Montana Aerospace AG (AERO) Earnings Call Transcript & Summary

Hello, everybody. Good afternoon, and a warm welcome from our side to this year's earnings call of Montana Aerospace for the full year 2022. Together with me, there is Marc Vesely. I have to apologize. My colleague and Co-CEO also, Kai Arndt, it seems like he worked too much. He got ill, and therefore, I have to apologize him. I will guide you through, and I will start with a very simple sentence. When we look at 2022, this quote, which is very well known, "Never let a good crisis go to waste," is more than relevant for us. We remember how strong, let's say, headwind we had at the beginning of the year, not only us but the general economic -- economy in the industry we are in. Energy crisis, material constraints, supply chain constraints, these inflationary costs, interest rates, human resource issues where there is a lack of good quality of labor available in the general markets. But when we look at the results of 2022 for the Montana Aerospace with a net sales increase of more than 65% and adjusted EBITDA which more than doubled in comparison to what we had in 2021, and if you look back also in 2020, for the last 2 years, we even increased our sales by factor 2. And even -- 2022, we, again, increased our contracted sales. I guess we can claim that we didn't let a good crisis go waste. We tried our best to materialize where we are here, what we are in, what we are doing and what we are. We think quite good in it and -- which gives us a well-balanced and a good start for 2023 and the guidance for the next years. If you look into the details, you will see that we had a very strong quarter -- fourth quarter in 2022 in all 3 segments. So Aerostructures rose by factor 2 from EUR 89 million sales to more than EUR 200 million sales in one single quarter, showing exactly the ramp-up and the winning of market share we always claimed after the last -- in the last 2 years. E-mobility, which is more close to its capacity constraints, optimized its sales performance with almost 27% plus in comparison to 2021 and more than EUR 50 million on total sales in the fourth quarter 2022. Energy had a massive change, and we come to that one later, in 2022. This complete -- market developed completely different to the years before. It changed from a customer-driven to a supplier-driven market from excess capacities to a lack of capacity where we are in. And therefore, also here, we see a strong performance, plus 16%. And what we will see then later on, an enormous high increase in EBITDA and also the earnings in total. 2 years ago -- almost 2 years ago, we started with a very strong claim in our journey as a stock-listed company. We claimed -- this was in the midst of the crisis -- of the COVID crisis where no planes were in the sky, airports closed, and more or less no traveling allowed. We claimed that the game changer -- we are the game changer in the supply chain we are in, in the aerospace supply chain. And why? Because we have a certain setup, a setup which is quite special in all our segments we are in. We are producing not only what we do and for the customers we are in but mostly in a way -- in the process which is quite unique. From the scratch of the material, which starts mostly also with the raw material, with the scrap, with recycling, till the end of the assembled product, all way through the value chain. And this is in a way that most of our entities are in best cost manufacturing footprint countries, enabling a one-stop shop concept for our customers with innovative product design and high material competence, which enables us to produce our products in aluminum, in titanium, in special steel or copper for our customers in the different industries. And still remember, we started this journey to complete our CapEx programs, which were based mostly on high contracted sales, giving us a kind of certainty and security for the next years to come that we will increase our sales and that we will have the chance also to come back to be a very profitable company -- very profitable, cash flow-producing company again. Where we are right now? I would say in the middle between investment phase and profit phase. We have more or less finished our large CapEx programs in 2022 and right now, to materialize on what we have built on. And this is also the main, I would say, topic which we'll come later on for the guidance of 2023 and 2024. In total, we have seen an increase in all 3 segments, sales and even more in EBITDA. Net sales rose between 25% when we come to Energy on a year-on-year basis from EUR 380 million to EUR 480 million in total sales; in E-mobility, 56%; and in Aerostructures, even more than doubled to EUR 636 million on total sales or 123% change on a year-on-year basis. I guess what is more important, and that's what we focus on, is to increase not only in sales, top line, but at the end, also bottom line or in this case, the EBITDA. E-mobility, very close already to its capacity constraints, has finished a very strong year on 2022 with EUR 24 million EBITDA, more than almost quadrupled -- tripled, sorry, their EBITDA over the last year. Energy has seen the most significant change I've ever learned in an industry in the last, I would say, 20 years. From, as I said, a market which was driven by the customers and by no price tag, energy or electricity