MAHLE Metal Leve S.A. ($LEVE3)

Good afternoon, ladies and gentlemen, and welcome to the conference call about the 2025 annual results of MAHLE Group. [Operator Instructions] You can also download the presentation from the MAHLE Investor Relations website. The presentation will be followed by a Q&A session of up to 20 minutes. [Operator Instructions] On the call today, MAHLE Group is represented by Markus Kapaun, CFO of MAHLE Group; and Ralph Josephs, Vice President, Corporate Finance. Now I would like to hand over to Mr. Kapaun.

And welcome to our investor update call. My colleague and I will now present to you the annual results of 2025. After our presentation, we'll be happy to receive your questions. In 2025, we continued to operate in a highly challenging market environment. Global economic volatility remained high and geopolitical tensions added further uncertainty. At the same time, our industry continued to undergo profound transformation. Demand weakened in key markets across Europe and North America, electrification progressed more slowly than many had anticipated. Supply chains remained under pressure and rising costs continue to weigh on margins. Against this backdrop, MAHLE did not stand still. On the contrary, we remain fully committed and even accelerated our efficiency, performance and liquidity initiatives. By doing so, we further strengthened the company's resilience and ensure that MAHLE is well positioned to adapt effectively to these challenging conditions. Let me share with you how we navigated through 2025 by taking a closer look at some important facts and figures. MAHLE Group sales amounted to EUR 11.3 billion, an overall decline of 3.6% compared to the previous year. This decrease was primarily driven by nonorganic factors such as negative currency translation and deconsolidation effects. Adjusted by these factors, sales is at previous year's level. In 2025, MAHLE's operational performance continued to improve. Our adjusted EBITDA margin reached 7.8%, an increase of 1 percentage point compared to 2024. This improvement was driven by ongoing productivity enhancement initiatives and the positive impact of sales price adjustments. These effects more than offset the challenges we faced from labor cost increases, tariffs, unfavorable exchange rate developments and lower volumes. The reported free cash flow of EUR 135 million for 2025 led to a reduction in net debt. Net debt-to-EBITDA stands at 1.3x, supporting a conservative leverage profile. Compared with the previous year, we reduced headcount considering also loan personnel by around 3,100 employees. This reduction resulted from ongoing capacity adjustments, particularly in Europe and North America to manage the volatile market environment. Now moving on to the market and business highlights. According to S&P Global, actual 2025 figures showed a mixed performance in global light vehicle and passenger car production. Total output reached 93.1 million units, representing an increase of 3.9% compared with the previous year. This growth was mainly driven by a 10% increase in China's production with India and South America also contributing positive growth of 8.3% and 3.2%, respectively. In contrast, Europe and North America slightly underperformed in 2025, with production declining by 0.8% and 1.2%, respectively, compared with 2024. For 2026, S&P Global expects global production to decline by around 1%. Most major regions are forecasted to contribute negative growth, including China, North America, Europe and East Asia. While India and South America are expected to deliver positive growth, this momentum is not sufficient to offset the declines in the later markets. The most notable shift comes from China, moving from double-digit growth in 2025 to negative development in 2026, reflecting weakening domestic demand ongoing supply chain disruption and broader geopolitical pressures. Looking at the medium and heavy-duty vehicle section, its vehicle production increased by 3.9% in 2025. This growth was mainly driven by strong output in China and India, where production rose by 23% and 13%, respectively. These gains more than offset declines seen in North America, Europe and South America. For 2026, S&P Global expects production to grow by around 1.8%, supported by an anticipated turnaround in North America and Europe, both of which are projected to shift from negative growth in 2025 to positive territory in 2026. According to our market analysis for light vehicles, the trend of the electrification of the powertrain continues, but the pace has clearly slowed. Policy changes in the U.S., [indiscernible] targets in Europe and ongoing geopolitical uncertainty are creating a more cautious market environment. China remains the strongest driver of new energy vehicles adoption. Overall, the direction is unchanged, but the speed of transition differs significantly across regions. The share of battery electric vehicles in the world market has largely developed in line with our expectation in 2025. And for 2026, we also expect it to remain broadly in line with our outlook. However, looking at the key regional markets, the