Heidelberger Druckmaschinen Aktiengesellschaft (HDD) Earnings Call Transcript & Summary

Ladies and gentlemen, I'd like to welcome you to our call on the third quarter results 2021/2022. Together with my colleague, Marcus Wassenberg, I will present the most important developments and key financial figures of our third quarter to you. Afterwards, we will be happy to answer your questions. In the third quarter, the positive trend of the first half of the year continued. This gives us high confidence in achieving our targets for the year in the fourth quarter. Thanks to a robust order development in all important regions worldwide, our order intake after 9 months is above prior year's level by around 1/3. The order book as at December climbed by almost 40% year-on-year and now even exceeds the level immediately before the COVID-19 pandemic. This enables us to render our sales forecast for the full year. More specific to at least EUR 2.1 billion now. This high backlog furthermore also represents a solid base to go into the next financial year 2022/2023. This is very good news for Heidelberg. We had not seen anything like this for many years. In line with the trend of the previous quarters, our operating EBITDA, excluding extraordinary income, also improved further. The recovery of our sales volume plus the positive effects from the transformation, which we have -- we had to initiate 2 years ago, were the drivers of this improvement in operating profit. The improvements are particularly remarkable in view of the unchanged challenges in parts availability due to the global supply bottlenecks. However, we were able to largely compensate for these in the third quarter through the qualification of replacement components and our established good cooperation with our suppliers. In addition, our high vertical range of manufacturing is currently proving to be an absolute advantage. Nevertheless, our organization will continue to face challenges in this environment in the coming weeks and months. Also, we are able to continue driving the strategic development in the past quarter. In November, for example, we concluded a strategic partnership with Munich Re, which enables us to exploit the full market potential of our subscription offering without burdening our own balance sheet. Also, our e-mobility business is expanding fast. And yet, this is just the beginning of the growth story now unfolding with the gradual transition of vehicles to electric drive. We continuously keep expanding our product portfolio as well as our manufacturing capabilities and capacities. If anything is holding us back a bit at the moment, it's the limited chip availability. In November, we agreed a strategic partnership with SAP to render our hardware smart by combining it with the software applications. We furthermore acquired parts of the charging station technology from the regional utility company, EnBW in December. More on that a little later. Last but not least, we are very pleased that the capital market is increasingly rewarding the implementation of our strategy as evidenced by our return to the German small cap index, SDAX. I will present further details of Heidelberg's strategy in a moment. But before that, let me hand over to my CFO, Marcus Wassenberg, to present our numbers, Marcus, please.

