Ladies and gentlemen, welcome to the Investor and Analyst Conference of the Full Year Results 2021/2022 of Dormakaba Holding AG. I am Sandra, the conference operator. I would like to remind you that all participants will automatically be in listen-only mode, and the conference is being recorded. For operator assistance, please press star and zero. After the presentation, there will be a moderated Q&A session. The conference must not be recorded for publication or broadcast. I would like to remind you that the conference includes forward-looking statements which are subject to risks and uncertainties. Listeners and viewers are therefore strongly encouraged to refer to the disclaimer, which is part of today's call. At this time, it's my pleasure to hand over to Mr. Jim-Heng Lee, CEO of dormakaba. Please go ahead. Thank you, operator. Good afternoon. Good morning, ladies and gentlemen. It is my pleasure to welcome you here for the first time in person and without mask. I know that some of you also follow remotely through our webcast on our full year results for 2021/2022. With me today is our Interim CFO, Kaspar Kelterborn. Thank you, Kaspar. Without further ado, allow me to give you a quick preview of the agenda for today. First, overview of our results. I would like to give you an insight of our current operating model. At the same time, it will be good for me to stand to share with you where we are in the implementation of Shape 4 Growth. I will go into more details, our performance at the group and at the regions level. Of course, it is also a great opportunity for all of you and for me to share with you how dormakaba differentiate itself and create values for our customers. Kaspar will be next on stage then to talk about the financial performance. You got to bear with me first. Then after Kaspar, I'll be happy to walk you through the basis of our outlook and the outlook itself. Naturally comes the most interesting part, the Q&A. Our performance for 2021/2022, how do I put it? I can summarize it as follow. Strong organic sales growth, significantly above our guidance in a very challenging environment. We have strong growth in America, in Asia Pacific, and we have also good growth in Europe and Africa, as well as Keys & Wall solutions. Adjusted EBITDA increased due to good growth. However, Adjusted EBITDA margin at 13.5% was impacted by cost inflation, as well as a negative product mix. Hence, the operating cash flow was particularly impacted by higher inventories. We can see that the net profit was impacted by Mesker divestments. Without that effect of Mesker, our net profit would have been at about CHF 184 million. Let me give you some more insights, which I'm sure you're interested in our current operating environment. We, dormakaba, is well-positioned due to a favorable global societal and market trends. Currently, as we speak, more than 200,000 people are moving to a city every day. We talked about that just now during lunch. I'm looking for a house in Zurich, but I'm not alone. By 2050, 7 billion people will be living in the urban areas. Those areas are becoming more connected, and this is precisely exactly the space where dormakaba had its strongest focus. There is a significant shift in the industry towards digital and seamless access. I know that because I've been through that. With this come increasing complexity of customer requirement to be addressed with our solution and customization approach. We have invested and will continue to invest in seamless access and with Shape4 Growth. Our new operating model is well-oriented towards solution selling. On the other hand, our industry, like many others, had experienced unprecedented supply chain and labor shortage and unprecedented inflation in labor costs, raw materials, and energy. We read about them every day, online, offline, newspaper. Despite our good pricing power. There remain inflation effects caused by the war in Ukraine and a squeeze in global supply chain when planning assumptions shift to JIC, just- in- case, instead of just JIT, just- in- time. We're talking about just in case. If I don't get the chips that I want, I better buy all chips that I need or I don't need, just wait, just in case I don't get any. As best practices of operational excellence just in time were over. We expect to navigate with limited visibility for some time to come. While order intake and backlog is good for us, but we are planning for the worst and really hoping for the best outcome that is ever possible. Having said that, we remain steadfast in executing Shape4 Growth, which is a long-term growth strategy. It is a long-term growth strategy. What that means? The chart that you see on your left is one that was presented on the November 15th last year on our capital market days, as well as I share it on March 2nd this year in our half year result release. As said, it is a growth strategy and what does that mean? What does that build on? What is it building on? What are the important parameters? We focus on our core business. We focus on our core market. We believe that ultimately customer centricity will pay us handsomely through further differentiations by way of digitization and sustainability that you jolly well know this is dormakaba's forte. Consequently, Shape 4 Growth require obvious investment upfront. No investment, no growth. All sustainable growth come from dedicated targeted investment, specifically in the initial phase. We strongly believe that it will ultimately lead to consistent sequential improvement in our overall performance. What have we achieved for the last six months in Shape 4 Growth? First, our new operating model is implemented with clear customer facing orientation. What do I mean by that? At its core, a global product development function and a global marketing and product functions as we speak is working hand in hand to add speed to the market of our solution and offering. As we speak, a global product solution pipeline with clarities on priorities has now emerged, targeting all our key markets and our global key account, which is fundamental. This is where the world is moving. Global management. We have already had numerous successes as a result. As we speak, a global operation function has been set up to reinforce the full value chain transparency and, more importantly, drive operational efficiency and excellence across all our sites in dormakaba. We further invest in specification. I grew up in a specification environment. I knew how powerful it is to write specification and to turn specification into your own pipeline, translate them into sales. This is particularly relevant in our commercial business environment. Visiting our core markets lately, recently, I have seen signs of early successes already. We have now 15% more FTE in specification around the world that has driven globalized lead and key account management, and this is gaining traction. In procurement and pricing, we have done what we say we will do and achieve the set agreed targets. You all know that June 22nd this year, we divested Mesker, which is an important step towards improving performance in region America. There is also one critical step towards regaining the trust that dormakaba meant what they say and deliver what they promised. This is an important first step. We have added more bolt-on acquisitions in our core