FACC AG (FACC) Earnings Call Transcript & Summary

Dear ladies and gentlemen, welcome to the conference call of FACC AG. At our customer's request, this conference will be recorded. [Operator Instructions] May I now hand you over to Florian Heindl, who will lead you through this conference. Please go ahead.

Good afternoon, everyone, and thank you for joining the call. My name is Florian Heindl, I'm the Head of Treasury and the Investor Relations at FCC AG. With me are Robert Machtlinger, our CEO; and Aleš Stárek, our CFO, and they will now guide you through the presentation for the half year results of FCC. I will now hand you over to Robert Machtlinger. Robert, go ahead.

Thank you very much for the introduction. Dear ladies and gentlemen, thank you also from my side for joining this afternoon's call concerning the half year result of FACC. I have the presentation in front of me, and I'm going to Slide #3, H1 2021 key topics. Overall, in a nutshell, the revenue development in the first 6 months very much developed as planned in our forecast. We see basically with all of our main customers a more stable environment and again, predictable environment in terms of rates, current rates and future production rates, which is giving us, again, the opportunity to plan forward and give good guidance for the quarters to come. Overall, and we talked about it in earlier calls, the key topic in a key goal of efficiency was a business turnaround in the fiscal year 2021 after a difficult year of 2020 due to COVID-19, thanks to the global aerospace industry. Overall, the bundle of changes in adjustments to our business are on track. And in comparison to the fiscal year, half year fiscal year 2020, we have reduced cost and increased EBITDA by EUR 37.3 million in the first 6 months, resulting in a half year result of EUR 2.9 million. So overall, as it stands right now, the measures we have put in place are delivering the momentum we have planned for, and Aleš will have more details on the individual tasks in his presentation. We're also quite happy that we signed up new orders in our 2 divisions, Aerostructures and Engines & Nacelles. It's basically new programs for the Dassault 10X new business jet. We do part of the wing including the winglets. We also are producing parts of the engine for that new airplane. And we are in further discussions for the same platform of also talking about the one or the other interior component, but I said this is not yet firmed up. The other 2 programs or projects are pretty much contracted, and we are currently developing those components. We talked about the Airspace cabin we have developed for Airbus. Not only the main cabin, we have done for many years for Airbus on the platform, but also the entrance area, the entrance area contract we signed 2019. We developed the components. And right now, we are quite happy that the first all new A320 Airspace cabin was put into revenue service with JetBlue in a very successful project we have developed frankly with our customer, Airbus. We rolled out the Strategy 2030 early in the year. And we also talked about that strategy in our previous calls, basically adding 2 more segments to our core business, which is aerospace and civil aerospace and business. We are more and more getting involved in the drone business, where we see a big momentum in the global market, but we also have planned and are fully committed to enter the space market. On sustainability, just for reference, we have received 2 awards, the GreenTech-Award in April 2022, which is certifying that FACC has a very comprehensive and [ innovative facility ] in terms of ESG and CSR, mainly in terms of economic production, but also product development supporting CO2 neutral [indiscernible] aerospace in the next decade. So for us, very important. And we are quite happy that these efforts are recognized by the certifying or by the auditing companies. We take a quick look into the market and jumping up to Slide #5, business environment. Overall, and this is getting very transparent, the vaccination program that is taking speed all over the world has a positive impact to aerospace. We see that customer demands in aircraft build rates continue to improve. So especially on the narrow-body segment, we see a fast recovery as predicted in our previous calls. So the small and midsized airplanes, if it's the A320 or the Embraer [ E-jet ], the 737MAX is picking up on new orders and on demand, very promising. And good news for us is the Airbus forecast that the A320 family will further increase rate in the last quarter of 2021 with solid insights into 2022 and 2023 developments. Overall, we think that the A320 airplane platform will reach pre-COVID production rates in the time frame of 2023. Very important for FACC because the A320 family is the one platform where we are producing 30% of our revenue. The wide-body airplanes recovery take longer as expected, and we talked about. This is currently pretty much confirmed. But also here, the rate has stabilized. We think that this rate will stay at the current production rate for the next 18 to 24 months before we see a recovery starting in 2023. General air traffic recovery