Thank you very much, Rainer, and warm welcome from me, too. Before we come to the outlook for the current financial year ending next month, let me run through the most important key figures. Order development in the third quarter was quite satisfactory at EUR 643 million in Q3. We saw the recovery trend continuing towards levels known before COVID. This was up 14% over prior year. Regionally speaking, Europe being particularly strong in the third quarter. But in respect to the first 9 months also, China, our biggest single market, came back strongly. This development is also reflected in our order book. At EUR 950 million, it is above the pre-pandemic level and marks a record value in our company's recent history. The backlog level also bodes for a good start into the new business year starting in April. Book-to-bill ratio remained constantly above 1 during the first 9 months, implying revenue increases will follow the order trends for some time next, obviously. After 9 months, order intake rose by around 33% to almost EUR 1.9 billion. As already mentioned, revenues naturally lag behind growing order volume, but at EUR 1.55 billion after 9 months, they also are clearly up on previous year. And EUR 582 million in the third quarter was above both the previous year's and the previous quarter's figures despite continuing restrictions in parts availability. In addition to the effects of the transformation, the increased sales volume has also reflected in an increased EBITDA, which rose to EUR 132 million. I will provide you with some details in a moment. The results after tax also follows this development. At around EUR 40 million, we are at a good level after 9 months compared to the EUR 3 million in the previous year. All in all, this quarter confirms that we continue on our path of a successful transformation. I will also explain the balance sheet situation after looking into the main drivers for earnings. We promised a significant improvement in the operating result, and this is particularly evident in the significant changes in EBITDA compared to the previous year. Essentially, we see 3 categories here. Number one, nonoperating earnings last year. In the first half of the previous year, we were able to realize the reorganization of a pension scheme in Germany, which was aimed in particular at curbing pension dynamics. This important milestone will sustainably reduce cash out for pensions in the future. In the first quarter of last year, however, the associated provision decrease led to an income of EUR 73 million, which significantly improved EBITDA and strengthened equity at the same time. Due to COVID, in the prior year, we also made extensive use of short-term work in the first 9 months of the last year to compensate for underutilization. This compensation effect largely ceased this year when rising factory utilization brought labor back. All in all, we were able to reduce this instrument by around EUR 60 million during the first 9 months in the current fiscal year compared to the previous year. During the third quarter, we were able to terminate short-term work completely. Number two, operational improvements. Compared to the previous year, increased earnings contribution of around EUR 75 million from a higher sales volume, minus increases in material expenses of around EUR 15 million, explain an operating improvement of EUR 60 million. In addition, we were able to improve our cost basis by around EUR 55 million despite increased expenses as a consequence of increased business activity. This was mainly driven by our transformation program. Number three, asset management and other effects. In the previous year, we also decided to sell 2 subsidiaries in the second and third quarter, respectively, which in total, represent extraordinary income of around about EUR 20 million. Likewise, in the current year, we generated extraordinary income of just well above 50 -- well under EUR 50 million from the sale of a property in Brentford U.K. as well as from the sale of DOCUFY software rights company, which we no longer considered a core asset. Another effect also other effects also relate to some temporary positive accounting effects, such as holiday accruals. Simply put, employees took over proportionate share of their annual holiday allowance during the first 9 months, which means we had a little tailwind during the summertime from easing holiday provisions. By the way, during the current fourth quarter, when workers take less holidays, the accrual will go up again equivalent to noncash expense. Overall, we were able to significantly improve the results after 9 months. And by that, we mean operating improvement. Looking at the segments, we basically see 2 developments. In the core business, the Print and Packaging Solutions segments recovered significantly due to the high market recovery, while we saw strong growth in the Technology Solutions segment, most of which is actually e-mobility. Let's start with the core business. In terms of incoming orders, both Packaging Solutions and Print Solutions were significantly above previous year after 9 months. Print Solutions showed a significant recovery compared to the previous year, which had been particularly affected by COVID. But also in Packaging Solutions, we were able to increase incoming orders by 26% compared to an overall comparatively stable period in the previous year. This dynamic continued in the third quarter. Both segments were able to achieve double-digit growth compared to the already recovery in previous year. Sales realization from the strong order backlog is below the dynamics in order intake in both segments. Nevertheless, sales increased quite significantly in both segments compared to the previous year. In terms of EBITDA, we saw an improvement in the operating profit in both segments of the core business, adjusted for extraordinary effect from the previous year and the current year due to increased volumes and effects from transformation. The EBITDA margin in the Print Solutions segment alone improved operationally by more than 500 basis points to 6.9%. While also nonrecurring income is allocated to the respective segments based on a revenue key. The sale of subsidiary, DOCUFY, was fully reflected in the segment. In the Packaging Solutions segment, too, we saw an improvement in EBITDA margin. Not quite as strong due to product and regional sales mix effects and disproportionate overhead allocation of around 150 basis points to 3.3%. In addition, the Gallus Group, which is still being restructured, is allocated to the segment and makes only a modest contribution to earnings. Actually, it accounts for EUR 10 million -- a decent EUR 10 million in margin. Technology Solutions. The segment saw its first revenue and order intake growth in equal measures by around 170% compared to the previous year. The EBITDA margin was from 0 to 11.4%. Our progress becomes even more visible when looking at the balance sheet. Equity and the equity ratio were increased by retained earnings after taxes. Discount rate for calculating the pension liability has remained constant since the end of last year. In the medium term, in addition to the positive after-tax results, rising interest rates can have a reducing effect on pension liabilities and, thus, an inverse positive effect on equity. We were also able to keep net financial debt near 0. And with only 25% of our credit facility utilized, we still have sufficient financing resource. Overall, our financing is on a solid basis. We are also making good progress on cash flow. The contribution from operating activities to the free cash flow increased significantly similar to the development in EBITDA. This progress, completed by cash flows from asset management, meant that we were able to report significantly improved free cash flow after 9 months compared to previous year. In the third quarter, free cash flow was below previous year, mainly due to an adverse swing in net working capital changes due to increased order backlog. After the first 9 months, we are fully on track. So let's now look at the targets for the full year. The high order backlog and improved visibility allow us to specify the forecast for sales target at least to a level of EUR 2.1 billion. Previously, we had said at least EUR 2.0 billion. From current perspective, we don't expect to see the traditional Heidelberg year-end rally reoccurring in the fourth quarter. Unevenly distributed sales also come with rising production costs and should also be avoided in the future, if possible. Ultimately, it must be said that the supply of parts remains a limiting factor. In terms of EBITDA margin, we confirm the corridor of 7% to 7.5%. As for holiday accruals, we expect a slight burden in P&L compared to the previous 3 quarters because simply put, our employees tend to take less than 1/4 of their annual holiday allowance in Q4, which leads to rising accruals on expense. Same underlying effect was shown last year, although it was overcompensated by sequential volume increase in the fourth quarter, which as I just explained, we do not expect this year. In addition, we expect other seasonal increases during Q4, for example, due to higher energy costs during the winter times in January and February. Finally, we confirm that we continue to expect a slight after-tax profit for the full year. With that, let me hand back to CEO, Rainer Hundsdörfer.

