BERTRANDT AG Aktie

Good morning, ladies and gentlemen, and a warm welcome to today's 9M 2025/2026 Investor Call of the Bertrandt AG. I'm delighted to welcome the CFO, Markus Ruf; and Head of Investor Relations, Marc-Rene Tonn, who will guide us through the presentation. [Operator Instructions] With this said, I hand over to you, Mr. Tonn. The stage is yours.

Yes. Thank you very much. Thank you very much, everyone, for joining us today. And without a lot of further ado, I would just directly hand over to our CFO, Markus Ruf, for today's presentation.

So thank you. Also, a warm welcome from my side. And let's start with the general conditions. And as you know, especially the automotive industry is under pressure, and there are a lot of market environment impacted by geopolitical tensions. But also, we have seen a lot of profit warnings from our customers in the last 9 months, in the first 6 months of the calendar year and also announcement of redundancy programs. But also, we see a much higher order income in the last 9 months, more than 30% ahead of the prior year. So I think it's a really positive indicator.

And we see also the challenging Q3 as expected because based on lower working days, there were only 58 working days in the last quarter. And we see also positive effects from our cost optimization program, and we extended our cost optimization program up to EUR 120 million, and we are in a good way. And we see also operating cash flow with EUR 23.2 million, clearly positive and also a strong Q4 result expected. Further, equity ratio at 41.4%, so on a very solid level.

On the next slide, as I mentioned, you can see the automotive industry is under pressure, and there were redundancy announcements from all our main customers in Europe. But we see also -- now it is clear what happens, and I think it is also easier for the next decisions.

On the next slide, what we have seen in the second quarter is an overall reduction in R&D spending by the German OEMs by 7.5% compared to the previous year. A decision the OEMs made in light of, let's say, weaker revenues, which they had also, let's say, were experiencing in the second quarter. On the other hand, when we look at the P&L development at the OEMs, the R&D cost ratio is frequently still increasing despite lower spending as they have to cope with the depreciation of former capitalized R&D.

So they decided, in some cases, to cut on the spending, to have some relief on the cost side because, of course, on the D&A side, they can't do a lot. However, when we look at this figure, 7.5% down in the second quarter for the R&D spending overall, that's a bit more than what we had, let's say, as a loss in revenues, which was more in the direction of 5%. So we were much more aligned to this trend when compared to the previous quarters.

So 9 months at a glance, we have generated total sales of EUR 672 million. So in comparison to the previous year, minus from 9%. Employees, 11,537, so impacted by the redundancy program. The EBIT from minus EUR 28.9 million after EUR 38.9 million in the previous year. And as I mentioned, a positive operating cash flow from EUR 23.2 million and the equity from EUR 269 million with an equity ratio from 41.4%.

So Q3 at a glance. So we have generated sales of EUR 215 million, but please consider it is the quarter with the lowest working days, only 58 working days. And I will show you later, in the next quarter, we have 66 working days. And we have achieved EBIT from minus EUR 15.8 million after EUR 24.6 million in the previous year. EPS from minus EUR 1.89 and free cash flow from EUR 14.8 million and investment from around about EUR 10 million, especially in e-mobility and in AI.

So on the next slide, you can see revenue decline, moderating in Q3. So first of all, so you can see the redundancy program. We are coming from 14,526 employees, '23/'24. And now we have 11,537 and year-on-year minus 1,000 employees. And we see also in the development from the quarters, we started as expected in the current financial year. And we see also for the next Q4, a strong Q4 with 6 working days plus in comparison to the Q3. And last year, we achieved EUR 235.9 million. And so we see there's much more potential for revenues in Q4, and every working day means around about EUR 3.5 million more revenue and EBIT level.

On the next slide, you can see we are in a good way with our diversification strategy. So strong growth in the aerospace/defense area with 18% year-on-year. And there are also a lot of projects in the pipeline. So we confirmed our statement from the Capital Market Day. The intention is up to EUR 300 million until 2030. And as I mentioned, so also midterm our strategic target, so 20%, 25% -- [ 30% ] outside of automotive industry is absolutely in the corridor.

Our EBIT benefits from cost savings while weak call-offs weigh. And on the right side, you can see we started as expected in the current fiscal year, Q1, with breakeven, but then Q3 and Q4 (sic) [ Q2 and Q3 ] are much weaker than expected. And last year, we achieved in the Q4 positive EBIT volume from EUR 3.4 million. As I mentioned, so based on much higher working days, we expect also a much better Q4. And you see also all cost items reduced in line with sales trend. And as I mentioned, so also additional cost optimization effects from around about EUR 15 million for H2 in comparison to H1.

So some more details on our profit and loss account. So as you can see, around about 9% minus, total sales minus EUR 70.3 million and especially lower call-offs. But today, as I mentioned, we see much higher order income, and we see also the optimization from the personnel expenses. So coming from EUR 595 million down to EUR 535 million. So it reflects the reduction of head count and our lower restructuring expenses. And you can also see the other operating expenses coming from EUR 67.5 million down to EUR 53.8 million. So I think I'm satisfied with our cost optimization program. Our problem more is the top line.

So stable balance sheet. There is no structural shift in our balance sheet. And so we are working -- with working capital management was successful. And our equity ratio, as I mentioned, was 41.4%. So there's no structural change in the balance sheet.

Talking about the forecast for the current fiscal year. So the environment overall is still challenging with, let's say, weak growth outlook for Germany, perhaps outside the car industry or just overall for the economy. The infrastructure programs, which are just starting, may provide some support. But what we've generally seen that with the outbreak of the Iran war or the Iran conflict, that the expectations for general economic growth have been reduced.

Our customers, as said previously, react to, let's say, a challenging environment of, let's say, weaker economic growth, lower volume sales, particularly in China, with cost-cutting measures on the personnel side and also on the CapEx side and on our side with reduced capacity call-offs, which are still volatile. On the other hand, as already mentioned, we had this very pleasing development of the order intake, which provides, let's say, some cautious optimism, I think, for the future that things may turn to the positive.

And on the other hand, we also see, let's say, a structurally well-intact environment for R&D spending overall, given, let's say, the challenges the industry is facing with the transformation towards autonomous vehicles, electrification, digitalization, all these trends are still fully intact.

And I think a really positive indicator is the order income. So as I mentioned, we can see from -- in the last 9 months from EUR 800 million to EUR 1.1 billion, up to 30%. I think it's a really good basis for the next quarters, and we see there are much more projects in pipeline. And additionally, we have last week also a large-sized project. And so we see, or we expect, there is a normalization from the call-offs after the holidays and after the announcement from the redundancy programs, and we hope so, then we have a normalization.

So summary outlook. So incoming orders in the last 9 months significantly up year-on-year. So we expect a normalization, a stabilization from the call-offs. We see also there's also continued trend to spend on R&D, and outsourcing expected to structurally increase again. And we will also see -- additionally, we will benefit from concentration of ESP landscape. Today, there is a consolidation on the engineering service provider list from BMW, also VW and Audi, and Bertrandt is one of the major ESPs. We see also internationalization offers additional potential with existing and new customers.

So last year, we opened a site in Sweden. Now we received some new contracts. So we see it's also on a good way. And we see also, as I mentioned, diversification to support growth and resilience, especially in the aero and defense sector, and we see a strong growth and also much more potential up to EUR 300 million. And also, AI initiatives in various fields are implemented in collaboration with diverse partners, like IBM or Microsoft. And also, we see our cost optimization program is on the way, and we are satisfied with the effects of our cost optimization programs.

