Ladies and gentlemen, welcome to the Frequentis Full Year 2023 Results Conference Call. I am George, the conference operator. I would like to remind you that all participants will be in listen-only mode and the conference is being recorded. The presentation will be followed by a Q&A session. You can register for questions at any time by pressing star one on your telephone. For operator assistance, please press star zero. The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Stefan Marin. Please go ahead. Ladies and gentlemen, a warm welcome from our headquarters in Vienna. With me are Norbert Haslacher, CEO, Monika Haselbacher, Chief Operating Officer, Hermann Mattanovich, Chief Technology Officer, and Peter Skerlan, CFO. Let's start with Norbert Haslacher's presentation on 2023. Yes, a warm welcome from me too. Before I start with the figures, I want to share a big thank you to all Frequentis employees around the globe who handled the past year in such a positive manner. I think we as a team can be very proud and satisfied with our result we have achieved 2023. Before going into the details of the past year, I would like to reflect on our now almost five years as a listed company. I think the listing gave us the opportunity to become more professional. It increased our visibility for stakeholders like analysts, investors, the media, the general public, and also authorities. The questions we get help us to improve. We managed two pandemic years followed by two years of high inflation, especially in Austria. Despite that, we grew significantly in the past five years. Revenues increased by 50%, EBIT increased by 70%, order intake increased by 65%, employees increased by 26%. I would like now to start our presentation with slide number 2. As forecasted a year ago, we increased order intake and revenues again. Order intake rose by a very impressive 25% or exactly EUR 100 million more than the year before, giving us EUR 500 million order intake. Orders on hand are close to EUR 600 million now. That's up 14%. The revenues grew for the third time in a row by more than 10% to EUR 427.5 million, above the EUR 400 million level for the first time. EBITDA was a little bit lower at EUR 44.7 million. The EBITDA margin was 10.3%, which is higher than the pre-pandemic average 2015-2019 of 8%. Compared to 2022, we made absolute progress with our EBIT profitability. EBIT was 6.6% higher at EUR 26.6 million for 2023. The EBIT margin was 6.2%. The pre-pandemic average was around 5.5%. Net profit was EUR 20 million, the second highest net profit in Frequentis history. In view of the net result, we are proposing a dividend of EUR 0.24 per share, which is an increase of 9%. Thanks to the healthy balance sheet, the equity ratio was at 41.9%. At the end of December 2023, we had a net cash position of EUR 84.3 million, including EUR 53.0 million from advance payments from our customers for our projects. Coming to the order intake now, slide number 3 shows that the demand for our solutions is growing constantly. Incoming orders broke through the EUR 500 million barrier in 2023. Order intake was up by almost a quarter or exactly EUR 100 million more than the year before at a total of EUR 505 million. Book-to-bill ratio was 1.18 compared with 1.05 in 2022. ATM order intake was +25%. In other words, EUR 70 million higher at EUR 345 million. PST showed an increase of 23% or EUR 30 million more at EUR 159 million. This leap forward was possible because we followed continuously our strategy. So product development through research and development, R&D, selling solutions rather than products, a high degree of local customer intimacy, which we have built up over the years, and then excellent teamwork over the whole value chain. Looking forward, we have a well-filled opportunity pipeline and order pipeline for 2024. As a growth company, our goal is to increase order intake again in 2024. On slide number four, it shows contracts and framework agreements that last for more than a decade. So they create the business for future growth, first through the revenue stream from the setup and implementation of the projects themselves, second through recurring maintenance revenues, and third through additional orders from change requests, and fourth because such projects create a reference base for other tenders. Usually, tenders are based on technology or references and price points. The bigger the reference base, the higher the reference points. For going more into financial details, I would like to hand over now to Peter, our CFO. Thank you, Norbert. A warm welcome from me in Vienna as well. Now to slide number 5. Orders on hand are now close to EUR 600 million, EUR 595 million to be precise, an increase of 14% versus the year-end 2022. That gives us a good visibility into 2024 and beyond. More than EUR 300 million out of the EUR 595 million will generate revenue in 2024. Revenues were up 11%, the third time in a row that revenues showed double-digit growth. 