RHI Magnesita N.V. (RHIM) Earnings Call Transcript & Summary

Hello, everyone. Welcome to today's RHI Magnesita Q1 Trading Update Call. My name is Seb, and I'll be the operator for your call today. [Operator Instructions] I will now hand the floor to Stefan Borgas, CEO, to begin. Please go ahead.

Thank you very much, and good morning from Vienna in this time of -- in this interesting time. I'm here in Vienna with Ian Botha, our CFO; and our IR team around Chris Bucknall. And we are happy to take you through the unexpected many events of the first quarter and then the meaning for our own business. There are really 3 key messages today that should be of your interest. The first one is the trading environment. The trading conditions are really difficult. The ones we outlined at the full year results that already sounded rather conservative, have actually been not even met. So the difficulties have continued. The end market demand is very weak. Customer volumes are still somewhat decreasing year-on-year and exports for steel, but also for refractory products from China are impacting global markets, not everywhere, but here and there and especially in those markets where we have high market shares. The second message, our business is set up comparatively well to navigate these changes and these difficulties. And it is set up comparatively well to deal with potential changes that the trade policy and the tariffs will pose on us. Despite the difficulties, we are still generating cash month by month. So we're not in any kind of panic, but we are facing significant challenges, especially customer project delays driven by the uncertainty that are increasing quite significantly in recent weeks due to the trade tensions. Third message, we had been guiding to a [ 45-55 ] split of our adjusted EBITDA results to be delivered in 2025, first half, second year, second half. But we now expect the first half to be only between 35% and 40% of our total annual results. The uplift then necessary in the second half to reach our guidance introduces some additional downside risk for the full year target. But for the time being, we are maintaining the guidance based on what we can see in our order books now. Let me share some more details on these key themes. The first quarter demand environment was very weak. It was not even in line with our expectations, although not surprising us fully. The main drivers of this are glass and nonferrous metals industrial projects, where we now have seen 2 years of declining customer orders, because our customers are not investing anymore. Still, the second half will see more industrial projects deliveries than the first half based on our order book. This is going to be the first improvement area that we are looking for in H2. There are some signs of early recovery in nonferrous now, even in strengthening the order book, but the glass refractory demand remains at a historically very low level across the world. We are taking steps to address this. And we announced at the beginning of May that we will close our plant in Wetro in Germany and consolidate the production of glass refractories from this site into other European plants for the European market. We are now consulting with local works council representatives on social packages for the affected employees there. We take our responsibility here very seriously. Plant closures such as this are sometimes necessary to respond to shifts in global market conditions as we build our global network. We must always evaluate the most efficient way to deliver value for our customers and sometimes the plant closure is an unfortunate consequence. We have also initiated other measures to reduce SG&A costs despite a still inflationary environment in this area and to improve production costs, and we expect to see the benefits for these 2 areas also in the second half, plant and production costs and SG&A reductions are 2 further reasons for the higher H2 weighting in our outlook. It is necessary to increase pricing just to restore the weak Q1 margins back to the levels of the last few years. And we have a program to deliver these price increases with benefits mostly in the second half of this year. This is the fourth delivery for the second half. The pressure on the pricing side is most intense in India and West Asia, where competition from low-cost imports from China is the most acute, but the India market is also suffering from the construction of far too much new refractory production capacity by both domestic and international refractory makers. This is now exceeding the growth in demand in India by far. This refractory overcapacity, combined with imports from China is impacting both margins and sales volumes and will take some time to resolve over the course of the next years. As a reminder, RHI Magnesita has not added new plant capacity to the India market, but we choose instead to grow through M&A, which we believe to be the correct approach in the refractory market as a whole worldwide. Then we talk about the trade tensions. Many companies are assessing the potential impact to supply chains and customer demand coming from the introduction of new tariffs all over the world. RHI Magnesita is directly impacted by tariffs, for example, in certain product lines, which we currently manufacture outside of the U.S. This includes some finished goods exported to the U.S. from Europe and China and also from South America, where finished goods must be imported as there is no domestic alternative, we are confident of being able to pass on additional costs to customers due to the essential nature of our products. But we prefer, of course, not to do that if local production is possible. We already seek to manufacture domestically as much as we can for U.S. customers. Those of you who have followed us in the past will know that this is not a new objective for us. We aim to be a local-for-local producer, and we are vertically integrated to some extent in nearly all of our regional production hubs. Our M&A program has been building on this, most recently with the Resco acquisition, which is intended to raise U.S. domestic production from its previous level of around 50% of sales to above 75% of sales at least. But this takes time to implement, approximately 18 months to fully deliver simply for practical reasons of changing the plants. Domestically produced refractories will be then much more competitive, assuming that tariffs will be in place for a while. And we will also be serving U.S.-based steel producers who are benefiting from tariff protection now. However, there are indirect negative impacts from global trade tensions, which may affect us in the short and in the medium term. For example, we are facing some customer project delays in our industrial business. It's clearly seen in the first quarter with lots of postponements as well as new planning for projects but also pricing and potential logistics uncertainties because the global container freight networks now have to adjust to the new trade flows and also that will take some time. Let me hand over to Ian now for some more details on the financial outlook for 2025.