So our revised forecast total revenues, so we see moderately down year-on-year. We see also our EBIT for '25/'26, as I mentioned, significantly up year-on-year, positive value uncertain. We have seen after 9 months, minus EUR 28 million as a positive Q4, then we are better than in the last fiscal year, and we expect also positive operating cash flow.

Yes, I think with that, we come to the end of the presentation and would hand over to the moderator.

[Operator Instructions] So far, we have not received any risen hands or any questions in our chat box. [Operator Instructions] We have one risen hand by [ Mr. Webb ]. [Operator Instructions]

Great. We understand that you're operating in a very difficult industry in a country which is suffering in that industry. I just wanted to get a bit of a feeling for what you're seeing in terms of order intake because, of course, a pickup of order intake of 40% sounds dramatic. Is it simply because you got such a low level last year that a 40% rise is not a lot? Can you give us a bit more color in terms of what 40% means? Is there any feeling out there that orders are coming in? Or does the market look still fairly in contraction?

I think, in general, first of all, I think it's an encouraging sign of a stabilization in the call-off situation. As said, with, let's say, the OEMs doing some kind of -- having done some kind of tactical insourcing, perhaps, while they, let's say, were suffering overcapacity in R&D, we regard that as a first step of, let's say, potential stabilization. On the other hand, and I think it's fair to say that, let's say, there's still a certain uncertainty regarding the actual call-offs from that number. However, that was also true last year.

So when we look at the comparison figure, it was also, let's say, a question which had to be answered for that figure. So I think overall, it's just, let's say, some -- more than a ray of hope, but something which is, let's say, indicating that things may have -- may turn to the better from where we are right now.

Okay. But can you help us understand a little bit more what that means? Because the 40% is a very big figure, and you put question marks on the call-off you may get from that. But can you give us a bit of a feeling whether that is from one of your very big clients that sort of moving something or that didn't put any orders in last year? Is it more spread out? Is it entirely from the aerospace and defense and other? Just can you give us a bit more color in terms of what this means.

It is a split over our customers. Also, especially from the aero and defense area, we received orders, much more contracts in this area, but also from big clients like VW or especially Porsche also. There's also much more clearness about the projects for the future. And so we see there are more projects, and there are much clearer visibility for the next months from today -- from the view today.

How does that make you feel today versus when you were publishing your Q2 figures 3 months? Does this plus 40% make a difference for you or you were pretty much expecting it as a...

It is much more positive because in the last months, we received a lot of contracts, and so it shows. It is a stabilization, and there are more projects running on the customer side. So it's much more positive in our view.

In the meantime, we have not received any other questions, not in our chat box or as risen hands. [Operator Instructions] But I guess there are no more. So as we have not received any further questions, we would come to the end of today's call. Thank you for joining, and thank you for your interest. Should further questions arise at a later time, please feel free to contact Investor Relations. A big thank you also to you, Mr. Ruf and Mr. Tonn, for your presentation and the time you took to answer the questions. I wish you a lovely remaining day. And with this, I hand over again to you, Mr. Tonn, for some final remarks.

Yes. Also, thank you from our side for your participation. Have a great summer, great vacation and time off for those who still have their vacation upcoming. And hope to speak to you soon and hear from you soon, latest with the release of our Q4 results in December. Bye-bye.

Bye-bye.

Good morning, ladies and gentlemen, and a warm welcome to today's earnings call of the Bertrandt AG following the publication of the half year figures of 2025-2026. I'm delighted to welcome the CFO, Markus Ruf; and Head of Investor Relations, Marc-René Tonn, who will guide us through the presentation shortly. [Operator Instructions].

And having said this, I hand over to you, Mr. Tonn.

Good morning also from my side. Thank you for joining tomorrow -- to the presentation of our half year 2025-2026 results. Yes, without a lot of further ado, I will hand over to our CFO, Markus Ruf, for the presentation.

So all the warm welcome from my side. And let's start with the review of H1 2025, '26. And as you know, market environment impacted by geopolitical tensions. So a lot of difficult conditions and the whole car industry is under pressure. So the OEMs recorded earnings decline in '25 with many expecting further deteriorating profitability in '26.

And so we see also sharp cost cutting in focus. And -- but on the other side, we see a solid order book, and we see much higher incoming orders in comparison to the previous 6 months. And so we see also positive effects from our optimization program at more than EUR 120 million PA ahead of original planning. So -- and we will also see positive impact from additional cost savings in the second half year from around about EUR 50 million.

And I think positive is our free cash flow with EUR 46.6 million, so it's clearly positive, and so -- and ahead of prior year's level and strong equity ratio from 44.5% is also very -- on a very solid level. And so on the next slide, Marc, would you explain?

Yes. That's what we do to just, let's say, put a bit more perspective on the general environment, which we faced in the last 6 months, what we have seen in the first quarter 2026. Now Talking about the calendar first quarter, so basically our second quarter is declining sales revenues at the auto OEMs, which you see displayed here on the chart. All of them reduced their cash R&D spending, which obviously also has an impact on what they give to outside engineering service providers like Bertrandt.

On the other hand, given the expenditures they had from the past, many of these manufacturers faced higher depreciation and amortization on capitalized R&D from the past. That means that the R&D cost ratio for many of them was on the increase. And now given the combination on the one hand side with margin pressure at our customers and on the other side, rising amortization of R&D from the past, cost saving in the scope of R&D was only possible for them to reduce cash spending, and that is something which we think was, let's say, felt negatively on our top line with the lower call-offs than previously expected for the respective time period.

So first of all, we are not satisfied with the development, especially of the second quarter and especially for the development of the top line. But in total, we were able to achieve EUR 457 million. So in comparison to the previous year, minus from 12%, and employees, 11,744. So you can see the effect from our redundancy program. So it's a minus from 1,437, minus 11% year-on-year. EBIT from minus EUR 13.1 million and after EUR 14.4 million in the previous year, and a strong operating cash flow from EUR 51.8 million means 65% year-on-year.

And as I mentioned, equity from around about EUR 300 million and the equity ratio from 44.5%. And the Q2, so as I mentioned, we are not satisfied with the development, especially with the total sales. So EUR 223 million are under our expectation for the second quarter and means quarter-on-quarter minus 5% and year-on-year minus 11%. Earnings before interest and tax from minus EUR 13.4 million and EPS from minus EUR 1.62, and free cash flow positive H1 from EUR 46.6 million and investments for AI, especially, and also for climate chambers from EUR 6.1 million.

And what we see is a solid order book does not yet reflected in capacity call-offs. That is the main reason. We have a much higher order income in comparison to the previous 6 months, but we do not see the call-offs. And so you can see the redundancy program on the employee side. So now we have around about 11,744. And so -- and as you can see from '23, '24 with 14,500, 14,600, there is a decreasing from 2,700 employees. So you can see on the cost side, we are really successful. But on the other side, you can see the declining of our revenues from minus 10.9%. And so our problem is today the top line, we have the contracts in-house, but we are waiting for the call-offs and for the start part of the projects.

Regarding the segments, we see a bit of a heterogeneous performance again. And I think in Digital Engineering, we see the generally weaker demand from the customers in the Automotive segment, leading to a decline in the top line compared to the previous year for the second quarter. Physical Engineering is rather stable, but on a low level, particularly when looking back at, let's say, 2 years ago in 2023, 2024.

