JOST Werke SE (JST) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen. Welcome to JOST Werke SE 2024 Capital Markets Day here in our production plant in Neu-Isenburg, Germany, where JOST was founded over 70 years ago. My name is Romy Acosta, I am Head of Investor Relations, and I am very excited to have you here with us today. In case the cameras didn't give it away, this event is being recorded, and the videos will be available on our web page on the following days. All presentation materials are -- will also be available on the web page. And for those of you here, you can already access them by scanning the QR code next to the agenda that you have on your desk or type in the URL. Now let me go forward, move to the speakers for today will be, okay -- sorry, yes. Will be Joachim Durr, Chief Executive Officer; Oliver Gantzert our Chief Financial Officer; Dirk Hanenberg, our Chief Operations Officer; Yenny Fredriksson, Head of Business and Agriculture -- Business Line Agriculture; Michael Fischer, Head of Global Research and Development and myself. Moving on to the agenda for today. We'll start with Joachim Durr your presenting to you JOST ambitions for 2030 followed by our Podium discussion in which we'll explain to you in a deep dive how JOST will be able to achieve these ambitions presented by our CEO. You will have, after the podium discussion, a possibility to also participate asking questions to clarify points that you want to know. Before we go outside to see a demonstration of our KKS Coupling system, we'll have a lunch break. And afterwards, Michael Fischer will present to you our innovations and our strategy and what we are doing in topics regarding research and development, followed by Dirk Hanenberg, who will tell you how we leverage operations worldwide in order to achieve the ambitions for 2030. And in the end, Oliver Gantzert will translate all those presentations into numbers and tell you how that will generate value for you as shareholders. Afterwards, for those of you that want to do the plan tour, we will meet here and we'll have 2 groups, 2 in English -- sorry, 4 groups, 2 in English and 2 in German, and we'll get the opportunity to put on our safety shoes before we move on. But that's it from my side. Let's get starting, please, ladies and gentlemen, welcome Joachim Durr, our CEO.

Thank you very much, Romy. And a very warm welcome to all of you. We're very happy and proud that you are interested in JOST and that you hear today with us in Neu-Isenburg today and that we have the opportunity to show to you what we do, but more importantly, to give you a little more insight in how we do it. And we call that the JOST system. And as I said, it's not only what we do, what we do, a lot of people do it. I think the secret is in how we do it. What does the JOST system mean to us? Quality, Safety and Reliability. Very important values for us because our products are used as critical -- mission-critical products for the truck, trailer and agricultural tractor industry. This truck will not be able to pull that trailer if our product fails, the farmer will not be able to do his work on the field if our products fail. So quality, reliability, safety are extremely important but not only for our products, also in the way we operate, in the way we act, in the way we treat our customers. These values are extremely important. We love to fulfill our commitments, we hate to overpromise and under deliver. And that is a value that we have throughout the organization for our products, but also for the way we operate. Global customer proximity. It also almost sounds like the equation that cannot be solved, global and customer proximity. But I think we have a very good concept of solving that. We have global customers, and they are supported by what we call the business lines. Today, we have a delegation from TRATON the big truck manufacturer here with us in Neu-Isenburg, we take care of global customers. But at the same time, there's meetings happening in Australia, in China, in North America, in Brazil with JOST people and TRATON people solving their problems in the daily operations. Any problems they have in logistics, any quotes that we have to deliver, we have local people that work with the OEMs. And not only with the OEMs that receive our parts and put them on their trucks. But more importantly, also with the fleets, the farmers, the dealers that operate our products. So that's important to us to have that application knowledge, not only to know how to treat with the OEMs, but also to have the application knowledge of the final product when it has to perform and that's important, and that's what we consider global customer proximity that we not only sell it to the OEM, but that we take care of it in the operations that we help the [ final ] customer to pick the right applications and that we support that product throughout the lifetime of the product with spare parts and services, which, by the way, is also a very attractive business, and that's why we like it, too. We need for that committed and skilled people. We have people in the organization that have been here for 20 years, 30 years, and some companies consider that a problem, we consider it a value. We love to work with industry experts. And why do we love to work with industry experts? It's very simple because our customers love to work with industry experts. They love to talk to people that understand their problems that they have the experience and the capabilities to solve their problems. If you're building a house, you don't want an amateur. You want a professional that knows the industry that knows the problems, and they can solve the problems. Same happens with our customers, with the fleets with the farmers, but also the OEM customers. And last, not least, strong flexibility and resilience. Our business model supports that. We have what we call a light asset business model. We have very flexible plans, we have a local for local coverage. That's why we have a lot of plans throughout the world so that we can be quick in responding to shifts in demand and quick in adjusting our cost structure so that we have the opportunity and the possibility to create long-term profitability by our strong flexibility and resilience. And I think if you look at our performance over the course of the years, even with the downturn and the weak markets that we have had in the first half year, you can see that, that actually works. So let's look into that world and how our sales are distributed today, and I'll talk to you a little bit about how we act in these different regions. Europe and Middle East is still the biggest region for us in terms of sales, also because we have the widest portfolio. We have more products in Europe than we have in the other regions in Europe. We have tried [ steering ] systems, we have axles, we have products that we do not have in the entire world. Second biggest region North America, a great and nice growth story over the last years. We've been growing in the trailer industry. We've been growing in the truck industry, and we have been growing in the agricultural tractor industry with our loaders and our implements. And we are #1 in landing legs, we are #1 in front loaders and #2 in Fifth Wheels with a market share of about 30% to 35%. South America, another very nice growth story. We have a joint venture for our Transport business since 28 years, I think, a very successful joint venture with the biggest trailer builder Randon. Works excellently delivers great results. We have a beautiful market share that is above 80% in fifth wheels and we are entering the market with our front loaders. We are building on the knowledge and the long-term capabilities that JACSA, JOST -- JOST Agriculture Construction South America, exactly, JACSA. JOST Agriculture Construction South America has. Currently, 17% of our sales comes from Brazil, and that does not include -- no, it includes the sale of the joint venture in this number. Asia, 12% of sales. China has been weak, as you all know, but still 12%. China is one part of that market. That is mainly an on-road market. The other part of that market is what we call off-highway. These are typical applications that go into the construction and mining industry, very nice heavy products and typically very high-margin products for us because they need to perform and the customers are willing to buy the best products so that they can perform in their [ mines ], they don't want any surprises. And that's a balance between the on-road products that are high volume, less margin and these off-road products that are low volume and high margin. Africa and Australia, 7% of sales also very profitable, nice markets for us. Here, we have, I think, a very good standing because we have customer proximity. Application knowledge, I talked about the industry experts. We have people that know how to support these road trains in Australia that know how to support the mines in South Africa with the right products so that they don't fail that they last long and if they have wear issues that they could find replacements quickly. So we have a global footprint, and this becomes more and more important also because our customers are becoming more and more global. And especially in the ag industry, and we'll talk about that a little later, this is a trend where we see a big consolidation and the global OEMs gaining weight in the overall markets, and they need global Tier 1 suppliers that can support their industry throughout the world. And we have already a very nice setup to support them. So if we look at our track record, and I mentioned a few of these things, and I will summarize them here. We are working in markets that have very strong fundamentals. Agriculture, world population is growing and everybody is trying to have access to better food. So agriculture will be growing and productivity in agriculture has to grow. And therefore, we need a more mechanized agriculture, and we're supporting that with our products. Transport also in -- around the world, with a growing population, growing GDP, transport requirements are growing. So the fundamentals of our industry, transport and agriculture are intact, and there is no sign that any of that would change as long as the population is the way it is and as long as we have an industry that is supporting that population. Long-term customer relationship. I already mentioned it, we have the Quicke brands with more than 70 years of history. We have the JOST, the leading brand in transport with more than 70 years of history. Our typical customer relationship is more than 40 years with the big customers. We love to solve the problems, we hate to walk away from the problems. We've we have not lost a customer because we had a problem. We had problems with customers. And I remember after the takeover of Quicke, we had an issue in North America. We were a new business hold we did not walk away. We fought back, we now are gaining additional business from those customers because they saw how we fixed the problems and they've created trust for a long-term relationship. And that's why for us, it is extremely important. And in our industry, it's extremely important. Product life cycles are extremely long. It's not a car that is old after 7 years, it's a truck that is designed and then lives for 20 years. The frame maybe lives 30, 40 years. Same is true for the trailer design, same is true for the agricultural tractors. They want long-term solutions and the long-term relationship and we, our culture supports that because we love to solve the problems. Strong brands. Why are the brands so important? And it's one of the -- one of the interesting facts, I think, how difficult is this to explain that. People think of automotive industry, we're not automotive. We're commercial vehicles. People think of suppliers, and they say, okay, this is all product life cycle very short, and you only sell to the OEM. We are a brand, the JOST and the Quicke brand, the TRIDEC brand, the ROCKINGER brand. They are important tools for us because they connect the demand from the OEMs with the demand that the fleets or the dealers have. The fleets decide in many countries, which fifth wheel comes on the truck. The fleets decide which lending leg goes on the trailer. The farmer or the dealer decides what loader gets mounted to the tractor. And to make that connection so that they can order that product when they purchase the tractor or the truck or the trailer, we need the strong brand. So they know I want a Quicke loader. I want a JOST fifth wheel, I want a JOST lending leg. That's why a brand for the way we operate and for our business is so important. On your cars, you probably don't know who builds the seat or who builds the muffler. On the truck, every truck driver will know what type of fifth wheel and what type of lending leg he operates. And the farmer's will know what type of loader he has on this tractor. That's why we are specific in that way, and that's why I cannot overemphasize the importance of the brand for us. It all comes with technology leadership. Technology leadership is important. For two reasons, one, we -- if you are a market leader, you have to have the right technologies. We don't want the customers to have to go to a competitor if he wants a technical problem to be solved, or if he works on an autonomous truck or an electric truck. He has to get the solution from us because if we are a market leader, we are obliged to be the technology leader. And the second reason, of course, is we have a lot of young engineers, and they all like to play with these things, and we want to keep them happy, too, because that brings a lot of new ideas into the company. And so we're doing it for our customers, but we're also doing it for you and your organization, Michael. Significant aftermarket exposure. It's a beautiful side effect of our business. Our parts, our systems, they are in operations. They get used, they wear, they get torn, the landing legs, they hit on a curb. We love to support these failures and these wear events, but it's also a nice business and it gives us also the volume to go and to work with the dealer channel with our products. And as I mentioned earlier, it's usually a very nice and profitable business for us. And with the 70 years of Quicke and the 70 years of JOST, of course, there's a big installed fleet and installed base of our products that we can work with. So with these fundamentals, we've been growing over the last years, as you see here, with a combined annual growth rate of 11%. Part of that was the acquisition of our agriculture business. But if you only look at the agricultural and the Transport business, we have had a nice development since 2017, and we picked that dates because that was the date of the IPO from EUR 700 million to EUR 1.25 billion last year. For Transport alone, that's an average growth rate of 6% and for Agriculture also of 6%. So how do I see JOST and the years up to now? Until 2017, until the IPO, really, we were building a strong foundation of the business by entrepreneurship, private ownership, a global expansion, careful global expansion, strengthening the brands and then going from a private ownership that was very entrepreneurial to a public ownership. Private equity for a while and then with 2017 with the IPO. Since 2017, these years, I would call seeding. We expanded into agriculture. We brought new products to the JOST family, we were building on that agricultural footprint, we've opened a plant in Chennai, we've bought a business in Brazil to support that agricultural business to make it a global business, we were acquiring new brands, the Quicke brand, namely that is the biggest brand for us, we're consolidating a lot of products under the Quicke brand, including the cabins that we produce in South America. We were growing our product offering also in agriculture. We have additional products that we bought in and also we have developed new products for new applications, and we are entering new markets. I already mentioned India with our plant, I already mentioned South America, and we'll discuss a little more in the next section, also here on stage how we will build on that. Because now it's time to harvest and to continue that story. And these 4 buzzwords that you see here, you will see them throughout the presentations. Boosting growth, we will have a discussion here to discuss a little bit about how we want to boost the growth based on those fundamentals. How we advance our technology, Michael Fischer, our Head of R&D, will explain that to you how to leverage global operations, Dirk Hanenberg, our COO, will show how we create efficiencies with our global operations. And then Oliver will tell you how that all adds up in the numbers that create value for the shareholders. So you think that's not specific enough, right? I think so too. Let's be more specific. We have an ambition for 2030 and our ambition is to have sales revenues of more than EUR 2 billion by 2030. And this will be an average growth rate of more than 7%, not so far away from what we've seen in the past. So it's doable, but it's a quite good ambition. And I think well within the reach of the capabilities of our organization. We want to create an adjusted earnings per share of EUR 10 per share. That is ambitious, that's more than 8% combined average growth rates and EUR 10 per share is, I think, a very nice number, and that is a very clear ambition also what is the value for our shareholders that we will create. And our EBIT margin corridor, we will expand, extend to 12%. So in the past, we gave you the 10% to 11.5%. We've extended that corridor and we'll extend it today from 10% to 12%. So we're shifting the margin corridor up the upper limit of 0.5% point. When you look at how to achieve this. Today, our biggest customers and our biggest industries are ag with about 25% or ag and construction with about 25%, 40% trader business, 35% truck business. Ag and Construction is an industry that is in the process of consolidation. They're still very local. If you look at AGCO, Caterpillar CNH, they are big brands, but they're only now consolidating the world. They're only now rolling out their products, their new platforms around the globe. In the past, they all had local solutions. They had a [ tractor ] for Brazil, a tractor for Europe, a tractor for India, a tractor for Asia, tractor for North America. They cannot afford to do that anymore. The technology, the integration of digital functions, integration of cameras and sensors, the integration of hydraulic components, the complexity of the emission regulations is getting so complex that it's so expensive to develop these [ tractor ] platforms that they can only afford to do this once and then roll out that platform throughout the world. Something that happened in the car industry 20 years ago in the truck industry 10 years ago. But it's now happening in the agricultural industry. And that's a great opportunity for us because we are with our global footprint that we've generated seeding in the last years we are able to support those companies. And Yenny and I, when we go to customers in Brazil, North America, we get the feedback that, that is exactly what they need because they need technology partners that can develop once and then roll out in each individual region in each individual country with the same technology. That's why we see the biggest growth opportunity in that sector. So we expect that, that sector will grow to about 50% of our sales. The growth opportunities on the on-highway are also there, we will also grow in on-highway but it will be less than in agriculture because it's already a consolidated market. We are already supporting these global OEMs on a worldwide basis. And therefore, the growth will be more limited -- limited to technology gains, limited to some market share gains here and there, but maybe to the technology needs. The nice side effect is that if you look at the profitability of the earnings of that industry, here we have the OEM earnings on average, the industry that we are growing faster is the industry that has higher earnings. In the mining industry, in the infrastructure industry, in the agriculture industry, we see a higher-margin quality with our customers and therefore, also throughout the supply chain. So what's happening into a profit pool that is more attractive since we're growing more in that industry. Logistics and transport, and it's, I think, an effect of the consolidation and the high volumes are more efficiency driven and less profitable for our OEMs. And on the car industry, it's been worse, but we don't -- we're not touching the car industry. But if you look at the margins that are generated there, the margin pressure is even higher because the volumes are higher and it's already highly consolidated. So this will be our way. We see more opportunities there. And as I said, the nice side effect in off-highway applications is that the profitability is more attractive in the entire segment than it is in the transport or the car industry. Okay. So we want to be what we call the #1 supplier with our JOST system for on-highway and off-highway commercial vehicles. We are limited to commercial vehicles, but we do on-highway and off-highway, and I've elaborated a little bit why off-highway is for us such an attractive segment. We are and we will be and continue to be the global market leader with very high market shares. And as I mentioned earlier, market leadership and technology leadership for me goes synchronized. It's important that as a market leader, we also provide all the latest technologies. No customers should go to any other competitor because he doesn't find the technologies with us. It's our ambition and our obligation, how I see it as a market leader to be the technology leader for our products and for our applications. That's, by the way, why we also invest in things like Aitonomi and Trailer Dynamics. We do a lot of these technologies in-house. A lot of the technologies are developed by our own organization but there are also technologies that are far away, and we still need to understand them, and we still need to be involved. And that's where we enter into technology partnerships like we're doing with Trailer Dynamics and with Aitonomi, and I'm sure you read it in the news how we engage with them. So with that, we want to create value for customers. I've elaborated on that with a high-quality and strong customer satisfaction. But with our operational excellence and with our flexibility that we see throughout the cycle, we also create value for our shareholders and for the entire JOST family. So that's our goal. And with that, I think we can come to the next agenda point Romy. Thank you very much.

