Ladies and gentlemen, thank you for standing by. Welcome, and thank you for joining the LEM Holding SA Full Year Results 2023, 2024 Presentation. Throughout today's recorded presentation, all participants will be in a listen-only mode. The presentation will be followed by a Q&A session. If you would like to ask a question and you're dialed in on a conference call, you may press 9, followed by the star key on your touchtone telephone. Please press 0, followed by the pound key for operator assistance. The conference will begin shortly. ... They have accomplished. I'll repeat that sentence so that everybody's aware of that. Together with all the employees they have accomplished, despite the uncertain and challenging environment, a solid result that they will be presenting today. Thank you. Thank you very much, Andreas. Good morning, ladies and gentlemen. Also, warm welcome from my side. My name is Frank Rehfeld. I'm the CEO of LEM. And for those who are not yet familiar with LEM, LEM is providing sensors for measuring electrical parameters, namely current, voltage, and energy, and with those, help our customers in society to transition into a sustainable future. This is the agenda for today, so I will basically start with a little intro. Afterwards, we introduce the business performance. Andrea will focus on the financial results, and I will then both introduce the outlook as well as the sustainable, sustainability report before Andreas Hürlimann, our Chairman, will share the proposal to our shareholders with you. When we met last time, six months ago, we looked at our half year results and could report an impressive revenue growth of 22% at constant currencies and 13% in Swiss francs. We already foresaw that this growth speed would not be sustainable short term, and that we would have rather difficult second semester ahead of us. This is exactly what we've been facing. 7.2% revenue growth in constant currencies that translate in no growth against 22-23 in Swiss francs. In particular, our China sales were weak throughout the whole financial year, caused by slow investments and high stock levels in the supply chains. At the same time, also the fact that we've been losing market share in automotive and renewables during the supply chain crisis, and not to be forgotten, one-third of the low sales in CHF can be attributed to exchange rate effects. Our other regions could overcompensate this in the first semester, however, not anymore in the second. We nevertheless managed to keep both gross margin and EBIT at good levels, despite the fact that we were continuing investing both in people as well as in infrastructure. Growth stories are no fairy tales. LEM is facing headwinds, and we take the challenge. We further drove our transformation also in 2023, 2024, and will continue to prepare LEM for CHF 600 million and plus in the future. We fully believe in a more sustainable way of living and working in the future, and that will drive our key markets. We are committed to continue to invest in R&D, also in difficult times. We're about to extend our Chinese research activities by an additional R&D site in Shanghai. In Europe, we've been establishing two new sites, a new R&D center in Sofia that is going to focus on software development and the development of products for the smart grid infrastructure. It is located close to our manufacturing site in the capital of Bulgaria. We opened an R&D center in Munich in order to extend our semiconductor activities. The electrification of mobility, the generation of renewable power, as well as the more efficient energy use, must be affordable. We therefore plan for the next generation of current sensing that will be used in miniaturized power electronics. We've therefore entered a partnership with TDK, the company with most and longest experience in TMR technology, in order to prepare this future. We also committed to invest into our manufacturing footprint. We've been inaugurating our fifth plant in on April nineteenth in Penang, Malaysia. That was finished ahead of time, and where already the first production lines are running. This new plant, that has about the size of Beijing, will help us to give LEM sufficient space for the next growth steps, balance our manufacturing footprint in the world, especially for Asia. This means that our Beijing plant will focus on China for China, and Penang on the deliveries to other Asian countries, the Americas, as well as Europe. And last, but most importantly, the new location of Malaysia will allow us to tap the talent pool of Penang with respect to semiconductor competencies, in particular for back-end processes. We have today in Penang, a team of 70 people who are eager to make this plant a lighthouse for the new LEM manufacturing and supply chain standards that we are rolling out. Now, let's move on to the business performance in more detail. Following our business structure, you see here the development of the five businesses in comparison to last year. Important to mention is that all businesses except automation have been growing at constant currencies and have been differently impacted by the strong negative currency impacts, depending on the exposure to the different geographies. I will explain each business segment in greater detail in the next slides, but would like to mention that all those markets cannot easily be compared as they are following different cycles and growth rates, different geographical exposure, and technically and as well as cost-wise, different challenges. Here you see the distribution of our businesses relative to each other and their development against 2022, 2023 in CHF. In comparison to the half year picture, 2023, 2024, there have been no major changes in the business sizes relative to each other. Since the automation business was shrinking by almost 12%, mainly impacted by cautious investments in uncertain times, and strongly impacted by