markets. Consequently, that helps us expand our market access and also further strengthen our service business, which is again, another unique feature of dormakaba. Now, how did we perform at group and regional level? As I said before, year-on-year sales total group dormakaba 10.3%, of which organic sales grow at 7.7%. Adjusted EBITDA increased by 2.8% to CHF 372.3 million. The Adjusted EBITDA margin was at 13.5%. The impact of the inflationary pressure was amplified by the war in Ukraine. Something we did not quite anticipate because when we went to inform you of our first half results. The war barely broke out. It's hard at that time to predict what happened. Now that it happened, we are impacted. We could not be completely offset by positive effect, higher volumes, and price realizations. It is what it is. We are at 13.5%. Items affecting comparability, also known as IAC, came at CHF 88.6 million. They mainly related to the Mesker divestitures and the cost of driving and putting Shape 4 Growth in place, which I mentioned before. It require upfront investment to bring dormakaba from good to great. Region America. A region that we often talk about. We clearly see a recovery in our commercial construction market. Latin America, market share gain and price realization. Organic sales growth stood at 8.3%. We were roughly 6% in the first half. We were roughly 14% in the second half, averaging around 8% full year. Growth was broad-based and across most of the product clusters. It's pleasing for me to inform you that the U.S. market is now helping us with attractive project wins and promising order intake. I was in the U.S. not too long ago, recently, and I've seen some progress in customer centricity and satisfaction. Customer had come forward to tell me that compared with a year ago, you are a lot more responsive. You are a lot more in a listening mode. What is to my pain point? I hope there were no pain point. The fact is that we are listening, we are taking action against those pain points is not a bad sign. We clearly went up a notch in meeting customer satisfaction. Mesker had a negative impact of 210 basis points on Adjusted EBITDA margin as planned. We divested it. It free up so much management attention to turn around the business that would not help in the long run, focusing on our core business. It was clearly one step too late, one step definitely not too late in the right direction. Region of Asia-Pacific. Here we grew 11.3%, ladies and gentlemen. This mainly driven out of India, Southeast Asia, and Middle East. We clearly defended our market leadership position in Asia-Pacific. No one can claim that. It's owned by dormakaba. This is on top of, as you know, there are today still occasional millions of people being quarantined and locked down in a huge country like China. It's just a matter of local zero COVID policy. Yet, we were able to overcome with resilience, single-mindedness, eye on the ball. EBITDA rose by 40 basis points to 19%, 18%, close to 19%, supported by volume growth and price realization. Performance in Europe and Africa is not bad either. Bearing in mind now the current setup is a combination of former EMEA, AS EMEA, Access Solutions EMEA, AS DACH, minus market Middle East that went to Asia-Pacific. In this current setting, solid growth registered amid challenges in supply chain topic. Particularly noteworthy is our strong growth in automatics, and that has resulted in double-digit growth. Why do I single out door automatics? Because this is one whereby it firmly entrench our leading position in a connected world, which also had a huge impact on recurring revenue when we maintain it well. The EBITDA margin decreased from 26% to 20.6%, mainly due to lower higher-margin sales in the Electronic Access & Data space that we call EAD and the inflationary pressure. In Key & Wall Solutions, it's a mixed bag. Combined, they grew 5.7%. Key Systems did better with 10% organic growth. Unfortunately, Movable Walls, that's where we decline organically by 0.6%. You know the reason why. Because it's operating in a different environment, which is very project driven. When it's a slowdown, this project got delayed, and we are stuck. Short term, there's no chance we can change that business model. We can do a lot in the long term, but we are working on it. The performance was impacted by COVID-related project delay, as I said, for Movable Walls. All in all, we are very happy that Keys & Walls, despite the adverse difficult situation in Walls, we are able to have profitability improved at 14%. Still below last year, mainly due to time lapse between price increase and price realization. Ladies and gentlemen, I have now come to a topic which I'm most passionate. Why do you choose us? As an investor or as a trader, as a buyer, we clearly have our differentiator. What is our value proposition? Because we are a truly global player. With dedicated solution, no matter the challenge. One dormakaba solution, one face to the customer, and that is unique to dormakaba, nowhere else. With our customers often crediting us with that one face advantage. We are a global player when it comes to cloud-based biometric access solution, which is why Norwegian Avinor had chosen us to become their exclusive provider of self-boarding gates in an airport environment for all their 44 state-owned. It's a huge country. That means 450 gates, and for a contract over a period of 10 years with serviceability. In Southeast Asia, one of the more challenging regions in our industry, we are proud to offer safe and secure access solution and people flow management in the biggest football stadium in Asia, situated in Jakarta, Indonesia. I'm very proud to share this chart next. One of the most disruptive innovations that I've seen in recent years. EntriWorX, spelled as E-N-T-R-I-W-O-R-X. It's important. The spelling is not traditional because the solution was not traditional. Why? It combined customer centricity, our deep knowledge of electromechanical offerings, and unique digital powers that only dormakaba possess. It was awarded the most innovative smart building product by a renowned German trade magazine, in short, SBM. Whether in planning, during installation, or ongoing operation, EntriWorX simplifies collaborations between all trades and optimizes that process throughout this building. This is something no one saw coming in this traditional industry, and we are making it happen. The increase in efficiency for architects and planners and installers in every construction phase. It has been rolled out in core markets with good reception, and we will continue to do so. Just recently, we tested the market in America. The response was pleasing. We had always been working on strategic alliance. Schüco is one such example. In July, we enter into a collaboration with Schüco with a clear understanding that their planning tool and our planning tool could collaborate together and do wonders for our customers. We did just that. We signed the agreement and more to come, how EntriWorX could work with Schüco, SchüCal, and that is their planning tool. Another important topic I would like to move on as well as our differentiator, ladies and gentlemen, is sustainability. Because it's key to our business. It is to the industry as well as to our future. The new sustainability framework that we have put together in Shape 4 Growth