Heidelberger Druckmaschinen Aktiengesellschaft (HDD) Earnings Call Transcript & Summary

Welcome to the conference call regarding the publication of the first quarter of full year 2026-2027. The conference call is being recorded. [Operator Instructions] Let me now turn the floor over to your host, Jurgen Otto.

Very good morning, ladies and gentlemen, and welcome to Heidelberg's conference call on the publication of the figures for Q1 2026-2027. We're delighted to welcome our investors and analysts. Besides commenting on our business performance in the first quarter, we will also cover the key highlights of the period and discuss our outlook for full year 2026-2027. Afterwards, we will be happy to take your questions. A key recent highlight has been the appointment of Christoph Burkhard. As Heidelberg's new CFO, Christoph brings extensive internal and national leadership and financial management experience. His strong capital market background, deep expertise in the specialized machinery sector and a successful track record in building and expanding new business areas were key factors in the Supervisory Board's decision and position him well to support Heidelberg's strategic development going forward. With official start on October 1, we are pleased to welcome Christoph Burkhard to Heidelberg's management Board. We would also like to express our sincere gratitude to the current Head of Finance, Volker Herdin, for his outstanding service, unwavering commitment and significant contributions to Heidelberg. During September, Volker will ensure a smooth transition of responsibilities to Christoph before retiring from Heidelberg. Before turning to the current fiscal year, let us first review the key achievements of the past year that have laid the foundation for our recent developments. First, we made significant progress in optimizing our cost base. Through disciplined execution of efficiency measures and accelerated digitalization, we strengthened our competitiveness and created the basis for future margin improvement. Second, we successfully established the foundation of our security and defense business through Heidelberg Advanced Technologies. This represents an important step in diversifying our revenue streams and reducing our dependence on the traditional printing business. Third, we continue to expand our digital and technology activities through partnerships and targeted M&A initiatives. The acquisitions of Manroland and Polar as well as the intensification of our digital partnerships, strengthen our market position and create additional life cycle and recurring revenue opportunities. Taken together, these achievements have sharpened Heidelberg's strategic profile strengthened our resilience and provide the foundation for the growth initiatives we are pursuing in the full year 2026, 2027 and beyond. Now let's take a look at the key figures of the first quarter. that was marked by conditions that remained challenging, which were reflected in particular in sales volume and earnings. Given that the expiration of the subsidy program in Italy alone has resulted in over EUR 60 million fewer orders in this country, in comparison to last first quarter, incoming orders of EUR 537 million were quite satisfactory. China, Japan and the U.S. were able to increase their order intake. In sales, we saw a noticeable decline to EUR 404 million, driven by the segment Print & Packaging Equipment. Regional-wise, also here, Italy reflected the phasing out of the subsidy program, but also other markets of the EMEA region as well as the U.S. showed lower sales volume while the Chinese market recorded a clear increase. Referring to profitability, the adjusted EBITDA margin was primarily impacted by the lower sales volume, resulting in a margin of 0.2%. Let me now turn to our strategic progress. Heidelberg continues to execute its strategic roadmap, driving high tech. Despite the challenging market environment, the measures implemented are already showing initial positive effects. Importantly, both our core business and HD Advanced Technologies, our strategic second pillar, built on the same technological foundation, competencies, people and infrastructure, generating synergies for both sides. Our activities in HD Advanced Technologies leverage capabilities developed over decades, including software, automation, manufacturing expertise, systems integration and service and apply them to attractive new markets and mega trends. For example, our expertise in complex power distribution and control systems for high-performance printing machines, 40 meters long, forms the basis for our charging, energy management and defense related solutions. Likewise, managing thousands of EV charging points draws the same digital capabilities that connect and monitor more than 11,000 Heidelberg systems worldwide. This shared technology base creates synergies, reduces execution risk and positions us to capitalize on key growth trends such as automation, e-mobility, energy infrastructure and security technologies. For a deep dive in our strategic progress, I hand over to David, starting with the core business.