Perhaps for Electric/Electronics, the decline appears to be rather massive on a year-on-year comparison when we look at the headline figure for the segment, which is mainly due to lower intracompany revenues. When we just look at external sales, these have been down 11% year-over-year for the quarter, so much more in line with what we have seen for the total group when compared to just looking at the headline numbers, which are displayed on this slide.

So diversification. So we are on the way. And especially for Aerospace & Defense, we see much more potential. And we confirm our target from 25%, nonautomotive revenues 27%. And we see for Aerospace & Defense potential from EUR 100 million 2027 and the strong potential 2030 up to EUR 300 million. And I think we have a strong basis, good relationship with a lot of customers, and we see the business is coming, and we see there's much more potential, as I mentioned, up to EUR 300 million for 2030.

And so on the cost savings side, we see we are on a good way, and we see reduced capacity demand causing uneven and unfavorable capacity utilization, and we see all cost items reduced in line with sales trend. EBIT margin in H1 at minus 2.9% at previous year's level. But as I mentioned, so the problem for Q2 was the top line, so EUR 11.5 million under the first quarter. And we see on the cost side, we are on the way, and we are benefiting from the cost savings in H1. And we see also further savings -- additional savings in H2 in comparison to H1 from around about EUR 15 million.

And on the profit and loss account, so you can see the decline of our revenues, total sales minus [ EUR 60 million ]. And you can also see from the personnel expenses, the reduction, and you can also see the other operating expenses. And also you can see the one-offs from EUR 1.5 million was from the Romania government, one-off, but you can see all cost savings are reflecting in the profit and loss account.

Balance sheet. So balance sheet total from EUR 648 million. And so you can see low CapEx level, the D&A and also working capital reduction and gross liquidity optimization, working capital is important. And so you can see we are successful in the working capital management with the free cash flow. So cash and cash equivalents from around about EUR 40 million. So on the plus side, working capital improvement, but also reduction of gross indebtedness.

And as you have seen in the first quarter, the payback from a loan and equity from around about EUR 290 million and the equity ratio from 44.5% and net financial debt from EUR 201 million and in comparison to the previous year, EUR 230 million. And financial gearing, 70% on a solid level, as I mentioned. So forecast for fiscal year '25, [ '26 ]. So you know the general conditions, so weak economic environment, sentiment building in Germany and growth outlook, subdued and announced investment programs could be helpful. And we see also ongoing and transfer of R&D into international locations.

This is also the reason why we have decided to open a new subsidiary in the Czech Republic for Skoda, for example. And we see also capacity call-offs still sluggish and volatile, but we expect a normalization from H2 based on our order income and the volume. And so the disclaimer, external factors, geopolitical tensions, trade disputes are outside the management's spheres of influence.

And we see other regulatory requirements, competitive innovation pressure drive investments in R&D mid-term. And so we see mid-term, there's potential for Bertrandt, but we need to call offs and we need the higher capacity utilization. So summary outlook. So we see the German automotive OEMs continue to spend in R&D. There's also external study on the right side from [indiscernible]. So they expect an increasement of the R&D volume up to 2030.

And as I mentioned, so incoming orders in the last 6 months, significantly up sequentially and year-on-year. And so we see there is potential in the market. And we will also benefit from the concentration of engineering service provider landscape. So this is ongoing. And we see 2 main customers with major push in this direction. And we received a green light from additionally 50 projects from one customer.

And now this is in the procurement and the negotiations are starting, and we will see this additional potential mid-term for Bertrandt. And also we see internationalization is on the way with existing and new customers, diversification to support growth and [ greenland ] through balancing of business cycles, long-term aviation and defense sales ambition, as I mentioned, of EUR 300 million. And I think we are on a good way, and also AI initiatives in various fields implemented in collaboration with diverse partners.

So we are in partnership with IBM, for example, also with Microsoft. And as I mentioned, so our optimization program savings of EUR 120 million PA, well above original target, EUR 70 million to EUR 90 million. And also, as I mentioned for the second quarter. So additionally, around about EUR 50 million cost savings in the second half year. So our revised forecast, so total revenues, so moderately down year-on-year means up to 10% and EBIT significantly up year-on-year, but positive value uncertain. On one side, as I mentioned, we expect a normalization on the top line. And additionally, cost savings from EUR 50 million, but it's not really clear on the top line side. And we see also operating cash flow significantly up year-on-year, as you can see in the first 6 months. So thank you for your attention. Now we are ready for your questions.

[Operator Instructions] That seems not to be the case. So everything is pretty clear around the figures. So if there are no questions or maybe at a later time, please feel free to contact Investor Relations, contact Mr. Marc-René Tonn. In this case, from my side, I wish you all a lovely Wednesday and for some closing remarks we go back over to Mr. Tonn and Mr. Ruf.

Yes. Also thank you very much from our side for your interest in our results and in our company and hope to see and speak to you soon. Thank you.

Thank you very much for your attention.

Hello, ladies and gentlemen, and a warm welcome to today's earnings call of the Bertrandt AG following the publication of the Q1 figures of 2025, 2026. I'm delighted to welcome the CFO, Markus Ruf; and Head of Investor Relations, Bjorn Voss, who will guide us through the presentation in a moment. After the presentation, we will move on to a Q&A session in which you will be able to place your questions directly via online chat. With this said, I hand over to you, Mr. Voss. The stage is yours.

Yes. Good afternoon also from my side, ladies and gentlemen. We will now guide you through the Q1 results we have realized for the last quarter. And with this, I will hand over to Markus.

Thank you for the introduction. So first of all, the first quarter developed a little bit better than expected. So we are satisfied with the first quarter. And as you know, the general conditions are unchanged. So there are also some challenges about the market. But we see also initial signs of recovery in Germany towards the end of the quarter. And especially, we are a little bit more optimistic because we see significantly higher order income in the first quarter, and we continue to act all cost items down, as you can see in our profit and loss account, F3 program accomplished and also further adjustments ongoing.

So let's have a look on the first quarter. So we achieved EUR 234 million sales. So -- and you can see it is in comparison to the last year, minus 12%. But in comparison to the fourth quarter, it is stable with EUR 234 million. And you can see EBIT a bit positive with EUR 0.2 million in comparison to the previous year, minus EUR 2 million and the EPS from EUR 0.27 and really positive free cash flow from EUR 47 million and a high equity ratio from 46% so reflects a solid balance sheet. So as I mentioned, total sales stabilized quarter-on-quarter. So you can see on the right side, EUR 234 million versus EUR 235 million from the fourth quarter from the last fiscal year, so in comparison to the last fiscal year.

And you can also see the effect from our redundancy program on our headcount. So today, roughly 12,000 employees and 4,000 are abroad and 8,000 in Germany. So you can see our redundancy program is successful, and you can also see the impact on our profit and loss account. And you can also see the positive impact from our cost optimization program. So personnel expenses, minus EUR 28 million, also material expenses, but also especially other operating expenses from EUR 2.3 million year-on-year and also D&A, EUR 1.9 million. And there's also a one-off item including in Q1 from EUR 1.5 million in the other operating expenses.

And also, I think interesting for you, our foreign subsidiaries with positive results. So we are successful developing in Spain, in China and in Romania, in [ Maruc ] -- so just on a good way. And on the right side, you can see 0.2 million EBIT and in comparison to the previous year, minus EUR 2.2 million. You can see the development. And in comparison to the last quarter, EUR 3 million, but please consider the last quarter had 4 working days more -- 4 working days more. So you can see we are on a good way.

