Dear ladies and gentlemen, welcome to the conference call of FACC AG. At our customer's request, this conference will be recorded. As a reminder, all participants will be in the listen-only mode. After presentation, there will be an opportunity to ask questions. If any participant has difficulties hearing the conference, please press star key followed by zero on your telephone for operator assistance. May I now hand you over to Tanja Meisenberger who will lead you through this conference. Please go ahead. Thank you and good afternoon, everyone. Welcome to FACC's conference call for the Q1 results. I'm Tanja Meisenberger, and with me today are Robert Machtlinger, CEO of FACC, and Aleš Stárek, CFO of FACC. As always, we have provided detailed financial information in our press release today. The forecasts and targets we discussed this afternoon involve risks, including those described in the disclaimer at the end of this presentation. If time does not permit to answer all possible questions on today's conference call, we would be happy to schedule additional one-on-one meetings afterwards. In this case, I would ask you to contact our investor relations department, Michael or myself, to coordinate appointments. I will now hand over to Robert Machtlinger. Thank you very much for the introduction. Ladies and gentlemen, thank you for participating in our Q1 call. Overall, as just mentioned, I think we went out with our Q1 results overall, and then going through the presentation, I'm on slide 3 on the Q1 2022 key topics. First of all, the first quarter of the year developed very much in line with our expectations in terms of rate increases on major platforms. I think the most important here to mention is the A320 rate ramp-ups, which is continuing also in the next 3 quarters of 2022. Also I think important to mention is the Airbus two twenty, where we see a continuous ramp-up in demand. Why do I mention the A220? The two twenty is a growing platform with more importance in FACC. We have more than half a million US dollars of revenue on the airplane and with the increased rates of the airplane, the organic growth of projects we have onboarded last year and is constantly growing. Also a good development in the business jet Aerion, all our platforms, Bombardier as well as Embraer, and the new platform we brought on board with Dassault are developing nicely. The rates basically approaching the rate we employed in 2019 or higher, which is also, I think, pushing sales in a known market environment or product line requirement for FACC. Overall, global traveling good development overall. We just had a discussion at the 2021 year-end closing conference call. Nothing too much new here. U.S. is leading on utilization, followed by Europe and China. In terms of regional flights, international flights, also no changes to the picture as we shared and discussed at the last call. Overall on the marketplace good development, stable development with probably one point worthwhile to mention is Ukraine Russian war. So far on the order intake, no impact. We know pretty much the planes deliveries from Airbus and Boeing in 2022 to the Russian market. In terms of Airbus, it's rather smaller number of airplanes, a little bit more than 10 airplanes this year. Most of them is A320s, a few A350s. On the A320s, we are expecting that those positions will be reallocated to other airlines because the A320 family is running at high rate and customers would rather prefer to have the airplanes sooner. On the A350, I think we have to watch and see how these airplanes will be reallocated. Overall, on the direct order intake, not impacting FACC. Globally, supply chains not impacted by FACC as well because we are not having supply chains, not in Ukraine, but also not in Russia. The rest of the impact, which is pretty much energy cost, energy supply, and liquidity cost, we had some precautions in our budget, and our risks we have put into our budget, I assess as well. Also here for FACC, no surprises. Important for us, we have insourced the vertical, the supply chain, and the shipping department, which was outsourced for the last 25 years. We have decided to do so last year to further reduce cost and be more flexible in terms of shipping. We have to say it was a good decision because especially logistics and shipping is a challenging environment today. Controlling logistics today 100% at FACC is giving us better flexibility and is also reducing cost, and we see the benefits already. Our Croatian ramp up, we talked last time as well, is progressing very nicely on plan. Just yesterday, we have completed the EN 9100 qualification of the facility, so fully qualified to our standards. In the meantime, we have ramped up the employment to 160 people, and revenue streams are coming out from the facility as planned and constantly increasing. Here, and to reiterate, a Croatian facility is a fundamental setup for FACC to ensure long-term profitability of our interior facility. We talked about lengthily on the OEM, so I will not repeat that. Intense growth in Q1 was close to 8%, 7.9 to be exactly. Again, very much in line with our Q1 expectations, and looking into the next quarters, and I will come back to it in the guidance for the rest of the year, the 10% growth is reconfirmed. Our group EBIT, EUR 3 million, and as we talked about details are also as planned, on inventory level. Here also, we have a few slides, slight increase. We have done this intentionally because of supply chain issues, just to protect ourselves, keep production up and running and support