didn't have a price tag for more than 10 or 15 years all over Europe and also in the other countries, it suddenly changed to one of the rarest and more important -- most important resources. This gave us the chance, as being a material company, mission-critical company, in this energy transition worldwide to materialize on it quite significantly. This not only rose the sales. More important, it grows significantly our EBITDA, where we tripled more or less our EBITDA within one year and most of it in the fourth quarter 2022, which gives us a very good tailwind for the year 2023 and the next years to come with a chance to reach only this segment also with some investments, I'll come to that one later, up to EUR 1 billion of total sales within this decade. Stepping into the details. On a company basis, total sales increased by more than 65%. Adjusted EBITDA reached far over EUR 100 million, EUR 134 million EBITDA or 139% [ that gets with ] this amount and also increased according to our guidance, which is focusing on EBITDA, net income and free cash flow. We are well in track -- a bit further in track than what we guided. And definitely, we see that we have the capability within our segments to materialize on the sales increase and the capacity usage in our 3 segments. Capacity is the key word, the buzzword for the CapEx. We have finished more or less our large CapEx projects in the field of Aerostructures. The last one was to build up a large heavy press mostly for the European Aerostructures -- or aerospace market in Romania. This last project were more or less is finished. So therefore, we see a decrease already from the CapEx in comparison to the previous years with EUR 120 million and even more in the years before, to EUR 86 million. We'll come to that one later with the guidance. On the year 2023, we expect a further decrease of the CapEx as the sustainable capital and maintenance capital is in the region of around EUR 40 million to EUR 60 million on a yearly basis. That's what we target within the next years to come. Trade working capital. Yes, we see an increase. It's still not there where we think in the midterm range, it can be back again. Please remember, we strategically implemented extraordinary high inventory mid-2021, seeing a material crisis and also supply chain crisis coming along the globe. So we intentionally increased the inventory of up to 18 months, being able to deliver even when no supply chain is working and others maybe are not delivering. Starting in September 2022, we started a program to bring it back to shape, which we'll then continuously go on till the year of end of 2024 to be then back in shape what we see as trade working capital. In total, also this reflects -- the increase also reflects, of course, the takeover of the entities of São Marco and ASCO. And as the balance sheet is immediately included the P&L only part of the year consolidated, therefore, we see still an impact -- a negative impact out of that one, which will be then also be aligned in 2023. Total assets, therefore, increased on 2 aspects. On the one hand, yes, through the CapEx through the acquisitions, the M&A, but also by the increase of cash. And the cash position was -- is over EUR 400 million, quite high, by the year's end. And this EUR 2.2 billion of total assets more or less also reflects plus/minus the total sales capacity of the installed capacity right now at Montana Aerospace. Stepping into some of the details. Sales, yes, based on the other topics, I would say, we see an increase of 65%. On the one hand, a win of market share. Sales increased, although driven by price increases, for instance, if we look at Energy and also E-mobility, but also, I would say, the ramp-up in certain industries like the Aerostructures. With the better usage of the capacity or even the price increases based on, I would say, the needs out of the crisis in the markets, we achieved the adjusted EBITDA, still knowing that adjustments were, I would say, 3 topics like we have also shown in the IPO in the year 2021. So continuously, the MSOP, which is sponsored by Montana Tech Components AG, the majority shareholder, out of the past legal expenses in connection with [ a legal ] case we have since many years and the post-merger integration with the acquisition of ASCO. Those topics are adjusted from EBITDA, which is reflecting EUR 126 million concerning IFRS. And within those EBITDA, also we have to admit to say that there are plus/minus around EUR 30 million worth of one-offs. Those one-offs are mainly out of the acquisitions of the São Marco entity, which is in Energy business -- or Energy segment; around 2/3 out of acquisitions and transactions within in Aerostructures. The result of the period, still negative. But I guess we have achieved an intermediary step. Not only that the fourth quarter was very strong and [ giving over ] to the guideline -- presenting the guideline for the next years and the next quarters to come, also the -- we have seen a positive operating result already in 2022. We come to that one later. The guidance for 2023 is to have also a positive net income at the end. Please be aware that we still face a high depreciation due to the massive CapEx we have done in the last few years with over EUR 109 million in 2022. Of course, it impacts our result of the period quite tremendously. But as I said, a