Ladies and gentlemen, welcome to the Interroll's presentation of the Half Year Results 2024 Conference Call and Live Webcast. I am Sandra, the Chorus Call operator. I would like to remind you that all participants will be in listen-only mode and the conference is being recorded. The presentation will be followed by a Q&A session. You can register for questions at any time by pressing star and one on your telephone. For operator assistance, please press star and zero. The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Heinz Hössli, Chief Financial Officer. Please go ahead, sir. Thank you for the introduction. Good morning, ladies and gentlemen. With me is Julia Weinhart, our Head of Communications and Investor Relations. Excuse me. We welcome you to our Half Year Result Presentation 2024, and we are glad that we have so many participants this morning. The agenda of today, I will first show a quick group overview, then the financials of the first half year 2024, followed by a Q&A live. For organizational purposes, we decided not to offer the chat as with written questions. Interroll is playing in a niche in the material handling equipment manufacturing market in the segment of internal logistics solutions. Even though the entire material handling equipment manufacturing market was about CHF 200 billion and is expected to grow at an average CAGR of 6% until 2030, our relevant market is estimated at CHF 6 billion- CHF 8 billion worldwide. Our market share is between 8%-11%, pretty much stable. There is not much which has changed in the first six months of 2024. The only change is really the number of employees rounded now 2,300. At year-end, we had around the number of 2,400. All the rest remains stable. What some of you might have seen today in the ad hoc, and this is not really in here in the presentation, is the acquisition of our agent in India. This is brand new. This is also why it's not reflected on the slide. We just signed this on July 31st, late afternoon, and the closing will be expected also quite fast. This slide shows the eight industries we focus on. Also here, there is no change. E-commerce is for us not an industry, but it touches many of the shown industries, especially customers using an omnichannel strategy like in fashion, but also now in food. The markets with a special focus in 2024 are the ones which are highlighted yellow. Our business model remains unchanged. Our customer in the center. We focus to be close to our customers and provide improvement, state-of-the-art technology with our product platforms. The end-user marketing approach gets us close to the ones using the equipment for many years, and in best case, they already specify Interroll when they request a quote from a system integrator. In addition, we receive valuable input about their pain points for possible product improvements. Here you can see our four product groups, all based on platform strategy. Nothing new. Our motto is here also modular, scalable, and flexible, and this also remains in place for the future. On the innovation side, we showed at the LogiMAT in April 2024, the small wheel vertical crossbelt sorter. This compact sorter allows a very small footprint to be operated, and this opens new possibilities with limited space to put a sorter in place. Now I come to the financials of the first half year 2024, and I would like to start with a summary. We stated during our media conference in March 2024 that we believe that the downturn has bottomed out in Q4 2023, and that we were unable to foresee when the market will rebound and that we see positive signs in the industry. Today, we can confirm that overall our order intake bottomed in Q4 2023, and in the first half of 2024, we saw a rebound in product sales, which partially mitigated the absence of bigger projects. The order intake decreased by 5.1% compared to the first half year 2023. In local currency, it's a decrease of 1%. Foreign exchange effects had a strong negative impact. EMEA shows an increase as the product business is recovering, but Americas and Asia-Pacific declined. On sales, we have a decrease of 3.5%, and in local currency, we grew by 0.1%, so basically flat in local currencies. Also here, foreign exchange effects had a strong negative impact. EMEA shows a growth, Americas a slight decrease, and Asia-Pacific a strong decrease. I come into more detail in the coming slides. The EBIT increased by 4% to CHF 29.9 million compared to CHF 28.7 million a year ago. This results mainly from favorable raw material prices and a high cost discipline. The operating cash flow is CHF 16.2 million compared to CHF 75.2 million a year ago as the net working capital increased in the first six months. Now here the chart with the order intake and the comparable last five years. The order intake shows a decrease to CHF 286.5 million compared to the prior year period. The growth in the product business Rollers of 8.4% and Drives of 12.4%, as well as the cyclical pallet handling of 26.4%, could only partially mitigate the decline in conveyors and sorters by -25.5%. It needs to be considered that this product group showed a very strong order intake in H1 2023 due to some strong project orders in Americas. The book-to-bill ratio is 1.16 compared to 1.18 a year ago. Coming now to the sales, the sales decreased by 3.5% to CHF 247.4 million. In local currency, the sales were with +0.1% flat. Except drives with a growth of 5.2%, all product groups have decreasing sales, but also in sales, sorters and conveyors did strongly underperform compared to the previous year. Looking at the sales development by region, it shows a diverse picture. As mentioned before, EMEA shows a growth, Americas a slight decrease, and Asia-Pacific a strong decrease. The strong decrease in Asia is partially explained by the big project in South Korea invoiced in the first half year 2023. As a result, the shares of the three regions changed considerably compared to last year. EMEA gained 5 percentage points and now represents 60%, followed by Americas with 31%, gaining 1 percentage point, and Asia-Pacific with 9%, losing 6 percentage points. The long-term target ratio of Interroll remains unchanged with 50% of sales coming from EMEA and 50% from the other two regions. The EBITDA increased