picture is much more differentiated. BAF adoption in our key markets such as Europe and the U.S. fell considerably short of expectations originally made in 2022 for 2025 and is expected to continue below forecast in 2026, mainly due to slower OEM electrification plans and regulatory easing. In contrast, China continues to be the main global driver of BAF adoption, with growth significantly exceeding our expectations since 2022, driven by low-cost bet an intensified local price war and rising exports. These regional differences underline the importance of adopting strategies that reflect the specific dynamics of each market. MAHLE's strength continues to lie in our technological diversity. Across our portfolio, we are advancing in certain areas like scalable electric drive and charging solutions, high-performance ICE technologies ready for renewable fuels, leading thermal and fluid systems for both electric and conventional powertrains and a growing industrial solutions business. Together, these areas position MAHLE to succeed across both automotive and nonautomotive markets as the industry transitions. In 2025, we presented 2 efficiency boosters for electric mobility. Our new range extender system, featuring a high voltage generator as a power source and a new thermal management module with an integrated heat pump. We are also transferring our thermal management expertise to applications outside the automotive sector. A new MAHLE cooling model for stationary battery storage systems will enter series production this year. Our new ethanol power cell unit can reduce CO2 emissions by up to 70%. The technology can be deployed immediately in the existing vehicle fleet. Our review of regional market development shows that each major region is facing very different dynamics, which reinforce the need for differentiated strategic approaches across MAHLE's global footprint. In Europe, our strategic focus is on strengthening our position in pet products, while at the same time, expanding our nonautomotive activities. North America is centered on increasing resilience against political risks materializing, among others, in tariffs and trade barriers. In China and East Asia, we are leveraging strong access to local OEMs while India benefits from fast market growth and driving electrification. South America remained stable, supported by the aftermarket and ice related opportunities. These contrasting market conditions underline the importance of maintaining a sharp regional focus and adapting our strategy to the specific needs and opportunities of each region, ultimately aimed at improving our overall profitability. Now I will give you some more insights into our financials. Enhancing MAHLE's profitability and strengthening our financial resilience remains top priorities. Through our back on track program, we continue to deliver continuous improvements, improving our P&L, cash flow and our portfolio. These measures collectively support our targeted annual savings of around EUR 370 million year-over-year. In parallel, we are advancing restructuring measures across our global footprint. For 2025, 18 locations across regions are affected through downsizing more closures as we adapt to market volatility and streamline our group. We are also progressing portfolio and asset optimization. The full acquisition of MAHLE [ BEHR ] has enabled the reorganization of our business unit structure and laid the foundation for additional efficiency gains. We simplified our structure by bringing business areas together and streamlining management layers. Our reorganization has empowered our regions with greater autonomy and direct customer alignment. At the same time, we are streamlining processes, capturing synergies and optimizing overhead in key areas like administration and R&D, predominantly in Europe and North America. Altogether, this is making us leaner, more agile, more efficient and subsequently more competitive. Looking at the results, we are seeing clear progress. Despite ongoing challenges like volatile demand and cost inflation, our focused actions, including headcount adjustments, strict cost control price management, CapEx discipline, working capital steering and tax initiatives are contributing to improved key figures. We see streamlined production, further optimize headcount, stronger margins, lower net debt and a stronger equity position. These results confirm that our transformation is gaining traction and moving MAHLE towards a more resilient and sustainable profitability profile. MAHLE Group generated sales of EUR 11.3 billion in 2025, representing a decline of 3.6% compared with 2024. The decrease was almost entirely driven by nonorganic effects, primarily negative currency translation of 3.2% due to the depreciation of several currencies such as the U.S. dollar, [indiscernible] Argentine peso and others. Changes in the consolidated group, including the deconsolidation of BHC and the [indiscernible] business in 2024 contributed a further 1% to the decline. Adjusted for these effects, MAHLE sales were at previous year's level with slight organic change of 0.6%. Sales development was impacted by