customer demands in the ramp-up process. In saying that, the market is doing what we've planned to do. We are prepared for the ramp up. We're managing the ramp up, and in saying that, I would like to hand over to Aleš Starek, giving you a deeper insight on the financials. Thanks a lot, Robert. Good afternoon to everybody from my side as well. Let's go to the first slide of the financials, where we take a look at the revenues and the EBIT. Revenues basically on a good trend, increasing trend. See that basically we are better by approximately EUR 9 million than we were in Q1 last year. The increasing trend is intact, and sales are then developing according to our expectations, especially Aerostructures. This is good news. Aerostructures sales are increasing, followed by Interiors. On the Engines & Nacelles, we are a little bit suffering on the sales side from the 787 situation. We then basically cross over to the bottom line to EBIT, then we see EUR 3 million slightly coming up from the EUR 0.4 million that we had the first quarter, 2021. On track to tripling the overall EBIT for the whole year as we have guided at the end of the last financial year. Again, here, engine nacelle while suffering on the top line from the 787 and then basically the EBIT is supported by that. So a positive project mix and a good profitability. On aerostructure, profitability increasing. Interiors still losing money, however contained and we see small contributions coming from the ramp-up in Croatia. Of course, first quarter of the ramp-up are not so significant, but we are expecting that contribution from Croatia will increase throughout the year. Overall, no concerns here, and everything is on track as expected. We go to the next slide, and then we take a look at cash flows. Starting again with EUR 3 million EBIT. Depreciation on top in line with what we have had last year, a little bit of one-time amortizations, project-related one-time amortizations, a little bit higher by EUR 1 million than what we have seen last year, bringing us to a EBITA of EUR 13.7 million. The cash consumption, as is already indicated by Robert, partly due to inventories, increasing inventories, where we are selectively building up stocks, safety stock, in order to pay tribute to any potential disruptions in the supply chain on one hand side, on the other hand side. We have talked about it during our last conference call when we discussed fiscal year 2021 results. There were some payments from customers that were actually scheduled for first quarter. They already arrived and are already done in last quarter 2021. Also from the receivable side, overall, EUR 27 million cash consumption, resulting in EUR 16.9 million in cash out. In investments, we see pretty much on the same level as they were in Q1 last year. Our first quarter of the year, traditionally, and not so investment cash out heavy. This is then basically coming during the year. We are on track, as we were planning cash outs between EUR 20 million and EUR 25 million on the full fiscal year scale. That's still on track. Nothing unusual happening here. A quick look at the financial debt. Here we see also, let's say a positive trend in terms of deleveraging of the company. As I said, Q4 2021, some extraordinary elements in there, customer payments. We increased slightly in line with the negative free cash flow, still staying below EUR 200 million in net debt. As you can see from the graph, the trend is pretty much in line with deleveraging. When we look at the leverage itself, we started this journey starting 15-16 in our last conference call, and we look at it from today's perspective, we are standing at 2.6, which is actually a very good result. When we basically, the 3.6 is basically following the agreements, the formal agreements from the banks, from the waiver that we have reviewed with the banks. By June, we will take the six-month EBITDA and multiply it by 2. What we did here is we took the three-month EBITDA and multiplied by 4 and then basically that was the denominator that we used for the calculation. That brings us to 3.6. As I said, there are a little bit of amortizations that were in Q1 that will not be there in the following quarters. When we would look at it from a little bit of a normalized level, then we would be around 4.2. Still good improvement in leverage. We are on the way. No worries here. Still needs the 5.25 leverage requests or requirements that we have from the banks at the end of June. Looking at the financial status, again, here, pretty much stable situation, and EUR 224 million in funding. The subsidized loans, the KRR facilities, EUR 50 million, EUR 60 million can fully utilize. Amortizing loans are slightly lower than two months ago, at EUR 14.5 million. The EUR 100 million in the rolling credit facility is still available to us. The spread between the banks are no change here. With that, I would basically hand over to Robert and to the outlook. Thank you, Aleš Starek. Well, key priorities for 2022, they will remain unchanged, and as reported also in the last call. First of all, the positive thing, industry is ramping up, further ramping up, forecast until the end of the year, especially on short and midsize airplanes is further increasing. That's positive. In line with the ramp up, we are securing supply chains from all over the world, especially as FACC task force is in place to overlook the global supply chain, so far all under control, and we are not expecting changes here. Ramp up of the FACC Croatian site, we wanna further expedite and inload faster than we have