produced more than 30 ESG targets. This is through the hard work of all of us, our team within the organizations. We reduced operational carbon emission by 2.4% the year before. Our facility in India, Chennai, particularly southern part of India, for example, expanded its on-site solar power generation capacity by 200%. This allow the site to cover 25% of its own energy through own renewable. In India, this is big thing. It can happen here. We are also aware of the increasing demand for environmental-friendly product. To this, we have launched energy-saving automatic sliding door. In Austria and Switzerland, and other markets will follow. We are focusing on responsible business behavior of our suppliers and trading partners as well. So far, we have assessed almost 19% of our higher risk supplier for their sustainability management program. We do that because we wanted to be a good corporate citizen. We ensure that our supply chain will treat us as a role model. dormakaba, therefore, was named as one of the most climate-conscious companies in Switzerland in the recent ranking by leading Swiss economic journals. With that, ladies and gentlemen, I've come to the end of my part of the sharing. I would now like to hand it over to Kaspar, who will give you more insights of our financial performance. Kaspar, please. Well, thank you, Jim-Heng. Ladies and gentlemen, also from my side, a very warm welcome to our analyst conference this afternoon. I will guide you now through the financial figures of the business year 2021, 2022. As Jim-Heng said, we in the second half of 2021, 2022, we have implemented our new operating model, and that had also some substantial impact on the reporting system, especially when it comes to the segment reporting. As a consequence, we have to restate the previous year's figures on segment reporting and therefore, I would like to give you or show you on a high level what steps we undertook in order that you can understand why the figures are looking on segment reporting a little bit different. What you see on my first chart is our starting point, the old operating model with the four access solution segment. KWS has not been part of these changes. In the first step, we did some organizational changes. That means, for example, we merged DACH and EMEA into Region Europe and Africa. We also reallocated certain businesses like the German Saflok business into Americas, and the Middle East business into Asia Pacific. In the second step, we carved out of every legal entity the new global functions, like marketing and products, like product development and the global operations. Especially to form global operations, we had to split the corresponding legal entities into a plant organization and a sales organization. This step was crucial towards implementing our new operating model. In a third step, we then reallocated the global functions, operations, and marketing and products back into the three regions based on value creation and the full value chain concept. We steer according to the full value chain concept. With that you also have a picture of the regional development. Product and development will remain a standalone segment, and that should give you some good transparency on our R&D investments in the future. Now, why did we do this? We have done this to have clear responsibility, clear accountability, and also clear transparency for our own internal steering. We have done this to have a clear customer orientation, as Jim-Heng said, and boost customer centricity. We have done this also to strengthen the focus on performance and value creation. Just an additional remark, for transparency reasons, we have disclosed a bridge from the old operating model to the new operating model for the full year 2021, 2022 in the notes to the financial statements. Please be aware that we will not be able to answer detailed questions on these changes in this conference call or in this conference. However, our investor relations offers to support you in building or adapting your own financial models. Please be also aware that the half year figures will be restated with the H1 2022, 2023 reporting. With that, let me go into the key figures on the next slide. Overall, our net sales ended at CHF 2.757 billion. We had sales growth of 10.3%. Organically, we reported strong organic growth of 7.7%. We generated an Adjusted EBITDA of CHF 372 million, which is slightly above previous year. Our operating margin decreased to 13.5% compared to 14.5% previous year, and was below market guidance as we already communicated in July. Net profit ended at CHF 122.5 million. If we exclude the negative Mesker effect, it would have ended at CHF 183.9 million, which is 4.9% below previous year. ROCE was impacted by the increased level of net working capital and ended at 24.4%, which is 50 basis points below previous year. Now I can give you some more details on certain KPIs. Let's go to sales development. Our top line was driven by organic growth of 7.7%, thereof 4.2% volume growth and 3.5% due to pricing. M&A contributed 2.8%, which is around CHF 70 million. Whereas the currency effect was almost flat. All regions contributed to organic growth. Strongest growth came from region Asia Pacific with 11.3%, followed by Americas with 8.3%. Europe and Africa as well as KWS had good growth as well, close to 6%. On the next chart you see the EBITDA, the Adjusted EBITDA bridge. Here, the picture looks a little bit different. The EBITDA growth of 2.8% has mainly been driven by an M&A contribution of CHF 9.4 million, and some currency translation effects of CHF 3 million. The Adjusted EBITDA margin declined by 100 basis points compared to previous year, and this was mainly driven by region Americas, as well as Key & Wall Solutions. Asia-Pacific slightly increased the operating margin despite the challenging situation in China, while in Europe and Africa, the operating margin slightly decreased. Our pricing measures largely compensated the cost increase of raw materials and components, but additionally, inflationary pressure on energy, driven by the war in the Ukraine, and labor cost inflation could not be compensated. Also, the effect of labor shortage, as well as a negative product mix and functional costs driven by the investments in our Shape 4 Growth strategy, adversely impacted the Adjusted EBITDA development. At this point of time, I would like to mention also the special situation of Movable Walls, as this business unit lost CHF 8 million Adjusted EBITDA compared to previous year. Due to the special nature of this business, which is a pure project business, where it is difficult to adjust agreed prices to the increased raw materials on short notice. I can say, however, that Movable Walls started to recover and moved back to profitable growth in the past or in the last two months. On the next chart, you'll find the condensed income statement. I would like to give some further comments here as well. Our gross profit increased CHF 62 million, of which 1/3 is due to M&A. The gross profit margin, however, decreased by around 170 basis points, of which 20 basis points is related to M&A. The remaining part of the decline was due to the same reasons I already mentioned for the Adjusted EBITDA development. Also, we compensated the cost increase on raw materials and components with our pricing measures. There