Ladies and gentlemen, welcome to the Rieter Results Press Conference Call 2022 Media and Investor Conference Call. I am Paul, 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 Dr. Norbert Klapper. Please go ahead, sir. Good morning, ladies and gentlemen, and welcome to Rieter's Media and Investor Presentation on the Results of 2021. We have prepared four topics for this presentation as usual. We start with the key messages, including a couple of additional insights on the record order intake we booked last year. This section will be followed by the financial results and a follow-up on strategy implementation. Then we will close the presentation by giving you an outlook for 2022. Before we start with the key messages, please allow me to express our deep concern about the war in Ukraine. We very much regret the pain and suffering of the Ukrainian people, and we sincerely hope that this conflict will be resolved peacefully as soon as possible. From a business perspective, Rieter is not affected directly by the war. Neither Ukraine nor Russia or Belarus are textile countries. Rieter only has a few customers in this part of the world. It is too early to assess the impact from cost increases, raw materials, energy and transportation on Rieter's business, and the same applies to the assessment of potential consequences on Rieter's customers. Let me come to the key messages on page three. Order intake, CHF 2.2 billion last year. We already reported this number in January. Today, I will give you some more background information on the rationale behind this record and the way forward. Sales of CHF 969 million despite the bottlenecks in the supply chain. As reported in January, Rieter demonstrated the ability to generate profitable sales from the backlog in a difficult situation. EBIT margin of 4.9% of sales. In January, we gave you a range of 4.5%-5%, so we are at the high end here. Net profit as a consequence of 3.3% of sales. Milestones achieved in strategy implementation. We will talk about the acquisition we did last year again and about Rieter Campus. More details in the third section of today's presentation. We propose a dividend to the AGM of CHF 4 per share, which is a payout ratio of 59% of net profits, which exceeds our dividend policy significantly. The outlook, which we will discuss at the end of the presentation, including our thoughts on margin protection, a major issue for 2022. On page four, we have the comparison of the order intake by half year, 2019, 2020, and 2021, which illustrates the record that we had in 2021. All three business groups contributed to this development, and you will find the details on the 2021 numbers in the annex of this presentation. The order intake has been supported broadly on a global level. The orders came primarily from Turkey, from India, from Latin America, from Uzbekistan, from China, and from Pakistan. There is two elements in this record order intake here. There is a catch-up effect from the two prior years, and there is a regional shift in demand, which I will explain a little more in detail today. If you follow me on the next slide, you see that the record order intake is based on the combination of three factors. There is a market dimension, there is a Rieter technology dimension, and there is a Rieter system dimension to it. In combination, they led to the record that we were able to achieve. This slide here highlights the market development. First factor, which we call the regional shift in demand. The rationale is the following: the staple fiber mill consumption in China, 2018 was around 23 million tons. Out of this, 50% were consumed by the mills for domestic demand. In other words, roughly 50% were exported. This development, this proportion changes at the moment, yeah. You need to know that for the production of 1 million tons of yarn per year, you have to invest in spinning equipment roughly CHF 1 billion. What we saw last year in the order intake of the industry is that orders for investments have been placed outside China, which represent a production capacity of 1.5 million-2 million tons per year. This is our estimate based on the numbers that we have analyzed. Out of the 23 million tons, 1.5 million-2 million will be taken out of China and will be produced outside China as soon as the new equipment will be operational. This is not a lot when you look at the export ratio or the domestic demand ratio out of the 23 million. This is why we expect this development to continue. At the same time, I have to highlight on this slide that the Chinese spinning industry invests in its competitiveness. There is two developments which are important here. The first one is that the industry is leaving China, and I gave you a flavor on the amount of capacity which has been invested outside China last year. At the same point in time, China invest into the capacities which will remain in the country. On my next slide, I have again the slide that we looked at in January, which illustrates what I just said. You see here, the order intake comparison in two boxes, the average 2011 to 2020, which Rieter booked, the ranking by