Ladies and gentlemen, welcome to the semi-annual report media analyst conference call. I'm Moira, the conference call operator. 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. Thank you very much. Good morning, ladies and gentlemen. Thanks for being with us this morning for the presentation of Rieter's half year results. I jump right away on page two, where we have summarized the key messages. In the first half of 2022, Rieter booked an order intake of almost CHF 870 million, and we have an order backlog of more than CHF 2.1 billion. Sales, we booked CHF 620.6 million sales. The sales could have been significantly higher. We will talk about that today because we had pre-produced deliveries in the three-digit million range, which we needed to postpone until the second half of 2022. EBIT came out at a loss of CHF 10.2 million and a net result of - CHF 25.2 million. The three major reasons are significant cost increases, which we could not compensate, additional costs in connection with the compensation of material shortages, mainly development costs, and acquisition-related expenses. It goes without saying that this loss is way below our expectations and ambitions. We have launched an action plan to increase sales and profitability in the second half of 2022, with two main pillars are important here. We have a program to compensate cost increases as much as possible and of course, also a package which is supposed to secure sales realization from our backlog in the second half of 2022. We also have news today on the Rieter site in Winterthur. We have started the sale of the remaining land here in Winterthur, where we are today. Last but not least, we have an outlook. We will give you an outlook for the second half of 2022. I move over to slide three, which shows you the order intake development. Order intake without acquisition is significantly above the five-year average. You see this in my slide here. Five-year average, CHF 570 million. Without taking the acquisition into consideration, we have been close to CHF 700 million in the first half year, 2022. The reason for this development is the regional shift of demand and the success Rieter has in this environment. The regional shift of demand continues. There is two dimensions to it. There is investments in spinning capacity outside China, and there is investment in the competitiveness of the Chinese spinning mills at the same time. Both comes together, both coincides. This is what we see in the market and Rieter is set up the right way to benefit from this. However, we expect a normalization of order intake, which will be driven by the long delivery times of the equipment suppliers and the global challenges that we all know about. COVID is still there, inflation and the impact, the potential impact on consumer spending and on financing of investments, that is the important things that we are looking at today when we talk about challenges. The order backlog at a record high level of CHF 2.1 billion and the cancellations at a rather low level, which tells us that our customers hold on to their investment projects. They see the opportunity which will arise when the markets recover. On the next slide, page number four, we give you an update on the reasons where the success in the market is coming from. You see the first block here, under the light green headline market. We already talked about that. This is the regional shift which continues in the spinning industry. The investments outside China in combination with the investments into the competitiveness of the Chinese mills, which are supposed to stay in China. We also have an update on the country ranking on the next slide. I will come to that in a minute. The second issue is of course as important, and this is Rieter's technology. Our technology offering, which targets at the value proposition of the lowest cost per kilo yarn, which is what our customers are looking for. This is obviously the right answer to the current energy cost challenge that our customers are having. The technology leadership in terms of energy consumption of our machines is very important in this environment, and it gives our customers a competitive advantage that we can benefit from. We also discussed the system dimension of this boom of the success of Rieter in the market. You know that we have completed the ring compacting system by acquiring the automatic winding machine. The order intake for complete ring and compacting systems gains traction. The completion gives our customers a competitive advantage, and this is also true for us. In particular, newcomers see the benefit of buying complete systems from Rieter, and the regional shift, which we experience at the moment, implies that there is a relatively high share of newcomers in this business. I'm coming to slide number five. As I promised, this is the country ranking in terms of order intake. You see on the left-hand side what we had over the last 10 years, in 2011 to 2020. China being number one, followed by Turkey, India, Uzbekistan, and the United States. We already talked about the financial year 2021 earlier. You see that the picture has changed. Turkey