negative exchange rate effects, its share in the total business reduced from 33% for full year 2022, 2023 to now 30%. In Q4 and Q4, our weakest quarter of the financial year 2023, 2024, all businesses were below Q3, except energy distribution and high precision, that grew mainly driven by DC meter deliveries. The long cyclical traction business showed growth against 2022, 2023 in each quarter, driven by order backlog and equipment upgrades in the traction metering area due to updates of standards in Europe. Analyzing the business now, one by one, I start with our biggest business automation that represents 30% of our global business. You see here the turnover plotted for the last five years. Our automation business was shrinking 5.5% in constant currencies, and as I said, by almost 12% in CHF. Growth we only saw in the Q1, the following quarters were all weaker than in the previous year. The development is not a surprise, in light of the drives, robotics, automation, business development of our customers, that saw all in all reluctance in investments and also rather high stocks. Also, the business in China was subdued based on the low export volumes that China showed throughout the last year. Our automotive business was growing by 7% in constant currencies, however, shrinking 2% in Swiss francs. Here, in particular, the weakening renminbi has had a strong impact. The new energy vehicle market is again, changing. Where we were once convinced that PHEVs, plug-in hybrid vehicles, would be only a bridge technology that would quickly disappear, we see an increasing share of plug-in hybrids worldwide and slower growth of pure battery electric vehicles. We see the reason in increasing energy prices, the slow build of energy, of charging infrastructure, and the lacking subsidies in the light of the still higher battery energy vehicle prices. Nevertheless, the new energy vehicle market is growing globally, and we have been losing market share in China to aggressive competition. We learned our lesson, and the new leadership team in China has a particular focus on automotive, fighting back through cost optimization, R&D investments, and strengthening the customer-facing teams with sales and field application engineers. Renewable energy, now 17% of our business, is including the solar and wind power generation. The business was growing by more than 15% in constant currencies, or 5.6% in CHF. However, looking at the global growth of the installed solar capacity of more than 50%, we see in the midterm by far more growth potential than what we showed in this year. In particular, due to the lost market share, due to allocation times. The second semester was weaker than previous year, mainly driven by Chinese inverter manufacturers that have high stocks and foresee also a difficult year, 2024. Chinese exports declined as a result of the geopolitical tensions. Nevertheless, we see the market for renewable energy generation continuing to grow, and with it, the need for energy storage. Energy distribution and high precision, continuing to represent 15% of our global business, contains our high precision business, smart grid solutions, energy storage, as well as DC Meter for fast charging stations. The business grew by 8.2% in constant currency and 2.6% in Swiss francs. Also here, we saw a slowdown in the second semester in all application areas, except for the smart grid products. The charging infrastructure as a key enabler of the BEV growth is under heavy cost pressure, and we see numerous Chinese players entering with very competitive prices. We are working already today with several of those Chinese players for their export business and to design in our product to them. At the same time, we work on next generation DC meters that are cost optimized to new architectures and also standards. Our smallest business track contains all solutions LEM has to offer for trains, metros, subways, trams, for both rolling stock as well as trackside. It grew to a 14% share of our global business and had an exceptional growth with 35% in constant currencies, or more than 29% in CHF. We grew in every quarter against previous year and eventually could deliver outstanding orders from the previous reporting period, and profited also from the update in our energy meters in locomotives, as well as the very strong demand in China. This very strong growth rate has to be understood also in comparison to a rather low base in the first semester, 2022, 2023. Now, projecting the business from a regional perspective, we see important changes in comparison to 2022, 2023. What is most apparent is that EMEA and China changed their positions. For a long time, China has been dominating our business geography with shares of around 40%, and, has now become second after EMEA, that moved up from 31% at full year, 2022, 2023 to 39%. The drop of the Chinese share from 39% to now 29% is the result of multiple factors. On the one hand, the strong depreciation of the Chinese currency, the slower economic growth, including also the negative export development, but also the loss of market share in e-mobility and renewables. Our new leadership team in China is fully empowered to take all necessary measures to increase speed and improve our cost positions. Nevertheless, the markets outside China developed nicely, as already said, in particular, rest of Asia, as well as EMEA. The Americas showed a solid performance with 2% growth in constant currencies. We've decided to further invest into the team to accelerate growth. With this, I would like to hand over to Andrea, who will introduce the final financial results in greater detail. So ladies and gentlemen, also from my side, a warm welcome. As the Group CFO, I will present solid financial results for the year 2023-2024, even though they are below the analysts' expectations. Let me summarize the financial highlights in three points. First of all, LEM managed to