Good day and welcome to the ams OSRAM Q1 2025 results Credit Investor Q& A call. My name is Regina and I will be your call coordinator. The format of the call includes prepared remarks from the company followed by a question and answer session, at which point attendees will have an opportunity to ask questions live. Attendees are also welcome to submit questions in writing via the Ask A Question button found on the upper right of Deal Roadshow. At this time I will turn the call over to Jürgen, Head of Investor Relations from ams OSRAM. You will now begin. Thank you, operator. Good afternoon, Europe. Good morning to the U.S. Jürgen speaking. We'd like to welcome you to our financial and business update on the first quarter 2025 for credit holders and investors. Rainer, CFO, will walk you through the updates during the call. We're referring to an excerpt from the slides that we showed earlier on the analyst call and that you can find on our website. We also provide a comprehensive full investor relations presentation where you find further details. Rainer, the stage is yours. Yeah, thank you Jürgen and hello to everyone. We are certainly staying on course in uncertain times. Our turnaround continues. Re-establish the base is ahead of plan. More savings realized in the last quarter, the key driver for noticeably higher profitability in a difficult quarter compared to a year ago. Let us look at the financial performance of the group on slide number two. Revenues came in at EUR 820 million above the midpoint of the guide, a sequential decline of 7%, pretty much in line with the usual seasonality across the board despite the underlying cyclical weakness. Seasonality was the clear driver in the auto lamps aftermarket business, whereas in Phoenix we saw more complex dynamics year over year. We are only down 3%, which is primarily due to the cyclical inventory correction of auto semis and the cyclical bottom in industrial and medical. Also the non-refundable engineering payments for the development of novel LED technologies contributed positively at constant currencies and excluding the divested passive optical components business, the decline would have been 4%. Now profitability adjusted EBITDA margin improved year over year by almost 2 percentage points to 16.4%. 2% more EBITDA with 3% lower revenue. That really shows the improvement in our earnings profile due to the re-establish the base program and the non-refundable engineering payments that we keep receiving while only down EUR 50 million quarter over quarter, less than a typical fall through. You remember that in Q4 we reduced inventories which lowered EBITDA fees year over year. We see a 9% improvement coming in EUR 11 million higher at EUR 135 million and this on a lower revenue base. Now quickly on the segments and thank you Jürgen for putting that slide together quickly. Optosimis came down 4% quarter over quarter, actually a bit better than expected. In short, non-refinable engineering payments for our novel LED technology and support from the EUR/USD exchange rate help balancing the negative effects of a typical January 1st BPA price down in auto semis and the revenue tailwind in Q4 from delivering on order backlog. Adjusted EBITDA stayed almost flat at EUR 49 million, coming in at 15%. Remember in Q4 last year we reduced wafer stance to bring down inventories, which impacted EBITDA and the kind of artificially lowered baseline then sensors and ASICs. Majority of the business is in consumer, which saw only very small seasonality due to the strength in old and new products. Most of the quarter over quarter decline was due to an end of life of a custom product in industrial, revenues down 9% to EUR 236 million. If we back out the sole business of passive optical components that still contributed a year ago, revenues grew actually more than 60% year over year. Adjusted EBITDA margin came in more than five times higher than a year ago, showing the structural improvement in profitability thanks to our RE service. The base program quarterly, it dropped stronger than a typical fall through would suggest as Q4 was elevated above the normal trend line due to one-off accrual effect and strong US dollar. Q1, however, saw the typical seasonal factory underutilization and some negative mix effect as the customer kept ordering already phased out low margins in those live products. Lastly, Lamps and Systems revenues came down 9% quarter over quarter. The aftermarket continues to be good and is going through its usual seasonal cycle with the lows coming in Q2 and Q3. Within the EUR 249 million, again around EUR 45 million of specialty alarm sales for industrial and entertainment applications, pretty much flat. Sequentially, a very favorable product mix, a one-time effect, and good plant utilization pushed adjusted EBITDA margin to almost 25%, a great result. EUR 61 million compared to EUR 50 million in the December quarter. Now it's time to look at the end markets in the semiconductor business and we are on slide number four. Semis