positive operating result was a great step into the right direction with a very strong quarter already reflecting the right dimensions of what to reach within the next quarters to come. Personnel expenses, which you see in the middle of this slide, increased by 54%. It's quite a lot. We have seen worldwide the massive increase of salaries. And there was a lack also concerning high-quality human resources, a lack of talent to be fair, mainly in countries like the U.S. but also in other areas, so depending on the region. Still something to add here is that the personnel expenses, the plus/minus on a line -- on a like-for-like basis concerning the increase on what we calculated, we calculated this plus/minus 9% increase for 2022 [ at the end. We ended, based ] on a like-on-like basis, country-by-country with around 10%. Of course, this personnel expense is slightly below the expense -- the increase of sales. So it's under proportional. We're still pleased to add here, it reflects that we have acquired companies like, for instance, ASCO, which are not situated in best cost manufacturing footprint country. So over here, the impact is still to be seen. It's going to be different within the next years to come concerning the growth of sales in comparison to the growth of personnel expenses, which will be under proportional. The net amount between operating expenses and income, so an increase of expenses of around a bit less than EUR 30 million. And if you look in the details, the main drivers of this mostly operating expenses were, as announced and also guided, 2 areas. It was freight, and on the other hand, mostly the energy. Energy rose by almost [ EUR 40 million ] on -- within this year 2022 in comparison to 2021, so plus/minus in the range of what we guided also very early already in January 2022. And of course, this fluctuating prices was the most crucial element how to deal with it. High prices is something else, but fluctuating prices are always very difficult to handle and to work with. But in total, also under this circumstances, we are quite proud with the general development of the operating expenses and income. The net amount [ asset is ] under proportional in comparison to the net sales in 2022. Net debt dramatically reduced. We have seen net debt -- please remember, in September 2022, so the third quarter results, has shown a net debt position of EUR 468 million. We claimed those days that this will be the maximum amount, which will be shown. It's going to be reduced dramatically. The same also when we come later on to the trade working capital. It should have seen by September 2022 the peak, and that's the case. So with a very strong positive cash flow in the fourth quarter, we have reduced dramatically the net debt position to around EUR 280 million. Even so, we acquired ASCO, we acquired São Marco, yes, we had some one-offs of around EUR 30 million, which also helped to reduce this net debt position. And this more or less reflects a net debt-to-EBITDA covenant of 2.2 factor for the full year 2022, which is almost in line what we want to achieve within the next years, which is below 2. Total equity, very stable, slightly plus, very comfortable when we look in later on the balance sheet. We'll remember, around EUR 2.2 billion of total assets. So the equity ratio of -- is less than 50%, or a 43% equity ratio. It's a very comfortable, I would say, situation which we are in. Number of employees increased by 21%, reflecting our growth, under proportional in comparison to the sales. We'll remember, still there is an acquisition also which we have performed in the Energy segment, São Marco, and also the acquisition of ASCO for the Aerostructures business. And those numbers already reflect, of course, the increase -- within the increase of the employees. The main driver for the positive cash flow was, beside the EBITDA, the trade working capital. We have seen a maximum amount of more than EUR 500 million in September 2012. This EUR 500 million was reduced dramatically by almost EUR 200 million to EUR 290 million by end of the year 2022. So there's a small mistake. It's not the trade working capital of the third quarter. But at the end of the year, we will change this one in the slides. We'll then put on the -- which deck is then presented and published within our home page. So this is reflecting the end of the year numbers with EUR 290 million. And this is one of the main drivers of how to generate cash. And this journey of under proportional development of the working capital in comparison to sales should also continue within the next quarters to come in 2023 and 2024. Contracted sales, already in a very high level in 2021. We were able -- this is only reflecting Aerostructures. So it's not reflecting the other businesses as we guide only on the contracted sales in this area as it is the best to calculate on. And this once again rose by a good factor of 30%, reflecting more than EUR 6 billion on total contracted sales in the Aerostructures, which will be [ worked up ] in the next years to come. Trade working capital reduction, EBITDA positive on a higher level increase in this area. Of course, this the main drivers for the operating cash flow. So therefore, the operating cash flow rose from a minus 27% -- EUR 27 million to EUR 130 million plus, reflecting a massive growth. Still, please remember, which