lower vehicle production in Europe and North America, but price adjustment helped to offset the reduced customer demand. Now let's look at the MAHLE Group sales by business unit for the year 2025. The powertrain and charging business unit reported sales of EUR 3.9 billion, a year-over-year decline of about 1%, mainly due to negative exchange rate effects. The business unit represents 34% of the total group sales. The Thermal and Fluid Systems business unit generated sales of EUR 6.1 billion, which is 4.8% lower than the previous year. The decline was mainly driven by negative currency translation effects as well and the deconsolidation following the sale of BHC and the [indiscernible] business in addition to lower customer demand in Europe and North America. The business unit accounts for 54% of our total group sales. The life cycle and mobility business unit accounted for sales of EUR 1.2 billion. This reflects a decrease of 4.3% year-over-year, mainly due to negative exchange rate effects. The business unit accounts for 11% of total group's revenue. Adding the OES business, Included in sales figures of business units, powertrain and charging and thermal and fluids, the business unit sales would be higher by EUR 715 million, resulting in total sales of EUR 2 billion or 17% of the group sales. The following slide gives insight into sales across 3 dimensions: By regional split, distribution channel and customers and thus, proves our diversified split. We operate globally close to our customers and develop innovations based on the needs of the respective markets. MAHLE is currently represented in 28 countries with 127 production sites and 11 tax centers. We produce regionally, our sales are well distributed across key regions. Europe is our largest market, contributing 46% of the total sales. North America follows with a 27% while China accounts for 9%. South America and East Asia each contribute 7% and India currently represents 4%. While India share is still relatively small, it's growing rapidly with organic sales increasing by 23.8% compared to last year. This strong performance highlights India's rising imports as a strategic market for MAHLE. MAHLE sales are also spread across the distribution channels. The original equipment business for light vehicles account for a little over half of group sales. The aftermarket business contributed 17% and the other channel, another 17%, and the OE business for medium and heavy-duty vehicles represents 12%, all those being further important sales channels. Our customer portfolio is well diversified. The 10 largest customers together account for less than 50% of total sales. Compared to 2024, MAHLE is delivering a visible improvement in profitability. While organically sales remained broadly stable, adjusted for restructuring costs, gross margin rises from 17% in 2024 to 18.2% in 2025. This reflects continued productivity gains and effective pricing measures driving margin expansion despite a flat revenue environment. Adjusted EBITDA margin improved to 7.8% in 2025, a 1 percentage point increase versus 2024. Despite headwinds from high labor costs, unfavorable FX and lower volumes, strong productivity improvement and effective sales price adjustment supported margin expansion. Reported EBITDA, however, declined year-over-year due to the absence of the prior year's one-off gain from the sale of PHDC shares and elevated restructuring costs in the reporting year 2025. In 2025, our EBIT margin increases to an adjusted level of 3.9%, representing an improvement of 1.9 percentage points compared with the reported. The increase is mainly driven by the adjustment of restructuring effects, contributing 1.3 percentage points, further supported by adjustment related to purchase price allocations, goodwill amortization and the release of [indiscernible]. We continue to aim for an operational EBIT margin of 7%. Given the current market environment and adverse external conditions, reaching this level will take additional time and is, therefore, expected over the coming years. MAHLE generated a positive reported free cash flow of EUR 135 million in 2025., representing a year-over-year decline of EUR 258 million due to several nonrecurring effects. When adjusting for items such as acquisition disposals, restructuring measures and working capital optimize programs, recurring free cash flow remained at a comparable level. This underscores MAHLE's stable underlying cash generation, supported by improved operational performance and continued CapEx discipline despite higher tax payments in 2025. Net debt at year-end 2025 declined by EUR 136 million to EUR 1 billion compared with EUR 1.2 billion in 2024. Improved operational performance, comparably low capital expenditures and a positive cash impact from the closure of U.S. dollar swaps could overcompensate for cash outflow related to taxes, restructuring and the full acquisition of MAHLE BEHR shares. Despite lower reported EBITDA, the improved net debt position supported a stable and conservative leverage profile. I would now like to hand over to Ralph Josephs to give you an update on our financing profile.