grow its sales at constant exchange rates by 7.2%, which reflects a solid performance in view of some weakening markets, such as our automation business. Second, LEM maintains a solid balance sheet, which is reflected in an equity level above 50%. And the third highlight, the free cash flow generation is solid, even though it dropped, mainly due to lower profits and higher investments. Now, let's have a look more in detail, line by line of the P&L. I will start with the gross margin. The gross margin in absolute value decreased by CHF 3 million, from CHF 192 million to CHF 189 million. In respect of the gross margin in percentage, we have lost 0.7 percentage points. What are here the main causes for this, margin deterioration? In order to secure our supply chain, LEM decided to accept price increases on some very, very critical key components. Those material cost increases could only be partially be compensated through purchase cost reduction on other components and also positive sales mix effects. For the future, we expect the material cost to come down, which we actually need to face a more stiffening competition.... Our two low-cost locations situated in China and Bulgaria cover today 80% of all sensors produced by LEM. The construction of our Malaysian site is now finished, and we will witness a shift from China to Malaysia over the coming months and years. Overall, the percentage of our low-cost location is expected to further increase in the future. SG&A, those increased by CHF 6 million compared to previous year, which are mainly related to increased investment in our digitalization projects and as well in our Malaysian production site. LEM as well decided to lay off 40 employees during the Q4 of this year, which resulted in additional non-recurrent severance costs in our profit and loss statement. Overall, the personnel costs, they remained basically at the same level as last year, as the total headcount remained stable, with the exception, of course, of the new Malaysian site. Let's talk about R&D. The R&D expenses, those increased by close to CHF 2 million, whereas the R&D percentage increased slightly to 8.3%. That increase of those R&D expenses is mainly driven by the R&D headcount increase of 30 employees compared to last year. We focus not only on renewing our current product portfolio, but as well on developing new product families, addressing new markets and applications in the future. For that, we have now additional R&D centers, as mentioned before by Frank, in Munich, in Sofia, and also more and more in Shanghai, and they shall contribute to this positive development. Going forward, the R&D expenses are expected to remain in the 8%-10% corridor. Financial expenses. So below the EBIT now. Even though a currency gain of CHF 1 million could be realized during the Q4 of this year, LEM suffered the full, for the full year, a foreign currency loss of over CHF 3 million, and this as a consequence of the Swiss francs appreciation over the last 12 months. This Swiss francs appreciation is against all major currencies of the last year. The gains from the hedges, they only could marginally compensate those losses. The financial expenses were also impacted by the IFRS 16 lease expenses on the one side, and as well, higher interest expenses on loans, primarily due to the increasing interest rates in Swiss francs, where we have today around 2%, and on the Malaysian ringgit, where we have interest rates of close to 5%. On the taxes, the 2023-2024 effective tax rate is at 12.9%, which is well below last year's level. There have been, however, some two non-recurrent elements. On the one side, we had the tax rate increase in the Canton of Geneva, starting on January 1, 2024, and as well, we had an IP transfer from our Swiss company, LEM International, to LEM China. And those two effects resulted in deferred tax asset set up. So if we exclude those two non-recurrent elements, the tax rate would have amounted to a level of 15.5%. LEM continued, as well last year, to benefit from the HNTE tax status in China, which results in a reduced special tax rate of only 15% instead of 25%. As we speak, we are currently reapplying for the HNTE status for the years 2024 to 2026. Here you find the full profit and loss statement for the proposed full year results, which is on the left side of the table, and on Q4, which is on the right side of the table. The Q4 sales ended at a significantly lower level compared to previous year, reflecting the ongoing market weakness and market share pressure, especially in China. The Q4 EBIT rate ends up at 13.2% only. Excluding non-recurrent elements, such as mainly the severance costs, which we reflected in the Q4, the EBIT rate would have amounted to close to 17%. So let's move now to the balance sheet. What are here the key points?... of the balance sheet per end of March 2024. The first highlight or first point I want to mention is here, the net working capital. It increased slightly, and this is mainly due to an inventory growth as a consequence of the lowering sales during the second semester. A second point I want to underline is the fixed assets increased, and this is mainly due to the investments in both in new assembly lines, but as well, of course, in our production, in our new production site in Malaysia. And the third point is about the net debts. Those increased to CHF 43 million, and this is due to the free cash flow of the year 2023, 2024 being lower than the dividend paid out in July 2023. All in all, those points result in an equity ratio, which is, as I said in the beginning, remains above 50%. Talking about free cash flow, here you find the cash flow statement. Both the cash flow from operating activities, as well as the free cash flow, dropped compared to previous year, mainly due to lower profits before taxes and higher investments in our new production site in Malaysia. In summary, LEM has achieved