Thank you, Jurgen, and hello, everyone, and also welcome from my side. Let's start to deep dive with our latest developments in our core business. The acquisition of Manroland is a unique strategic opportunity that strengthens our market position as system integrator while also supporting industry consolidation. It expands our customer reach by more than 3,000 customers, enhances our service and spare parts business and supports the continued growth of our life cycle business. Increasing the contribution of recurring revenue is quite important for several reasons. First, recurring revenue provides visibility. Second, recurring revenue reduces macro-driven cyclicity and makes Heidelberg more resilient. Third, the life cycle business offers higher margins and will drive group profitability in the future. And Manroland's presence in 35 countries with approximately 600 employees drives and streamlines Heidelberg's footprint. Accordingly, a key benefit is the combination of our sales and service networks, stronger together. Heidelberg and Manroland represents around 2,700 sales and service employees worldwide, strengthening our presence in key markets such as China, Mexico and Latin America. Importantly, in early stage, we are already seeing commercial successes including the first sale of the Heidelberg VLF machine to a Manroland customer, our Cartonmaster 145. Let's turn the attention to the business case. Following the successful completion of the acquisition in early July, we expected the Manroland operations to contribute a mid-double-digit euro amount to Heidelberg group sales with no impact on the operating line in the current year. With regard to the potential for synergies, we anticipate 2 types. First, following the full integration of the Manroland operation, which is planned to take place over a 2-year period, Heidelberg expects a positive absolute EBIT contribution to the group in the low teens. Second, and even more importantly, larger scale creates substantial leverage opportunities. Additional synergy potential is expected from the sale of Heidelberg systems plus recurring consumables business. Both contributions are expected to come in with typical margins for such business. Following the full integration of the Manroland operation, Heidelberg targets for the combined operation a stable sales contribution of in total EUR 100 million plus with an EBIT contribution ambition of approximately EUR 10 million to EUR 15 million per year. As already mentioned, stronger together, and we are confident that this partnership will create long-term sustainable value for our stakeholders. Another important strategic step in recent weeks was a complete acquisition of Polar. Polar is a highly recognized specialist for post-press systems and has been a long-standing partner of Heidelberg. The acquisition supports our ambition to become an even stronger system integrator for our customers and contributes from different engines. By fully integrating Polar machines and systems into the Heidelberg organization and ecosystem, on the one hand, we strengthened our position in packaging and labeling while expanding our offering along the value chain. On the other hand, the transfer of the Polar production to North Macedonia is a key lever for improving our cost competitiveness. Let us now switch the focus to our international expansion plans, reducing reliance on the domestic market. China recently recorded one of its strongest quarter 1 order intakes. With our strategy in place, we will further enhance efficiency to continue growing in China. Building on over a century of presence in Japan, Heidelberg's strong market position enables the company to capture future growth opportunities across the region. In Vietnam and India, too, we are pursuing a dedicated initiative to further secure and strengthen our access to the market. The African countries are also focus markets for Heidelberg. And this means that we are unlocking new potential with a tailored strategy. In Brazil, thanks to a strong sales and service network, we see an opportunity to capitalize on the promising market growth. Packaging printing is also a key growth driver here fueled by rising prosperity and the increasing use of paper packaging. Accordingly, sales in the first quarter of the current fiscal year more than doubled. Another promising region is Mexico, which is primarily driven by nearshoring, especially for packaging and label. With that, let me conclude the section on our geographic expansion strategy across customers and end markets. Equally important, our geographic ambitions to ensure further competitiveness of Heidelberg as base for stakeholder value creation. As part of our efficiency and cost optimization strategy, we are establishing a low-cost country footprint in North Macedonia. We have created a new entity, Heidelberg Industrial Solutions, operational since the beginning of 2026, starting with the assembly of post-press equipment and scalable over time. Execution is progressing rapidly. Production ramp-up commenced already in 2026, with the site expected to reach full operational capacity by 2028. The location offers a very attractive cost position at China level combined with government support for both CapEx and OpEx. As previously highlighted, the relocation of Polar production activities to North Macedonia will support the ramp-up. Overall, the expansion of production in low-cost countries is a key lever to structurally improve our cost base and support margin expansion. Having laid a strong foundation through consistent cost optimization, we now shift our focus with full conviction to unlocking substantial growth opportunities in new markets beyond Heidelberg's core business. And with that, I will hand back to Jurgen.

