Nordex SE (NDX1) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen. Here, I would like to welcome you on behalf of Nordex to our analyst investor call related to our announcement of yesterday evening. Our CEO, CFO and CSO, Jose Luis Blanco, Dr. Ilya Hartmann and Patxi Landa will share additional information with you about the preliminary figures for the first 9 months of this year and our revised guidance. This is followed by a Q&A. [Operator Instructions] Please keep in mind that we have a call next Monday for additional questions related to the Q details. And so I would like to take the opportunity to hand over to Ilya. Thank you very much. Please, Ilya, go ahead.

Yes. Thank you, Felix, and good morning, everyone, also from my side. So before we jump into the main topic of the call, let me provide you with a quick summary of our preliminary Q3 financials. So if we see the slide on the balance sheet side, we continue to have a strong liquidity position, thanks to the capital increase earlier this year and also due to around EUR 30 million of free cash flow in the third quarter. And the cash, as you can see, at the end of the Q stood at EUR 870 million. Our working capital level also continues to be strong and supportive at a negative 7.7%. And our equity ratio has improved significantly in this quarter to around 28%, again, because of the capital increase, of course. And this puts our balance sheet on a much stronger footing, which I think is helpful in this volatile environment. On the P&L side, as you can see, we continue to report strong growth in sales with around EUR 3.9 billion we reported in the first 9 months of 2021. This is down to good execution on the ground and supported by good order intake momentum. The order book also continues to be stable despite a 25% growth in sales. Now we achieved an EBITDA of EUR 101 million with an EBITDA margin of around 2.5% in those first 9 month of the year. So going to the main topic, the margins have been impacted by ongoing inflation pressures and supply chain disruptions. And José Luis will talk about this a bit more in detail in a minute. And from my side, more details on all this next week when we come back, as Felix mentioned, with our regular q3 call. So with this, José Luis, I would give it to you.