Thank you, Markus, and welcome, everybody. Our funding portfolio is well diversified. The main funding source are capital market instruments, bonds complemented by the syndicated RCF bank loans and working capital financing tools, which contain ABS and factoring programs. Given this variety of funding sources and proven capabilities in the high-yield capital market, we feel very comfortable dealing with the upcoming maturities over the coming years. As of December 2025, liquidity from committed credit lines plus cash on balance sheet totaled EUR 2.2 billion. As of 31st of December, also our debt maturity profile is diversified and balanced through 2033. Corporate bonds are maturing in 2028, 2031 and 2032. Our syndicated revolving credit facility of EUR 1.2 billion provides for backup purposes and short-term cash flexibility and is virtually undrawn. As of February 2026, this credit facility has been extended with all lenders consent through February [ 2029. ] This collaborative effect reaffirms our strong relationship with leading financial institutions and highlights our ongoing commitment to maintain a robust financial structure. For MAHLE, ESG remains important. At the foundation-based group ecological and social responsibility as well as a strong governance structure from the unifying theme of our actions, and we fully support the goals of the Paris Climate Agreement. Our achievements in terms of sustainability are well documented and acknowledged externally. Since 2023, our climate targets covering Scope 1 to 3 emissions have been validated by the science-based target initiative, and we regularly report on our progress towards these targets. By 2025, we have reduced scope 1 and 2 emissions by already 47% compared to 2019 levels. With regard to Scope 3, we have achieved a reduction of 23%. In October 2025, MAHLE was awarded the gold medal by EcoVadis, one of the leading independent specialists for corporate sustainability ratings. With 82 out of possible 100 points, the MAHLE Group ranked amongst top 2% of all companies assessed by EcoVadis worldwide. CDP, formerly known as Carbon Disclosure Project, rated MAHLE with an A for climate change and A minus for water security, placing MAHLE, again, on the so-called CPA list. We report our ESG performance on a yearly basis, and ESG data is externally assured by an independent auditor. In preparation of the upcoming European sustainability reporting requirements, our annual sustainability report 205 has now been integrated into the annual report and is available on our website. I would now like to hand back to Markus to give an update on our outlook and upcoming events.

