Meyer Burger Technology AG (MBTN) Earnings Call Transcript & Summary

Dear investors, analysts, ladies and gentlemen, welcome to Meyer Burger's webcast presentation of the results of H1 2021. My name is Gunter Erfurt. I'm the CEO of the company. With me, I have the CFO of the company, Mr. Jurgen Schiffer; and our Managing Director responsible for Sales and Marketing, Mr. Moritz Borgmann. Two housekeeping advices, this conference is being recorded and available on demand from Meyer Burger's website after the call. And the second housekeeping advice is that you find on your left screen side, a question mark, which you can use to send us a question, which will be answered after the presentation of myself, Jurgen Schiffer and Moritz Borgmann. The presentation is going to take about 20 to 30 minutes, and then we have around 30 seconds -- 30 minutes to also answer your questions. Moving on to the next slide. So I will give a quick review of what has happened in the last period and also most recent developments. The financial statements will be presented by Jurgen Schiffer. And I believe, the most important to all of you, the sales and marketing update, you'll hear it directly from Moritz Borgmann and then we will close with an outlook. In the solar energy markets, nothing really has changed, at least not to the negative side. What we can conclude from observing the markets in the past month is neither the COVID pandemic, nor the resulting module price increase has affected the solar market growth prospects. So we stick to our earlier publicated expectation with regards to the global solar market growth of a CAGR of plus 13% for the years to come. And this is driven essentially by the fact that solar is -- solar energy is already among the most competitive sources of electricity and will most likely stay there for ever and ever. So what we have communicated today in our press release is something that makes me very proud, makes the company very proud. We have completed our strategic transformation. That means we have in the last -- on the H1 2021, and since we announced the change of the business model, delivered and achieved all the major transformation milestones which we had communicated in our plan. So especially in the Sales and Marketing segment, we have been able to start reestablishing Meyer Burger as a premium solar module brand. So this is a process that is still going. It's not finished, and it will be continued and Moritz will give us an update later. We have done successfully the product launch and this year's start. So this happens basically at the same time. We have also, as planned, achieved our IEC certification, which is required in order to also sell the product. The production was started. We had the grand opening of both factories in May. We have moreover before, of course, opening the factory, secured the supply chain for all the materials for the cell and module production, so in that respect. And despite the current tight situation in global supply chains, we can report that we have no issues on that front and are able to feed our production accordingly with the materials required. And we have started the ramp and -- the start-up and the ramp of the line, which is not entirely completed as we have communicated a week ago because we were suffering from, I would say, minor supply chain issues, which had a great impact to standard components needed to start up certain equipments [ that ] were not available on time. And last week, we concluded, as a management, that it is very unlikely that we can keep the advice time line or envisioned time line of closing the ramp at the end of August. So that's going to take a few weeks longer, but this is not a strategic issue or a material event. In terms of the organization and the financing, we have also been able to transform and rebuild the organization. As you know, we had to grow a new sales organization, a new marketing organization and disposals went very, very well besides, of course, also growing the operational organization or operations organization with all the personnel required to run in a full continuous 24/7 mode as well also to supply chain organizations. We can report today this process has come to an end in regards or in respect of having a critical size of an organization in place that is working on the common targets. And last but not least, but this is not in order of priority or in order of impact on our business transformation, we were able to secure the growth financing both in the debt financing as well as in the funding that we received from the bond placement and the additional share placements. So I would also like to spend a few minutes on the last week reported delays in our production ramp-up because it may have sounded very serious, but I can assure you that the -- that this is of temporary nature only and it's closely managed and we expect this to be resolved within the coming few weeks. So we did, as expected, start module deliveries in July. The cell and module production has transitioned to 24/7 operation, as I've already mentioned. So that also means we were able to hire enough personnel also for the shifts operations. As I already mentioned, we have been able to secure all the components and the materials required as direct materials for the cell and module. So this is -- has been secured the current capacity. And also from today's perspective, we do not see critical issues for the anticipated growth of the business. But bottlenecks in the supply chains for some standard components, very, very simple components, nothing really critical, had an impact on decommissioning of certain machines and hence, has also this small negative impact on the speed of the production ramp. But the components have arrived, so this gap is closed. But the delay, we have piled up, if you will, we are unable to keep up or catch up [ the expectation ] in order to get back to the original plan. So this is very unlikely to happen. Therefore, we expect the ramp to be completed a few weeks later. And the sales team is in very, very close discussions with our customers who are affected. So what I can also say, and with a lot of pride is that we have now entered the operational phase. So from -- coming from the transformation phase, which was pretty challenging in many regards, we are now a solar module manufacturer with a growth road map that we are executing accordingly. And so we are now in a phase where we are optimizing our operating business, both in manufacturing, in supply chain management, and of course, the sales and marketing and we are in parallel, of course, preparing the next growth phase and are in the midst of these projects already. So supply chain management has secured all the materials as I already mentioned. And we have now also introduced a process where we continuously minimize supply chain risks and optimize our procurement pricing, i.e. multi-vendor strategy is pursued. We have also, in order to achieve our planned cost structure, we have launched projects, which aim at achieving target costs in accordance with the business plan and the next expansion project to achieve or to reach 1.4 gigawatts of cell and 1-gigawatt module in our existing factories in Germany is underway, and we have already started ordering the equipment. It's closely monitored and tracked. And also, this requires some management attention as also the -- for the equipment business, supply chains are tight, but we have started only enough. And I believe we can deliver things on time. So the decision for the second module production side for the additional initial 0.4 gigawatts is underway, and we had communicated on June the 16th but we expect to make a decision in the third quarter of 2021. So this is very likely happening within the next couple of weeks. We have an update also on the competitive situation and the message here is comparing this with what we have communicated on also June 16, with the last update before this one, nothing really has changed. So we still see a situation globally where the majority of existing Tier 1s and the industry leaders, primarily the companies from China that you see on the right side, with Aiko, Canadian Solar and the others are continuously focusing their expansions on PERC existing technology. We see a little bit of cadmium telluride with First Solar. Also a little bit of TOPCon announcements, but not really much. And [ at ] Meyer Burger, that's what we can really say. We have a well-founded expansion strategy, number one, because we have a plug-and-play technology available; and number two, we have now the funding also on-hand and can act according to market requirements. And we'll, of course, continuously monitor this. So the manager are not stuck. Our competitors are standing still and do nothing. Of course, everybody is trying to get the foot in the door into new technologies, but we believe we have a big advantage and a timing advantage here due to our plug-and-play ready technology. And speaking about technology, also this was already communicated, but since this is a hot year, 2021, communication, I would like to reemphasize this. We have designed building factories, hiring people, setting up sales and marketing and everything we spoke about. We have, of course, also continued working with the next-generation technologies, which is as an next step to our Gen 2 heterojunction, which will provide much higher module efficiencies and energy yields, and we could achieve a proof of concept of 24.7% module efficiency. This is an outstanding result, and we are working now towards the finalization of the industrialization in order to be ready to use this also in production and to produce the products accordingly. With this, I'm coming to the end of my part of the presentation and would like to give the floor to Jurgen Schiffer.