planned a year and one and a half years ago. Benefits already we can see, so this is why we are expediting. Of course, staff ramp up is pretty much going in line with the increasing demand. So far, we are on track here as well. We are able to attract people, good people, to join FACC. So overall on track here as well, but the people ramp up will continue for the rest of the year. Of course, quality and performance is non-compromisable. So we are still keeping our 100% performance as main focus. As Aleš Starek said, strong focus on cash, liquidity and profitability will be focus areas overall. Organic growth, I just mentioned before, A220 with new programs, but also the engine business with new contracts last year is entering a serial production phase in the second half of the year. Full focus here. So far everything on track with, let's say sizable business volume coming in in Q4 and of course in 2023 and thereafter. Business guidance are no change to the guidance we had at the year start. Ten percent growth overall are between 2021 and 2022. Orders are fully supporting the 10% growth, and risks from the overall market are basically considered. No change here. We have to target to triple the operational EBIT compared to 2021. Q1, I said before, also nicely in line with our expectations, with the volume increase coming late in the year. We are expecting, and we are seeing, increases in EBIT from quarter to quarter as well. With Q3, which is the seasonality, I think, with lower demand, especially July and August, with a little bit of lower EBIT, but nothing new for you because that's normal in the business, in aerospace and for FACC. Net debt, the target of EUR 197 million at year-end. This is considering the ramp-up, but also is considering the safety buffer in inventory, as Aleš just mentioned before. In investment, we are still tight. Most of the investment reserved for this year is technology and growth investments. This is pretty much planned for programs we are currently negotiating with our customers, but not yet having a contract in our hands. In saying that, guidance we confirmed, and I would like to give back, and the floor is open for yours, and we're more than happy to answer your questions. Thank you. Thank you. We will now begin our question and answer session. If you have a question for our speakers, please press zero one on your telephone keypad now to enter the queue. Once your name has been announced, you can ask a question. If your question is answered before it is your turn to speak, you can dial zero and two to cancel your question. If you're using speaker equipment today, please lift your handset before making your selection. One moment please for the first question. The first question is coming from Harry Breach at Stifel. Your line is now open. Yeah, good. Good afternoon, Robert, Aleš and Tanja. Can I just ask a couple of questions maybe on margins and maybe one on supply chain? Just, you know, on margins, Aerostructures seem to do better than I was expecting for a first quarter. Was there anything sort of unusual in the performance of Aerostructures, or was it just a benefit of higher volumes and their fixed cost absorption? Moving over, just to talk a little about engines. Again, there obviously we have the 787 contract repricing effect. Any other effects in there, and should we be thinking about that first quarter margin as sort of being a sustainable level for later on this year, the third quarter as Robert touched on? Moving over, obviously the euro dollar spot rate has come down to very low levels now at 1.05. Aleš, can you give us an update on where you are in terms of hedging cover and the average rate in your cover for 2023 next year and maybe 2024 as well? Maybe last question, guys. Just on the guidance, the cash flow, and please forgive me if I didn't hear so well. With the cash flow number you gave there, I think that -EUR 16.9 million, is that assuming the full payment of the arbitration award and the related amounts and costs all within 2022? Thank you. Okay. Let me take on your questions. When we look at Aerostructures, then basically really indeed you are right. It's pretty much due to the volumes and to the increasing volume. As I said before, Aerostructures experienced the biggest growth of the three divisions compared quarter-over-quarter between last year and this year. There are no specifics on the margins, margin improvements. It's simply a better coverage of our fixed costs. Engines & Nacelles, yeah. Again, here it is really another 787 and no other special issues on margin improvements on margins jumping to be better on other projects. It's really the project mix, the 787 still very low. Going forward, we all expect that at one point in time the issues will be resolved and going to return gradually to the rate of 5. Over the year, I would basically expect a normalization of the margin and a deterioration from the current levels to a more, let's say, mid single digit levels around maybe 6-7% by the end of the year in Q4. That would be my expectation for Engines & Nacelles margins. US dollar, yeah, you're right. However, we have been basically hedging as the dollar was increasing already last year. We have for 2022 done quite a lot of hedges already last year. Also for 2023, we have done some hedging, hedges for 2023 as well. Now, as the dollar has jumped, now let's say to the levels of 1.06, 1.05, we have done some hedging now as well. We are somewhere in the mid-1.17 as a hedge rate for the 2022 year, and for the 2023 years, we are approaching 1.16 now, let's say. Yeah, somewhere between 1.16 and 1.17, closer to 1.16. Mm-hmm. Mm-hmm. Yeah. Um- Yes. Yes, please. Yeah, sorry, Aleš, I was just saying, can you give us any idea of the percentage of your net exposure that is now covered over the next three years? 