Siemens Aktiengesellschaft
Q1 2015 Earnings Call Transcript

Published: 27 Jan 2015

[Executives:]

Mariel Von Schumann - Head of Investor Relations Josef Kaeser - President and Chief Executive Officer Ralf Thomas - Chief Financial Officer

[Analysts:]

Ben Uglow - Morgan Stanley Mark Troman - Bank of America Merrill Lynch Andreas Willi - JPMorgan Martin Wilkie - Deutsche Bank James Moore - Redburn Simon Toennessen - Credit Suisse

[Operator:]

Good morning, ladies and gentlemen, and welcome to Siemens 2015 First Quarter Conference Call. As a reminder, this conference is being recorded. Before we begin, I would like to draw your attention to the Safe Harbor statement on Page 2 of the Siemens' presentation. This conference call may include forward-looking statements. These statements are based on the Company's current expectations and certain assumptions and are therefore, subject to certain risks and uncertainties. At this time, I would like to turn the call over to your host today, Mrs. Mariel Von Schumann, Head of Governance and Markets. Please go ahead, Madam.

[Mariel Von Schumann:]

Good morning, ladies and gentlemen, and welcome to our first quarter fiscal 2015 conference call. The earnings release and the financial information was published this morning at 7 AM. The files can be downloaded from our website. This morning's presentation is online, and this call is being webcast via the IR website. Siemen’s President and CEO, Joe Kaeser, and Siemen’s Chief Financial Officer, Ralf Thomas, are here this morning to review the Q1 results. Since the Annual Shareholder Meeting starts right after this call, we will limit the duration of the call to 45 minutes. Joe will start with a brief presentation and then we will have time for Q&A with Joe and Ralf. And with that, Joe I would like to hand over to you.

[Josef Kaeser:]

Thank you, Mariel. Welcome, and good morning, everyone, and thank you for joining us to discuss the first quarter results for fiscal 2015. All in all, we started into the new fiscal year in line with our expectations in a volatile economic and political environment. On the one hand, there are continued risks from geopolitical tensions, volatile currencies and the raw material prices, on the other hand, we experienced some tailwinds from our short-cycle businesses like Digital Factory and Low Voltage. In the United States, we’ve seen some acceleration for industrial investments and solid construction activity. China continues to show strong demand by the remaining focus on its structural reforms. Finally Europe, Europe proceeds at a modest pace a bit powered by industrial strength present for most in Germany. Since I am sure that the potential impact of oil prices is in everybody’s minds, let me upfront give you our take on the oil price developments. We do not see the current sharp oil price decline as a structural demand this year, but rather output driven. We therefore believe there will be a recovery in the mid-term. The fundamentals of the markets in terms of demand are intact at this scenario. However in the short-term, we expect a significant CapEx decline and some project delays associated with the oil price development. The developments are already visible in the tendering activity of our oil and gas related businesses, such as power and gas and produce in this recent price. OpEx and service related spending however is rather stable and should not be materially affected. Negative knock-on effects on infrastructure spending in oil exporting countries can however not be ruled out and depend on the duration of the low price level and their financial reserves. On a positive side, we expect to benefit from higher investment in infrastructure due to lower energy builds, in particular emerging economies such as India and increased demand from automotives and downstream customers. In this environment, the focus on our area of influence and continue to implement our Vision 2020 strategy. Let me highlight some of those key developments in the first quarter which we reported in the new organizational structure for the first time. Our book-to-bill reached 1

[Mariel Von Schumann:]

Thanks, Joe. Operator, we would like to open the call for Q&A please. Thank you.

[Operator:]

[Operator Instructions] And our first question comes from Ben Uglow, Morgan Stanley. Please go ahead. Your line is open.

[Ben Uglow:]

Thank you. Morning, Joe, Ralf, Mariel. And, couple of questions. First of all, on the EPS guidance the - at least 15% number, I wanted to - now that we have the disposal gains, I wanted to sort of on the stand what the offsets were? So if I take the €3 billion of announced disposal gains this quarter and I add that to lost is EPS, I come out, if I math is correct, at about €9.90. If I simply increase 2014 EPS by 15%, I get to €7.33. What I am trying to say is that there is roughly, I think a €2.2 billion cushion in - between where disposals are in the 15% guidance. Maybe a question for Ralf, but could you give us an idea of what is coming in that €2.2 billion? How much of it is provisioned for restructuring? What are the adverse effects could there be that impact the actual earnings number over the course of the year? So that’s question number one. And question number two for Joe is, can you just elaborate little bit more on the mix effects, what exactly is going on in healthcare? When we talk about low margins in imaging systems et cetera, could you be a little bit more specific, is this to deal with ultrasound, is it to do with sort of launching new products? And are there any price effects going on in that? Thanks.