Thank you, Ilya. Good morning, everyone. Let me start with our view on the industry first, and I would like to reemphasize 3 points. First, across the world, we see an increased push for renewals. Nonetheless, there is a huge gap between what is targeted by different governments and the current level of penetration and execution in the ground. In addition, we believe that the ambition government plans around green hydrogen, demand for renewals, specifically for wind and specifically for onshore wind, is slightly to get much more stronger in the next decades. Second, levelized cost of energy for wind has declined by over 70% in the last 10 years. As a result, wind is now one of the cheapest sources of energy, if not the cheapest source of energy, in many places. The chart highlights levelized cost of energy for different energy sources based on 2020 International Energy Agency data points. As you could imagine, levelized cost of energy for conventional fuels is only moving towards the right due to the recent strong ramp-up in coal and gas prices. However, wind levelized cost of energy is yet to make that journey. As you can imagine, we are not happy with the chart. Third, that brings me to the last point. We believe that given the competitiveness of the sector, wind levelized cost of energy has sufficient headroom to accommodate the recent cost increases in commodities and especially in logistic without affecting its position as one of the most competitive sources of energy. In a way, it's quite difficult, quite odd that we live in a world where the clean energy is the cheapest, gives -- deliver society long-term price stability, content inflation and most of the OEMs are in losses. At the same time, fossil fuel and fossil energy is way, way more expensive for society, no long-term price stability, risk for inflation and volatile for economies across the world, for youth, but profitable for shareholders. In other industries, it usually is the other way around. And this is something that our industry needs to fix somehow in the future. Let me go to the next slide. Let me start with observation on the PPA prices for wind. Wind prices in auctions are slowly bouncing back in general from the very low 2018 and early 2019, along with the general spot power prices across run-up of the globe. On the other hand, turbine prices across the period have remained more or less flat, slight increase. As mentioned previously, given the competitive nature of wind levelized cost of energy, the industry should be able to pass on the extra cost to the end customers. We have been discussing this with our customers for a few months now. And we can now report that the general response has been encouraging and in the right direction. Unfortunately, this year, after, in some cases, several price increases, cost and volatility has eating that part. Within this context, we are happy to report that our order activity has remained quite good despite all those challenges and price increase discussion to customers. To add to that, our on-the-ground execution has been really strong if you take into account recurring supply chain disruption, factory stop, blank sailing and so on. This gives us enough confidence to tighten our 2021 revenue guidance to the upper end, in between EUR 5 billion and EUR 5.2 billion. With this, let me give you some color about what's going on in our industry. I think you are well aware about those issues in general. Very much we are in a highly inflationary environment today. Prices of steel, copper, resins have gone up quite substantially over the last 12 months. Prices of oil, coal, gas, have also added the overall inflationary pressures for every one within and outside the wind industry. This situation is affecting everyone worldwide and not just the wind industry. Other industries have different ways to pass those costs. But for us, and in particular, is a much bigger issue when it comes to the shipping market. As you can see, the global container freight index has gone up around 50% in Q3 after having gone up 3x between 2020 and 2021. In addition to this, the instances of shipping delays and cancellations, especially on Asian routes have been going up quite substantially and this has an impact for us in at least 2 ways. First, higher waiting times at the different ports, higher spot prices due to the need to book another ship and then as well related liquidated damages due to delays to deliver our products to our customers. Second, there is substantial delays in component deliveries to our factories, impacting production schedules, which might come into more cost and as well later work deliveries and associated liquidated damages related to those milestone. To address this volatility, we have been working on several topics, 2 of them are the main ones. First, negotiate the cost pass-through to customers in the short to midterm, as previously mentioned; second, accelerated cost-saving initiatives in our company program. Unfortunately, this cannot fully offset the ongoing supply chain disruption. And we believe this is and will now start eating into our guided margins for the year. Moving on to the next slide. It's guidance for 2021. As discussed earlier, and as you have all seen, we adjust our revenue guidance to EUR 5 billion to EUR 5.2 billion, our EBITDA guidance to around 1% for the year to account for the supply chain disruption and also for the better-than-expected execution despite the execution challenges that we have mentioned. With that, let me move now to the strategic targets. As I mentioned before, we are in an extremely volatile and inflationary environment. Where supply chain are still struggling to adjust to the post-COVID world. At present, it is unclear how much longer those conditions will continue but the consensus view is that this might take a little longer to settle down. Thankfully, the wind industry, as discussed, is in a multi-decade growth phase, and wind energy starts with a very competitive position. That give us and the industry sufficient headroom to pass on those extra costs without affecting our relative competitiveness. But in the short term, this process will not be an exact process, and we will have to bear some of those extra costs temporarily. However, in the midterm, we are confident that we can get back to our normalized level of EBITDA margin of 8%, once this period of adjustment is over and the wider markets are relatively stable. And we are still in crisis with that medium-term direction once cost reaches stability and supply chain the ability to deliver without road blocks as it used to be in the past. With that, I hand over back to Felix to open the for Q&A.

Jose Luis, thank you very much for the presentation. And now as said from Jose Luis, I'd like to turn it over to you, operator. And I would like to open the floor to Q&A. Thank you.

We'll take our first question, George Featherstone from Bank of America.

I'll go one at a time. So my first one, it sounds though September and October, things changed significantly from a cost perspective. And you've obviously got sort of extra detail on shipping, et cetera, in the charts, which is a welcome, thank you. But can you explain how much of the guidance cut on profitability is explained by raw materials and how much is on logistics? And on logistics, specifically, in terms of your deliveries, what's changed since the second quarter update?

I'll start with -- thank you, George, for the question. I start with the first part of the first question. So you're right, so that -- those last 2 to 3 months have been intense, if not more, in that respect. So when you think of the overall impact of that, I think between 200 and 300 basis points is a fair frame to see what has been eating into our margins. Now how they break down between shipping and other raw materials, I guess, Jose Luis you want to comment a bit more on that. But I think what is important to understand here is that this is basically how we've seen this as a package, and this is all now assumed in our gross margins.

