Stabilus SE ($STM)

Ladies and gentlemen, and welcome to the analyst and investor web conference regarding the Stabilus results in the second quarter of fiscal 2026 [Operator Instructions] Let me now turn the floor over to your host, Dr. Mr. Pickle.

Hello, and welcome together to our earnings call today. My name is Michel Pilsen, I'm the CEO of the Stabilus Group. And for sure, you also have our CFO, Andreas Sieger, with us in the call today. Actually, in terms of the presentation, we'll see it slightly different today because we wanted to put also a main focus on where we stand in terms of our strategic priorities and also as we are in a transformation, giving you some updates on the transformation along the sideline. So what's the current status and what do we plan in the close future to proceed and to further improve. Our bottom line is a key takeaway, I would say we're progressing very well on our transformation. And despite of rough waters, we delivered stable results. In the past weeks, we did streamline further our industrial footprint in Asia this time around with our Suzu plant. We'll talk about that in a bit. Then for sure, we also had a lot of new business wins, in both automotive and on industrial side, I would also like to highlight 1 good win, which is actually in terms of the aftermarket, a big win in North America again for electromechanical devices. We are further working on our defense applications. That's important to us. It's steadily growing. We'll have an own section about this business or part of the business in a couple of slides. And then for sure, we continue in general to start 2030 platforms. This time around, we also talk a bit about the robotics market. establish for automation, that's our slogan and we invest in the automation sector, predominantly also in the robotics area in the close future to make sure that we follow the megatrends which we are faced with. Yes. There is also a good progress in terms of our personnel-related measures, which we did introduce half a year ago. We've been fully executing them. And this actually helps and we'll see that on the financial deck to improve our margins along the line because even with lower sales this year around, we could maintain our EBIT margin. Yes, this resilience point is extremely important for us in difficult times. predominantly also with the slogan, and this is really what we live local for local. So in the region, for the region to be close to the customer. Switching to the next slide, actually point it out. Spot on, we had in the second quarter, EUR 304.9 million in terms of sales. which is better than the first quarter this year where we have been in the range of EUR 291 million. However, it's 10% less than prior year. And the remarkable thing is that despite of lower sales, we achieved same EBIT margins than last year, which was 11.2%. which underlines again our execution in terms of our cost measurements and cost measurement savings, which we initiated over the course of the past months. Yes. I've been talking about the defense sector in the beginning of the slide. And actually, we had significant order wins over the course of the past quarters. And it's significant for us because we already sold EUR 3.2 million, and this will be triple soon. We'll be tripling soon where we are selling all kinds of features, be it dampening systems, opening systems, gas springs, gastros for all kinds of applications in the military sector starting from standard weapons up to drones. So we are basically becoming bigger and bigger in this sector of our business. And this is only a starting point because when it comes to the next and even bigger areas like Human retorts, we are also now in the progress to develop the right features to be also present in that market. So you see that with whatever we do, also in strategic terms, we invest a lot in that point. Yet to be closer to the customers, we decided to combine our industrial brands under 1 roof. So we had the inauguration of our new plant in Suzhou 2 weeks ago. It was a great success. 65 valued customers have been participating in the same way than representatives from the government, for sure, the management was there of the Stabilus Group. And we could open in brand new facility to actually capture our industrial brands under 1 roof. and to be closer to the customers, this is really appreciated by our customers, and we see very nice order intake since that because now we have all the export brands under 1 roof. which adds to basically efficiency, and it brings us very close to our customers, which is absolutely appreciated and needed this time around. So it's in the region for the region by Excellence. Talking a bit about the market environment. And I told you already that the presentation this time around is a little different than the times before because we also would like to talk about the market environment, right? So there is still a lot of competitive pressure in the market. You all know that particularly in the automotive industry, Asia Pacific for front, right? The global lightweight production is below prior year's plan or below prior year's execution by 3%, yes. We see some unfavorable currency translation effects, driven mainly by the U.S. dollar and the renminbi. And at the end of the day, the industrial segments, they are also impacted by the current situation out there in the market. There is a consumer sentiment, which is basically cautious in all kinds of investments for goods. And then for sure, along with that, we are basically working on protecting us in terms of supply chain disruptions, right, driven by all these geopolitical unrest in the world basically protect ourselves and make sure that our supply chain is independent and robust and stable. So this is currently the market environment we are faced with, like many or almost all other companies in the world as well. And as I said, we are fighting through that because our EBIT margin basically stood at the same level than last year with even lower sales, which underlines the execution and the effect of our activities at the Stabilus group. So on the next page, we jump directly into our deep dive and different market segments we have on hand. And actually, now at 50-50 between automotive and industrial businesses. Our Industrial business actually did grow organically 2%. However, the FX rate was an issue in the first half of the year, particularly also in the second quarter. And the automotive industry, as I said before, minus 16% is impacted by the currently weak automotive market, yes, around the group, right? You see that on top of the slide on the red-hand side, 16% down year-over-year. Also, the industry machinery and automation market is impacted by that people are consuming less. And this also brings to the point that the companies are investing less in automation. They're investing less industrial machinery. And this is certainly something we feel. However, distribution and first from the commercial vehicle and also the aerospace, marine and rail sector, they are performing well. And this is basically, for us, particularly the commercial vehicle sector an indicator for growth in the future because typically the economies start to grow with commercial vehicles and commercial vehicle growth. This basically drives the economy on global scale despite of the current headwind we are seeing in the global economy. So with that, on the next page, I would hand over to Andreas Gage, leading us through the financials for the last quarter and the first half of the year.