Thank you, Stefan. Given the uncertainties which Stefan has just outlined, it's more difficult to predict the outcome for the full year. We have been reforecasting, checking orders, applying risk factors to the full year forecast. And we've concluded that it is not necessary at this stage to reduce our expectation to be modestly ahead of the 2024 adjusted EBITA of EUR 407 million. One variable that we can quantify is that if the U.S. dollar holds its current level against the euro for the rest of the year, this will have around a EUR 15 million negative impact to adjusted EBITA compared to our expectations when we gave the full year 2025 guidance. The factors which give us confidence to maintain full year guidance are as follows, and there are 4 of them. Firstly, the first quarter was always expected to be weaker. We knew this coming into the year. Secondly, the order book for nonferrous metals for Process Industries and for steel in the second half shows an increase in sales volumes. Thirdly, in the first 4 months of 2025, we went through a phase of selling high-cost inventory due to elevated raw material prices, in particular for alumina and graphite, which have now worked through. And finally, the phasing of synergies from the acquisition of Resco, the cost savings from the plant closures and the other measures have a second half weighting. Having said all of that, it is right to point out that downside risks have increased, and we are continuing to manage the business accordingly. On the balance sheet, we continue to benefit from a long-dated amortization profile, a low cost of debt of around 300 basis points, around 3/4 of that is on fixed interest rates, and we benefit from substantial available liquidity of over EUR 1 billion, even after the payment of the Resco consideration in the first quarter. Now due to the expected weakness in first half earnings, we are likely to see the ratio of net debt to EBITDA temporarily increase to around 2.9x at the half year, but to then return towards 2.5x into the year-end based on current cash flow and earnings expectations for the second half. Thank you. Stefan and I will be happy to take any questions that you might have.

[Operator Instructions] First question today is from Harry Philips of Peel Hunt.

A couple of questions, please. Just the first would be on volume and pricing in the first quarter. If you could give an idea of -- I mean, obviously, you said as you expected, it was going to be tougher, but just an idea of how those 2 elements work. I'm guessing pricing reflecting the absence of the project work was greater than volume. And then the second would be the inevitable question probably about bridging that first and second half. I mean, if you do sort of crude math, you sort of -- if you take guidance, say at EUR 410 million, it's EUR 150 million in the first half, so EUR 210 million. I can't do the math in my head now, whatever it is in the second half. If you could just help us on that bridge, that would be very helpful on those buckets of potential opportunity, please?

Yes. So volume and pricing. Volume is down and pricing is down. So that's not a very comfortable situation and cost is up, especially raw material costs, as Ian has pointed out, and therefore, margins are not very attractive in the first quarter. As Ian has said, we knew this was coming. Partially it's temporary, but partially it's also structurally. So we have to deliver a price increase now, especially in the Indian market, where the margin drop has been the strongest. The volume drop in India is not that big, but there is a volume delay there. So if you talk about the bridge, and Ian will give you the numbers in a second, there's 4 components to deliver in order to make this bridge happen in order to make the stronger second half happen. I just repeat this. The first one is we must be successful with the price increases. They are moderate, but we have to be successful, especially in India. The second component is the industrial projects business, the volumes have to improve. And part of this is steel volumes in India, but the other part is -- the bigger part is the industrial projects business, which is recovering from this very, very low level in the first quarter. We have orders on hand for this, but we always risk, of course, delays in projects. So this is the second component, the volume piece. The third part is a somewhat focused reduction on cost of goods sold. This is -- part of this comes from closure of plants of the [indiscernible] plant, but other things, there are many smaller measures also in our plants. And the fourth piece is the reduction of SG&A costs, counteracting the inflationary increase that we have there that is still somewhere between 3% and 5% if we look at this globally. So we can't afford this 3% and 5% increase because of people cost increasing. Actually, we have to deliver some reduction compared to 2024. And if we deliver those 4 pieces, then the second half will be more or less in what we expect now. Ian, do you want to add the numbers, please?