99.5% of the revenues growth in 2023 was organic. We achieved a compound annual growth rate, CAGR, of 8% in revenues in the past 5 years despite sluggish Corona years, thanks to the hard work of everybody at Frequentis. The progress achieved in revenues proves that our motivated employees are as resilient as our business model. The segments split showed an increase at ATM. It accounted for 69% of revenues in 2023 versus 67% in 2022. Public safety and transport was 31% in 2023 and 33% in 2022. Relative and absolute revenue growth in 2023 were higher in air traffic management, with an increase of 13.8% versus 4.8% for public safety and transport. So slide number 6. The stable business model fosters growth, and there is ample room to grow our business. With our current solutions, we can address a market of EUR 3 billion-EUR 2 billion. The total global market for control room solutions, including equipment, is EUR 13.1 billion annually. The slide shows that we are able to grow revenues in all regions. While Europe showed the highest absolute growth, Australia Pacific was the fastest-growing region in relative terms, with growth of more than 20%. On a regional basis, our European home market remained strong and generated two-thirds of revenues, followed by the Americas with 16%, Asia with 11%, and Australia Pacific and Africa with 7%. I'm now at slide number 7, which is a good exemplification of our business model. The pie chart on the left shows that more than 60% of revenues were generated by systems that are already installed for our customers. 36% came from new products and systems for our customers. The pie chart on the right shows the revenue split by revenue type. It's an appropriate split as customers order and buy complete systems, not individual project services, software or hardware. More than 35% of revenues come from project services like the design of control center architecture, project execution, and day-to-day project management. Next comes maintenance, which accounts for 30%, mostly recurring revenues. The pure software part is about 20%, followed by hardware, which accounts for less than 10%. Software is almost exclusively software developed by Frequentis and sold within projects. Hardware includes in-house design and manufacturing of selected safety-critical hardware and some third-party IT components. Our aim is to increase the proportion of software, but there is no fixed timeline for this as it depends on customers' needs and priorities. Let's have a look at slide number eight. The slide shows the constant revenue development for the group in both segments. The group EBIT margin was 6.2% better than pre-pandemic levels. In other words, compared with 5.7% in 2019, but a little bit lower than the 6.5% margin in 2022 due to inflation. The graph shows the outperformance of profitability in the public safety and transport segment compared to the bigger ATM segment. Public Safety and Transport shows that it is possible to achieve double-digit EBIT margins. In 2023, Public Safety and Transport's absolute EBIT even surpassed the 2021 level when profitability was positively influenced by lower travel costs due to the travel restrictions in the pandemic years. A few comments on ATM's EBIT margin. We are investing in product development in ATM right now. We put together comprehensive solutions and systems based on the products we have acquired through merger and acquisition. Research and development is not capitalized. In addition, ATM needs to earn enough to cover the depreciation of product and customer rights following acquisitions. In the Public Safety and Transport segment, our main software product, 3020 LifeX, is well developed and a leading edge for control rooms. The business model behind is software-centric and based on licenses, software maintenance, and project services like implementation and training. It is important to understand that startup costs for the major products gained in 2023 in both segments will have an impact on the EBIT margin in 2024. For more information about our merger and acquisition strategy, I will hand over back to you, Norbert. Yes. Thanks, Peter. So what we want to share with you on slide number 9 is a little bit of history since our stock listing in May 2019. Since our IPO 2019, Frequentis has made 9 acquisitions. So the proactive search for interesting M&A opportunities is, meanwhile, core of our strategy. When making acquisitions, we focus on parameters such as expansion of the product portfolio, a profitable business model, but also a cultural fit and the acquisition price. In 2023, the focus was on make-or-buy decisions for technology acquisitions. In April 2023, Frequentis acquired a 77% stake in the German voice-over-IP company FRAFOS. We use FRAFOS technology to enhance the cybersecurity of our customers' connections to the IP world. And in June 2023, we acquired 100% of GuardREC based in Norway. After the acquisition, we formed a global recorder business that also includes the existing product line. The purpose of this step was to strengthen the competence in the recorder market and data analytics. We will continue to look at which technologies and products we develop ourselves and which we buy in due to, for example, time-to-market reasons. Slide 10 shows growth markets where products developed by our company are already in use. So all these markets are being developed step by step in a sustainable manner. Digital towers are in place all around the globe. Frequentis is leading the way with innovative solutions that go beyond the original starting point and remote towers to handle air traffic for small airports from remote locations. Now, even large airports like Munich in Germany evaluate virtual towers. That is a major milestone for the digitalization