Thank you, Michael, and also from my side, a very warm welcome to this conference. If you look at the first -- the second quarter, where I will start, that's January to March, and then I will go into the half year result. So in the first -- in the second quarter, we lost compared to prior year, 9.8% in the revenue, and you see about 2/3 is really coming from the volume where 1/3 is impacted by foreign currency translation, so we had headwind from that side. If you then look where this volume drop is coming from, it's mainly Asia Pacific. and also Americas isolated Q2 had a softer revenue result than in the prior year. What we also did realize also in the second quarter again are some synergies from the taco combination of EUR 2.4 million. If you then look at the EBIT margin with minus 9.8% in revenue, we could maintain the EBIT margin at prior year level. So that shows we really could flex our cost basis. From the revenue side, you see it then later on in the bridge. We lost more than EUR 9 million in EBIT but where we really strong was in the compensation with overhead cost of EUR 7.6 million. And just bear in mind, we reduced them by EUR 7.6 million compared to prior year despite the headwind we have from all the inflationary price increases. If we then move around to the profit for the second quarter, you see it went down by 17%. However, it's important to notice that the deviation basically comes from the EBIT, so below the EBIT, there was not a lot of movement as compared to the prior year. The adjusted free cash flow in the quarter, and it's important in the quarter stand-alone was clearly below the prior year level. The main driver behind there was a strong March. We had in March, very strong sales, clearly above the normal run rate that we have, and these sales were then reflected in higher accounts receivable. If I then move on to the half year results, you see the revenue in the half year was 1.2%, down. We also half of 2/3 volume, half FX impact. And what we see then in the -- if you look at the whole half year 2026, it was predominantly from Asia Pacific and in Asia Pacific, a big portion from Powerise. If you look at the whole half year 2026, we realized more than EUR 4 million of sales synergies in with the taco. In the EBIT, a similar picture, you see the gap to prior year and was closed a little bit in the second quarter. That's also why we see a bigger deviation in the first half year, the margin still 10.6% in the quarter stand-alone. The major impact when you also compare it in absolute numbers compared to prior year also comes from the volume effect. You see in the full half year 2026, we even reduced overhead cost by EUR 14.3 million. So here, you see the effort from all the measures we took, we really see in the results. Moving on to profit, similar pictures for the second quarter. The major deviation in the profit as compared to EBIT comes from the lower EBIT in absolute terms. And then if you move directly on to the cash flow, you see if we compare the full second half year with prior year, we even generated slightly more cash flow. The reason being in the prior year, the Q1 was weak. and now this year, Q2 was rather weak. But if we compare to the full 6 months to prior year, we could even slightly increase it. What you also see, if you just go for 1 second back, you also see that on 1 hand, it's the operating cash flow, but we clearly adjusted also current level of the business activity was the cash flow from investing activities. If we then move on and look more the sequential view, that's also new slide that we prepared and also a new kind of presenting the results, you now see the quarter's trailing for the last 12 months. And you see we improved our revenue as well as our EBIT from the first quarter to the second quarter. On 1 hand, that's driven by the higher revenues that we could achieve and also by the good March revenue that we could book. And you also see that our cost measures on cost of goods sold, but also on the overhead cost showed its positive impact even more in Q2 than we saw it in Q1 2026. If I then go into the region and give you a little bit more flavor about the region, the 3 region developed quite differently. In the U.S., the top line went down quarter-to-quarter by 11.5%. That's really driven by the automotive business, but you also must note that the automotive business was only in the second quarter, particularly weak in the U.S. where we achieved good or I would even say, very good results is industrial components, and particularly in the form of taco where we could increase in Americas, the revenue by 6%. If you then look at the development of the EBIT, we said it already in Q1 presentation that we are not satisfied with the EBIT that we delivered in Q1 with the EUR 5 million. In Q2, it