That's very nicely point. I think we see impacts in unexpected and forecasted the last time we talked in blank sailing. So I mean vessels are supposed to show that -- don't show up to pick up the loads, and these have delay LDs for projects, extra cost for the project because usually, when a vessel doesn't show up, we need to pay more for the next one to book the lot. Second, we have several impacts in our inbound logistics to our factories. The container has gone up substantially in the last 4 months, in the last quarter. It was not in the planning. And very much, we run out of buffers to keep dealing with this unexpected situation. In several aspects, we see situation easing a little bit. But in other aspects, in other cost components, the situation is still volatile, like the container right index and the project cargo shipment costs, especially in some routes, Asia to LatAm, and to a certain extent, Asia to Europe. So the main blocks is in inbound logistics, project logistics, liquidation damages for late deliveries either, one, because we don't produce in time, second, we don't deliver on time. And as well resin prices. And I will say to a less extent at this point of view is other commodities. So the main impact in the last quarter and the main impact that we forecast for the rest of the year are inbound and outbound logistic and resin prices on liquidated damages associated with late delivery of projects. The sub breakdown we don't have it and the compound impact that we forecast, the visibility we have today is what have mentioned. But as you can see, we were -- as you can imagine, we were expecting Q3 with improved profitability compared to Q2 in our last call, and this has not happened. And so as a consequence, with the current volatility, it is prudent to take a view for the rest of the year.

My next question would be, given you expect the cost challenges to continue into 2022. Should we expect the first half margins in 2022 run rate at a similar level for the second half that we're seeing in 2021? And also, is there a potential that 2022 margins could be lower versus 2021?

Let me start. I think the question is very valid and we wish we could give you more visibility. But we can share with you, to start, we are increasing prices. In some cases, those price increases cover the cost increases. In other cases, unfortunately, even in some cases, after the very -- past call to go to the customer 3x for price increases, the cost increases it had price improvement. But the sales organization is doing a great job to communicate the situation to the customers and slowly moving prices to cover these increases. Unfortunately, this is not going to impact in the first half of next year because we are executing backlog. The backlog, at least the first part of the year, it's going to be impacted. In the current volatile environment and in the current inflationary environment, I mean, we don't have the requisite to give you more visibility. So we have, of course, a bottom-up view. And the budget has now been finally approved. It will be approved in the next couple of weeks. But in the current market environment, we need to wait to the full year results and the '22 year guidance around March. But directionally, with information we have today and with all disclaimers mentioned, it might be very well possible to have better margins in 2022 compared to 2021, of course, obviously subject to volatility and supply chain disruption. But if things stabilize in the current level as of today, directionally, 2022 should be better than 2021. And long term, we're still seeing the pricing of the industry towards that midterm target. So long story short, first stability, then visibility. But we don't see, I would say, structural risk in the market whilst this industry should not be where it needs to be.

My last question just on orders. If I exclude the...

I have to jump in. We said 2 questions. I'm going to make an exception.

Yes, that's fine. So if I exclude the large order you got from Acciona in the third quarter, then underlying orders declined quite strongly year-on-year. And I think it equates to about 0.5x book-to-bill. Can you help us understand if this is a consequence of delays by customers in placing orders as a result of the pricing pressure that you're having?

Yes. Thank you very much for the question. This is Patxi Landa speaking. Indeed, there was a delay effect in the orders at the beginning of the year as a result of this situation as a result of having to go back to customers with price discussions a number of times. But however, the outlook for the year, we expect a very strong Q4. And as a consequence of that and despite the large order, we expect to land the year above the levels of order intake that we had in the previous year. So the order intake momentum continues to go in the right direction.

[Operator Instructions] We'll take our next question, Vivek Midha from Citi.