Thank you, David, and let's continue with the reflection of the latest developments in our second growth pillar. Our strategic partnership, Phenogy, is another important step in expanding Heidelberg's technology portfolio. The partnership targets the rapidly growing energy storage market and supports the diversification of Heidelberg beyond its traditional core business. Together with Phenogy, we aim to establish a European industrial platform for sodium ion battery technology, addressing increasing demand for resilient and sustainable energy storage solutions. Heidelberg will contribute its industrial manufacturing and printing expertise across the entire value chain, ranging from procurement and production to installation, service and maintenance. A key differentiator is the combination of Phenogy's cell chemistry with Heidelberg's specific printing technology, creating opportunities for scalable and cost-efficient battery production in Europe. The partnership also strengthens European technological sovereignty by reducing dependence on non-European supply chains. Overall, we see attractive long-term growth potential in this market and a strong strategic fit with Heidelberg's industrial capabilities. Another important milestone was the launch of Onberg's live demonstration hub in Brandenburg, providing customers and stakeholders with a dedicated environment to experience integrated counter UAS solutions in real-world scenarios. The facility showcases the interoperability of various defense technologies and [Technical Difficulty]

One moment. The speaker will be back in a few seconds. Sir, you are now back. Please go ahead.

Okay. So particular emphasis is placed on the protection of critical infrastructure, a market that continues to gain strategic importance across Europe. Demand for effective counter-UAS solutions is increasing as security requirements continue to rise. Recent incidents, for example, Leipzig Airport have further underlined the need for reliable and integrated defense capabilities also for critical infrastructure. Through Onberg, Heidelberg is positioning itself as a technology and industrialization partner in a growing defense market, leveraging existing engineering, manufacturing and system integration expertise. While this business is still at an early stage, we continue to see significant long-term potential and remain fully committed to expanding our presence in the security and defense sector. Before turning to the detailed financial review, let me briefly summarize the key highlights of the first quarter. In our core business, we further strengthened our market position through the integration of Manroland Sheetfed and the acquisition of Polar. We also achieved the first successful VLF machine sales to a Manroland customer, demonstrating the initial commercial benefits of the transaction. In addition, we continued to intensify our partnerships in digital printing and further strengthened our packaging ecosystem through targeted collaborations. Another important milestone was the launch of our new production site in North Macedonia, supporting our ongoing efficiency and cost optimization agenda. With our second growth pillar, the Onberg joint venture commenced operations for automated drone defense while the signing of the MOU with Skyeton further expanded our capabilities in unmanned systems. HD Advanced Technologies also entered into the strategic partnership with Phenogy, opening access to the energy storage market and creating an additional growth opportunity beyond our traditional core business. Overall, the first quarter demonstrated solid progress in executing our strategic priorities and further advancing Heidelberg's diversification and growth agenda. And with that, I'll hand over to Volker.