in total came in essentially flat with minus 1% year over year. A 6% quarter over quarter decline is rather typical. This can be explained by looking at the main verticals, that is, first automotive, our biggest exposure. Revenues came in 6% down compared to the previous quarter. Currency helped but also our new sensor project ramped well. The LED inventory correction cycle developed as per playbook during the quarter. Demand was still a bit depressed whilst we saw a book to bill of around 0.5 at the beginning of the quarter, which improved steeply to slightly above 1 over the course of the three month period. There is certainly a lot of uncertainty persisting in the supply chain. You can see this at the short term ordering behavior, which is regularly below normal lead times year over year. We see clearly the LED inventory correction cycle taking its toll with 11% down in order revenues. We see this particularly at the very short term ordering of the OEMs as the fulfillment inventories and channel partners are in normal range. Second, industrial medical horticulture revenues are the seasonal low. The green shoots in terms of demand improvement at our bigger direct industrial customers are just noticeable in revenue. Street lighting is an important, normally very stable application within professional lighting. However, last quarter we saw the first project push outs in the U.S. due to the federal budget. The distribution channel did a bit better in Europe and the U.S. China was weak. It still feels the cyclical low is reached with another quarter over quarter and year over year decline of around 10% each. We must await any impact of the new tariff regime ahead of us. As mentioned before, a key driver for the reduction in Q1 is the end of the life of a specific product. Third, consumer where we are mainly supplying sensors to smartphones and wearables. Typical quarter over quarter demand reduction year over year. We could even compensate the exit of the non-core portfolio by new products and ended up with significant growth of 21%. The new products clearly kicked in, but we also enjoyed some more orders for legacy products. For this, the typical seasonal reduction compared to the December quarter was hardly visible. On slide 5, let's talk a bit about products. We are very proud that further car models featuring our EVIYOS products are hitting the streets. The new Opel Grandland from Stellantis, a midsize SUV, comes with a 25,000 pixel forward lighting. It shows again the attractiveness of this solution not only for the high-end market. On top, one of the leading innovative Chinese EV makers has this 5th Generation launched a 25,000 pixel forward lighting in its latest flagship model. I will tell you more about this next quarter and this is just the beginning. Further models from various carmakers will launch with EVIYOS on board in the quarters to come, gradually turning the significant design win basis of around EUR 5 million into revenues. Q1 saw not only EVIYOS making it more and more to the market, but also other great developments. Let us take a look at slide number six. Continuing with Automotive, we are proud of a design win for hands-on detection with a major Chinese EV maker. It was chosen by a leading OEM as a key element for its intelligent driving system. Next, I mentioned a couple of quarters ago that we see opportunities in leveraging our Azure capabilities into our automotive customer base. Now we are making the first inroads. We are providing an open system protocol LED driver chip to a customer that OS has been working with for many years on LED and switching gears to industrial medical, we could land a big design win in the X-ray center space for computer tomography as an aging customer. Lastly, to consumer, we developed a unique optical heart rate sensor that features in a wearable device that allows for unprecedented precision, especially when you're performing sports. Unfortunately, we cannot go into more detail for confidentiality reasons, but we are extremely proud of this achievement and I'm sure some of you are the opponents. Moving on from the top line to the bottom line, the re-establish the base program has been pivotal in improving and structurally stabilizing our bottom line. I'm on slide 7 now. End of December our realized run rate savings stood at EUR 110 million. Implementation is pushed ahead without pause. As such, we can report about EUR 135 million implemented run rate savings end of the first quarter. You will see the effect when we come to guidance for the next quarter. Just for completeness, we upsized the program to EUR 225 million run rate savings by the end of 2026. In Q3 last year, all necessary measures and actions to realize that are identified. With that, it is time for cash flow on slide 8. First quarter operating cash flow came in at just EUR 10 million compared to EUR 79 million in the December quarter. Several effects that are in normal times, sometimes positive and sometimes negative, all happen to be negative. In