is ongoing with robust [ regional ] transportation numbers in the main markets, I will have a slide for you later. The others sentiment towards 2022 and beyond is positive, as stated before, with a couple of minor shifts on the Boeing 787. First of all, Boeing decided to move the 787 production line to 1 production line, not 2 as in the past. This caused us some production interruption with a certain sales reduction in 2021. But that's already brought -- behind us and is well adjusted. We also see that the China business where we are participating on all of the programs, the A321 and the C919 continues to increase rate. The A321 was not impacted by COVID-19 last year, it's not impacted this year. It's for the opposite. We see a rate increase on the [ CFS ] as well and the COMAC 919, which will see final certification and into interservice with airlines later in the year is picking up on rates, I think with visible revenues in 2022 already for FACC. Business jet, which is EUR 85 million business per year for FACC is picking up rapidly. And we think that at the end of 2022, the business jet recovery is fully executed with growth rates in 2023, again coming. So overall, a business jet we see, in the meantime, very positive as well. My slide, I'll go to the next page, Page 6. This is the overall trend in the aerospace market. This is available [ seats ] in the main market. We still see a regional difference. However, and this is confirmed that the vaccination program is having a positive impact, especially to continental traveling whereas, at the time being, North America is leading that recovery. U.S. market currently is running 85% volume compared to pre-COVID-19 [ regions on rise ]. So still picking up on a good track. China is getting stable because it was good already, and also very positive Europe in the last couple of months due to the momentum of the vaccination program is picking up on continental traveling. The international traveling still takes longer. And you see that on the next page, Page 7, there is red bars and blue bars. The blue bars is international traveling. The red bars is domestic traveling and we see a continuous growing of domestic traveling in the main markets, which is very good and also drives the need for smaller airplanes. And we see here that the international traveling, meaning connected from Europe to Asia, mainly China or connecting U.S. to China is still extremely weak. The traveling between Europe and North America is slowly picking up, but constantly picking up and as discussed in earlier calls, full recovery of international traveling will take longer than the national traveling. But overall, I think in the small airplane platforms, we've seen a growing demand in air traveling. This is also reflected on the next page, Page #8 if we compare airplane deliveries from our main customers to the airlines. Overall, there have been 453 airplane deliveries in this year versus 157 a year before. And it's getting very obvious on the chart that Q2 2020 was extremely weak for both main OEMs, Airbus and Boeing. Comparing to the first 2 quarters in 2021, we see a constant increase in output in Airbus but also in Boeing, and that certainly is supporting FACC because we are producing for all of those airplane platforms. A little bit of a longer view on Page #8 -- sorry, Page 9. The bottom of the market is behind us. That was August 2020. Since that, we see good indication from all of our customers with a stable forecasting again that can be provided. In Q4 2021, we see another 10% to 15% increase in short- and medium-haul airplanes. I mentioned it before. This is mainly driven by the A320 family. It's ramping up already and continues to ramp up late in the year. And again, repeating my statement, the long-haul aircraft rates are stable for the time being and it will not increase until 2023. We stick to our previous statements. FACC will be fully recovered to pre-COVID-19 levels, at the latest 2025, not too far before. And thereafter, we see a 4% growth rate, very positive with the return of airplanes that have been parked to the airlines. 9,000 airplanes has been parked by the end of December. This number was reduced to 5,000 by the end of May. We are waiting for the final numbers from [ market bottom ], which we're expecting in the next days to come. But we already know that the number of type airplanes again went down significantly from the 5,000 we have seen in May. So overall, I think the business is stabilizing and picking up and that will support, let's say, the FACC plan for this year, the EUR 0.5 million revenue, which is pretty much firming our books and the EBIT development also seems to be slightly better than previously expected. In the very long term, latest updates from our customers, it's pretty much well aligned between the 2 big ones by the year 2039, around about 43,000 airplanes are needed 40% for the Asia-Pacific region. This is pretty much representing a 1-year offset to previous figures, well, which is naturally because of the last year's events. In saying that, I would like to hand over to Aleš guiding you through the financial figures of the first 6 months of the year. Thank you.