Thank you, Jurgen. Good morning, ladies and gentlemen. Let me now turn to our financial performance in the first quarter of fiscal year 2026-2027. As expected, we continue to operate in a challenging market environment. Order intake amounted to EUR 537 million compared to EUR 560 million in the prior year quarter, representing a decline of 4%. The main reason was expiry of the Italian incentive program, which had significantly supported order intake last year. Encouragingly, we continued to see positive momentum in China and the United States, while our order backlog increased from EUR 639 million at the beginning of the fiscal year to EUR 762 million at the end of June, providing good visibility for the coming quarters. Net sales amounted to EUR 404 million compared to EUR 466 million in the prior year quarter, a decline of 13%. The lower sales volume was primarily driven by softer demand in Print & Packaging Equipment, particularly in EMEA and Italy following the phaseout of the subsidy program. The lower sales volume had a direct impact on profitability. As a result, the adjusted EBITDA margin came in at 0.2%. Compared to 4.4% in the prior year quarter, it's a decline of 420 basis points. At the same time, our cost measures continued to show tangible effect. Headcount was reduced from 9,228 to 9,019 employees, a decline of 2%, while staff costs decreased from EUR 208 million to EUR 196 million year-over-year. The continued realization of our workforce measures and increased flexibility in working time arrangements helped to reduce the cost base and partially offset the impact of lower sales volumes on profitability. Free cash flow amounted to negative EUR 77 million compared to negative EUR 68 million in the prior year quarter, representing a deterioration of EUR 9 million. The development primarily reflects the lower earning levels and the typical seasonality of the first quarter. Let me now turn to our segment performance. In Print & Packaging Equipment, the phaseout of the Italian incentive program continued to weigh on order intake, sales and profitability. Despite the lower volume environment, the implementation of efficiency measures remains on track. Digital Solutions & Lifecycle once again demonstrated the resilience of its business model. Order intake increased while sales remained stable. Profitability declined compared to prior year due to the allocation of nonproduct-related overhead costs. Heidelberg Technology continues its growth path, with increases in both order intake and sales. The segment continues to benefit from our diversification initiatives in areas such as defense, energy and e-mobility. Overall, while market conditions remained challenging in our core equipment business, life cycle and technology continued to support the group's resilience and strategic transformation. Let me now provide some additional color on the regional development. Starting with the EMEA. Order intake amounted to EUR 241 million compared to EUR 288 million in the prior year quarter, a decline of 16%. As discussed earlier, the phaseout of the Italian incentive program had a significant impact on order intake and explains the majority of the decline. While niche growth areas provided some support, they could not fully offset this effect. Net sales in EMEA came in at EUR 195 million compared to EUR 252 million in the prior year, down 23%. The decline was primarily driven by weaker business again in Italy as well as softer demand in the Alps region and Turkey. Turning to Asia-Pacific. We saw a very encouraging development. Order intake increased from EUR 152 million to EUR 177 million, representing growth of 17% year-over-year. Net sales also improved rising from EUR 126 million to EUR 129 million, an increase of 3%. This positive performance was primarily driven by China, where we continued to benefit from solid demand and improving market momentum. Overall, Asia-Pacific was the strongest contributor to growth in the quarter. Finally, in the Americas, order intake remained largely stable at EUR 119 million compared to EUR 120 million in the prior year quarter. The region benefited from continued positive momentum in the U.S. which helped to compensate for weaker developments elsewhere. Net sales amounted to EUR 80 million compared to EUR 88 million in the prior year, a decline of 9%. Lower sales in the U.S. and Mexico were only partly offset by a positive contribution from Brazil. To summarize, the regional picture clearly shows that the primary headwind remains the normalization effect in Italy, while at the same time, China and U.S. continue to demonstrate encouraging underlying demand trends. Asia-Pacific, in particular, delivered strong performance and supported overall order intake in the quarter. Let me briefly explain, on the next page, the year-on-year development in EBITDA. Adjusted EBITDA declined from EUR 20 million in the prior year quarter to EUR 1 million in Q1 this year, mainly driven by lower sales volumes and reduced capacity utilization. At the same time, relative product margins improved, thanks to disciplined pricing execution, customs duty refunds and improved mix effect. Ongoing cost optimization measures and workforce flexibility measures provided meaningful support and partly mitigated the volume-related pressure on earnings. Overall, the bridge clearly shows that profitability was primarily impacted by lower volumes rather than structural factors. We, therefore, remain confident that the measures already implemented will support a gradual improvement in profitability over the course of the fiscal year. Turning to cash flow. Operating cash flow amounted to minus EUR 55 million in the first quarter, starting from an adjusted EBITDA of EUR 1 million, tax and interest payment of EUR 14 million remained broadly stable year-over-year and therefore, had no material impact on the development versus the prior year period. The most important positive driver was working capital. Net working capital improved by approximately EUR 15 million year-over-year, reaching negative EUR 12 million, supported by lower inventory levels and significantly higher customer prepayments. This reflects our continued focus on disciplined working capital management and contributed positively to cash generation. Part of this improvement was offset by cash payments related to our ongoing transformation program called Zukunftsplan, which increased from EUR 5 million to EUR 7 million year-over-year. Additionally, pensions and other operating changes improved by EUR 9 million year-over-year. Other provisions remained negative at EUR 23 million. The improvement was mainly driven by customs duty refunds and other operating effects. These positive contributions were partly offset by acquisition-related items, including the Polar transaction, higher pension obligations and lower bonus-related effects. Overall, despite the weaker earnings development, operating cash flow improved year-over-year, reflecting disciplined working capital management and continued operational focus. Moving on to free cash flow. Free cash flow amounted to minus EUR 77 million after the first 3 months of the fiscal year, a deterioration of EUR 9 million compared with the prior year period. Compared to operating cash flow of negative EUR 55 million, investments totaled EUR 24 million during the quarter. These investments included strategic acquisitions most notably the acquisition of the Manroland Sheetfed service and spare parts business of approximately EUR 11 million as well as the Onberg-related investment. At the same time, proceeds from the sale of demonstration equipment remained broadly stable compared with the prior year at EUR 2 million. The decline was primarily driven by the lower earnings level and higher investment activity related to our strategic initiatives, partly offset by the improved working capital development discussed on the previous slide. Finally, let me briefly comment on Heidelberg's balance sheet. Equity amounted to EUR 536 million at the end of June compared to EUR 568 million at fiscal year-end. The corresponding equity ratio decreased from 27.2% to 24.3%. The main reason was a net loss of EUR 32 million recorded in the quarter. In addition, changes in actuarial assumptions for pensions had a negative effect, which was only partly compensated by favorable foreign exchange translation effect recorded directly in equity. The pension provision increased slightly from EUR 605 million to EUR 611 million. This was mainly due to a reduction in the discount rate from 4.2% to 4.1%, increasing the present value of future pension obligations. Net financial position amounted to negative EUR 39 million compared to positive EUR 39 million at the end of the previous fiscal year. This development was primarily driven by the negative free cash flow in the quarter. At the same time, our financial flexibility remains strong. Following the early extension of our revolving credit facility mid of January '26, EUR 298 million of the overall volume of EUR 436 million are undrawn by end of June 2026. Therefore, despite the seasonally weaker first quarter and the strategic investments executed during the period, our liquidity position and financing structure remains solid to continue the path to diversify Heidelberg business into growth areas such as defense, energy and e-mobility. So now let's summarize the key takeaways, Q1. Despite lower sales volumes in the first 3 months of the fiscal year '27, contribution margin ratio improved to 32.6%, up 110 basis points year-on-year and 720 basis points versus Q4, reflecting a normalization in operating performance. Second, our efficiency and cost optimization initiatives remain firmly on track and provide the foundation of -- for a gradual recovery and profitability. Cost discipline continues to be a key priority across the group. Thirdly, while market conditions remain challenging, we continue to see encouraging momentum in key growth regions. Strong performance in China and resilient demand in the U.S. partly offset the impact of the Italian incentive phaseout and underlines the benefits of a diversified geographic footprint. Free cash flow was negative in the first quarter, reflecting normal seasonality and targeted investments in future growth areas, such as defense and energy. These investments are fully aligned with our strategy to drive growth, diversification and future profitability. At the same time, our balance sheet remains solid and provides the financial flexibility to execute our strategic agenda going forward. And with that, I'll hand back to you, Jurgen.