So Joachim, thank you very much for your presentation and for introducing to us the goals that JOST want to achieve by 2030. And I think what would be interesting to know is how to get there for everybody in the public but also for the people. I think we'll start agriculture because that was what you mentioned is also a big part of the ambition going forward, but also the move that JOST did in the year 2020, expanding its ROCKINGER brands in agriculture with a much bigger #1 technology leader, the Quicke products and bringing it into the JOST family of brands. Yenny, you were with Quicke long before JOST acquired and has been with us since then. And maybe what would be interesting to know is how do you feel regarding JOST as an owner, what changed for Quicke, what are the opportunities? And how has the development been for the company and the brand over the past 4 years?

Well, I would say it's been a big deal for us at Quicke. I've been with the company since 2007, and we always consider ourselves as global in our footprint, we used to be present in Europe, in China and the U.S., and then we had global partners in this chain to supply the customers. But now with JOST, we have local presence in South Africa, in Australia, New Zealand. We have opened up the plant in Chennai in India, which is a key milestone for us to be able to win not only new markets, but also new OEM agreements in the compact segment. We have acquired a company in Brazil, which was on the agenda for as long as I can remember. So finally, we can take that off as well. So it's been a big thing for us. And as Joachim mentioned as well, we get this feedback from the customers that we have taken another step in that partnership with the customers that we are now really a global partner to them with a local presence that we can serve the customers with.

Also, Michael, maybe interesting would be what has Quicke -- how has it changed R&D? What has it brought and how that works together between agriculture and transportation to different business lines?

And maybe as a fun fact, my onboarding on 1st of April 2020, next day, I had my first PMI meeting with Quicke at that time. So that was really a cold start into a process that showed how cultural integration happens first, how the understanding of a new partner in team is showing the best of your own team is creating a lot of emphasize for excellence, you want to be perfect as the partner where you integrate a new partner and you want to be ready for that. And from a technical perspective, it's obviously from the first minute that you tap technology stacks that you get new knowledge for the synergies you are heading towards you see immediately that there is a huge -- that there are domain experts with a knowledge you can immediately integrate in your products and you start thinking immediately how can you use that for a benefit to the customer. And that happens from the first minute of integration. That's, I think, one of the big early values you get from that process from the very early first minute of discussion.

Thank you. Yenny, when looking at the development of sales, I mean profitability it's great. And all the investors know also that we have -- that continues to be accretive despite the debt that we had in sales in 2023. But a lot of questions that we usually get is what happened, why does it develop so fast and then drop in 2023, and a tiny bit and then we'll go into the future. How do you see that development and the reasons for it?

Well, the most honest explanation of that development is that post-COVID situation with material shortages on the market and also the global financial and political situation created an uncertainty in the supply chain, and there were more orders coming in than the actual demand. So there is an inventory on the market today at the dealerships, which needs to be sold out, so to say, before the orders come back. And we start to see that now, we start to see that the dealers are more positive for the future than what we have seen in'23.

At the end of the day, we are in a cyclical market. Agricultural and Transport is a cyclical market environment. This was in the 70 years in the past, and this will be 70 years in the future also. At the end of the day, with this nice company, we got EUR 120 million of purchasing volume addition in our company and this grows up in a total purchasing volume of EUR 600 million. So we became a big partner for all the suppliers, we have power on the market with this nice company in our role.

So looking into the future, cycles go down and then they go up. And the point is to phasing that potential. What are your ambitions? I mean we did discuss this in advance. But maybe with your own words, what do you see the potential for agriculture development going forward and then how to get there?

I see a huge potential still. First of all, I'm very happy to have this task to double the business line, right, in the next coming years. We are well set for that, we have so many ongoing discussions with OEMs right now and also with the R&D team and the product portfolio, the road map we have for the coming years, we already have more ideas and say, projects ongoing then what we can really so to say, tell about today. But for sure, we have been awarded for new products which will come back in volumes when the market comes back. Also in -- as Joachim said, in platforms with the OEMs when they become global, we already are a part of those projects for the future. So I'm confident that we have a very solid ground for the growth in the next coming years.

So maybe a bit of a question for the audience and for myself as well. When you say become one shops dealer -- one shop stop for dealers, what do you mean by that? What is the advantage for Quicke? And what is it different from today? And where do you see there the potential for organic growth, and we are focusing for now on the organic part of the growth before we move to the inorganic?

Yes, the one-stop shop dealers is something we have used for many years at Quicke, and it relates to the fact that when we if we put the OEM side, let's say, aside, then being a partner for the dealers for them to pull not only the Quicke loader but also being that supplier of other products, we said we should be that one-stop shop to offer all the implements and attachments to the tractor, but not only to the front loader also for other machines on the farm. So that is also development of all the implements and the wide portfolio we have today, and it's growing as well in the next coming years.

Okay. For geographical expansion, maybe where are the -- we now have food in India and one in South America. What are the steps there? And where do you see there the potential comment also regarding market share gains in those countries that we are now entering, as Joachim mentioned at the beginning.

Yes. If we start with India then, right now, most of the business is for export. And then as everybody know, India is a big country with also a big agricultural market. And when time comes, it's important to be present. So not only for what we see today, the say, export markets that we have out of India, we also see a big potential to grow within India and Asia. Moving over to Brazil. This is also a very big agricultural market. And so are the countries that are on the border, so to say, close to Brazil we are just starting up here, and we see a huge potential. We have also all the OEMs, which we're discussing with, we are supplying today. And here, of course, we will continue to supply existing and new products into South America in the future.

Maybe some -- how is the post-merger integration of a new company in Brazil ongoing. Maybe you can say something about that? And how is the product development going down there and the talks with the customers?

Yes. Let's come to the product straight away. I think we've just launched the new loader in Brazil. It was one of the effects after the JACSA investment and one of the key projects. And we are producing already after 1 year, the first loader in JACSA. So that, I think, shows the capability of the Swedish team when it comes to technologies and to implement those technologies in the regions. But also the eagerness of the Brazilian team of getting additional products into their plants, they have the capabilities, they have all the functions and all the technologies to produce those loaders. And I think it's one of the nice examples. Just like the plant in India that we've opened last year, a year ago, that was 1 year earlier. We were also able to implement that into 1 year. So for me, in terms of integration, that is a prime example where we can build on the regional organization that we already have, used the eagerness that the regions have to grow their business and combine it with the technology and the capabilities that we have in R&D and in the business line and to bring that together. Does that all happen automatically? No, I remember we had discussions at the beginning. This is not my business. Why should I really get engaged in that? But very quickly, if we were able to find a common growth there and all our regional heads, some quicker and some a little later, came to the point where they say, no, no, I see this as my business. And let's build that business together. And we're not arguing where it comes from. We're looking at the customer, we're saying the customer needs the support. And we bring it together between the local capabilities that we have and the technologies that come from the central R&D organizations and the business lines. So that, I think, is a great example of an integration. The India example of an integration of the business line ag into our organization. The localization in Brazil, a great example of really bringing JACSA in the people from Brazil into organization -- into our organization. And most importantly, the feedback from our customers when we go to existing customers, I'm not talking about the new customers now, but the existing customers of JACSA. When they said, well, we were really concerned what would happen if the company would be sold to a private equity or in the worst case to one of our competitors to know that they are part of JOST, again, that's why the brand is so important. I'm sometimes surprised myself how many people, even though they are in the construction industry or the ag industry, know of JOST. Our heritage is transport. But the customers in Brazil say, "No, no, we think it's great because everybody knows JOST, we know them, we know they are reliable. We know they are there." And so somehow that image that our products have reflect rightfully, I think, reflects on the organization and creates the trust that we can play with, with the customers and it creates their trust so that they can give us and they do give us new orders. So I think that concept has been working very nicely, and I'm always happy if it does. And if it doesn't work, then of course, we get engaged, and we're collecting some miles and fly there and have a discussion. And most of the time, we don't have to go there and convince people and to bend their arms to work together. Most of the time, if we talk about our customers and about a common business that's conviction enough and that's dedication enough, and everybody wants to grow that.

So you mentioned heritage transport, and that's good point to jump ahead also as part of your CEO function, you're also the Head of Global Transport at JOST. And it will be interesting to know how do you see the business side developing? You saw -- you also mentioned before in your presentation that is a more consolidated business to certain parts, especially the logistics and transport end markets. And how do you see the ambition and the potential also for transport for the JOST company?

Yes. Yes, as I mentioned, it's already more consolidated. So we cannot benefit from that effect that our -- with our customers, we go to give different countries and that it's new turnover because we are already around the globe. You find our products everywhere. And typically, even the further you are away from Germany, the higher market share we almost have exactly for North America. So to benefit from an underlying market is very hard. We will grow organically, mainly by new technologies by implementing technologies, camera systems, sensor systems into our products. develop new products that meets the needs of the market. And as I mentioned, we do that and Michael Fischer has a presentation on that with our own organization, but we also do it with technology partnerships that we engage in. And that is one of the big growth drivers. We constantly review our portfolio. I mentioned we have the widest portfolio in Europe, and we have a more narrow portfolio worldwide. We will continue to balance that. We will find the most attractive products in those -- in that portfolio and grow them. We will fix the ones that are not so attractive. And we still see a chance to increase in market share in some areas, especially in North America in truck. In other areas, I have to say, when we have more than 80% market share, it's hard to grow, and it would be stupid to grow by entering into a price war because that will not help anybody. There is much better to grow with new technologies and with additional products. So product development, additional products, technology, sensing technologies, camera systems, highly automated coupling, autonomous couplings, where we already have solutions, and we see the market in some applications growing rather quickly. That's the main growth drivers. And by the way, next week, IAA starts, IAA transportation in Hanover. And this will be a great opportunity to also look at the new products that we will be showcasing there.

Yes. So profitability was the second pillar that you mentioned and where we want to improve further. Of course, you already explained the difference between the on-highway and off-highway potential, but what else does JOST need to do also here to boost the profitability to continue to be flexible and resilient through the cycle. Where are the initiatives taking place also from operating point of view, maybe Dirk, if you want to talk about that?

We have to work on our flexibility in each of our plants. This is coming directly after our local to local approach. First of all, if we install management we say, you are responsible. You have to make your decision. So you have to make your decision within the region to fulfill customer needs. And if adoption of the construction is necessary, yes, it's a lot. If another way of transportation to the customer is necessary, yes, this is slow. The day-by-day business has to be decided locally. And after this, we are steering the flexibility of our environment. First, we want to make sure that we use standard machines, no special machine. I do not love special machine. Maybe a special machine is a little bit quicker. But 5 years later, they are much more expensive regarding maintenance costs. So standard machines. Second is qualified staff that the people know what are they doing. Third is a good and strong purchasing department so that we can push our suppliers in a better condition and that we can see that we can leverage our purchasing volume worldwide.

From the structure of the organization, are there changes that need to take place in order to achieve this growth target of 2 million revenues and higher efficiencies as what would need to change? Or are we prepared? How do you see that? All of you actually...

Probably I can start first and I love what Joachim is normally talking. He says to achieve the ambition that we have shown a couple of minutes before, we need to be an integrated company. That's somehow the slogan that once we have started to develop that new strategy and ambition Beginning of the year, we also launched to the full audience of the company. We need to be an integrated company. It has been only a couple of years now that JOST was a EUR 700 million business privately held is now a stock-listed company, EUR 1.3 billion, goal is to be EUR 2 billion with a worldwide presence with several end markets that have to be handled and to be dealt with. And that, for sure, increases complexity, no doubt about that. That complexity comes in our ambition with nice profits and shareholder value, but that also drives the need that we have to improve internally our processes, systems and so on and so forth. And in the meaning of why has JOST been successful in the past, and Joachim mentioned that and describe that with the JOST system and Dirk said it's local for local. That's what we need to keep. We need to keep that success factor, but transform the organization and to be able to serve that system, so to speak, globally and across the whole end markets that we want to serve. And for that, I'm a big fan of platforming. So what I'm working on with my CFO organization, and I will give a quick glance in my presentation later is we need to work on unified ERP systems. Just one example with all the acquisitions we did, he said, et cetera, we have now quite a number of 4 to 5 ones. For sure, that creates inefficiencies. We shouldn't hide that that's a fact. So even that is the potential of the company at the moment. We have purchasing processes, probably 4 or 5 approaches at the moment in place. And this is why suppliers, they can probably cheat on us. And we need to make sure that we work here on being better in the future so that we can leverage those potentials going forward here. So that ambition in terms of what M&A, what we're going to do, where we want to grow also. That also creates a lot of work in the company. And for that, it is important and Joachim somehow described that we have strong regions, strong business line management because that cannot be done out of no easier work. My favorite example is already with the acquisition of [ Crenlo ] JACSA last year, I think 80% of our staff is not in Germany. We are -- we are a German headquartered company, but we are not a German company. We are a global company. And there, we need to work a lot, and I think that's something we need to catch up over the next years.

So we saw when we were looking at the targets, both in agriculture and later in transport that M&A, of course, also plays a role in achieving those more than EUR 2 billion sales in revenue. And I think what's important to understand is what are the strategic criteria that we look into when we are looking at targets, what's important for JOST when looking at potential companies. And maybe let's start with that, Joachim, what's.