[Ralf Thomas:]

So, thank you for the question, Ben. With regard to the EPS guidance, let me try to give you a bit more insight there. I mean, first of all we have been announcing pretax figures obviously and we cannot comment on the after-tax impacts which will of course have an impact on the EPS and its guidance there. So, you need to be a bit patient as we need to since we are closing that relevant quarter only by March. Then Joe has been already indicating that we will support the way forward for Unify with a substantial amount of money that needs to be reflected in there. And last, but not least, I mean, we have been guiding you with restructuring expenses potentially coming from a 1/16 activities in the area of €500 million. Now, we see as we go, how far we can jump in that field and on top of that of course, we also see some fields for adjusting outside that 1/16 exercise that is pretty much referring to support functions and supporting activities in the businesses. Now as we speak and as we have been talking about the requirements to also lead some change in - especially in the PG area and additional investments in R&D in sales force, plus CapEx is taking us to a fairly higher level here compared to that what we saw last year. So, with that, I think you need to give us a bit more time until half year until we will provide you with the final bottom-line effect on EPS from the disposals, especially with regard to taxation.

[Ben Uglow:]

Okay. Let me just come back on there - Ralf, this issue, the Unify costs. So, we’ve had a €300 million impact in the current quarter. Are you saying that that is not the end of it, but there are going to be sizable ongoing effects? Because, it wouldn’t - I mean, even if I take tax off, and I put in €500 million of restructuring, there is still a huge number. So, is that largely going to be accounted for by Unify?

[Ralf Thomas:]

No, I didn’t say that, Ben. What I said is, the Unify impacts will be effective in the second quarter, this is around the €300 million that you have been mentioning. What I said is that restructuring of €500 million that we have been indicating in the past is pretty much referring to the 1/16 exercise which is focusing on support functions and supporting activities in the businesses. However, we also have been and will continue investing in R&D for catching up in certain fields. We also will invest preparing by feet on the streets volume growth where it’s profitable way forward. And we have been also increasing our budget on CapEx compared to last year. On top of that, we see the needs to transform businesses like PG, but as we said in the past, before we can be more precise in that field, we will follow the path of negotiations with the workers’ council first, then talking to our employees and then coming back with figures to the outside world.

[Ben Uglow:]

Okay, thank you, Ralf.

[Ralf Thomas:]

You are welcome, Ben.

[Josef Kaeser:]

Hi, Ben, let me go through the healthcare margin. First of all, most it has been the effect on the mix. I mean, obviously we do have significant differences between service and new equipment and it was in the new equipment our material differences in profitability such as MR versus - for example ultrasound. So, the most part of the margin decline has been mix related. There has also been some pricing method, obviously because as you rightfully say, especially in the Japanese environment we do see that there is competitive dynamics about trying to take advantage from the exchange rates which got provided by that. But take advantage of the opportunities provided by the exchange rate of the Japanese Yen. So there is some pricing method there too. We also do see some dynamics in that area in China where local competitors are much more courageous about pricing than the incumbents are. So there is some pricing method there. But it does not really materially relates to the margin decline, that’s first and foremost coming from the mix effect and therefore also should be temporary nature, at least for the most parts.

[Ben Uglow:]

Thank you very much.

[Josef Kaeser:]