is a little bit better with 9.9% and 8.8% margin still not there where we want, and it has basically 2 reasons in there. Reason number 1 is the challenges we had in the production of Gas Spring in Mexico. We already discussed that in the last call for Q1. And what we also see so in the second quarter and when we produce in Mexico, we ship a big part of our products to the U.S., and we invoice that in U.S. dollar. And when the currency moves and the dollar gets weaker, we then get less Mexican peso when we converted to Mexican peso in order to cover our cost. When we then look at EMEA, we see a different picture. If you look at quarter-to-quarter, we could basically maintain our revenue level organically even slightly increased it mainly also coming from Automotive Gas Spring. Interesting to see is that industrial components, even in Europe, where we really can say, have not an easy economic environment, it could increase the revenue by 4.3%. And in Europe, different to the other region, we could maintain or even slightly increase the automotive Powerise business. When we then look at the EBIT margin, also here, a clear improvement quarter-to-quarter from 10.8% to 11.2%. Also here, we see on 1 hand, the volume impact that we could realize with a better EBIT and what we also see that the cost saving measures are really booked now into the results. Asia Pacific, also again, a different picture than EMEA and Americas. In Asia Pacific, we clearly see the lower revenue. The top line was down 28% or 26.6% if you compare it quarter-to-quarter, mainly -- is mainly coming from automotive and within automotive, especially from the Powerise business. What I would stress here and highlight is the EBIT and the EBIT margin, I mean, we lowered the revenue significantly driven by the economic mainly in China. but we still deliver EBIT margin of 18%, 16.7%, what I would consider as a strong result. When we then move on to the bridge, that's also a new slide that we now share with you. And here we compare the EBIT from Q2 '25 to the EBIT Q2 '26 to give you a better flavor what is the driver of the result. And you see clearly on the negative side is the impact from the revenue with EUR 9.3 million. On the margin, I could say with minus 0.4%, it's almost flat. So we adjusted our cost of goods sold to the new volumes that we have in Q2 2026. And then you see the savings we realized totaling EUR 7.6 million, a little bit in R&D, but mainly in selling, and that is even more important in admin expense that it could reduce by 7.4% in an inflationary environment. The adjustments also were a little different than in prior year, and that brings us to the EUR 34.1 million in Q2 2026. We also prepared for you a similar bridge for the cash flow, I mean the cash flow, we compare the cash conversion, and you see we started the EBIT, and then we had the depreciation and amortization so that we are at the level of the EBITDA. Then you see the change in net working capital with the strongest negative impact, the change in net working capital is mainly explained from the higher accounts receivable from the good revenues we had in March 2026. To a lower extent, it's also driven by the fact that in prior year, we reduced the inventory in the second quarter notably. And this reduction, we obviously cannot repeat year-over-year and year. So in comparison than the prior year, this has also a slightly negative impact as well as tax and others. That brings us to the operating cash flow of the EUR 15.7 million. If you then make the bridge to the adjusted free cash flow, we invested EUR 15.4 million in our facilities and also new production equipment. significant less than last year to adjust also and to preserve the cash and then you see with the adjustment, it gives us a free cash flow of EUR 4.1 million in the quarter, which is clearly below prior quarter stand-alone but as I showed at the beginning, if you look at the first half year, we were even slightly above. With that, I would also show you how the net leverage ratio developed and it went slightly up because the debt increased slightly as compared to 2025, However, we continue our deleveraging our reduction of net financial debt over the years, and we will also continue that path in the second half of 2026. And we also initiated actions and plans in order to particularly work on the inventory level in order to bring that further down. The last slide is then from my side on the net working capital. Here, you see the increase on trade accounts receivable. You see it also on the right-hand bottom side, the major increase the 27.7% comes from accounts receivable by the strong month March 2026. That's what we prepared for you in respect of a deep dive into the numbers, and I would hand back to Michael for the remaining presentation.