Maybe before we go there, I complement your comments about the integrated company because I think it's important for organic growth but also for inorganic growth. We've seen with the 3 acquisitions that we've done in the last 3, 4 years that it adds complexity. And but we've also seen the power of integration, integrating the purchasing functions, integrating operations, integrating IT, using a common platform for technologies, camera systems, sensing systems and so on. And we are preparing the organization for that integrated company. There's projects, unified ERP is one purchasing system, is another one. R&D is a big program where we create the sensor technologies, the systems technology, systems engineering capabilities in software development, so that we can integrate the same technologies on different systems because they have the capabilities to have camera systems unloaders on fifth wheels and on other products. So we use that integration. But last not least, it's also an HR topic. We need to be able to integrate the right people and the right talent into JOST. And that is important for organic growth because we need other capabilities that we've had in the past. We need to be more attractive for some capabilities. But it's also important, obviously, if we do an acquisition to integrate those people, right? And I'm very happy to have Yenny here, who is a prime example of a successful integration, I would say. She comes from Quicke. And she acts like she's been JOST forever and I think from a culture that has been a very good fit in the end, but it does not happen automatically. It's also a cultural fit that needs to be created. And that's why that HR would stream is also important for us in preparing that integrated company. And of course, we will build on that with organic growth and inorganic growth. And that was your question, Romy, sorry for the long into that.

That's with the panel. Everybody should jump in when you have something to add, please.

For us, when we look at acquisitions, of course, it is important for us that it fits to the segments that we're in. Agriculture, construction, transport, these are all commercial vehicles are used for those purposes. That's on our list of -- on our focus list. We like market leaders, we like market strength. It works very well for us because it works very well with the system where we want to create support for our customers. And if we have high market shares, we are typically able to generate the right technologies and the right results for the company. So we like high market shares and like branded products, products that are able to connect the power of our reliability at the user with the negotiations that we have with the OEMs. And you all know the OEMs, they have a fame for being very tough negotiators and taking advantage of the supply base. And I am in a lot of negotiations and Yenny is with the agricultural large OEMs, and they can create a lot of pressure that is true. But it's always a good feeling to know that they cannot just walk away and pick another supplier because if they don't have a quicker loader and they -- and the final customer wants a quicker loader or if they don't have a JOST fifth wheel and the final fleet has only JOST fifth wheels, in its fleet. It's a really tough decision for them to take us out of the program. So that's also -- and I'm not saying it couldn't happen if it becomes too bad, but we typically like to solve the problem, so we don't enter into that problem. But it's just a very comfortable feeling that the negotiation power is not 100% on one side, but there's also a hurdle on that side. And that's another reason why brands are so important for us. They create the opportunity to do push pool to work at the user end, which we call [ pull ]. They say, I want the fifth wheel, the fleet wants the fifth wheel from JOST. And the push where we go to the OEMs, and we have the capabilities to work with them. And luckily there, a bit of a deviation. They're increasing the hurdles to be their partner also. The requirements that they have on ESG, on capabilities on logistics, they're going up and up and up. And with that, they exclude automatically a lot of the smaller suppliers, and that's also why it's important for us to grow. And that's why we work on this global footprint, and that's why we work on that growth because we need to grow in relevance for our suppliers. And that's also one of the criteria when we look at acquisitions that we have that high market share that we increase the relevance for our customers. And what also works well with our products. And if we find that with any targets is what we call low share of overall cost. So a fifth wheel in comparison with the entire truck is not a high cost for the fleet. But if it doesn't work, it's as bad as if the truck doesn't work. So they are willing to spend a bit more money on the fifth wheel because it's in the end, it's not a lot of money for the right fifth wheel, for the right application. But as I said, if it doesn't work, is it if the entire truck doesn't work. And therefore, that is one element that works very nicely for us that supports the quality and reliability that we provide, and if we find that in a potential M&A, that's also one of the criterias that we really like. And then, of course, we want to enable that to get all the synergies in manufacturing, in logistics and in purchasing. So if it works similar and he can fully integrate it and we get the synergies out of that, that is also an interesting point that is certainly on our list when we look at M&A targets.

Interesting, right? Oliver and Joachim, they are looking for opportunities on the market and buying companies, and I have to work.

So now maybe this is the strategic criteria we look for. So the ideal target would fill everything but not necessarily all the boxes need to be ticked. What's important also to understand is how the financial aspect plays into that? And what are the things that counterbalance that and also very important for investors, in general, how do we guarantee that an acquisition can become accretive for the overall business and for shareholders.

Exactly. And that's for sure, again, my part, and we get this question or those questions. Very often when we do investors meetings and then for sure, especially Joachim, myself, we discuss what is important for us. You see on the slide on the left side, for sure. We need to do also going forward to achieve the ambition probably larger, let's call it, larger acquisitions as well. And there might be ones which are then from a value accretion, synergy realization really needed. For us it's important that we can realize so, the synergies with an M&A, let's say, on a midterm basis. Internally, we normally say the run rate after 2 years should be definitely accretive. And that we have achieved this with the Alo/Quicke acquisition, I will show a couple of slides later. But that's also going forward, definitely one of our main goals. On top, and Joachim has just mentioned the new margin corridor, which has a midpoint at 11%. That's the second important criteria. Those acquisitions, especially the ones more on the right side, and I will come to the buckets in a minute. They need to be able to be at that margin or within that margin corridor also on the midterm time horizon. For us, it's important, for you as shareholders, is important. And I think we have proven that track record over the last years is that we do those acquisitions and maintain a high capital efficiency, which is in one number, the ROCE that we are looking at it. And we have done that in the past, achieved that in the past. Again, I will also show the details in the afternoon. So we have set here the target that even with acquisitions, we want to achieve 18% ROCE going forward. The acquisitions, and probably put a little bit aside really technology start-ups like Aitonomi, Trailer Dynamics, but all the other ones, now for sure, they need to have an immediate attractive cash flow potential funding, et cetera, et cetera. It's the buzzword here and probably not directly being seen as a financial criteria, but we have put that here on list as well. And I think it was -- I think you described it Romy or Joachim is this is somehow to put it in brackets, so to speak, is the best owner principle. What does it mean? For us, it's very important that when we look on an acquisition that, it's not only that we acquire the business because there are lots of checkmarks and tick the boxes for the criterias above. We want to, at least to a high likelihood when we start those discussions make sure that from a strategic point of view, we are probably the best owner. What does this mean because that helps with bringing the organizations together, bringing the culture together. And sometimes, this is forgotten when we talk only about numbers like the CFO's, no, this is about synergies, et cetera, et cetera. The real risk most likely of a deal is bringing cultures and organizations together. That's at least from a time-wise perspective, something that's forgotten and this is very important for JOST that also the other side understands, hey, JOST is coming, but JOST is probably the best owner for the business, clear agenda, clear strategic goals. And together with JOST, we are probably more a healthier organization. I think that's -- and we are investing a lot in this communication also. So that's a little bit about the criteria. With that criteria our -- we have a dedicated PMI and M&A team working on M&A. I would say over the last 1.5 years that has again done another step in terms of profitization. How do we do PMI, how do we screen the market, et cetera. What we can say at the moment is, although for sure, we cannot disclose details, but as a generic M&A pipeline that we are looking at 9 targets with an overall revenue potential pool of EUR 1.3 billion and we can separate a little bit that into 3 buckets, what we say. We have a smaller one, let's say, 5 to 200 or 50 to 100, so let's say, the smaller one, where we say here, most likely the technology incubation is a major criteria. And Joachim mentioned that before, the 2 step ins where Aitonomi and Trailer Dynamics this year, probably Michael will touch on that point a little bit. So that's something where we say, okay, probably that's a little bit longer time horizon. Joachim mentioned that, but we are sure there is something coming up with that in terms of technology where we need to be in, et cetera, et cetera. So that's the duration for that. But definitely most likely going forward that will be the smaller portion, so to speak, of the M&A growth. Then we have a midsized pool, we say purchase price or enterprise value of around EUR 50 million to EUR 300 million, where we want to strengthen the regional positioning of JOST that can be in both business lines, by the way, that can be all the 3 buckets can be for both business lines and broadening product portfolio. I would say the Crenlo or [indiscernible] acquisition that we did last year is a perfect example of that midsized bucket, regional expansion and expansion of product portfolio. And also, we are not afraid by no meaning that we have to do potentially over the next years to achieve the ambition that we have shown before, 1 or 2 larger scale acquisitions. And this is also -- Joachim, again, you mentioned that a little bit, we need to stay relevant for our customers and scale in an industry where, yes, the margins are higher, obviously, than in automotive, but it's a matter. It's still a commercial product. So finally, it's about a cost benefit position. And with all the pressure that is upcoming, ESG, regulations, et cetera, et cetera, also JOST has to make sure that we stay relevant and that we achieve growth also for the purpose of scaling up our organization. And this is why we have opened that third bucket here as well. And you know our balance sheet, and I will give a detail later as well, we definitely have the firepower to do so.

Okay. I don't know if -- maybe we are good at the time to open the questions to the public. So that I am not the only one asking all the questions. I'm sure there are things I haven't touched upon that you want to know as well. So please give us a hand sign and let's start the Q&A session. Yes. Can you bring the microphones for others? It's easier like that.

One -- a couple of questions from my side. First is to do with electronics. You are coming from a highly mechanical world and all those new businesses that you're talking about, how much electronics do they need to integrate all the products, you always mention autonomous driving, autonomous docking, and things like that. So what's the pressure that you feel on your side to integrate more electronics? How much does that cost? And how can you sell it to your customers to have like a more integrated product? That's question number one. Question number 2 is coming back to the agricultural business. I was surprised to see on the slide called Opportunities To Achieve Profitable Growth. There was one name missing one, I think, a German company called CLAAS. Why isn't CLAAS on your list of customers there.

Just because of the space of the slide.

It might be that we didn't have enough space.

Yes. Well, thanks for the questions. And I'll ask Jenny to answer on agriculture and Michael on the technology, but just a few words. CLAAS, of course, is an important customer to us. They have bought the Renault agricultural tractor business and are, therefore, one interesting customer for us. They already buy the couplings for their harvesters, but the biggest potential is on tractors, but Jenny can elaborate on that a little bit. And on electronics, you're absolutely right. It's one of the areas where we have to develop extremely quickly and where we have to generate the critical mass of knowledge and the critical mass of auto products. That's why we do it across the business lines. We are looking at JOST modular system that can support applications for loaders, applications for fixed fields, applications for landing legs, and Michael will elaborate on that a little bit. But here, it is very critical for us that we also find the right people. Michael will talk a little bit about technology, but we have to be attractive for young engineers that are software engineers that know these technologies. And you are absolutely right that, that is one of the key focus areas for our development, and that's why we're not only focusing in Europe, but we're also working with our subsidiaries in India so that we can get the right talent also from other countries. But maybe, Jenny, first on the agriculture question in a bit more detail and then Michael.

It wasn't an easy question for me then because, of course, CLAAS is also an important customer. They should be on the list and many other brands as well, actually. So it's more space, but it's we could have had more, for sure. Today, it's not that no one say, which is not mentioned is still -- it could still be on the list.

We sell to anybody.

Okay. Thank you, Jenny. And continuing with the Mechatronics and electronics question. That is really a very good question, and it's a crucial point to our R&D organization worldwide. First of all, with the Quicke acquisition, we get -- we got a really huge technology stack on technologies, which is connected technology, which is real-time based technology that is available for the farmer when he leaves the tractor and goes into his farm office he has the data at the same very moment available in his office. So there is a lot of technology and the whole stack of technology, which is already very much matured in the agricultural business. And this helps us in an area where we had a blind spot on the transportation side. On the other hand, transportation is very much benefiting from our ability to support autonomous trucking. Nearly everyone on this globe is doing autonomous trucking sooner or later comes and shows up here because we provide the only solution to couple autonomously. And we also showcased technologies where we show that we are able to give to the virtual driver all position information that the truck can do without a driver of full proper coupling. We did that already with truck OEs. And both together -- the message I want to give here is that we have a strong tech stack on that with the support from Quicke and there is a huge potential for synergies as well already available. But you're right, that is only leading us into the future, but it's not bringing us to our vision. And here, we have not discussed yet the transformational effort in the industry, be it agriculture or transportation, our OEMs have to do. They have to do the electrification of their vehicles. At the same time, everyone expects Level 4 driving on the road next year or so. And reality is that we will do it together on terminals, on yards, on fenced areas, on operational design domains where we have the full access to the safety, where we have full access to vehicles and be sure we are deep in that discussion with the relevant autonomous companies already to learn a lot from them to understand what can they do on their own and where do they need support. And altogether, of course, leads us into a position where we well understand what we need in the future. We spent during the last 2 years in our total R&D budget, I would say, in both years, more than EUR 4 million on mechatronic development, on advanced development in total and that will be a continued process. And so far, I have -- I mean the lucky position that the Board always asks me, Michael, how much money do you need to do your mechatronic developments and to provide the solutions for the customers. And from that point on, where we also work with Aitonomi. Aitonomi is one of the leading brands of autonomous transport in inbound logistics. I will talk about that later when we come to Trailer Dynamics. We also tapped 2 technology leaders in their domains be it about electric drive, but also about autonomous driving, and that is helping us a lot in knowledge transfer and we cannot invent everything on our own. So collaboration, co-innovation will stay and will remain an important part of the future because to me, R&D transformation means that the changing technology is changing faster than the durance of 1 project. So if I start a project and need a different technology at the end of my project, then we know that we are in transformation. And we cannot do everything with our own force. So we also have to be smart and to learn with our partners how to get the best benefit from all these knowledge, which is available for us that leads into more collaboration. And besides these 2 companies where we already engaged with investments, there are much more where we are really seen as a market leader to bring these products into the market, that is our contribution and these start-ups or small businesses with very dedicated experience, they bring their technologies and we bring it together in new products. That is the way how we deal with it and not talking too much about future technology hubs in maybe countries like India, where we develop at the moment, concepts how to drive that forward to not have every resource about and not every talent about mechatronic competence and at the end in Europe.

There's another question from the audience, yes.

So the mix shift to off-highway, what is that going to do with your exposure to aftermarket and spare pipes? Obviously, that is one of the attractions of the business model. And going forward for the next 5 years, is there going to be a different strategy or a way of organizing the aftermarket and spare parts business? Or is that going to be similar.

Yes. I think we have a similar mix of aftermarket in agriculture and in transport. So we do not expect a big shift in the percentage of our aftermarket business when we grow in agriculture more than in transport. And I think was the first question. We -- I expect that we will gain in aftermarkets just by size because the more relevant we become with the installed fleet and we think it's all equipment. Our aftermarket potential is growing. And we see it, the nice effect that we always see when the market is going down, we sell less to OEMs, and we still keep selling more or less the same to the aftermarket because the utilization of the product is the same. And therefore, it has the nice effect that it dampens the downturn because our aftermarket share goes up. And I would expect that over the coming years, with the wider portfolio, with a portfolio that is more technological and needs probably also some upgrades where we can install upgrades of camera systems on existing loaders, upgrades of steering systems to existing products that our aftermarket potential is growing a bit more than our OEM business.

I have 2 questions. One on sort of the estimated M&A volume you think you'd be able to spend over the next few years and also phasing and what kind of multiples you're willing to pay? And then secondly, when it comes to capital allocation in perse, what amount of capital percentage-wise is fine, do you think will go into organic growth investments versus M&A versus distribution to shareholders?