country. You see that China was number one, Turkey number two, India and Uzbekistan and the U.S. followed. In 2021, we had a different picture. We had Turkey on number one, we had India on number two, we had Uzbekistan on number three, China number four, and Pakistan new on the list, number five. You see the different order of magnitude also. The average over the last ten years was close to CHF 950 million. Last year, we booked CHF 2.2 billion. If we considered Latin America as a country, it would have been number three, on last year's list and number five on the ten-year lists. We see the regional shift here very clearly, and based on the rationale that I explained to you on page five, we are of the opinion that this is not over yet. The second factor is on page number seven. The second factor, which facilitated this record order intake, is Rieter technology, the blue box. To better explain this, we need to look into the mechanics of this business, of the yarn business. Yarn is a commodity. More than 90% of the market is a commodity market. The target for a company which is in this business, a spinner, is to achieve minimum cost per kilo yarn at a given quality level. The key cost elements in the cost per kilo yarn are obviously raw material, energy, labor, depreciation of the equipment. This is what Rieter does. Rieter provides the technology with the lowest cost per kilo yarn. This is our goal, particularly in the area of innovations. Lowest cost per kilo yarn is what a premium supplier provides. It goes without saying that in the current situation, when we look at energy costs, but also raw material cost, this value proposition is very, very important, even more important than in the past. When we move on to page eight, we can look at the third factor in this combination of things that led to the record. This is the system approach Rieter is pursuing. What you see here is, the ring and compact spinning technology is the most popular technology in this market. It represents more than 80% of the global capacity. Rieter is particularly strong in this segment and has invested in this market segment over the last couple of years. By these investments in innovations, we improve the system attractiveness, the Rieter system attractiveness in terms of machine performance. Just give you two highlights here. Two major machines in this, system setup is the card, the preparation machine, and the comber, which takes the short fibers out. We presented two new machines at ITMA in Barcelona in 2019, and we sell a lot of them. We invested in automation of the system. You might remember the ROBOspin, the little robot which repairs the yarn breaks on the ring spinning machine. Very important and it is a USP. There is no comparable product on the market. The digitization of the system is also very important. We have the Rieter Digital Spinning Suite ESSENTIAL, which is very important to take the inefficiencies out and limit the number of operators that you need for the mill. The flexibility of the mill is important. We presented in Barcelona in 2019 our compacting devices, which help you to turn a ring mill into a compacting mill back and forth very quickly. We also sell a lot of all of these products, and they helped us to improve the competitiveness, the attractiveness of the system. This is the third element, the third factor which facilitated the record order intake for Rieter. Of course, we did the acquisition in the only machine which was missing in this setup for Rieter in the automatic winder. In summary, we can say the favorable market conditions in connection with the right technology and the right system offering, this combination led to the record order intake. On page nine comes an important point, order intake is great and order intake and the resulting backlog are, of course, a precondition for success. Push comes to shove when order backlog has to be turned into profitable sales. In the second half year, last year, we booked CHF 569 million in sales, despite the bottlenecks that we are all aware of. Material supplies, not only semiconductors and electronics, many other things, were difficult to get on the market. The freight capacities we discussed earlier. The slide illustrates what the Rieter team achieved in 2021, despite all these challenges. Of course, this underlines that we will also be able to master the new challenges successfully, which we will see in terms of turning order backlog into sales in 2022. Again, the details on the sales numbers for 2021, we have in the annex. Right. So far, the key messages and the background information on the record order intake and the conversion of backlog into sales. I now hand over to Kurt, who will guide you through the financial results. Thank you, Norbert. Good morning and welcome also from my side. I start on slide 11 with the financial highlights. After the tough year 2020, 2021 was a different challenge. The start in the year was still suffering from the low orders of the previous quarters. The recovery was first seen in the after sales and components business. Then followed orders for single machines, and later on