Q1, inventories went up and accounts payable went down. Some customer payments came in a day or two late because 31st of March was a bank holiday in Singapore and we saw some negative effects from FX swaps and finally Q1 and then also Q3 had the big coupon payment to compensate. We increased factoring while reducing reverse factoring. The avoidance of net interest paid is included in the definition of operating cash flow. Now on CapEx, just EUR 52 million in the first quarter. That means a ratio of 6% CapEx to sales, well below our average target ratio of 8%. Looking at inflows from divestments we recorded EUR 40 million in Q1. From selling unused lands and equipment in a free cash flow, the reported free cash flow ended up with -EUR 28 million. However, without that bank holiday we would be looking at a neutral or slightly positive free cash flow in Q1, which was my internal guidance to Treasury. Moving on to debt liquidity and maturities on slide 9, end of December we had EUR 1.1 billion cash on hand. On March 7th we paid back EUR 447 million to the holders of the 25 convertible at maturity with cash on hand. Consequently, our cash on hand position reduced by that amount to EUR 573 million by the end of March. Cash is also down EUR 20 million due to FX effects, that is the holdings we have in US dollar and SGD. It's down because of EUR 50 million. Minority shares were tendered and because of the negative cash flow of 28 in 26 bilateral facilities, around EUR 110 million will become due and then next bigger ones. Twenty-seven converts in late 2027. As you know, in 2019 we have the US dollar and EUR high yield bonds. The value of the Malaysia sale and leaseback transaction stood at EUR 429 million. It is actually down compared to the end of December due to the heavy devaluation of the Malaysian Ringgit during the first quarter. Usually you would expect it to go up because of the quarterly accrual of a part of the lease pay. This brings us to a slightly increased net debt position of EUR 1.9 billion compared to the end of this semiconductor. The outstanding minority put options amount stood at EUR 570 million or 13% of outstanding shares end of March. Minority shares with value of EUR 50 million were tendered in Q1. You know about our revolving facility that could in principle cover an exercise of all the outstanding put options. We take cash, the revolver, and buy that reliance into account. Our available liquidity remains very strong at around EUR 1.2 billion. In addition, we also have quite a few unused factoring losses. On the right, you find the maturity table of our outstanding loss. Now, slide 10. Deleveraging. We talked about this before and we have prepared this, and now the preparation is complete and we're getting serious about that. We want to get below 2x net debt to adjusted EBITDA as we have said before to expedite this process. In view of the increasing uncertainties in economic boundary conditions, we now have a defined five-pronged approach. First, we will continue to improve profitability in free cash flow yield through re-establish the base and growth in the core business. Also, as we already said, we will restrict CapEx to below 8%. By all of this we will accumulate net cash over time. Second, we continue to expect selling the empty factory in Kulim and getting rid of the sale-leaseback. This is an active process but it is taking some time given the volatile environment. There is actually no news compared to what we said before. Third, we are currently working with our banks on extending the revolver by one year to be on the safe side in case a large portion of the outstanding minority shares would be tendered after the final verdict in the appraisal case at the appeals court. Fourth, we are considering various strategic options with certain assets to generate cash well above EUR 500 million to speed up the deleveraging. This will allow us to cover a large part of the 2027 convertibles and the amount of the minority shares potentially covered by the revolver. For the remaining low triple-digit million amount we will find an adequate instrument. Fifth, on the back of the positive free cash flow, higher profitability growth, and net debt below two, we will have a much improved implicit rating which will allow refinancing the maturities at much better conditions and ultimately our goal is to bring the interest payments below EUR 100 million a year. Now let me summarize the key developments of 1Q 2025. On slide 11, we delivered revenues and profitability above the midpoint of the guidance. Book to bill improved across all business lines to above one. Execution of the re-establish the base program progresses very well ahead of plan. We paid back the EUR 25 million convertible and maintain a strong cash position. We continue to win new business at a rapid pace and our technologies ramp in the market. I just explained our deleveraging plan. With that, let us look at Q2 and the fiscal year 2025 outlook. On slide 12, for the second quarter, we expect revenues