being number one, India, Uzbekistan, China, Pakistan. U.S.A. No longer being on the list. We have the same top five countries we had in the first half year of this year, but the ranking changed a little bit. India became number one, and this was driven by the automatic winder orders that we sold in India. India number one, Turkey number two, China, Uzbekistan, Pakistan. If Americas, the Americas were a country, they would have been on number three, on that list. That tells you that the regional shift not only takes place in Asia, it also takes place in Central America. Customers who are investing in Central America are targeting the U.S. market. On the next slide, we have a little update on our last exhibition, on our last trade show, which took place in June in Istanbul. The discussions we had in Istanbul confirmed the market sentiment that we had heard before from customers. It was the first time that we presented the automatic winder under the Rieter brand. The customers told us that the gold rush in the spinning industry is somewhat over. However, they hold on to their investment projects. They are confident that investments will pay off when markets recover. This is why we see such a low cancellation number. Page number seven, sales. As I said already, my sales grew significantly compared to last year. However, sales could have been a lot higher. We had to postpone shipments, pre-produced deliveries in the CHF 3 million range to the second half of the year, due to missing material. The material was mainly missing as a consequence of the Shanghai COVID lockdown in March and April. The Shanghai COVID lockdown led to a situation where many of our suppliers were not able to ship what we had ordered to our plants, in particular to our Chinese plant. At the same time, the port of Shanghai was congested, so shipments did not go out. You can see an indication for the order of magnitude of these pre-produced deliveries, which we had to postpone in our inventory build-up between December and June last year and in June this year. We built up inventory of more than CHF 140 million. We have launched a program to catch up on sales realization, and the actions are in place. I'm coming to the third reason for the disappointing result. Disappointing profitability on page eight. It illustrates the margin deterioration. The slide says the following: On June 30 last year, Machines & Systems, Rieter Machines & Systems, had an order backlog of CHF 959 million. Over the last 12 months, we realized sales mainly from this backlog of roughly CHF 755 million. Between April last year and April this year, costs increased significantly. I have two cost indicators here on that slide, which tell you what happened. It's the cost per ton aluminum and the container freight rate index, Shanghai-Rotterdam. You see the dramatic cost increase. As a consequence, we had to buy material and freight at costs which were significantly above what we had calculated when we sold the contracts. Kurt will show you the impact on our numbers. Obviously, we have been working on countermeasures for quite some time. You see here what we have done. Of course, the task here is to synchronize price and cost development. This is why we have increased prices in the meantime by 20%. This works very well in the Components and After Sales business, where our margins, we could protect our margins. For the reason that I mentioned before, it did not work in the first half year for our Machines & Systems business. Price increases, price adjustment clause for delivery times which exceed one year. Everybody hates it, but there is no way around it. We continue to gain attraction with this price adjustment clause. More and more customers accept it, but we have to protect our margin for the future. We have to insist on this clause, which gives us an extra payment from our customers in case inflation goes on between signing a contract and shipping the material more than one year later. We are in the process of renegotiating the contracts which we have on board. This is, of course, also a painful thing to do, but again, we all know, everybody in the business knows what happened over the last couple of months. There is a need to do that. We are in contact to our customers to see whether we can come to an agreement here. If there is a chance for cost savings, we will obviously take it. Having gone through the margin deterioration picture, I'd like to hand over to Kurt for the key figures of the first half year. Thank you, Norbert. Good morning, and welcome from my side to this call. I start on slide nine with the financial highlights. The first half of 2022 was characterized by a continued high order intake and a significant increase in sales. The order backlog is at a record level. This success in the market demonstrates Rieter's technology leadership that was completed with the strategic acquisition of the winder business. Despite higher sales, the significant increase in material and logistics costs, as well as the expenditure incurred for the acquisition, resulted in a loss. Let me highlight some of the key figures on this slide. Although sales were up more than 