So total sales, as I mentioned, EUR 234 million, material expenses from EUR 28.9 million and also personnel expenses, you can see a much better cost ratio from 74.7% and based on headcount development, and other benefits from the cost optimization program, D&A regular declined and other operating income, as I mentioned, including a one-off from EUR 1.5 million and other operating income from EUR 1.25 million. So solid balance sheet with EUR 635 million. And you can see there's a movement in the cash and cash equivalents position and also in the net financial debt. So the loan was due in December, and we repaid it in December. And you can see the effect in the equity ratio from 46.4%.

And you see also net financial debt from EUR 157 million in comparison to the previous year, EUR 179 million. So forecast fiscal year, economic and geopolitical environment remain volatile and challenging. But we see ongoing and accelerated transfer of R&D in international locations.

And as I mentioned, we see a much higher order income and normalize, we expect the car loss from the new contracts with the beginning of March, April. And so we expect a much better and stronger H2. And especially, we will see the completely cost effects from the cost optimization program in the whole fiscal year. And also positive for Bertrandt, a lot of customers announced a lot of new models and technology, more hybrid solutions, more IC models, also more EV models and this is positive for Bertrandt. Every new technology, new models need engineering and needs especially testing and validation.

And we see also diversification and balanced customer base. We are successful on the way with aviation and defense customers was really successful in the first quarter, and we see also much more potential for the whole fiscal year. And additionally, regulatory requirements, competitive and innovation drives R&D budgets. So we confirm our guidance. Total revenues for the whole fiscal year growth moderately up year-on-year. We confirm also positive EBIT for '25, '26 and also significantly up on operating cash flow and also our midterm margin ambition between 6% and 9%.

So summary, market environment stabilizing, recovery of order income. Sales still down year-on-year on higher prior year base, but stable quarter-on-quarter, as I mentioned, and we will see the benefits from our cost optimization program in the current fiscal year. And I think we have a really solid balance sheet with 46% equity ratio. And as I mentioned, we see also a normalization of call-offs with the beginning of March, April and a strong H2 and especially a really strong Q4 with a normalized call-off volume and the fully impact of our cost optimization program. So thank you for your attention. Now we are ready for your questions.

Just a quick call to give you some -- give you enough room to raise your questions, if you like. [ Mara ], would you coordinate them, please?

Yes. Thank you so much for the present. [Operator Instructions]. So far, we have not received any questions, not in the chat box or raising hands. So please, ladies and gentlemen, the stage is yours. Feel free to raise your hand and ask any kind of questions you have.

If there are no questions, no worries, I'm available anyways. So if you want to have a one-on-one dialogue, of course.

With this said, we actually just received a question in our chat box from Mr. Salvador. He is asking, it would be great to hear more about cash flow generation in 2 hours or next year.

I think he is referring to the second half H2 maybe.

Yes, maybe. And he said, yes, I guess so.

Yes. So for the whole fiscal year, we are expecting a strong operating cash flow and also positive free cash flow because based on a really tough working capital management and based on low CapEx volume because I think you have seen in the last fiscal year, we had CapEx from around about EUR 9 million, and I expect also a low CapEx volume for this year. And with a normalized margin level, we will see a cash flow generation.

So guidance is significantly up year-over-year. And yes, I think normally, during the year, the first quarter is quite strong in terms of cash flow, also the fourth quarter, so maybe a little weaker in the second and third quarter, but this is the normal development we see every year.

Thank you. And thank you so much for your question, Mr. Salvador. We just received another question by Mr. Salvador again. He says, thank you. Just a follow-up non-auto business initiatives.

So we have aero and defense initiatives, and we are working for aero and defense customers across our Europe, so in Spain, in France and in Germany and also in Italy. And we see there's much more potential for Bertrandt, and we implemented also additional sales capacity because there's a big demand. And today, I think we have around about EUR 80 million revenues, and we see in the next years, there's also potential up to EUR 300 million.

In the defense and aerospace field.

In the defense and aero field business, and we see or we expect also much more growth for the second half year.

Perfect. Thank you so much. We have not received any raised hands nor other questions. So please, ladies and gentlemen, feel free to still ask your questions into the chat or raise your hand. If there are any occurring questions at a later time, you can always contact Investor Relations.

Okay. Thank you very much. Thank you for your interest. We have seen many of you already in the last weeks, and we are looking forward to see you in person in May 13, when we will have our Capital Markets Day in evening in close by Stuttgart. We will maybe also webcast it online. But of course, we would really appreciate to see you in person. So with this, this call ends, and thank you, Markus. Thank you, [ Mara ].

Thank you. Bye.

Thank you so much for joining and your interest. And a big thank you also to you, Mr. Ruf and Mr. Voss for your presentation and the time you took to answer the questions. I wish you all a lovely remaining week. And I would hand over again to some final remarks.

No, we are fine. Thank you. Bye-bye.

Bye.

Good day, ladies and gentlemen, and a warm welcome to today's earnings call of the Bertrandt AG following the publication of the full year figures of the financial year 2024-2025. I'm delighted to welcome the CFO, Markus Ruf, as well as CSO, Michael Lucke; and Head of Investor Relations and M&A, Bjorn Voss, who will speak in a moment and guide us through the presentation and the results. Afterwards, we will move over to our Q&A session, in which you will be allowed to place your questions directly to them. Having said this, I'm handing over to Mr. Voss.

Yes. Good morning. Also from my side, a warm welcome to our Christmas annual report. Again, in December, we are presenting our full year numbers for the last fiscal year. Together with me is Markus, our CFO; and Michael, our CSO. Michael will run us through the market and customer environment we had last fiscal year, and Markus will, of course, present the numbers which resulted out of this market environment we've had. Michael will then give you a market outlook, how our customers are currently behaving, what we see in terms of R&D sourcing. And of course, what this means for our guidance will be presented by Markus. Again, afterwards, as Judith already said, we are ready for a Q&A session and happy to discuss all issues and questions.

With this, I will hand over to Michael. Please, Michael.

Thank you, Bjorn. Good morning, ladies and gentlemen. I will give you an overview to the market development in the last business year. So we are embedded in the macroeconomic situation and what we saw. Of course, we have an impact on the geopolitical conflicts, the trade disputes and overall political uncertainties. What hit us really in a heavy manner was, in the second half of the business year, the trade disputes and the tariffs. It put a lot of stress on our customers.

They have to decide where to produce and develop their products, in which area of the world. And all of them had an evaluation on their business case if they are still valid or not. And this had a direct impact on the outsourcing volume. So this was a huge impact for the second half of the business year. And overall, we have the international heterogeneous development in China, U.S., India, or in Europe. And in Europe and especially Germany, we still suffer on the structural problems and a weak economy.

If we have a closer look at the automotive industry, uncertainties, trade disputes and, of course, some of our customers struggle with software supply chain or lack of competitiveness. So we saw a lot of different individual situation on the customer side where we have to reflect and manage the consequences. We saw a lot of profit warnings and short-term cost-cutting programs, which leads to in-sourcing, delayed decision and relocation of the R&D work in their global R&D network, with a major impact, of course, on the German workload.

And then the expected recovery, our expected recovery for the second half of the business year did not materialize, the reason I mentioned before. So the consequence, even if we did a lot and we reduced our workforce in Germany, the top line drop was higher than expected. So we faced the consequences that we still had some overcapacities in Germany. And we saw a small growth outside of Germany, abroad. Markus Ruf will go in detail afterwards.