Was a bit hard for me to understand, but if I'm right, it's about the volume of M&A within the next years. That was the first question, so to speak. I mean, the numbers that we have shown here and they will not happen all at once. So for sure, at the moment from, let's say, a high-level calculation, from what I would say we would be able to stem an acquisition of around EUR 400 million, EUR 500 million. We are not afraid at all of this going forward, so we are then very committed to execute that M&A strategy. That's for sure, especially, again, it's not all happening at once. We have a clear target regarding synergy creation going forward and then deleveraging as well, coming a little bit to your capital allocation. I have definitely something to talk later this afternoon about capital application. But what you can hear from the strategy is pretty clear, it's first accretive M&A. That's definitely the top priority of our list. We are committed to grow. We need to grow to stay relevant. And that's for the reasons that Joachim described not possible with organic growth only. Now we have good ideas. We have lots of opportunities for JOST, but we need to also do M&A. And we are preparing and have prepared the organization to execute on that. Secondly then is if we have done an M&A, we are, and we will also, again, show that a little bit later. We have done that after the Quicke acquisition. We have a strategic leverage corridor between 1x and 2x EBITDA. So whenever we do an acquisition and are above that leverage corridor, we definitely first want to drive the leverage down into that corridor. That's in our industry, we believe, relevant in terms of being secure that we are an investment-grade company. We have our lenders here as well. We want to have low interest rates and so on and so forth. And then it comes to dividends and potential other instruments. So it's first M&A, second deleveraging.

And could you maybe add something on the multiples you're willing to pay?

That's something we look on a case-by-case basis. So we don't have a dedicated -- and Joachim you can add on this dedicated factor in mind. For sure, we don't want to pay too high, but it's not the case that we are looking for, so to speak, cheap M&A. That's not our goal. We want to have a strategic fit. We want to show -- we want to see that the business case shows accretive potential within 24 months. And we want to be the best owner for the company. I think in the Quicke acquisition, the multiple although I was not there, it was around 8, 9 something like that. With the Crenlo acquisition that we did last time, it was around 6.5. This also has to do something that the valuation and cost stack has come down. So that's definitely you can see a range when we are comfortable with. But again, finally, is it 7, or 8, or 9, for us, it's important that with the business case that we then stringently execute, it's accretive, means post synergies, the valuation shouldn't be higher that we are, at the moment, value that.

Yes. Maybe in addition to that, the -- that slide kind of shows it too. It depends on the size. If we have size more on the right side, absolutely. It's important to us that we don't dilute that we have an accretive M&A. But if you look at technology incubation, it's not possible to buy at a 6 leverage. If we need the technology, then we will be able and for that size, willing to pay a much higher multiple, if it is the right technology for our business and if we need to enter into that technology. So it depends really on the buckets that we're looking at and on the strategic relevance. But if we're talking about one more on the right side then of course, those are all true points, and that's -- and we consider that. And as you mentioned, after 24 months, we wanted to be accretive in 2 ways: one, earnings per share, but also on the margin, it needs to have our -- to be within our strategic margin corridor after the synergies.

Following on with this question, maybe if you could give us some measure in terms of payback you are aiming for in these acquisitions or harder return because, obviously, all these qualitative aspects are quite good, and it makes sense. But I guess that when you are pursuing an acquisition, you are aiming for a clear measure of returns. So if you can help us with that, it will be very helpful.

You want to...

Not 100% sure, but from a direction point of view, so when we do an acquisition, for sure, we do a full business plan and valuation and it's clear now we are -- we need to achieve an internal rate of return, which is clearly above our average cost of capital. So that's one important KPI that we're also continuously tracking after the acquisition. We are also tracking the ROCE. So is the business capital efficient, so to speak, going forward, not diluting. We also see this after the Quicke acquisition. In terms of a shareholder point of view, and I will show later a slide as the outcome out of the Quicke acquisition is we want to make sure that with that acquisition, one example, if you compare the sales contribution of the acquisition versus the adjusted EPS contribution to the total company, it should be accretive. So the share of the adjusted EPS from the acquisition should be higher than versus just the sales add on. And the adjusted EPS, and I will talk about that later as well, going forward will be the key measure also for the dividend ratio. So there is then a clear correlation and link to that KPIs and measures that the shareholders will participate on that accretion, so to speak, that comes out of that.

And what's the cost of capital you are using these days to measure acquisitions as a harder return. You mentioned before that you are looking for acquisitions that are obviously the rate of return are above, is above, sorry, your cost of capital. So I would like to understand what harder return are you using these days?

18%.

18%. So you are looking for a...

Definitely, when we do an acquisition and for sure, there can be a phase until you finally realize that which Joachim also mentioned that 24 months, but that's our goal. Yes.

Are you seeing increased competition from Chinese companies in markets outside of China?

Very limited, very limited. We do see it indirectly through our Chinese customers. We've -- in the past, when we look at the Chinese OEMs when you talk about trucks, the Chinese OEMs for their export vehicles, they in the past, they were not relying on exports. They didn't have to because their home market was so healthy and was growing that they were just happy to grow with the home market. Now the Chinese local market is coming to a standstill almost. They want to continue to grow. So they're looking outside of China. They're being more aggressive in markets -- in Asian markets outside of China. We see a lot more of these competitors entering Indonesia, Thailand and other markets, but also Middle East and Africa. So you see more of these Chinese OEMs operating and trying to sell in those markets. In the past, that was always a benefit for us. It was very little, but it was always a benefit because typically, they would use a fifth-wheel on these products because that's what the markets outside know. Now we do see that they are for the local production in order to reduce their costs that they are more aggressively bringing in other Chinese competitors and that they're trying also to take these Chinese competitors outside of -- in their export vehicles. So we see that to a certain degree. We've always -- so that's for fifth-wheels, but not -- I wouldn't see that it's a real change. Up to now, we're still benefiting from the fact that we have the brand recognition in those markets outside of China and that it's very hard for them to bring in other fifth-wheels because the customer will feel that he is not supported with those with fifth wheels. And as I said, for the customer, if the fifth-wheel doesn't work, it's as bad as if the truck doesn't work. So we're still benefiting from that. When you talk about trailers, it's a bit more complex. We've always had one big Chinese landing leg suppliers being very aggressive around the world. We were able so far, and we will continue to be able to fight against that. As I mentioned, in North America, we don't barely see them at all. In MENA, Middle East and Northern Africa and in the African countries, we do see them on fairs. We do see them in competition with us. And of course, that is a healthy competition that we've always had. I would say that the pressure is probably a bit higher now that the home market is not growing the way it was in the past, but the limitations that they are fighting against are also still intact. And it is a healthy competition, and we have had that competition for a long time. And I'm sure it will continue to be a competition. For us, it's important that we bring our costs down that we are with the customers that we convince them, but that's almost daily business, I would say. So yes, to a certain degree because their home market is being limited, we see them go out. But there's also limitations. They become more expensive. They're not as price attractive as they have been in the past. Also, Chinese companies now have to make money, in the past, in their growing phases, it was not so important for them. So we see them more, but we don't see these obnoxious behaviors that we were seeing in the past where they were just strategically trying to enter at whatever the cost is. That was not sustainable. So they are operating more sustainable also now.

Can I just ask one more. Could you provide some commentary on EU and U.S. truck trailer markets?

Say again.

Could you provide some commentary on maybe like how truck trailer markets develop over short, medium term?

Sure. We've had similar to what Jenny said about the agricultural tractors, we had in the truck market more so than the trader markets, the effects that in 2020 with COVID, they had their plants shut down for 6 weeks, 8 weeks, 10 weeks, and the trucks were still operating. Everybody need toilet paper and we were driving toilet paper from left to right. And the trucks were operating and became older and were worrying, but they were not produced at the same amount because the plants were closed. 2021, they could not produce the entire amount of trucks in North America and in Europe because semiconductors were not there. There was a shortage of semiconductors. We all remember that was a limitation in 2021 and 2022. In Europe, we had the limitation that a lot of wiring harnesses came from Ukraine. And with the beginning of the Ukraine conflict, that supply chain was not capable and so there was also limitations. So in 2023, last year, all that bubble was the ability to produce all those trucks was there, and they produced like crazy, and that's why we are comparing to a very, very strong 2023. And everybody had 2 years, 3 years of history where they could not get what they wanted. So they all ordered like crazy, and that's why we right now have the downturn. It happened earlier in trailers. It typically happened earlier in trailers because it's the more dynamic market. It has less investments, less structures, the processes, the supply chains are shorter. So the processes are much shorter. That's why it reacts -- the trailer market reacts much quicker to the market, to the actual market than the truck market. That's why trailers went down mid last year and trucks only went down beginning of this year. We see now and from the European OEMs, we get no positive signals in terms of an increase in markets where they say, okay, this is -- we now see a big boost. What we do get is from our people in the field, the same response that we also get on agriculture that the dealers are more optimistic than they have been a while ago. It will take a while until that goes into the production and into the call-offs that we see from our OEMs. But I see that as a sign that the market is bottoming out, that we are more or less at the bottom, and that from now on, we will continue with that level. That's what we also see in the call-offs. We'll now have to see for the remainder of the year after the IAA and after they all come back from vacation, we will then look at the call-offs that we get from the OEMs. But I don't think they will adjust up. I think we will continue to see a very low level for a while. And then next year, there will hopefully be a bit of an increase on that low basis. So we think from everything that we hear from the market, it's bottoming out. Not a lot of hope for the rest of this year, but we should see some more activity in the next years. The utilization of the trucks in North America is still very high. In Europe, we do see a little less traffic. We see that the industrialization, if you want, is actually happening a little bit. So high energy prices and other issues do have an impact. But still the transport is on a much higher level than the actual sales. So we will benefit from the fact that transport still occurs even though the level is a little higher.

We do have to stop now because we're a bit over due time. There will be a second opportunity for Q&A in the afternoon session, and we will have launch together. So -- and we will not run away if you come to ask us questions. So that's also another way to get your answers. With that, thank you very much for your interest and for your attention. Thank you to all of you for explaining how to achieve the goals for 2030. And now we will move outside to see a demonstration of our products live before we have to break for lunch.