Marcus, thank you. As you can see, we continue to work consistently and successfully on generating value for all Heidelberg stakeholders. To this end, we have launched strategic initiatives that have already shown initial success in the business year and promise great potential for the future. Heidelberg has left the restructuring mode and is focusing on profitable growth now. This means focusing the core business on packaging printing, digital business models and the growth market, China. Heidelberg will continue to reliably serve its customers in the print media industry in the future and will strive to assert itself in the most attractive and growing market segments in particular. For Heidelberg, there also lies high value creation potential in developing markets outside the print media industry, applying our expertise as a technology company outside printing machinery. How can we strengthen our core? I come directly to my favorite subject, subscription business. Subscription offerings of Heidelberg and the announcement of partnership with Munich Re is, I think, a great success. I think we have found a great and forward-looking solution for our core business here. In our last quarterly publication, we already presented the cooperation with Munich Re in the field of subscription. I would like to take this opportunity once again to emphasize the importance of this strategic cooperation. Subscription as a business model is very important, not only for us, but also for our customers. Our customers benefit from a risk-minimizing, asset-light model where you only pay per use for the printed sheet on top of a base fee. Clients who have chosen this model benefit noticeably and measurably from increased efficiency through state-of-the-art technology, comprehensive advisory services and a perfectly coordinated offering of services and consumables. However, due to constantly changing production processes and disruptive developments in our customer end markets, this improvement is not a one-off act but a long-term project. We make it easy for our customers to stay with us in the long term, strengthen customer loyalty and increase exit barriers. But this model is also interesting for us. It provides many answers to question marks in our industry. On the one hand, it gives us better access to the margin-attractive service market beyond the warranty period and, thus, increase sales compared to our traditional activities. It also makes the customer investment decision more independent of economic cyclicality as the cost of the machine for her or him is spread more evenly over time. This business model can develop into our special USP as our intelligent machines enable us to offer it as first and only supplier. With Munich Re as a capital provider, we are now able to scale this model quickly without the burden to have -- to take machines sold into subscription contracts onto our own balance sheet. Currently, local sales companies, which act as a technical vehicle for contract processing with the customers, are being established by Munich Re in selected countries. We will keep you informed about the progress. Among the new technology offerings, the rapid growth of e-mobility continues to stand out. Our organic growth of almost 170%, 1-7-0 percent is clearly above the market growth. In Q3 alone, sales are already at EUR 40 million. The momentum was a bit slowed down by the noticeable shortage in the supply of semiconductors and other materials. Parts of the competition, however, seem to have greater difficulties with that. After 9 months, our cumulative sales have already reached EUR 35 million. We are, therefore, on track to exceed our original goal of doubling last year's turnover significantly. The current order backlog for Wallboxes only forms a far-reaching basis for our growth ambitions. In order to be able to meet the order boom promptly, we have put into operation a fourth production line at the Wiesloch-Walldorf plant in autumn last year. Further lines are already being planned and will be launched in the current business year. The success story will also continue for the coming years. Thus, a continued high demand for hybrid or battery electric vehicles is expected, which will further drive the rapid expansion of the charging infrastructure. It is predicted that by 2030, 80% of hardware sold will be installed in private homes. In Germany, we already dominate this large and attractive market today as the market leader with our current product portfolio. We are continuing to expand this business and planning to recruit many new staff for it. Our international expansion is going according to plan. Market entry in Austria and Switzerland has taken place. France, Poland and Hungary are in preparation. In addition, we are preparing smart, future-oriented offerings and, thus, work on expanding the scope of our business models in e-mobility. In this context, we launched a strategic partnership with SAP at the end of November. The jointly marketed software solution, SAP e-mobility, offers users and operators of charging points standardized and scalable cloud-based services. In combination with Heidelberg's charging solution, this enables operators to operate their charging system intelligently and, for example, to set up a modern e-fleet management system. In addition, at the beginning of December, Heidelberg took over parts of