of air traffic control. Drone management, where Frequentis supplies flight information systems for air traffic controllers, is a growing market with installations already in full operation in Austria, Estonia, and Norway. Frequentis is an active player in the use of technologies for networks for air traffic management, police, fire, and emergency services, as well as public transport. Our strength is underlined by 2023's order from Verizon for the enterprise network of the Federal Aviation Administration, which is responsible for the United States airspace, and the contract placed in 2024 by the FAA itself for the digitalization of air-to-ground communication. On slide number 11, we would like to regard our employees as the cornerstone of our success. They are the experts who help make the world safer for all of us. We have a focus on increasing the portion of women at all levels through various initiatives and programs. The group now has 23% female employees, and the percentage is a little bit higher in Austria with 25%. Romania's 33% reflect a higher proportion of women graduating in technological disciplines in Romania. The average age in our group is 43. All generations are united in the Frequentis team. The youngest employee is 18 years old, and the oldest is 79 years old. So many stay with us for a very long time. Long-term commitment is a core value for us, which is reflected in the loyalty of our employees and our customer relationships. On average, our systems run for 10-15 years, some for even as long as 20 years. Thanks to our good reputation, we get more than 4,500 applications a year. However, it remains a real challenge to find technical skills like network IT and software development. With revenue growth of 8% in recent years, we have expanded faster than the market average, which was 4%-5%. The operation of national safety-critical infrastructure is largely independent of macroeconomic trends. This is the basis of the Frequentis business model. The drivers that grow our business are fully intact: security, which is a prerequisite for the development of societies and economies, mobility of people and goods, and technology is needed to make processes more efficient. Let me conclude with the outlook and our agenda for 2024 on slide number 13. Based on orders on hand worth almost EUR 600 million, we are working at a very good capacity utilization level. More than half of the orders on hand will generate revenues in 2024. We aim to further increase revenues and order intake. The sales pipeline is well filled also for 2024 and beyond. Capital expenditure will be about EUR 12 million. A very important part of our success is our professional R&D. Our self-financed R&D expenses were EUR 25 million in 2023. We expect R&D to be higher in 2024. As you can see in the balance sheet, almost no R&D expenditures were capitalized. R&D expenditures have been recognized in the income statement. Regarding profitability, the inflation and the startup costs for major projects acquired in 2023 will impact the margin situation in 2024 as usual. Therefore, we expect an EBIT margin of about 6% in 2024. Finally, I would like to highlight that we are looking forward to another year of growth in the Frequentis group. We are now ready for your questions. We will now begin the question-and-answer session. Anyone who wishes to ask a question may press star and one on the touch-tone telephone. You will hear a tone to confirm that you have entered the queue. If you wish to remove yourself from the question queue, you may press star and two. Anyone who has a question may press star and one at this time. Our first question comes from Miro Zuzak with JMS. Please go ahead. Yes. Hello, ladies and gentlemen. Can you hear me? Yes, Miro. We can hear you. Okay. Thanks for taking my question. I have basically one, a bit a bigger one. If I look at the development of your group, we see extremely strong order intake growth. We don't see strong sales growth. We don't see any increase in the EBIT margin. And you also do not guide for an increase in the EBIT margin in 2024. I also don't see a sales guidance for 2024. Can you at least give us a bit of an idea that basically the top line is going to grow, probably not as much as the order intake did in 2023, but can you give us an idea what you expect from the top line in 2024? Okay. Probably I start with one of your comments. Here's Peter, Peter Skerlan. I would like to start with the EBIT margin. As we tried to highlight in our presentations, EBIT margin is especially a little bit weaker in ATM. Even we have a market share of 30%. But increased R&D expenses are currently necessary to turn individual projects into end-to-end solutions. And as in the past, we didn't capitalize R&D expenses. And the individual products, we have gained through acquisitions. So what we would like to do now is to transform from our hardware-centric to software-centric in the ATM segment, where we are still underway but not as far and as advanced as in the public safety business domain from the public safety and transport segment. At present, not all ATM customers issue tenders for software-centric solutions. So we still see here not enough software sales. We want to improve here. Concerning your other questions for 2024, Norbert pointed out that we want to increase order intake and revenues but see the EBIT around 