So if we have a look at the other main branches for our business, it's surely aerospace. What we saw is a slight increase in the civil area and, of course, a double-digit growth in the defense area. We realized that there is a lot of investments, especially in the defense sector, and it will pay off in the next year or the next years. And we did a closer look on the civil area, the defense area and the space environment regarding our aerospace division. And space, as you know, it was not a growth business last year. Most of the German players had some restructuring programs ongoing. But we expect, with the new investments, the space segment will be interesting as well. Maybe not a huge growth market, but in some niches, it could be a relevant market for engineering service suppliers.

We saw a slight decline in the domestic order intake in the electrical industry, a slight increase in our medical activities. And of course, the transportation sector, especially in Germany, is in a restructuring mode as well. So the current situation is not that good, but we see a lot of investment from the government, and we expect here new projects in the next years to come.

Overall, as we mentioned before, geopolitical tensions, trade disputes and delays or in-sourcing tendencies on the customer base was one of the major problems in the second half of the business year. We saw a revenue and the EBIT drop on our customer side with consequences on the R&D budgets. And most of our customers started also redundancy programs. And in this space, especially the middle management of our customers, which is relevant for the outsourcing business, was not in a good mood and getting stable from month to month. So we expect hopefully that there will be a more reliable situation in the next year.

And due to the cost optimizations and the local requirements from our customer side, so their requirement in China is different than the U.S. or in Europe, we saw that a lot of our customers redistributed their engineering work in their global engineering network. The consequences for us, we continue with our structural changes. We improved capacity and we strengthened our portfolio in our service environment. This was the major consequences from the market development in the last year.

I hand over now to Markus and come back with the outlook later. Thank you.

Thank you, Michael. Also a warm welcome from my side. And following my colleague's remarks to market and customer, I will now present you our key financial indicators. So first of all, the challenging conditions are also reflected in the development of our sales and revenues. And so we achieved EUR 978 million. And so compared to the previous year, a minus 18% year-on-year. The most international subsidiaries are stable, except of France. There are also challenging French conditions.

Sales share outside from (sic) [ of ] Germany at 24% is also stable compared to the previous year. And headcount aligned to market demand, 12,184 (sic) [ 12,185 ], means minus from (sic) [ of ] 1,843 year-on-year, and earnings improvement program accomplished and additional measures implemented. We are satisfied with our cost optimization program, and we expect it to fully impact in the current fiscal year. EBIT of minus EUR 36 million, but please consider including EUR 33 million one-off special items, additional restructuring, portfolio measures, also the cartel fine in France, but positive. So the first quarter after 5 quarters with losses, the Q4 was positive with the EBIT from (sic) [ of ] EUR 3.4 million. And I think important, a positive free cash flow from (sic) [ of ] EUR 18 million, and solid balance sheet ratio with around about 42% equity ratio.

So at a glance, total sales, as I mentioned, EUR 978 million; employees, 12,185; EBIT from (sic) [ of ] minus EUR 36 million, but including one-offs from (sic) [ of ] EUR 33 million. Free cash flow, EUR 18 million; and equity ratio from (sic) [ of ] around about 42%.

So customer-specific impact. Honestly, we started in the first quarter as expected. But then in the Q2 and Q3, we see a sales decline much more than anticipated. And so the Q3 (sic) [ Q2 ] and the Q3 were really, really challenging. And now Q4, as I mentioned, with EBIT from (sic) [ of ] EUR 3.4 million positive. But international, we see also minus 16% year-on-year, especially in France because of project-based reduced external services, and other countries are broadly stable. But Germany is our problem with a minus from (sic) [ of ] 18%. And honestly, also one customer group is our main problem, with one customer group we have here more than 50% of the sales decline to achieve.

So we are on the way to more diversification as we launched in 2010. So we are on the way to 25% nonautomotive business. And in the last fiscal year, it was around about 14%, but our ambition '27 is 25%. And as my colleague mentioned, so we see also potential in aerospace, in defense, but also in health care, medical or in energy power. So heterogeneous segment performance. So we see also all segments are under pressure, especially our physical engineering, but we see also in the electric/electronic delayed and relocated R&D projects, we see also potential -- and we see also a lot of potential in the future, especially for electronic and software.

So now let's have a deeper look on the special items. So as I mentioned, around about EUR 33 million one-offs. So additional restructuring costs for settlements and for costs for the period of notice from (sic) [ of ] around about EUR 15.6 million; portfolio measures, EUR 10.7 million; fine in France, around about EUR 3.6 million, so we are on the way to the court; and all the other one-offs like write-offs, customer receivables from (sic) [ of ] EUR 3.2 million. And we see also first benefits from our cost optimization program in the fiscal year '24/'25 around about EUR 55 million.

And we are successful abroad. So our foreign subsidiaries with EBIT from (sic) [ of ] EUR 7.6 million; and non-IFRS, so excluding the one-offs, is around about EUR 14 million. And as I mentioned, we started in the Q1 as expected, but especially Q3 was real challenging for Bertrandt based on lower call-offs of [indiscernible] and project postponements.

So our key expense ratios. So optimization on the personnel costs, you can see, including the restructuring costs, especially based on the headcount development/redundancies program, but also short-time work. And we see also normalization on the depreciation and amortization with around about EUR 54 million. And you can also see the benefits from the cost optimization program in the other operating expenses. So we reduced, including the one-offs, as I mentioned.

So EBT from (sic) [ of ] EUR 47 million and the net income from (sic) [ of ] EUR 53 million. So there's an impact for the carry loss forward. We do not evaluate all carry loss forward in the fiscal year. So there's a hidden reserve maybe for the future. And we see also EPS is better than before, but minus EUR 5.3.

So summary, group profit and loss account. So total sales, so based on the capacity utilization, project-related decline and the capacity. Material expenses has a project-related decrease, especially in France. So optimization on the personnel costs, but also including restructuring charges and headcount reduction. Depreciation and amortization normalized after the impairment in the previous year. And operating expenses was EUR 85 million, including one-off items, as I mentioned. Other operating income was EUR 9.6 million.

So let's come to CapEx and see on a low level. And the question is what is the new normal. And so we expect for the future around about EUR 20 million, but we are flexible. If it is sensible, we are ready to do more.

Cash flow positive. Cash flow from (sic) [ of ] EUR 25.6 million. So we see also there is impact from the cash out for the provisions for the redundancy program in the fiscal year 2024/2025, so is also reflected in the cash flow from (sic) [ of ] EUR 25.6 million, a positive free cash flow, and stable -- and equity from (sic) [ of ] EUR 307 million, and a stable equity ratio from [ of ] 42%.

So balance sheet. So reflects also the lower revenues with EUR 735 million. So working capital management, so optimization in the working capital from (sic) [ of ] EUR 338 million (sic) [ EUR 238 million ]. So cash from (sic) [ of ] EUR 85 million. So as I mentioned, including the cash out for the restructuring program, equity from (sic) [ of ] EUR 307 million. Equity ratio, as I mentioned, 42%. And net financial debt, so including the IFRS-16 impact, EUR 179 million, and without the IFRS-16 impact from (sic) [ of ] EUR 118 million. And gearing from (sic) [ of ] 59%; and excluding the IFRS-16 impact from (sic) [ of ] 39%.

