Interroll Holding AG (INRN) Earnings Call Transcript & Summary

Ladies and gentlemen, welcome to Interroll's Presentation of Half Year Results 2023 Conference Call and Live Webcast. I'm Andre, the Chorus Call operator. [Operator Instructions] And the conference is being recorded. [Operator Instructions] The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Heinz Hossli, Chief Financial Officer. Please go ahead, sir.

Thank you very much for the introduction. Good morning, ladies and gentlemen. With me is Julia Weinhart, our new Head of Communications and Investor Relations. We welcome you to our half year results presentation 2023, and we are glad that we have so many participants this morning. This is today's agenda. I will start with the group overview. After that, I will present the financial highlights. And at the end, we will have a live Q&A session, where you can raise your questions. For organizational purposes, we decided to no longer offer the chat to ask written questions. Interroll is playing in a niche in the material handling equipment manufacturing market in the segment of internal logistic solutions. Even though, the entire material handling equipment manufacturing market was about CHF 200 billion in 2022, and is expected to grow with a CAGR of 4% to 7% in the next years, our relevant market is estimated CHF 6 billion to CHF 8 billion worldwide. Our market share is between 8% to 11%. There are basically no changes in the first half year of 2023 except that the round average number of employees has decreased from 2,500 to 2,400. All the rest remains the same as presented at the media conference in March. This slide shows the 8 industries we focus on. E-commerce is for us not an industry, but it touches many of the shown industries, especially customers using an omnichannel strategy like in fashion, but more and more also in food and in other industries. Our business model has our customers in the center. We focus to be close to our customers and provide them proven state-of-the-art technology with our product platforms. The end-user marketing approach gets us close to the ones using the equipment for many years in the best case they already specify Interroll when they request a quote from a system integrator. In addition, we receive valuable input about their pain points for possible product improvements. Here you can see, our 4 product groups, all based on a platform strategy, modular, scalable, and flexible. This is the motto of Interroll. At the LogiMAT in April 2023, we launched a high-performance conveyor platform. With that, we closed the gap in the segment of high-speed sorting and conveying. A core element is the new multi-belt switch. The next upcoming innovation is the AMR top module. This solution will allow to seamlessly connect AMRs and conveyor solutions. This innovation will be launched in September 2023. Now, I come to the financial highlights of the first half year 2023. I would like to give a broader overview at this point in time, and then I go into details in the next slides. We stated during our Media Conference in March 2023 that we are cautiously optimistic, but added that, this depends on the further development of the global economy. After a particularly challenging second half year in 2022, we saw our pipeline for opportunities growing, and we started the year with a strong order intake. With the end of the lockdowns in China, a significant improvement in the business was expected and part of the cautiously optimistic outlook in March. On top of that, we estimated that our customers' de-stocking would come to an end latest in March, increasing the demand for products. However, the postponement of projects from our customers' pipeline significantly led to the fact that the de-stocking continued and only ended by now, what also triggered the profit warning placed in June. The order intake decreased by 0.8% compared to the first half year 2022. In local currencies, we grew by 4.3%. Foreign exchange effects had a strong negative impact. EMEA shows a substantial decrease in order intake, whereas the momentum in America, especially in the project business, was stronger than anticipated. Asia-Pacific grew, but the previous year was a very low comparison base. Sales decreased by 17.6% and in local currency by 13.5%. Also here, foreign exchange effects had a strong negative impact. Only Asia-Pacific shows a growth, mainly driven by the invoicing of a large project in Korea, where we issued a press release in December 2021 about the order intake. The EBIT decreased by 29.7% to CHF 28.7 million compared to CHF 40.8 million a year ago. This results mainly from the missing contribution margin from the sales decrease