6% for 2024. Okay. Thank you. Just to follow up, I think you didn't answer my question. So my question was about an idea of the top line that you expect in 2024 or the growth of the top line. Is it more like 2024 or more like 2023? Yeah. There is a consensus from the coverage banks. So that's BankM, Oddo, and RBI. The consensus lies around EUR 445 million for the top line for 2024. And as usual, I think we feel very comfortable with that top line development, which is the consensus of these three banks. You can imagine with EUR 500 million orders, of course, the revenue line will also develop accordingly in a good way. On the EBIT line, I just want to mention Austria still has an inflation rate of 8% now, the second in a row, 2022 and 2023. This is still challenging for the bottom line. But I think we have managed very well an 8% salary increase by the Labor Council's negotiation as we have in Austria. I think the EBIT impact we have managed very well in 2023, and we will also manage that very well in 2024. What's very important for us to understand is our business model. So when we acquire a EUR 100 million deal, which is delivered over the next 10 years, you always have costs in the first year and then go into the rollout the years after for 3-5 years. And as you have seen, we have won the U.S. Federal Aviation Administration. We have won the French Railways, and we have won Norwegian emergency call-taking. Those are very large programs. And 2023 and 2024, the initial investments for such big programs, which then will go in rollouts 2025 and beyond, will have an impact on the EBIT margin again. And I think this is pretty normal for our business model when it comes to the EBIT line. Okay. So you basically say consensus is what we should expect, the EUR 445 million, which would be a, let's say, growth a bit more than 6% or so. That's your answer. That's the consensus from the session. After that, After that, yeah. Miro? Yep. And maybe one last question. Last year, so in the presentation, you say that more than EUR 300 million of the EUR 600 million order backlog should realize in 2024. What was the number last year? Did you also publish such a number last year? Yes. Yes. Yes. I think it was 270, but we'll look it up. We will look it up. I think it was 270. Okay. Good. Thank you. Thank you. Our next question comes from Teresa Schinwald with Raiffeisen. Please go ahead. Hi. Thanks for taking my question. First, on the R&D expenses, they fell to 5.9% of revenues in 2023, but they were at 6.9% in 2022. Is this 6.9%, 7%, a realistic number to expect for 2024, as you mentioned, the increasing R&D costs, and to get a feeling for the number? Hello, Teresa. Here's Peter. Thanks for the question. So your question was, I hope I've got it right. Your question was in 2022, the R&D expenses were 6.9%. In 2023, it's 5.9%. So if we have now a higher amount, can we expect something like 2023 or something like 2022? Is that the question? Yes. I guess, or rather, is this around 70% level? Would this be a fair assumption for 2024? We hope that it will be between 2022 and 2023. We hope that we will not achieve again something with almost 7%. But it will increase due to inflation and cost increases, but it should not increase in relation to the sales. Okay. Then my next one is, can you give us an idea how much of the new long-term contracts like France and Norway and the FAA contributed to the order intake in 2023? I remember you mentioning a single-digit amount, for example, for the FAA order in the first half earnings call. But just can you give us a feeling how much of it was already booked in the 2023 order intake? Yes. For the large FAA program, as you know, we have a principle. We only book the definite orders we get from the customer out of the program. So the programs are usually very large, so three-digit million. But then the orders we get are piece by piece. So I think for the FAA order, we have only booked EUR 13 million, if I'm not mistaken. Yeah? Peter says yes. So it's around EUR 13 million. We have booked as part of the EUR 500 million. And I think the large railway program in France was similar size, also only EUR 12 million-EUR 13 million. And Norway, I think, was around EUR 20 million. So very, very small share of the EUR 500 million. The EUR 500 million, are they for each order, or are these the orders combined? No, sorry. The order intake. Sorry, sorry. I got it wrong. My last question is on a potential timeline for large airports evaluating this remote tower. So as Munich is now looking at it, what's the timeline and the process we can expect from this evaluation and also the potential positive outcome if Munich decides to go forward with the remote tower? Yeah. That's a question I would also love to get answered, especially by the air traffic controllers in Munich. But I cannot answer that, Teresa, unfortunately. But what I think it's a big step that Munich has contracted Frequentis with a validation system for the Munich Tower, which is a high-capacity tower in Europe, to validate it and to learn concepts of operations for air traffic control in a large, high-capacity tower. I think the next 16-18 months will show how satisfied the controllers are. I can hopefully report or we can hopefully report in our next annual conference how satisfied the controllers are with our technology in Munich. Great. Thank you very