the charging station technology from the energy company, EnBW, thus expanding the scope of services with a public -- publicity approved charging station for public spaces that complies with calibration laws. With these new offerings, we are targeting new customer groups. We are working intensively on new products and services that we will also promptly bring to the market, such as a Wallbox with intelligent capabilities. The course for the future and, thus, the entry into new markets with reoccurring turnover has been set. We want to establish Heidelberg as a leading provider in this new growth area of e-mobility. We entered, you remember, the market for charging devices from the hardware side, in Wallboxes and charging columns. But we see technical developments in smart home energy management systems. These can be combined with battery storage and photovoltaic systems as part of an overall energy management system of private homes. In view of dwindling grid capacities and rising energy prices, there is an evident future need for reliable providing electricity to electric vehicles on a daily basis. We are striving to supplement our -- and [ design ] charging ecosystem also by solutions for larger fleets, office buildings or apartment buildings, particularly the software-related aspect, how to bill companies for the charging of fleet vehicles from home or a semi-public charging point. At this point, calibrated hardware and billing solutions will be the most important issues. The SAP e-mobility solution will, for instance, enable the billing of the fueled energy directly into a company's ERP system in case it is a company car. In line with this vision of where the market is going, we are striving to establish ourselves as a provider of public solutions. Hereby, the EnBW technology will help us to enter the market very fast. In addition to operational success, our ambitions also document a clear commitment to sustainability. With its intelligent e-mobility solution, Heidelberg is intent on making an important contribution to the overall transition to renewable energy consumption and sustainable mobility. Although I have been serving this company as CEO for more than 5 years now, our research and development departments continue to inspire me with their technological expertise, which reaches far beyond Heidelberg's traditional core business and focuses on current mega trends. In the field of printed electronics, our electronics expertise, together with our printing know-how, gives us an almost unique skill advantage for offering system solution. Even though printed electronics are still in the stage of less than future topics, a couple of weeks ago, we caused a sensation at the CES in Las Vegas, one of the world's largest electronic trade fairs, with new 2 prototypes. Both were developed by InnovationLab, our partner in this field specialized in printing organic electronics. The examples show the progress in printed sensors for automotive applications. Together with RECARO Automotive, for example, a car seat was presented there that can recognize passengers and distinguish them from other objects by means of pressure sensor foils. The information obtained through such sensors can be passed on the driver assistance and safety systems, such as reminders to fasten seat belts or the activation of the airbag when a child seat is detected. We also present innovative solution for battery monitoring. The printed sensor foil used here are so thin that they fit between individual battery cells and can record detailed pressure and temperature data. This cell-level information provides valuable insight into battery health and performance and supports better design improvements, including for extending the driving range of electrical vehicles. Ladies and gentlemen, this is a special day for me. Since I took office in November 2016, I have regularly answered your question at numerous press calls and conference. Today is the last I will do so before I leave Heidelberg as planned at the end of March. I will leave with mixed feelings, a mixture of sadness and happiness. Sad because this great company and its almost 10,000 employees have grown close to my heart. I wouldn't want to miss my time at and for Heidelberg. I'm happy because I can retire now, because I know that a competent and experienced successor has been found in Dr. Ludwin Monz, to whom I soon will handing over a well-ordered house. I am satisfied and grateful seeing what we have achieved and successfully mastered together. Today, Heidelberg stands, above all, for a highly motivated team, customer proximity, growth, high cost efficiency, solid profitability with still some upside potential, a healthy condition of financial stability. Heidelberg is meanwhile characterized by a focused and profitable core business and the special innovative strength of a recognized technology group, which succeeds in opening up new business areas outside the core business. If I had asked you 5 years ago, how do you see the future of Heidelberg? Probably not many of you would have thought this result was realistic. So Heidelberg is facing the future stronger than ever, and I'm convinced that our shareholders and customers will take pleasure in the company, while the employees can be proud again of being part of Heidelberg company. Thank you for your attention. We now welcome your questions.