you see on the right-hand side, we did some CapEx projects. It's the finalization of the large CapEx projects which give us the capacity of around up to EUR 2.2 billion total sales. And the last major steps were performed in 2022. This, of course, and beside also the impact of acquisition this year, don't forget that we have done 2 major large acquisitions in 2022, they influence the free cash flow. And therefore, the free cash flow is negative still but on a much lower level than what we have seen in 2021 and, therefore, giving a very clear signal also concerning guidance in 2023. Here, we come with the guidance 2023, what to expect based on, I would say, a solid development, which we have already seen in the first months of this year in all 3 areas. We are quite positive to achieve the numbers, of course, of this guidance 2023, which we want to reassure or reiterate once again, an increase in sales of around 15% to more than EUR 1.5 billion. Please take into account that we sold a smaller entity by end of the year 2022 worth around EUR 100 million of total sales. So on a like-for-like, it would be a EUR 1.6 billion -- or from EUR 1.2 billion to EUR 1.5 billion sales increase. And what does it mean concerning the different segments? E-mobility, I start with the smallest one, as I said, is very close to the capacity constraints. So here, the emphasis is, once again, to materialize most on an EBITDA and therefore, net income increase, which is the focus here where we were already on a very good path with over EUR 20 million on EBITDA last year. So also this year is to focus on mostly net income generation, free cash flow generation and EBITDA increase. Energy segment, the most significant turn in 2022 with a complete change of the market, a market, as I said, which was driven by -- for many, many years by excess capacities, now sees a lack of capacities for many, many years to come and, therefore, a very positive environment for the energy business. So here, we do best to increase our capacities, and we guide for more than EUR 550 million of total sales and also, again, a very strong EBITDA in this region. The one area which is increasing fastest with sales is Aerostructures, where the capacities are installed to also provide the basis for further growth within the next years to come. And this year, we will see from around EUR 550 million to EUR 750 million to EUR 800 million on total sales. Once again, this EUR 100 million have to be adjusted, which we disposed 53% last year. So on a like-for-like basis, it would show a EUR 350 million increase to -- EUR 350 million -- to almost EUR 400 million increase on a year-on-year basis. What to expect on the EBITDA? Please note that, yes, we have seen some one-offs around worth EUR 30 million. So this is the EBITDA, not adjusted EBITDA. It's the IFRS EBITDA. Also this slide we have to correct. It's just a test whether I know the numbers. So this is reflecting the IFRS EBITDA. So we guide for around EUR 130 million to EUR 150 million in 2023. We had EUR 126 million IFRS EBITDA in 2022, and this was impacted by one-offs of around EUR 30 million. So without any one-offs, there should be, again, quite a significant over proportional growth in EBITDA in comparison to sales. And this is the clear guidance also, what to expect and what we work on, a high profitable business with a net income positive result and a free cash flow positive result within 2023. CapEx, no major projects ahead, and therefore, more in the dimension of EUR 50 million to EUR 60 million and a shift towards more maintenance and sustainable CapEx. So the outlook for 2023 is mostly on the generation of positive free cash flow on a positive net income; a streamlining of the trade working capital; and still, again, in comparison to our peers, over proportional growth in sales and therefore, also profitability based on the contracted sales we have enhanced. Today in the morning, we also not only published the full year numbers for 2022 but a so-called also soft announcement. And let me shortly tell you a bit about this soft announcement. It's about a potential, I would say, partial spin-off, including also an option of an IPO, of our Energy segment, which is named ASTA Group, which is a worldwide group, quite mission critically for the energy transmission generation, transportation and also for e-mobility. And why have we announced this soft announcement? It's quite simple. We have not only seen a massive shift last year of the industry, but also this tailwind and the strong demand in the areas we are in. And please note that without this Energy segment, without ASTA, 1/3 of Europe would be dark. There would be no electricity. 1/3 also for Americas and almost -- also for Asia. So it's mission critical for this area of energy generation, transportation and transformation and also more also for e-mobility. This is now -- this market is now offering ASTA the chance with some investments of plus/minus EUR 100 million over the next few years to grow to a EUR 1 billion company within this decade with a quite significant strong EBITDA. And therefore, we announced this soft announcement, at least trying to evaluate the chances of a more, I would say, independent development of this segment. Thank you very much. This was the presentation for today's earnings call, and I'm happy now for answering your questions.