60% compared to last year, the gross margin was only increased by CHF 5.4 million. The gross margin decreased from 31% to 21%. Partly because of a negative mix effect, higher gross contribution of the lower margin Machines & Systems business reduced the margin by CHF 15.8 million. More important, the margin deteriorated due to the cost increase that could not be transferred instantly into higher prices. EBIT reflects this deterioration of the gross margin. Additionally, two effects impacted EBIT. Acquisition-related costs, as well as certain cost increases, mainly related to the shortage of material and increased volume. Net profit includes, besides the usual tax and financial result, a one-off charge of CHF 8 million related to the acquisition. When Rieter paid the purchase price back in August 2021, the euro exchange rate stood roughly at 1.08. At the moment of the first consolidation of the winder business in March 2022, the exchange rate was at 1.04. This reduction of the euro exchange rate led to this CHF 8 million effect, which is, by the way, not cash- relevant. The free cash flow was negative, mainly due to the inventory build-up of CHF 141 million in the reporting period. The inventory increase is related to two factors. First, the high volume and order backlog requires more material. Second, the postponed deliveries due to the shortage of material and logistics. However, despite this increase, net working capital remained negative. In other words, Rieter inventory and receivables are fully financed by down payments and payables. Last year's net liquidity of almost CHF 100 million turned into a net debt of CHF 237 million. This decrease of more than CHF 330 million includes CHF 350 million cash outflow for the acquisition in 2021. The acquisition was completely financed by existing cash and additional debt. Finally, liquid funds on the balance sheet remain strong and are above CHF 190 million. Looking at the graph on page 10, there are obviously three factors that contributed to the EBIT reduction from +CHF 9 million last year to -CHF 10 million in the current year. Deterioration of gross margin. Assuming the same gross margin as last year, the additional sales of CHF 220 million would have generated an additional margin of CHF 49.4 million. A negative business group mix effect, more gross contribution of the lower margin Machines & Systems businesses, reduced the margin by CHF 15.8 million. More important, due to significant cost increase that could not be included instantly into price adjustments, the margin deteriorated. Altogether, these effects amount to CHF 32.5 million negative. Increase in structural cost. The increase in structural cost includes additional cost for compensation of the material shortage. Although structural costs are fixed costs in theory, there is always a volume-related component. These two factors explain the major part of the increase in structural cost. Acquisition-related cost. Acquisition-related cost consumed CHF 11.2 million of the margin. These costs include CHF 2.4 million transaction costs, the net result of the operational business, as well as the effects from the IFRS acquisition accounting. The structure of the balance sheet on slide 11 did not change dramatically despite the first time consolidation of the acquired winder business at the end of March 2022. Liquid funds remained at high level, above CHF 190 million. Net liquidity decreased by CHF 75.1 million, mostly related to the increase of net working capital, namely inventories. This increase in inventories by more than CHF 140 million in the reporting period includes postponed deliveries in the three-digit million range. Net working capital, though, is still negative. I expect a substantial decrease once orders are fully delivered and inventories cleared. The decrease in shareholders' equity by CHF 68.8 million is related to three major factors. The negative net result of the period of CHF 25 million, the CHF 18 million dividends paid in April, and negative currency impacts from the translation into Swiss francs. With this final remark, I turn back the word to Norbert. Thank you, Kurt. I'm now on page 12 to make you familiar with the action plan that we have launched, because obviously it is our target to make half- year two significantly better than half- year one. The two building blocks you see on this slide, compensation of cost increases and secure sales realization. Compensation of cost increases, what are we doing? We continue to implement price increases. So far, as I said already, we did across the board roughly 20%. If we see that the inflation continues and the producers' price index continues to go up, we will implement further price increases. The margin improvement in our backlog is obviously a priority. The renegotiations with customers have started and the cost reductions that we are looking for wherever possible. That goes without saying that we are doing that. The second block here to secure sales realization. What are we doing? Close collaboration with key suppliers. Although many of our key suppliers cannot fulfill our demand, we work together with them to get the maximum