Thanks, Ralph. Geopolitical tensions are adding uncertainty to our planning for this year. In addition to potential disruptions in supply chains and logistics, there is a risk that the broad economic environment could weaken consumer demand. For 2026, we currently expect sales of around EUR 11 billion, an EBITDA margin of roughly 7.5% and a net debt-to-EBITDA ratio of about 1.2x. To conclude, 2025 was a year of continued challenge but also one of clear progress for MAHLE. Through disciplined execution, decisive measures and a strong focus on efficiency, performance and cash gene, we strengthened our financial resilience and laid important foundations for the future. While market conditions remain volatile and uncertainty persists, we are firmly focused on what we can control. With a robust balance sheet, a diversified technology portfolio and our back on track program firmly in place, we are confident in MAHLE's ability to navigate the transformation ahead and to further improve profitability and cash generation over time. With this, we are coming to an end with the annual results 2025 investor call and would like to [indiscernible] upcoming calls already. Our next call is the Q1 2026 call scheduled for June 1. The half year results 2026 call is on September 9, followed by the Q3 2026 call on December 1. For further updates, please visit the Investor Relations section on our website, mahle.com. Thank you very much for your attention. and we would now like to start the Q&A session and are available for questions in the next 20 minutes.

[Operator Instructions] And we have the first question by the phone. [indiscernible] from [indiscernible]

[indiscernible] speaking. Congrats on your great results. I have 3 questions in the line. The first question is about the current headcount reduction program. About 3,100 shops have been cut in the current year. Are there any figures or further plans for the reduction or the resulting costs for 2026? That would be my first question. The second question would be about the current situation regarding in the mobility market. I mean many other suppliers are complaining about low production capacity utilizations and postpone production plans by the big OEMs. Can you provide us with a little bit more color, let's say, what is the situation at MAHLE and the production sites of MAHLE and the last question would be about the possibility for the possibility in future business areas. Are there any strategic considerations to possibly end the business areas such as humanoid robots or the defense business like like some competitors of you announced in the last couple of months? That would be my 3 questions.

Thank you very much for the question. So I'll try to go one by one. So you mentioned the headcount reductions, and we will see further headcount reductions in this year. And one of the major elements is our program, which directs on the indirect headcount. I think we also announced that. So it's publicly available. It's about 10 people on the indirect sections, mainly between Europe and North America. We provided for that in our restructuring expenses already in the balance sheet of [ 2025. ] Currently, so in the U.S., a lot of that was already executed. Currently, we are here, especially in Europe, it's mainly impacting Germany, yes, not only but mainly, we are targeting about 550 employees here at the headquarter. We started about now, I think, 3 weeks ago, a voluntary program and an early retirement program. It's currently being discussed with the respective employees. And in parallel, we are negotiating with the employee side on a so-called gaining [indiscernible] track, a tariff contract which also offers contributions from the employee side. We target to have that finalized in May. And then, obviously, volatility asked for adjustments on the blue collar side, wherever it happens in the region. So I count also in the current context and with efficiency gains, which we have sales are more or less flat, what we expect. But with efficiency gains, also a few more on a global perspective to drop out, but too early to say the exact number here. If we go into duration of e-mobility programs. And yes, we feel that as well. I think we also -- in the press conference, we mentioned the restructuring and write-off, which we embedded in our 2025 result was in the amount of EUR 214 million. If you just take the write-off, which is purely related to, let's say, delayed [indiscernible] programs. It's only EUR 30 million in '25. But you have to account for if you compare that with most of the other messages from competitors that we do our balance sheet in German commercial code. That means all the R&D expenses are already expensed in previous years, while for a lot of the competitors under IFRS, this is also in the balance sheet, and it's part of the big write-offs for us already digested. So that might feel comparably low, but that's one of the major reasons here. And we see that, especially in North America with a delay, but also in Europe, so programs are either canceled or delayed in that aspect to a certain aspect, but also ahead of having, let's say, a lot of spend already in the beginning. But we watch carefully here in that relation. The strategic part in terms of, yes, let's say, let me call it, industry business in a broader way. You mentioned human robot but also defense. So MAHLE is delivering to the defense industry already for decades. And we see let's say, a growth in those areas, but we talk here about, let's say, double-digit million euro numbers, which we might double in sales even which is really a good contributor. Overall, our industry business is at around, let's say, EUR 700 million. We target to increase that to EUR 1 billion which is good and good profitability then also. But if you put that into relation to, let's say, EUR 11 billion group. It will not turn around generally the overall setup of MAHLE. But yes, we look on those and it's mainly transfers of existing products, which we see in light vehicle, heavy-duty vehicle and with adaptations then to the respective industry segment. And we strengthened that -- maybe a last word here. So we bundled our industry sales into 1 key account with the reorganization, which we did last year. This was also one of the moves and helps us to target also here more precisely.

Okay. Maybe just sneak in a little follow-up question about the last point about the [indiscernible] sector. Can you comment on your customer structures here? Are we talking about 1 or 2 big customers? Or is it more diversified?

Yes, I would not go into too much detail, but it's not only in Europe, we can say it's also in North America, and it's also in India, for example. [indiscernible] it's on the industry side. It's a couple of the ones you read in the media all the time.

So we have the next question from [indiscernible] from [indiscernible].