Thank you, Robert. Good afternoon to everybody from my side as well. Let's switch right to Page #12 and start with the financials and numbers, with the top line and working our way through the P&L and the balance sheet. As you can see here, we have, after the sharp drop in sales in Q2 and Q3 in the last fiscal year, the turnover stabilized and now Q1 and Q2, we are basically moving around the EUR 120 million in turnover per quarter. And this is basically well on track towards the EUR 500 million that we are guiding on a full year scope, Q3 probably a little bit lower due to the summer low activity and Q4 then, again, stronger -- on the stronger side. This is what we are expecting. Then we go on Page 13, and we look at EBIT. Then of course, the 3 quarters of last year were heavily impacted by the crisis, not only operationally but on the operational losses that we have suffered, but also the one-offs from the valuations and -- of the balance sheet positions from the impairments. Now -- and that was the goal to basically return the company around in terms of profitability. And we are achieving that in both quarters, profitable again Q1, slightly; Q2, now on a more solid basis. So we are moving in the right direction, I would say. And when you look at the Slides 14, 15 and 16, where we basically see the profitability, let's say, than the revenue and profitability situation of each of the divisions. Then we see basically the Aerostructures settling slightly below EUR 50 million per quarter in the revenues on average, We see then on the EBIT side a continuous improvement, again, Q2, Q3, Q4 that were basically also impacted by one-offs. Q1, still a little bit negative due to volumes, EUR 39 million, a very, very low turnover in Q1. So below [ EBIT ], even line now, the sales increased around EUR 45 million and then the division is now turning to profitability. On the Engines & Nacelles side, Slide 15, a weaker Q2 basically due to the 787 situation with much lower deliveries. And then on the profitability side, both quarters basically impacted by this -- the 787 situation in a positive way, so lower sales. But better profitability in that division. Coming to Interiors. Interiors -- and then we have been saying that it had the least impact in terms of a sales decrease. So now basically, by far, the strongest division in terms of sales. And in terms of profitability, still not, let's say, positive. Still lagging behind. And here, what I would like to mention is a little bit the kind of technical impact that we have in the P&L. So what we do is with the center function costs, they are allocated to the divisions by sales. And so what we see here on Engines & Nacelles, the impact is basically not there because basically, their share in sales is pretty much constant, pre-COVID and post-COVID. But on the Cabin Interiors and the Aerostructures side, we see a shift in the pre-COVID world, the share of turnover on Aerostructures was much higher than on -- than the share in Interiors. So the Aerostructures were carrying a higher share of the -- the fix was of the [ center functions ]. Now it turned around. So now basically the share in turnover on the Interiors side is much higher than on the Aerostructures. So what we see here is -- so basically, pre-corona, the division with the highest margins, they're carrying the highest share of fixed costs. Now basically the division with the lowest operating margin is clearing the biggest share of the fixed cost. And this is kind of distorting the picture. So when you look at it, the EUR 1.9 million or what is it, EUR 1.9 million in Q2 on the Aerostructures side, a little bit too -- let's say, too good because of this shift in fixed cost allocations. And then the losses on the Interiors side, the EUR 1.4 billion, they are a little bit too overstated and in that case basically to carry the higher portion of the fixed costs. So I think this is fair to consider when we look at the profitability of the individual segments. Of course, we are continuing our margin improvement and margin expansion program, especially on the Interiors side, and we look a little bit into the future, 2022, ramping up Croatia will help the margins. So then basically, this will also support the profitability of the Interiors division. And even though Interiors will probably still for some time be the biggest division in terms of turnover, the margin expansion will help them absorb the cost allocation on the fixed cost side and the division will turn profitable as well. On the free cash flow side, a quick comparison, I think 2020, pretty much clear in the first half of the year, a lot of one-offs, then a lot of them, of course, without cash effect. So EBITDA around EUR 20.8 million. This year, the free cash flow calculation was a little bit more normal, I would say, with a positive EBIT, also depreciations more towards normalized. So what we are expecting for the year is EUR 35 million, EUR 36 million in depreciations. And this is more normal compared to the business volume as we had before. So then EBITDA ending up around EUR 20 million. Looking at working capital here in last year, especially due to the safety stock that we have built up, we had a negative impact in the first half of the year of almost EUR 20 million. And now, we are showing EUR 3 million. And I would also like to stay with the EUR 3 million a little bit because at least EUR 3 million, they are not only including the typical inventories and account receivables and payables position. They are also including other receivables and other payables. And as you may remember, in January, we have [ rebate ] the deferred income taxes and social security contributions of approximately EUR 20 million. And so if you look at the EUR 3 million, it's basically a combination of the improvement in the working capital as such management. But then basically, this improvement is offset by the cash out of the EUR 20 million deferred social contributions. On top of that, there is another EUR 3 million increase in other receivables, also in this position that the receivables for the short-time work that we still did in the first half of the year. So overall, when we look at the working capital improvement itself, it's about 22 million that we have generated from the reduction of inventories, which was EUR 10 million and then basically from a very strict receivables management. This year didn't increase so much on the EUR 7 million approximately. And then, of course, management of our payables. So altogether, working capital management on a very good track. And net investments is also, let's say, under control, investing mainly into new businesses. What you see here with the EUR 5.7 million is -- this is basically the impact of our investments in the new business on the fixed asset side. The capitalizations of the engineering work you do not see in that position, it's not recorded as investment. It's again basically a portion of the other -- of the others, of the EUR 4.8 million, and it's approximately EUR 4.6 million that we have invested into engineering work on new projects in the first 6 -- half of this fiscal year. Continuing on Page 18, a quick time line of investments. Probably not very much more to say. And also on the working capital, you see the improvement in the time lines. And as I say, the [ 100 ] -- out of the improvement of the [ EUR 40 ] million that you see here is pretty much a combination of working capital and other payables and other receivables. Maybe one word also for those of you who are looking into the balance sheet, and we would like to find the EUR 20 million of deferrals impact in the balance sheet. We are reporting it on a net basis, net receivable -- a net receivables and then payables. And usually, we are on the asset side. Usually, we are carrying about EUR 40 to EUR 50 million of other receivables, which is basically the net number. And so when you look into December 2020, then you will see that the other receivables number has dropped significantly, and that's basically due to the increase of the liability part of this net number. And now we are normalized back to EUR 40 million and then the difference -- then the increase in the other receivables is basically coming from the repayment of this liability of the deferrals. So you will see that not on the liability side, you will see it on the asset side. Coming to Slide #19. The equity ratio, equity in absolute terms, of course, naturally due to the losses in 2020, decreased gradually. But when you look at it in ratio terms, we are still basically on a, I would say, comfortable 38% equity ratio. Net financial debt, a positive improvement. So along with the free cash flow generation, also the net debt went down, continuous and gradual decrease from EUR 234 million, EUR 232 million and now EUR 225 million. So basically, you see we are deleveraging towards the expected or let's say, planned EUR 200 million, EUR 205 million in net debt in order to be able to meet our covenant of 5.25. So also here, we are the on track. Last but not least, the financial status, pretty much unchanged picture from the Q1, still basically EUR 100 million in the revolving debt facility available, EUR 50 million for M&A facility available. And also on the drawdowns, no changes in the KRR and in the KRR facilities, EUR 110 million drawn down, not repaid and the term loan is also on the -- on a similar level. Calculation of leverage doesn't make sense to do at the moment. The trailing 12 months still negative, and this is most likely going to be also for Q3 and then partly for Q4. Because if you remember, most of the adjustments have been done in December. So the December losses, they will still have an impact on the EBITDA, on a trailing 12-month EBITDA [ until ] in December 2021, we return basically to a positive EBITDA in -- on the 12-month perspective. With that, I would like to close that section of our presentation, handing back to Robert for the outlook.