to come in between EUR 725 million and EUR 825 million. Guidance is based on US dollar exchange rate of 1.13, while the average rate in Q1 was 1.05. Quite a significant step, and this effect will have a negative revenue impact of approximately EUR 35 million in Q2. Other than that, very well in line with normal seasonal patterns. Automotive lamps aftermarket going into its annual soft demand phase, automotive theming slightly improving quarter over quarter. Industrial medical still weak but with signs of life and consumer continues to go down seasonally in Q2 before then recovers in Q3. Altogether semi revenues should come a bit lower quarter over quarter due to the weaker US dollar in contrast to a year ago in line with fall through but with the re-establish the base savings making a difference, adjusted EBITDA margin should come in at 18.5% ± 1.5 percentage points and for 2025 the year. We continue to believe that the second half will be stronger than the first half. Scheduled project ramps are mostly unchanged. Also some push outs do happen. Seasonality will also help in second half. Obviously the previously assumed market normalization is less predictable in view of the new U.S. tariff regime. In terms of tariffs, we are mitigating most of the primary impact by renegotiating terms with customers such that they pay the additional levies. If we decide to reroute production flows where possible and tampered, we may incur some transport costs, but this will not have a major impact on the P&L. The real question is as the primary factor mitigated, to what extent will global car production be negatively affected or will fewer smartphones be sold? We will all need to see how the situation develops as it continues to be highly volatile on an almost day to day basis. Looking at profitability, we continue to be ahead of realizing our run rate savings from re-establish the base. This will help stabilizing gross margin improvements and the bottom line as long as the more severe impacts from the tariff war do not become too big. Looking at cash flow, we continue to be very strict on CapEx and plan for less than 8% of sales, lower than our target operating mode. Q1 came in at 6% as we mentioned earlier. Despite the lower predictability for the second half, we continue to expect free cash flow to come in above EUR 100 million, of course including net interest payments. This includes the currently known impacts of tariffs and still has some bigger room for some further uncertainties in terms of top line. This concludes my remarks and we are ready to take your questions. Thank you. We will now conduct the question and answer session. If you would like to submit a written question, please click on the Ask A Question button on the upper right of the Larojo and type in your question. If you would like to ask a live question, please press Star one on your telephone keypad to enter the queue or if you have joined via web, please press the Raise Hand icon on the right side of your Deal Roadshow screen. Once again, to send a written question, click on the Ask A Question button on the upper right of Deal Roadshow and type in your question, and to ask live questions, that's Star one on your telephone keypad or the Raise Hand icon on the right side of your Deal Roadshow screen. Our first question is a live question from Thomas at Saria. Thomas, your line is now open. You may proceed. Good afternoon. Can you quickly just confirm the amount of supply chain financing that you have at year end? It was EUR 113 million, EUR 112 million. Can you just go through the exact Amounts of what supply chain financing that you've got currently? Yeah, we don't disclose the exact numbers. As I said, you can see that we increased factoring, but we also took down reverse factoring at the same time to optimize the interest rates. Net net. Would that be an increase or a decrease? No, it's an increase in factoring. As I said, kind of in Q1 there was a bit bad luck that everything went, the negative things that are sometimes positive, sometimes negative. Bit weird that inventories go up and at the same time payables go down. We increased factoring a bit, net net. We reduced reverse factoring, increased the factoring a bit more than we reduced the reverse factoring. Okay. Just on the inventories, how. Much of that inventory buildup was to place the inventory into the U.S. before potential tariffs? No, that wasn't the key reason. Right. I mean that was a bit too. But as I said, it is basically that the customers are paying for the tariffs and also kind of, you know, U.S. in the end is not that large of an end market because most of our products go to Asia where they are then assembled into electronics. The reason that inventories went up is the major reason is that that kind of, I mean, we will see a significant uptick in the business second half of the year. And supply chains can be in semis can be between three and six months. You have to start pre production so that we have the product available to sell in the