solid results in the year 2023-2024, with two very, very differing semesters. LEM was faced with slowing markets during the second semester, and the impact on the financials are very visible. You may now wonder what the future will bring to LEM. For that, I'm happy to hand back to Frank. Thank you very much, Andrea. Yeah, let me now elaborate a bit on the outlook for our business. For those who are, who were attending actually our Capital Market Day 18 months ago, this slide might look familiar. However, I wanted to share with you again, how important the business transformation is that we are driving, and that is yielding results. We see here the share of the two business types that we are calling Heritage business in blue and our Megatrend business in green. And what is actually comprised in these businesses? For Megatrend business, automotive, renewable energy, Smart grid, charging infrastructure, and for the Heritage business, the automation track, HIP and UPS. This shift towards more and more Megatrend business gets driven by the substantial R&D investments we are doing while upgrading our processes and also working on our corporate culture. Alongside with that, we see that the megatrend markets are growing faster than the heritage markets. Whether this development continues also in the future with this speed, will depend very much on the geopolitical tensions, in particular, the shift of substantial financial means into defense budgets, rather than into the transition towards a more sustainable world. Now, what do we expect for the current financial year, 2024, 2025? Looking at all our markets in which we are delivering, we see a rather moderate development in 2024, 2025 for our global business. The development we've seen in the second semester of the last financial year will continue for some time, mainly driven by inventory levels that result from overstocking during the supply chain crisis and investment reluctance. However, we hear positive signals from our customers with respect to the second semester and expect some improvements from autumn on. We continue to invest into R&D, into our customer-facing teams, as well as an improvement of our processes, since we are confident that the megatrends of sustainability is going to further drive our growth. Now, we've been taking a new chapter in this year's agenda, the sustainability report, and I'm very happy to shortly also introduce this to you. Under the lead of our Chief People and Sustainability Officer, Rodolphe Bouchet, we have published this year for the first time, a sustainability report. You find the document on our website together with our annual review and this presentation. LEM has committed to reduce its Scope 1 and Scope 2 emissions by 2025 to net zero, and Scope 3 by 2040. Consequently, the senior management, including the executive team, have accepted to link the bonus payout with the achievements of those targets. A cross-functional team has been rebaselining our as-is situation according to the Swiss law, and prepared a long-term roadmap following a double materiality assessment that allowed us to prioritize the top 8 focus areas on which we want to work. We are very much aware that the achievement of net zero by 2040, and therefore the reduction of our today 200 ton CO₂ footprint to 200,000 ton CO₂ footprint to less than 20 ton, will still grow while still growing is a huge challenge, and we are just at the beginning. However, the high level of engagement of our teams to work on this target in line with our purpose, makes me and the leadership team confident that this target can be reached. With this, I would like to hand over to Andreas, who is going to introduce the proposal to the shareholders. Thank you very much. Thank you, Frank, for your introduction, also to the non-financial reporting, which is new. Can you hear me? Yeah. Okay. Good. Well, let's move on. I'm pleased to introduce you to Dr. Libo Zhang. Ms. Zhang is an experienced board professional, corporate finance advisor, and brings multiple years of experience in management in the areas of finance, controlling, and commercial processes, having worked in international industrial companies across Europe, Americas, and Asia as well. Among other mandates, she's a member of the board of directors of the Swiss Technology Group, VAT, whom probably you know, most of you. Ms. Zhang was CFO in the automotive manufacturer, Borgward Group, in Germany, and of FFG, Europe and Americas, a worldwide specialist in tooling machine industry. So both industries which were very active. Before, she held management roles in finance and commercial operations at SGL Carbon, MTU Aero Engines, MAN, and Siemens. Ms. Zhang lives with her family in the Swiss Romandie, to be more precise, in the Nyon area. She's German citizen and holds a PhD in economics and an MBA from Georg-August University in Göttingen, Germany. The board of directors is convinced that with her background, know-how, and experience, Ms. Zhang will be a very valuable contributor to the future of LEM. We had multiple reasons in recent years to be distracted from our long-term view, but we were not. We are now, what I would call, at the tail end of the supply chain bullwhip effect, namely overstocking at our customers. Yet, we had no reasons to change our strategy. Our scenario for the future, and Frank mentioned the mega trends, they remain intact and will provide structural growth that we can capture. So are our ambitions and strategic investments, such as the significant R&D investment in... with the examples of the new centers in Munich, Sofia, or the collaboration with TDK. Our projects to further de-risk our supply chains, as evidenced by the go live of our factory in Penang, and our efforts to enhance our regional competencies. This will make our company even more resilient, but also more agile, and with this, more competitive. Oh, it's too fast. The board