much. Before we take the next question, probably I can correct my answer concerning how much of the orders on hand we planned to realize one year ago. I mentioned EUR 272 million, and the number was EUR 4 million higher. So it was EUR 276 million to give you the right figure. Okay. Thank you. Our next question comes from Gottlieb Lebuhn with Oddo. Please go ahead. Yes. Thank you for this presentation. My question is about the EBIT margin. So I understand that for 2024, the EBIT would be about 6%. But do you expect a growth from the EBIT margin in 2025, 2026, or if you have new contracts, the EBIT will stay close to 6%? Yes, Gottlieb. Thank you for the question. I think looking into the future, we always said that Frequentis is in the middle of the change of changing our portfolio from hardware-centric to software-centric solutions. And this is not a fast endeavor. That's a continuous endeavor. At the moment, as reported last year, we spend a lot of R&D money for replacing our world-market-leading air traffic control communication system, Release 8, into a software-based Release 10. That's a double-digit investment per year we have to undertake. We won good contracts to support that investment from NAV Canada, from Austria, and also from Norway. So the solution itself is in the trial mode in those countries. That will continue. But I think over time, we have a very good chance to increase our EBIT margin. I think we have shown that from our history till 2019, we have been around 5.4%, 5.7%. Then we had Corona, where we had no travels. We had nearly 9% because nobody was allowed to fly, so we produced no travel costs. After that, so the comparison should be pre-pandemic and past pandemic, we increased from 5.7% EBIT to now 6.2% and 6.4%. And I think the way is paved for further EBIT improvement in future. Nevertheless, we have to invest into our solutions to make them adequate to the market expectations and to follow our software strategy. And from the beginning, we said it's around a 5-8 years endeavor when we have to change our portfolio continuously. Now we are around at 70% software share of our solutions already. Okay. Thank you. Yeah, so you don't have any clear timeline on the growth of the EBIT in the next years? Yeah. Thank you very much. Our next question comes from Roger Becker with BankM. Please go ahead. Yeah. Hello. Do you hear me? Yes, we can hear you. Thank you for taking my questions, which have almost been answered. But two short questions are left on my paper here. The first is regarding the orders on hand. And my question here is whether there is a possible issue with the bulk risk. Maybe you can comment on this item a little bit. And my second question extends to the question from my colleague regarding the R&D, which is guided to be a bit higher next year, the current fiscal year, then compared with the last fiscal year. Do you have a set of focus on where to invest the R&D expenses? So these are my two questions. Thank you. Okay. I would like to answer. Hello, Mr. Becker. I would like to answer your first question concerning orders in hand and the possible issue with bulk risk. As you can see, the orders on hand are distributed fairly among ATM and public safety and transport, two-thirds in ATM and one-third in public safety and transport. Due to the fact that Norbert mentioned larger orders where only the first orders are included in the orders on hand and not the total framework, we think that it's fairly balanced. I would say, again, two-thirds of it is in Europe. I think that makes it easier for us on our home market to execute their orders. Concerning the second question, I would like to hand over to our CTO, Hermann Mattanovich. Yeah. Hello. We have invested in the past more in PSD. You know that we are on our way from hardware-centric products to software-centric products. The PSD market segment is faster in this respect than the ATM market. ATM market is very conservative in many respects. And now, post-pandemic, we see stronger growth in the ATM market. And we invest now mainly in the transition from hardware to software in the ATM market. And at the same time, we have acquired new products with M&A. And we combine, as Peter explained already, those new products into solutions into the ATM market, which again is an R&D investment in ATM. This explains as well why you see that the profitability in ATM compared to PSD, where it's growing, in ATM, it's flat or even going down. This is because we do not capitalize this development, and we pay it out of our sales. This clearly explains the picture that you have seen in the presentation. It's the same for 2024, where we even plan to invest a bit more than we did in 2023. Okay. Thank you. Our next question comes from Stefan Winterling with Isar Holding. Please go ahead. Hello. Can you hear me? Yes, we can hear you. Perfect. Two questions. As you're moving to a more software-centric business model in ATM, do you still sell licenses, one-off licenses, or do you also generate software as a service, rental, recurring revenues? Has that reached a critical size? And can you please comment on the Corona effect in ATM? Your customers, the airports, they still had to invest during Corona, but they didn't earn much. So they've probably been more price-sensitive. Now, I presume they are earning pretty well. So has price sensitivity of your customers in