Thank you, Gunter. Good afternoon, ladies and gentlemen. I'm Jurgen Schiffer, CFO of Meyer Burger Group. And now I am presenting to you the figures of the first half year report 2021. But please, before I step into the report, please allow me some short comments. These figures, I am presenting to you are characterized by the transformation on the one hand and the ramp-up phase on the other hand. Therefore, this report should also interpreted against that background. Let's start with the net sales. You'll see the CHF 18 million in this. It includes the machine sales to legacy service business and inspection equipment business. So reducing business of machinery producer at least a negative EBIT of minus CHF 34 million end of June '21. And accordingly, net sales also minus CHF 37 million. You see the active -- activity of the new business model in the following pictures. The employees, the noncurrent assets and equity, the employees measured in full-time equivalents. We have 1,743 end of June. You see also the increase in our equipment within the last 6 months of CHF 50 million up to nearly CHF 90 million. And still, you see very high equity ratio of about 82%. Thank you on the next slide. So our successful funding in this year is not shown in the first half year. Therefore, I provided you a little preview, which you can see here. We have here, our equity increase, about CHF 80 million. We have our successfully launched green senior unsecured guaranteed convertible bond of about CHF 148 and a syndicate loan facility of EUR 136 million. And with factoring agreement of CHF 65 million, retained a total funding of about CHF 440 million. So that was roughly the key figures from my side. Thank you.

Thank you Jurgen. So please, Moritz, it's your turn. I'm switching slides and you tell me when to go to the next slide.