Thank you, Aleš. With the outlook for 2021, we stay very focused on the health and safety of our people. We have had a vaccination program in the company, vaccinating our people directly in our facility. We still do testing on -- just to keep the workforce healthy. And basically to protect also deliveries to our customers for doing so. All cost reduction, cash flow improvement will have most important focus of the entire management group. So as Aleš said, introduction in cost containment is on top of their agenda. We see a stable market environment and customer demand and that will give us a good basis for a revenue of around USD 500 million in this fiscal year. A little bit more positive is the forecast on the EBIT. As you might remember, the forecast at the year's start was a balanced EBIT [ hitting ] around plus/minus 0. Based on what we see and the momentum on our cost execution programs is giving us visibility that the EBIT will be definitely to the positive side on a full fiscal year assessment. Well, we -- management sticks to the expectation that certain quarters will be weak, especially Q3 because of holiday seasons with most of our customers. The revenues went down as in the previous years and before COVID already. So we see that's pretty much as expected. But this weaker Q3 will be compensated by a solid order book we have so far for Q4. And looking a little bit ahead in 2022 mentioned before, we see some moderate growth in 2022 because of the figures. We have currently -- that the figures we currently have in front of us from our main customers and platforms. [indiscernible] I want to thank you for your attention, and we are right now ready to answer your remaining questions.