by 2.8% to CHF 41 million. This results mainly from favorable raw material prices and our high cost discipline. The EBITDA margin increased from 15.6%- 16.6%. The EBIT increased by 4% to CHF 29.9 million as the absolute amount of depreciation amortization was basically equal compared to the previous year. As a result, the EBIT margin increased from 11.2%- 12.1%. Between the EBIT and the result, we had a positive financing result from interest income and foreign currency gains, and it was burdened a bit by slightly higher tax rate. The result increased by 8.5% to CHF 23.9 million, and the result margin is 9.7% versus 8.6% in the previous year. The operating cash flow decreased significantly to CHF 16.2 million, mainly due to an increase in net working capital, especially in work in progress and accounts receivable. This is not unexpected as the net working capital was reduced to the maximum in 2023, resulting in the best-ever cash flow of the group. Even though we continue to invest in modernization of our production sites, the gross investments, including the IFRS 16 lease, which are capitalized of CHF 8.5 million, are considerably below previous year's value of CHF 17.1 million. The free cash flow amounted to CHF 11.1 million. This chart shows the positive long-term development of return on equity and return on net asset. There is always a half-year effect from seasonality visible in the first half year. In addition to that effect, the very strong equity ratio of 73.9% is negatively impacting the return on equity. The chart reveals the strategic long-term perspective. Since the last major crisis in 2008-2009, Interroll has driven forward its globalization and expansion into new markets, as well as the expansion of its technology platforms, and massively strengthened its market position with a balanced mix of measures. We boosted productivity while always keeping an eye on cost. We have done our homework during the good times and aligned ourselves even more closely with our customers and their needs through our business model with the end-user approach. As soon as the market fully recovers and the new phase of growth will start, both KPIs should continue the long-term development with moderate increase year-over-year. Now I come to the outlook. From the EMEA region, we see that the ongoing challenges in the project business may come to an end following the rebound we are seeing now in the product sales. In the Americas region, we also foresee continued growth in product sales. In the APAC region, we predict in general a slower recovery. With our innovative product platforms and production capacities, we are very well positioned in our regions to meet future demand and ready to seize opportunities when the market fully recovers. In the medium term, we believe that all fundamental trends for global demand for material flow solutions remain intact and have strengthened increasing the demand for further automation. For the next six months, we expect overall more of the same, then really a strong rebound. Might change, but what we can see from today's point of view, we expect really more of the same instead of a big change. As in the previous years, also the complete half-year report is published on our webpage as an online report enriched with multimedia content. We invite you to visit our website to have a look, and we would be delighted to receive your feedback to Investor Relations. With this, I'm at the end of my presentation, and we would go over now to Q&A. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the touch-tone telephone. You will hear a tone to confirm that you have entered the queue. If you wish to remove yourself from the question queue, you may press star and two. Questioners on the phone are requested to use only handsets while asking a question. Anyone who has a question may press star and one at this time. Our first question comes from Walter Bamert from Zürcher Kantonalbank. Please go ahead. Good morning, everybody. My first question is regarding the work in progress inventory, which went up significantly against the intuition of the order backlog from big projects. So did you speculate here that it will pick up, or is this reflecting your hope for an acceleration? Good morning, Mr. Bamert. Thank you for the question. At Interroll, we only produce for orders, so we do not produce on stock. So you can assume that this is a positive inventory, which soon will then also be invoiced. Okay. Then I see it's against my intuition that you experienced lower sales in rollers while the sales in drives went up. Is that price-related, or is there another explanation you could share with me? There is another explanation. During the supply chain crisis, we lost a lot on drives, especially on roller drives. There is no secret. And we could gain back quite a number of customers, which now buy again the roller drives from us, which went into a dual strategy, which bought then most from the competition, and now is coming back not into a single strategy again, but they buy now 90% plus from us and keep the second source at a very low level. Okay. And then in pallet handling, I noticed there that you have project business that grows. Is that driven by the smart pallet mover, or is it just overall demand? No, it's not driven by the Smart Pallet Mover. It's driven by the comparable period last year was very weak. So I think this now is an okay order intake. It's not a fantastic order intake. Looks very good compared to the previous year, but in fact, it's just an okay order intake. But you would expect a positive trend to continue, or it's risky and volatile? This is very the most cyclical product group goes up and down, but at the moment, I would expect that it continues on this level. Okay. And can you say something on the regional and client diversification in Pallet Handling? I can say something on the region, not on the client. The region which drives this is EMEA and Americas. But broadly diversified, not just a few? Yeah, it's not a big project. It's diversified. It's a various number of smaller projects. There is no big project. Okay. Yeah. I Yeah. I Yeah. I like that. Thank you very much. You're welcome. The next question comes from Sebastian Growe from BNP Paribas. Please go ahead. Good