[Operator Instructions] Our first question today comes from Daniel Gleim from Stifel.

I actually got 2: 1 on the core business, 1 on the Wallbox business. Starting with the core business. I would like to understand a little bit better what the timing and magnitude of the price increases are. So by when do you expect them to be visible in revenues? And secondly, if you could elaborate a little bit on the total cost headwinds you currently have in this fiscal from supply chain and material price inflation? And what the likely trend is for next year? I'll stop here.

Thank you, Daniel. First of all, price increases, we have actually informed the market starting 1st of July for a price increase of 3%. And we actually see the effect already to the level of around about 2 percentage points and -- sorry, 4 percentage points in terms of order book. That is correct. So in our order book, we see 4 percentage points already, which is helping us quite a bit. When it comes to the cost inflation per category, we actually have seen a hit of around about EUR 24 million coming from several categories, like iron scrap metal spot markets that we had to employ for several selected items, particularly on plugs, sheet metal, electrical parts. And most critical materials in terms of availability are semiconductors and electrical and mechanical components.

Let me add a little comment to that. In times where you read in the newspaper daily about increase of raw material supply chain shortage, whatever, it has become easier than usual to increase prices. And our sales force is quite successful increasing those prices right now. And we'll probably will increase prices further as we go as the inflation is moving on.

We now move on to our next questioner, which is Stefan Augustin from Warburg Research.

Yes. Actually, I think there's still the Wallbox question from Daniel left. So I go first on the packaging and then the operational. So excluding the one-off result in Q3. And you mentioned Gallus. And here, if I recall that correctly, in the past, you had outsourced or let's say, sold some of your production location of Gallus to benpac, and benpac filed for insolvency finally in the third quarter. So wondering is how much of that deterioration in the third quarter could be possibly attributed to, let's say some things to be undone from that past restructuring. And how quickly you would assume that packaging goes back with the operational margin to, let's say, a level like Q2?

Thank you for the question, Mr. Augustin. The relation to benpac was completely finished quite some time before they filed bankruptcy. We have, as you remember, concentrated all manufacturing, except of a few small areas like the screen in Langgöns in our most cost-effective factory, and that has had no impact. So all that is completely resolved and not related. Gallus label is part of the packaging group. We are in the process of restructuring the business, and we are certain it will deliver a positive contribution to the earnings in the next fiscal year. The restructuring is going quite well, and it will become, again, a solid contributor to Heidelberg's success. Does that answer your question, Mr. Augustin?

Yes. Yes, that answers my question. And I would just have one follow-up here at this point, and then I go back in the queue. And that is actually related to the subscription model. So how many of these regional joint ventures have already set up so far? And how do you progress in building up the specific sales team needed to -- teams needed to sell the subscription model?

So our partner, Munich Re, is basically in the process of funding those entities. Key focus areas are Europe and the U.S. Right now, those entities have not yet been funded, but will be funded very soon. When it comes to the team, we have a core team here in Germany that is quite successful, that will utilize our sales force in the regions, that is highly experienced even in those matters. And we will benefit from their experience at the same time.