[Operator Instructions] And the first question is from Peter Rothenaicher from Baader Bank.

Firstly, on Engines & Nacelles and [ translating sleeves ]. So do you expect that in the third quarter, the sales will increase again? Plus has been a negative impact on EBIT?

Peter, I can answer that question. I think we have pretty much right now a solid forecast for the end of the year. There was another slight reduction announced to us a couple of weeks ago. Basically, what we know is already factored into our EBIT forecast. And as mentioned in previous calls, the 787 Nacelles contract has been put on a new foundation already 2 years ago, so by January 1, 2022 that issue can be considered history. So overall, there will be no negative impact on the 787 expected in Q3 or Q4, already factored into our forecast.

Then, you have mentioned your China business is seeing some good development. So can you perhaps give us more concrete figures? So what are your sales expectations in business with Chinese customers in 2021 and then the expectation for 2022?

Yes. That's a fair question. And I think if we say what it was stable and ramping up, that statement ramping up from a very low revenue number. As you might remember, 2 years ago, the revenue was EUR 12 million. Then it went up to EUR 20 million of revenues. Right now we are bouncing around EUR 30 million of revenues a year with the Chinese programs. This will continue to grow towards EUR 50 million of revenues by the end of 2023. So it's a steady and constant increase of volume and reaching whatever, 15%, 20% in the next years to come. So we're starting from a very low number, but the positive is the rates are picking up and they are stable.

Then you just mentioned in your outlook, you're expecting a moderate increase in sales in 2022. I'm a little bit wondering regarding your comments. So China is just one of the aspects and the increasing production rates for the A320 family and also the start of the entrance area of the A320. So perhaps you can be a little bit more precise on 2022 sales in excess of EUR 600 million realistic? Or...

Well, I think we need to give you a little bit more time. So the forecast we currently have on the rates, they are good, and we plan for it. I'd say we can a little bit more specific after we have Q3 brought behind us. So we still are a little bit cautious on international traveling. We had the one or the other back draw on A350 and 787. We know that the 777 is struggling on [ international ] service. So we still are very positive on the continental traveling. We are still cautious on forecasting in terms of international traveling. So I would ask for you patience and acceptance that we will give further guidance into '22, a little bit later in the year.

Then you mentioned in your report that you have finalized short-term work now end of June. So what is your current situation with regard to capacity utilization? Have you been able to compensate for the missing workload by in-sourcing components and something like that? And yes, how do you see here the situation as capacity utilization?