Sure. On the EPS, again, look, the most important element of the guidance when you say the EPS will grow larger than 15% was the larger. This is known along already from November that there would be significant gains. We obviously are very pleased about the price and the conditions of hitting it which obviously shows that Siemens can also sell high, very high actually. The reason why we are, kind of dancing around a little bit is simple, because we want to make sure that we can configure as much restructuring and transformation cost as we can, because the more we can do clearly, the better the benefits will be, or the sooner the benefits will be from our program of the €1 billion savings. And that’s why there is some volatility on how much the restructuring will be which we think still can be considered in fiscal 2015. I want to comfort you on a few topics. First we said our top-line will be about flat to modest and that goes to maybe to revenues, like-for-like and that is still in place. Secondly, we wanted to make clear to the market that the margins on the industrial business, even in a year of operational consolidation will be just about the same like-for-like as they were in 2014. Thirdly, we knew that there would be some below the line unfavorable items firstly on tough comps year-over-year, but secondly also in a widely expected decline of the interest rates which was I think no rocket science to predict. Fourth, the market should be assured that there are no known relative structured things which we still want to consider and compensate for by the large gains which we have in the books. So as Ralf mentioned, we will be more specific when we know the exact tax rate and then we have finished the detailed conversations with the workers’ representatives in Germany which start as early as next week February 4 and 5 about clear and how exactly we are going to take advantage from the structural improvements which the new organization provides. So that was important to me again to give you that reassurance that we are pretty much on track and find with what we see.

[Ben Uglow:]

That’s very helpful. Thank you.

[Ralf Thomas:]

Ben, this is Ralf again. Just one quick data point, I am sure you took that into consideration, but be aware also that the former BSH equity pick up in prior years of cost is no longer there and last year we have been there in the area of €350 million. So, that’s also something that will not repeat itself obviously anymore and the treasury impact that Joe has been mentioning is also something that you need to see that what the swing against prior year of substantial magnitude. Therefore this is two more data points you may consider in modeling.

[Ben Uglow:]

Right, thank you, everyone.

[Mariel Von Schumann:]

Thank you. Next question please?

[Operator:]

We will now take our next question from Mark Troman from Bank of America Merrill Lynch. Please go ahead. Your line is open.

[Mark Troman:]

Yes, thank you very much. Good morning, Joe, good morning Ralf. Got a question on the process industries and drives and in particular the impacts from oil and gas and the weak gas price and on commodities. So, firstly, if you could just give more detail about what you are seeing today in terms of the weak commodity prices that we are seeing and obviously the substantial oil decline that we saw at the end of last year? That’s the first question. And then secondly, maybe one for Ralf, on the Dresser-Rand acquisition, Ralf, I just wanted to clarify what the situation was with currency in terms of a fixed price, but it’s being paid in dollars as we saw it on the release, or is there any variation around that or just some clarification about the actual end euro amount that will be spent on Dresser? Thank you.

[Ralf Thomas:]

So, Mark, maybe I may start with the second question around the Dresser acquisition. I mean, this is a very serious one that we - and we gave it a lot of thought even though we started to sign the documents obviously. And as you rightly said, the proceeds will be in US dollar. The acquiring entity is going to be one of our subsidiaries in the US and there will not be any equity need for that particular subsidiary and there will no euros been turned into US dollars when we close that deal. On top of that, all the assets or the biggest part of the assets and liabilities of Dresser-Rand are US dollar denominated and also the vast majority of the business case and the proceeds that we will earn from that investment later on is also US dollar based. So we see very broad kind of natural hedging environment in that field. There is clearly no need for any hedging activities as we finance in US dollar an acquisitions that is US dollar based.

[Mark Troman:]

Okay, thank you.

[Josef Kaeser:]

Hi, Mark.

[Mark Troman:]

Hi.

[Josef Kaeser:]

The commodity pricing, it is related to process industries and drives and obviously, there is two effects in there. The direct impact of a reduced CapEx spending and first breaks already with our customers, but there is also another - that also relates to industries such as mining. There is another impact and that is to end a lot on the earnings from selling oil and gas, are getting into increased difficulties in buying the equipment, because obviously, the funding is not there anymore due to reduced earnings. We see that especially in the area of midstream like large drives related to both oil and gas, also associated with Russia where obviously the older course have been shifting toward a period of time. We do expect that to continue for a while but then the weakness also in P&C was related that we need to invest in some areas. So our OpEx has been going up as planned, but also effect to the bottom-line.

[Mark Troman:]

Okay, thanks.

[Mariel Von Schumann:]

Next question please?

[Operator:]

We will now take our next question from Andreas Willi from JP Morgan. Please go ahead. Your line is open.