Yes, certainly. So Harry, on your first question, our sales volumes in Q1 down 2% year-on-year, excluding the impact of Resco, including the impact of Resco, we are up by 1%. Our pricing down year-on-year by around 6%, but a significant impact from a much weaker mix, nonferrous metals and glass being materially below year-on-year. On the bridge, as Stefan highlighted, there are really 4 buckets. Each of them roughly account for EUR 30 million. The first EUR 30 million is high-margin nonferrous metals and process industries sales. We can see this in our order book. We've got our volumes up by around 20% in the second half of the year. I think that we can see nonferrous metals probably has higher probability. The area of risk is around glass where the risk is delays out of 2025. The second bucket is around increased steel sales, again, based on our order books, particularly increases coming out of India, North America, East Asia. We've got our second half volumes up around [ 8% ] on the first half. That's not massively different on what we saw in 2024, where you recall our second half volumes in aggregate as a business were up 8% on the first half. The third important bucket, this is our lower cost of EUR 30 million. There are 3 components to this. The first our network optimization, which we flagged well. It's the closure of our Mainzlar plant and the Wetro plant in Germany, around EUR 10 million. Secondly, it is measures to reduce our SG&A by EUR 10 million. And thirdly, measures to reduce our plant costs by EUR 10 million. And then fourth, the final EUR 30 million is improvement in pricing. Generally, we're able to get pricing through, but the question is timing. And as Stefan has highlighted already, the highest risk here really in India. The other items like buildup of the synergies in Resco and the FX largely offset each other. So there is a clear bridge, but manifestly, there is higher risk.

Next question is from Andrew Simms at Berenberg.

Just a couple on some geographic color, if that's okay. It would be good to get a bit of a view from you on what's happening on the ground in China and how you're seeing -- I suppose related to that, how you're seeing steel export volumes as well as the refractory volumes export as well. Good to get a sort of temperature check there. But also, I suppose, on the ground in India and the U.S. as well, I know you touched on India briefly, but just understanding a little bit about what customers are feeling on the ground there, that would be really useful. And then I guess in addition to that, on the order book, can you sort of confirm how that's evolved as you put price increases through or as you started to put pricing increases through, that would be good to know.

Yes. So maybe we just go from East to West. China, the local demand is actually relatively stable. The atmosphere is calm. I was there recently myself to check with customers and also with our team. So there's no massive change compared to the outlook from last year. People are very focused. Pricing continues to be very undisciplined like it is unfortunately the tradition in China. And the steel exports are not increasing now compared to last year, but last year, they were at a very high level. So here, I think we have no relief, if we want to put it this way. Refractory exports is the same. They are shifting into those geographies in which there are not big tariffs. For example, South America, I'll get to there in a second. So China, no support for the business. Also in the industrial projects business in China is weak because they have built a lot. So there's not enough demand growth there in order to reward more nonferrous, copper, lithium, aluminum glass plants or furnaces, but at least there's no decrease here. India gives us quite some headache. In India, we have this overcapacity in the refractory side that I mentioned, but also with our customers. Of course, the new capacities there come on stream in chunks and not dynamically as the demand grows. And now this year is a year where more capacity comes on stream than the market can absorb. So there will be domestic overcapacity in steel, not as much as in refractories, but also -- so that the market for our customers is not so easy. And at the same time, China imports are not releasing both on the steel and on the refractory side. And because of this overbuild in refractories and this over ambitious focus of many of our competitors there, pricing really, really has suffered in India really badly. So this is a big focus for us. We need to see these new plants coming on stream so that our volumes go up. That's the reason for the volume increase in India for us. And -- but we also need to see more price discipline. Otherwise, the margins are going to be quite lousy there for the foreseeable future. In the Middle East, it's a little bit become the region where many people are exporting to because they don't find other markets anymore. So prices are more under pressure there than us than they were usually traditionally. I think as we go deeper with our customers, this can be moderated in order to prevent it from declining any further because service expectations in the Middle East are very, very high, but it's a region in which we should have a view -- an eye on and be concerned rather than hopeful for. Europe is -- continues to be weak. But in Europe, also, you have also kind of an optimistic outlook into the future. Unfortunately, decisions are slow in this region and things don't come into place very quickly. So I think factually on the ground, we will not expect much volume improvement. But the mood is going from -- we give up to -- we start fighting mood. And I think this has some potential for the future. Competitor behavior is disciplined more than in previous years. We can't get price increases very easily in Europe, but also there's not a big decline here. So situation -- good situation, but on a low level, unfortunately. South America is a region now that suffers a lot under Chinese imports. Chinese are putting a lot of pressure on the South American customers in many countries. And there's a danger here that the previous discipline of the last years is degrading. So we are concerned about this. From a volume perspective, South America is flattish or positively flattish with a slight, slight increase. And U.S. finally is a market where I would say the best description is on hold. Many of our customers and some of our competitors are putting projects on hold to see how the situation develops. The U.S. suffers the most under the uncertainty. So our customers focus on short-term price increases because they have an upside from tariffs here and there, some weeks more, some weeks less. But projects are not moving forward. One of the largest integrated U.S. steel mills has just announced 2 days ago that they will shut down their mills for some time. This is quite bad news, but it shows that the volume in the U.S. is weak actually because the downstream demand for steel and other products is not there at the moment. Why? Because everybody is waiting. I don't know if that's the answer you expected, but this is a picture around the world.