second half of the year. Thank you. You. Thank you, Thomas. Our next question is a live question from Philip at BTIG. Philip, your line is now open. You may proceed. Hey, great. Thank you very much. It's Phil from BTIG. I just wanted to ask around the strategic options for raising financing. Could you give an indication of the timing of any deal or deals, please? I cannot give you a detailed timing, Philip. As I said, the preparations have been completed and now we will be starting talking to potential buyers. Once we have the feedback and once we know kind of what value is realistic, then we will decide which avenue to go forward. All right, thank you. Would it be fair to say that you'd aim to get this done before the bond goes current? Sort of before the convertible bond. Reaches 12 months before maturity? that is November 26, yeah? Yeah, that is certainly clear. Yes. All right, thank you so much. In terms of the sort of alternative options for a refinancing, if sales do not reach your target, you mentioned sort of appropriate instruments. Should we think about potential mortgages or secured charges on real assets and convertible bonds? Are those in your toolbox? Is there anything else you might consider, please? Yeah, I mean, the investments are certainly part of the plan and I'm very confident that we will be successful on that. I mean, depending on the amount, we just said it will be about EUR 500 million. I mean, we didn't give an upper limit. There might be a smaller additional instrument necessary. That is obviously what we will decide then. Secured asset financing is not part of the plan. That's kind. Thank you so much, guys. Appreciate it. Our next question is from Laura at MFS Investment Management. Laura, your line is now open. You may proceed. Hi there. Thanks so much for taking the question. I've got a few, actually. In terms of the free cash flow guidance of over EUR 100 million, could you just maybe give some more color around some of the parts? In terms of working capital development, what do you expect for the full year? For example, is that going to be neutral cash source or cash use, then cash taxes and cash interest, what kind of ballpark figures do you expect there? Just to confirm, does this at all include any of the grant that you will be receiving from the Austrian government towards the development of a production site in Austria? Yes, that is correct. The grants are certainly included that we will receive quite a bit of that coming this year and more coming in the next years. Cash taxes are around EUR 60 million. Interest payments are what, a good EUR 200 million. And working capital, I assume, will. Continue. To go up a bit. As we are preparing for the ramp in the second half of the year. Got it. Just going back to the. Grant, because you said you will get quite a bit this year and then some next year, I think the total is 2027. If you can just confirm that. Should we expect to see half of that this year or is it more than that or less than 50%? Yeah, I mean, we don't have too much experience with the speed of the government. I don't want to give too much of a disclosure here what our expectations are. As I said, it will be a significant payment this year and more to come next and over next year. The total is 2027. 227. Sorry. Yeah, roughly. Final question just regarding those prepayments. I believe you're receiving the prepayments and the expectation is to then use the money to obviously develop the product, et cetera. When should we see the sort of cash out for that? Is that included in your CapEx guidance? Yes, the prepayments we received in last year and we will start repaying that in 2026 over the course of 10 quarters. It is not against CapEx, you can treat it as mentally like an interest free loan. Got it. Sorry, last question. In terms of cash exceptional items for 2025, can you give a ballpark estimate for that? You have transformation cost from executing our re-establish the base program and those are of the order of EUR 70 million. seven zero? Yes. Okay, great. Thank you. Thank you, Laura. There is a question from the audience in written form, asking on the net leverage covenant in Q1. It is well below. The level. Rainer will comment on that. The second one is the timing of the appeals court verdict on the minorities which we continue to expect. Or. Best what we know is not going to happen in the first half. Maybe in the second half. There the covenant was 4.5 and it's coming down to 4. The leverage we're actually having is 2.0. Far away from that now, the verdict is kind of we said in the second half of this year. Now it's already May tomorrow and we haven't heard anything. We are wondering if that is still true. We are trying to find out, but internally we assume still it will be coming in the second half of the year. We will let you know if there will be a further delay. Thank you team. Our next question is a written question from Benjamin at Robles Capital. When is the final verdict of appeals court expected and what effect do