considered carefully profit and cash flow, the underlying strengths of the business across diverse business sectors and geographies, and the general economic uncertainty ahead. Our long-standing dividend policy is to distribute significantly more than 50% of net profits to our shareholders. We are therefore proposing to our shareholders a dividend of 50 CHF per share, which represents a payout ratio of 87.3% and a dividend yield of 2.9%. It also reflects the solid performance and demonstrates our trust in the long-term fundamentals of the business and LEM's future. We continue to make significant investments in talent, R&D, business development, and marketing, as well as operations. IT, in particular, infrastructure, which results in new products, enhanced value add, and increased market share, as well as our more robust geographic footprint. With that, we've had that. That's the long-term view. And with that, I would like to thank you. On behalf of the board of directors, I wish to extend special thanks to our employees worldwide for their expertise, reliability, and innovative solutions. I also thank our management team for their prudent and empowering leadership. We would also like to extend our gratitude to our customers, suppliers, and business partners for their continued trust. We thank our shareholders for their confidence, as many of you represent here, for their confidence, and they continue to place in us, and we thank all of you for your interest in LEM's performance over the past year and in our future prospects. Now, let me wish you all the best, and we are now looking forward to taking your questions. Thank you very much. Please allow me, organizational note before we start with the Q&A, as we also have, ... audience joining us on a web call, on a telco, on the webcast, I would ask you to take the mic to ask your questions so that they can hear you. We would like to ask you to introduce yourself with your name and name of the company. We will take first the questions here in the room, then we will go to the questions coming from the telco and then from the webcast, and then we do another round. So please, who would like to have the mic for the first question? Thank you, Tobias Fahrenholz from Stifel. Sorry, but have to ask on the guidance again. What do you mean with moderate? Can we maybe overall expect a flattish top line development this year? And especially could you comment a little bit more on destocking? This looks very volatile from competitor to competitor. What's the size you're looking at? And, is the destocking mainly coming in the running quarter or maybe also the quarter afterwards? And, yeah, what does this obviously mean for EBIT margin? Do you expect the 20% or not? So, you want us now to project us at the end of March 2025? If I would be able to do that, that would be great. But, unfortunately, we are not. Actually, there are uncertainties in this market, and, obviously, these uncertainties vary market by market, and depending on the cyclical and, on the cycles each market has. So, we typically forecast basically total year revenues and EBIT spans by after six months of the financial year. At the moment, we basically cannot go beyond what has been already said. Just to repeat that, we rather see the level of Q4 continuing for the time being and expect a pick-up, depending on the different markets, for sure, not equally, but rather in the short cyclical markets from autumn on. That's basically what we foresee. And for margins, you know, we typically talk about 15%-20% as the ambition for our profitability, and we don't want to make changes here to this ambition. I hope that this justifies it, all its cloudiness, your question. Okay. And maybe on the midterm view then, is it still valid, this CHF 600 million and 2027, 2028? So we still have the same ambition, and we have no doubts about the long-term growth. And therefore the CHF 600 million, even a longer outlook towards a CHF 1 billion, is from the markets and the market growth that we see very, very realistic, and this ambition has not been changing. The short correction effects that we see here, and you see that also in the way we react, we don't basically reduce our R&D investments. We go further forward and also invest into manufacturing capabilities. We are believing in this growth story also for the future. Yeah, Tobias Fahrenholz, something less. Do you hear me? Can you be more specific on China, maybe the situation? Key question for me would be, business seems to be under pressure on pricing, competition, quality seems to come up to your level. So do you deliberately let go business? And in which area would that be? So what's the strategy in China, so to protect margins, prices, et cetera, and so on? I think a very good question. China is for sure one of the most debated markets and obviously this was also the market where we were not performing as we wanted. China has been basically strongly developing in the COVID time and basically switching two gears up where we were busy in making sure that our kids can go to school. We see basically now the results of this. We see an increased competitiveness and increased knowledge level, and we need to face this. Then LEM is, I think, very well set up to face this, because every second LEM employee works in China and basically has a Chinese DNA, and we want to for sure leverage that. So with the organizational change, we want to make sure that this team is empowered in order to shorten R&D lead times, get down in the cost to become Chinese, and drive with the right ambition, basically. So we don't want to give up. We had to give up some because we could not deliver, but we strategically want to regain those market shares and believe also that we have all the means to make that. ... Other questions? Good morning, Arben Hasanaj from Vontobel. First of all, on those layoffs, so I was wondering those severance costs, will