Just a follow-up on George's question. You talked about the raw material impact and you said other commodities impact is guided to be smaller. The question is particularly for the commodities like steel, as maybe you go into further into '22, does the impact of those commodities get larger over time?

Thank you very much for the question. I think we are trying to hedge the best possible ways our risk. The obvious and best way in our view is back to back, so place the order for the components at the moment you get the notice to proceed from your customers, the same for the shipping company -- contract. This is achievable in several cases, but unfortunately, not always. With the visibility we have today, we have substantial coverage on the steel costs for next year, both, I would say, 3 quarters of steel towers should have very limited impact, the same as the steel tower for the [ river ] for the concrete towers. So that's not our main concern. As of today, our main concern as of today is container price and project cargo logistics costs, which is not fully hedged. It's back to back in several part of the backlog. It's in a project-to-project discussion, but there is parts of the backlog where that risk lies on us. This combined with the resin prices, which is still volatile at this point with the visibility we have, is what concerns us more and concerns us more than the steel price at this point in time.

Our next question, Ajay Patel from Goldman Sachs.

I look at these numbers, and I go look at Q4, and you're seeing margins that are around minus 5% or so. And I'm thinking, well, the market conditions are quite strong as you've highlighted in the presentation. ASP increases for the first, at least, 9 months of the year -- well, 6 months of the year wasn't particularly strong. Why should margins -- and activity levels probably are going to be weighted to the second half, so what are the drivers or what -- could you point to any drivers that would basically raise the situation where margins are higher in H1 2022 versus Q4 '21? I think I just need to understand, I think, maybe the '21 Q4 number a little bit better because it doesn't seem to me that, that number would improve, which wouldn't put a quite sizable negative margin over H1 next year. So could you unpack that a little bit for me?

Yes. I think at the end, this bottom-up planning project-by-project at the end of the quarter is a compound of product costs and project execution. So the risk we have from now to the end of the year, we have forecasted and quantified in that range. Around 1% means there is some leeway left or right. We don't want to be in a position to give you bad news again. So with the best -- to the best of our knowledge, this is what we can quantify today. And the next year is a consequence of bottom-up planning with information we have today. Information we have today might change from now to March if foundry conditions substantially change. But the foundry conditions, especially shipping, resin prices and container index staying at current levels, we see an improvement. And the same applies for the full year. To reconcile a breach is quite difficult at this point in time because it's -- we are a project company. We are executing projects in different geographies, liquidated damages play a substantial role which might change the Q4 versus the next year. We are planning the year with a different liquidated damage forecast. And the rest is project composition.

Maybe if you could help me with that, is there any idea of what you can give us what you're assuming for the liquidated damages for Q4, even the rough range? So at least then I can understand what an underlying margin is what is liquidating damages and then make my own mind on where the world goes for Q1 and Q2?

I mean we cannot be very specific. But there is a substantial, let's say, nonrecurring cost build up into the guidance of this year.

Yes.

Our next question is [indiscernible].

So my first question has been asked. I have just to follow up on the 8% midterm guidance. What do you mean by midterm? Is it '23? Or should we expect '24?

Yes. Thank you very much. Let me phrase that -- let me see how can I phrase it. If the foundry conditions stay at they are today, '23 should be possible. But this is subject to those uncertainties. And what are the uncertainties is the ability of a lower supply chain to deliver parts to factories, so to have a stable flow is the ability of the shipping industry to deliver projects from factory to sites, and it's an assumption that those costs won't go up. And it's an assumption that the current order intake is landed with the current margins. Unfortunately, what we saw in the last quarter was price increases. But those price increases were -- the margin associated with those price increases were deteriorated by way higher cost increases. And this is the risk we see forward. If things go back to normal, it could be done, yes.

We'll take our next question, Constantin Hesse from Jefferies.