as we continue to have a very high cost discipline. The operating cash flow is CHF 75.2 million compared to CHF 1.2 million a year ago, as the net working capital strongly improved. The order intake shows a slight decrease to CHF 301.9 million compared to the prior year period, despite the big growth in conveyor and sorters of 28.8%, driven by a very good momentum in Americas, our product group rollers declined by 18.6%, drives by 17%, and pallet handling declined by 18.7%. The book-to-bill ratio is 1.18 compared to 0.98 a year ago. Sales decreased by 17.6% to CHF 256.2 million. In local currency, the decrease is 13.5%. All product groups have decreasing sales, but also here, sorters and conveyors did much better than the other product groups. The product group pallet handling suffered the most as a result of the missing order intake in 2022. The product groups, rollers, and drives suffered from the destocking. Looking at the sales development by region, it shows a diverse picture. As mentioned before, the strong growth of Asia-Pacific is mainly due to the invoicing of a big project. As a result, the shares of the 3 regions changed considerably compared to last year. EMEA lost 3 percentage points and now represents 55%, followed by Americas with 30%, losing 3 percentage points and Asia-Pacific with 15%, gaining 6 percentage points. The long-term target ratio of Interroll remains unchanged, with 50% of sales from EMEA and 50% from Americas and Asia-Pacific. The EBITDA decreased by 23.9% to CHF 39.9 million. This results mainly from the missing contribution margin from the sales decrease. The high-cost discipline helped to safeguard the EBITDA margin that declined from 16.9% to 15.6%. The EBIT decreased by 29.7% to CHF 28.7 million, as the absolute amount of depreciation and amortization was basically equal to the previous year. As a result, the EBIT margin decreased from 13.1% to 11.2%. Looking at the results, between the EBIT and result, we had a negative financing result from foreign currency losses and a slightly higher tax rate. The result decreased by 33.5% to CHF 22.0 million. And the result margin is 8.6% versus 10.6% in the previous year. The highlight of the first half year is the cash flow. The operating cash flow increased significantly to CHF 75.2 million, mainly due to much lower net working capital. This strongly underlines our principle of cash is king. Also, out of a position of strength and following the management's long-term view, we continue to invest in modernization of our production sites. The investment of CHF 17.1 million is higher than the CHF 12.4 million in the previous year. Nevertheless, the free cash flow of CHF 60.0 million is the highest in Interroll's history. This chart shows the very positive long-term development of return on equity and return on net assets. There is always a half year effect from seasonality visible in the first half year. In addition to that effect, the strong reduction of net working capital boosted the return on net assets, whereas the lower result and the very strong equity with a ratio of 70.9% have a negative impact on the return on equity. The chart reveals the strategic long-term perspective. Since the last major crisis in 2008-2009, Interroll has driven forward its globalization and expansion into new markets, as well as the expansion of its technology platform and massively strengthened its market position with a balanced mix of measures. We boost the productivity, while always keeping an eye on cost. We have done our homework during good times and aligned ourselves even more closely with our customers and their needs through our business model with the end-user approach. The outlook. We currently see positive developments in Americas. In Europe, the product sales volumes are expected to increase as destocking is over. In Asia-Pacific, we expect moderate growth. Interroll is strongly positioned and well prepared to benefit from our leading technology platform and capacities at any given moment in time when the market rebounds. In the medium term, we believe that all fundamental trends for global demand for material flow solutions remain intact and have even strengthened as labor shortage increases the demand for further automation. There is nothing mentioned in today's ad hoc, but the profit warning from June remains valid. As in previous years, the complete half year report 2023 is published on our webpage as an online report enriched with multimedia content. We invite you to visit our website to have a look and we would be delighted to receive your feedback to Investor Relations. With this, I end my presentation. Thank you for your attention and now we start the Q&A session.