2022 is hedged closer between 85% and 90%. Yeah. We are getting to 80% hedging for 2023. Yeah. 2024 is not hedged yet. I think the... Let's say from my personal point of view, how I view this, I wouldn't start hedging 2024 maybe until the summertime. I think we'll move on these levels for some time because why should things change, yeah? The interest rate differential will probably increase. Probably the Fed will be more aggressive than the ECB in increasing interest rates. The geopolitical situation with Ukraine and Russia will certainly not resolve during Q2. Until the summertime, I would probably not do hedging. I intend to start hedging, let's say in Q3 for 2024. Mm-hmm. That's my plan. Now, looking at your last questions, cash flow. The arbitration, there were no cash outs on the arbitration yet. We are still in the situation that we are awaiting couple of clarifying rulings from the arbitration and the interest rates that are part of the game. Also the underlying, as we already mentioned, we have filed a complaint to the High Court in London on the outcome, and that's also not decided. No payment there. I would not expect any payments on the arbitration in Q2. Maybe some payments will be done in Q4 as of today. That's likely. probably also during the summer we will not be doing any payments. That's from today's perspective. Yeah. Yeah. Yeah. That's the situation. Yeah. Aleš, just to understand the guidance, where the third bullet on slide 11 says cash flow of negative EUR 16.9 million. Is that assuming that all of the cash out relating to the arbitration occurs this year or that none of it does? No, that's related to the Q1. Actually, that's the Q1 numbers. Okay. I'm sorry. On slide 11, that third bullet. Yeah. This is just the Q1. I'm sorry. Yeah. My fault. Just the Q1. Sorry for the confusion. No, I'm having a slow day again. Thanks, Aleš. It's really confusing the way it's put together, so don't worry about it. No problem. Thank you, guys. Thank you both. Thank you. Thank you. The next questions come from George McWhirter at Berenberg. Your line is now open. Hi. Good afternoon. I've got two questions, please. Firstly, on the inventory buildup that we saw in the first quarter, should we expect it to continue? I think you said that we should. Just, can you put a number on the full year impact on inventories, if that's possible? And secondly, on cabin interiors margin, do you know when we should expect the margin to sort of trend in towards positive territory, and beyond? Sort of a number term, what's the sort of possible margin we can reach in this division? If I may, I would like to answer the second question, Interiors margins. We had shared our Interiors plan in 2019 at the Munich conference, which had five pillars. One major pillar was Croatian setup, which had been postponed because of COVID-19. Right now it's up and running. Some vertical integration and some cost reductions in fixed as well as in variable. In answering the question, Interiors will be solid EBIT positive during the course of 2023, rather in the later quarters. Stepping up from that point on to a 5%-7.5% EBIT margin business. Whereas I would say 5% is the lower end, 7.5% is more the upper end, depending on product mix. In comparison to Aerostructures in the past, here we had EBIT between 11% and 13%, 14% also, a little depending on product mix. Interiors was a little bit handicapped because of one contract that was loss-making, which is cured since the first of January 2022, which was the 7 and 7 contracts. Overall, profitability in Interiors will come, and we're expecting round about 5%-7.5%. Third question, Aleš, if you can answer please. On the inventories, George, basically, the original plan was to be flat on inventories by the end of the year with a slight increase of EUR 45 million in the summertime around June, July. That was the plan. Now we have, let's say selectively, built up some buffers, and then inventories are higher than we have originally planned. So from here, I would basically expect what we have actually expected another EUR 4 million in build up until summertime. Then gradually, from the underlying, the business model at the end of the inventories should then basically go down again. How much we'll be able to improve inventories in the second half of the year pretty much depends on the stability of the logistics and of the supply chain and how things will develop further with all the containers and then the ships and then that stuff. That's to be seen. Probably we will not be able to get to the same level as we were at the beginning of the year. Probably the inventories by the end of the year will be slightly higher than they were in the beginning of the year. That's very helpful. Thank you very much. Yeah. The next question is coming from Louis Cheer at. Your line is now open. Hello. Thanks for the presentation. So I would have three questions. First one is until when is the M&A facility amounting to EUR 50 million restricted for availability? The second one is when is the EUR 6 million KKR facility loan due? Is it on March 31, 2023? And the last question would be the EUR 100 million unused credit facility, what is the latest date when you would be able to draw this credit line? And do you have any indication on when you plan to draw it? And in the end, will