was, however, still a dilutive effect, a squeeze, of about 100 basis points in the gross profit margin. In addition, as mentioned before, the gross profit margin was also impacted by inflationary-driven wage increases, a negative product mix, but also due to COVID and supply chain-related inefficiencies. The result from sale of subsidiaries is negative, and this is mainly related to the divestment of Mesker in June 2022. Now, if you look at the functional cost in the P&L, keep in mind that these also include certain items affecting comparability as well as some M&A-related cost increase. Underlying the SG&A costs increased due to higher business volumes, investments into our Shape 4 Growth strategy, as well as labor and energy cost inflation. The financial result, as you see, was negatively impacted by higher level of net debt as well as due to some or by some adverse FX impacts. While the income tax slightly decreased, the income tax rate increased to 29%, driven by non-tax deductible items in connection as well with the Mesker divestment. Items affecting comparability were at CHF 88.6 million, and also here, the major part, or around CHF 57 million, is related to the Mesker divestment, where the goodwill had to be recycled. The remaining part comes from accelerated IT projects of around CHF 30 million, as well as our Shape 4 Growth program. Within the Shape 4 Growth program, we have booked severance expenses of around CHF 6 million-CHF 7 million, which is so far substantially lower what we had originally expected. This is mainly due to the current labor market situation, where we experienced much more natural levers. Coming to the next slide, some remarks to the cash flow statement. As you see, the cash flow from operation was substantially below the very strong previous year, and this was mainly driven by the different net working capital development in these two years. For 2021, 2022, net working capital ended at a level of 27% of net sales, and this was driven by two factors. On the one hand, net working capital reflects the increased business volumes, but on the other hand, the increase was also driven by additional inventory due to higher material prices, supply chain inefficiencies, and a conscious decision to build up the corresponding safety stock. Further, you can see that we continue to invest in our future, and we spend around CHF 78 million on CapEx and around CHF 83 million on M&A. With this, our free cash flow ended at the negative amount of - CHF 31.6 million. If we take M&A out, the free cash flow before M&A ended at CHF 51.2 million. Due to the elements I just mentioned, the operating cash flow margin decreased to 4.6% compared to the very strong previous year margin of 12.5%, which, as you remember, was strongly driven by the COVID-19 related Cash is King project. On the next chart, some words to the net debt. Net debt increased by CHF 200 million to CHF 708 million, which is mainly driven by M&A activities and the buildup of the net working capital. Also, you see in the notes to the financial statement that we had a change of the mix of our financial debt. In October 2021, we refinanced a bond of CHF 360 million via the syndicated credit facility. As the planned capital market takeout in spring 2022 was canceled due to the war in the Ukraine, we signed in June 2022, 300 million bridge to bond credit facility to regain the financial flexibility under the syndicated loan. This bridge to bond facility was fully drawn, or is fully drawn, and our current leverage is 1.9 x. Finally, with my last chart, I come to the dividend proposal. Our consolidated net profit after minorities is CHF 63.2 million. If we exclude the Mesker divestments, as we communicated with the closing statement of that transaction, the corresponding adjusted net profit after minorities would be CHF 95 million. In line with our dividend policy, which we continue to apply despite the challenging current economic environment, our board proposes to the AGM a dividend of CHF 11.5 per share, amounting to a total amount of CHF 48.3 million and a corresponding payout ratio of 50.4%. With this, I would like to thank you for your attention, and I would like to give back to Jim-Heng. Thank you very much. Thank you, Kaspar, for the very thorough analysis and explanations. We have looked back for the figures of the past year. I would then like to comment on the way forward and what lies ahead of us. Before to get there are some changes in our board of director, which I would like to draw your attention to. Let me walk you through. Before I add that, when reporting on our half-year results this March, we announced a plan of a staggered renewal of our board of directors. The board proposes Michael Regelski, Kenneth Lochiatto, Svein Richard Brandtzæg to be elected as independent board member at this year's AGM. Subject to his election, the board intends to appoint Svein Richard Brandtzæg as vice chair and lead independent director. With these changes, the board also intends to enhance the expertise in the access and commercial building industry, especially in the very important American market for us. Before we start our Q&A, I would like to give you information about assessment. Our assessment of the current business environment, as well as the outlook for the financial year 2022/23. The current business environment is categorized by uncertainties and lack of visibility, such as geopolitical risk, higher interest rate, inflation, supply chain constraint, and potentially new COVID outbreaks and lockdowns. Therefore, our outlooks applies to the first half of 2022/23. We will continue to carefully assess the economic situation in the next months and will update our guidance for the financial year 2022/23 with our half year results. There it goes. Based on a healthy order intake and a backlog at the end of 2021/22, we expect a good start in the financial year 2022/23. For the first half of 2022/23, we expect organic growth slightly above the mid-term target range of annually 3%-5%. Expecting a sequential improvement on the 2021/22 second half performance, excluding the dilutive effect of Mesker business, we expect an Adjusted EBITDA margin of around 13% in the first half of financial year 2022/23. Independent from macroeconomic conditions, we will continue to focus on the execution of the Shape 4 Growth initiatives, which include both growth and cost management measures, such as pricing and cost management. With that, ladies and gentlemen, I close the presentation for the past financial year 2021 and 2022. We are happy to take your question, Kaspar and myself. Before that, I would like to invite our head of investor relations, Sigi, to the stage to join us. Welcome. Good afternoon from my side. We have this time, similar to the capital market day, a hybrid format. We're looking for your questions here in the audience, but you can address your questions remotely as well. Here, later on, there will be a short introduction of Sandra. We can really start with Toby Fahrenholz. Yes, thank you. Tobias Fahrenholz from Stifel. Could we start with the energy costs? Could you tell us about your current energy cost share? Is it in the mid-single digit percentage area or already higher single digit? What kind of additional profit headwind have you concretely baked into your H1 outlook? We're looking at these 13% EBITDA