[Operator Instructions] The first question comes from Phil Buller from Berenberg.

Congratulations on the results. I have 3, if I may, 2 related ones. Firstly, on the free cash flow and the debt position. Obviously, a huge improvement in Q4, a big change in the trade working capital. I was wondering if you could comment on whether there has been any material change in your view or approach to things like factoring. And the second and related question, I guess, you mentioned in the annual report an objective to try and address the ties on your debt with the parent company, MTC. I was hoping you could take us through where we are in terms of the parent company covenants and what needs to happen practically to enable the ties on the debt to be removed and in what kind of time frame we could expect an update.

Phil, thank you very much. And you're right -- I'll start with the second part of the question. You're right. We also said that we are more and more cutting the ties to our old -- or to the majority shareholder, Montana Tech Components AG. Please, for everybody in the call, remember that we have -- our financing is based, on the one hand, on cash. But on the other hand on -- we still have a net debt position on debt, and this debt is consisting of a good portion of so-called promissory notes. And these promissory notes have a so-called covenant criteria, and the most crucial one is the net debt to EBITDA. As you have learned, Montana Aerospace itself has a very solid net debt-to-EBITDA ratio with 2.2x, so definitely in a, I would say, highly investment area. But out of the past, because those promissory notes were issued long, long before an IPO, the covenant criteria is calculated on the MTC, so the old shareholder's group perspective. And therefore, if one of our sister companies, in this case, ASTA, did not reach what the numbers to be expected, this has a potential impact also for us. And therefore, to tell you, 2022, everything is solved also by our strong development but also by other topics. So there is no issue. But this left, of course, a clear focus on our side to really cut also this, I would say, the last major criteria which is linking us to the MTC by changing the financing of the gross debt of these promissory notes in 2023. And we are in the process of that one. And I think that we will have a good result by mid of the summer, and then we'll present the details on that point. But there's a clear goal not only to reduce gross debt but also to change it and also to reduce a bit net debt and therefore have no major impact negative on the interest rates, but just to have a complete, I would say, independent structure of financing of Montana Aerospace not for only for now but also for the future. The other topic is trade working capital, which is, as you said, linked a bit also to the financing because we had a very high trade working capital with over EUR 500 million. We reduced it dramatically over the last quarter. This was the starting point. Already, if you can remember, I indicated in September's call, the peak was reached, and now we started to reduce it to bring it back to normal. Back to normal means something like plus/minus 35% trade working capital ratio on Aerostructures, around 16% to 17% in E-mobility and around 7% to 8% in Energy in comparison to sales. This is a process, mostly in Aerostructures, to take some time. So we're in the middle of it, and it will be more or less continuously reduced till the end of 2024, where we should reach those numbers then on a steady basis also for the future. However, trade working capital in 2022, yes, we have seen some special, I would say, topics in there. We did some factoring worth around EUR 25 million, but it's nothing which is completely out of, I would say, the ordinary course of business. We did also in the past some factoring when it comes mostly to countries like China, India and Brazil as they faced already in the past, not only now, only in the past, already high interest rates, for instance, Brazil, up to 17%. And therefore, factoring with much lower rates was a, I would say, usual way of how to finance in a much cheaper way, the same like in China. So nothing majorly out of the ordinary course of business. Of course, we pushed a bit by the end of the year, but that's the case.

Got it. That's helpful. Just finally on the potential spin of the Energy business. Obviously, the financial markets are a bit volatile at the moment. I assume there's no urgency. But is there a time frame you'd like to get this done? Say, is 2023 an objective? Or is that the wrong way to think about it? And in terms of who would you consider to be the most appropriate peer group for people to look at when doing a comparable assessment of that business?

Thank you very much. The main, I would say, the impact -- or the positive impact for this contemplation, let's say, like this is -- was coming also from potential strategic investors or strategic partners who said that it would be interesting to maybe take a stake or a part of our ASTA -- or our Energy business. Yes, you're right that there is no need for rush. So whenever the market is then able to, I would say, to accept again interesting stories and interesting IPOs, then we will be ready whenever it is. If it may be in the second quarter, third quarter, fourth quarter, we don't know it. Nobody knows, I guess. But I've learned in the past, at least you must be prepared. You have to be prepared. You have to give also potential strategic partners the chance to get a closer look into the company. And then we will be ready, whenever it is. In any case, we won't change our program. Of course, it would accelerate, in case of an IPO, the investments, but that's it. We still also follow here growth and also net income increase program in 2023 onwards. When we come to companies which you can compare with our business, it's not that easy as we are one of the major players in this field. I would say even that we are quality and also worldwide leading concerning capacity in these high-voltage solutions. And what you can say is that we have peers in the areas of, I would say, leading cable producers. It's not the same product, but it's the same industry we were in. For instance, like this very well-known company, Nexans, or KEI, or HUBER+SUHNER, Prysmian Group. And on the other hand, we have our customers which are industrial conglomerates we are working together very closely, like Siemens Energy, Eaton, Legrand, ABB, Schneider Electric. Other -- or e-mobility accelerators, which are the companies we see again and again when it comes to the copper cores of e-mobility or mobility in general where we are more and more in. It's Alfen, Garo, Kempower or Zaptec when you talk about listed companies. So this is, I would say, the full universe where we are plus/minus in. But please note, once again, Phil, that what we are doing is only more or less done by very few companies. And we are, I would say, concerning capacity, quality and also, I would say, the footprint, the major player in this area. And therefore, we would compare with those companies just named.