morning, everybody. Hi, Mr. Hössli. First, I would be on the pipeline, if you could comment on the discussions with customers and how these are developing at this point. So specifically, how is the pipeline, the project business progressing? That would be very much in focus for me. And do you expect that the sequential improvement that we have seen in the H1 period of 2024 can continue, or would you rather think that the conveyors and sorters business is kind of as good as it is for now at around a good 100 million Swiss francs? And related to that, if you could also comment on your pricing policy and how that compares to competition. And then I would have one more around the cost base. Yeah. Maybe first, we see that, as I mentioned on the outlook, we see that this should continue, and clearly, the conveyor and sorter product group will come back as soon as the over-investment into e-commerce is absorbed in the market. And this should be quite soon. But that we now say, "Yeah, we expect this in the second half year," would be too early. We know that the big integrators, they look positive into the future. They see the projects already. We don't see them yet. And I always said I like to comment when I see it before. It's only speculation. But for now, it is rather than what I can also read then from the biggest e-commerce company probably in the world that reported yesterday, that it's rather than, I think, for same-day delivery capabilities, etc., but it's not really the big sort of brick and mortar expansion. That's the right way to look at it. And you would expect, if that piece is correct, that this would kick in somewhere during 2025, if I understand you correctly. This is what we anticipate, yes. Okay. And around pricing, is there anything that is worth mentioning when it comes to your pricing policy as opposed to competition? Have you raised or lowered prices in certain product categories, and how does this compare to your peers? So competition is very difficult because there is not really official communication from the competition what they do. What we hear from the market, that quite a few competitors have increased prices. We have kept most of the prices stable for 2024 compared to 2023, and we decreased two product groups, or within two product groups, we decreased the prices. For all the Drives and for Rollers, we have taken the prices slightly down as we have the target margin in place also with this. What we also did again for this year is we knew already that the cost, especially the personnel cost, is increasing. This has already been, for a big portion of it, negotiated for almost 1,000 employees in Germany last year. So this was known. And we have seen lower raw material costs, and the strategy that we have in place not to increase the prices, compensate the higher personnel cost with favorable raw material prices so far works well. That's actually a pretty good segue to the other area of question that I would have. Firstly, on the gross profit margin. So apparently, it was very strong at the 64% in the first half. I would assume, however, with the order intake mix that you have taken on board in the first half with a greater share than also of the project business, and whenever then conveyors and sorters might really inflect. But what is sort of the directional trend on the gross profit margin side? I would assume at least that we should see a softer gross profit margin in the second half just because of that very, very mixed composition. Is that the right way to look at it? For the second half of 2024, it really depends. Now, if our outlook comes through that we say it's more of the same, then you can expect that this stays also gross margin-wise more on the same level. When we go back into a growth mode, yes, the projects have by tendency always a lower margin, and this would then have a negative impact. But for the second half year, I don't see this happening. Okay. So then the last one then around the cost base below the gross profit line. It looks like this is relatively stable at around CHF 130 million in the first half on the current revenue level. Whatever then the right revenue outlook could be for the second half, I would assume it's probably closer to the order intake that you secured for the first half. But is there any scope for cost cutting, or would you say that what you can do you have done already, or how should we think about any sort of self-help potential at your end? What you said is a fair statement. No, we already squeezed the lemon quite a bit last year. We continue to this. We deliberately do not reduce the headcount. So we have only reduced temp people. We do not go into a firing mode. We keep the people and the knowledge on board. So much more, you cannot expect that it comes from the cost. The cost is very well managed, and we will have a positive leverage effect when the growth comes back. Okay. Understood. All right. Thank you so much. I go back into queue. Thank you. The next question comes from Remo Rosenau from Helvetische Bank. Please go ahead. Yes. Thank you. Good morning. I will come back. I would like to come back on the statement more of the same. I mean, you still have the seasonality though, which means that the second half should still see an improvement versus the first half on a seasonal pattern. And does this statement translate into the conclusion that the second half should be profit-wise comparable to the second half of last year as well? Or is there a—I mean, the margin was better in the first half, so might there also be a slightly better margin in the second half compared to last year? Thank you for the question, Mr. Rosenau. This statement, I would say, is not what will happen because last year we had a very strong second half year with a very, very high margin and a high volume. And this year, we have to see that we started the year with CHF 30 million less orders on hand. The currency is also not in our favor. And the second half year will be better than the first six months. I think this is given by the seasonality, but also the lag that we have on the order intake, and especially on the projects which have a different cycle than to be invoiced in Q4. I see that the revenue will go up, but not as much as last