[Andreas Willi:]

Yes, good morning everybody. My first question is on power and gas where that the 11% low end of the margin range still holds for this year. Also given that, what potentially could come from the rest related costs later in the year? And are you still committed to the R&D ramp here particularly for the age frame, given the more limited market potential? The second question on Digital Factory, you made some comments about continued good strengths there and the good environment, but order growth slowed to 2% which is one of the weakest quarters we have seen in a while. Maybe you could just elaborate between your comments and the disconnect relative to the order growth we have this specific quarter? And, lastly on foreign exchange, you said, you expect a gradual improvement in the positive impact on margins, could you give some indication, if current spot rates stay, how much we could get back maybe relative to what we lost over the last eighteen months, particularly in the more sensitive business as healthcare and the industry. Thank you.

[Ralf Thomas:]

Andreas, this is Ralf speaking. Thank you for your questions. Let me start with the FX impacts. I mean, we have been pointing out at a couple of times that we have been following consequently our hedging policies in the past and that will of course kind of delayed with regards to bouncing back effect on the margin side. But to give you some flavor as Joe has been pointing out in his speech and also in the press conference already, the impact on the margin of industrial business in the first quarter was only, so to speak 10% - 10 basis points and for the company in total it was about 20 basis points while on the business volume, we saw substantial translation effects in the area of 220 basis points for new orders and 240 basis points for sales. Now, assuming that the US dollar remains compared to the euro on that level between 110 and 115, you may assume that we will see a best case of 30 to 40 basis points of positive impact on the margin for the full fiscal year. The other question around the Digital Factory and the potential disconnect between order growth and revenue growth, let me give you a bit of insight there. I mean, first of all, the first quarter was really strong, especially in China, we saw clear double-digit growth in some areas of the product business. However, that has been also benefiting from some restocking effects in the channel which will not repeat itself obviously. Then in the US, with regard to revenue we have been also been quite - doing quite well with high single-digit growth on revenues. However, the big question mark remains Europe and also Germany to a certain extent, there is a lot of mix signals out there still. Italy has been doing fairly well in the first quarter with its project - product business in the general motion control and factory automation arena. However in Germany, it was overall still pretty sluggish environment. When you compare to the verticals, software was good, especially on the license and maintenance side with high margins. Automotive, modest, but we are not convinced that globally this trend will increase question mark if oil price impact is going to have in that field and when it comes to the machine tool building industries. There was also strong momentum driven by China which we believe in terms of industrial production in China. In total the expansion level will not increase, but rather get to a new normal that is a bit below, that’s what we saw in the past except the chemicals and food and beverage. So I hope that was giving you some insights while we are expecting what we said before.

[Josef Kaeser:]

Hi, Andreas. On the ramp of R&D in PG, and obviously this is not only related with the H class next generation topic, this is more about building a - I would call it concept for flexibility for last - 500 megawatt. That’s a more comprehensive topic there to not just build one frame further but to make it much more flexible in terms of different needs for different economic reasons. There will be a huge market for H frame or H class frames, think about Japan or Korea or elsewhere, but there will also be a modular concept elsewhere in the world. So that’s what we are going to build. So that’s more comprehensive to - really to one single frame where we need to build in some enhancements interest. I guess that’s pretty much...

[Mariel Von Schumann:]

Yes. Thank you. Next question please?

[Operator:]

We will now take our next question from Martin Wilkie from Deutsche Bank. Please go ahead. Your line is open.

[Martin Wilkie:]

Yes good morning, it's Martin from Deutsche Bank. So, just a couple of questions. Firstly, just coming back to the oil and gas impact, if you could just clarify to what extent the different parts of that industry contributed to the decline in the Process Industry division? Is it too early to see that impact in some of the downstream industries and it's largely so far more sort of up and midstream or if you could just give us some sense as to where you are seeing that? So we can perhaps think about how that might develop as the year progresses. And the second question was on China, just to come back to the point you mentioned a moment ago that in China the growth rate may be little bit lower than it has been in the past, but obviously you have pointed out in the release this morning that China was as big contributor to growth particularly in Digital Factory. And if you can just point out what was very strong in China in the quarter just to help us understand those dynamics? Thanks.

[Ralf Thomas:]

So, let me start with, coming back to the China topic. What we said is, that revenues has been fairly strong in China in the first quarter. However that the industrial production is likely to expand on a still good level, but will continue to lose momentum and it’s going to approach new normal with regards to investments in nearly all industries except the chemicals and food and beverage industry. So that’s what with regards to the quarters to come when it comes to where were the pockets of strength in China that was obviously driven to a certain extent by restocking as I said before. Products business was strong and in particular in the machine tools system industry we saw double-digit growth in China that had of course also quite substantial margin impact, because motion control is a very profitable entity as it’s now.