Thank you, Andreas. Thank you for leading us through the financial sector. And as you see, considering the lower sales we saw over the course of the first half of the year, we are protecting our margins. And we're also on the same level of cash flow than last year, which is a good indicator for us that we are spot on with our strategic initiative, in particular when it costs and maintaining good cash conversion. And this is very, very important for us. So how do we do that? And how do we continue this development. . So you see the strategic pillars, which we have on hand and basically, it's all about the strategic pillars to us. And I wanted to give you an update on what we achieved over the course of the first half year and also where our impact will be and next milestones will be to further progress on this improvement path. So when you talk, for example, about the motion control innovation, right? Innovation is key for success for us. We did invent the industrial Powerise solutions for us, the door actuation system and also, for sure, automation-related products like Powerise for automation. And this is something which drives our performance. It drives also the shift from automotive to industry, and it guarantees a healthy and good margin profile. So what's the focus in terms of the next milestones, the industrial automation will also bring that to the defense applications now, right? And we are working on human-robot systems. What are we doing there? Yes, we have, for example, the hinges, right? There is more than 20 hinches in a humane robot and you need a reliable motor with a gear system and the right software. And due to the fact that we work together with our partners like Synapticon, where we acquired a certain stake, as you know, we have the right software and the right hardware and execution to be successful in that market and this is something which we are now driving. It's under the umbrella of Stabilus for automation, which also captures the doings in terms of our test business. Talking about that, this is basically, for us, the motion ecosystem, right? Stabilus for automation and for sure, also along with that, our dealings with AI, AI holds the world. It's for us on the product side, which Stabilus for automation, but also it's in terms of, for example, sales channel management, so will be faster to the customer with the right product and the right product quality. This is how we use AI and big data amongst them throughout our company. For sure, we also did good progress in terms of sustainable and profitable company, right? We've been installing several solar systems are progressing in terms of renewable energy and will even put a stronger focus based on that also going forward on our growth levels, including the margin improvement measures to basically progress on this path of a stable, profitable and sustainable company. Asia center of gravity, Andreas has been talking about that a bit. There is a big shift in Asia, as you all know, there is on 1 hand side, the big pressure from the competition. On the other hand side, it's very, very important to deliver not only steady and stable results there, which we do with our financial performance of around about 17% in average percent, EBIT margin over the course of the first half year. Also, on the other hand side, it will be very, very important to be in the region for the region, and this is what we do with our additional footprint with further empowerment of people, local decision-making, and that's something which we also execute along with our transformation program. And for sure, in terms of operations agility, we're driving efficiency in the plants, right? We've been investing a lot in automation, particularly when it comes into the production of Powerise systems it's fully automated now, and we improve our labor productivity with that along the line. That's what we did. And here, we also want to focus on further cost savings and cost initiatives to bring the prices down -- the cost of our products down and to invest more in operational excellence. So that's basically an update on the strategic execution. You see in terms of the product, it goes more into innovative products with human reads, but also defense areas, then the cost management is extremely important to us. and for sure, the flawless execution. This is what it brings down to. So in terms of cost measurements, and we talked about that also at the beginning of the slide, and Andreas highlighted that our cost savings, they're coming through, right? The cost savings in the first half of the year were EUR 14.3 million. The expected savings for 12 months effect is EUR 19 million. And even in 2028, we will see EUR 32 million out of this complete reorganization and transformation program, including the restructuring, which we've been doing over the course of the past months. And that's not over yet. I mean these first initiatives are done. We are executing them. We are flawlessly executing them along the line. But for sure, we continue this path of success and cost management in our company because that's vital these days. And this is also why we achieved similar EBIT margins in the first half year, even with lower sales by 10% compared to the prior year. Talking a bit on the next slide about our programs, our transformation program, right? The transformation is key. We drive it in each and every region. we do the organizational transformation. We've been reducing heraical levels in all the areas just our new plant in Suzhou is 1 example, right? We're taking out different layers, bringing the businesses together in order to be close to the customer and take out costs because this is what it's all about. in these days, making us lighter, making us fast and agile in a difficult environment with a lot of headwinds. So that's what we do. So location relationship measures, this is 1 example. Such plant, but also we've been working on our facilities in Germany, U.S., Singapore and Thailand. to bring things together and combine them to take out costs. And this is something which we will progress over the course of the next quarters as well. because there is 1 thing which is extremely important to us being close to the customer, managing our costs well and also drive our top line with innovations. And the personnel-related measures we executed them already according to the plan, which we did set up last year in September October, taking out 450 employees, predominantly on the overhead side, which is actually 6% of the global workforce. And it's predominantly in Europe and Americas. for sold in Asia Pacific, driving a little bit of different spin because there, we need to invest in local for local and also feed our engine for growth for the future. So bottom line, you see the programs are on track. So we are investing in these programs, but nevertheless, maintain our healthy EBIT margin in an environment of lower sales. And also, we are maintaining our cash flows. And I think that's remarkable. So on the next page, we've been talking a bit about the sustainability