Can I just confirm, you said the 8% EBITDA margins will be possible in '23 if the conditions basically normalize, not if they stay the same as today. And then my second question is, again, with regards to '22. I mean it seems like from your guidance that you're going to have a very similar year to what you had this year in terms of installations and revenue right at a level of about EUR 5 billion. And I mean looking at current conditions, it doesn't seem like things are improving much especially from the logistics side among others. So maybe if you could share in terms of what could be some of the cost tailwinds or potentially margin tailwinds that we would see next year? I mean with the higher share of Delta4000 be one in the ramp up, anything that you could share here, which would give an outlook of margins better than 1% for next year?

Yes. Let me start with next year. So next year, the biggest tailwind is less nonrecurring costs. This is the biggest tailwind we have. So on top of the nonrecurring costs, name it LD and some others, but primarily, LD, cost stability. If we have the cost stability, Patxi and the sales organization, are managing very successfully with the customers, a different price level for the industry. So if this stays stable, it won't affect substantially in H1 but it could improve profitability of H2. And that's our the main 2 levers for 2022. 2023, I mean, if we don't feel comfortable in the current volatile environment and the inflationary environment, to give you more visibility and we ask your [ compression ] and your understanding to give us some more time to guide the year in the normal calendar and waiting March to give you more visibility, you can imagine that we are quite uncomfortable about 2023. But the underlying margins of the company, excluding this huge volatility, are moving in the right direction. And the pricing discussions are moving in the right direction. So directionally speaking, the same -- somehow the same view that we have for better '22 directionally comparing to 2021 applies for 2023.

Exactly. And one of the drivers for that is, as Constantin mentioned, again, actually, that's the mix of Delta4000 have increased or the structural improvement that we've been discussing in the past is still the same just because of the conditions that Jose Luis mentioned. The [ visibility ] is different.

The India for global, which was one of the big levers for lifting profitability in 2023, part of this lever has been temporarily eaten by logistic disruptions. But once things go back to normal, this should support 2023. What we are doing is somehow we keep using maximum capacity of the Indian blades, unfortunately, with less savings, still substantial savings, but less savings than previously expected. In the nacelles, we decided to focus in the India activity for non-European markets because given the current volatility and uncertainty, there is no more sufficient visibility. That doesn't change anything the strategy of this capacity expansion. But this is expected to bear the full potential once the situation stabilizes.

That's great. So really just to confirm, because there's a lot of moving parts, so basically, if nothing else changed, there's nothing changes in terms of higher logistics costs and, let's say, similar LDs for next year, the structural improvement in terms of the higher share of Delta4000, that alone could add a few potential basis or maybe the entire basis points with a few points to your margins next year, if nothing changes?

Let me -- with one correction. Less LDs plus margin improvement should support directionally better 2022 than 2021.

We'll take our next question, Sean McLoughlin.

If I could just understand from the previous question what is going on in India because I think you'd originally targeted to be at a full 4 gigawatt capacity by the end of this year. And I understand that is now looking different. So could you just kind of update us on kind of where you are in terms of that ramp and what your expected time line is? That's my first question.

Yes. I think we are -- as we mentioned in the previous call, with a slight delay in the ramp-up, COVID was hitting hard in India in Q2 and some part of Q3. Nonetheless, we are operating all the blade plants and ramping up all the blade plants. The plan for ramping up blade production in India up to 8 production lines is unchanged. The Indian blades are one of the most competitive sources for many geographies, which combined with Brazilian blades for Brazil and Mexican blades for the U.S. as well as on activity in Europe for Europe. So this plan hasn't changed. Unfortunately, the project logistics costs has eaten, temporary, some of the expected savings. It's still way more competitive, still the right strategy, unfortunately, temporary, not the full potential as expected before. The intention is to continue. In regards of nacelles, the intention is to use -- to keep using India for supplying nacelles to -- mainly to the non-European markets where that capacity expansion brings cost benefits. So no idle capacity is expected in India. No overhead burden in India as we plan to fully utilize blade plant and our nacelles plant was an existing Nordex plant converted and expanded to Delta4000. Unfortunately, we were planning to do more nacelles in India, which we are slowing a little bit down those plans until the logistics situation stabilizes and could eventually bring potential profitability improvement shifting those nacelles to Europe. It brings potential shipping those nacelles to the U.S., to Australia, to South Africa, to many geographies, not the previously expected potential to Europe. So we are somehow reassessing the situation of how to deliver European market, talking about nacelles and the delay situation unchanged, unfortunately, with less margin improvement than previously expected. And we think this might be -- we are -- we cannot get when the logistics cost will go back to normal, might or might not go, might or might not go midterm or short term or long term. But the good thing of having a global supply chain with factories in Brazil, Germany, Spain, Turkey, South Africa, Mexico, India and the outsource supply chain in China give us the possibility to adapt the footprint in the best interest of the profitability of the projects.