for full systems. From Q2 onwards, orders were on a very high level for the rest of the year. With the strong growth in orders, different challenges came. External bottlenecks, namely in electronic components like inverters or controllers, and in logistics, prevented Rieter from having higher sales volumes in 2021. Let me now highlight some of the key figures on this slide. The gross margin recovered from a very low 23.4% to 28.5%, mainly due to better capacity utilization in our operations. The EBIT reflects the recovery of the gross margin described just now. This positive impact was partly consumed by higher costs. Roughly half of the cost increase is volume-related. Another third is due to a base effect. In 2020, special COVID-19 measures for cost savings were implemented. These one-offs apparently did not repeat in 2021. Free cash flow turned to positive due to the operating recovery, as well as due to the positive development in net working capital. The net working capital was already slightly negative in 2020, and is now at -CHF 80 million. This means payables and customer down payments exceed inventories and receivables by CHF 80 million. The high down payments from customers based on the high orders were the main driver. Despite the high free cash flow of CHF 128 million, net liquidity of CHF 41 million turned into net debt of CHF 162 million. This decrease of around CHF 200 million includes CHF 350 million cash outflow for the acquisition from Saurer. As you can see on page 12, there is one major effect that influenced the EBIT compared to previous year and led to this EBIT improvement of more than CHF 130 million. The gross profit improvement was, on one side, driven by higher volumes, plus CHF 93 million gross profit. On the other side, by margin improvements in all three business groups, CHF +73 million. The mix effect, more sales in the lower margin machine system and systems business reduced the gross profit by some CHF 23 million. Parts of this gross margin improvement was consumed by higher costs. As mentioned before, roughly half of the cost increase is volume-related. Another third is due to a base effect. In 2020, special COVID-19 measures for cost savings were implemented. These one-offs, like short-time work, lower costs for trade shows and traveling, et cetera, did not repeat in 2021. The other result added in total CHF 23 million net to the improvement. The highest contributor to this effect were higher restructuring expenses in 2020 that did not repeat in 2021. The rest of the improvement consist of several smaller items described in the annual report. The structure of the balance sheet on slide 13 changed mainly due to the acquisition from Saurer mentioned before. Various positions were directly or indirectly influenced by this acquisition. The increase in non-current assets reflect the EUR 300 million acquisition. Partly, the acquired assets are shown on the property, plant, equipment, intangible assets and goodwill. The remainder is included in deferred considerations. The second bond of CHF 100 million that was issued in August 2021 is shown on the non-current financial debt. This explains a major part of the increase. The increase in current financial debt includes additional credit lines that were drawn in connection with the financing of the said acquisition. Also, equity increased in Swiss francs by CHF 46 million. The equity ratio did decrease to 27.6%. This is due to the fact that the acquisition was fully financed without additional equity by existing cash, additional credits and the CHF 100 million bond. The further decrease of net working capital is not related to the acquisition. As mentioned before, it was driven by higher down payments from customers based on the high order intake. The free cash flow on slide 14 amounted to CHF 128 million. This is more than CHF 200 million above the low free cash flow in 2020. The two main drivers were the net profit improvement of CHF 120 million and the positive net working capital development. Included in the net working capital change are the increase in advance payments from customers due to the high order intake. Depreciation and amortization are balanced with the CapEx and remained at around CHF 37 million. CapEx was CHF 10 million above the low previous year. This reflects a certain catch-up effect as well as some investments in operations to eliminate internal bottlenecks. Finally, on slide 15, the dividend proposal already mentioned by the CEO. Based on the profit of the year, the Board of Directors proposes to the shareholders a dividend of CHF 4 per share or CHF 18.7 million in total. The payout of 57% of the profit is clearly above the minimum payout of 40% stated in Rieter's dividend policy. With this, I give the word back to Norbert. Thank you, Kurt. Let me share a couple of thoughts on strategy implementation with you. On page 17, we put together the cornerstones of Rieter's strategy to illustrate the impact of our last acquisition and of the Rieter Campus on strategy implementation. You are familiar with the cornerstones. We look at ourselves in terms of an ambition to be