from them that we can have. We focus on electronics like many other companies, and we have an efficient crisis management set up with our key suppliers to make sure that we get as much as possible based on their situation, on the situation they have with their suppliers. Of course, we are developing alternative technical solutions to substitute missing material and to increase the flexibility in terms of sourcing. The rollout is progressing. We have a significant amount of alternative technical solutions in, particularly in electronics in the field already. They are working very well. Customers are happy with it. This is in the making. The next slide, page 13, explains what this is all about. You see here, where we are coming from with our control systems, the Programmable Logic Controller, PLC, which is part of every machine. We are coming from a situation like many other companies in the machinery and equipment industry, that our sourcing strategy was built on strong partners and who supplied, a customized solution in order to keep costs at a minimum. That was the rationale behind this sourcing strategy. Things have changed, so we are moving towards a different setup. We continue to work with our strong suppliers, obviously. In addition, we move towards standard hardware and software instead of customized hardware and software, and a modular design, which replaces the customized and fully integrated design that we had in some areas before. This will enable us to buy from different sources, from multiple sources, so it increases our flexibility, it improves the security of supply. The problem of security of supply in electronics will not go away very quickly. We don't believe that. We invest a significant amount of development money into this change that is illustrated on the slide, which I just mentioned. We're coming to the Rieter site in Winterthur. On the next slide, you see our beautiful site here with the River Töss in front. The Board of Directors has decided to begin the process for the sale of the remaining land. You know that Rieter is in the process of building a new place for our development and technology center and a little administration building. This is where Rieter will stay in Winterthur, and the 75,000 sq m of land, which Rieter will not need in the future anymore, will be part of this transaction. The piece of land is very attractive, and we will see whether the market responds correspondingly. I'm coming to slide number 15, the outlook. We already discussed earlier in this year that we expect the demand for new systems, for new machines to normalize further. We talked about the drivers also in this call. The capacity utilization of the spinning mills is still at a good level, so we don't anticipate that the demand for consumables, for wear and tear, and spare parts will be at a different level. We expect this business to go on like we have seen it in the previous months. For the full year, we expect sales around CHF 1.4 billion. In March, we said we expect CHF 1.5 billion. We have changed this due to the fact that we see the challenges in the supply chains, the global supply bottlenecks, which are still there. CHF 1.4 billion is our expectation, and it is clear that sales realization is, of course, associated with risks. We all know about the current situation, for example, in terms of of energy supply, that we have potentially in front of us. We have seen the impact of the eight weeks COVID lockdown in Shanghai, there is a risk here which we have to mention. Despite the higher sales, we expect EBIT and net result below previous years' level. We don't think we can fully compensate the cost increases in materials and logistics, the additional cost in development for the compensation of material shortages and the expenses in connection with the acquisition. Despite the price increases which we implemented already and which we are prepared to continue to implement, the global cost increases continue to pose a risk. We are convinced that the underlying trend is still intact, the regional shift of demand that we talked about a couple of times already. We see it in our numbers in the first half year again, and Rieter is well-positioned to benefit from this trend and from the exceptionally high order backlog in the future. Thank you very much for your attention. We are open for questions now. The first question is from Walter Baumert, from ZKB. Please go ahead. Good morning, everybody. I noticed that also the After Sales margin and the Components business margin are quite compressed despite much higher volumes. Could you share with us if you attribute that to supply chain issues, pricing, or is there another effect that we should consider? That's my first question. The second is regarding the cancellation. I think about CHF 100 million. Do you account for that in the order intake as a negative order intake? Could you give us some color on why and where these cancellations happen? Yes. Thank you very much for the question. The profitability of After Sales and Components is okay from a pricing point of view, yeah. We have been able to implement price increases along with the cost