you expect with regards to the exercise of the remaining minority put options? Yeah, already said that it's expecting the second half of the year though they're wondering if that's still true or if it gets further pushed out given that, I mean the majority is owned by professional investors assuming that most of those will tender. Quite a bit is also owned by retail investors where we simply assume that half of those will tender in lieu of a better assumption. For our internal planning we use 90%. Maybe that is a bit pessimistic and maybe some people will hold on in anticipation of a squeeze out offer. Just to be on the safe side, we assume 90%. Thank you. Our next question is a live question from Sydney at Citadel. Sydney, your line is now open. You may proceed. Hi, good morning. Thanks for taking my question. Just going back to the factoring and I understand you don't want to disclose the number, but if I look at the cash flow statement and think about how the factoring is accounted for here, the receivables going up by 130. Is that directionally the right amount of where the, how to think about the new factoring balance. Yeah, it is certainly an indication for the factoring. As I said, at the same time we reduced reverse factoring quite a bit and if you add that up, the number is actually quite a bit lower. Got it. Okay. You know, help me out here. I'm having trouble bridging up to your two times net leverage target. In the slide you show, you know, EUR 1.9 billion net debt LTM EBITDA. I think it's about EUR 586 million. If we deduct EUR 600 million from net debt. Right. I'm getting that number from, you know, your target of EUR 500 million from the asset sale, EUR 100 million of cash. Cash flow this year. debt goes to EUR 1.3 billion. You know, that implies around about two and a quarter of net leverage, which also does not assume any deduction in EBITDA related to the asset sale. You know, I understand, you know, you are kind of limited to what you can say about the asset sale, but could you maybe clarify like those numbers? Maybe I am missing something, but how does that kind of tie to your target of under two times? Yes, there's one thing you certainly miss and that is the leaseback in Kulim that will go away once we sell the factory. Right. You can deduct that. That would also kind of help the EBITDA a little. I mean the EUR 500 million is certainly kind of the lower end of our expectation. In our target setting we have used more realistic assumption on what proceeds we are expecting, which is not the number that we want to disclose today. Okay, I guess that makes sense. Maybe also direction, can you guide to like the expected amount of EBITDA that. You would sell that, you're assuming? Okay, fair enough. I guess like last question, I guess again going back to timing and I understand it's difficult to answer at this time, but just given the put option, if and when there is a court decision out in the second half of this year, how does that kind of tie into your thinking around the strategic alternatives to deal with the balance sheets? Yeah, I mean, it's kind of. I mean, we have always been assuming that 90% about sending shares will be tendered. We have cash flow is positive and we also have the revolver to catch that. When we think about the refinancing, then somewhere in 2H 2026. Right. There will be the disposal proceeds and depending on the exact amount, there might be another smaller instrument that we will require for the refinancing. I see. Sorry. Maybe just clarify, is the right way to think about it, therefore, you probably need to get the asset sales done in order to fulfill any obligation tied to the put obligation. No, no, no. There's no correlation to the revolver and the minorities. It is just more kind of the November 27 convertible that will become current in November 2026. That is more kind of the latest point of time when we need to have it completed. Okay, understood. Thank you. Thank you, Sydney. Our next question comes from Colin at PPM America. Your line is now open. You may proceed. Hi, this is Luke. I'm for Colin. Just kind of wanted to poke into the segments a little bit. What gives you confidence that Industrial Medical is kind of reaching that cyclical trough? Yes, I mean we have some visibility into orders. We also have some visibility into inventories. There certainly, as we had disclosed previously, there was a lot of excess inventory and we have seen that coming down and there is kind of. We do not expect a steep recovery, but there are some green shoots that are visible and kind of, you know, it is. If you talk to customers, they certainly see some light at the end of the tunnel. Are there any particular. Kind of. Sub verticals within that that are seeing different parts of strength and weakness? We have some subsects of Industrial where we see it. Certainly, Auto Medical is certainly one of the areas where we see a bit of improvement. Also, obviously backed on some design wins and some major design wins that are kicking in. Do