the market leader in short-staple fiber spinning systems. Number one in premium, number two or three in the middle segment, and a market share of 30%+. In the premium segment, this is where we wanna be number one. Lowest cost per kilo yarn. I already explained how important that is and what we do to achieve it. Lowest cost per kilo yarn you can get by a combination of the best machines, the best components, the best digitization, and the best service. All four together make up the system which provides the lowest cost per kilo yarn. Obviously, with the acquisition of the automatic winder, we added an important machine to this combination, but we also added an important component to this combination. This is Accotex, the elastomer components which go into the ring spinning machines mainly with a strong focus on ring and compact spinning. I told you already how important the ring and compact spinning system is in this market, and I told you about Rieter's position. The maximum revenues from the installed base is, of course, super important for the profitability of the business. It goes without saying that along with the automatic winder machine, we'd acquired the service business of the winder on the installed base, which is in the field. The enabler for all of this together is technology leadership. We have been talking about this a lot of times, and it is still true, and it will not change. Technology leadership is what is key to achieve the lowest cost per kilo yarn in a spinning system. This is marked in blue here because the Rieter Campus will have an impact on this. Technology leadership depends on having the right talent, the right people, who can create technology leadership, who can be innovative and creative at a level that allows you to be the technology leader in the market. The Rieter Campus will attract this talent. Adjacent businesses we do selectively. You know that we have nonwoven activities. We also have filament activities and precision winding. The filament segment, part of our business has been strengthened by the acquisition of Temco, which is the third business that was part of the acquisition from Saurer. We are very happy that we have been able to add this component business to the Rieter portfolio. Financial targets. Yeah, obviously, the Saurer acquisition will have an impact on the financial structure and the targets of the company. We will come back to this point when we have the carve-out of the business behind us. On the following slides, there is again an illustration of the winding business. To remind you of the numbers, in 2018, this business generated under the ownership of Saurer sales of EUR 193 million and an EBITDA of EUR 22 million. We have not consolidated it in 2021 because the carve-out is not done yet. We will accomplish it during the first half of 2022. On the next slide, you see again Accotex and Temco. Accotex, the elastomer components for the spinning machines, and Temco, which is a component business serving the filament industry. It is two strong component businesses which are very... I'm very happy that we have been able to make these part of the Rieter family. To remind you of the numbers, 2018, both businesses together generated sales of EUR 67 million and an EBITDA of EUR 12 million. We have started to consolidate them, as the carve-out is behind us already for these two businesses, in 2021. We started in December. You see the corresponding numbers here on this slide. The third achievement in terms of strategy implementation is the Rieter Campus. When you come to our place, you see the construction site. We have started when we did the groundbreaking ceremony in September, on September 8th. As I told you already, it is absolutely critical for Rieter to have this, because we need a customer and technology center where our engineers and our people can work together in a environment and an atmosphere of creativity and innovation, and where you continue to have access to European technology, and of course, to also attract young talent, which is very important for the future of the company. Let's move on with the last chapter of our presentation, the outlook on page 22. As we said earlier, we anticipate a gradual normalization of the demand for new systems in the coming months. The reason is basically that the delivery times for new machines and systems have become very long. It's not only a matter of the delivery times for machinery. I was in Turkey, recently, and customers in Turkey reported about very long delivery times for new buildings, bottlenecks in the construction sector in Turkey. It takes you a lot longer to build up a new spinning mill than in the past, yeah? It's not only the equipment, it's also other factors, for example, like civil engineering. ITMA 2023 is coming closer. There are customers out there who think about it, "Okay, if we place an order now and we get the machines in 2024, why don't we wait until ITMA?" I've heard them saying that already. Of course, we don't know yet what the war in the Ukraine will have in terms of an impact. However, the underlying rationale of the regional shift away