Perfect. Thank you Gunter and Jurgen. My name is Moritz Borgmann. I'm Managing Director at Meyer Burger and I'm responsible for all commercial aspects of the business, i.e., sales, marketing, product management and business development. And Gunter, if you would switch to the first slide, thank you.

Already there.

Great. Next one.

So we have this ...

We're still seeing the chapter divider. should be on Slide 16. I don't see it in the webcast yet. Okay, there we are. Good. Perfect, thank you. So I'm very happy to report that now is the time that we can finally back up the confidence that we have had as management into our new business model with hard facts.. And I can also say that we, as management, are very happy with the results so far. The results on the sales side are fully in line with the expectations in the business plan and even exceed our personal expectations as management. So what you see on this slide is that with the -- can you please stay on #16? With the launch of our products in April, we immediately started taking orders. And since then, we have experienced a steady ramp-up in our order book and are very, very happy about the volumes, which is now reflected in the fact that we're well sold out into Q4 2021. And also, of course, the very important message is that the pricing that we're selling at is fully aligned with the expectations. And currently, we are, in fact, limited by the availability of product in terms of onboarding new customers. And as we ramp and of course, also, as we expand our production capacity next year, we will be able to take on new customers. Some sales highlights include, first of all, we have now around 30 customers on board, and this includes all the big players in Europe and already some very relevant players, market leaders in the U.S., including names such as BayWa r.e., Krannich Solar, IBC Solar, Sonepar, Memodo and in the U.S., CED Greentech. And this means that we are extremely well represented in all the relevant sales branches. In fact, we are now represented in more than 60 individual country branches of our customers. And it is safe to say that installers that want to install Meyer Burger usually have a very easy and convenient way to actually source Meyer Burger product. Among the installers, already, more than 175 have listed with us and registered as Meyer Burger installers. This number keeps growing week on week. And we have especially good coverage in the German-speaking region of Germany, of Europe and are currently quite actively expanding that into the further countries in our core regions as well. As Gunter said, we have now started shipping product end of July. And I'm very happy also to report that we have booked first orders in the project business, i.e., orders for the utility and large C&I segment already ahead of plan. These are, of course, pilot products, since at this time, we do not have the specific customized utility scale product yet, which will come in the -- at the end of 2022. But do we have to pilot large-scale observations on our path to bankability, of course. This all is backed up with a very strong commercial team, of course, foremost the sales team. We have an extremely motivated team and we repeatedly managed to hire the top talent in the industry. And what we are doing here is really giving our staff a sense of purpose, and we have there, mission-driven people on board, which fills me with great confidence that we can then also translate that into future sales success. Next slide, please. So I want to go into a bit of detail on why things are currently going very well. And this has 2 key drivers. One is that we have an intrinsic strength in how we are approaching the market, but also we are experiencing tailwinds from the markets, i.e., the macro environment. Gunter have you switch to #17, I'm still seeing 16 on the webcast.

Yes. Yes, I did. It takes a little longer apparently.