you have any visibility, I guess on the auto side that's still going through a correction? I know some other auto semis seem a bit more optimistic, but I know they're playing in different types of products now. We certainly, as we said, the book to bill is now above 1 across all in auto. It is maybe at 1.2 and still improving. Right. We see the improvement. It would certainly need to go up a bit further to reach our expectation for the second half. That is typical for kind of that situation. You would see every week a bit of further improvement. That is what we are currently seeing. We are not yet there, but it is going the right direction. On the other side you have this tariff thing where you wonder if all the kind of the end market effects are yet fully visible, right? Kind of. IHS reduced their forecast for the year by a million cars or so. If that is the right number, then certainly the impact should be very limited. Who really knows if there's more impact to be coming? That is certainly also the question, kind of what is the next step in the tariffs, right? I mean, currently the tariffs are reduced to 10%, the reciprocal tariffs also at a good 20%. What is the next step, right? Will it come down? Will it go back up? That's difficult to say. I guess so far with that improvement in book to bill from 0.5 to a little over 1. How much of that is due to kind of normalization from lower orders from Q4, which I think you mentioned on the main earnings call, versus like a more supportive inventory? I mean, I mean you have to think it through. Maybe. We always said a typical LED inventory correction lasts for three to four quarters. Initially you see book to bill and revenue going down, which we saw around the turn of the year, it was 0.5. Now it seems that particularly at the Tier 1 customer, their inventories are run down and you see book to bill up. Why do we think so? First of all, they order on very short notice. Secondly, maybe 40-50% of our automotive business, the warehousing is done from general partners like Aero as Net or whoever. There we have a view on their inventories and they hardly move. They're always between eight and 10 weeks. Compared to three months ago, it was just a few days left. We basically feel that it reflects the real demand. Before the tariff thing, our greatest worry was that an immediate snapback in demand plus replenishing of their inventories, which would have brought us rather into a shortage or allocation situation. From that, yeah, I mean, we basically pretty much follow what they need. Even if you model a somewhat lower car production or car sales in the second half, yeah, it's probably not the end of the world. I mean, 1 million cars, we typically model top down with maybe EUR 12 million-EUR 15 million revenues on the top line. Then, yes, you have to fall through. If you assume 1-2% down because of all that or even 3%, you can do the math. Yeah, it's a number, but it's not the end of the world. Thank you, Colin. Our last question comes from Teo at Pictet Group. Your line is open. You may proceed. Hi. I just wanted to clarify two things. One is the $500 million in proceeds that you mentioned are at least $500 million. Does that include any proceeds from the Kulim facility or is that separate? No, that's separate. Okay. From the Kulim facility, given you have a sale and leaseback already on the property itself, should we expect any substantial proceeds? Because again, you're not technically the owner of it, right? Yeah. I mean, technically. Technically I would look at it that we own it, but we have pledged it against for a loan. That's probably the best way to look at it. We could cancel it at any time with a small payment through. I would look at that way. If somebody would take it over at the current value, which is around EUR 430 million, and there would be no additional cash payment, then what would we book? We would book EUR 430 million positive cash flow from proceeds and at the same time a negative cash flow or negative financing cash flow. That is if there's no cash payment between the buy and the sell of the facility. Okay, and when you say you would book a negative financing cash flow. How. much is the sale leaseback facility worth? Now then in terms of how much. Would you have to repay if you do get out of it? If the buyer takes it over, then they would have the liability and it would disappear from ours. All right, more questions. This concludes the Q and A session of the call, handing it back to Juergen from ams OSRAM for any final remarks. Yeah, thank you everyone for joining this call. Your questions and your attention. If there are further questions coming up, please do not hesitate to contact us at investor relations and we will be trying to get back to you as quickly as possible and help you with that. With that, thank you so much. Have a great day and we'll be speaking again in three months from now. This concludes today's call. A replay will be made available shortly after today's call. Thank you and have a great day.