from China in connection with the investments into the competitiveness of the Chinese industry, this will go on. We expect this to go on. In addition, we expect the demand for wear and tear parts to remain at a good level. The spinning mills have a high capacity utilization, so we look at this as described in our outlook statement here. For the full year 2022, we expect sales around CHF 1.5 billion. The order backlog and the consolidation of the businesses which we acquired from Saurer bring us to this number. We also expect the second half of 2022 to be higher than the first half of the year in terms of sales. We already discussed the realization of sales from the order backlog, yeah. It continues to be associated with risks. This is not a secret in relation to the well-known bottlenecks in the supply chain, the pandemic, which is not over yet in some parts of the world, and of course, the recent geopolitical uncertainties. Despite the price increases we have already implemented, the rise in global costs poses a risk to the development of profitability. This statement tells you that a super high priority this year is margin protection. It's a key issue in the current situation. I told you in January, you will see it also on the next slide, that our backlog margins are healthy, yeah? In the meantime, we saw a new wave of cost increases, flooding the markets, so margin protection remains the top priority. For components and after sales, it is not that difficult because the backlog reaches only a couple of weeks into the future, and this helps a lot to synchronize price development with cost development. I can tell you that this works very well. Nobody loves it, as I said before in one of our presentations, but everybody understands it. In the machines and systems business, the situation is different. The backlog here goes into 2023 or even 2024. So here we have to work on margin protection in a different way. Our approach is straightforward. We have already increased our prices for more than 15% in the meantime. We work constantly on efficiency improvements to take costs out wherever we can without jeopardizing, of course, the quality and the performance of what we offer to our customers. We have done one thing, which I have to highlight today. We introduced a price adjustment clause in our contracts. This is not common in our industry. I was in Turkey to explain it to customers, and the reaction was. Let me say it this way. They were surprised, yeah. In our view, this is a must in the current situation. We have to have that, so we implemented it as you would expect from the market leader. So far, the outlook and the margin protection. We are at the end of the presentation. Please let us have your questions. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their 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. Participants are requested to use only handset while asking a question. Anyone who has a question may press star and one at this time. The first question comes from the line of Dominik Felges from NZZ. Please go ahead. Yes. Thank you. Good morning, gentlemen. I was wondering, you know, I mean, if I look at, although there have some been shifts there, but if I look at the markets, I mean, not really any new countries have propped up there. I mean, I was wondering, you know, I mean, there's a lot of talking about de-globalization, you know, in many industries, localization. Is it not or is that not happening yet, or will it not happen, will it never happen, you know, that new markets maybe will emerge for textile manufacturing, especially maybe also in the industrial countries, which partly at least have been active in textile manufacturing, or will it just all remain in Asia as before? Connected and related to this question, second one, I mean, is Winterthur really still the right place to do innovation? I mean, or would your new campus not rather have to be in Asia, you know, where the music really plays in textile manufacturing? If you allow me a third question. I mean, the share price has obviously also for Rieter come down significantly. I mean, does this mean that we have really seen the best in that the market really is not really expecting much further increase, you know, or in your business. Thank you. Yeah. Thank you very much for the three questions. New countries. No, we see the usual suspects, but what we see is a different mix of the usual suspects, right? We have not seen a new country popping up. We saw a strong increase in Mexico and in Honduras, for example, but that doesn't mean that the industry had not been there before. A brand new country where the spinning industry was not present, we don't see in this regional shift that we explained. The mix of countries, the weight in the distribution of order intake, which will later lead to the mix in the installed base, is fundamentally different from the past. Yeah. What I have to say is I don't expect the spinning industry to come back to Central Europe. I guess you wouldn't be competitive in Central Europe if you try to run a spinning business. The European textile industry will be