Okay. Ladies and gentlemen, it's now my job to take your safe back from lunch break to the afternoon session. Thank you very much for your attention. And I also have to care about my voice. So please excuse if my voice is getting a little weak this afternoon. My presentation today is about advancing technology. And I would like to take you on a journey. What we at JOST do it in the JOST system to develop our products into the future. And starting with that, I think it's quite clear to everyone that commercial vehicle industry, transportation industry, but also very much the agriculture industry is about transformation. And transformation means to me in R&D, we are always working against a certain gradient of things changing quite fast. And the things changing at the moment are the vehicles in transportation, it's about electrification, it's about autonomous and the same in the business line ag in agriculture vehicles, it's about smart farming, smart vehicles, electrified vehicles, and we see all that when we remember the last Agritechnica and when we remember the last IAA, we are well prepared, and we are also very keen to see how this evolves in the upcoming IAA, which is in front of the door. And we will see how this gradient is really very steep into these new technologies. And we had a good question this morning about how we deal with that. And we learned from the startup world that ambidexterity is about doing exploring and exploiting of business at the same time. But for us, in a corporate world, that means that fitness and growth happens at the same time. We can never ignore fitness of our existing products because most of the future technologies are based on our existing products. And our 4 main tools to do that are road mapping. That is a very resilient oriented topic. We need to know how we can contribute to the transformation with products, with future products with a strategy implementation and at the same time, being always able to adjust this road map to the current situation. Not talking too much about VUCA or Barney or however you call it uncertainties, but we have to be prepared for that. And at the same time, we have to be resilient enough to do the right things at the right time. Open innovation. We cannot do everything on our own. We have to rely on partners, we have to collaborate, and we have to find partners thinking in the same direction. And with open innovation, we learn a lot from others how they see the world. It's not only developing new products. It's also finding ways of common sense, what is the future, what will the future bring to all of us. And when we look into our portfolios, we see what everyone contributes then, and that gives us a clear picture, a clearer picture where the future can be. It has a lot to do with culture and with diversity. Intellectual property, very important for JOST. Historically, JOST is always strong in IP and strong -- and JOST has to be strong in IP, especially in times when transformation is very fast because now we pave the road for our future products. And we do a lot to foster our IP, to update our IP, refresh it, have new big points in the technologies, and to consider it always from an application point of view. Technology-wise, we cannot cover everything. But in the very application, in the domains where we are with our customers, we have to be prepared with IP. And the same with standardization and regulation. We are working in many committees worldwide in China, in U.S. and in Europe to shape regulatory future frameworks. And that is also very important. Imagine a product, which is maybe the best technology, but is not allowed to be on the road. So we also have to shape regulation. And I will show you a good example later. According to the 3 horizons, fitness and growth and also the renew of technology, we can also project our organization on that, fitness happens in the regions, fitnesses, having an update of a product, having one more feature, having one more function to a product, and this is what we do in the regions, growth is new projects. It's a new product. It's a new product baseline and a new product family, and that happens in the business lines. And renew means to us having new technology available for the business lines and also for the new products. That gives us also our time horizons to be ready for the market. That's our global footprint where we do that with our teams. Global R&D at JOST is a very diverse organization from U.S., South America, India, Australia and also China, we have R&D teams who are very strong in the local markets to understand the local customer, and that is also paying into our market intelligence. And in Europe, we have strong teams in Neu-Isenburg and in Umea, for example, maybe the backbones for the business lines, transport and agriculture and some more locations where we have different teams with different domain expertise. And from all these teams, we get the application knowledge and put it then into new requirements, new product ideas. And that is also our -- that's guaranteeing us that we have diversity for innovative solutions, you cannot plan creativity, but you can plan how to organize innovation in our teams, and that is what we do quite successfully. Our R&D, D&A was already mentioned earlier by Joachim, from our perspective is about safety, safety, safety. Our products are safety critical in many aspects. And we are every day happy, but we don't think about that this morning, we have not seen a trailer without a truck somewhere at the road. So we rely on these systems to 100% efficiency. These products, we are providing to the market. They are all helping our customers to earn money. That means they have to be efficient and to provide the solution to the customer, he has to have for his job. Reliability is underlying function that is, of course, expected. But to give that day by day means a lot of commitment to the customer by service, by spare parts or by the availability for discussions to improve the product according to the customer requirements. And at the end, we also want to provide comfortable systems to the driver and in the future also automatize systems. And we see comfort was not too much of a topic 5 years ago, but the driver shortage is pushing also the argument of having comfortable systems, comfortable products for the driver. And it makes a difference if a driver has KKS in his truck or not. And we have seen cases where someone is knocking at the truck door to ask who is your boss? Can I drive also for this company, and that is what we see that the driver who was just working on a workplace, the truck is a workplace, has now also a voice in the decision which vehicle and which systems are purchased from the company and providing new products and services to our customers to generate additional revenue streams in the on- and off-highway, that is what we have in our mind, in R&D, day by day because that makes the difference. And that is also a change. When we look back a couple of years, it was more or less, we have a new feature. Now we should think about to whom to sell, to what price and where, but that changed mainly because today, we are not talking about a feature. We are talking about an end-to-end process, and we are talking more about how we can provide at the end, a revenue stream to our customers. And to implement that, that is what we are heading to with our innovation strategy. Now I don't want to talk too much about products and product families, but I want to frame for you is what technologies mean around these products. And we are not only talking about the product. We are also talking about the services, which is a very important part of some revenue streams when you have to support your product in the market, you have to create a pool. You have to organize that the customer is demanding a product from the OEM and to have products then in a larger scale in the market. We -- our technology stack around that means the control systems we have, we can refer on. It means the sensor systems, we can rely on our visual systems. We have in place, the hydraulics we are using in different applications. the methods of development and also the tools we are using for development. And tools, it does not mean a wench. A tool in our case, means tool chains with digital methods, for example, simulation, product life cycle management, starting with the CAD model and going until a digital twin at the end of the lifetime of a real product in the field. And how could I not start a presentation about products without AI. So that's the reason why I put this slide in here. What we are doing, we care for our people and also for our future implementations about AI literacy. So we are looking how we can make our people familiar with the use of AI in a reasonable way and what we are doing at the moment. We deploy a system that is a technical customer service chatbot. And just to have one question here, is the question of a service person, a customer reported a problem with play in the fifth wheel, coupling, he uses the JSK37C, how can I help him with technical advice as first level support. And then the large language model refers and gives as an answer, check for excessive play, inspect the locking mechanism, replace worn components, and then he gives all the part numbers of our spare parts. Now that is a application we are growing, and we feed in thousands of pages of our product documents. So we are able to retrieve prompt for answers to understand our product, to support new people getting into the product, learning about the functions of a product. And with that first success we have at the moment, of course, we plan to reshape that over time. What does reshape mean? When we reflect the answers, we find some answers are not really satisfying, but why is that? Because the documents behind were always thought from a product perspective and explain what the product does. But what we know now, we have to adjust the documents that the product explain the customer, what the customer can do with the product. And that is a different way of considering the product documentation. And that is what I mean with reshape, we look how that reacts with us, how that resonates with us and how will that influence our future development and also our documentation of products. And finally, of course, invent means we can then consider how we use it for new business models, for new services, or maybe for new products. So it's, for the moment, more about our literacy working with AI and overcome the distance between the people in the business application to learn with it and do it in a safe in explainable and in an ethic way. And that is also very important. We don't want to have discriminatory answers or anything. So we also have, first, to make sure that all our answers we get from the systems -- from the system are really helpful from a technical point of view and no nonsense. Looking into our operational domains. I mentioned that earlier, it's not anymore that we can say, okay, a truck is a truck, a trailer is a trailer, and that's our business model. We have to understand the operational domains where our customer is working with our product because these are the value pools, there we earn our money. And that's the reason why, for example, on yard, be it a farm or be it a container terminal or a distribution hub or is it on-highway, in the cities on the highway or is it off-highway, how I would mean it off-road or non-road applications in mines, in -- on the field or in construction projects, these are finally the domains where our customer has the value. And therefore, we have to think our products always from a domain perspective. The product portfolio, of course, we can allocate it to the business lines, transport, agriculture, that's fine, and we do that. But what we also from day to day check is if there are new lines, we connect between the dots and that is another view of how we think and how we look into additional values. How can we help from one product line to the other. I will show you some examples. For example, the King Pin Finder, you have seen that live at the vehicle. And the values from the King Pin Finder are clear, better visibility for the driver. It's a product where you have 100% acclimatization when you use it the first time because from the first minute, you intuitively understand the product and you know exactly how to use it. You don't need much explanation. Maybe that was not the most expected product, but if such a product is in the market, it has to be from JOST because we are a market leader in fifth wheels. And that's the reason why we have to show up with this kind of product. And we know it's not so simple and not so easy to put a camera in the exact position where we have it at the moment. And we don't care about cameras at the rear of a truck. There are 100 positions where you can put a camera, but there is only one camera where you have the full side on the full coupling process. And this is exactly the one we used here. And that is our approach to make a difference for the driver. Because if you have a camera at the rear of the cabin somewhere, you lose sight to the King Pin from 3-, 5-meter distance, and then it's -- you're as blind as you were before without a camera. And that is what makes the difference for us. And this is how we can create the value. We cannot compete with camera manufacturers or with camera providers selling that in the spare market. The only way we can use the value or make the value out of it is using it in our core product. And cameras are a thing for us. We started in 2020 with the first SOP of a Drawbar Finder camera close to a towing hitch, low-coupler towing hitch for certain vehicles, which are also doing blind couplings with tandem trailers, for example, 2022, we showed up with the King Pin Finder concept on the IAA. '23, we showed a camera system for combined harvester to also do blind couplings. You know maybe these big harvesters, they have their own trailer for the spindle of the combined harvester, and they tow it to the next field. And this poor driver is on his own, and he needs support to do that. And that is what we provided him here. And now at the Agritechnica this year -- sorry, on the IAA Transportation this year, we show a towing hitch with another Drawbar Finder camera. But this time, we also be able to fulfill R158, which is the real -- the reversing drive regulation for vehicles. So with this camera in this position, we can help the vehicle builder to use the camera also as rear drive camera according to R158, and that is a new level of safety for the truck operator. Switching to domain implements. Implements are like Swiss Army knives for a tractor operator or for a telehandler operator. However, they can be for a very specific purpose, but also for a very wide range of applications. And our goal in R&D is to provide implements which are beyond the tractor. We have so many opportunities for more implements in different markets, be it infrastructure, construction or different applications showing up in the future on a farm. And the ability, which is important here, is about how to handle these variants, how to configure hundreds of implements with different details, with very different applications and to have, at the end, a smooth customer experience to have a implement as soon as possible on his farm before the next harvest or for whatever reason, it is always urgent in the farm. And that is why implements are so important for us because here from R&D, of course, it is the ability to understand what the next implement should do. But it's more of that. It's -- you have to be ready with the next trade show, you have to be ready on the next market, at the very day when you need this part and you -- and therefore, we have a very straight development process, having always the pipeline full of implements and being able to provide it globally to the next relevant trade show. And that's what [indiscernible] requires us to do because that is really urgent, that's a seasonal business, and you cannot come 3 months later with your implement. It's ready or it's done. Quicke loader, in this case, V-Loader; it's a story for itself. But the general story here is we have a loadee for the Brazilian market under 12 months from the deal with JACSA to ready to market within 12 months after PMI. We could immediately start with the project, and we have the localization project ready within that 12-month period, and we are now ready to have the best solution for the South American market. Putting one more market on that slide, you already know, shows some more overlaps. There are overlaps between transport and infrastructure, and there are also overlaps between agriculture and infrastructure. And that is what we want to use and what we can tap as further value pools in the future. And one very simple example, there is a very robust heavy-duty suspension from our colleagues from TRIDEC, and that's really cross-domain application for agriculture, for construction, but making that available then in very quick time for regulatory change to not overcome the [ 2.55 meter ] for the road application to develop such a fitness product very fast and have it ready for the market. So you see these trailers on road construction, you see it in the Agricultural business. But you also see it on the road for the contractors, for example, energy farmers. And as I mentioned earlier, the QCS, as a Quicke Control System, is a huge tech stack for communication, for cloud applications and for availability of data for the farmer directly from the tractor into the farm office next minute. The data are available, whether you do weighing of your loading goods or whether you have additional accounting of your number of bales you are loading. And all these kind of information is cloud-based, and it's a very strong technology stack with telematics for all applications in Transport as well. That's a typical product that is hardware-based but software defined. And BusLink is another story inside transport and logistics for the public transportation. For us, it was all new product, a new product line, if you want to have a system ready for articulated buses, including the BusLink structure, the bellow and all the wirings and harnesses that are going through the bellow, like, for example, high-voltage energy wirings for the electric bus. And there is a huge increase of knowledge, the huge [ wealth ] of experience making for us in R&D to get that work done and to get that satisfying to the customer, and that is where we are at the moment. And of course, regulatory pool will organize that this market is changing more and more then into electric buses in Europe, and we are ready to follow that transformation. KKS, we have seen that already. I want to jump over that. I just want to mention one thing. We have not thought that reefers, cooling logistics are interested in KKS, but the market showed us that. And for example, pharma, surgical logistics are now changing their way of doing medical transport because they all have to care about their drivers, they have to make sure that the driver is driving and not waiting for the next load. And that is changing the logistics behind the reefer transport. And that's the reason why the market is interested in having KKS also for these very dedicated vehicles. And electrification, another big story. It starts small. At the beginning you understand, okay, there is not much space between the battery packs and the trailer, and you have to put in a fifth wheel there. And you learn that architecture of vehicles are really transforming slow, but then always faster and starting with some modifications in serial OEM vehicles to all new vehicle concepts coming from start-ups, coming from other companies you have never heard before with new architectures of trucks in complete new and very dedicated electric applications. So the architectural impact has a -- even if the market for fifth wheels would be very stable, nothing changes, but it changes anyway because the architecture of the vehicle is changing much more than we would have thought in the beginning. But that's not all of it. On the trailer side, in our core business, we also start looking into ECO and functional design like aerodynamics. There is, of course, a need to improve the trailer efficiency, not only the truck and how good the truck is, the trailer has to contribute to the aerodynamics and to the efficiency of the vehicle. And with that, we see from a theoretical point of view, there's a drag coefficient possible on a trailer or on a vehicle on the level of a good passenger car in principle, but that is not where we are today. That is the upper side. At the moment, we have a huge drag coefficient on a truck and on a trailer. And we jump into that without any background, but we have no problem in understanding that physical background and start developing aero design elements. And when you see from the lower vehicle, which is the basic reference vehicle, to the upper, you see how these tails of back pressure loss are decreasing. And the current development stages are even better. So we are really able to provide part of solutions for aerodynamic trailers. And understanding that business is the first part. That does not necessarily mean we will show up with aerodynamic products, but we will show up with products who are beneficial for aerodynamic products. And this is affecting our axles, our landing gear and everything we mount at a trailer. So that is also an upcoming topic for us. And if that is not enough, to have sustainability on transport and CO2 saving potential, we will continue in being faster. That's the reason why we engaged with the investment in Trailer Dynamics because here, we see the purpose of helping the truck with driving the trailer. So propulsion system on the trailer is new to the market. They do it with a very dedicated and with a very committed way. And we help them to do their journey. And on the other hand, of course, they help us also because we also do -- electrify the self-propelled trailer axle. We will show that on the IAA. So what we did is the system that is able to help the truck to propel the vehicle on a low level. We did it very low to support. Electrification on a trailer is different to the truck because if the truck is under-electrified or under equipped, the truck will not move the trailer. But whatever we can help with on the trailer is always supporting the whole product carbon footprint balance, and that is very good to the whole system. So we -- if you are interested, we can continue that discussion on the IAA. We will -- we are proud to present a trailer system with self-propulsion with a control system and with a battery energy management system to propel a trailer. And with Aitonomi, there is another partner we worked together, and it started with a normal market supply chain. So Aitonomi asked us for components to help and to enable their truck and trailer to get autonomous. And they are operating these vehicles with Coca-Cola on inbound logistics. And what we provide is the full system of KKS fifth wheel, KKS trailer connector, angle sensor, Modul E-Drive, so the electric landing gear and the steered axles with axle steering system. And that is only to provide our systems into a pragmatic automated system, and that is running in operation at Coca-Cola. There's an [ old film ], but I will jump over that. The main information is already there. And Automation and Smart Systems, now outlook into the future. Of course, there are many opportunities how we can provide support to the transformation from the agricultural vehicles. Starting, of course, with our current QCS, our current Quicke Control System going into more automatic vehicles. I cannot show you here the real pictures, but I can tell you, we are working with very high-tech companies on integrating [ leaders ] into their automatic vehicles. And that is also at [ taps ] where we can get a lot of knowledge, where we learn everything about automatic agricultural systems. And of course, with this information, we can provide -- we also go into a strong direction of smart farming. And the same is true on the Transport side. Our KKS connector, you have seen that system. You cannot overestimate the value of it if you are a frequent coupler. But of course, when it comes to automation of vehicles, we also have to consider fast Ethernet. And there will be a development in the future, where this connector is also able to transform Ethernet signals to have cameras on the trailer, to have complete view of autonomous vehicle to get 5 or 6 camera pictures from the trailer into the truck. We work on container lockings, which are able to do it autonomous. There is no driver necessary to lock the container when the container is put on the chassis, so we can also help to smoothen the process in the terminals. And over that, of course, further automation of vehicles, autonomous coupling process, based on a KKS connector, is what we are looking into. And what I will show you now is a very new concept of a system we will, in the next step, put on a truck to provide automatic coupling in a different way, not because we don't believe in the KKS as it is today, but we want to overcome the restrictions from KKS. And that means we have to reduce the [ investment ] on the trailer, and we have to put the [ investment ] on the truck because the truck is already a very expensive vehicle on a terminal, and we have to reduce the value in the trailer to scale up the numbers of trailers who are equipped with KKS. And to way, how to do that is not something I would like to show you in a quick video footage. I have to explain that this will not be part of the presentation afterwards. So we don't want to share this film later on in the material because this is very new to us, new information, and we don't want to share that already in the market by today. So I will show you that video, and we will not provide it with all the other material. Thank you very much for your understanding. [Presentation]