So let's come to our dividend policy. So after the second year with losses, so we will now pay a dividend, but we confirm our dividend policy from (sic) [ of ] 40% from the net income. So if we are successful in the future, we will pay dividend with our dividend policy from -- based on our dividend policy from (sic) [ of ] 40% of the net income.

So let's come to our cost optimization program. So as I mentioned, we realized benefits of around about EUR 50 million, EUR 55 million in the last fiscal year, and we will see the full impact in the fiscal year 2025/'26 close to EUR 90 million, and this is helpful for the future.

And you can see there are a lot of measures, more than 200 single measures over all disciplines. So for example, we optimized around about 26,000 square meters, and there's a benefit of around about EUR 5 million, and we will see the benefits in the current fiscal year and in the following years.

So let's come to personnel headcount, '24/'25, as I mentioned. So we are coming from 14,500 employees. And then we see the crisis now with 12,100 (sic) [ 12,185 ] employees. And you can see a long-term trend. So we are growing international with a CAGR from (sic) [ of ] 8%. And we see there's a problem in Germany, and we see also in the future much more potential abroad, and we will see what happens in Germany. There are also opportunities, especially in the defense or aerospace, but also in automotive there.

So thank you for your attention.

Thank you, Markus. So I will explain our outlook on the market for the next business year. We start with the automotive industry. Here are some figures from the German association for automotive. And what they expect is a stable volume on the vehicle side, so from 81.3 million to 81.7 million in 2026. And with the distribution in the regions, we see still a growth in China and more or less rightward trend in the U.S. and in Europe. This is only one indicator of our business. More important is the development of the R&D budget and of course, the outsourcing ratio of these R&D budgets on our customer side.

If we have a look at the R&D budgets, these are also figures from the association. We see that driven by regulation, competition and innovation, the budgets are still increasing, or at least are on a very high level. And we have now to evaluate, on each customer side, what will be the consequences regarding outsourcing and service portfolio of Bertrandt. So we estimate that if the political changes continue that we will have a certain level of uncertainty in the political arena. We saw that R&D budgets are still on a very high level, and we have to differentiate between the customers.

What we see, especially driven by the regulation, that we have an extension of the portfolio of our customers. So most of them will go with EV, hybrid, range extenders, and ICEs. And this will have an impact on the outsourcing, and we expect that we see an increase in the existing business regarded to better call-offs or better call-offs, yes, in the existing contracts. And we expect that after the reduction of the workforce on the customer side, there will be some new project award -- so new project RFQs for derivates, because what we see, they have to increase time to market, most of our customers, and this will bring opportunities.

What we say is the importance of the right global setup and the capability. So most of the customers reduced their workforce. We did it as well. And what we have to synchronize now, if there is a new demand regarding a derivative, we have to have the right skill set and the right team on board in order to deliver this. What will happen as well, in our point of view, we will see a continued price pressure or cost pressure because we still have overcapacity in the market. In comparison with the demand, it's still overcapacity in the market. We expect that this will be getting better over time.

And one indicator is most of our customers really reduced their panels regarding the engineering service providers. So there will be more work for less engineering suppliers on the OEM side. And Bertrandt is well positioned. So we assume that we will be one of these engineering suppliers who have the chance to acquire more work through the consolidation process. It's not a digital topic. At the end, it's really dedicated to different projects. But overall, we expect that the consolidation will have a positive impact on the occupation.

If we have a look at the other most important branch for our business, this is aerospace and defense. So you can see in the picture, this is not only aerospace, it's space, it's ground defense and also naval. And we worked a lot on our customer base in this area in the last year, and we are in contact with most of the European companies. And they are going through a transformation phase as well regarding the acceleration of their outsourcing. We are not familiar or that familiar with outsourcing, but now they receive a lot of money from the governments, and they have to deliver their products. And this is what we see, and we are in constant dialogue with them in order to improve their outsourcing models as well. So our expectation is that we will have a double-digit growth in this area. And our task is to enlarge our European footprint, because most of the huge defense customers have engineering centers in Germany, Spain, France, U.K., Italy. And if we want to gain the business, we have to be there where the business is.

If we have a look at the civil segment of aerospace, here, our target is to enlarge our footprint inside the major customers. We are preparing ourselves for the decision of the OEM side to develop a new aircraft. We are very focused on engineering, not that on manufacturing that large. So our target is to strengthen our engineering footprint globally, because we expect if there is a new plane to develop, it will have an impact on Germany, France, U.K., India or the U.S. And this is what we are working on.

If we have a look at the other industries, of course, they are embedded in the overall macroeconomical situation. We expect a slight increase in the electrical industry, further increase in medical, and in the transportation area. If the money from the government is placed to the customers and they transform it in projects, we will see a growth here. So for each segment, we have dedicated customer where we focus on. And we believe that overall, these industries will have an increase with the recovery of the overall economic situation.

So if we have a deep dive in our segments, one of our target in automotive was to enlarge our customer base. We announced this year that we were nominated as a Tier 1 supplier for Volvo. It's a new customer for us. And now we try to position ourselves, and this gave us an opportunity not only for Volvo car, but also for the Volvo Group and maybe for Geely as well. So here, it's a diversification in automotive in another country and in a third topic in another industry in Sweden.

Regarding defense, what we see, we are not -- no, we work on this topic with the whole range of services of Bertrandt. So not only, for example, in software development or cybersecurity or functional safety, what we see is an increasing need of our customer also in mechanical engineering and physical testing. We are still testing drones in our climate chambers. So if this works as we expected, there is a possibility to see a rapid scaling in the defense area because we could monetize the complete range of services in this customer segment. So we want to grow with our existing customers and step-by-step enlarge our customer base. And of course, as I mentioned before, we have to work on the European footprint.

If we have a look at the other diversification in other industry, we took a lot of effort in strategic partnerships. So we were nominated as a Tier 1 or strategic supplier for Zeiss. This is a semiconductor business. We're working with some of our system suppliers, which enlarge their nonautomotive business as well, for example, Bosch-Siemens Hausgerate. So we support them with coffee machines, washing machines and some other topics, but it's an increasing business. And in the transportation system area, we established the first projects in Scandinavia. So it's accounting for the regional diversification then also for the branches.

Another very important topic for us is continuing our internationalization. So we have the intention to scale our platforms in Romania and Morocco. We acquired a lot of projects with our customers, which will have an impact on our footprint in Morocco. We have partnerships in India for some especially software-driven topics. We have a clear plan how we want to increase our footprint in the U.S. and China. And this will not be only organic growth, also inorganic growth.

Another very important topic is digitalization and AI. Here, we have really a dedicated team on board who drives the productivity and accelerate our processes together with the operations. We established an AI stack for Bertrandt, where we continuously develop new software models and support our operations, the administration, but also finding new business models for our customer. So one major topic is using the data from our test centers, put them in a huge data source and with AI, create new values for our customers. This will have an additional revenue stream in the future.

And the last topic is really not only service business, but maybe there will be some product business in the future coming up with this digitalization initiatives. Okay. So far for the outlook of the market.

I will hand over again to Markus.

Thank you. So let's come to our group forecast. And so our traditional disclaimer. So there are some influences outside the management here. So as you know, economic and geopolitical environment remain volatile and challenging. But we see ongoing and accelerated transfer of our R&D into international locations, and we are prepared for the transfer. So we are in China, we are in the U.S. So we think there's a good basis for the future. And we expect also a normalization in capacity call-offs expected from H2. Because we have the contract, so we are waiting on the call-offs. And so we see also mounting cost benefits, as I mentioned.