margin. Maybe I can take the first question with respect to the energy, Tobias. Thank you. While we do not report on individual cost item, but I can give you a guidance on that one. Our energy cost overall is in line with industrial standards, with industrial companies. It's a low single digit in the percentage of sale. It's a low single digit number. Interestingly, and I think this is what you have also seen in our numbers, is that the increase of our energy costs, you know, was substantial. We talk about 20%-30% increase. This is of course volume, but also pricing driven. We experienced quite a substantial part of this in the second half of our business year. To answer your question, it's a low single digit number. I jump in. Thank you, Kaspar. If I understand you correctly, Tobias, your second part of the question was how this energy has been factored into our second half or first half guidance. Is that what it is? I think the question of energy is not just a question of profit and loss and cost to a company. It's a question of livelihood. Because we have taken the tasks of forming of a task force to look at how, in a view of that natural gas not being able to be sent and delivered fluidly to countries in Europe, how does that impact us on our business and so on. The task force came to the conclusion that, you know, if natural gas are not able to reach us in Europe, particularly in Germany will have its first hit. However, we ask ourselves with natural gas, does that stop our production? No. However, we will get a little chill because the natural gas today is contributed towards our temperature, our heating environment. It is what it is. We are doing all that we can to mitigate that measure. The task force has represented certain steps and measures to make sure that it doesn't impact our livelihood, but to a certain extent, we concluded that the stop of natural gas will not impact our major site in Germany because we are not driven on a production by natural gas. That is out of the question. Again, we are doing what we can. How does that factor into our first half outlook? We're actually taken that as what it has been affecting us. Clearly, if any further deterioration of the situations, then it could just not affecting us, but it will catch everybody off guard. Thank you. Next question from Martin. Thank you. Martin H üsler Zürcher Kantonalbank. I have two questions. First of all, how should we look at the midterm targets that you announced last November, now having such a different environment? What's your best guess, if you look into 2023, 2024 margin target of 16%-18%? That's your first question? Yeah. Okay. You want me to take it now or Yes, please. Okay. If I may, this is how I would advise you to look at. We make that guidance of our midterm target November 15, 2021. We clearly said that the 16%-18% has to be one number that is the target that is built on normal market condition. We all know that the market condition is hardly normal at this point of time. Albeit, as you can see, all our efforts are towards doing the best we could in terms of margin improvement, in terms of growing our top line in these market conditions. Hence, it goes hand in hand with our current guidance of the lack of sharp visibility. In some cases, there were not even visibility. Hence, we are guiding based on a first half. Consciously aware that we shift our growth in an adverse environment like that, we have to continue to deliver value for our business and contribute to growth. We guided for sequential improvement based on our second half performance of 2021, 2022. As I said in my guidance, when I released the results for the full year, for the first half of 2023, where I could see clearer than at that time, I can see clearer now the external environment, I will be able to give further guidance at that point of time. That's how I would propose to see it that way, Martin. I hope that is from your perspective as well. Yes. Sure. Thank you. The other question a bit related to that, in November, you announced some cost initiatives and also some benefits that coming through CHF 30 million in the course of the years. How do you see the improvement there? What costs should we account for this year? Maybe I can take the first question. I think you refer to these items affecting comparability, which was presented in November 2015. I can give you an update there. You know, we have said at that time that we would have IT-related project costs in the items affecting comparability of around CHF 15 million. Currently, I have said this in my presentation, we are at CHF 13 million, so we are pretty much in line there. On the other side, we have this part of others, items affecting comparability. That was around CHF 8 million, which was communicated. Here we are a little bit above. We are at CHF 12 million. We are a bit, a little bit above that. We said at that time also that we would provide or we would expect CHF 25 million for the FTE reduction program. As I said in my presentation, we have currently expensed or provided around CHF 7 million. The reason why it is much lower than what at that time was expected is because at that time, that was a rather high level estimate. We experienced now with the execution of that program that we had much more amicable settlements and natural levels. I can also say to you with respect to that program, we are on track. The 300 positions, they are identified. About half of it, we have agreed transfer and/or leave agreements. For that, we had made these expenses or had these expenses or these provisions. I would expect that this program will continue. I would expect that we will have some further expenses on this program, but it will be much lower at what had originally communicated of that CHF 25 million. It would be substantially lower. Thank you, Kaspar. To Bernd. Bernd Pomrehn from Vontobel. You talked about the outlook and you talked about the strong backlog, which should drive continued good growth in the next six months or in the current six months. On the other hand, obviously, we have seen PMIs coming down, Architecture Billings Index in the U.S. coming down. What activity level are you currently seeing for your spec business and your quotation levels in the three regions and also specifically in China? If you could speak a little bit about this market as well. Thank you. Yeah. Thank you. Low interest rate regime and so on. In a sense that we see stable business environment amid challenging employment market. We also see increasingly difficulties in getting and retaining our people amid this very tight labor market. That is driving up our costs as well. That's where our P&L in America suffer, because of a current situation like that. I think we are not there yet in terms of trying to say that the labor market has stabilized. Now, it's an interesting situation whereby you have jobs that require the service, but you do not seem to have enough and the right people to service those job. We have good order intake year-on-year, and we grew 8.3% last year. That say a lot about us. By the way, in the 8.3% for America, about half of that is coming from volume, half of that is coming from. I don't think the market is growing at more than 4%. Therefore, we are winning shares. We are gaining shares. I know that you might have heard differently, but from my numbers, I'm