[Josef Kaeser:]

And to add to that a little bit, I mean, China is not all the same for all our businesses, healthcare has had its challenges on new product businesses. Obviously, among other things impacted to a very aggressive local competition, Digital Factory, Ralf explained already, there is no reason to believe that this should be coming down significantly. Then think about low voltage, it has also been very decent in terms of growth. There obviously we need to kind of be mindful about the building of markets, real estate markets in China, which obviously has been moving from a sort of red hot to almost ice cold type of environment. So this is an area where we do our business at, but still that’s something to watch carefully. Overall, there is still positive from China because we believe the reforms will do a lot of good there if it comes to have a spectrum. Let me now come back to your first question which was fuel and gas impact on the process industries and drives. The impact where we see the weakness is mostly related to midstream and in products also upstream to think about driving compressors and alike through with large drives that relates to both metals mining as well as oil and gas. Think about the midstream floating ship, e-houses that have electrical powerhouses built that’s also being used for downstream - for upstream and midstream. On the downstream side, we are not that heavily involved. As you know, it becomes installed base, so the impact there will be limited.

[Martin Wilkie:]

Okay, thank you very much.

[Mariel Von Schumann:]

Next question please?

[Operator:]

We will now take our next question from James Moore from Redburn. Please go ahead. Your line is open.

[James Moore:]

Yes, good morning everyone. It's James from Redburn. I've got three questions, if I could. You mentioned the increased price pressure in power and gas given industry overcapacity, could you perhaps put some numbers to that and help us quantify what happened to the like-for-like price impacts for both orders and sales? Has it moved a percent or is it more than that? Secondly, you mentioned some positive mix effects in mobility and is that the Components business or something else driving that? And thirdly, finally, you mentioned the negative interest rate effect in both CMPA and treasury for the Hanau obligation and the hedge accounting. Is the full year 2015 guidance for those two lines still valid or does it needs to move given where we are with current bond yields?

[Ralf Thomas:]

James, Ralf speaking. Let me start with the interest rate impact. I mean, with regards to the Hanau asset retirement, obligation, we have been seeing €53 million negative in the first quarter over a positive effect of prior year in the area of €20 million. So there is quite a substantial swing and talking about the interest impact only in that long range where discount rates really matter. The pure graph effect of interest to loan which has been a multiple of that amount, however, we have been hedging that quite successfully obviously for quite some time taking volatility out of that asset. So, since we can’t predict whether there is any reversal of the interest rates in the long range - long-term area, I would be hesitant to give you an update on guidance in that field due to the magnitude of the impact and the fact that it’s not that easy to kind of hedge long-lasting activity like the Hanau asset retirement obligation which is extending into the 2017 in terms of duration. When it comes to the treasury impacts from interest derivatives, negative impact in the first quarter was in the area of some €70 million against the prior year positive in the area of €40 million, so again, quite a substantial swing and what we have been seeing there is, I mean, the 10 year US dollar yields. They have been decreasing by something around 35 basis points in the first quarter only. And the British pounds in the 15 year area even higher by decrease of 65 basis points roughly and since we do hold assets like financing, our templing [ph] project that you are well aware of. So also the basis on to which that has to be applied. It has been growing, when is that going to be reversed? With regard to the interest rate, we don’t know as you don’t know probably, but the underlying transaction have quite some distance to go in the example of templing [ph] it’s obvious. So that we don’t expect any positives in that field current fiscal year and I do believe that we also need to expect some negative impacts in the second quarter on the treasury end as well.

[Josef Kaeser:]

James, hi. On the pricing matter in power and gas, I mean, obviously there is two topics here, one is the pricing per megawatt, that’s been coming down in the neighborhood of about 4% and the other topic is there is different dynamics we’ve seen in a certain product performance classes. So, as a rule of thumb, the bigger the machine, the higher the pricing dynamics is at this time, obviously it has also has to do with the transparency of the market for bigger projects. On the other hand, one of the big impacts, of course also on the margin decline reflected as you know since May 2014, is the mix structure between new structure and service activity and utilization of the new fleets. I would say, quite an amount of machines in the Europe - in the European environment which obviously is not that largely utilized as it could be and that also drives service revenues and associated margin in the mix.

[James Moore:]

Thanks. And on the mobility mix?