Right. So does your 8% medium-term margin necessarily need you then to follow the original nacelle strategy in India? Or actually, do you still see that 8% margin being feasible assuming that the costs ease following your current strategy?

I would say, with the current price increases, it should be feasible, provided that the foundry conditions do not change. And you need to understand that logistics, the price for containers, I mean, it's self-explanatory. We have around 10% to 15% in logistic cost every year, EUR 700 million. And those changes are massive. I mean you [ use ] very easily EUR 100 million of 3-digit EBITDA in one of those logistics streams, so for us, the best is stability because with stability we can manage prices and margins and visibility. And if the supply chain is configuration 1 or configuration 2, that's not that relevant because we have a very similar flexibility and supply chain configuration as our competitors. Our competitors, I was following up, as you can imagine, what they said, regarding the midterm profitability and regarding pricing of the industry. So if that's the behavior of the pricing of the market, we can configure our supply chain the same way as our competitors to deliver, I mean, similar profitability, of course, with the Delta -- in volume that we have compared to some of our competitors. But we don't see any structural disadvantage of Nordex other than the volume compared to majority of our competitors, we have the possibility to reshape the global supply chain to do more Europe or less Europe or to adapt to the market circumstances.

Thank you, Jose Luis. I think we have some last questions open. And please -- the last questions, please.

We'll take our next question, James Thompson from [indiscernible].

Two, if I may. One is if you have any thoughts on refinancing your green bond. And the other question is regarding the fact that Moody's will do their rating on Friday. Is that something you've discussed with Moody's? And could you share the thoughts there?

Thanks for the question. I will take them. This is Ilya speaking. So on the first one, yes, on the refinancing, as Jose mentioned, it is not coming due until the year after next. So we're still in evaluating our options there. So this is still under evaluation, and we will execute that at the right time. For the Moody's question, yes, maybe as your question indicates, we have been discussing with the colleagues from Moody's in very professional amicable terms. So with -- that has been a termination on a mutual discussion between the colleagues from Moody's and ourselves. So that was a good and professional process that we have with the colleagues. So that is basically also what you can see in the press release that they, I think, placed on Friday or Monday.

So we see that there are 2 in the line, which we're going to take. Please, the next one.

Our next question, Ajay Patel from Goldman Sachs.

Just 1 follow-up. Just thinking about free cash flow and working capital changes. I've been -- in terms of the impacts when we think about next year, as in you -- what kind of working capital impacts can we expect or liquidated damages types of impact? As in could they be quite sizable? Could we talk about -- are we talking about a few hundred million? Or is it just too early to tell? Anything that you can give us on what's happening with the cash flow at this time frame would be really helpful.

Thanks for the question. Let me take the working capital one and then maybe Jose want to say something to the LDs. But I think we're going to ask again for your understanding that this is a bit early to come with a number there. I mean we're just finishing, as Jose Luis said, the bottom-up budget process. So of course, we will try. And it's always our intention to stay at those levels we're achieving. But really to guide you something, we will have to wait until beginning of March next year when we do the guidance, and that always includes our guidance for working capital.