Thank you, Volker. Let me conclude today's presentation with a review of our outlook. Despite the challenging start of the year, we confirm our guidance for fiscal year 2026-2027. We continue to expect net sales to remain broadly stable compared with the previous fiscal year. While short-term market conditions remain demanding, especially in some European markets, we see opportunities from regional expansion initiatives and portfolio developments. At the same time, we expect a noticeable improvement in adjusted EBITDA margin. This improvement will be supported by strict price and cost discipline, the continued implementation of our cost and efficiency measures and an increasing contribution from higher-margin business areas. Our guidance assumes that macroeconomic and industry conditions in our core markets remain broadly in line with current expectations and excludes potential currency effects. Based on today's visibility, we remain confident in our ability to achieve the targets communicated on June 10. In line with the group guidance, Heidelberg reiterates its segment guidance to: For the segment Print & Packaging Equipment, we confirm our expectation of a noticeable decline in sales reflecting the continued cautious investment environment. At the same time, margins are expected to increase significantly, supported by efficiency measures and structural improvements. In Digital Solutions & Lifecycle, we still anticipate slight sales growth driven by our life cycle business with a modest margin dilution as a result of slight growth in sales. In Heidelberg Technology, we stick to our ambition of significant growth in both sales and margin, supported by strong momentum in e-mobility, energy solutions, security and defense. Let me now turn to the final slide of today's presentation and summarize our key growth drivers supporting Heidelberg's long-term strategy. First, our dual-use strategy creates access to attractive high-growth markets such as security and defense while leveraging Heidelberg's existing industrial capabilities. This increases diversification, reduces cyclicality and strengthens the company's long-term growth profile. Second, we continue to expand our role as a system integrator in packaging production by offering comprehensive end-to-end solutions along the entire value chain. Through partnerships, acquisitions already seen in recent weeks and targeted portfolio expansion, we create additional value for customers while increasing recurring revenue streams. Third, digitalization and artificial intelligence will further enhance efficiency and productivity throughout the organization. These initiatives will support structural cost improvements and unlock additional savings potential over the medium term. Together, these growth drivers form the foundation for Heidelberg's future development and sustainable stakeholder value creation. Thank you for listening and looking for your questions. Saying that, let me hand it back to the operator.

