the job that we have made for the support of the local team, we have been able so far to secure conditions which are basically in line to the condition that we have with Western OEMs. It's important to consider to let you know that in our plan, we are considering to penetrate Chinese OEMs with an average selling price, which is slightly lower compared to what we are currently reporting towards Western OEMs. So it's embedded in our plan, and we do think that this is going away in order to penetrate the local market.

With reference to the change in regulatory and as we discussed already, I think, in the last call, of course, this kind of new situation is shifting from BEV to PHEV and FHEV. So we see the penetration of the so-called ex-EV that is increasing, as I show in the data with a major portion than in the past considered from full hybrid and the plug-in hybrid. So this kind of segments will, of course, have a major weight than foreseen in the past.

Okay. Thank you. If I may, just a quick follow-up on one of the previous questions. Yes, we have seen, let's say, a mixed outlook from carmakers from Volkswagen, which has been a bit more positive on a good start to the year and others less, and we know about the weaker trend for Tesla. Can you -- do you have an indication about the potential sequential trend between the first half of the year and the second half? Sequentially, do you expect a different trend and an improvement over the year?

Yes. We do think that there is going to be an acceleration in the second part of the year.

Next question comes from Mr. Giovanni Selvetti.

Can you hear me?

Yes.

A quick one, maybe again on the guidance point to 10% growth. You said before that the impact should be around EUR 50 million, 5-0 from M&A or EUR 15 million? Just to have a sense of how much is going to be organic and how much is going to be M&A. Then again, maybe a question on the 2 end markets. So, how should we think about this 10% in the sense of what is the growth that we should think about EV & Automotive or what is called now e-Mobility Solution, and Industrial, what kind of growth should we think of organic, of course, should we think about the Industrial segment? The other question is maybe on the order book that I can see that it came down slightly. I was wondering if here you can provide maybe a bit more color on if the Chinese order book is still going up with the, let's just say, the negative delta being Europe or Western clients in general, postponing or canceling some orders. The other question is, you said now that the average selling price in China with Chinese OEM is a bit lower. Is it the production price there is also a bit lower, meaning that is it like should we think that going forward, the more you penetrate Chinese OEMs compared to Western OEMs, the more in a way, dilutive is at the profitability level?

Okay. So question number one, 5-0, so 50 is the part related to the Kumar consolidation. We said above 50, 5-0. If you want to, let's say, divide 2025 guidance by business unit, just to let you know that we are considering all of the growth basically deriving from the Industrial business to be achieved through the consolidation of Kumar and the rest in our guidance is expected to remain somewhat flat whilst and this is as well including an additional approximately 5% price decrease expected in Europe in the first quarter. And then auto will be the rest in order to match the 10% CAGR that we are considering as a target. Then on order book reduction, you're right. So compared to the latest data that we disclosed in November, China order book has increased. You see there region which has experienced the biggest reduction compared to November, it's USMCA. I have to say that for USMCA, we have been very cautious in light of the current scenario, the current market dynamics. So we are applying overall a 40% discount compared to the volumes which were part of our order book. Then on average selling price in China, of course, this is as well related to the fact that we want to penetrate the local market versus the Chinese OEMs in order as well to secure any potential additional business coming from Chinese OEMs as well in Europe. And that's one consideration. On the second consideration, it's, of course, we do think that through the execution of our local partnership, we will be able to maintain our margin increase, frankly, our margin in China going forward.

Our next question today comes from Mr. Michele Baldelli.

I just wanted to analyze a little bit the guidance that you gave 1 year ago to the current results and to discuss what was negative compared to those ones? Because to me, it is mostly driven by the Industrial division. But if you can comment a little bit about this, it could be useful. Then still referred to the slides 1 year ago disclosed that there were motor cores that and by the way, you reached 3.8 million core sets above the 3.6 million promised last year. So my question is on financial year 2025. You said that you expect at that time, 7 million core sets. So in 2025, what we shall assume if we can have some color around the volumes expected for 2025. And lastly, on the Industrial division for this year, you said that price declines should be only in Europe. Just to clarify why only in Europe and not also in the other regions given that steel costs for the time being until at least H1 probably will be down? And then if we can expect an improvement of the pricing in the second part of this year, given that the steel pricing has rebounded strongly after the Trump administration's tariff debate.

Hey, you want to take the first part of the question?

Maybe just to say on the industrial, for sure, the industrial situation last year was, let's say, not recovering in the second half of the year. And we were considering at the beginning of the year a slight recovery that did not realize in Europe. And with regards to the steel price, of course, the steel reduction that we have seen in Europe in the first months is specifically to this region in terms of our business. And the impact that we can see generated by the tariff or the geopolitical discussion is, of course, all not clear yet. There are many things that are happening. But so far, there is not a clear trend in order to say this is already clear. So the months in view of this, let's say, changes that in the geopolitics discussion requires to wait what will be the final results for all the discussion. And this is for me the point.

Then there was as well one part to the number of motors core set. So last year, we sold approximately 3.8 million, of which 1.8 million was in Europe and 1.2 million in US and the rest in China. In light of the evolution of the targeted top line, we do think that in 2025, we will sell more than 5.5 million motor cores.

Okay. If I may just a follow-up on the adjustments that you do at a group level. Can we know specifically on the 2 divisions, how much was the adjustments for each division?

Yes. For 2024, we said EUR 5.7 million, of which more than EUR 4 million for the Industrial business, given that the vast majority of the extraordinary cost related to M&A were part of the Industrial division, whilst slightly more than EUR 1 million was the part related to the EV & Automotive business. For 2025, we are as well considering EUR 5 million adjustment, of which EUR 3 million approximately for EV & Automotive and EUR 2 million for the Industrial business.

So it's included in the guidance, the adjusted.

Yes.

So thank you, everyone, for joining today. I will now hand back to the speakers for any final comments before bringing this presentation to a close. Please go ahead.

Thank you very much to all of you for the interest and the questions. We have clearly reported the results and the performance of 2025 that we consider positive and strong. And we have as well highlighted the plan for the 2025 to 2028 that is a robust framework with clear guidance and direction that we reinforce the EGLA leader position in the market in the electrification. So thank you to all of you, and we remain available to do all the follow-up that are needed in order to give you the comfort that you need. Thank you again for all the questions and the participation.

Thank you. This presentation will now come to a close.