nurtured by countries like Pakistan, Bangladesh, particularly Turkey, North Africa to some extent. This is where the yarn will be produced for the European consumers. The same way Central America will be the hub for the yarn production for the U.S. consumers. Is Winterthur the right place? Of course, Winterthur is the right place. As I explained, Rieter's ambition is to be the technology leader. In order to be the technology leader, you need to have access to latest technology from other industries, from other sectors. Latest technology is absolutely key and make this technology available to the spinners of the world. This is what we do in Winterthur, and this is absolutely the right place to do that. The share price, I cannot comment on the share price. I guess what we saw in the last couple of years, particularly last year, is that Rieter has made a major step in strategy implementation. We see the benefits of the strategy implementation by the order intake that I explained to you. I guess the share price will follow. That is what I would expect. Can I just add a follow-up question there? You were talking of North Africa as well as a market. I mean, is that? Do you mean maybe Egypt or what? Which markets could become more relevant? Which countries? Egypt is on top of the list for the North African countries, where investments in spinning equipment go at the moment. Just to follow up. Why don't you come for an interview, please? Yes, sure. Okay. Because your third attempt, I guess that is not fair to the other participants. Okay, thank you. That's fine. Yeah. Don't worry. I mean, it would have been a very short question, but- Yeah, of course. Comes another short question, yeah. No. Give me a call. Let's talk about it on the phone that time. Okay. Thank you. Okay. Good. The next question comes from the line of Walter Bamert from ZKB. Please go ahead. Good morning. I would ask three questions if I may. The first on orders, the second on sales, and the third on components business. Does the start in order intake in this year confirm that the fourth quarter decline was just typical seasonality, or how did this year start in terms of order development? When it comes to sales, could you help me with the guidance for the second half, relative to the first half? Is that increase due to your visibility in the order book, or is it because you expect component shortage to go away, or is it that you ramp up capacity? For me, it would be more helpful if you tell me if you expect sales in the first half to be above second half of last year, or if you see there something that slows it down, or if you say, "We have more capacities in the beginning of this year, so we can do more sales also in the first half relative to the second half of last year." In the components business, perhaps I also come in for an interview because I would like to know who are the clients. Is this the competition or are these really yarn producers? In which regions are they getting, let's say, is there over proportional representation of the components business in certain countries? Is Saurer, for example, still a client of you, or was that related to the businesses you took over from them? Okay, three questions. The start into 2022 was good. Yeah. We are satisfied with what we saw in January and February. What we saw in January and February underlines that our expectations in terms of the market development is about right. Sales first half year this year in comparison to the second half of this year. Well, this is basically a matter of the order intake, yeah, and the delivery times and the lead times. That is the underlying rationale here. It depends on what orders you take when and when you supply. That is the big driver here for the difference between the two half years. The components business, the biggest customer of our components business is the spinning mills around the world who buy the wear and tear parts from these components units that we have. Of course, there is also a portion which goes into our new machines, and there is even some which goes into machines of competitors. But the by far biggest customer segment for the components business are the spinning mills around the globe. Great. Yeah. Good. Further questions. The next question comes from the line of Christian Arnold from Stifel. Please go ahead. Yes. Good morning, gentlemen. I also have a couple of questions. Maybe starting with the outlook and a follow-up question we just heard before, this CHF 1.5 billion sales you expect. I mean, to what extent have you included the Saurer activities? I mean, of course, Accotex and Temco will be fully included. What about the automatic winder business? You expect that to be consolidated in the first half. Does it mean that you have included some half of the business of the EUR 193 million into that CHF 1.5 billion? Well, I'm not smart enough to answer this question, Christian, to be honest. Yeah. The carve-out is not done yet. We are still talking to Saurer about the way we take over backlog, or they continue to manage backlog and so forth, and so forth, yeah. It's too early to say that. I guess we