[Operator Instructions] The first questioner comes from the line of Walter Bamert with Zürcher Kantonalbank.

I see that you got a lot of orders from the U.S. for the second half, but I'm surprised that work in progress is for this season quite low currently. Is there something different when it comes to lead times? Or why you're not already working on the omni-channel orders from the U.S. for the second half? And the second question is pellet handling looks quite weak in the second half of last year already, but also now the order intake is kind of thin. What would you blame? Is it the regional exposure? Is it a timing issue? Is it your pricing, which leads to pellet handling being quite weak still?

To the first question, the U.S., yes, we have received quite a good order intake in the U.S., mainly driven by the revitalization of e-commerce. And this is not really reflected one-to-one in the bid, as this is still in the early stage of production. This will be -- most of it will be delivered to the Black Thursday -- Black Friday sales and the Christmas sales, but this is coming into sales in the second half year. Overall, we started the year with a very low order backlog. This is also the reason why we have a lower bid at this point in time, as we just missed the orders on the backlog when we started the year already. To the second question regarding the pellet handling, yes, the pellet handling is weak, and the pellet handling is particularly vulnerable to prices, as there is a lot of steel involved and not really a lot of own value add to be added. And in general, we see this every time when the economy is slightly going in the reverse mode, then pellet handling projects are the first ones which are kept on hold, and they are postponed and postponed and postponed. This is also what we see now.

The next question comes from the line of Lasse Stueben with Berenberg.

I just want to touch on the outlook for margins in the second half. You mentioned the destocking effects seem to be cleared now in Europe in the products business. I'm just wondering what that means to the outlook for the second half, just given your -- the better order intake and subsystems would suggest you'll have slightly negative mix on margins in H2? Or do you expect that products business to come back much quicker? Have you seen that already in July and now early August?

We don't -- we have a lot of discussions with the big integrators, and we are now clearly on the point where they have to reorder, but this also depends on their business. But yes, we are optimistic, as I mentioned in the outlook, that on the product sales, especially in EMEA, we will see an increase in the second half year as the destocking is over. How much this will be, we cannot judge right now. This is still open. And this also depends a lot on the order intake of the system integrators by themselves.

Okay. But I guess, in general, you expect H2 to sequentially be stronger than, I guess, the first 6 months of the year. In the first 6 months, yes, compared to the last year, I will clearly say no. On order intake, yes, but on the rest, no.

The next question comes from the line of Sebastian Vogel with UBS.

I have 3 questions. I would ask them one-by-one. The first one is if there is a chance to indicate the pricing tailwinds that you had in H1 on orders and sales, at least in the ballpark range, and if there is a chance, how much pricing support you would see in the second half, if you can give an indication, that would be also appreciated.

The pricing, and I think if you then look into detail in the figures, you can see this easily when you look at the change in WIP and the material cost, the pricing is now fully in the market. This we have seen. This we have promised and we have done. This is clearly in the market. So the effect where we see now the profitability being negative compared to the last year is really coming from the volume. But pricing is in the market. To the second question, is there a big boost in the second half year? I would say no, because last year, the second half year was extraordinarily good. We had more than 18% margin in the second half year. Last year, this was triggered by one-time effect. This will not repeat in this year.

And if I look at your order book in H1 and what it potentially means for the second half year in terms of sales, I get a sense that it could be somewhere around like CHF 300 million ballpark around that area, depending of course, on some economic uncertainties in that regard. Is that a fair, is it a logic of fair thinking there? Or do you see some sort of effect that would heavily speak against such an outlook?

I would like to come back to the answer I gave to Mr. Bamert. What we can see today, yes, we can see what we have from projects, which will be invoiced in the second half year, but this personality we always had also in the past. It really depends how strong product sales are coming back in the second half year. And from today's point of view, I cannot give you an answer if this is right or wrong, what you just said.

The last 1 is on CapEx. If I'm not making it wrong that I thought it would be around like CHF 40 million, given what you have seen in H1, that would be meaning quite a pickup in the second half. Is that still your sort of thinking there? Or do you actually target a bit of a smaller number, and therefore more of an equal CapEx trajectory over the course of the year?

We clearly target a lower number than what we said at the media conference in March, because these 2 projects we postponed last year in Germany for the expansion in Wermelskirchen and in Baal, we will postpone also now into next year. We will not do this this year.

The next question comes from the line of Serge Rotzer with Credit Suisse.