Leveraging global operations. As I mentioned already, we are living in a cyclical world. And therefore, I need flexibility in my production facilities worldwide. And doing this means that we identified 5 fields of actions. The first one is the global footprint. So regularly, we discussed is our footprint in a proper way. Does our customer love the facility? Do they enjoy if they get parts from us or do they only discuss about pricing and so on? Flexible and asset-light production. We invest roughly 2.2% to 2.9% of sales per year in our CapEx. So what kind of machinery is behind? As I said, I want to have asset-light production and I want production that is able to copy worldwide. So this is the reason why we're talking about of standard machinery. In one facility, we get a new generation of machinery in. We test it. And if it is running well, then we can copy it into the world. This is the idea behind. Skilled staff, a point that becomes more and more interesting because we have a lack of people in the future, demographical change in the future. So we have schooling and training systems installed already in Brazil, in China and in India and since a few weeks also in Germany. So we have to start to train people in Germany. Time is gone that a lot of people are willing and waiting, working for JOST. We have to train ourselves, our staff. In [ Röthenishumbach ], we started in these days with 7 people. The ability to rethink. Day by day, I ask my team, are we in a correct manner? Are we in a correct mainstream? Do we do our work good or not? What should we do to become tomorrow better than we are today? Tomorrow, must be better than today. This means that we ask is our welding process up to date or not. And we will see an example later on where we gain welding speed by 20%. And last but not least, automation and efficiency. Due to the fact that we will have a lack of personnel in the future, we have to start with automatization processes. But I -- personally, I prefer low-cost automation, even though we are working this way, and you will see the one or other examples. What I'm talking about in general, I'm talking about 24 facilities worldwide. As you see on the landscape, the blue stars are facilities for the Transport and the orange stars are our locations for Agricultural. Are we well sorted in the world? I would say, yes. We are in North America, South America, Europe. We are well in Australia, South Africa and so on. 4,500 people are belonging to these facilities. And we are working with a local-for-local approach. This means responsible management teams in North America, they have to decide what is to decide day by day for their daily business. And just only if it comes to investments, just only if it comes to looking for opportunities on the purchasing side to have a scale effect, then we are starting with central processes. This is the idea behind. And this makes us quick in the decision-making process. And this makes us robust even when there is a crisis. For example, a crisis like Corona. JOST was able to deliver what the customer asks for. No customer had a lack of material from our JOST side. We were able to deliver. And this is the result out of a local responsibility to make the customer happy. On the other side, we have to look for the best opportunities, for example, in the purchasing. So local for local is, at the end, if they buy more expensive material in, for example, America, then they can get out of China or India. And this is the point where I say, okay, this is now the end of the discussion local for local. Here, we have to strengthen ourselves. And here, we have to look, for example, for the purchasing market in China. This will raise up the question, okay, what is the dependency then of China? Is this a dangerous situation maybe in 1, 2 years? And this brought us to the decision to say, okay, we want to have the China market for the supplier market, plus a second source. And the second source, for example, in our example here; is India. And by the way, in China, there are 1.4 billion people and in India also. So this is also a more than interesting local market. And this is the reason not only to buy parts out of China and out of India, this is the reason why we are produced with 2 plants in India and 3 plants in China directly for this market. And this answers again the question about the competitors out of China. We are also competitors to the Chinese colleagues there. We are there with 3 plants, and we are happy to be there. And it is nice and keeps us fit and awake that we have a local competitor over there. Going to Chennai. Chennai is a new plant for our Agri business. And we identified it as a really good solution to serve the world with agricultural products, but also to prepare the Indian market itself. And now I get some help. Let's hear what the responsible person from out India says to this plant. [Presentation]

From what Mr. [ Pradip ] explained in 9 months' time from breakdown to finish, perfect running factory. In 9 months' time, I do not have the permission in Germany to build anything. Then we go further on to China. We acquired that LH Lift. And LH Lift has a factory in Ningbo. We also have a factory in Ningbo. So we started the footprint discussion. Okay, do we need two factories, two management circles, two environment circles? What's going on going on, going on? No, we decided to put one factory into the other one. And also in these days, end of these months, the relocation of the former LH Lift facility is done. [Presentation]

6 months' time for a huge investment in the painting line as a total project time, 6 months. Great. This is China's speed, and this helps us to be awake when we discuss, for example, a painting line here [indiscernible]. Try to explain, it costs time, 3 months of calculation, 3 months of [ quotation ] to the supplier, 3 months of installations, 3 months of getting [ a freezing ] stop. We have an example already onboard 6 months, not a day longer. This keeps us competitive. Want to see an example? Here is one. [Presentation]

You've seen this small little green robot, putting wooden blocks onto our fifth wheel. One block, second block. This small robot costs less than EUR 40,000. But he is responsible for the handling of a 100-kilogram fifth wheel to a [ pallet ] and the pallet has to go then to the truck and the truck to the customer. So it's just like this fifth wheel from the dimension, 100-kilogram roughly. If you ask an engineer how to handle 100 kilogram, say, yes, by robot, it's possible. This robot will cost EUR 250,000 to EUR 300,000. With this amount of money, the project will not bring enough return. The engineers, in U.S., they said, today, we lift this fifth wheel by a chain. and the chain has just a little device where up and down. You have to press with the finger up and down. Maybe I can find the robot for just only EUR 40,000 who placed the wooden blocks and then goes with this metal finger to the chain up and down to the pallet. And it works. EUR 40,000 instead of EUR 250,000. This is an example for low-cost automation. You want another example? [Presentation]

20%. 20% faster. Okay 20% faster for all welding. In the JOST world, welding is one of our main processes. So day by day, we make thousands of kilometers of welding lines in our facilities. And imagine if we bring this idea into the world with a speed of 20% plus. This is a fantastic result. A fantastic result. You want more? [Presentation]

You've seen this small, little green robot, wooden blocks onto our fifth wheel, one block, second block. This small robot costs less than EUR 40,000. But he is responsible for the handling of a 100-kilogram fifth wheel to a pallet, and the pallet has to go then to the truck and the truck to the customer. So it's just like this fifth wheel from the dimension, 100 kilogram roughly. If you ask an engineer how to handle 100 kilogram, so yes, by robot, it's possible. This robot will cost EUR 250,000 to EUR 300,000. With this amount of money, the project will not bring enough return. The engineers in U.S., they said, today, we lift this fifth wheel by a chain. And the chain has just a little device up and down. You have to press with a finger up and down. Maybe I can find a robot for just only EUR 40,000 who place the wooden blocks and then goes with his metal finger to the chain up and down to the pallet. And it works. EUR 40,000 instead of EUR 250,000, this is an example for low-cost automation. You want a further example? [Presentation]

20% faster. Its okay, 20% faster for welding. In the, [indiscernible] welding is one of our main processes. So day, we make thousands of kilometers of welding lines in our facilities. And imagine if we bring this idea into the world with a speed of 20% plus. This is a fantastic result. It's a fantastic result. You want more? [Presentation]

The Hungarian team, they touched my heart emotionally very hard because they are also in a dip situation. And over time, is already reduced and the temporary workers are already out of the factory, but it's not enough. We have to make deeper cuts on the cost side. So really a cost-cutting process. And the people of Hungary, in our plan, they came together and they discussed the actual situation, and then they decided to do something similar to the German short work system. So reducing the working time and acceptance to reduce the salary. And for this, they asked for keeping the people onboard when the [ market ] recover, that the people are there to produce parts. On a voluntary basis, they reduced their salary. This was really a great decision from our colleagues in Hungary, and I'm very grateful to this. This is also a signal for family spirit on the one side, and on the other side, the understanding of the current situation and following the logic of "This is a cyclical market. Now we are in a dip we have to take actions and better times will come in the future, and we are looking optimistic into the future." Again, an example. [Presentation]

Our biggest facility in Brazil, biggest facility worldwide, yes, and we merged it, and the EBIT was not a double-digit EBIT at the beginning. And we discussed in 4 weeks, together with the colleagues in Brazil, it's not sufficient. Single-digit EBIT is not enough. And they immediately started an action plan, and this was quite impressive. After 6 to 7 months, we saw now the first monthly results was with 10% plus EBIT. So they took over the family spirit. They took over the good ideas from all the world regarding the processes, welding, branding, painting. They reduced the workforce and yes, back on track, 10% plus in EBIT. This is what we are looking for. Ladies and gentlemen, I skipped one chart, but the information from this chart is also very interesting to you. I think looking again to our CapEx situation, nearly 50%, to be precise, 48%; of the CapEx we invest in automatization and robotics. And just only 20% in clear replacement of machinery. So it's our ambition in the Board that we decide just only positive to a CapEx investment. If there is an idea behind to become quicker, faster, more solid, more quality related, whatever, but just only to replace one by one an old machine to a new one is not our target and just only 20% of our CapEx. With this, I'm on my final chart, and you see, again, the 5 dots, our improvement fields or work of action. And you see the examples I gave you, China, India, 4 dots from out the 5 will be supported; in Europe, 3 of the 5; in Brazil, 2 of the 5 and in Northern America, 3 of the 5. This is our way to gain flexibility to become tomorrow better than we are today. Thank you.