will be in a position to make a statement on this when we talk about the first half year results in July. The CHF 1.5 billion excludes the automatic winder business? No, it doesn't. There is some of it in, but it's a rough estimate, which is not a number that I can share with you. Okay. That would also explain that H2 will be higher than H1. That is also a part of it, yeah, for sure. Okay. The deferred considerations, I mean, you booked CHF 192 million in the balance sheet, also from these non-consolidated Saurer activities. A rough guess how that will be divided into tangible assets, intangible assets? Christian, are you trying to fill up your spreadsheet here or what? Yes. Yeah, I can take this. I think you asked this question before. It really depends on the purchase price allocation. It depends on the backlog Norbert just described. If you want to make a guess for your spreadsheet, just take 50/50. I cannot come up with a better number at the moment. Okay, good. I can also take 50/50 for the Egyptian order, that it will be booked in 2022 and 2023? Yeah. We will start to ship this order in the second half of the year. Okay. It's rather less than 50 this year, more than 50 next year. That depends on a couple of things, including the progress in the buildings in Egypt. Yeah. Okay. Last question. You haven't given us any guidance for the profitability for 2022. It would be a fair assumption that profitability would go towards, let's say, a level which you in the past had as a target, with CHF 1.3 billion sales at 10% EBIT margin. I mean, it goes into that direction. Maybe not there because you have higher costs, of course. You have some additional expenses coming from the acquisitions. Let's say towards a high single digit EBIT margin number, that would be something to be assumed. Is that a fair assumption? Christian, I guess you watched yesterday, for example, the nickel price, right? Yes. 44%+ on one day. Yeah. I will not give you a profitability outlook today. I guess it would be wrong to do that. Many, many things can happen during the course of this year. It is about the ability of Rieter to manage them, to master them, and to generate profitable sales from the huge backlog that we have. I shared our thoughts regarding margin protection with you. I guess this is straightforward and but many, many things can happen while based on the development that started on February 24, 2024. We cannot give you a profitability outlook today. Okay, fair enough. Thank you very much. Thank you. As a reminder, if you wish to register for a question, please press star and one on your telephone. The next question comes from Sebastian Vogel from UBS. Please go ahead. Hello, good morning. Can you hear me? Yes, we can. Hi. Good morning. Perfect. Many thanks. I've got a couple of questions on first on the repricing of previous orders. Is that something what you actually can do? Because, I mean, you said you have already increased the prices for orders coming in. But if you have some orders in the backlog, is there a chance to make a repricing of those existing ones? That would be my first question. The second one is on the adjustment clause that you introduced also in your description of what is going on at the moment. What sort of cost is covered there? Is it like labor cost, energy cost, or is it more for general adjustment that is covering a lot of individual ones? Last but not least, you mentioned shortly the revenues and the EBIT contributions or the operational profit and the sales number for the winder and for the components in 2021. Would you mind repeating them? Sorry. For the first one, I understood. Repricing. You can always try to negotiate in terms of repricing. This is something which of course depends on your willingness of the customer to follow you on that. If you don't have a corresponding clause in the contract. This is why we introduced the price adjustment clause. The logic of the price adjustment clause is that it covers 70% of the value of the order. Which is material cost plus a couple of other things. That is the idea. The cost of value creation, basically value added. The last question I didn't understand. What do you mean by the numbers 2021? Yeah. I saw that you referred to something like EUR 193 million for the winder in terms of sales and components and EUR 67 million in 2021 from Saurer. This was 2018. Right. Okay. 2018. In 2018, the Winder business, including the service business, generated sales of EUR 193 million and an EBITDA of EUR 22 million. The Accotex Temco business generated EUR 67 million of sales and an EBITDA of EUR 12 million. This was in 2018. This is the point of reference for us because this was the last year which with let's say normal market conditions. That's why we look at 2018. Great. Many thanks. Just one quick follow-up. In terms of integration cost on the Saurer transaction, what do you think could be a reasonable assumption for 2022 there? You can see in the annual report that we had last year, CHF 4.4 million on this. Now, we say we're gonna integrate in the first half of the year. The same we don't know yet. Maybe 50% is