I would like to extend the question about pricing and sales mix. We haven't discussed the cost base. Are there any headwinds or tailwinds? So I don't know. Can you see it in steel prices, transportation costs, or do you see labor costs? What is the net effect of all these headwinds and tailwinds you have?

We don't have a detailed analysis of how much is really coming from price and cost. What we can see is we have this internal index from our purchasing basket, what we purchase. There are variations in. But overall, the index is moving only within a range of minus plus 1%. This is also why we don't see any reason for a price decrease or a price increase. The assessment we did last year by not doing a price increase January 1 and use the headwind or the tailwind we got from the material decrease to cover the headwind from the inflation pressure on salaries and on the other general expenses. This has worked out well. So we don't see that we have a need to really make a change here. We have the new price in the market. We get our target margin if the product mix --from the product mix. Now the mix can change in the second half year, but overall, I expect that this time will be different as we really lacked product sales, high margin sales in the first 6 months. And if this rebounds, then we should see a little bit of difference in the second half year than the normal ones, where really project business was always dominating the second half year.

And then probably the last question. You always have been talking about this large tender pipeline in spring time, also already last year in autumn. Can you give me some flavor here that did this tender pipeline change in volume and size? And do you see further postponements? And probably, where is this tender pipeline? Is it in airports? Is it in CEP? Is it food and beverage? And what's the share of e-commerce and also in the region? I know it's a little bit of an open question, but for a tender pipeline, bigger or smaller? And in which areas, in markets and regions?

Yes. If you come to the pipeline, the pipeline remains to be strong. The pipeline is not as strong as it has been in the past. This -- we also clearly need to state. There are some projects where they have been postponed by 1 month, by 2 months, which now are postponed by a longer period of time. So we do not -- no longer consider that right now as a hot project. But the pipeline is a little bit smaller, but still it's a good pipeline. But as long as the projects are postponed, and where we really suffer is the 2 regions. One is EMEA, which is our biggest market with more than 50%. And this clearly is a big part and has a big influence on the total. And the other one is Asia-Pacific. Asia-Pacific is not coming back as we expected, and we did not even expect the V curve. We expected that there will be a strong rebound, but far off from a V curve. But clearly Asia-Pacific is much weaker than we expected. And we also say now for the outlook for the full year, we don't expect a very strong rebound from APAC.

And what does it need -- or would it need for Europe, for EMEA, that this could change?

EMEA, I think the sentiment is the same when we talk about the negative. It's not all in. It's a risk of recession. The behavior makes a difference. I mentioned this always also with investor calls. We see this in the -- especially in the U.S., where the glass is half empty or half full. They always look at a half full glass, whereas in Europe they always look at a half empty glass. This makes a difference if you then trigger and invest into CapEx, if you take the risk, or if you are risk-averse. And in Europe, we see much more risk awareness. And basically, we talk about the biggest market, which is Germany for us. And there we see this in the highest level. We have signed that we are off the discussion of a global recession. Also all the negativity in Germany, that they are now in a technical recession. All this is really very negative for the investor mood in this region.

Okay, quick follow-up and then I'm done. Do you believe that your visibility is now better than it was in March? Because in March you believed that the destock will be ending at Q1 and then it was Q2. So when you look now into your crystal ball, do you believe that your visibility is better compared to spring time?

Especially when you talk about the product and the destocking, it's a very handful, but very big system integrators. Yes, there we have a much better position now. I'll talk about projects for the second half the same.

Say it again, please.

When you talk about projects, it's the same. Now we see the postponement. There at the crystal ball we don't have. But clearly from the very big system integrators on the product side, we now know that they need to order with their new orders coming in. They need to order products. They don't have them any longer on stock.

The next question comes from the line of Alexander Koller with Stifel.

Alexander Koller from Stifel Schweiz. You talked about regions. Can you give us as well some more details about the developments in the end markets? And I would be particularly interested in the business performance in the airport business and your progress in the new food application.