Okay, good. Okay. So of course, the key strength that we have is our product. And it ticks all the right boxes in terms of market demand. So we have a highly performing product that is among the best, if not the best performing product currently in the market, which is manufactured according to very high European quality standards. It is manufactured in the heart of Europe, very close to the demand. And of course, we also have very high sustainability standards, which all meet the requirements and expectations that customers, especially in the premium sector of the residential market, have. We have already started the preparation of our sales and marketing a long time ago already in the third quarter of 2020, immediately after we had decided on the strategic transformation and came the first financing round. And this is now paying off in the sense that we have now well-established relationships to the -- around 30 customers, as I said before. And we can now execute on those existing relationships. Also, what we clearly sense in every conversation that we're having is that we do enjoy a high-level of trust. Of course, we are not a -- in a sense, we are a startup. But we, at the same time, have a long history going back to 1953 and we are perceived as a very reliable quality player. And we are seeing that trust and the relationship to our customers already today, even at the point where we've just started shipping product. The sales and marketing team has a very, very long track record, a collective track record and experience in the market and, of course, also brings an extensive network to customers to wholesalers, distributors and installers market. And this is now also helping us to take off from the ground and realize our sales. And last but not least, the human touch is very important. Meyer Burger wants to be close to the customers. We are here in the market in Europe, in the U.S. We're close to our customers, the distributors and also the installers. And I'll also talk about customer engagement a little later. And this is clearly also rewarded and very well perceived. In terms of the macro environment, the overall growth of demand is continuing unabatedly, especially in our focus regions. And on top of that, we are currently seeing very poor availability of PV modules in general and especially the disruption in the global supply chain and logistics are having a huge impact on the availability of modules here in Europe and also in the U.S., which means that our competitors are currently struggling with supplying their customers and are usually perceived as being quite unreliable. And our customers are having a lot of brief with fitting their orders that they're getting from their customers. On top also, there is a heightened awareness, of course, of the product origin in connection with the logistics, also in connection with certain supply chain issues related to sustainability. And we can, of course, already assure our customers that we have a clean supply chain, that we are sourcing our silicone from renowned manufacturers, such as Wacker. And of course, we are manufacturing here in Europe and a very large chunk of our value creation is happening here in Europe. Related to the poor availability of product, pricing of standard module has also gone up quite significantly, which, of course, helps -- generally helps. And then to sort of the icing on the cake, the -- our competitors in our specific segment, i.e., the premium segment are currently struggling. Many of them are losing the technical edge. There's some brain drain as well going on, and we have seen competitors losing market share. And we are stepping in with our product, which is a technically highly differentiated product manufactured in Europe. And so again, we are filling the right market demands at the right time and are confident that we can very quickly gain substantial market shares from our competitors. Next slide, #18.

So it may take, again, a little bit of time.

Yes. So as a background, there has been quite some discussion in the market around our sales strategy and how we are scaling our sales. What I want to convey today is that we have a very scalable sales model. And the key paradigm is that as we scale up our production capacity, our revenues will effectively be limited by the available production capacity. And the objective of our sales effort is always to basically sell all the product that we are manufacturing, of course, up to a customary small amount of inventory that simply need to be kept for reasons of flexibility. And so we have, quite strategically, divided our sales efforts into 4 phases. The first phase is now coming to a close, which was the market entry in the rooftop segment. And we successfully set up our sales organization. We built our customer network, which we're still expanding on, but the base foundation is now set. And we are now ensuring the availability of our product at all the key customers. This is still an ongoing process as we have just started shipping product in July. And the focus is on the core European markets, especially the German-speaking countries and also increasingly in the U.S. Now this is immediately followed by Phase II, which we are basically entering now, which means that we then need to make sure that our customers, in turn, are selling our product, which we have delivered to their warehouses to their customers. So selling through the product is the key objective here. And this requires, on one hand, a very dedicated and intensive sales effort, which we are in full gear running with our sales team that we have on board. So we are now engaging the distributors and the installers with the objective to turn as many installations as possible into a Meyer Burger installation. And at the same time, we have launched our end customer and installer marketing campaign, and I'll talk about that in a bit as well, which is, again, very important to create the pull from the market for the new Meyer Burger product. And at the same time, strategically, we are pursuing pilot projects for utility and [ more ] C&I installations, which then serves to prepare bankability and build the pipeline for the last stage, which is the execution on utility projects. This phase will span for around 3 to 4 quarters well into the second half of 2022. And at that point, we will be expanding our production capacity in Freiberg to approximately 1 gigawatt, i.e., more than a doubling of capacity. And of course, we need to be ready by then for the market to absorb that additional volume. And this means that we will continuously strengthen our covered markets. Also, of course, then putting more and more emphasis on the non-German speaking countries. We will additionally also start to supply into further markets such as the markets in the APAC region, of course, the U.S. will get even more into focus. And we will also start executing on our C&I pipeline, which we are already in the process of building up. And we will have a specific product at that time that is targeted and catered towards C&I projects. And at the same time, we will continue building on bankability for the later entry into the utility segment, which is then going to happen with the opening of our second module fab initially with around 400 megawatts of capacity, which will then be able to produce specific utility-scale products, which we will then sell into our pipeline, which we have more than a year now to build up. And so overall, if you are sort of wondering to how our overall sales process is working from order intake to delivery invoicing and revenue recognition. Currently and for the time being, well into 2022, we will be operating primarily under a distribution model, i.e., we continuously supply our customers, they keep a certain amount of stock, typically a couple of months on stock, and we resupply them as they sell off the product. And then as we enter the C&I segment and later on, also the utility segment with larger volumes towards Q3 and Q4 of next year, we will be experiencing longer lead times and also an even longer visibility into our order book. It doesn't mean that we don't have long-term visibility into our offtake already now. The opposite is the case. We do not have the firm orders yet stuff on a very long-term basis. But of course, given that we have now successfully entered the market, the demand there. Our product is in high demand, and the markets are not stopping. We can, of course, be very confident that this business model is working very well on a rolling basis. Okay. I would like to then continue on the next slide. On #19 and give you some insights into how we are now fueling the demand and creating the pull from the end customer side and also the installer side, of course. And the key for that is the brand and the marketing efforts that we are running, which is basically put on 4 pillars. The first one is our very successful repositioning of the Meyer Burger brand, and we've seen that since March of this year. We have completely reinvented Meyer Burger also, from a corporate identity perspective, as a European premium solar module manufacturer. And this is very well reflected in our new corporate identity and is receiving very good recognition from the market. And then the second pillar is our digital marketing campaign. So quite deliberately, we are almost exclusively focusing on digital channels for our advertising and end customer marketing specifically, because we are convinced that this is the most effective way to spend our media budget. And this way, we can target our potential customers in a very efficient manner. I'm very proud that we have just launched a terrific marketing campaign, which was built together with the renowned marketing agency, Jung von Matt. And you may already have encountered some of our ads on YouTube, Facebook, Google Search, et cetera. If not yet, I'm quite certain that you will, over the next couple of weeks and months. And please also have a peek at our new brand clip, which you can see on our website. Next to the marketing campaign, it is also very important for us to set new standards in terms of how we engage customers and specifically, end customers. This is really quite novel in the industry. So far, the dialogue between the dialogue between and the engagement of the module manufacturer with the end customer is typically quite limited. But our ambition is to set new standards in that respect. And for that purpose, we have already launched the Meyer Burger app concurrently with the product back in April and are continuously expanding on the functionality. And last but not least, of course, we are also present physically, primarily at trade shows and customer events. And of course, this is currently slightly hampered by the coronavirus pandemic situation, but we are confident that we will still have 3 major trade shows this year. And that is, of course, very important for the direct contact to our customers. With this, I would like to conclude my section and hand over back to Gunter. Thank you very much.