And so also, I think, helpful for Bertrandt and for us as an engineering service provider, a lot of customers announced many new models and technology for the next 2, 3 years. And technology diversification, new models drive R&D budgets, and high R&D budgets are helpful for Bertrandt. And we see also diversification to balance customer base. And additionally, regulatory requirements, competitive and innovation pressure drive also investment in R&D. Also the decision from the EU government the day before yesterday is also helpful for Bertrandt.

So for the new fiscal year '25/'26, we are expecting a moderate growth from the revenues, and we expect also a significant optimization of our EBIT to a positive value in '25/'26, also a positive operating cash flow. And we confirm also our midterm margin ambition between 6% and 9% in a normalized sourcing environment and also based on our cost optimization program.

So summary, we have seen the market development weaker than originally assumed, especially with project postponements and the capacity utilization, but we are really satisfied with the implementation of our Fit for Future program. And so we will see the benefits fully impact for the current fiscal year. Also, we are on the way, we are on track with the successful diversification and internationalization in line with group strategy. And so we see also peak RFQ, many new models announced, as I mentioned, and broad technology solutions also helpful for Bertrandt.

So business expected to normalize during '25/'26, but honestly, the first quarter is still challenging, but we will see the optimization especially in the H2 and with the beginning of January, February.

So thank you for your attention.

Thank you, Markus. Thank you, Michael. Isabella, I think we have already some questions in the chat room. So maybe you can guide us through the Q&A process.

Yes, we do. Thank you very much for the presentation, gentlemen. We will move over to our Q&A session. [Operator Instructions] And I will start with the first question. The EUR 33 million EO items, how are they spread on the quarters?

That's an interesting question, yes. So mostly in the Q3, but also one part in the Q4 and one small part was in the Q2. So it depends.

Thank you. I will move over to our audio question from Miro Zuzak.

Just one question. Because obviously, it's a difficult year. And obviously, we hear this from everybody else exposed to the German automotive sector. I mean that we've discussed it already in the past calls. But if you look at your outlook, there seems to be a kind of, I think your word is, normalization by positive EBIT, you can argue, and it's still not a normalization. But if you look at your business, it's really shrinking. So taken from the number of employees from 14,000 now to 12,000. Do you really see a change in like the overall trend? Because, frankly speaking, I cannot see it. Looking at the German OEMs, I think it's a stable negative trend.

Yes, in the last 2 years, it was a stable negative trend. And certainly, it will not happen from one day to another. But to be honest, if our customers, mainly the German ones want to compete with the global competition, they have to develop new products. And if you have a look at, for example, BMW and Mercedes, there are new products, they are very competitive. And what we see behind the scenes, everyone working on such a new portfolio. So we believe that there will be a recovery.

To be honest, we said it 2 years ago, then the tariffs happened. It's really not easy to predict when it will happen. But as I mentioned before, what we see, with the decision from the regulation, most of the customers try to have something in their portfolio for EV, range extender, hybrid. This will boost the development overall. And hopefully, we see this during 2026 in our existing business, but also with new products. And then we expect a recovery in automotive.

And yes, the headcount, we reduced the headcount. It's not a secret. We have a huge stake in Germany and the business is more global in the future. This is what we are adjusting at the moment to find the right setup for growth in the future.

Okay. And an additional one, if I may, and then I'll step back into the queue. We hear from many other companies that they are dislocating employees into other countries as you -- I mean, you also have the chart that you showed in the presentation. Even to Switzerland. Steel, for example, they moved over employees to even Switzerland. Do you think that, as long as this is happening, that this turnaround will happen? I mean, it seems like a broader pattern, the industrialization of Germany, I mean, it's probably a tough word, but it's happening. Do you think this has to stop before you can grow again in Germany? Or do you think you can grow still against this trend?

So there is work in Germany, for example, in aerospace and defense. Most of the work is under like security clearances. So some of the work is Germanized only. And as I explained, the defense sector will grow, maybe not from 1 year to another in an extent that it could compensate the drop in automotive, but it will grow, and we work on our position. I think overall, this position is good. So there will be work in Germany as well.

In automotive, what we see or saw in the last 2 years that most of our customers redistributing the work in their global R&D centers. And the German centers are still strong, and there will be outsourcing work in Germany. And I mentioned also that we see a consolidation process in the engineering service panel of the OEMs. So even if the market not increased, there is room to grow in Germany with the existing customers in the engineering topics. And this is what we believe. Maybe again, it's not very fast double digit. But if the market recovers a little bit, we will see a growth.

And maybe last question, Markus mentioned, we still have some overcapacity in Germany. So if the work comes back, it will have a direct impact on revenue and profit.

I will go over to our Qs in the chat box. Is the targeted moderate growth of sales in 2026 realistic without expanding the number of employees?

Yes, also a good question. So it is realistic because we are expecting much more call-offs on existing contracts. This is also helpful, and we expect also a normalization of utilization and gross margin, especially in the second half of the fiscal year.

The next question. Considering the impressive EUR 52 billion defense order announced last week, should we expect some indirect boost of activity for Bertrandt?

I already explained what we expect. What we have to consider, most of these companies are not used to work in a very huge scale with engineering service suppliers. But they are in this transformation phase. And what we see is that the projects are getting bigger. But again, not from one day to another. But it's moving on and there will be a lot of money and these customers change their behavior to work with external service providers. So we believe that there will be a growth in the future, next 3 years with this customer.

And I think we are well positioned, and we are close to the customers. So we are in a really good dialogue with our customers, and this is additional potential for Bertrandt.

Regarding 2025 and 2026 guidance for the EBIT, significant growth and positive. Could you refine the part of this growth that will be driven by non-repeating one-off costs and underlying improvement, including Fit for Future?

So as I mentioned, first of all, if we see the normalization -- expect normalization, so we have a one-on-one impact on the EBIT line. And also, we will receive the full impact of our cost optimization program. And so we see the potential and so we see the way back to a positive EBIT.

And the last question in our chat for now. What is the outlook for CapEx in 2026 and beyond? Is the CapEx of 2% of sales a reasonable expectation?

So as I mentioned, so the question is how is the new normal. So we are flexible, but 2%, I think, is a good figure roughly.

Sorry, we can't hear you anymore. Yes, here we go. Now we can hear you again.

Okay. How much sequential sales growth do you need in 2026 to offset the embedded revenue decline from 2025?

So it's a little bit difficult to say because we reduced our breakeven point with the cost optimization program. So if we see the revenue level from this year, so then we are breakeven.

And we have one more question from Miro.

Can you hear me?

Yes.

I ask this because I always have to press things here on the screen. So I'm always unsure. Okay. Good. Can you please -- I'm referring to your presentation on Page 12, where you have the split between aerospace and defense. If I take the 6% this year, you made roughly EUR 60 million in aerospace and defense revenues in the past year. Can you elaborate how much of this is classical aerospace? Airbus, I think, is a client? And how much is true like defense?

So the main stake is in defense. And Markus mentioned it before, we said in our Strategy 2027, our target was at least EUR 100 million until 2027. We are pretty sure to achieve this and overachieve it maybe. So it will be between EUR 100 million, EUR 150 million until 2027, I would say.

And so the growth comes definitely from the defense part of the business, while our civil part is more or less stable as long as we don't see a new aircraft development. But this is also around the corner as Airbus already announced it. So this should add more business after '27, or maybe already in '27.