And just on the order book, does that reflect price increases already put through? Or is that yet to come to be seen in the order book as you see it?

It depends on what the orders are. Of course, many of our orders in the order books are open to price adjustments as the cost adjust. Freight, for example, is a big pass-through item now in the next weeks because freight costs have gone up quite significantly on many lanes. So that allows it. The real big projects, they have been locked in before. So there's no pricing there that can be changed. So I would say 2/3 of our business is possible to adjust the price or maybe even -- yes, about maybe even 70%, 75% and 1 quarter was not possible to adjust the price.

Next question is from Jonathan Hurn at Barclays.

Two questions from me, please. Yes, just to say a few questions. First one was just on tariffs, please. Obviously, in the statement, you talk about obviously actions you can take to offset the tariff impact. But can you just maybe sort of give us what you see as the financial impact to RHI and tariffs, please? That was the first one. The second one was just coming back to India, just on your overcapacity comments. I mean, can you give us some kind of feeling about the sort of level of overcapacity, maybe a percentage number you think is residing in that Indian market right now? And also, just to clarify, what was the growth in Q1 in India? Or was there no growth? And then the third question was just under that sort of fixed cost under absorption, which obviously was a drag in the -- or to the margin, I should say, in Q1, and it appears that, that under absorption was negative or worse compared to Q4. Is that essentially the low point for that as volumes pick up as we go into H2 should that under absorption start to improve? And what kind of drag has that been on the margin, please? Those are 3 questions.

Okay. Let me give the explanation and then maybe Ian can add a couple of numbers. So on the tariffs, this is mostly at the moment, a U.S. effect. 50% of our business in the U.S. is imported. So that's where the tariffs have an effect, plus the tariffs on the locally produced raw materials that need to be imported as well. We have a significant price increase under negotiations with our customers. The value of our products in the cost of our customers is very, very low, somewhere around 0.5% to 1.5%, depends on the application. So for customers, this is not necessarily a big issue to pay higher prices. Therefore, these discussions are quite constructive now in the U.S. So we will assume that for the totality of the year, the tariffs in the U.S. will have a neutral effect on us. Some -- because the price increases are partially delayed, depends on the case. And then they will catch up with the actual tariffs and then we can restore the margins that we have there. India, my estimation of the refractory overcapacity is that we have refractory capacity that can now serve the projected India demand for 2035. So it's really significant. And that because a lot of this capacity is new or some of this capacity is new, newly freshly built plants. You can probably collect all these announcements from our competitors. Many global competitors who have built big plants with a lot of investment. Now they have a pressure to pay some of this back. And therefore, they're pushing market in the -- product in the market, and that depresses margins significantly. Significant double-digit price reductions compressing margins really significantly. It's a big problem. That's the effect here. And if the discipline doesn't improve here, India has the risk to become like the Chinese market over the last 15 years, very, very low in value and unattractive. This is the risk here. I'm not saying that it happens, but this is the risk here. The volume market in India -- the volume growth in India is okay. It's as predicted. But this is a volume growth of 5% to 6%. It's not 20% or 30%. So 5%, 6% takes a long time to absorb this capacity. That's why I'm saying we have enough refractory capacity for the next 10 years there. The drag of the underabsorption, Ian can give you the number, of course, but in the first quarter, clearly higher than in the last quarter last year.