We return to the question from Mr. Gleim from Stifel.

Can you hear me well?

Yes, we can.

I was actually dropped in the middle of your response from the call. So apologize for that. It rarely happens, but it does happen. So you mentioned 4% order book price accretion. What is the period of sales, please?

Excuse me, will you come again? The lead period?

You mentioned that the order book prices were increasing by 4% because it's going already in the books. I was just wondering when will this be visible in revenues?

Next year. So basically, normally, we have a coverage of 25% of the revenues for next year at this point in time. We now have a ratio of 34% around about. So basically, the price increase will protect us next year.

And this will be from the second quarter onwards, something like that, right? It's not going to switch on, on the first after the next?

You have a lead time from 6 to 9 months. But on the other hand, you have, of course, some orders that are older than that. So actually, I think you will envision this basically from the first moment there.

Understood. And the absolute amount of cost headwinds? I saw the EUR 50 million you put in the presentation. It's probably not the total.

For the full year next year, yes, that's correct.

I mean in terms of total...

Cost inflation for this year is EUR 24 million. Now I got you. And that is a...

So it's just the material. It's not the inefficiencies from availability of parts.

This is just the addition in cost.

Okay. All right. And now to the Wallbox question, I was just trying to follow up on our previous dialogue from last quarter. My understanding was that a potential IPO was in designed for the next 12 months. So for this calendar year, is this still the time line? Is this something to expect from '22?

No. No. Basically, I mean, yes, an IPO could be something that we are investigating, but it might be a strategic investor. At the same time, we have not decided yet. We are evaluating all our options, and I think that has been said last time as well. Keep in mind that basically to do an IPO, you have to have a certain level. Otherwise, the cost is just too high, and we are far away from that. So give us some time and before we actually can talk about that. It's too soon, honestly.

And at the time, we can finance the growth out of our own finances.

Mr. Hundsdörfer, good luck for your future endeavors.

Thank you.

We now move on to our next question, which is Peter Rothenaicher from Baader Bank.

Yes. Firstly, on the Wallbox business again. So you mentioned EUR 35 million sales for the first 9 months of the year. So this is also the sales volume of the technology business. So is more or less all of the technology business now related to the sales -- to Wallboxes?

Yes. Basically, what you see in revenues is coming to 99% from Wallboxes. As you know, printed electronics has been hit by COVID. Therefore, the cooperation doesn't fly as high as we would have hoped to. But I think we're coming back. And with Zaikio, Zaikio has specialized on paper manufacturers. We brought in quite a lot of those from our peer group. And unfortunately, paper is basically not existing in the marketplace anymore. So therefore, it's now been rooted through the platform and, hence, you don't see revenues here or significant revenue.

Printed electronics still is small but has great growth potential in the next 12 to 18 months. There are many, many very interesting projects, two of those I mentioned before, where we see very, very good volume coming.

And what capacity expansion do you expect then for the next fiscal year? Will it be in the magnitude of 50%? And to what extent will then also the charging solution of EnBW contribute?

Overall, it will be at least 50% capacity increase, maybe even more. We'll have to see that. EnBW is certainly something which contributes as well. This new technology contributes as well to this growth. It could be probably also more. We are just careful. This is what it's going to be in any case.

Then you had an excellent order intake now in the third quarter. How do you consider the current market environment? Is this a strong market? You mentioned in particular, Europe, continuing. And what might be a fair assumption for order intake in the fourth quarter? Normally, you said a normal quarter has had order intake perhaps of, let's say, EUR 520 million to EUR 550 million. So can we expect similar or order intake in this magnitude like in the third quarter also for the fourth quarter?

The economy still is strong all over the world, of course, fluctuating a little bit. China was very strong midyear last year. It's still growing but at a slower scale. Order entry levels are very satisfying also right now in the current quarter. So I expect it will be in the range of EUR 500 million to EUR 550 million. That's what we can say at this moment. It looks pretty stable. And yes, we like it. That's the way we want it.

And my last question, perhaps then on the cost and pricing position if I compare Q3 with Q4. So you mentioned you do not expect the year-end rally, which we normally see with a particularly strong revenue generation in the fourth quarter. So if we might consider perhaps comparable revenues, would you see the situation, prices and costs similar then in the third quarter or even more difficult?