Okay. And if I then basically look at your guidance backwards, basically, if I extrapolate from this chart, actually going from 6% to 15% would imply at current sales levels from EUR 60 million to EUR 150 million. If I extrapolate, that would mean like EUR 100 million or so, EUR 110 million in 2026. That's just now a linear extrapolation. But given your guidance of moderate growth, or what was the wording exactly? So you would basically then also still imply that the automotive sector basically downtrend continues. That's the main -- how we should understand it?

Yes and no. We expect a volume growth in automotive and normalization of project placement. But as our Board members said, we expect this volume growth predominantly happen in foreign countries at lower prices. So this is the calculation behind this.

So that will be true. So in euros, sales still going down, but offset -- more than offset by defense growth?

Yes. Hopefully, we will end up a bit better than this. But yes, that is the basic assumption.

Okay. Then 2 more questions. In which segment are these defense contracts booked?

Over all 3 segments, because we have also physical projects in the validation testing, but mostly in the electronics software segment.

Okay. And the last question. Could you elaborate more on what kind of -- what type of clients you have? You mentioned drone testing in the weather box. There might be -- there is Rheinmetall, obviously, with tanks and so on. There is no Hensoldt or Renk, but these are not OEMs. Can you elaborate a bit on what we have to imagine there, what you do?

Not really, because we have NDAs with all customers, and this is really sensitive. But be sure, we are in dialogue with all potential customers internally, but also in Spain, in France, in Italy.

Including submarines, stuff like that?

Exactly. Exactly.

Okay.

And all the services we also offer for our automotive customers can be used also in the military and defense field. So we have almost an 80% overlap in terms of our headcount skills.

Okay. And I don't know how many people are in the queue. I have more questions. Shall I continue? Or shall I go back?

I have 2 more questions in our chat box. I would...

Okay. I go back, then I'll come back later.

Yes, and I will come back to you. Thank you very much. So can you quantify the overcapacity that you still have?

Yes, we have around about 500 people in short-time work still at the moment. So this is what you could call overcapacity, but to be honest, as what we see in terms of customer dialogue and in terms of the RFQs we have, there is a reason why we are currently not laying these people off, because of the projects we see on the horizon. But this is what you could currently define as an overcapacity.

And also in terms of FTEs?

Yes, as I said, about 500 people.

So, Miro, you are back in the queue.

Sorry, Markus has to leave for a press interview now, but Michael and I will stay here and answer all the other questions.

Thank you very much for your attention, for good dialogue in the last year, and wish you a Merry Christmas and a Happy New Year.

Thank you, Mr. Ruf.

Regarding the utilization levels, in the past, you mentioned the percentage number like 90% or so. Where would you stand right now?

So in the average of the last 3 months, we are 88%, 89%.

Okay. Then a bit lower. Then another question related to the labor unions and negotiations, because I guess you're also impacted by negotiations with the unions. We have seen in Austria a bit of a change there because the Austrian unions realized that the businesses are dying and they've forgone -- as they said, we omit wage increases which have been previously agreed upon. They said, okay, that makes no sense to basically consume these wage increases for the next year. We don't increase by, I think, 3.8%, we increase only by 1.8%. And that was pushed by the labor unions, which was a bit astonishing.

We also heard from VW that the labor unions are a bit more flexible. They understand that things have to change. Can you confirm that you basically experience the same with the unions that you work with, that you have more flexibility and, for example, no overtime hours, in-home office, stuff like that, or also the number of people, sick days. I mean it's what the numbers we hear from Germany is 20 plus, which is, I mean, I think in Switzerland, it's 3 or 4. So maybe you can -- do you feel that there is a change actually happening?

In general, certainly, they realize what is the overall situation. But to be honest, it's -- the discussion is lasting very long. And if I compare it with the necessary speed we have to or the speed we need to turn the situation, it's not a huge change, in my point of view.

But Miro, I can tell you, we have not had any kind of wage increases in Germany last fiscal year and the year before. So 2 years without any regular wage increases. It's a bit different in our foreign subsidiaries. And I have also shown a ratio on one of the charts with a voluntary fluctuation rate of just 4%, that also gives an indication what -- I mean, how our people, even if we don't have unions, are currently reacting with regard to job security.

They hold on to their positions, of course, right, at this point in time, they don't find...

Especially here in the southern part of Germany.

No, that's clear. If I look at your numbers, if I may continue, and you interrupt me, right? You did if you think it's too much. If you look at your numbers, the personnel expenses, Q4, EUR 180 million roughly, compared to a level of last year, EUR 220-ish million per quarter and EUR 200 million this year. Now we are at EUR 180 million in Q4. Well done. Good job, I think. Is this a sustainable level, like the EUR 180 million per quarter?

Yes. As long as we don't see any kind of headcount growth. We would see headcount growth if we see the project awards normalizing abroad. But this is a sustainable level. There are even some one-off costs also in Q4. And you might have seen that we have installed some additional measures on top of the Fit for Future program. For example, we ceased one hierarchy level in June, July. So these are also the effects which we will only see in the next fiscal year. So it should actually drop a bit further in this fiscal year.

How much was the one-off, do you remember?

I think total for restructure -- within the personnel cost item, I have to scroll back. It's in the presentation. I think it was EUR 15 million. Yes. Give me a second. We have it in here.

In the meantime, ladies and gentlemen, let me remind you that we have 3 minutes left planned for this call. And if you still have questions, please place them now.

Yes, Miro, it was actually EUR 16 million.

16, 1-6?

Yes. But quite equally spread over the quarters.

Okay. Good. So roughly EUR 4 million still in Q4. And the other cost lines, especially material costs, EUR 24 million, significantly down versus last year EUR 34 million, coming from EUR 40 million and more than EUR 40 million. Is this also -- are these basically the measures that you have taken? Also other operating expenses down to EUR 17 million in Q4. That are all very good numbers. Is this sustainable? Or was there also some one-off effect maybe helping a bit?

Miro, to be honest, we saved everything we could. And you can't do this forever. So there will be a time when you have to clean your windows again. But generally speaking, we try to be cost conscious in the future as well.

I think there was one major project in France, where we had a lot of material, and this was ended during the last business year or at the end of this year. So this will have another impact on the material costs. So both, we saved a lot, and there was one major project with a lot of materials which comes to an end.

And I have one last question in our chat box. What is the rationale for an acquisition in the U.S.?

To be honest, we see quite a nice growth and demand, not only in low-cost countries, but also in other international subsidiaries like in Spain, like in China, but also in the U.S. So our customers, for example, the Volkswagen Group, is currently investing also in the U.S. You might have heard about Audi also thinking about a production plant in the U.S. So we will strengthen our footprint, or could strengthen our footprint in the U.S. and enlarge our services there.

Okay. Thank you very much. In the meantime, we have received no further questions. We, therefore, come to the end of today's earnings call. Thank you for joining, listening and all your questions. A big thank you also to the gentlemen for your presentation and the time you took to answer the questions. Should further questions arise at a later time, please feel free to contact Mr. Voss. I wish you all a lovely and healthy pre-Christmas time and handing back over to Mr. Voss for some final remarks.

Yes. Thank you very much for your moderation again. Thank you all in the line for having joined us today and for your patience and for the questions. Really appreciate it. And also from our side, Merry Christmas and a Happy New Year. And I'm looking forward to see you in January back on all the conferences and earnings calls. Thank you.

Thank you very much.