year. Okay. Okay. [Foreign Language] Okay. Good, thank you. [Foreign Language] Any other questions? The next question comes from Constantin Hesse from Jefferies. Please go ahead. Thanks so much for taking my question. Actually, most of them have been asked. Maybe one last one. If we could talk a little bit about the development of the service business. Has there been any change there since you obviously introduced the strategy to try to increase the share of service in the mix of revenues? Any update you can give there would be interesting. Thank you, Constantin. On the service, yes, we will now from year to year increase a little bit, but this is not what makes the big chunk. Even if we can increase, we came from 10%, we have been on 12%. It's now going to 13%, 14%. This is a nice journey, but this will not change the overall picture too much. That's great. Thank you very much. You're welcome. The next question comes from Sebastian Vogel from UBS. Please go ahead. Hello and good morning. I have three questions. I would ask them one by one. Potentially, one of the questions will be a repetition because I was thrown out in the meantime. Sorry for that in advance. The first one would be if you can go through the key verticals like airports, warehouse, distribution, food and beverage. Can you remind me what sort of order demand trends you see them there individually? Yes. Clearly, the highlight of the first six months is airport business. It's airport business EMEA. We always said that the airport business is waiting until the new scanning technology is approved by TSA in Americas. What we see now is that the European airports are going forward, have invested, have now also placed quite a lot of orders with our partners' Smiths Detection. If you travel in Europe, you might have experienced this by yourself. You now have no chance to say on an airport if you go through a new scanner and you can go through with a bottle of water, or if you have to throw it in the bin before you go through the security check. So Europe has gone ahead with this. We expect that this will continue. That is now the start of this wave, which will take many years to come until the airports on a global scale will adopt this new scanning technology. The rest is basically unchanged now. It's not really an industry where I can say this is really now going good or not good, except what I said, everything related to e-commerce is not yet on this level. If we take out this very huge order last year or few big large projects last year we got in Americas, then still this is also it's okay. It's not that it's a decline, then it's still an increase, small increase over the last year. Got it. The second question is if I look at your end-of-quarter growth rates in product versus project and compare that versus the stuff what you have seen in July, was there any sort of development there or was it also, as you said earlier, more of the same? Can you decide? Not get acoustically. End of July, what? If I compare the growth rate in end-of-orders in end-of-July versus the end-of-June or versus the June numbers on project and product. July numbers, I don't even know yet. So this is too early. But what I can say is July is always a weak month. This is a holiday month, and this is all every year a weak month. If this weak month is now better than the last year's weak month, probably yes. But I don't have the figures yet on a consolidated level. Understood. And if I look back to the margins over the last couple of years, your second half year margins were usually much better compared to your first half year margins. Do you see this sort of development could repeat potentially in 2024? Do you see anything that speaks in favor or against that? Nothing speaks against this, but the margin like in last year, H2, will not repeat again. This was on a very high level. But that the H2 will be better than H1, this is basically given by also higher volume. Yeah. Got it. And one last one, if I may slip that in. How should we think about more on the maintenance side regarding working capital intensity and then CapEx for the second half of 2024? CapEx, we continue probably on the same rate like in the first six months. But as we are sitting on a lot of cash, if something comes up which is not planned but makes sense to invest, then we might go over the first six months run rate. If not, it's also here more of the same than a big change. And working capital intensity? Working capital, I cannot judge. Normally, the working capital end of June is higher than end of December because end of December, a lot will be invoiced. The WIP is much lower because the projects will be invoiced in Q4. So normally, it's slightly lower. If this is the case also this year, it depends how it will play out. Got it. Many thanks. And I'll go back to the queue. As a reminder, if you wish to register for a question, please press star followed by one. No further questions? It seems that so far there are no further questions, sir. Would you like to make some final remarks? Yes. There are no further questions. Thank you very much for participating at this morning's call. And I look forward to have contact with you in the near future again. And hopefully, we can also then convey positive messages. But clearly, the market will come back. There is no doubt that the market will come back. We are well positioned. We gained a lot of customers back, which we lost due to not being able to deliver during the supply chain crisis. And as I mentioned in the outlook, we are really ready to seize the opportunities. And also what we get from the market feedback is that we are quite well positioned. So we need to be patient. We need to wait until the market really fully recovers, but then we are there to harvest. With this, if there are no further questions, I would like to close. If there are questions, let's give 30 seconds. If somebody still has a last question, please now. There's no question, sir. Okay. Seems not to be the case. In this case, I would propose that we close here. Thank you very much for participating and see you next time. Ladies and gentlemen, the conference is now over. Thank you for choosing Chorus Call and thank you for participating in the conference. You may now disconnect your lines.