Yes, the end markets are developing quite even, I would say. There is not a big -- well, you can say there's a big difference. Is it really very positive, very negative. What we see is a tendency that airports are coming back. And we see over the next coming years airports could be much stronger than today. And this all depends on the regulatory changes with the expected change in the U.S. that you use new scanners on the check-in security. There this might trigger an investment wave that not only the scanners will be replaced, but also the entire unit will be replaced. And this is why we see airports positive. Automotive is different. Automotive, we cannot judge at the moment. But over the long-term, we clearly see a positive momentum over there. E-commerce has picked up very strong in the U.S. in the first 6 months. And we expect that this will trigger over to Asia and to Europe with a delay. Courier, express, parcel, the classical one, there are more, even there is not a big fluctuation. They are very long-term oriented. When they make an investment, it takes a lot of time until it gets through all the approval processes. So this is stable. Food, you mentioned also on the food side that we launched this new product. But this will also take some time until we really see volume in the market. And this is nothing new. This is what we always said when we launch a new product in this conservative industry, this needs some time until you see a ramp-up effect. And in food with the approvals you need to have for hygiene, and this will even take some more time. Does this answer your question?

Yes.

The next question comes to the line of Constantin Hesse with Jefferies.

I had some technical issues this morning, so I lost a bit of it. So apologies if this question has already been asked. With regards to service, if you can give us an update there, how it is developing?

I did not touch the topic of service at all, so you didn't miss anything. On service, we are just on track. We are in the middle of the rollout of the service organization in Americas. And then we will trigger next year. We will take South America and Asia, which is on the plan. On the sales, we also see that we are step-by-step increasing slowly. So service is good. It's okay. It's on track. But nothing to report now for the first 6 months, which will be something extraordinary.

The next question comes to the line of Sebastian Growe with BNP Paribas.

I would like to start around the order intake. I think you were quite specific with your answers around the overall volume expectations when it comes to revenues for orders. Could you give us an indication where you see the H2 orders compared to the CHF 300 million roughly that you took in the first half? You only said, I think, it should be above the H2 '22, which is an order, I think, on admittedly low comparison days. So any color here would be much appreciated if you could start there.

The order intake, this is what we mentioned. We expect that the order intake should be better than last year, H2, which was quite a low figure. But this all really depends when the trigger point will be reached for a rebound in the market. Now we are now about 1 year with this order intake, with postponement of projects, which is quite a long time now. And this is also why we really expect there will be a rebound. We are -- we were the first ones which went into this downturn, and we also expect that we will be the first ones which are coming out of this downturn.

Can you then comment on how the order intake has played out during the first half period? Or do you see some sort of light at the end of the tunnel that towards the end of the first half things have improved? Or how should we think about the sequential development?

No, the order intake was a rollercoaster during the first 6 months. It was a very good month. We had a very good start. Then it went down, and it was just mixed. It's really like a rollercoaster. And this is what we see. Now that we had the lower product sales because of this destocking, this was clear. This was expected that we have this until March, but this then continued. But also on the project side, we see this rollercoaster until the regional difference. Now very strong Americas, whereas EMEA and Asia-Pacific not really where we expect it to be.

And on the comment you made on the end market, and especially on the e-commerce, how should we read this? Is this real expansion, or is this more kind of an upgrade investment? We've seen a similar positive kind of at least shorter momentum at one of the bigger system integrators recently reported. So any color there would be also very helpful.

What I can say is it's really coming from the big e-commerce players in Americas, and it's optimization, automation of the last mile. The issue they have, if they have to do 2 different deliveries. So picking, packing is the topic, and it goes more and more also into these micro spots where they have much closer warehouses to the end customers.

Yes. And you would think that this is kind of just at the beginning, or would you think that it's halfway through? Or where are we in the process of this last mile improvement?

I think the last mile, this is the biggest topic what they all face, and this is only the beginning. If this is the solution, we also don't know, because there is also a lot of cost involved. What is very clear is that the big warehouses will not disappear. So you cannot just go to micro hubs and say this is then, we have much more high micro hubs, but the big warehouse can be eliminated. This is a little bit the topic in here.