Just some clarifications on the guidance, please. So for the evidence of the 7.5% EBITDA margin that you are guiding to this compares to the 6.9% reported margin, not to the 7.8% adjusted margin. Just a confirmation there. Okay. Great. And so this is reported EBITDA. So what would you expect to achieve in adjusted EBITDA? Or is adjusted and reported EBITDA for 2016 is expected to be the same?

No, no. It's again, higher, we would anticipate. So we feel comfortable for the moment what we also saw in our budget expectations where we, on an overall perspective, said, okay, we want to increase another percentage point in profitability. So we target on that. And if we achieve more, we would, again, like last year, think throughout the year where do we need to anticipate potential further restructuring into our results. You can definitely add for sure, another 0.5 to 1 percentage point on the adjusted.

Okay. And then just a clarification there. So you already have some restructuring plans in place, but what you're saying is the 0.5 point age point adjustments on EBITDA would be mainly related to provisioning where decisions haven't yet been fully made for the full year?

Exactly and we'll be exactly, exactly. A little bit like last year, yes, you know we still have to improve basically on every P&L item. And if we see the chance to go quicker, this is something we would review throughout the year again.

Okay. Great. And my second question would then be around if you could give us a little bit more guidance on some of the related cash flow items for the full year to the extent you can give us indications on tax, working capital interest and CapEx?

In '25, you mean then yes, in comparison, especially?

In 2026.

Yes. We will see on the -- let me start to build the bridge a bit, especially because some of the questions in the chat might be closed with that also. When we look in '24, the restructuring cash out was about EUR 36 million. In '25, it's about EUR 87 million, and we target up to EUR 200 million in '26. If we go on the tax cash out in '24, we were at EUR 187 million. We had in '25, EUR 254 million. So really a high tax cash-out relating also to gains out of '23 and '24, and we target to be double-digit million only in '26.

And working capital, do you expect an inflow, outflow, what magnitude?

Fairly balanced. We still have some -- so we see sales are flat more or less here if you consider that. And we still have some improvement possibilities on our inventory, especially in the life cycle mobility area, but also on our [indiscernible], but I would say we consider it for the moment as a flat development with upside changes.

In CapEx, you had relatively low CapEx in '25. Is that meant to continue? Or is there a bit of a step-up [indiscernible]

It's a bit of a step-up. Our CapEx budget was around EUR 420 million. And we see -- we keep that still in our forecast. There might be some chances to have that reduced as well. But for the moment, it's like in budget.

And then lastly, could I just ask for sort of what you're budgeting for total interest paid for next year. I'm sure we can back calculate it, but you have some ABS that's new, so on and so forth. So maybe a cash interest out number would be helpful.

Yes, I have -- so when I look just at the pure financing interest, let me start with that one. We had last year, and this is just the net financing around EUR 110 million. I would expect it in the same range. If you add, let's say, other programs and so on, you add another EUR 20 million or so -- EUR 20 million, EUR 25 million, I think it would be in the same range as well. But this detail could [indiscernible] can give that even more details.

The next question comes from [indiscernible] from Deutsche Bank.

Most of my questions were actually answered. Just one question on the EBITDA margin since it's improving. Can you give us a bridge where those 60 basis points are coming from? That's the first question. And do I understand it correct, once you have formalized restructuring costs of up to EUR 200 million, is this going to be then readjusted down? Or the margin? Or how is it going to work?

So the -- let me see if I understood it right, and then correct me if my answer doesn't please it. So the restructuring, the EBITDA margin of '25 is you look at the [indiscernible] is adjusted for this EUR 214 million. And I'm not quite sure if I understood it, the cash out, what I related to, we expect in our forecasting about EUR 200 million of cash out in '25. Yes, '26, obviously, yes. But that would have been adjusted already for -- in last year, '25. In '26, we also foresaw already a certain restructuring amount in our P&L item, but this is already in the, let's say, the EBITDA forecast, which we gave is already included [indiscernible]

Okay. This is very clear. All right. Great. And can you give us a bridge for the 70 basis points improvement in EBITDA in the, let's call reported EBITDA? Where this is coming from?