We feel we have to be very careful when it comes to this quarter because we see special effects in terms of energy cost, in terms of, as I said, holiday provisions. And we see, obviously, the burden of parts availability. And therefore, we are very, very careful to sort of reflect on EBITDA levels that are higher than anticipated. We just want to be not disappointing you. And therefore, we want to see where we land. So right now, we feel like we are pretty well placed with the ratio of 7% to 7.5%.

Okay. And perhaps then as a last point, what is the current expectation of tax charges for the current fiscal year? So I was positively surprised that in the third quarter, we have seen only EUR 3 million taxes. Is this something we can expect going forward? Or do we have to fear that for the full year, income taxes will be in the magnitude of EUR 20 million as, for example, in the previous year?

I would reckon that the tax expenses would amount to around about EUR 15 million to EUR 20 million, actually, as you said. So we will keep this number, I think, pretty much stable.

We come to Jean-Marc Mueller from JMS Invest.

Yes. First of all, very top down, could you, at this point, reconfirm your guidance for next year, the EUR 2.3 billion in sales and at least 10% margin?

Yes.

Simply yes.

Simply yes.

All I want to hear. That's all I want to hear. And then I have a couple of more than specific questions, financial questions. In the cash flow statement, first, working capital, there was quite a move in receivables and payables from now the half year to 9 months. Is there something specific there? Or I mean, it was like quite a negative charge. So I was wondering whether there is something you would like to point out.

I think it's just what you see is the normal cycle actually. We're building net working capital because of revenues rising in the future. So there's no special effect. It's just a cycle that moves into the other direction this time. Nothing to worry about.

And then the change in other provisions, if I recall correctly, you were basically guiding the market to a roughly EUR 75 million outflow in the cash flow statement base, that accruals being built and now basically, the cash going out. I would have expected this to be visible in change in other provisions, but that number is now at minus EUR 21 million. Was actually in the half year it was at minus EUR 25 million, so it actually has even improved. What can we expect there? I mean are there some other measures that go against this in that line? Or where do I see the EUR 75 million cash out for structuring?

Honestly, Jean-Marc, I think you caught us here. We have to get back to you because we have to look it up. Honestly, right now, I see everybody here just thinking like, okay, I should have caught it. We didn't. So we'll get back to you, okay?

Okay. Because similar then, I mean, there's other line, this change in other items of the statement of financial positions, which is plus EUR 55 million. If I could also get some explanation there unless you have it handy right now. Otherwise, we can take this offline.

No, we don't. We'll take it offline. I'm sorry for that.

[Operator Instructions] We now have a follow-up question from Stefan Augustin from Warburg Research.

So yes, and here is a quick add-on. We remain with cash out of the EUR 75 million for restructuring. And how much would be left in Q4?

We feel like this should be a number below EUR 60 million, right? Round about that number, yes.

For the full year?

For the full year, for the full year, yes.

Okay. And then the rest, the other EUR 25 million that's not coming, these are pushed out into the next year. Or are they actually, let's say, do you need to pay less overall?

I would expect that we need to pay less, but we'll get back to you, also.

Okay. Sounds good. Back to the Wallbox business here. Actually, is the carve-out already finished? And how has it been with the asset allocation? Is the -- is that one decided? Does the production go to the Wallbox business?

The carve-out has not been finalized yet. We will do so for tax reasons at the year closing, basically through 1st of April should be fulfilled. When it comes to the production, production will remain with headquarters.

All the best to you, Mr. Hundsdörfer, in the future.

Thank you, Mr. Augustin.

As there are currently no further questions. I would like to hand the call back over to you, Mr. Hundsdörfer for any additional or closing remarks.

Thank you very much. Ladies and gentlemen, at the end, allow me a last personal comment. Many thanks for the always fair and trusting cooperation and the open dialogue. Quality coverage by journalists and analysts alike is more important than ever, especially in these very challenging times. Stay true to yourself and stay loyal to Heidelberg just as I will do. And all above, stay healthy. Thank you very much, and goodbye.