telling you, we gain shares. I think amid a challenging environment, I think our American units are sequentially improving. Coming to China, my view of China is that we were lucky. dormakaba is China but lucky, but we are also good at what we are doing because we have been able to avoid the residential challenges they were facing because of cash flow situation. You see a lot of these Chinese residential developers, they are going into some kind of a trouble because they are unable to service the construction for the down payment that was being put up. That create a issue for them. The lockdown in China due to COVID has contracted our single month dormakaba China sales by 40%. On that month alone, we were contracted by 40%. I hope that lockdown will not last long. As I said in my opening statement, there are, on a daily basis, hundreds of thousands of people in different parts of China being quarantined in one way or another, albeit different magnitude. This is the current environment that we are facing. I think if you look at these two economies, and if you look at our exposure, yes, America, we have a bigger stake in there. China, relatively, we have small stake in there. On the whole, we are not yet in a crisis situation. Me and my team, our focus is to ensure that Shape 4 Growth is being executed. China and USA remain a core country in our plan for leadership in the core, whereby we will do whatever it takes to make sure that we are either one, two, or three market positioning in key clusters like access control solution, access entrance solution, and the new solution clustering. Therefore, Shape 4 Growth is an investment strategy. We will invest before we see growth. Invest in not just skills that we don't own now, invest in also make sure that we are skilled in certain people that are being transited into a broader population. This is also what we are doing across the organization. I may not have answered your question directly, but that gives you a sense of from a recent visit. No, that was actually very helpful, Jim-Heng. The only market may be Europe. How do you see the European market currently and activity level? You know Europe much better than I do. But I think from my industry, I can only tell you that our growth story in Europe continues in July. However, having said that, you know this natural gas issue. If that were to happen, then I think we have to go back to the drawing board. Rethink the way we look at growth should be coming from where. But again, with no exception, Europe and Africa will benefit from our Shape 4 Growth investment like other regions. That's where we continue to invest in the area that we should be in specifications and customer centricity. I draw a lot of comfort from EntriWorX. Because EntriWorX has put together a planning tool, 360-degree, that satisfies all different stakeholders. No one in this industry has ever done that before. I knew it because I've been in this industry for more than 25 years. It never happened, and now it is happening. We stand to gain from that. Very clear. Thank you, Jim-Heng. You're welcome. Patrick Rafaisz from UBS. Patrick. Thanks, Patrick Rafaisz from UBS. Hi, Patrick. On pricing, you talked about 3.5%. I was wondering about differences across your segments, right? What you just indicated for America would suggest America was above average, right? Maybe 4.5. Would you say Key & Wall is below average? Would that make sense as an assumption given the project business? Yeah, just any color on the segmental pricing. I don't want to run against our CFO. He has all the details. No, I think I can give you an answer here. I mean, there are regional differences, because also, you know, the inflationary pressure per region is of course a little bit different. You are right. In United States, the price increases were a bit higher than for example, in Asia. With respect to Key & Wall, Key & Wall solutions, we had better chances to increase prices at the Key system business. Whereas the Movable Walls, as I explained, and there you see also the negative growth of the Movable Walls business of -0.6%, with that, you know, long-term fixed price contract business. There it was difficult. We did some, but it was difficult to increase prices. Overall, there are some regional differences, you know, but not in a grand scale. U.S. was a bit higher, Asia a bit lower, and Europe and Africa in the average. Thank you. Thank you. Thank you, Kaspar. Patrick here. Holger Fisch. Holger Fisch, Zürcher Kantonalbank. With respect to the high investments that you took into working capital and especially inventory, would you feel comfortable now with the inventory level in order to reach your sales guidance for the first half of the year? Can we expect an improvement in working capital for the first half of the year? Yeah. Thank you for this question. I think it's a very fair and a relevant question because our net working capital indeed did grow. We have invested around CHF 110 million into the net working capital and around CHF 86 million of this is coming from inventory. And within the inventory, as I explained, we have also due to some cautious decisions taken also some safety stock in. The 27%, for dormakaba, we look at this as a higher level, and also here we very clearly want to go back with sequential improvements to where we came from, which was around 25%. There is actually what we want to go back to give you a guidance, but also in sequential, you know, in sequential improvements. That will not be possible, you know, towards mid of the year, when you ask me, you know, but it's very clear, we want and also here achieve sequential improvements. It is also important to see that the new operating model makes it also very transparent and also who is very clearly responsible for inventory. A big part of the inventory is now in global operations and is taken care thereof, whereas more of the service part of the inventory remains in the region. That is also helpful, you know, to have this transparency to manage the net working capital and the inventory. Yes, we are working also on that part to bring it down again. For the next question, I would like to hand over to our operator. Sandra, are there any questions from remote? For questions over the phone, please press star and one. The first question comes from Rizk Maidi from Jefferies. Please go ahead. Yes. Hi, good afternoon, gentlemen. Thanks for taking the questions. I have a few, and I'll take them one at a time. Number one is I struggle to understand why you are only guiding for 13% EBITDA margin in H1. That implies 130 basis points margin decline in H1, and that guidance is without Mesker, which is sort of helping the margin mechanically but 50 basis points, man, if that's correct. We're talking about 180 basis points margin decline versus 110 basis points decline in the last period. In H1, you're obviously gonna get better pricing, so higher than the 4%-5% achieved in H2. Steel prices are coming down. You said energy is low single digits% as a percentage of sales, but yet you are getting 1%-2% of the CHF 1.2 billion procurement bill, CHF 30 million savings. Maybe if you could just help me with the different elements. I know I'm being too picky here, but what could be sort of the labor bill for the year, raw materials and logistics costs, please? I'll start here. Should I take this