Now to the LDs, I think, unfortunately, I cannot be more specific here or we cannot be more specific. I mean as to reiterate what we mentioned that there are substantial nonrecurring costs in our forecast 2021 that are not in the 2022 plan.

And now finally, we are coming to the last one. And so operator, please hand over them for the last questions.

Okay. Our last question Guido Hoymann from Metzler.

I have 2 questions actually, both more or less addressing this LD topic. Obviously, these LDs is an overproportional risk, in my view. And it is actually resulting from a situation in which the whole of globe is confronted with. And so I'm asking myself how comes that you are the ones who have to bear the damage from delays, et cetera? But the concrete question is, can you do something to exclude these obligations from your contracts? Or where is -- what is the legal basis for you being the ones who have to bear these costs? And isn't it possible to get that out of contract somehow? And, yes, the other question is actually relating to power which broke down a few months ago, I think, here in Germany. I think it was one of your latest projects. And I was just wondering if that also resulted in an extra additional costs? If that is also part of your nonrecurring cost items in Q4? And what the actual reason was for this breakdown, if you have any further insights there already?

Thank you, Guido, for the 2 questions. I mean the first one is a very good one and we somehow share your view. I mean when we show the first chart of wind being the cheapest cost of energy, and fossil fuels, they're way more expensive source of energy. And majority of the OEMs in wind, shareholders losing money and shareholders of the oil and gas enjoying a very profitable business, thus, something very difficult to reconcile. So to your question, I think we need to keep doing what we are doing, educating society that the value of wind energy is not only cost, it's long-term price stability. If you want to get rid of inflation, install more wind because on top of helping to save the world, give you cost stability. And margins need to adapt to the risk profile. We were coming last year -- the name of the game in the last year was cost of energy reduction year-on-year and stability. So we were always counting with the future cost savings to deal with very limited uncertainties that we have in the past. And now we, abruptly, we are switching to cost increases and volatility. So we need to have these discussions with governments, with customers that we need to adapt to the new situation. In order to get rid of existing contracts, I mean, usually, it depends in a case by case. There are project finance that they want a fixed price. What we are discussing with customers is even, in some cases, customers with ongoing contracts were willing to support us with those cost increases, not in majority of the cases, but in some cases. In case of projects in ongoing negotiations, the situation is slightly easier. And somehow for future orders, we somehow -- we're adapting to the new pricing. In terms of the scope, what we are trying to do whenever is possible is to have back to back in the supply chain with the customers. So we can derisk the portfolio because we don't have an exact formula to hedge our cost and our risk. So this is an ongoing discussion project by project, geography by geography, customer by customer to try not just to improve prices and profitability, but to derisk, scope and execution. And we hope that over time, we will manage to bring the industry to a new more risk reward balance level. Talking about the specific of the towers, indeed, at the end of September, a turbine in Haltern Germany collapsed. This turbine was installed in a hybrid power. It's a concrete bottom and a tubular steel section on top. As a precautionary measure, we have stopped all 22 other towers with the same configuration. And a team of internal and external experts is working on the root cause analysis and investigation ongoing as we speak. We have the result of the root cause, we cannot be more specific. But please note that this concerns only a very small number of turbines, in total 23, all of them installed in Germany. And current and future business doesn't rely on this type of tower. As 1 year ago, we developed a new alternative reputable supplier for those towers. So Nordex is not the manufacturer of this tower. And all the non-German tower with in-house technology are very reliable, on track, with a very good track record. And the new very reputable suppliers that derisk our current and our future business. We are quite happy with that. Unfortunately, this has a substantial impact and is as well considered in our forecasted numbers. And that's how far I can go now.

Okay. Thank you very much for the Q&A, for the presentation, for participating today. And I would like to take the opportunity to close the call. And I guess let's speak on next Monday to another dive into our Q3 results. Thank you very much. Goodbye.

Thank you very much.

Thank you.