they, will you also have some of those in the start of the year? And also specifically those layoffs, kind of in what areas were they, or did you relocate maybe? If you could, elaborate. So the severance costs were booked in the Q4. So we have no further costs coming from there. The positions concerned were a bit throughout, but it was mainly in operating expenses, so SG&A, a bit R&D. And some of those positions, yes, they are being affected in Geneva and then created in other places, more cost competitive places. In terms of those digitalization investments, and also R&D, can we expect that to remain rather elevated, let's say, in the near term? So in respect of digitalization, we do, and maybe you recall, we have a major, let's say, project in introducing a new ERP and lots of other systems, and the ambition is really to provide a very automated, strong, best practice backbone for our processes. We are in the middle of the implementation. So in the year 2024-2025, those investments, those expenses will still persist. So we see that. In the, let's say, more in the medium term, of course, we will then reap the fruits, saying we will of course not have those investments anymore, and we ourselves give ourselves the ambition to actually increase efficiency, and this will then to support as well, the future growth. On the second point, R&D, yes, we will also here continue to invest, the R&D investments, because in the end, it's so critical. The long-term success of LEM is that we develop products which are competitive and which the market actually demands. So you will see here continuous investments, and, you know, Frank just mentioned we have actually just opened up a couple of new R&D centers, be it in Munich, in Sofia. So this is a very clear commitment to the long-term growth. And then just a final one. In terms of those integrated current sensors, so if you could comment maybe, yeah, how happy you are with the success of the products you've launched, maybe market share, how that has developed? So we've started this endeavor in 2017, and we are not yet fully happy with the success. That was the reason why we've been opening a second R&D center in Munich to actually accelerate, to boost the activities. Very clear, we have been building up a group around Geneva, but see that the ecosystem in Geneva doesn't really allow us to get all the talents that we need to further boost this. This was the reason why we eventually decided to move to Munich and actually take over a complete team from another company. And we expect that is also going to further grow. So, at the moment, we are a bit too slow, which is for sure something we are reacting to. On the other hand, the future conversion from conventional and current sensors towards ICS products is so important that we have sufficient opportunities to also grow and to have an important position in this future market. So we don't plan to give up. Yeah, Ferran Tort from Kepler Cheuvreux. Good morning. I would have a couple of questions on the sales development. If you could give, like, a little bit of guidance on the difference between, like, or the impact from market share loss and economic slowdown, how would you categorize more or less? And then on pricing, could you comment a little bit on the development there on pricing? And then I would have, like, a question on the heritage and a new business. How would you split, like, the difference between, like, a cost competitive business or so, like, which part of the new business is defended by IP and innovation, and which part is gonna go down to cost competition? Like, basically what you mentioned before, going back to China and compete there. So somehow more protected than just a volume business. Thank you. Thank you very much. Sounds like we can do a complete business review across all the businesses. Let me give a couple of bullet points here. To differentiate between economic slowdown and market share loss is not always easy, because even when we see that end markets grow, since basically the amount of money you get per current sensor is going down, this is obviously not directly linked. Or there is at least a correction factor that you need to have in mind. We clearly saw that- ... In China, we lost market share in automotive and in renewable, in particular, due to the fact that we could not deliver in these supply chain shortage times. There is obviously now room to catch up. Pricing will, in particular in China, always be a very, very important part, and it's rather increasing than becoming smaller. We have to react as an organization to that. We also see that the competition in China amongst Chinese is as tough as it is also with us, so it's us to obviously need to be able to respond to that. Therefore, we are set up to do that, and the team has been understanding the situation. We see also positive customer reactions to the new speed that we are already showing in the market, so I'm here rather optimistic. But the topic of cost pressure will prevail, and there is no way out, and it's not only cost pressure, it's also speed pressure. So what we do in three years is done in China in 18 months, and also here we need to follow. We need to basically be fully in this rhythm. Like I said, we've been with our organization that is basically focusing on Asia and on Europe, Americas, with separate leadership teams also set up that these fully empowered teams can do that and execute accordingly. Talking about competition, whereas competition fierce, it's probably true that in all these markets that are led by China, the competition is most fierce. So we talk on the one hand about the automotive market, where 60% of the world market is happening in China. And also talking about the renewable market, where from our customers, more than 80% of the global market and our customers are the inverter manufacturers, so those who basically provide the equipment