The next question comes from Richard Frei from ZKB.

First of all, just a clarification. If I got you right on Slide 16 regarding guidance, you said this is GAAP EBITDA, not adjusted EBITDA, you guide for EUR 130 million to EUR 150 million.

Yes. I guess when the slides were made, they wanted to test me whether I know the numbers or not. Yes, you're right. So the EUR 126 million, as you see on the left-hand side, is definitely the IFRS EBITDA. So therefore, this year, we guide for usually adjusted EBITDA of EUR 130 million to EUR 150 million. Of course, there is a gap between IFRS and adjusted. But plus/minus in this range, it's fine.

Okay. Then I got it correct. Then regarding E-mobility, you've mentioned that you'll probably reach a situation where you have capacity constraints. On the other hand, if I got you right, you mentioned that you have invested now for around sales of EUR 2.2 billion sales for the group. So is there a possibility to shift capacity from Aerostructures to E-mobility? Or how should I understand this? Because for the group, it doesn't seem that there is a CapEx need, and for E-mobility, it seems that there is some.

Richard, you're correct. So we are more or less close to capacity constraints, the installed capacity we built up in year 2016 to '18, starting production. Then with the third plant in 2019, '20 is more or less full. You can remember at the IPO, I said we are may be able to reach something like 180, and now we stretched this one again, 220 already. But with that one, we are more or less really full. Of course, here and there, there are some optimizations possible, but it is not big, big jumps and not big increases. On the other hand, we have learned in e-mobility or, let's say, with the automotive business in general that overcapacities can be very, very tough then to handle. So if we invest then only on the basis of very clear contracted sales for long periods of time and -- which are then giving us a very -- secureness not to fall in a situation where we have an excess or overcapacities in this area. Therefore, the clear goal is not necessarily to invest or not necessarily to increase sales in e-mobility but to strengthen again and again and again EBITDA, net income, free cash flow to have a very high positive free cash flow business and to really see out of its strengths, whether some contracted sales basis in e-mobility is possible to then start maybe a program within the next years to come. Is it possible to shift capacities? Partly, yes. As you know, we work together between the segments for some areas, for instance, when it comes to seat structures, also some batteries -- battery boxes, which we jointly work together. But aerospace is ramping up so fast. Therefore -- and also having even better at the end possibility of EBITDA, too much shift doesn't make sense, so it should be seen on a standalone segment.

Okay. So then in the near future, it's more about quality of sales than sales growth in E-mobility?

Exactly. Exactly. Exactly, Yes. So we want to reach this 13% to 15% EBITDA. And then it's a very high cash flow business. Please remember, the assets installed, there is about EUR 60 million. So when you then look at EUR 220 million sales, a good portion of something -- good portion over 10% EBITDA, I said in the region of 13% to 15% with 5% depreciation, it's a very strong net income and very strong cash flow business.

Okay. And then last topic also on Energy, so a trade sale is also possible.

At the end, everything is possible. But I think the major intention is to have, potentially, a bit more independent development of Energy segment. We see it highly accretive and highly valuable for also us. It's an asset-light business at the end in comparison to Aerostructures. We want to keep the majority. There could be within, for instance, also potential IPO, the one or the other strategic partner coming in as a shareholder, and that's definitely the preferred business. Also, for everyone as a shareholder, what we want to achieve with this is mostly the accelerated plan to reach EUR 1 billion of total sales with a solid EBITDA and a very high net income and therefore, also have potential, obviously, good return for every shareholder within Montana Aerospace but also Energy business.

Okay. Then I understand now the press release of this morning a bit better. As you say there, potential IPO proceeds of around EUR 100 million to EUR 150 million are for future growth of Energy. This now makes sense if you keep the majority. So then it's like you dedicate out of the proceeds EUR 100 million to EUR 150 million to Energy. Is that the correct reading?