Okay, finally. It's all about numbers, for sure. So a couple of slides to summarize that up. And I think afterwards, we will have again a quick Q&A session. Probably we come back on stage again and altogether. So there will be enough time not only to question about the financial topics, also again about R&D and operations, in case you want. I have clustered that session into 3 -- content-wise into 3 areas, so to speak. Quick wrap up about what we have achieved so far and what are the current run rates of the business. You know, but just as a quick wrap up. Then -- and we have heard already a lot, but on a couple of slides, the new ambition, the new financial targets and what does this also mean from a shareholder value point of view. And then at the very last also to put that a little bit into a governance context, which is increasingly important also for us, topics like ESG, further regulations. Also technology regulation plays a role, et cetera, et cetera. So let's quickly start. You know the numbers, and Joachim already mentioned that in the beginning, we believe, and we are proud. JOST is success story since the IPO, for sure. I don't want to repeat the numbers on the left side. We have seen a significant growth. We have seen a strong cash flow generation, especially over the last 1.5, 2 years through the cycle, et cetera, et cetera. And if you sum that up, since the IPO, what we have generated is an almost 100% TSR, total shareholder return. I think that's, for a stock title like us, quite impressive. It's a bit of a simplified calculation. If you analyze that as a compound rate, that's almost 10% or is around 10%, which we believe is a remarkable number. And moreover, if you look back almost 3 years, this is when we held our last Capital Markets Day in summer -- late summer 2021. Although it was not as nice as here, it was a hybrid meeting or it was a full online meeting, I believe. Coming back to what Joachim mentioned, we love to fulfill what we promise, we love to fulfill what we are committed to do so. And I think we have delivered. So that -- these were the, let's say, financial goals that we have set in 2021, and we have achieved them. Now you can see it was a strong growth, we achieved high margins, we are still on a very high margin level in the upper area of our corridor. We have also managed that growth with disciplined capital usage and have also been able, especially over the last 1.5 years, to turn the profit that we have generated from that growth into a strong cash conversion, although we can be better, for sure. There's lots of topics we can improve. There's lots of potential, not only in operations, also in our administrative functions and processes and -- might at the very end also link quickly to that. Then probably more or less the last quick wrap up where we are at the moment. You know our half year 1 numbers. You know that we are in a cyclical downturn in both industries, as Joachim described a little, bottoming out at the moment. Nevertheless, EUR 600 million sales, adjusted EBIT margin in the first half year of 11.5% and with almost 20% ROCE, still very capital efficient. And also showing here, cash conversion is still very high, helping us. And probably, I mean, you we seen that going forward, we want to grow very, very strong organic-wise and organic-wise, and that needs a cash flow profile allowing that because we want to maintain a strategic leverage corridor, I will come to that, et cetera, et cetera, that allows flexibility. And we are in a cyclical business and have to maintain that. What has that meant also for you as our shareholders or -- and we have shown here two numbers. One is how has the adjusted EPS in euros per share developed from a period before we had the last Capital Markets Day, let's say, also before Corona, compared to a period since the last Capital Market Day, where we announced the strategy going forward. You can see that we have increased that by almost 66%, almost 2/3, so to speak, from [ EUR 3.3 ] to EUR 5.4 per share. And more important is, and we had that question a little bit before and also in the break, we achieved that with a high capital efficiency. As you can see, the ROCE has not been diluted. It's on a very stable level of roughly 19% over the last years. And we had that in the podium discussion. Our goal forward is also to be in that range, going forward. That's important for us. So then that's the quick wrap-up. Let's start now into the outlook going forward. And regarding sales and adjusted EBIT, Joachim already mentioned that in his opening speech, we are -- we have a strong ambition to grow JOST further on. We have set ourselves a goal of EUR 2 billion or even more until 2030. And this through a combination of organic and inorganic growth, and the details have been talked about in the podium discussion. And for sure, in the Q&A. If there are on top questions, we can elaborate on this. Let's say, roughly, we say organically, this will be contributed by 50% and inorganically also by 50%, resulting in a CAGR of around 7% per year. And we don't want to only grow our sales, for sure, we want to do this sustainably in a profitable way. And we saw this morning with the underlying principle and the potential that we see, especially also with the strategic movement into looking more also in off-highway applications, where we see that the whole supply chain has a stronger need for further consolidation than in the on-highway sector. We will be able to lift our margin corridor up to 12%. So it's then a range from 10% to 12%, also resulting then that the midpoint -- because that's a corridor, again, like we did the last Capital Markets Day through the cycle. The midpoint is then lifted up to 11%, which should be then on average through the cycle our target. And I think that's a strong commitment for profitability. This somehow is clearly framed by additional financial targets in order to properly manage this profitable growth. We will maintain our leverage target between 1.0 EBITDA and 2.0 EBITDA leverage. That's, for us, important. We are in a cyclical industry. There are always downturns, and we need to maintain flexibility also in downturn cycles to proactively be a consolidator in the industry, especially in the off-highway area. And for that, you need a strong balance sheet. And that's speaking out here or written out with that goal. Just to make it clear, so that's always excluding IFRS 16 lease liabilities. Sometimes we get this question, is this included or not included? That range is [ without]. It's the pure financial net debt. If you would add lease liabilities, you can add around [ 0.3 ] on top. We have just seen the presentation from Dirk about CapEx. Historically, we have seen a CapEx ratio in percent of sales of 2.4%, up to 2.7%, and that's also the range we see going forward. You have seen how we are able to do so. Yes, there are investment needed, there is automation needed, but we do it -- and Joachim had the nice wording. We do it in the JOST system way, so to speak. So we are questioning, question our engineered people again and again and again. And we want the optimal and smarter solution whenever we do an investment. Within that number, you have seen 50% is for OpEx improvement. That's what Dirk has shown. So 50% of that CapEx number, which is at the moment around EUR 30 million to EUR 35 million, goes into P&L improvement. I think that's an important message. And ROCE, we have talked about that. We set a target. We want to be 18% plus. And even if we do an M&A where we might have for a certain period of time, realized synergies, especially when it comes to large-scale M&As. The goal is clearly that we return to that range very quickly after closing of such an acquisition. We also had that discussion quickly in the morning session. What is the priorities that you used for capital allocation? What we have put here on the chart on the bottom right is what has been the capital allocation over the past 5 years, 6 years and then also prioritized again looking forward. It is obvious, and it is clear going forward to execute that strategy. First priority for us is value-accretive M&A. And, what value-accretive means. We have shown we want to grow EPS. We want to maintain a high capital efficiency. We want to do M&As that are very soon after an acquisition contributing to be in our strategic margin corridor and so on and so forth. And I will come to in a minute also to our dividend policy -- you also will see that it's important for us that the shareholders immediately benefit also from doing such acquisitions by the way of dividends. We need to do appropriate leveraging. In case we are above the strategic leverage corridor. I describe that -- it's important for us. Investment grade is important for us, flexibility in downturn cycles is important for us. I had a quick discussion in the breakout session about what are our finance costs at the moment. I will not disclose probably that will be a question later. But I think we are competitive here. We are using certain instruments at the moment to -- there are some lenders here and they know how tough JOST can negotiate looking at [indiscernible]. But it's important for us because in case we can reach that, then we are in a better bargaining situation and can use those instruments. Dividend payments for sure. We are a regular dividend payer. There was only 1 year missing. I think this was the AGM close to the corona crisis. But nevertheless, we have a strong track record in dividend payments and at least for our German stockholders, there's always this nice benefit from the gross for net payout because we pay out of the tax gain in the balance sheet. And that is going to continue. And then if there's excess capital out of the capital allocation from the first 3 points, there might also be the idea of share buybacks in the future. How can we afford this because all this needs cash? What I've shown before, we are a cash flow generating company. Me personally, for sure, as the CFO, I'm looking on working capital management. Operating-wise, strongly together with Dirk, our COO, I think we can confirm this is on our daily agenda. Working capital management is in the deep part of the company. And I think over the last, let's say, 1.5, 2 years, we have shown quite a good development here, and we will make sure that we can maintain net working capital in a range between 17.5% and 18.5% of sales, which is in our industry and with the global value chain, imagine we are transporting pre parts from Ningbo in China to Europe. We have all these shipping topics and so on and so forth, I think it's quite a decent number. Regarding cash conversion, which is in our definition, the free cash flow, free cash flow before M&A divided by adjusted net income. We have historically achieved throughout the whole cycle a ratio of around 1.0%. There is still a catch-up mode after Corona, with all the supply chain issues, but we are confident that we can be at 1.0 or even above also going forward. Just a quick example, and we had the discussion before about M&A and what does it mean for you as shareholders? Just very quickly -- we have talked a lot about the left side, what has quickly brought to the company, the exposure to off-highway. You have seen that off-highway is a big portion or a big storyboard for our strategy going forward, the technology, et cetera, et cetera. It has also been margin-accretive. I've also said -- it's definitely accretive in terms of the internal rate of return or the -- yes, the interest rate -- implicit interest rate that we generate from that -- business is definitely significantly higher than our cost of capital. But more important is what I would say on the right side, when you look on the last or the years, including Quicke, what was the contribution in terms of sales to the company to the overall JOST company? And what was the share of adjusted EPS to JOST, you see that's accretive. It's 22% in sales, but it's already a quarter in terms of adjusted EPS. And this underlines that we are confident it was what Joachim showed that with the push into agriculture and also going forward, the push into more off-highway business where consolidation is needed where the margin pool is obviously bigger than in the high competitive on-road transportation sector, we can continue that path and story. And when we look on organic development and growth opportunities and also inorganic growth opportunities. We always have that picture in mind. How can we add adjusted EPS to the company in terms of more adding sales to the company. I think that's a clear message and commitment. And you need to participate you as our equity investors need to participate on that. And this is why, and the left goal was already mentioned this morning by Joachim, we have the clear ambition to grow our adjusted EPS more than the sales growth. That would lead to an adjusted EPS until 2030 by per 10 EUR per share or even more depending on the final growth. And also, we will change the dividend policy in a way that we say historically, it was linked to reported net income, which obviously has sometimes the issue if there's first, an exceptional item or secondly, impact from an M&A that you might have distortions. Clearly, going forward, our KPI or measurable will be the adjusted EPS. Historically, we have shown a dividend distribution of around 25%, 24% of adjusted EPS, we have set ourselves with the strategy, the ambition tool. Continuously pay out dividends in a range of 25% up to 30% of adjusted EPS. So -- Okay. So that's the first part, wrap up of the numbers as we are second part, ambition and shareholder participation finally putting that a little bit into a governance context. We want to achieve that, not only in -- by investing in nice robots, et cetera, et cetera. We want to do that sustainable for all our stakeholders. And stakeholders are not only lenders or investors. It's also our people. It's the environment. It's the community around our plants. And this is why we have deepened, let's say, the link of ESG goals to our company. So the management compensation for sure, is linked to ESG, the financing is linked to ESG. We have involved, so to speak, the whole company, regional management and key stakeholders to an ESG contribution. I think, Dirk, you have not shown this today, but it's remarkable what JOST has achieved, especially in Europe over the last 2 year, 3 years in terms of real energy consumption. I think we are around 50% at the moment, and that's really a P&L impact. So we want to really put that together, and I think we were quite successful in that. And this is why we have also 3 clear targets at JOST. We want to further reduce our CO2 emissions, that's Scope 1 and 2. We are still elaborating how we are going forward with Scope 3 emissions by 53% until 2030. We have already achieved 45%, 46%. So you can say -- wow, is this really ambitious. Yes, this is ambitious because the quick wins are done now, and the basis is lower. So this is really hard work over the next years. And hopefully, we are even a little bit better, we are committed also to grow the diversity in our company. I mean -- it's commercial vehicle industry, transportation business, agriculture business, construction business. It's more difficult to find a talent. But for us -- yes, as a growing company, diversity for us is a success factor. I mentioned that also in the podium discussion 80% our staff is not from Neu-Isenburg. It's not German. So from that point of view, we are global. We are committed to lift up the women's share, so to speak, in our management positions up to 25% by 2030. At the moment, we are at around 18%. And I think that's a strong commitment. Today, at least we were 33%. So let's see. And also, that's an important goal. And I think you mentioned that Joachim or Dirk. Safety for us is really important. Whatever we do, it needs to be safe, not only our products needs to be safe, how we operate the businesses, say, for us. The people make JOST. So we need to take care about every people. And this is why we sat here the operations set the target that we always want to be better at the industry average. And I think that's remarkable -- our role is to be almost 40% better in terms of accident rates compared to the industry average. So that's a little bit the framework for that operations. And coming to my last 2 slides before we end up with Q&A. I want to wrap up a little bit, talked about complexity, how to manage that growth et cetera, et cetera. We heard all the things on the left side. M&A will play an important role. Growth, especially out of Europe, will play a role in North America, the Asian region. We will further increase off-road business, increase in product [indiscernible]. We will increase -- Michael talked about that technology partnerships. So it's not always that we are taking over 100% directly from the beginning -- a trailer dynamic, it's 10% nevertheless we've to make sure that we are tied to the company and can somehow make sure that there's benefit for JOST out of is -- like we have it included in the business case. We have increasing regulation, I just mentioned that, and have also believe that, and we have just seen the KKS products, we need to track this and understand this. Are they really bringing finally euros to the company -- finally it's about numbers. And this all brings workload for the CFO organization. I'm a big fan of platforming. So what we are currently doing is we are investigating how can we create a future ERP landscape for JOST, which is not only fit for purpose for today but also allows us to be fast in terms of P&L. I don't want to wait 3 years after an acquisition until I fully have connected the company also IT-wise, that's a big effort. We have potential I mean it's only a couple of years ago that JOST was a EUR 700 million business still Neu-Isenburg mindset, mid-market, et cetera. Lots of those values we want to transform into the future. We want to keep that mid-market very personal spirit. Nevertheless, we have to leverage our grown footprint. And this will be somehow also a mindset change for JOST using nearshore and offshore footprints that we have already in our organization to leverage our SG&A costs, so to speak. We need to find talent outside Germany. This is very hard at the moment here in Neu-Isenburg, to find a software engineer to find an R&D engineer for Michael Fischer's team that's almost impossible in a certain range of cost range you want to have. So also for that, it's important that we are now -- that we support this. We need to use digitalization and AI technology. One example was shown by Michael, but also for our other internal processes. And for sure, the [ CFO organization ] is a key leveraging partner for that because it all comes into connecting to our system landscape. And for me, the ultimate header on this is I want to make JOST able for faster decision making. We have seen this from the operations. Now they can build in 6 months, a factory, et cetera. If I compare this, we need 6 months for budget. So just a little bit joking. We need to be fast, world is changing fast. We will never come back into a period at least until 2030, is my opinion where we will have this stable development before corona. Every 1 or 2 years, there will be some kind of black swan event. I'm pretty sure whether this is this war or this war or this war or what else, and your organization needs to be fit for that, yes. And for sure, my daily job is to challenge the business that we use our capital efficient. So to sum that up, what are the key investment highlights why we want that you invest or even invest more into JOST. We are a technology leader with strong brands and high market shares worldwide. That's for given, that's for sure. And with every step in our strategy that we do -- and Joachim listed that point, that's definitely a checkmark that needs to be set and that we are carefully watching this because we are a strong believer that out of this comes finally profit and cash flow that we can then distribute. We want to maintain a flexible and asset-light business model perfect examples shown by Dirk, how we do this, very intelligent, very smart and very careful. We have an excellent track record of delivering results. I think we have shown that as well. We have a proven value creation via M&A. So nobody should be surprised at least from our point of view, that M&A is a strategic part going forward, probably an even stronger strategic part that it has been in the past, but I believe over the last 12 to 24 months and with the experience of Quicke acquisition and the success and you have seen the proud of the people in Brazil, we are confident to execute so. And with that altogether, for sure, we are positioned to create higher value for our shareholders than we are creating today -- and we have seen the goals. We definitely want that you participate on that. With this, I will close the session. And if okay, we go into group Q&A.

So maybe the first question. I got one question with regards to your technology expansion. So you mentioned partnerships, but also minority stakes as well as M&A as an opportunity. So how do you ensure the cultural fit or the integration of a smaller agile entity into your organization without losing the entrepreneurial spirit. And also with regards to technology developments, with regard to product development, looking at KKS coupling, for example, it implies a further shift from kind of components towards solutions. So in a 5- to 10-year timeframe, how will the product split or the portfolio split look like in terms of components only versus solutions? And how should we think about the M&A? And the R&D requirements for this?

Okay. I'll do the framework and then hand over to you, Michael. The -- you're absolutely right, these young companies that drive technologies, they have different processes, and they have a different culture of how to operate. That's why when we worked with Aitonomi and others, for example, we work in technology partnerships, and we don't fully integrate them into our processes. But we've also learned to adjust our processes in some effects where we use Sprints and other development tools than the traditional development programs. So that's important. And Michael will elaborate on that a little bit. When it comes to the question of how should we see the portfolio, you will see more and more parts where -- wire and a connection will come out in the future. You've seen the sensor fifth wheels. You've seen the camera integrated fifth wheels -- you've seen the KKS and the questions I got from you. And I get from a lot of people that look at this and say, why does not every truck have that? This is -- it's hard to believe that we still drive around without the safety features? And of course, it will not happen overnight, but there will be lower cost in these products, and there will be a much higher market acceptance. Just like every car now has a rear camera when you drive backwards in the U.S. It's even the legal requirement and rightfully so because it's probably hard to count the amount of lives of children that can be saved by these cameras. And similar it is here. So 10, 15 years, I'm sure there will be a lot more electronic components integrated into our traditional products and our product being extended with a higher integration into the vehicles. Today, we provide already in a number of cases, the software to integrate the picture into the display of the truck -- so we don't have to mount our own display. We are fully integrated into the truck display. The same is true for the tractor where we have the waiting functions and other functions on the tractor display. So our product will develop into the truck to a certain degree. It's by the way, one more reason why we will see a consolidation of the industry. It will not be possible to have 20 different loader suppliers worldwide for one tractor company. Same is true for the fifth wheels, the more functional integration we have, the more that requires one solution -- one global solution and one platform that is typically provided by one supplier. Michael -- with a bit more detail on how we manage?

Yes. Thank you. Cultural fit One thing that we did after the PMI with Quicke team is, in fact, that the R&D Central Mechatronic team changed into agile Kanban framework. So that was not there when we started that, and that shows -- and it came from the team itself that there was an obvious need to change the way of working from a more waterfall project framework into that agile way of working. And that shows at least how the journey goes. Of course, it is cultural fit means a lot of soft elements soft facts, and you cannot enforce it. And you cannot maybe fully planned that, but you can prepare your people to be open for that. And that's what I feel in the whole organization. First of all, of course, the partners open up. Otherwise, we would not get into communication. But at the same time, we do so. And I see that is a quite easy way of adapting. I think our ability to adapt to 2 organizations is really strong, maybe a strength of JOST, which is not so obvious in a day-to-day business, but very important for us. So that is the cultural fit. And feature or solution. Automation brings the need for solutions. Integration is coming with automation. Maybe we are at kind of point in time of this catch-up bottle problem. It's not there. You don't see automation in a large scale at the moment, but you see all these solutions are there when we look what happens in the Emirates, where new greenfield terminals are built. Of course, they show up with 100% approach to be autonomous and to have autonomous at the very core of their new harbor infrastructure. And we see infrastructures in China and also in Freeport and other areas where there is a lot of strong pool to get into automation. And we see -- of course, we get confused by watching what's on the Interstate 10 in U.S. when they all drive along with their Level 4 trucks? We look into the terminals and see how they do their autonomous operations there? And we should consider that, that happens from 2 different ends. One is the infrastructure side, one is the road, both will happen, but not today and not tomorrow. And the terminals are the infrastructures, which are able to do it first because they have a very fast payback. And that is what we see now in all our discussions. And from that point of view, I would say -- little -- seeing customer problems from a solution perspective and not from a feature perspective, already happened in our organizations, in our talks to the customer, but it's not yet visible in the market. And same is true in the agricultural area. We will see transformation of tractors in the next couple of years, which is, I think, much more relevant than the development of a tractor in the last 50 years. And with that, with the electrification of a tractor with the autonomous operation of a tractor on the field, on the yard, we will see so many different impacts on our products in the agricultural business, that will drive us in the same direction. We will have to provide solutions for them. And -- there is also one learning. You cannot do it on your own. You need partners for that, maybe infrastructure partners. And we also, for example, at that day, as we speak here, we are talking to one of the very important autonomous and remote operation companies how to do together an end-to-end process analysis of the coupling process. And then this shows how things changed. How could be that a startup with very high merits on autonomous or remote-operated vehicles in terminals is approaching us to say, okay, let's look together with your domain expertise and ours into an end-to-end process. And that, I think, is the journey we are in at the moment.

I have 2, 3 questions, if I may. So the first is regarding the front loader that you saw us in Brazil. Very exciting to see one Quicke front loader there. Can you remind us what is your target in Brazil from the front loaders because I have my own number that if I remember whether it was like 5,000 per year? I mean, not now, no, but in the future, taking account of your 30% market share target globally. Is this -- is it still more or less your view for the market?

Yes. Our goal is 30% of the market shares in Brazil, similar to our global presence.

So that could be compatible with around, I don't know, 2,000, 3,000 or above front loaders in the country.

Around 3,00 right now.

3,000. And for that, you need to develop the dealer footprint you have or with the existing clients with [indiscernible] and the rest you can already get to the numbers?

It will be similar to Europe. I always say that the Brazilian market, there's a couple of decades behind Europe. So it's a market which is both on the -- in an OEM channel and in a dealer channel. So we will have a similar setup -- we'll both be working with OEMs supplying into their channels, but also straight to Quicke dealers and set up loyal dealerships with us.

You have any target for Brazil that you can share with us? Any goal for the front loaders? Any budget for front loaders in Brazil for next year? Do you have a number?

For next year, we -- we are still working on this market. For this year, it's only a couple of ones. It's a ramp-up this year. I don't have a number, but it's -- you have the number -- it's a 3-digit number, low 3-digit number.

Okay. Also regarding India and the partnership with Mahindra & Mahindra, it was also surprise is mid-single-digit euro sales that you did in the second quarter. Again, can you give us more color on how this is developing and how can -- how we can expect which contribution we can expect next year from Asia for the agriculture new footprint?

I don't know, Joachim, if you want add?