increases. What we see in the profitability is acquisition-related, yeah. Both business groups have their share of the acquisition, yeah. After sales has the After Sales business of the winder, and Components has Temco and Accotex. This is what we see in the numbers here. These are temporary issues to a large degree, which are not expected to stay to- Yes. To the same degree in the second half. Yes. We will, of course, have for some time a PPA, as you would expect, yeah. Over time, PPA will go down, and all three businesses are profitable from an operational point of view, yeah. After Sales business for the winder is profitable, Temco is profitable, and Accotex as well. Maybe I can add. Initially, this amortization of intangible assets from the acquisition, this is at the beginning, very high. Then, after a year, it goes to a certain level, and then it runs out over the next 10-12 years, but on a lower level than this year. Okay. The cancellations. What you see in our numbers is the net figure, yeah. We booked the cancellations were booked out. You see a net figure here, CHF 2.1 million is after the correction. I can say from personal experience why these cancellations happen. I talked to a customer in Turkey who had placed an order with us of CHF 20 million, and we had to cancel it because he did not come up with his financing. The reason that he gave me in our discussion was very simple. He said he was not able to acquire the land that he needed for the mill because one of his competitors was faster. It had nothing to do with his ability to finance the investment. It was just a matter of a battle over land in Turkey. We also had customers who had to cancel because they were not able to get the financing together on time. But I'd say CHF 100 million out of CHF 2.2 billion, this is not a lot, yeah. The vast majority of our customers tell us, "No, no, we hold on to the projects. We move on. We see the opportunity which will come our way, when the market recovers. Okay. Do you take the cancellations out from the order backlog of CHF 2.1 billion? So that was negatively impacted. Was the order intake of CHF 869 million also lowered by this CHF 100 million because you take it also over the order intake figure or not? Yes. This number was also impacted. That's also a net figure, the CHF 869 million. That's also a net figure. Yeah. Perfect. Thank you. The next question is from Alessandro Foletti from Octavian. Please go ahead. Yes. Good morning. Thank you for taking my questions. I have three. Can I ask them one by one, and then I have a follow-up on what we just discussed? All right. Let's get started. We will see. Thank you. First of all, on the margin deterioration, you have explained what the reasons are, and I think I've understood. What I'm interested in is, what do you feel were the mistakes that you have done? I mean, in such a situation with booming sales and having the margin imploding, there must have been mistakes done. I would like to know if you have identified some and how do you plan not to repeat them? Well, we reviewed the situation, of course, and we don't think that we made a mistake, yeah. I guess nobody expected costs to increase by 20% within one year, and nobody did that. When we got the orders on our books, the prices were very good. We were happy with the margins. And the second thing that I have to mention here is, despite many efforts in the past, we didn't have a price adjustment clause in our general conditions. The resistance of our customers was very high. Now in this situation, we have been able to introduce it, and we make progress contract by contract. The industry in total was not able to implement this before. That is the two things that happened here. I guess nobody had more than 20% cost increase in the estimates. The price adjustment clause was an unknown thing in our industry. That is the two major things that I can mention here. Okay. Thank you. Fair enough. This leads perfectly into the next question. When I look at the backlog, CHF 2 billion, approximately, can you give an indication of how much of this backlog really still has this problem? I imagine not all of it has this problem of being sort of hanging skewed on the prices. Can you say what's the progress if you manage to now sort of renegotiate 20%, 30%, 50%, 80% of what you plan to renegotiate? I mean, you saw from our slides. Let me show you really quick. Which slide is that? Eight. Eight. You saw from our slide eight that, roughly CHF 200 million of backlog, which we had acquired before June 30 last year, is still on our books. Yeah. That is the main focus of the renegotiations. The rest of the order backlog, Machines & Systems is, if I got that right, at CHF 1.8 billion, roughly at the moment. Yeah. The other CHF 1.6 billion has been acquired in the meantime, including the price increases, including price adjustment clauses. The big rock here in terms of renegotiations and margin improvements is obviously the CHF 200 million, which we still have from the times before June 30 last year. All right. If I understood properly, the CHF 1.8 billion that has been acquired later already has the new price adjustment