Jonathan, so on the tariffs, now our standard protocol is that we're seeking to pass on these as a surcharge for euro. It does require individual conversations with each customer. It doesn't just happen automatically. The tariff that currently exists is equivalent to less than 10% of our revenue of EUR 850 million. And as Stefan highlighted, that's been pushed through at the same time that we are pushing through higher costs. The risk clearly that some of our competitors don't fully pass on these tariff increases and seek to gain market share. On India, for the India region, including Middle East and Africa, steel volumes were up 3% year-on-year. Our refractory sales were up 3% year-on-year, likewise in the first quarter. On the fixed cost under absorption question, certainly, it got weaker in the first quarter of 2025 on what was already a weak fourth quarter 2024, and we're running at -- in that quarter, an annualized run rate of [ EUR 60 million. ]

Our next question is from Mark Davies Jones at Stifel.

Can I ask on broader trade and tariff policy, are there signs of other geographies taking steps to limit imports undermining their own domestic markets? Are you seeing any such moves in Asia or in Latin America? Or are those markets totally open and therefore, at risk of further pressure?

So we see discussions in many places. In India, there are discussions. In South America, there are discussions in certain countries such as Brazil. But -- and then there are discussions in some countries in Southeast Asia. Europe, right now, not. It's clearly a place where free trade is held up, also in the Middle East. And in China, there's no restrictions on imports or tariffs for imports in our sector, at least. Why? Because it's not -- just not relevant there. So that's what we see at the moment. It's mostly a U.S. topic.

Sure. I mean, clearly, getting some sort of price stability or rises during the back end of the year is part of that bridge. It sounds difficult to see how that's achievable outside of the U.S. against the level of overcapacity you've been describing. And presumably, the risk is if there's that level of overcapacity in India, maybe folks start exporting more from there, too, adding to that global pressure. Is that a concern?

It's a concern, yes. The price increases are a concern outside of the U.S.

Okay. And then finally, on Resco and ramping up domestic supply, 18 months seems quite a lengthy transition. Is that a matter of renegotiating supply contracts with all your customers so that they can be delivered to out of existing Resco plants?

No. So 18 months is the time line for -- to get to this 75% or even 80% level. Of course, this will happen in step. Some things can happen really quickly, actually, we have and other things take longer because we need to build infrastructure in the plants. And for this, you need to do some engineering, get some permits, hire people until this is up, test the product with customers and until this is running -- fully running, then we are at this 18-month timeframe.

Our next question is from Vanessa at Jefferies.

Just wondering from everything you're saying about India, it doesn't really seem like the situation will get better in the next couple of years. I was wondering if it doesn't, what you can do on your side and when you think about footprint rationalization and if you still consider yourself to have 30% market share there?

Yes, we do. It's a question of balance. If we go from 30% to 28%, it has a very clear sign to the market. And we would do that in order to bring price discipline. Price discipline starts with ourselves, right? So it's not -- we are part of the field here. But we need everybody else to have the same recognition and the same understanding there. But if we are forced to reduce our market share by more than -- by a significant amount, then eventually we can, of course, not accept that because we cannot be the only disciplined player in the market and give up volume to everyone else. So it's a difficult situation. It's totally true. It's a bit frustrating because this has been going on for 9, 10, 12 months. But we've had similar situations like this before in Europe a few years ago, where we were in a very similar -- under a very similar pressure. And here, things cleared up after some time or stabilized after some time. So there's hope here, but there -- but that's what it is. It's hope, there's no evidence yet.

Our next question is from Joel Spungin from Investec.

I can start off. I was just wondering the comment you made earlier about the price and volumes [indiscernible]. Could you just maybe give us a sort of steer on how that splits between the steel and industrial markets just to illustrate the sort of weakness on the non-steel side?

Yes, Joel. So the industrial part of the business from a volume perspective is down 1% and the steel -- from steel sales volumes down 3% in Q1 '25 on Q1 '24. I cannot give you a split on pricing.