Well, capacity is still on certain production lines, mainly production lines that are producing wide-body components. They have been running for 3 shifts, 5 days a week before COVID-19. Overall, we produced around about 25 wide-body airplane equipment in a combined rate, A350 and 787 together. This is right now down to slightly below 10%. So those production rates are running in a 1 shift, 5-day environment instead of 3 shifts, 5 days. So some of the open capacity, we have backfilled with insourcing and vertical integration. But definitely, utilization in FACC with the EUR 500 million revenue we are forecasting for this year is still running at a utilization rate of around about 60%. So there is still capacity available. We're working to fill it up with new programs. I have announced 2 today, and we are working on other opportunities as we speak. But utilization is not yet even close to what we have enjoyed for [ co-banking ].

Your next question is from Harry Breach.

Can I maybe ask you a couple of questions? Just firstly, perhaps on free cash flow. How are you thinking about that for the full year? It looks as if on the EBIT side, we'll be seeing a slightly better performance there. But as we look to 2022, you might have to make some inventory investment to prepare for higher narrow-body rates. So can you help us to think about free cash flow sort of for this year overall, given where we've got to.? Maybe second question for me was when we think about the change to your expectations, your forecast for EBIT this year. Is it possible for you to sort of help us think a little bit -- is it roughly the same contribution to the improvement between your execution and cost savings, lower 787 production and higher A320 production rates? Or is 1 of those factors maybe a bit more important in driving the guidance? And then just finally, on biz jet, Robert, I heard your opening comments about the outlook being very favorable. Can I just check little -- did I hear you say that you think that by the end of next year, those jet production rates should be fully back to the pre-COVID levels with growth above that from 2023?

Well, Harry, I will answer your last question first. And you're right. This was in a statement. We think that business jet will be recovered by the end of next year to pre-COVID levels, and we're expecting business growth thereafter. So that was a correct assessment and summary of your statement, I can confirm based on today's market insight we are having. The first 2 questions, Harry, I would like to have Aleš giving you the answers.

So let's look at the free cash flow. And here, I would like to really do a kind of rough top-of-the-head calculation on a full year basis. And when you look at it, we have started the year with a net debt of EUR 232 million. And our guidance -- or the number that we are at the end of the year 2021 would be a net debt of -- and I'm saying basically over EUR 200 million. And so when you look at it, let's make it easy, it's EUR 202 million. So basically, it would be EUR 30 million in total cash flow that we would need to generate in order to lower the net debt by EUR 30 million, but we have approximately on the financial side, financial cash flows is approximately EUR 8 million. So basically, that means that the free cash flow needs to be in the area of EUR 38 million in order to basically achieve what we want to achieve. We want to pay the interest rates, EUR 8 million, and we want to lower the net debt by EUR 30 million. So that would be my calculation for the free cash flow. The change in EBIT forecast and then what is driving it. Basically, our plan was -- and we said it's pretty much balanced. So we wanted to keep a little bit of our flexibility with the turnaround, how the turnaround is going. Now we see -- and indeed, you are right, it's the 80/20 rates are going well. We have a good project mix at the moment. We have the cost saving measures. The fixed cost reduction is basically fully on track. The improvements on the contribution margins are running well. And of course, the 787 production ups and downs in the first half of the year, they helped. I wouldn't pin it down to any particular, so it's even when we look at it and especially in Q2, the EUR 2.5 million profit, I think it's a combination of both. All of the 3 levels, project mix, A320 cost measures and the 787, both is kind of equally contributing to the positive development that we have. So then basically, we see the 0 line is pretty much the bottom line. And we are looking at Q3. Q3 will be a little bit weaker. But as I said, we are pretty confident about a good Q4. So that's why we changed the guidance. And then based on the combination of all of the elements, we have changed the guidance, let's say, slightly and carefully to the upside. Of course, the 787, maybe the contribution from the 787 in the second half of the year will not be as significant as it was in the Q2. But as I say, especially our cost cutting measures, our cost improvement measures, this is running quite well.