[Josef Kaeser:]

Excuse me?

[Mariel Von Schumann:]

Can you repeat your mobility question, James, please?

[James Moore:]

You mentioned some positive mix effects in mobility.

[Josef Kaeser:]

Oh, yes, yes.

[James Moore:]

I wondered if you could help us on that.

[Josef Kaeser:]

Components versus solutions, right? Yes, I mean, mobility obviously is benefiting a lot from quite a growth scenario from our Chinese customers to supply components to the trains built, that’s related to the whole proportion system and that obviously was helping in the first quarter in some way. But then again, also the underlying robustness of the mobility business has increased substantially. So we may not see another 8.5% or 8.4% in Q2 but I would expect that this is going to be closely to what we have achieved in fiscal Q1.

[James Moore:]

If I could just follow-up on one question, just on the power and gas business.

[Josef Kaeser:]

Yes.

[James Moore:]

When you look at the pricing in the orders versus the pricing in the revenues as we saw four, five years ago in power transmission, do you see materially worse pricing in orders that the P&L still has to wear over the next couple of years. That is an increased degree of pressure over what we've seen for the last year or so?

[Josef Kaeser:]

No, obviously there is also some pricing in the order book. However, if it comes to margin which relates to pricing conditions versus productivity on how to carry out the order, there should not be any material downside in the backlog. Obviously, always we need to look at the mix between products and solutions and new business versus service, which is always something which in a certain quarter can be volatile, but overall, one should not expect any adverse or more adverse condition in the current order book.

[James Moore:]

Thank you very much.

[Mariel Von Schumann:]

Thank you.

[Josef Kaeser:]

Sure.

[Mariel Von Schumann:]

We have to be mindful of time. We have to move on the AGM. We have time for one quick question and I apologize for all the others that did not have the opportunity to ask the questions. The team is available the entire day obviously to take your calls. So, operator, please, the last question.

[Operator:]

We will now take the last question from Simon Toennessen, Credit Suisse, London. Please go ahead. Your line is open.

[Simon Toennessen:]

Yes, thanks. Good morning Joe, Ralf, and Mariel. My first question is on basically energy management. It seems as a very clean quarter in terms of charges and in terms of the legacy projects and in the past you highlighted that particularly in the Transmission business, so now Energy Management, there is risk for charges going forward. Does this remain and when do you expect to be after a solid improvement in terms of the margin in that business to be in that 7% to 10% guidance range? And also is there an update whether you can claim back the bearings-related costs from your supplier that you have seen last quarter? The second question is on the 13 underperforming businesses. As you mentioned in the past, I think initially you said the strategic review will end next month in February. It seems you might make a decision in May what to do with those businesses. Should we consider if you were to divest more businesses that May is the earliest date we will hear about it? Thanks.

[Josef Kaeser:]

Hi, Simon. On the underperforming businesses, there is no - not a single bit of change as to what we have discussed and announced in Berlin at the Capital Markets Day. We do have the strategic reviews of the remaining - of those remaining underperforming businesses, a few have already been taken care, think about the metals for example or DIT business and healthcare. So we’ll have the strategic reviews for several days in February and then by May, we will inform about what and how to deal and put those businesses forward. On the wind topic, I mean obviously, there are recovery efforts and claims on certain matters, but those ones will be considered once we are in agreement with the other party and that may take some time here. And on the energy management, bearings by the way was the wind’s business in the Wind division. On energy management, I mean, there are still, we are not done with the legacy projects for the platforms in the North Sea nor with the substation - the two substation projects in Canada. However, we’ve been further moving the works at the operation from an area of concerning to more area of influence. We are just about to finish the first two of the North Sea platforms and continue the work on the other two for the degree of completeness is getting closer. For example, on HelWin, we are at 90%, BorWin 2 is 92%. The remaining other ones like the SylWin is at 78% and HelWin at 82%. So we are not depending so much on the weather anymore, whether or not to take out the ship out the platform. We are on platform, we are in an area where we know exactly what needs to be done which is the commissioning. So, the likelihood of disappointments has been going down. But, we need to be done fully to say that it’s over.

[Simon Toennessen:]

Thanks very much.

[Josef Kaeser:]

Sure.

[Mariel Von Schumann:]

Thank you very much, Joe and Ralf for your answers. Thank you everyone for listening into this call. And this will now end the Q&A session and the call. Thank you. Good bye.