one? Shall I answer the? Yeah. Maybe. I will take Yeah. I'll take the basis of the outlook. That's okay. Let me go first. Okay. It's okay. Is that Rizk or? Rizk. Rizk Maidi. Hi, Rizk. How are you? Yeah. Okay, thanks. Yeah, good. Good that you hear me. I'm not surprised by your questions. Let me just repeat what I said as far as the guidance is concerned. We guided for sequential improvement. Sequential improvement was building upon the second half of last financial year, and that's where we guided a sequential improvement 13%, around 13%. We have spent enough talking about the external environments that is hardly certain. All this point towards the visibility that is totally not there. Not if not for the strong orders on hand and order intake and backlog that we have now sitting since the beginning of this financial year, July 2022, we were not able to provide a guidance for the first half year. We did come forward to provide a first half year guidance, top line and bottom line. Nonetheless, it cannot take away the fact that visibility remains extremely low, if not, could even get lower in the months and months ahead of us. My message here is that, Rizk, while Kaspar will be able to give you some more light and color on this, but my general statement here is that we are dealing with an unprecedented environment that is just mathematically able to do the sum, but I think if you look at the physical environment we are in, I'm not a mathematician. I'm dealing with business, I'm dealing with challenges, I'm dealing with real customers, I'm dealing with real colleagues in the organizations that it's a guidance that I reserved, and even that, to me, the headwinds will not disappear overnight, my view. Kaspar. Yeah, maybe I can add to that. Hi Rizk, this is Kaspar. You know, when you look where we start from, if you take the second half of our business year, we start from an Adjusted EBITDA margin of 12.7%. Now, of course, if you add back the Mesker business, then we are around 13%, maybe a little bit above. As Jim-Heng said, our visibility is still very limited, especially when it goes into 2023. That is the reason why we guide for half year of this first half year. We can also see that, especially in Europe, there are some risks with certain delays on construction sites. There we see certain risks. You are right, we do continue with price increases. That should give us some tailwind. On the other hand, you would agree to me that supply chain is not yet back to normal. We still have a shortage on larger sized chips, which are the ones which we need, and also, for example, on panels. Also we have additional risks with the lockdown policy in China. There might be further lockdowns also in China and Asia. On top of this, we continue to invest in our Shape 4 Growth strategy, which I think is the most important thing to do, because at the end, that will make our company better and stronger. Therefore, I think it is very, for us, a right figure to guide for the first half year, to this, around 13%. Okay. Thank you. Thank you very much. The second question is for you, Jim. So you've been in the CEO seat now for nine months. Just wondering, what is your assessment of, you know, the turnaround in the business, particularly in the U.S.? Are there things that you think will take more time than expected? Any pain points or areas of resistance to change that you've noticed? Just perhaps your thoughts here on how you feel about the organization nine months into the job, please. Yeah. Thank you, Rick, for your question. I'm not yet nine months. I'm eight months into my job after today. How do I see the American business? I mean, it's definitely high on my agenda. I see the American business that we are currently having falls perfectly into our expectation of a sequential improvement. Numerically, we're not there yet. However, when I visited the markets, I talked to our customers, I talked to our colleagues and associates in America. I see a desire turning into tangible effort to put a foundation and an embracing Shape 4 Growth, because to me, this is very important. Shape4 Growth is crucial for all of us. In America, there's a separate section on 21st, on November 15th, capital market day, whereby it was shared and what is expected out of America to contribute to the larger good of dormakaba program. They are on track, but I also admit that it does not help given the many challenges and headwinds that all of us are facing globally. While I'm consciously optimistic about this, I'm also acutely aware that there are external environmental developments that may easily cause distraction to the local team, and we have to persevere. It is something that we are working very hard on together with the local team. Long story short, my impression for the first nine months or eight months now, right now, is that there's still work to be done, but we are taking small step in the right direction. Are you there? Okay. Yes, I'm here. Thank you very much. You're welcome. The last one is just on the growth that we are seeing at the moment, and I mean, the last six months and on how you see H1 now are, I would say, growth rates that are above normalized growth. I'm just wondering whether you've done any work or if you looked at how much of this strong growth is actually driven by channel restocking and where do you think your channel partners' inventories sit at the moment? Your question, if I understand you correctly, is that whether the growth that we have had in the past is sitting with our channel or is it now going to the end user? Is that your question? Yes, correct. Also pull forward demand from end users. It's a difficult one, complex one, Rick, because our go-to-market different from market to market, and some we have intermediaries, some we have agents, and in some situation, we go directly to market circumstances. In this regard, I would incline to see that the sell-through is increasingly evident. The sell-through from our channel to the end market is increasingly evident in some markets, but not in the other. Why do I say that? For China, we clearly see that the sell-through is not there because of the lockdown. In other markets in Europe, we are clearly seeing markets whereby the adoptions of our solutions are happening as normal. Therefore, there is no one market that is exactly reflecting that reality. I think we are dealing with different markets and different mix of go-to-market and indirect channel. I hope that satisfy you. Yes. Thank you very much. You're welcome. The next question comes from Martin Flückiger from Kepler Cheuvreux, please go ahead. Yeah. Good afternoon, gentlemen. Thanks for taking my question. I've actually got four. Starting off with the first one, could you talk, and I guess this is for Kaspar. Could you talk about the price cost spread that you have seen in 2021 and 2022? You know, when I talk about price cost spread, I'm specifically talking about not only selling price impacts minus the impact from material prices, but including the effects that we've seen from higher freight and energy costs. By the way, regarding energy costs, were you referring, when you were referring to a low single digit number, did you mean that in absolute terms or in relative terms as a percentage of sales? Yeah, that would be. Let's take it one at a time, otherwise it gets too complicated. I