Okay. So steel is actually down a little bit more than the industrial markets. Okay. Understood...

But that's quarter-on-quarter that's Q1 versus Q1. If you take Q4 versus Q1, then the -- is very different.

Okay. Understood. And then maybe just moving on, you obviously talked about how you think that the order book is giving you some confidence for the second half. I was just wondering if you can talk a little bit about the resilience of those orders. I mean how easy -- how could that change how easy is it for customers to cancel those orders if market conditions don't recover as expected or worse?

So we have to differentiate between the steel and industrial projects and industrial repairs is kind of 3 segments. Industrial projects are the most firm, especially those projects that have been scheduled to be delivered this year. Usually, customers are very loyal in taking it in the year that they have ordered. They move within the year. In recent years, they always move towards the end. That's why we have such a strong fourth quarter now for many years in a row because of this effect, but this is very reliable. Then you have the industrial repair business, which is about 1/3 of our industrial business, that is actually a business in which we are underrepresented from a market share perspective, but that suffers less under low projects because companies still repair, maybe even a little bit more, while they wait until they shut down their furnace and then revamp it completely. Especially Resco is quite strong in this business. So that will help us potentially in the second half of this year, but it's a small part, of course, of our total business. In steel, it's a one-to-one pass-through. If steel customers produce less, they order less refractories. If they produce more, they order more refractories. And there's a double effect here. If they produce less and they have less utilization, usually, they order lower quality refractories because they don't need the high-quality refractories to optimize the steel output. If they have slack, then that's where there are some savings also. And of course, we have lower margins on these products and on the very high-performing refractory products. So high volumes is good for us from our customers and low volumes is not so good for us, sounds benign. It is benign, but it's good to remind.

And maybe if I can just squeeze one more in just very quickly. Just thinking sort of about the U.S. market overall, obviously, once you've bought Resco fully integrated and things like that, would you be the largest domestic local producer of refractories in the U.S. market? I'm just wondering if that end up being high for a very long time, whether that sort of advantage that you're the largest local producer?

We are the largest local producer together with Calderys, yes. We're both more or less the same size. But by a long shot, we are the largest local producers. So our -- the things we do in the U.S. get very positive feedback in the country. From the customers, they appreciate this a lot. They understand that they need a transition, so they will support us in this transition also from the regulators and from the local governments and from the employees and from the unions. So we get good feedback for this. We just need to get it implemented.

Currently, we have no other questions on the phone line. Just moving to a question we've received on the webcast from Barney [ Randall at TVR Partners ]. This is a question for Ian, please. Guidance for leverage clear for H1 '25 and FY '25, as you see demand now, how do you see leverage evolving in FY '26? Secondly, tariff impact on magnesite pricing. Is Chinese produced magnesite still impacting the price at which you're able to sell your raw material production? Or are tariffs resulting in a 2-tier market?

So let me take the second question, and then Ian can take the first one. Yes, the magnesite pricing from China is clearly making the market. This is 80% or more of the available world market is supplied by Chinese producers actually in a very reliable way. There's no shortage or anything like this. Also, there's no attempt to -- for shortage. But therefore, prices will remain subdued for the time being. There are discussions in China that the value that the country gets for its magnesite is not long-term appropriate, but let's see where this leads to. And as a result, we are a price taker here. And our backward integration margin is not -- there's no outlook for massive improvement here.

Barney even on your first question, our cash conversion continues even in the first quarter to be strong, where we not to do any further M&A leverage in 2026 would reduce by 0.4x.

So that's approximately the reduction of leverage per semester.

Thank you. So at this time, confirming we have no further questions on the webcast or the conference call. So I will hand the floor back to Stefan for any closing remarks.

Thank you very much. And also to all of you, thank you for dialing in. To repeat the key messages, very difficult trading conditions and demand weakness around the world. RHI Magnesita is set up comparatively well to navigate through this, including the changes in the trade environment, whatever they will be. And third message, because of a very weak first quarter and this outlook of uncertainties, our EBITDA delivery for 2025 will be even more focused on the second half of the year with about 60% to 65% of the profits being made there, hence, increasing the risk for our guidance somewhat depending on the 4 deliveries that we've outlined. Thank you very much for dialing in and listening to us and talking to us on an ongoing basis, and we look forward to engaging over the next days and weeks. Goodbye from Vienna.

Goodbye.