between the solar panels and then the grid. And again, here, this is to 80% a Chinese market, and they are driving this market. And it is a ruthless competition between those players. And these are all not small companies who face very, very tough competition, and we are in it, and we need to face it. But I see that rather as a sporty challenge than as a reason to complain. Daniel Koenig, Mirabaud Securities. I have one nice question and then one more difficult question. I was wondering, EMEA is so positive, is that likely to continue this year? Or, I'm just wondering what the medium term and the short term brings. That's the nice question. Good that you say it. And then the second question would be, your plant in Penang. I was wondering, it's now in a ramp-up phase, and I saw a statement that it would be at full capacity in 2027, 2028. I was wondering, does this mean ramp up means always a little bit lower profitability or one-off costs or things like that? Can you elaborate what Penang means for profitability this year and maybe next year? Thanks. You take the less nice one, and I- For sure. Talk about Europe? Good. So in Europe, we don't see a short-term improvement. So when we talk about improvement and improvement signals, then we expect them rather coming from Asia, and Europe, we see rather a stagnant numbers, also minimum now for the foreseeable timeframe. And when I talk about foreseeable, it's sort of a 3-6-month time frame. That's what we see. Asia, more agile, in particular in the renewables market, and we see there first glimpses that this could start probably not fully in 2024, and very strong then again in Q2 2025. That's at least the messages. But we expect to see signs already in 2024. In respect of the less nice question about Penang, you know, it's really about, you know, absorption of the fixed costs. That's the question. And, you know, what kind of fixed costs do we have? The major one are, you know, supervisors, the personal cost of supervisors, the amortization of the assembly line, these are the main fixed costs. And the most critical thing is that the few assembly lines we have in the, in this year, in Malaysia, they're running at full steam. This is then really helping the profitability. The amortization overall of the, of the factory itself, it is not as a huge financial impact. So it's really about, even though, let's say, the, the factory is not fully loaded, the question is more, are the lines loaded? That's the most critical one. Overall, for this year, 2024-2025, one can expect a certain, let's say, pressure on the gross margin, slight pressure coming from, let's say, the underutilization of this factory. There are currently no other questions here in the room. Please, operator, do we have questions from the telephone conference? Thank you. Dear ladies and gentlemen, if you are dialed in, in a conference call, you can now place a question for the speakers by pressing nine, followed by the star key on your telephone keypad. Please, one moment for the first question. The keypad combination is nine and star. At the moment, we have no questions incoming, so I would hand over back to you for now. Thank you very much. So let me go to questions from the webcast. As a reminder, there is a question mark sign on the webcast surface on the left-hand side if you wanna ask a question. And there is the first question from, Reto Huber, Research Partners. He asked: How many extra costs, meaning costs related to the renewal of the ERP system and similar costs and other restructuring, are you expecting in the next few quarters? So in respect of extra costs for the ERP project, here, you will see a same level as this year. You cannot expect any major increase or decrease on the P&L. In respect of severance costs, one cannot foresee, you know, this is not one thing that we now would publicize, but it depends also very much on, let's say, the future development of our business. Then, Reto, the second question regarding DC meters. Demand for DC meters for charging stations load significantly. Why, and what are your expectations for the next few quarters? Yeah. DC meters have been cooling a bit down now, not really because the market is down, but because also our customers have been losing some market share. At the same time, we see increasingly Chinese players coming into this market and providing solutions that are by far more competitive than what the established players are able to offer. So we are already working with them in also, in order to get our products designed in. And at the same time, we expect that our future solutions that are basically meeting new infrastructures and new standards are able to grow again. But these will then be at substantially also lower cost level. So the story that applies in the, let's say, standard current sensors also applies in these more expensive energy meters. There will be cost pressure everywhere in order to make this a way to sustainability affordable. So we expect growth, but it will probably be less steep than it was when we launched the DC Meter for the first time, but further course in the future. Hopefully this answers- Thank you. the question. Yeah. I presume. There's another question from Lucas Glemser from Berenberg, who asked you if you could talk about the potential effects of the newly announced U.S. tariffs and how they will impact LEM. Do you want to? Yes, okay. We, of course, as you heard before, we have transferred, or are transferring quite some assembly lines to, from China to Malaysia. The whole purpose was really to get, let's say, not exposed to further increases, tariff increases, because at the moment, or let's say, over the last, in the past, all the Chinese products were suffering these kind of tariffs. In respect of priority, we of course, shift assembly lines to Malaysia also, which, for products which go to U.S. So in the short to mid-term, we will. This will not