Exactly. Exactly. And if you remember, we talked a lot about, Richard, about the segments and also the synergies between. As you named before, there are strong synergies between E-mobility and also Aerostructures within the Montana Aerospace Group. They have common groups. They have the common material, aluminum mostly. They have common [ engine enhance ]. On the other hand, the synergies between Energy and the other segments is very low. It's quite independent and exactly this independence here also concerning the potential development. This is the intention with this, I would say, at least evaluation. Yes.

[Operator Instructions] The next question comes from Beltran Palazuelo from DLTV.

I have a couple of questions. First of all, I'm sorry about asking again about the Energy business regarding maybe, I think you were quite clear, the proceeds and the growth opportunities, but maybe if you can go in more detail why spin it off. Do you really see, let's say, a multiple arbitrage about the possible valuation of this business? Then my second question is regarding the Aerostructures. With the volume you have guided, it's, let's say, EUR 200 million to EUR 300 million to reach, let's say, maximum capacity in Aerostructures. Could you guide us regarding the, let's say, the current guidance of margins of this year to -- how do we get to the 20% EBITDA margins in the Aerostructures? Then my third question is regarding competitors. If you could give us, let's say, a little bit of more detail around the 3, let's say, segments, how competition is functioning. Fourth question, regarding the outlook. It was quite weird because you said that you're going to suffer a lot in the first to the third quarter. Is that, that your plans compensate you in your fourth quarter? Or how does that function? And my last question is regarding M&A. Clearly, seeing your excellent, let's say, balance sheet and prospects for positive net income and free cash flow generation, are you starting to analyze, let's say, possible opportunities in the Aerostructures to be executed in 2024?