No, I think we -- it's too early to give projections for next year. We're working on the budget right now. As I mentioned, we see a recovery, and we expect a slight recovery in the market for next year. Also in agriculture, -- but it's too early to really guide on numbers for next year, especially when it comes to compact loaders versus agricultural loaders. But we do expect that this market has been stalled this year that we will see a revitalization of that market.

And I think we mentioned that during the Q2 release call that we were a bit positively let's say, impressed by the development of the ag sales in India. It's definitely above our investment case. Mahindra & Mahindra pushed a lot the first half year, but I already made the comment that, we have to see if this is still sustainable? Now our internal investment case where it makes sense for us is lower than the current run rate of the sales. In total, we are quite confident about the development in India. It's -- I mean, also for next year, there will be -- will be a good tailwind, I believe.

Okay. And my last one, regarding the pipeline that you commented that is quite impressive. Now the 9 targets with around 1 billion cells. Do you have any of these potential deals that you are studying in advance? Like we should expect something for next year already? Or is it in an earlier stage?

Definitely, I expected this question. I cannot comment on any specific topics. And I mentioned that to you -- and to the investors during all of our calls. Since beginning of the year, Joachim and myself, we say for a company like JOST, the environment in 2024 and 2025 should be a strategic buyer environment. And that's where we are working on. So we are quite confident that we are on a good track, so to speak, and once we have to announce something, we will announce.

I have 2 financial questions. One regarding the margin, the EBIT margin. I mean, you pointed out that you want to be in a range between 10% and 12%. I mean that's basically where you are already. At the same time, you pointed out that you still see some efficiency gains and you put a lot of money into becoming more efficient and automate more and so on and so forth. So that should also drive down cost. So why are you not more ambitious for your EBIT margin? And my second question is regarding the adjustments, especially for the adjusted EBIT margin in 2030 and the adjusted EBIT. How much of that will be purchase price allocation adjustment and how much of that will be like other adjustments? Because I think -- most recently, you had also EUR 10 million or even around EUR 10 million other adjustments -- in your total adjustments and one can discuss if that's really an adjustment you should make. But -- so what -- will that share of adjustments, PPA adjustments remain the same? Or will you have more other adjustments going forward?

Should I take the first one and you explained the adjustments because you're the only one who knows that. Yes, EBIT target and ambition I think we are a very profitable company for what we are, being an industrial company here in Germany with the production that we have. And the fact that we are in this downturn, quite profitable is a fact that is a lot of work to maintain. And that's also an effect where we are benefiting from a few positive impacts. So we still have a positive price impact because our prices with the OEMs, they have variable price adjustments in there. They depend on energy costs and on material costs and others. We're still benefiting from a certain buffer of a certain high price in the pricing, while we are already enjoying lower cost with the purchases and the parts that we buy. We have a positive mix effect. We mentioned that -- that real economical loaders. They are not selling at all because they have all refurbished their products in 2021 and '22. So our mix of higher volume -- of higher cost loaders is better. That's helping us. And all the ideas that we're having a good part of those ideas, we need to fight those effects. The effects of a continuous inflation, the effects that the material price adjustments with our OEMs may be reduced. So to maintain what we have, we already need a lot of ideas because obviously, cost -- inflationary costs on rent, on labor and so on, it's something that we have to compensate with those ideas. We are extending it to 12%, which I think is quite ambitious. By the way, also our customers think it's quite ambitious. When I talk to our customers, it's not always easy to sell them in a price increase. And then I get the call later, they say, well, we've looked at your quarterly reports, we don't really understand why we should help you with the price increase. I mean we are making less money than you are. So that doesn't take away the ambition of continuing that path. But it's also, I think, something that needs to fit in the total environment. That's why we feel very comfortable with the 12% range. I think in a range, as I said, for our company, up to 12%, even with some adjustments that Oliver will explain, but I think they're very reasonable is a quite ambitious range. And that we are enjoying a good profitability right now is a lot of work, and we need a lot of ideas and implemented ideas to maintain that level alone.

And then just to add on this, I think we have to look also on the midpoint. If you look at the midpoint of the past years, it's around 10.3%. It's not the 11.3%. Now -- and our goal is that the midpoint of that corridor is 11%. I think that's quite a decent number, so to speak. Regarding adjustments for sure, our goal is not to achieve this by adjusting. So the vast majority will always be purchase price allocation going forward, if we execute that strategy, yes, there will be purchase price allocation, which is then adjusted in the adjusted EBIT. And this will be the vast majority. So non-PPA adjustment should always play a minor role, right? There might be things like that. Like last year, we had this arbitration topic et cetera, et cetera. But the vast majority is purchase price allocation.

Okay. But just one add on. But would you say for next year, you will see -- because of these special adjustments you already had in 2022, I think, around EUR 7.8 million and then in 2023, you had EUR 10.2 million or EUR 10.3 million. So for next year and the years after around...

It should be a little less under normal circumstances, so to speak. But we have always -- and I mean, we don't announce JOST strategy if you do restructuring, by the way. And we do continuously restructuring. It's not that JOST goes public and they say, "Hey, we close the plan? Or we do this and this? We do it. Finally, you see it in the numbers, but you also see it in terms of profitability.

Yes. So what is your IT landscape look like now? Because you want to do an ERP rollout, you're thinking about it? What is the urgency behind that?

I would say around 60% is an SAP ECC system where maintenance runs out partially 2027, partially 2029. We have then a couple of other systems, Movex system, Microsoft Innovation Systems. So that's a bit of challenge in terms of becoming an integrated company. We have to work very fast on this because this creates complexity in our IT landscape and also creates inefficiency in terms of costs. So we have developed over the last -- since I joined the company we have developed a clear IT strategy going forward. And this includes a renewal of our IT landscape and predominantly -- and I said this, I'm a big fan of platforming. So we will separate between, let's say, bigger operations and especially operations, which have more cross-linked to other plants. This will be predominantly an integrated SAP solution. Next question would be what are the costs, et cetera, et cetera. We are still elaborating but it will be part of the operating costs that we already have. We have to digest and find a way to finance this with the margin corridors, et cetera, that we have. But we might also think about a second solution, a smaller solution, much more cheaper, probably even not an SAP solution for smaller operations, but that's still in process.

And have you done something about Cyber risk. Because your -- one of your peers got hit?

Not specifically. But for sure, there is Cyber risk. And we have a 24/7 monitoring. We are continuously investing in our Cyber protection, so to speak, et cetera, et cetera. That's for sure.

Are you insured for Cyber risk?

Partially, yes. But me personally, I'm not so much a fan of these insurances because they have always the leakage at your real pain point. So normally, I'm always balancing what is better to spend the Euro into an insurance company? Or is it better to spend it in real physical or provider protection, but we do both.

Nicolai Kempf, Deutsche Bank. First of all, thank you for the insights in the presentations. My question is also on the EBIT margin guidance. So you got 10%, 12%. My question is what needs to happen to achieve the 12%? And what needs to happen that you achieved a 10%? I mean, this year, we have a downturn in truck, trailer also agriculture and it still go probably above 11%. So what should we factor in -- in case you should reach 10% or 12%?

Yes, I think these are the things that are hard to predict because, of course, you never know how the markets will be. How the pricing environment be, what challenges we have -- we all remember COVID, it's not so long ago, even though it feels like history, that had an impact on profitability on all companies, quite obviously. So we would say in a normal range between the 10% and 12%. The main drivers are market size, profitability. If we are smooth -- if we have smooth operations or we have disturbances in operations, sometimes if we have new products, new product launches that may lead to a dilution of the profitability because you have the investments in the new products. You still have the old products, you may have inefficiencies in your production and into your logistic supply chains. Those are kind of the main drivers that I would see within that range.

And probably also the -- I mean, if you have a back wind or tailwind from the raw material from the purchasing environment generally worldwide. That does have an impact. And you know, Nicolai Kempf, that that's what we have seen over the past 3 years. So in an environment where raw material prices are rising fast for sure that gives at least a temporary dilution because it needs time to pass that on through to the customers. On the other side, and that's what we see also since, I would say, mid of last year or so -- if you have a little bit of a tailwind because prices are already down and you still can keep a high price momentum. If you look on our North American numbers, I think it's a perfect example at the moment than you are normally at the upper range of the guidance.

Okay. And maybe one follow-up because you mentioned the truck fair next week in Hannover, anything you would before that momentum pickup in European truck market? Or are you happy with this?

I mean we all are looking forward to an interesting fair. The fair itself will not change the market environment. But -- and if the question is, are we hoping for any subsidies or anything else that will come from the governments, I don't expect that to happen at the fairs either. We're looking for an interesting fair where we see technology drivers and technology can also drive efficiency for our customers, and that we see a bit of a kick from that point of view that customers are interested in applying new technologies into their products, into the vehicles. And other than that, we're looking forward to meet the industry, to meet customers, to meet partners that we work with. And I personally, and I'm sure I speak for all of my salespeople that are working at JOST and we are a sales-driven company from that extent. We are looking forward just to reunite to talk about trends in the industry to pick up the best trends to convert them into ideas and into products for the future that's also why we like so much to go to the IAA.

[indiscernible] from Metzler. Just got a couple of questions. First, to Dirk, if I may. You spoke this morning about centralizing the processes on procurement. And then in the afternoon session, you're obviously emphasizing local for local approach, local decision-making smart procurements and you showed you example of China and India. But just for where the tipping point is for the more central approach in terms of keeping the scale benefits and then that local approach. And my second question is for Yenny. And I'm just wondering, something I've been thinking about is changing CapEx sort of patterns in agriculture and 2 things. One is the emergence of super farms globally, who I say -- may have purchasing power. The other question is sort of climate change. And if you look at the U.K. specifically this year, very, very wet spring, huge amount of soil damage, yields down 50% -- 30% to 50%, very late harvest, could go right into November. So as a farmer, I might be thinking, well, do I just hang on to my piece of equipment until next year or the year after. So I just wonder whether you're seeing changing -- slow changing patterns in terms of agricultural spending? So 2 questions, sir.

The organization regarding purchasing is quite easy. We divided the complete purchasing department into technical aspects, for example, casting, the biggest one. And there is one commodity manager responsible for the castings worldwide. And it's his decision to say you in the region with this small amount of casting you ask for, you are free to do everything you want, please decide on your decision, on your table, what's going on. But if we discuss, for example, the fifth wheel, this casted fifth wheel, the commodity manager will say, no, we are not free to select any new supplier. It's my decision. So I do not know the English word for extreme incompetence. Policy -- yes? So it's a central policy. This commodity manager has on his shoulders to say, I give you free. You are free to decide or no, it's my personal decision, and I want to know everything, every talk to the supplier, every visit to the supplier. I want to know exactly what's going on there. And to support this, you need proper figures and you need proper targets regarding price reductions for the future. And then this system works very well. I've got a new leader for the purchasing department since 2 years, and we make a good, good progress with this kind of a system. So let them free in the regions as much as possible. But for certain kind of processes, we are fully responsible. And central processes does not mean that they are located here in Neu-Isenburg. I explained to my people Neu-Isenburg is not the son of JOST anymore. If we buy the most of the casting material in another region in the future, then it makes sense that the commodity manager is located there and not here in Neu-Isenburg.

Okay. When it comes to farmers and larger farmers, I understood you also mentioned because it's going in that direction, and then we have also that one-stop shop idea -- again that we come back to. So we have already products on the market, which is not only take that Q companion and the Quicke control system that Michael showed, this is also possible to have a retroactive fit onto a telehandler and so on. So we have products and intelligence, which can be outside of the typical say, tractor that you have on the loader arm and then also all the implement of that, that we could attach. We have developed a system, which we call a bolt-on hook system. So instead of having welded hooks that you fit on to the machine, so to say, so the loader arm or the machine, you have a welded -- or you have a bolt-on system, meaning that you can offer any implement to any producers, so to say, by different hooks at the rear. And If we then take the climate question, Michael was going to also. But of course, that is the challenge. Still, we -- when we looked at the map, there are so many areas which we are not present or leader in yet. So I see a big potential to grow still on other markets to say, without seeing that the situation in Europe right now would hurt the growth plan for the future. Michael, you were going to say something.

Yes. Thanks, Yenny. I just want to add that, of course, climate change in this is very -- has ambiguity. On one hand, I think to the societies to regions, to even down to the individual farmer, it has a very strong impact on how people run their agricultural businesses, and that is opening them up for all kind of technologies. And then on the other hand, we see how the harvesting windows are getting so close. It can be 1 day, 2 days in a week or in 2 weeks. And that is kind of -- that is a distraction to that development. You can have small cute robots everywhere on the field. But if you have this 1 day harvesting time, you need a 250 ps tractor or you can stay at home at that time. And that is -- that causes a huge distraction into that market, what is the right and sustainable approach to get the work done in these small harvesting windows and what is necessary to do seeding, fertilizing and everything. And I think we will see a split that always will have that power to do harvesting at the available time. And you will have other workloads on a field, which can be done with the smart equipment, with the smaller equipment, you can do these -- you can look for the field maintenance during 24/7, and we will see these kind of vehicles. But when it comes to harvesting, I'm quite sure we will end up with this powerful machines, as we have it today, and it also needs a certain flexibility, which ends up with our kind of products.

Okay. Thank you, Romy. Well, thanks to all of you for coming here to the heart of JOST. I think it was very nice to be here in this environment. It's probably quite unique to see an industrial operations, so close to the airport, so close to Frankfurt. And that's why we're very happy that you gave us the opportunity and your availability today to come here into the heart of our organization to understand a little better what we do and to give us the chance to show to you not only what we do, but also how we do it. And to summarize it, I think we have a quite stable, quite solid company that is able to operate in the cyclical environment that we have -- cyclical environment, but still very stable results. And -- that is a very good basis. We've had a good development over the last years when we went in the last 6 years since IPO from the EUR 700 million to the EUR 1.25 billion, but we very clearly have the ambition, and I hope we could convince you that we also have the capabilities to continue that growth plan and to go towards our ambition of having more than EUR 2 billion sales company in 2030 with more than EUR 10 adjusted earnings per share and continuous profitability of around 11% with a range of plus/minus 1 percentage point. We are all excited about the opportunities that we have been seeing over the last years. And now we're eager to go and harvest that, to build on the organization but you should take along. I think there was on your slide, and you will get all that detailed information on the numbers. But what you should take along is that we here as a management team, we are really eager to bring that into reality. And we have another line of managers behind that, that share the same ambition. And I think we have it set up quite well so that everybody in JOST is eager to achieve that EUR 2 billion targets. There's a very elaborate program. But as I mentioned earlier, for us, it's more important that we share the same culture then that we have a tracking program that's the homework that we do anyhow, and we will do that. But it's more important that we have the ambition. And that's why also I like the videos that you showed and especially the Brazilian guys that our newest addition to the JOST family, I think you could sense the eagerness and the pride that they have to bring that into play and to make that growth for Brazil happen. So thanks a lot for your attention. I hope you enjoyed it as much as we did. We will share all the information -- there is an opportunity to look at the plant in detail if you have the time and either after that or right now, I wish you a wonderful day and safe trip home. Thank you very much for your interest.

And thanks to Romy and her team for organizing all this.

Absolutely. Absolutely.