ATM changed? In other words, is there a prospect for slightly higher, better margins, even for new contracts in ATM? And ATM has really taken off in the last one or two years, looking back, I would say even during Corona. So could you also, in that respect, comment on the Corona effect in ATM, please? Yes. So first question, license business. I think when you compare public safety and transport versus the ATM segment, we can show that initial R&D investment in replacing hardware with software, on the example LifeX, shows that we can achieve continuously double-digit margin, EBIT margin, with our software-centric business model in PSD. The same will apply for ATM, but it will take time to change our product lines. When it comes to, is it licensed or is it software as a service, PSD segment, which is usually a more brave segment than ATM, does not show at the moment significant software-as-a-service requirements. They are still on-premise solutions, buying licenses and paying software maintenance. We have contracted the first software-as-a-service contract in the United Kingdom with West Yorkshire Fire. That was the first customer. We see some movements in the U.K. going to a software-as-a-service model, especially for smaller customers who cannot afford an on-premise solution. But at the moment, I would say 95% of our software-centric business model is license-based, and only 5% is software-as-a-service-based. But that can change over time if they see that a software-as-a-service model is also working well for them, moving CapEx to OpEx. So that's one thing. In ATM, we don't see any software-as-a-service at all because they are usually, in their budgeting, buying hardware, buying systems, buying licenses, and then pay maintenance for it. When it comes to ANSPs, I mean, to be honest, I've rarely seen an air navigation service provider thinking commercial. So most of them are still governmental entities. They want to spend their money. They get as a budget for the year. So price sensitivity, I think, is not driven by the ANSP. It's more driven by the competition who want to enter the market or enter a specific customer. And when you see our business model, it's all public tender-based. So if we want to win the customer, we even go below our margin expectations initially and win a contract with very low margin because we know that over time, 10, 15 years, we will get the money back three, four times over change requests, maintenance efforts, and so on. That's our business model. And that's why I explain, especially for large contracts like the Federal Aviation in the United States or also the SNCF in France, there you have to win the contract initially, and you make your money then the next 15, 20 years. That's the model. Is it more price sensitive or less price sensitive than during Corona? I don't see any difference at the moment. It very much depends on how they structure the evaluation criteria to award a tender. I think that's the brain where you can win or lose a program, helping the customer to shape the winning points for price points, reference points, and technical solution. I think we have shown with EUR 500 million orders last year that we have done that pretty much well in 2023. Does it answer your question, Stefan? Yes. Thanks. Perfect. Our next question comes from Werner Friedmann with A&I. Please go ahead. Yeah. Hello. It's only a short question on the minority share of the results that went up substantially in the last year to EUR 1.5 million. It always was clearly below EUR 1 million. The question is, is this coming from the acquisition, FRAFOS, you made? Is this a very profitable company, or is there a one-off part in that increase? Yeah. Thank you for the question. It's a mixture where the subsidiaries with minority shares achieved quite good results in 2023. We managed especially for two companies to improve their EBIT margin. That means that also their minority shares have earned more value. So no one-off component, and one should think that this positive development is going to continue? Sorry. It's not a one-off. It will continue. Yeah. Yeah. Of course, we hope that the improvement is a long-term improvement and not only a short-term one. Okay. Thanks a lot. Thank you. As a reminder, if you wish to register for a question, you may press star and one. We have a follow-up question from the line of Miro Zuzak with JMS. Please go ahead. Yes. Hi. Thanks for taking my questions. Again, first of all, thank you for clarifying the number. I think we needed the presentation of last year as well. That's 276. I have just a very small one. In the presentation on page 16, you mention a EUR 3.5 million change in project provisions. If I get it correctly, you took the provision charge in the books, so in the other operating expenses. Can you tell me what project this was related to and what the reason was to take this provision? Yeah. Thank you for the question. We are forced to do a provision if the future revenues don't cover the future cost of a project. There are two reasons possible for that. One is that the margin the project was sold is a very low one. And the second one is that we already had the possibility to bill everything and to realize all the revenues, but there are residual costs to, let's say, eliminate some errors or do finalization steps for the project. In this case, it's a bulk of projects