And if I may stick your brain around the EBIT bridge for the H2, so I had your comments around the price hikes and the general remark that the mix in the second half should not be materially different to what it was in H1. So, I would read this as a kind of 60%-ish gross profit margin eventually. Against the background, how should we think of OpEx heading into H2? Is there much of a pickup expected beyond the CHF 130 million -- CHF 130 million in the H1, or what's the sort of framework that you could give us here?

A little bit are our fixed costs related to the top line, because all the personnel costs are shown there. If you produce more, then we will have also more personnel costs. The other fixed costs we expect to be more stable also in the second half year compared to the first half year. But all is really decided with the top line. If we increase sales, we have slightly better percentages on the personnel and on the other fixed costs, the material we expect to stay where it is more or less. So, top line growth is the big topic, which will also then trigger the margins.

Yes, that makes sense. And the very last question for me, then, around working capital. Obviously, you benefited from a massive working capital reduction the first half of the year. Now, you made some constructive comments around order intake at the same time, but there is probably also a bit of an inventory build going into H2. So, I was just wondering around this kind of material improvement in the working capital ratio to only 15% of last year controlling sales. How we should think of that going forward? Do you think you can keep that working capital ratio at such low levels, or would you rather expect a certain build-up, a certain increase again in the ratio?

Yes, it's a very good question. Clearly, there are 2 points to this really big change in net working capital. One is really the optimization. We also did reduce our stocks. We could reduce our accounts receivable. So one part -- big part is the optimization, but there is also a second effect. Clearly, if you have a shrinking top line, you have less capital bound. If we grow again in the second half year, this would also clearly indicate that we will have a slightly higher net working capital.

Yes, on an absolute base for sure, but in terms of relative?

In relative, we are confident that we can continue on this level.

[Operator Instructions] The next question comes from the line of Stefanie Scholtysik with Mirabaud Securities.

Yes, hello. I would have 3 questions. One is actually you said that, airports are coming back. Can you give us some flavor on other verticals? Which verticals do you think will come back the fastest? Which ones do you think will stay a bit subdued? Then a second one is on wage inflation. Especially in Germany, I think wages went up in May. Do you think that we will see more wage inflation in the second half? Do you have any contingency plan in place? Then a third one on your CapEx plan, which you're postponing. You say that in the medium term, the drivers are still intact. So, why exactly are you postponing your CapEx plans? Where exactly do you or which CapEx do you explicitly postpone?

First, I would like to start with answering your question number 3, the CapEx. I touched on this already a little bit before. The 2 projects what we announced already in March, we have postponed last year. It's the extension of Wermelskirchen, where we produce our rollers in Europe. There, we see -- we did make some investments into new machines, but the building expansion, at the current level, we don't see the real pure need, but we really have to go for it. This is why we said, we will postpone it further into next year. And it's like with all our strategic investments. We do normally the investments much before we really need the capacity to have some reserves. But now, with the sales of the rollers, we also clearly see that the need is not here. We can easily postpone this also for a year or 2 more into the future. And we clearly decided now not to do this in this year. We postpone it for next year. If we then do it next year or postpone it another year, it's still open. The second one is the building in Baal for the food application. In Baal, we have already many buildings. And there, we decided also not to pursue this construction or remodeling. It's more a remodelization and expansion. We postpone it for next year. These are the 2 projects. These are exactly the same 2 ones mentioned already in March. So your second question is regarding the wage inflation, especially in Germany. We have this considered. The wage inflation is a part of the offset. That's why we did not do a price decrease from the tailwind we got from the commodities we used. But this we have under control. And so far, as I mentioned before, this has worked out quite fine. If there will be a next big inflation round coming up for next year, then this is a different story. But for this year, we don't see now a need for a price increase or decrease - to have a correct price in the market. So we absorb this with what we get from the material side.

But wages are still going up further in H2?