areas. This slide shows you some results, right? We're investing in renewable energy. We've been basically despite of lower volumes, increasing our renewable energy share, you see that top left, but also there is CO2 reduction of our emissions in the facilities, a big point. We could do that by another 20% and then also, we are harvesting our own energy with solar power systems in place, which basically adds 1/3 more than before in terms of being sustainable. And this also gets recognized by the sustainability ratings we recently got, and you see it on the bottom right. So they are all in a very good level with good ratings and also progressing well to further steps in executing on that long-term plan for us. Because it's important to be sustainable and profitable for us as a company. Over the course of the past quarters, I did tell you that we will reduce our investments which is vital for us because we want to tailor our investments to the needs we have and also to the current market situation. So we basically have been going down in terms of investments to a range of 5%, 5.5%. As I always promised, right? We talked about the last year that the investment in the range of 6% to 7% is not a level which we'll pursue a long run. So now we are at 5.6% and at the end of the year, we will also be in the same magnitude. So we are investing where it matters in terms of new technologies, but we are very cautious in terms of capacities and for sure, safe wherever we can to underline our vital financial performance in difficult times. On the next page, this basically leads to the key priorities for the year. Deleveraging is the most important thing for us. We need good financials for that, stable transformation in terms of creating and generating cash. That's what we do. We need a swift execution of our personal related measures for that. The footprint organization optimization goes on, the stringent cost management. And then for sure, despite of all this cost management, we still need to invest in the development of the latest technologies like human read because we don't want to miss that share because it's a fast-growing market and also in the terms of defense. as traditional markets are basically suffering or running flat like the automotive industry, we see a slight decline. we are investing and getting business in terms of new technologies like Establish for automation, automation, technology and human read and also the defense area. And this is the main drivers we have to continue our success. And then for sure, we have also operational measurements like ramping up factoring and other points to in difficult times, stabilize and continue stable progress of our business. Yes. I'll lead to a summary now. The next 2 pages are basically giving you a summary and outlook we conclude the meeting with our guidance for the year, which, by the way, remains unchanged due to the fact that in the first half year, we could deliver stable results. And then for sure, we'll have later Q&A session. But let me summarize before that so the first half of the year was impacted by a drop on the -- in terms of sales, however, driven by a market which is unfavorable. However, we could maintain our margin position with 11.2% particularly also in the second quarter, we've been having a good financial result overall. Also, our cash generation is similar than last year even with lower sales. local-for-local approach is extremely important for us, not only because we want to be close to the customer. It's also a natural hedging for us, right? In difficult times, we never know how the margins -- how the FX rates go up and down. You need to have kind of a natural hedging. And this fosters basically a resilience in this currently geopolitical unrest situation and this is extremely important for us. We continue to do that. And then for sure, the transformation program is on track, as I said, with the savings at hedged and also taking out hierarchical levels. And fourth front, it's important for us to invest also in the future an innovation to be spot on with tables for automation and also our investments we do in the defense areas. On the next page, basically, also giving you a bit of an outlook how markets in the economy from our perspective will continue. We see moderate growth. We see some light at the end of the tunnel in terms of how the economy is developing, as I said, also at the beginning of the slide, commercial vehicle for us is a little up in terms of sales. And this is an indicator for us that at the end of the day, we went through that valley and see also some positive signs here. And we see also a stronger momentum in the U.S. and China to start with, and this is basically a good sign for us. Yes, we are -- in the next quarter, there has been particularly important strengthen our supply chain, protect from supply chain disruptions because we also see that in a market environment where the economy is suffering, also our supply chain needs to be secured not only within the region for the region, but also with certain measures to stabilize our supply base. And then at the end of the day, we see that the light vehicle production stays flat now at 92 million units produced slightly less than last year. But let's see at the end of the day, we see in the second half of the year, a slight improvement as well. So that's what I mean with light at the end of the tunnel, we see in the commercial areas -- commercial vehicle areas, some improvements. But also we see slight improvements in the vehicle market in the second half of the year, which should lead to a better environment in the second half of the year. And that's what we are basically having as an outlook and prognosis for the next half year. Yes, towards the end of the meeting, confirming the guidance for the year 2026, as I said, we see slightly lower sales than last year. This is something which we had from the beginning in our ballpark of our prognosis and guidance for the year. That's why in the first place, we've been shaping the guidance with a revenue of EUR 1.1 billion to EUR 1.3 billion, and we are within this corridor, well to the midpoint. And in the same way, and you see that with the performance of 11.2% in the first half of the year, we see that we are within the guidance in terms of the EBIT margin, which was at 10% to 12%. And then cash flow. We all know that Stabilus typically due to slit generates more cash in the second half than in the first half of the year. We've been on a similar level than last year. So we will also confirm here that we are within the guidance in terms of the cash flow and the guidance here is between EUR 80 million and EUR 110 million. Yes, this is basically an overview of the Stabilus group where we stand as a company. As I said, cost management, deleveraging, nevertheless investing in the latest technologies to grow in the human read market as Stabilus for automation and also on the area of defense. That are the priorities for us. And now we are happy to receive your questions. We will start the Q&A session with that.