[Operator Instructions] And we have the first question from Stefan Augustin from Warburg Research.

The first one is actually on your guidance and the implied development for the next 3 quarters. So basically, we need to see an acceleration in the sales and we need roughly a bit more than 1 percentage point of margin increase. So this blends in, obviously, also a bit with your acquisitions, and you have not really changed the guidance despite the acquisitions. So how should we think about that overall? Where does the confidence come from? And which is actually the biggest lever to the expected increase in the margin in the next 3 quarters? Is that -- I mean, we should see some restructuring costs at Manroland. Have they already occurred in the first quarter? Or will they come in the next 3 in this year? And is that -- let's say, this is the basic part. It's a bigger question, but let's say, take it from here.

Yes, Stefan, this is Volker. To your first question, how we achieve our guidance. So the decline in group revenue to EUR 404 million and adjusted EBITDA margin close to breakeven was basically expected. It is seasonally clear in the first quarter, we always -- in our segment, we have a weak start in the business. We see, according to our plan, a normalization of sales and sales is a key issue for our EBITDA margin. Staying with that, we are in line with our expectation and is therefore consistent with our guidance. At the same time, the performance of our 2 operating segments and regions reinforces our confidence in the underlying strength of the business and validates our strategic direction. That means our Advanced HDAT new segment is coming up. We have a strong investment year this year. We're holding this line, however. Consequently, we reaffirm also here the guidance and also on Digital Lifecycle. On the second question, the business plan ambition, the recent announcements basically are strategically important and strengthen Heidelberg's long-term positioning. That means all what we are investing this year and next year, we will take advantage we see in 2029 and '30. We cannot talk -- and Jurgen will come later most likely on this point on our defense topics. We cannot basically say too much about it, but our long-term and midterm planning is showing that these investments will be paid back in the upcoming years.

Okay. So on that point, I take it the most -- the largest lever on the upturn of the margin is actually coming from the near-term volume pickup in combination with your cost savings and there is nothing in a bigger amount from your current defense activities. Is that basically correct?

That is correct. The cost structure basically is on track. And with upcoming sales in the second, third quarter, we are back on track on the plant, which basically is our planning process here.

And let me comment -- please go ahead.

Yes. Just the question then would be the follow-up is, would it be already fair to assume that the margin should expand in the second quarter year-over-year on the group level?

Yes.

Okay. And now I interrupted you.

No, I just wanted to comment on your question on our acquisition activities on Manroland. So following the full integration of the Manroland activities, and this is what we have communicated. This is planned over a 2-year horizon. Heidelberg targets a stable contribution of the operation of in total EUR 100 million with an EBIT contribution ambition of approximately EUR 10 million to EUR 15 million, but it will take 2 years for full integration. And it's a bulk of several single measures ranging from optimization of the common cost base without compromising the customer relation, increasing effectiveness of the global footprint to better respond to customer needs to the integration of Manroland IT systems into the Heidelberg environment are, of course, the key ones. Main risks include potential customer loss, of course, discussions with labor unions and the lack of corporate identification. However, we have implemented measures to identify and mitigate these risks early and addressed them effectively. And of course, we need always -- let's call combined, of course, restructuring costs versus quick wins, we have to always have that in mind what would count first. And at the end, this is what we have also communicated. We see first big wins. We sold the first Cartonmaster 145 to a Manroland customer. So we see a potential also for, let's say, upside let's say effects here.

The next would be on the free cash flow development. I mean, CapEx obviously went up also on the purchase of Manroland. Your strategy overall expects us to do more investments. So how should we think overall on the cash generation in this full year?

Yes. On our free cash flow situation, the weaker performance compared to prior year primarily reflects 3 factors: first, the seasonal inventory buildup, which is typical in the first quarter. Second, the higher net loss compared with the prior year period. And third, investments associated with the integration of acquired business and expansion of our defense activities. We always said it's a very strong investment year this year and next year, and the return will come in the following years. So basically, it's -- currently, our situation is as we have planned it. So for that, we are very positive that we're reaching basically also on the free cash flow, our planned target. And our financing structure is very solid and holding and keeping basically the pressure.