it be different tranches or at once? Okay. The M&A credit facility was basically dropped as part of our second waiver negotiations in December last year. The M&A facility will not come back anytime soon. It will not come back. That is not so dramatic as the EUR 100 million revolver can be also utilized for M&A purposes. That was not a dramatic loss for us when we gave it up in December last year. The EUR 60 million COVID KRR facility is due for repayment in March next year, by the end of March next year. The overall club loan is basically due by August next year. As basically the tranches are three months, basically in May next year, that will be the last possible draw down point in time for the revolver. That's pretty much theoretical because we have already started discussing with our core banks extension or let's say, well, not necessarily extension. We have started discussing how to deal with the club loan and how to deal with the two KRR tranches. We also started discussions with the aws, the government bank that is subsidizing those loans and also securing those loans. We are in discussions, and the plan would be that by summertime, when we return from summer holidays, we will have a plan how to do. We will execute the plan in the rest of Q3, September, and then in Q4. By Christmas, we should have basically a renewed facilities in place and then basically look into a safe funding scenario again. Let's say safe. We are safe now and we want to be safe going forward. I want to have everything in place well ahead of the point in time where the current facilities become due. Okay. Very clear. Thanks a lot. Yeah. Again, reminder, if you have a question for our speakers, please dial zero one now to enter the queue. The next question is again coming from Harry Breach at Stifel. Your line is now open. Hello again, guys. Just wondered if I could ask a slightly different one. One of the concerns really for the sector at the moment has been cost inflation, both on the energy side and also in terms of the bill of material, the subcontractor direct purchases. Can you give us any light or any understanding, typically for the purchasing you make of the average sort of contract lengths and how pricing works with those. Is it fixed until the end of each contract? Can you give us any feeling on that? Also about how you guys can pass through or whether you have any escalation clauses in your contracts with your customers. Thank you. Yes, Harry, I can answer that question. First of all, in terms of material supply contracts, we have longer term contracts in place ranging from three years to five years. They vary depending on the program, rates, and also a little bit depending on the commodity. In areas where we see more dynamic and more opportunities where we have more flexibility, we are rather going for a three-year term on commodities where I think the flexibility is not that high because there is only a very limited amount of supply chains available. We rather fix pricing for a longer term, in that case, five years. In terms of some materials, let's say aluminum, let's say prepreg or some other commodities, we have agreements in place with our customers. It's one of the two depending on the contract. The one could be if there is increases or decreases in the raw material, we pass on the changes to our customer in terms of a price adjustment. It's the one vehicle we have in our contract. The second one is the material contract like for titanium or some other, let's say, raw materials is confirmed or is negotiated by our customer. We have access to that material volume, and we enjoy a stable price. The ups and downs from the stable price are compensated by the OEM. Here, I think, on unique aerospace materials, we are able to pass on the inflation through our contract arrangements. There is some other material which is not unique. Here we have to work through ourselves by changing suppliers, changing supply chains, which is well under control at the time being. Energy we are hedging as well. We are normally having a 12- to 18-month, sometimes 24-month energy hedging contract, and electricity and gas, for example, we are hedged for the year 2022 and half of 2023. The peaks we have seen in the last couple of weeks and months are not impacting FACC this year, and also not at least for the first 6 months of next year. We will go into hedging later in the year, and we are watching, of course, the industry quite closely. Great. That's very helpful. Thank you. Maybe one more point, which, to complete the story, and the information. In terms of labor cost inflation, two things. There is step changes. At this specific term, which could be 2 years, 3 years or 5 years, we can rebalance our labor rates, and adjust the price. In between those steps, we are compensating the annual increases, which are normal by productivity gains, by CapEx and by industrialization. This is a standard thing, we've done for many years, well under control. Also here we have confirmations. Great. Thank you. You're welcome, Harry. There are no further questions at the moment. Again, the reminder, if you want to ask a question, please press zero one now to enter the queue. No new questions are coming in for closing remarks. I expect to the speakers. Good. Thank you for your participation and for all questions. If any further questions come up, please feel free to contact us. Thank you very much, and talk to you soon. Bye-bye. Thank you very much. Bye-bye. Ladies and gentlemen, thank you for your attention. This call has been concluded. You may disconnect.