Four questions, so I'll try to answer them best possible way. Let me go first on the Energy segment and the details of the idea behind it. It's quite simple. At the end, we have a very independent segment. We have a very clear plan. Now we have a massive tailwind, as I said, already quite some while in the business. And that's never seen in one single industry such a massive change within one year where suddenly, something which didn't have a price tag like, for instance, in this case, electricity, was one of the -- got one of the most valuable goods around in the market. This is driving our business not only now but also for the next few years. And this gives us this chance to really grow extensively where we want to have -- to use proceeds in 3 areas, which is quite special for us. Again, I would say, this green copper, this recycling of copper for this copper-based business; more e-mobility mostly in Asia; and also capacity increase in Europe, which is in this case in Bosnia, which we want to [ intend ]. Details on that one will follow as soon as we have the chance, also now that we have the chance also to go out. But let's say, as it is, we have, of course, to not only look at the company which is doing quite well, but I guess also on the markets, how they accept new stories. What to expect here? In general, we had last year EUR 32 million on -- EUR 33 million, excuse me, on EBITDA, out of which one, plus/minus EUR 10 million were one-offs in connection with the M&A acquisition we had in South America, the São Marco transaction. So if I take this or deduct this, I would say, normalized EBITDA was something like EUR 22 million, EUR 23 million based on the EUR 480 million total sales. And plus/minus, this is a business with only 2% depreciation, very low. Usually, it's not financed, which is in our case is the case, by IC loans. But if it's financed normally with a very low trade working capital of only 8% -- 7% to 8%, it's a cash flow strong business. And exactly this business is going to -- shall be grown to a level of around EUR 1 billion by the end of the decade with a high single-digit percentage of EBITDA, rising steadily over the next years to come based by the 3 areas we want to invest around EUR 100 million till the end of 2030, over the next years to come. It's exactly the plan, and it's exactly also what to await in here. That's why we evaluate the chance of a potential partial IPO, including also the chance maybe to include the one or the other strategic investor. You talked about the Aerostructures and how do we get to 20% EBITDA. You're right. If we look at the Aerostructures only, 2022 was dilutive. So we have seen under proportional positive development of the EBITDA in comparison to sales. But please note, we acquired ASCO. And ASCO, we calculate it with a 0 EBITDA with all the PMI costs and other costs, where only a fraction of it was then adjusted. And at the end, it came out a bit better than expected. But however, still it was dilutive. So if I take this away and if you look at the other plants in Aerostructures which are running at a decent utilization already, then we see that they reached, again, more than 20%, 25% EBITDA. And therefore, we have a very easy way of seeing that with more sales. We are continuously improving our EBITDA. Sales is what we guide. So therefore, you can also derive from that one that we will increase over proportionately in this area also EBITDA. And this is something you will see this year, the over proportional development of the EBITDA concerning our guidance in comparison to the sales in Aerostructures. So short to midterm, we guide for over 20% in Aerostructures also for this segment also in a clear guidance. Competitors in all 3 segments, I'll start with the Energy business as it was your first question. The competitors in energy, there are only 2 major competitors we are in. It's a Korean group and one which is a mix [indiscernible] Italian/Korean/Japanese group, but they don't reach the quality technically and also the capacity areas we are in. So therefore, we think that we are leading in this area. There are many smaller ones, but they are not really able to provide then those applications which are needed when it comes to quality, efficiency and so on. And the more need for electricity, the more need is also for high-tech quality -- or high-end quality because here, every single nanometer or micrometer counts. Just to give you an idea of how much this market is now driven. A couple of days ago, the so-called very famous newspaper, Handelsblatt, in Germany wrote still that Germany needs to double, double please, its capacity for generation, transportation and also transformation for electricity till 2045. And this is exactly the market from ASTA, from Energy business. It's our market, and the higher the demand, the less competitors we have. In E-mobility, there are a couple of other competitors, for instance, [ High ] Group and many others. But to be fair, we are in a kind of, I would say, special niche. The main part of our business is producing -- developing the prototypes of these battery packs and then delivering the -- including the surrounding material to the OEMs, the German-based mostly OEMs in mobility and e-mobility. And therefore, I would say we have a good standing in this area. But still, we have to be clear. There are many, many potential also split up in the value chain competitors. So here, I would say the landscape is a bit different. But altogether within the value stream, there are very few, and this is exactly our competence. And that's also undermining -- underlining our clear strategy not to have excess capacities, but to materialize on what we have and increase our net income and cash flow in this area. Aerostructures we are, concerning the setup, special, yes, special in the way that this long value chain is coming more and more into the focus of interest of the OEMs. Also, they have the need and also accept more and more that only some -- if a company has the -- also the capacity installed concerning the full value chain and they're really able to provide the ramp-up, then more and more, of course, they have to look then ESG-related topics like recycling. So does the material under control, is recycling under control to solve -- to help to solve with solutions to reduce the CO2 footprint like [ local to local ], less transportation, reducing lead time. It's getting more and more crucial. Yes, there are competitors out there like, for instance, Precision Castparts in some areas, which are similar. But we have more than enough to do. We can be, in the meantime, very selective concerning what we want and what we want to take. And therefore, I would say the competitor landscape did not massively change. Yes, many have more problems than we have seen maybe 2 years ago concerning their supply chain. And this, once again, emphasizes our own business, but competitors like companies like Meggitt, Senior, Precision Castparts and many, many others. The Q1, 2, 3, our statement in today's announcement, we calculate at least with -- you can remember, we talked about energy one year ago before even the Ukrainian crisis started, and we said there is an energy issue. And we talked about material supply chain issues in September 2021 already, long ago -- long before maybe others also took this topic as a material part of their guidance. Still, we see within the world we are in that there are many topics not yet 100% solved. So we still think, and this is part of our guidance, that it will be not easygoing concerning supply chains, concerning certain OpEx, certain other parts, to handle with. We have to expect the unexpected. And this is what we wanted to say. We still said that still, the first 3 quarters will be tough to handle with all those impacts coming from different ways. So for instance, some areas of some supportive material which we need in the supply chain, or extensive cost increases. But we are prepared, we think. We are flexible enough to react fast on those topics. We will try to keep those topics as a chance to increase even our market share. But it's part of -- and it is part of our guidance. M&A, last part of your question, Beltran. We're looking at, again, at many interesting potential targets. However, we want to stick with our guidance, which says not before we have the chance to fund a potential M&A out of our free cash flow and not risking our financing structure with a net debt to EBITDA on the 2 ratio. And therefore, we would guide more for 2024 with another M&A transaction in Aerostructures then for 2023.

There are no further questions at this time. And I hand back to Mr. Pistauer for closing comments.

Thank you much -- very much for attending. We have a very interesting year, finished with the presentation of the year 2022 results. A very interesting year started with where we see the first months going right in the direction which we intended and also guide. So a strong tailwind in all 3 areas, mainly in Aerostructures and also in Energy. And with that one, I'm looking forward to the next call we have together. And hopefully, we will be then able to present again a growth in all areas with a clear focus on more cash flow, more EBITDA and more net income. See you soon, and thank you very much.