The next question is from Bernd Maurer, RBI (sic) [ RCB ].

First, I want to come back to the question of the [indiscernible] from the impact of the 787 rate cut on the engine profitability. I think you -- if I would ask you for increased number about this, this effect would -- I think you always would be happy if you can share it. But I would phrase my question otherwise like as, would engine -- would the engine segment have been posted this -- if the 787 production rate would have been unchanged versus the pre-COVID rate? So just to get a feeling how big is the effect on EBIT. This would be the first question. Second question is on all companies we hear are about, comments about bigger-than-expected input cost inflation, supply shortages bottlenecking the supply chain and so on. Of course, aviation is not the overcrowded feel at the moment, but it was not addressed from you at all? Does this mean that input cost inflation shortages for certain part is no challenge for you at the moment? And lastly, I would ask you, Aleš, you mentioned that the speed of the overhead cost among the segments according to the share of revenues, is this changing on a quarterly basis? Or even you have it for internal reporting on a monthly base with this -- I'm going to say I don't [indiscernible] just I get a feeling about the frequency of the changes to cost allocation.

Okay. Let's start with the easiest question, allocation of fixed cost. We are allocating the fixed cost based on the sales on a monthly basis. It's every month. We are looking at the sales then according to the sales split, it is done monthly. Pick up your question, maybe the first one on the 787. I think this is a difficult and tricky question because the pre-COVID rates, I mean we haven't done the simulation. So that's -- that is not number one. And then what you see, I mean, if you would keep all of the current rates and just increase the 787 from the current rate of 5 to the rate that it was in pre-COVID, then, of course, the division would be able to be -- would be loss-making. If you would go and then the A350, which is profitable and then increase it back to the rate that was in pre-COVID and that was to the rate of 9%, 10%, yes, then I think that the division would be somehow around breakeven.

Yes, it's helpful.

Yes. So I think now it is helping. But then again, you have the impacts of the A350, which is profitable; you have the impact of the 787 that's negative, all together as a package, altogether as a package, it was positive. But yes, it's -- I would probably say, I would tend to say that it would be around breakeven. And I think on the parts and maybe Robert has some -- Robert can then basically maybe take over on the shortages of the past. But then back -- just a reminder from the beginning of 2022, based on new pricing on the 787 and then also the 787 is profit making. So basically, we just -- looking forward, I think we need to get to a little bit of a state of mind that the 787 is not a problem, not a problematic project, yes.

Yes, Bernd, on the second question you had on supply chain. And I think you pretty much delivered the answer once you raised the question. I think we in aerospace have very unique materials that are not that much commonly used in the other industries. So we have here, and we didn't mention it because we don't have a problem with material supply. There was the one or the other issue smaller things, where we had backups. But in the larger context of what aerospace has seen in the last 18 months for us, this is a nonissue. So overall, long-term contracts in place, our suppliers are delivering nicely. We replaced out of 500 suppliers. We have squeezed -- we have removed 50 suppliers last year because of the one or the other issue they had quality or financially, not being capable to survive the crisis. We took that order volume from those suppliers and gave it to the strategic suppliers. So overall, supply chain is very stable and in a good shape. The only point we are addressing is logistics with container transport between U.S. and Europe. Again, this is a well-known issue that transportation cost, especially in the container shipment, has increased on cost. On the other hand, the cost of transportation is a minor element in our total cost structure, so also not impacting us too dramatically. But overall, stable suppliers and for us, no issue. As we hear it from other industries, quite significantly.

We have no further questions. I would like to hand back to you, gentlemen.

Okay. Thanks to everyone joining our call today. If there are no questions left, enjoy the rest of your day, and see you soon. If you have any follow-up questions, just let me know, and we will answer that after this call. Thank you very much, and goodbye.

Thank you, everyone. Goodbye.

Thank you. Bye-bye.

Ladies and gentlemen, thank you for your attendance. This conference has been concluded. You may disconnect.