Wages in Germany, this has been considered already in the base planning. When we made this assessment and said, we do not go for price increase. We compensate the tailwind we get from the material side with the increased fixed costs for personnel and for other SG&A costs. And this is still correct. We don't see any change there. Now, this price, what they get, this has been already clear in January that, there is a second round and that there is a one-time payment. This is nothing new. For next year, the picture looks different. But this is still too early to tell. And we also did not make any promise to the market that next year, there will be no price increase. This is only valid for this year. On your first question, I mentioned the airports, some of the airports, when I talked about the airports and said this is an investment wave, this is a multi-year investment wave. This will start immediately when TSA in the U.S. will announce this change, because it has a lot to do with convenience but also with space. If you can walk through a security check without taking out anything from your hand luggage and anything out of your pocket. You just walk through, you put your hand luggage on the belt and you walk through the scanner and you take it off. Then this throughput per square meter is a factor higher. It's not 10% or 20%. They talk a factor 5x to 8x higher on the same space. And this is why it will trigger. It's the convenience of the passenger, but also the space which is required for the security control, which will be much lower for the same throughput. And there the industry is really waiting for TSA in the U.S. to make this announcement. And then this will trigger a wave. Technically, this is today already possible. And I think in Denmark they have already some trials in Copenhagen where they test the equipment for quite some time. From the equipment, from the scanner producers where we have the partnership with Smiths Detection. We know also how this is technically. This is for many years now a given. They see exactly the same as today, where you have to take out liquids, where you have to take out electronics. You just walk through. And this is why we say there will be an investment wave. So this is not just new airports. This will be replacing equipment in airports. Food will grow steadily but there will not -- there we don't expect a big increase. What is promising is this omnichannel approach. This is going now to food. You see a lot of supermarkets especially also in the U.S. with Walmart. Walmart did a big trial in Mexico. They will now expand this into the U.S. and all the supermarket chains are following. The online portion sold is increasing. This requires new solutions. And this is also a kind of omnichannel approach where you fill up your stores at the same time you fulfill online orders from the consumers. And electronics goes into the same direction. You see this with the premium ones. The Apple Store is a very good example. When you place an order directly on the Apple Store you get a goodie, you get the same price, but you get a goodie. They say you can have a writing on your iPhone, a dedication or whatever. And this clearly, they try to bring the consumer directly on their platform to get the middleman out. And this is a trend we also see. And in fashion, this is just this omnichannel has started and this is clearly still going on, going further. And there we see also that the store inventory can be reduced, if you have a good online channel. So consumers can go into a store, they can try their sneakers and they can say at the end I want to take it with me or please ship it for free at my home. And this is where they say, if consumers start to add the second one, I try it in the store but then I get it shipped to my home, next day delivery. Then this could be a big potential to reduce overall stock because you can reduce the stock in the individual stores, and you have a bigger stock in a central warehouse. Industry, automotive, these are the normal cyclical businesses. They expect up and downs also in the future. It's not something where we say this is now the driver for the next years, but clearly, also a growing industry. Does this answer your question?

Yes.

The next question comes from the line of Emrah Basic with Baader-Helvea.

Yes. I have just 1 quick one left. You mentioned the prices are in the market now. I'm not sure if a number was mentioned, but how much approximately out of the minus 13.5% local currency growth was price growth?

Sorry, can you repeat? I didn't get this acoustically. The price in the market and then the next one.

Yes. And then just how much out of the local currency growth of minus 13.5% was approximately price growth?

This figure we don't have. We don't have the impact of the currency on all lines of the income statement.

I didn't mean the currency, just the pricing, the impact of the pricing on growth or otherwise?

Also this we don't have. No, we do the pricing on the entire product hierarchy. The pricing has never been a universal pricing for each product group. It's always on the component space, and we cannot -- we don't have this detail.

Ladies and gentlemen, there are no more questions. I will hand over back to Interroll for any closing remarks.

Yes, maybe just give the participants a minute, if somebody else would like to ask a question. If not, then we would close. But just hold for a minute. Okay, it seems to be that, there are no further questions. Then I would like to thank all the participants and say goodbye. Thank you very much.

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