behind this provision. It's a long list. It's a small amount. Like five different projects where you have to take a provision. So there's no one-off. Sorry. Miro, can you speak a little bit louder because we hardly understand you? Sorry. Is it better now? It's better now. Yes. Yeah. Thanks. Okay. So it's more like a couple of projects. It's not one single one. So it should be considered a recurring charge. You're going to have this next year again. Yes. Yes. Yeah. You will always see that. The question is, are we able to finalize a lot of projects, but where there are several residual costs like EUR 10,000 there, EUR 50,000 there to finish it, but we have already got all the way around? Or the other thing is when there is sharp competition and we have to minimize price, then that probably leads also then to the point where we have to make a provision. But in this case, it's a mixture of both and a longer list. Last year, I think we finished 200 projects. Okay. Thank you. Thank you. Another follow-up question from Stefan Winterling with Isar Holding. Please go ahead. Thank you. M&A, could you comment on your M&A pipeline and potential M&A targets? Are you focused or is software one focus area for you in light of the transition? So would you make acquisitions rather for technology or to acquire customers, geographies? You're thinking about targets. And if you could comment on the landscape of larger corporates. Historically, you've also made acquisitions of non-core assets, spin-outs of larger groups. Is there still a regrouping in these big corporates, or how is the current situation with regards to that pipeline? Yeah. So answering the first question, my statement from the IPO is still valid that we have currently around 500 governmental customers around the world in 150 countries in the world. So what we are not interested in is to acquire companies with additional market segments or with additional customer segments because I think we have pretty much good coverage with our local subsidiaries and sales organizations in creating enough intimacy to our existing customer baseline, which is a very broad one around the globe. So what we are focusing on is to extend our product portfolio step by step, but in a sustainable way and not too fast because we do not want to overstress the organization. The product lines have to be software and to follow our software story and to build together with our existing product solutions together with the new products to create operational value for our customers and have a better place in the upcoming tenders. This year, so 2023, we also implemented an evaluation process internally to get away from the not-invented-here syndrome, meaning that is it really necessary to develop everything ourselves, or does it make sense to buy a technology which is shortening our time to market and also limiting the risk of having a self-developed software? That's why we have acquired GuardREC and FRAFOS as a technology piece to be able to have a shorter time to market in the area of cybersecurity and the area of data analytics. Coming to your second question, we analyze between 25 and 30 companies a year. To be honest, most of them do not fit our strategy. They are hardware-driven. They are old technology or no cultural fit to our family culture we have in Frequentis. That's why we keep our fingers away from them. Of course, there are opportunities out there. We are not in any major due diligence process at the moment, but there are companies which are still of interest for us. Are they part of corporates? Currently, not. But what we see in our competition environment is that especially defense companies, they, of course, try to reassess their portfolio because they all focus on hardcore defense products. That has been the case, as you have mentioned, with L3Harris already three years ago. We also see that other large defense companies reassess their portfolio and maybe get rid of softer pieces which are not part of their core defense strategy because they are more in the civil environment like air traffic control or public safety. So both questions I can answer with yes. M&A is still on our agenda, a little bit slower maybe to give enough time to get organized with the acquisitions we have done so far. And yes, there are still corporates reassessing their assessment, especially large defense companies who have civil products as well as they have a clear focus on defense because the margins and the market growth is significantly in the hardware defense core business of them. Does that answer your question? Yes. Very helpful. Thank you. Thank you. Ladies and gentlemen, this was our last question. Back over to Stefan Marin for any closing remarks. We are looking forward to the meetings at the Zürs Conference hosted by Raiffeisen Bank International, the Hauck & Aufhäuser Stockpicker Summit, and the Berenberg Discovery Conference later on in the second quarter of 2024. We will report our half-year results on the 14th of August, 2024. In the meantime, you can always drop me a line at investor@frequentis.com to arrange for a call. Goodbye and take care. Thank you. Alright. Thank you. Bye-bye. Thank you for your questions. Ladies and gentlemen, the conference is now over. Thank you for choosing Chorus Call, and thank you for participating in the conference. You may now disconnect your lines. Goodbye.