[Operator Instructions], The first question is from Yasmin Thilan from Berenberg.

I have 3, if I may. So the first 1 on your confirmed free cash flow guidance. So could you shed more color on the free cash flow development in H1? You said already that in general, it's kind of half where you generate higher cash flow. However, how should we think about inventory impact from a potential supply chain disruptions there? So inventory to be built up. And is there anything we should keep in mind in context with the actuation ramp-up second half. And just to clarify, you adjust for the entire cash out related to the restructuring program. That's my first question. And the second, on the deleveraging. So in Q2, we have seen a sequential increase on higher debt levels. How should we think about the EBITDA leverage by year-end? And the last question on the door actuation system. So China announced the ban of the fully hidden poorelectric door handles starting as of next year. So do you expect to push towards semi-hedesigns? And how will this impact the demand for our dotation system, if at all, many things.

Because I had some click in the line. Just I mean the third question was in terms of the penetration of traction, you mean? .

So basically, kind of the development and with the kind of upcoming ban in China for the fully hidden pop-up electric door handles. So how this will impact the demand for our dotation systems? And kind of if you have anything in particular from your Asian OEMs as a feedback so far in terms of the expected ramp-up or the kind of overall penetration...

Thank you for the clarification in terms of the question. Thank you for your question, Yasmin. I will start answering them, and then I for sure I hand over to Andreas. In terms of free cash flow guidance. Last year, we had EUR 119 million free cash flow. And this year, the guidance is between EUR 80 million to EUR 110 million. So that means 1 of your points was did you reflect or what's the impact of the accrual we did and the cash out of our restructuring program. This is considered in that. It was EUR 18 million, and we considered in our free cash flow guidance that this EUR 18 million is an outflow because when you then this deduct from last year's plan, the reduced sales and thereby the reduced EBIT and then also the cash out of the EUR 18 million. This basically is leading us to the mid point of the guidance corridor. So from that point of view, there is, for sure, in the second half of the year, a lot of things to work on, you mentioned them, like there's the ramp-up of the door systems, which has not a big impact on our inventories because typically, in the automotive industry, you just like have just in time and sequence production and delivery of these parts, and that's why it will be average in terms of our inventory needs. On the other hand side, if you look into our financial set, for sure, there is higher inventories. These tardy in our plan. due to the fact that we see some headwinds coming when it comes to supply chain securities or safe to stability. Bottom line is in our current forecast, there is included the current softer sales, but also the ramp-ups, and we did deduct the cash out of our restructuring program of EUR 18 million. if you count that all up, it basically we are still in the guidance corridor, and this is why we can confirm it. But to this point, for sure, or maybe Andreas has further things to add. In terms of debt level, our target is for the year-end to be below 3%. So you saw now 3.2%. We have some strategic measures, but also some measures which we pull in the here and now like factoring or also reducing inventory numbers to basically bring our profits up and also to delever further, bringing our profit up is also main priority towards the second half of the year. Here we concentrate with our programs to reduce costs on bringing up the margins further in order to generate good cash to delever. And then as I said, there are also strategic levels in place, which we plan to execute in the second half of the year, which basically will lead us to a net leverage ratio of below 3. So the third question is in terms of the door handle, there is fully electric doors in China coming up to the market. This, however, doesn't impact