You mean now between the forecast in '25?

Yes.

Okay. Yes, this is operational improvement, basically on those elements. This is really coming -- if I go in detail, it's on our 4 programs, which we have on the P&L side in back on track. So we will have further elements on the pricing sites of top line. We have our productivity gains in production. We have our [indiscernible] so this is the internal product cost optimization in purchasing. And then you will see a significant contribution also from the indirect cost reduction. So the program I mentioned, we have the expectation to save EUR 150 million on the indirect cost, about EUR 100 million come out of personnel cost. I mentioned roughly 1,000 employees of reduction and EUR 50 million out of other costs. This is split typically of such a structure. And we embedded for our 26 assumptions, a ramp-up of already EUR 70 million to EUR 70 million out of that, which we are throughout the year on track to realize that. And then the fully annualized impact of the EUR 150 million we will see in '27.

And the next question comes from [indiscernible] from [indiscernible].

Yes, I just wanted to ask first on the factoring. Can you remind me of how much factoring you are using?

ABS and factoring together amounts to EUR 300 million. The split is EUR 276 million ABS and EUR 46 million factoring.

So it has decreased year-over-year, right? I think in the past, you had something around 500?

No, no, no.

Okay. So you are around EUR 300 million of -- we are working [indiscernible]

We increased in 2023. And since that, it's relatively stable. But the base funding to us is reasonable right now, and we do not foresee any further change.

Okay. Yes, I think since we are in April and given your optimistic outlook for full year. So can you confirm that current trading was in line or it was rather going in the right direction?

Yes, I can confirm that for the first quarter.

Okay. So do you see any kind of impact from the ongoing conflict in Middle East, especially with the rising oil prices. Do you have [indiscernible], I mean, people are more reluctant to make purchases and the volume will be revised down in the end?

Yes, fair question and also kind of, in that case, also answering already what is in the chat from Tom. So we don't see it yet in the overall sales forecast. So this is somehow this aspect of, okay, how long does the conflict around Iran go on. If that 1 would last into Q3, Q4, I think definitely, this would have behavioral impact on customers buying cars and not and with that reflected on motor and engine production, but we don't see it for the moment. So our sales budget was around EUR 11.2 billion, and we see that currently also for our full year forecast around EUR 11 billion. So not yet visible. What we see is obviously an indirect impact on prices. Not only now Iran already before, we had aluminum, copper, nickel, you saw that on the LME increasing. While we are overall fairly compensated on that 1 with material clauses with our customers. There might be sometimes a delay in compensation. Depending on the customer, there is a 1 a 3-month or a 6-month delay in compensation. So that might be that 1 or the other element would have a calendar impact on P&L, but not overall. And obviously, on the supply chain, so far, we are managing, mitigating that well. But we kind of made a risk scenario for us. And if we embed those things to a P&L impact from a cost perspective, this would amount around EUR 100 million for the moment. And we feel like this is size, we have to mitigate and manage. So yes, is there some some risk and stretches in that one. But from today's perspective, we see as if this for us is well pleased through mitigation.

Okay. And last question is on the '28 bond. Do you have kind of a plan to address it? Or you -- because of the [indiscernible], you wait until next year?

Well, let's say, given our strategy also in the past, we, of course, will keep an eye on the 28 maturity. And in general, we refinancing -- we are refinancing upcoming debt maturities somehow 15 to 18 months in advance currently, of course, it's a little bit dependent on market environment. We feel very comfortable with the funding sources we have in this respect. So we are not desperate. But of course, we will take care of the refinancing writing advance. So let's say, second half of the year or beginning of next year, at least would be an option.

Thank you. So there are no further questions. Back to Mr. Kapaun.

Okay. Then thank you very much for attending the call and for the questions and for accompanying MAHLE and looking forward to the next Q1 call then. Have a good day.