start with the second question, Martin. I was talking not in absolute numbers. I was talking in relative numbers. Okay. All right? Makes sense. Yeah, makes sense. Okay. When you say low, you mean really low, right? I mean. Because anything else would be kind of surprising. Yes, I mean low. You know what the industry average standard is, you know? I mean low single digit. Okay. Maybe related to your second questions. You know, if you look at the P&L and you see that our gross profit margin has decreased by 170 basis points. As I have outlined, it was around related with there. In there, we have a 20 basis point impact due to an M&A and around a 100 basis points impact due to the dilution effect, you know. As we absorbed with our price increases, the cost increases on raw material and components. The remaining part is due to the inflationary pressure, which we very strongly experienced also in the United States, especially on wages. It is also a strong mix effect in there, and it is also an impact in there of labor shortages, especially in the service business, but also some supply chain related inefficiencies. Now, if you look at the EBITDA margin, you see the 100 basis point deviation, and there the dilutionary effect of the gross profit that was minor on the EBITDA. It's maybe around 10 basis points. What much more impacted our EBITDA is the inflationary effect on the wage inflation and energy. That is around 40 basis points. The remaining part is also due to the mix effect, due to also some investments in our Shape 4 Growth strategy, and some supply chain related inefficiency, as I explained before. You know, that is more or less to give you a bit a picture, you know, to how you see how this has been developed. Okay, quite a complex picture. To clarify, were the selling prices enough to offset the higher material prices? The selling price increase was, in absolute numbers, enough to compensate for the raw material and components input price increase. Okay. Great. Thanks. Secondly, seems like the availability of larger chips, as you put it, is pretty crucial for the overall margin level, and particularly for the EAD product cluster. Can you walk us through the latest developments with regards to availability for such chips and you know, what kind of outlook you're expecting over the coming six months or so? The current outlook remained complex and unclear, Martin. The reason for saying that is that you know that for our product to function to the features that we wanted it to be, we are more looking at the larger nodes, not the smaller one. You know that the smaller one would have higher speed and more energy saving and so on. The largest device producer has moved because of the shortages of the smaller one, taking into the larger one, which we traditionally will be depending on. While you see, generally speaking, the chip supply from a global perspective seems to have somehow eased off, but it did not quite help us in the sense that the real ones, the chips that we have wanted to didn't actually come by easily because the bigger guys, the equipment manufacturers, the PC manufacturers had chosen to go, and the car manufacturer has come into our segment, our sector. I was told that the approach that most of these companies are doing is just in case. If I don't get the right chips that I want, I grab anything that is available, and that is not helpful because we have to then be able to buy from someone or somewhere that would help us close our own gap. It is a challenging environment. My team told me that we would expect this unsettling situation to persist for another three-six months. I hope they were wrong, but most of the time they are right. In these circumstances, it remain unclear, and I caution that we should not look at chips in a generic sense because they are chips, and the chips that we want is of a different kind of specification than what is conveniently described now. Okay, great. Thanks. My third question would be on the incremental cost savings from restructuring, whether you could provide some guidance there. I'm not sure whether I understood Kaspar correctly before on his, you know, outlook with regards to items affecting comparability in 2022, 2023 and the subsequent financial year. If we could just clarify, you know, for the new financial year and the next one, what the incremental cost savings from restructuring will be and what the one-offs will be that we need to take into consideration. Yeah. I think that's a good question. Thank you, Martin. I think with respect to the items affecting comparability, we can remain on the level of what has been communicated on November 15th on the Capital Markets Day. That is, yeah, that remains also for the coming year. You have seen, with the exception of the CHF 25 million, you have seen for our past business year, we had been more or less in line with what had been communicated on November 15th. With respect to the savings or the impact from the Shape 4 Growth program, there had been, on the savings side, not yet. I mean, pricing we have achieved, this is very obvious. Procurement, we have also achieved. Also we entered in the lower range of what we have said at the Capital Markets Day. There is from the FTE reduction program still in 2021, 2022, there is still a limited impact or almost no impact with respect to the savings. The program is on track, and we do expect to count these savings as we have communicated at the Capital Markets Day on November 15th. We are, with respect to the run rate, there we are on track, and I do expect that these savings will come through in the coming business year. Okay. Quantitatively, what are we talking about? CHF 10 million, CHF 15 million incremental cost savings in 2022, 2023? Yeah. We said, you know, it's a 30%, so it's a 30% or 40% of the CHF 30 million. Oh, right. Right. Yeah. You remember. Okay. Yeah. I got it. Yeah. Okay. Just finally, sorry for the number crunching, but given the new segment structure, I was just wondering whether you could provide us with a guidance for the global R&D and corporate-Adjusted EBITDA and EBIT. You know, what are reasonable numbers to put in our model there? Well, if you look at the new segment structure, then you see the global R&D numbers in that segment. That segment is we're talking about, if I remember, CHF 95 million for business year 2021/2022. That is now very transparent for you and for our investors, so that you see how much we invest into our future, how much we invest into our R&D department. Okay, that number is gonna be stable to up? Yeah. Very likely. Well, yeah, that depends on what kind of projects we follow. The number will be transparent and you will see it in the segment reporting also coming forward. The corporate CHF 64 million at the EBITDA level, EBITDA loss. Yeah, the corporate remains. That remains stable as it is. Yeah. Okay. Perfect. Thanks so much. Thank you, Martin. Gentlemen, so far there are no more questions from the phone. Thank you, Sandra. I think before we wrap up, is there any additional question here from the audience? It looks like there is no questions. On that note, I would like to say a big thank you for all of your questions, and more importantly, your physical participations. I look forward to further interaction with you. For now, thank you, goodbye, and take care. Thank you very much. Thank you.