Thank you, Moritz. So I have the pleasure now to provide you an outlook of what we expect for the next period before we come to the Q&A; and I'm sure we'll get back to you, Moritz with many questions already received from the audience related to sales and marketing. So what we can conclude as of today is Meyer Burger is now standing on 4 substantial strong pillars. On the 1 hand, we have a future-proof technology platform established, i.e., we can build on what we have in place. We can do add-ons, if we will, to enrich the technology and get to number one, higher efficiency levels, but also work on reducing our cost structure accordingly. These new products and also -- or they will -- this will result in a new products and also segments, which we are supplying. We have already provided some examples in previous communications with regards to our envisioned products we are going to launch next year for the utility segment as well as our solar roof tile product, which will, as well, be available in the second half of 2022. And the first reviews being been provided at Intersolar this year in October. The second thing, of course, is we secured financing. We can now execute our expansion plans for better economy of scale. We have more flexibility to act according to market requirements with a solid financing. And just to reflect, the last 12 months were able to raise almost CHF 600 million for the future expansion plans. The strong solar brand as a third pillar was just explained by Moritz. We made very good progress here, but this is not the end. We'll continue to further enrich the branding and Meyer Burger's position as a premium module supplier. And also, as Moritz has entertained to you, we have a scalable sales strategy in place where we are trying to foresee, as good as we can, certain segments and how we can scale and win these certain segments in this sort of market. So Meyer Burger is ready to shine. As I said, the solar markets continue to grow, and this despite the COVID pandemic. That was only last year in June when the pandemic broke out. First wave, the market had seen a little bit of a drop and some delays in the execution of especially utility products -- projects. But what is also now very visible is that despite the -- from the COVID pandemic, resulting rising module prices due to higher input costs have not really [ hunched ] market growth globally. So we can scale on the business and expand the capacities first, at the German sites, which are made ready as we speak for receiving the additional equipment. And so this is going to -- is planned to be completed in 2022. We will have the new products, as I already mentioned, with the utility module, solar roof tiles in 2022. And as Moritz has also explained, we can use the benefit of producing locally. This is not only a big advantage in the market, the way we can approach customers, but it also helps saving logistics costs and shortening lead times to the customers. And last but not least, even though this is -- this has never been a pillar on which we build our new strategy, but as a result also of the COVID pandemic, but also some of the global trends, industry policies in the West are discovering the solar manufacturing sector as strategic. Why? It's not just the in consumer product. It is critical energy infrastructure and this is providing us some more tailwinds also along our expected growth. The financial outlook, our guidance remains unchanged. So we can again confirm the target for 2023 and the long-term goal is 2027. So this we can confirm today. And with this, I'm coming to an end of the presentation.