the door actuation because the door actuation is basically the electromechanical device to open and close the doors itself. However, that door is actuated. You can do that still by tipping on the car, slightly manually open it or with gestures. However, this is basically embedded into the vehicle. It has nothing to do with the pure electromechanical device to open and close the doors in conjunction with the radar systems because however you activate the door, you need a radar system, the software, the ECU and the electromechanical parts to then open and close the doors mechanically. So that means there is a limited impact there. And also, we get very good customer feedback. You know that there was the betting auto show. And we are particularly in the mid and upper segment of the cars, there is no brand anymore without the door actuation India. We've been recently and we monitor that, as you know, every quarter, have been winning with a great wall additional door actuation systems. So for us now in China, there is not a single OEM who is not jumping on the door actuation, There is the -- in Europe, the big car manufacturers who are in the mid and premium sector, they are all avoiding the systems now for their SOPs. And you know that with BMW, we are about to have the launch in a couple of weeks for the first biggest volume in the Western world. And we see the same thing in North America. So from today's perspective, this product and this technology is very well accepted by all OEMs and end customers who are desperate to use them. So that's in terms of the 3 questions. Andreas, from your perspective, anything to add when it comes to the free cash flow guidance and the debt levels.

I think on the free cash flow, I could probably help with the rough calculation. So we made in the first half year, about EUR 30 million, that would bring us to EUR 60 million for the full year. And on the EUR 60 million, you should add then certain aspects and FX that will come in. So first of all, on the net working capital side, we launched the inventory reduction program. And as I said, we had at the end of Q2, this extraordinary impact from the high accounts receivable over the time, over the next couple of weeks, our customers will pay us and then this levels out. And then more on the financing side. We also have 2 initiatives we'll be working on. On 1 hand, we're rolling out the ABS program, so an asset-backed security program for our accounts receivable and we also roll out the reverse factory program or the bankers among us, better known as the Seafox program and these 2 initiatives will then more on the financing side also support in order to reach the guidance. On the rest, I have nothing to add unless you would have a specific question.

Maybe a follow-up on the actuation system. So could you remind us who are the main competitors on the dotation market. So is it mainly in Gino have you seen also other Chinese competitors entering the field.

I would divide it in 2 regional aspects, right? If you look into the Western world, it's still the main competitors we know, right? It's pause, it's agent Magna. And if you go for China, it's -- yes, the main competitor is still engine. And then there are 2 or 3 smaller ones who are basically working with minor local brands, but the biggest 1 remains engine. And the biggest 1 actually is also not only a competitor of ours in terms of direction, as you know, but also take opening systems in general terms. So these are the biggest competitors we have. .

[Operator Instructions] At the moment, we have no more questions in the queue. [Operator Instructions] But there's been no more questions to be incurring. So with that, I hand over the floor back to Buschner.

Yes. Thank you very much. Thank you for joining today. I think that saves us a couple of minutes. We all need desperately in our day-to-day business anyways, particularly on Mondays. So thanks for joining today. And again, the main priorities are for us deleveraging, execute and improve further our cost position. And then for sure, nevertheless, in difficult times, invest in the latest technologies needed in the market. Thank you very much. And I wish you a good and successful day and week. Thank you. Goodbye, everybody.

Thank you. Goodbye.