again a good guess. Got it. Many thanks. The next question comes from the line of Andrew Gibbs from Otus Capital Management. Please go ahead. Hi there. Thanks very much for taking the questions. I guess this is more of a sort of strategic question or structural one, but if I look at that order backlog, as it's been building, obviously there are a lot of moving parts to that. In the sales that you've currently shown, you know, you're indicating that there's some mix effect. I guess the question here is, does that mix effect. If you're shifting production out of China, is the first thing you do to put a middle, well, a lower mix product, if you're one of your customers, to build up the base load, and therefore is premium product a later cycle event, if you like, in this dynamic. That's question number one. Question number two is, you gave some indication of the, well, the extent to which product was being shifted out of China and suggested there was more to come. In your discussions with customers, can you get any sense of how, you know, what their intentions are on this front? The CHF 23 million, we divide by five, divide by two. We've done, as you said, CHF 1.5 billion-2 billion. You know, where do you think that settles? At half of a half or what do you expect? Thank you. The mix effect, that depends on what type of systems we sell. Yeah. There is a couple of systems, a couple of machines in our systems which have a very favorable gross margin, and others which have a less favorable gross margin. This is where the mix effect comes from. There's no cyclical element to it. They are. It depends. Does the premium product have a higher gross margin, generally speaking? Yes. Of course it does, yeah. The question here, I guess, is does premium product, if you're building up new capacities in countries that are taking over the substitution effect, is the first thing you're doing is filling volume and later you fill with premium product? No. You do it all at the same time? No, customers who are investing outside China invest in premium. Okay. Yeah. There is no cycle in terms of building up spinning industry in a country like Honduras or Egypt or Bangladesh or Pakistan, yeah. Customers who decide to invest in this country invest in premium. Okay. And, uh- Yeah. The settlement, where will this point be from the 23 million down to what level will it go? Well, this is hard to tell. We don't know. What I said is I don't expect it to stop at the 1.5 million-2 million tons, which we've seen so far. Yeah. I mean, you could even go further and ask yourself, okay, let's assume it goes down to the domestic demand, yeah, which would cut it in half. Why would the Chinese market be supplied with domestic yarn that will be produced domestically, yeah? I mean, in Europe, this doesn't happen anymore. Yeah. All the yarn comes from elsewhere. Yeah. But this is speculating. Yeah. What we saw so far is 1.5 million-2 million, and we expect it to continue. Okay. I sort of interrupted you, sorry, when you were just saying about the different mix. Some of your products have a very high gross margin contribution. What is it about them? Is it a market share situation you have in those products that creates that price- Separate discussion. No, let's not go too into the details. Okay. of our product portfolio here, yeah? Okay, fine. If you wanna talk about that, we are always available for a discussion. Yeah, no problem. Thanks. Good. Thank you. The last question comes from Marc Saint-John Webb from Quaero Capital. Please go ahead. Yes, good morning. Just a question to try and understand whether the rise that you're talking about in material costs and in component costs what is the different impact whether you are producing your premium machines or mid-range machines compared to maybe lower end machines of the competitors? Could one presume that the impact is less on premium machines and might actually tempt some clients to buy premium machines rather than lower end machines? You mean the development of the material cost for our machines or for our customers? The material costs for your machines, i.e., a machine made of steel. The steel price rise is the same impact for a low-end machine that costs a low price as for a high-end machine, and therefore the overall impact, one might imagine, might be less on the premium machines. Well, the premium machine. Yeah. Premium machine has a lot of electronics and semiconductors, yeah. That tells you the story, you know. Thank you. Yeah. There are no further questions from the phone. All right. Thank you very much for the lively discussion. As I said, for those who have not been able to place their third or fourth or fifth question, we are available to continue this conversation on a one-to-one basis. Please feel free to contact us, and we will answer your questions in a one-to-one. Thanks a lot. I wish you a good continuation of the day, and let's hope for peace in Ukraine. Thank you. Ladies and gentlemen, the conference is now over. Thank you for choosing Chorus Call, and thank you for participating in the conference. You may now disconnect your lines. Goodbye.