have an impact on them. There's another question from Miro Zuzak, from JMS Invest, who's asking which P&L lines, the one-off costs have been booked? Yeah. Again, as I said, it is on different lines. You have, but the majority of it is in operating expenses, and I would say it is probably a two-thirds SG&A and one-third R&D, so as a rule of thumb. And here I'm talking about the severance expenses. ... So there are currently no more questions from the web. Any questions here? Ferran Tort from Kepler Cheuvreux again. I have one question related to your tariff on China. There are some rumors, or it's been published, that China is intending to basically localize more of the supply chain, especially on the OEMs. So I was wondering how that could affect you, and then somehow related to the HNTE tax benefit, how likely is it that you're gonna basically renew it? Maybe we start with the first localization of supply chains. Yes, this is happening while we are speaking, and we do exactly the same. Now, we are already localized in China, so a large extent of our bill of material that we are using for our products are already localized, and we will further work on localizing this. And the intention is very clear. The independent from outside is a strategic key criteria for China, being faced obviously with multiple decisions to basically not being allowed to ship to the to China in particular for U.S. players. We believe that being a Swiss company, we rather have here a advantage coming basically from a neutral ground and being fully localized in China. HNTE, Andrea, maybe you want to- So of course, tax regimes, you never know, you know, how they will evolve forward in the future. At the moment, there is no indication of any changes, so we are currently applying again for the years 2024, 2025, 2026. But in the long term, yeah, we, we cannot answer. But I would say in the short midterm, I think, we will be able to defend this so-called HNTE status. And sorry, a follow-up on the IP level, on the localization, does it have any impact, for example, if you have to transfer any R&D from, let's say, Munich or any R&D is gonna be done in China for China from now on, basically? So the IP level has a big impact on the HNTE status. So the prerequisite to get this high and new technology status in China requires that a certain IP is also in China. So this is for sure a very key topic also for us to basically make sure that this status can be guaranteed. What we do is all our R&D centers, they do, our R&D, contract R&D, and they are invoicing their services to our head, let's say, to LEM International in Geneva. The owner for all the IPs developed is LEM International, until we decide to partly transfer it to LEM China to defend a potential HNTE status. Yeah. Thank you. Walter Anders from AMG. Maybe a simple question, but this, can you elaborate a bit more on these geopolitical tensions between China and U.S.? And how would your business be impacted if Taiwan would be, become a conflict? Now, already many people elaborate on this. I think, the way we believe we can react on that is to basically be fully flexible. You've seen with the organization that we've implemented in April 2022, we somehow were already foreseeing that there will be two probably differently behaving worlds. With a further localization in China, with basically reducing export from China, in particular to the U.S., but moving this to Malaysia, there are a lot of steps that basically will allow us to be least impacted by those tensions. We believe we are here really on the way to set that up. Now, Taiwan is something that, probably is very difficult to foresee what would be the global reaction towards China when China would make such a step, because this would then be potentially have, again, an impact on whatever sort of supply chain. So therefore, forecast is probably very, very difficult. But I don't foresee something like that in the next 2, 3, 4 years. This is probably something rather... When you look at the, China ambition to, having finished this by the hundred years of, the, establishment of China, so that means in 2049, there is still a bit of time until something like that, would have been realized. We don't foresee that for the very short term, in particular, since also China has a couple of challenges internally, with an aging population, with basically not having yet a social network that I would not assume. And for sure, also, China, the Chinese renminbi is not fully convertible, that such a step would be foreseeable for a short term, sort of look. ... Daniel Koenig, Mirabaud Securities. I had just one question, because I remember a previous meeting, there were at least three or four questions on the cooperation with TDK, and now I haven't heard anything. So I'm very curious what has happened with that cooperation of TDK and that TMR product? Okay. Sure. I've been mentioning this, so, I'm sorry when I was there, not clear enough. So this was on the R&D slide. So this is ongoing, and, we are working very well together and very closely together, so this is making progress. And, we basically expect towards an, time frame, let's say 2026, to have, year products, on the market. So this is something that works very, very well. And, both companies are committed, to this cooperation, and, we fully believe that this was the right step to move forward. Seems there are no, no more questions here in the room. There are no questions either in the telephone conference nor the webcast, which means so we're coming to an end of the official part. We say thank you very much for your interest in LEM Holding. We say goodbye to the participants that joined us virtually. And of course, you here are all invited to the standing lounge, which takes place in the Pavilion room. If you leave the room to the right-hand side, the LEM management will be glad to continue the discussion with you. Thank you very much.