And I'm now going through the questions one by one as we received them here. Starting and then I will pass on the question to either Moritz or Jurgen or will answer it myself. Starting with the first one, "Do you have any initial feedback you can share with us concerning the first shipments? Have distributors, installers already given feedback regarding installers from countries ex-Germany, Switzerland? why haven't we seen more registrations?" So I think, Moritz, that goes to you.

Yes. This is still too early to say. So as we have just started shipping products. And so overall, the feedback is positive, but nothing substantial to report yet.

Okay. Next question, when can we expect the commercial module efficiency of over 24% in mass manufacturing? That this is most likely related to the update on the IBC technology. So there is no known plan yet when we are going to do this. First of all, we need to work through remaining industrialization topics. This is not yet finalized. But what I would like to say is the product should be introduced into the market when the market is ready and when the time is ripe and not when the product necessarily is ready. So we will carefully balance and find the right time for the introduction of those products. Another one. Going forward, input cost about the spreading of panels allow some differential margin? I'm not sure if I understand the question entirely correct. I believe it's referring to increased input costs and the pricing and hence, the gross profit margin. So trying to answer. Currently, we are facing higher input costs, which we already explained in June. So silicone and -- silicone is the primary driver. We have 1 enormous benefit compared to anyone else in the market that we can, for the silicone example, for instance, we used thinner wafers, as card wafers, which is saving us also -- with regards to the silicone use. And we have other projects, as I said, already launched in order to achieve the cost that we -- where we want to be. And I'm quite confident that we have a very fair chance to be successful. So we have many questions related to the Oxford PV topic. What exactly should be achieved legally in relation to the dissolution of the corporation with Oxford PV. We have another one, which is asking the same thing. What is the outcome of the revenue of legal options against Oxford PV, and so on and so forth. So I would like to answer them all in one. So the legal assessment is not yet finished. So that's why we cannot comment further on these questions -- on this question. So how high will be the total investment in the roof integrated high-performance solar system and what EBIT margin is planned? Also this is too early to say. We are not commenting this as of today. "You said that pricing is very much in line with your expectations. Can we, therefore, expect price levels to be around CHF 0.40? For what peak or above?" Moritz, this question goes to you.

We are generally not commenting on specific prices.

"You're showing your backlog in chart, but there is no number you're sharing or I'm missing anything here?" Another 1 goes to you, Moritz.

Yes. And this is, of course, commercially highly sensitive information. And so we will not share quantitative information on our order backlog at this time.

"So do you expect any issues or delays concerning the availability of components in the ramp of the 1.4 gigawatts, similar to what happened recently?" I mean after the fact you're always smarter from what we can see today, I would say this issue is well contained and under control and manage well. Important for us is, of course, the direct material as well as anything we need to build our own equipment. But as I said, we have started only enough. We have been able to secure many components already, and we'll do so accordingly in the coming months in order to stay on the projected time line. We have other another. Could Meyer Burger, independent of Oxford's stock cross cuts tandem cell production in competitive mass production until end of 2023 and scale production capacity, at least, to over 1 gigawatt. I would answer this question by, there is nobody who can scale production, a mass -- a competitive mass manufacturing of tandem solar cells until the end of 2022. This was never the plan for Meyer Burger and it is also very unlikely that this is going to happen globally. So the technology requires some more years in order to reach the level of competitiveness, specifically also elements like the efficiency on the one hand, but also the reliability and durability of the product. So there is still some work to do. But could Meyer Burger, independent of Oxford stock cross cut tandem cell production? Eventually, the answer is yes, once all these issues are resolved. Have distributors taken more than expected normal stock level sell-through rate trends? I'm not sure if I understand the question, Moritz can you answer this?