clauses in the contract. Not all of it. We only implemented it early this year. I mean, this is only important or is very important for backlog that goes beyond the delivery time of one year. There, you really need it. Since we implemented it early this year, we are able to get it into the contracts one by one, contracts which have a delivery time exceeding one year. Right. Understood. Okay. My third question before I come to the follow-up on the cancellations. Regarding Turkey, I'm kind of surprised to see it's really so strong, given the development of the lira. Why do you think it's so? The Turkish textile industry managed to disconnect themselves from the Turkish lira. This industry works based on hard currency. They have sales in euros or U.S. dollars. They buy their raw material in U.S. dollars or in euros, and they buy their machines in Swiss francs, our machines. Yeah. The only guys in this industry, the only participants or stakeholders in this industry who are still connected to the Turkish lira are the workers. Yeah. The rest of the business is based on hard currency. This is why we don't see an impact of the Turkish lira inflation on our business in Turkey. Right. That must also mean that most of your Turkish client, they actually export their products because otherwise they would have to sell in lira. Yeah, absolutely. The Turkish textile industry is a hub which targets the European market. Okay. Thank you. My follow-up on the cancellation. You mentioned that basically the main reason for this cancellation were financing availability. What I don't understand, if you mentioned that, one of the examples was, financing was not ready on time, but what does that mean, really? Why not just waiting until one week or one month or two months longer? Why there's the need for a cancellation? Because the price was not okay, Alessandro. Basically, the decision is you walked away from the contract? Well, we can. This is what I don't. If we have a customer who makes a commitment on bringing the financing to the table, and he says, "I can do that," we give him additional time, one time, two times, three times. Okay. Based on the fact that contracts have been acquired earlier and the margin is not where it's supposed to be. Okay. There is an end to this. Yeah. We told the customer a couple of times, "This is the third extension of your deadline, but this is the final one." Yeah. Okay. Now I understood. Thank you. The next question is from Christian Arnold from Stifel. Please go ahead. Good morning, gentlemen. Question on the acquisition-related impact at EBIT level, as you mentioned, is CHF 11.2 million. How much of that is actually integration cost? How much is additional amortization? We do not split into this. We have the transaction cost, this CHF 2.4 million out of this CHF 11.2 million, and the rest we do not split. Okay, the CHF 2.4 million, they are not recurring, they are done, and the rest is partly recurring and partly not? Yes. You can see it, when you look at the EBITA that we have introduced newly as a key figure. The difference between the EBIT and the EBITA is the amortization effect. Okay. This is in the key figures, on the media release on the last page. Okay. Good. On the guidance, you are saying that you expect an EBIT to be below last year's level. If we now think only about H2, do you think you can meet last year's level? Just looking at H2? To be very honest, I've not looked into that. I don't know. I mean, you are going to have again, clearly higher sales level, CHF 200 million-CHF 300 million higher sales level in H2 like in H1. If you look at your EBIT bridge on page 10, one should also think that the margin deterioration should be clearly less, compared to H1, as you have now worked through your backlog quite substantially. Yeah, I was just thinking what you could share here about your thoughts. If you compare H2 last year to this year, when you look at sales, last year was CHF 570 million, roughly. This year, when you take the CHF 1.4 million minus the CHF 620 million- Yeah. It's CHF 780 million, just below CHF 800 million. This is certainly the key to a better EBIT in this second half year is the volume. This is, of course, there's a certain risk that we cannot deliver this volume. Of course, we will still have some additional costs related, first of all, higher costs, because it's not fully in the order backlog, the full cost increase, because this was done step by step last year. There will be a certain effect. On the other hand, we will have a positive effect from the higher fixed cost absorption in the factories because the volume is higher than compared what we did second half last year. Negatively, we will have, of course, still costs related to overcome these missing material effects. All this together then goes into the EBIT. Last year we had an EBIT of CHF 38.6 million. This is, it's a good number, I would say. I cannot give you more guidance on this. It's mainly, I think the main thing is it's a volume thing in the second half. Does this help, Christian? A bit. Thank you. You're quiet. Okay. Thank you very much. Thank you, Christian. The next question is from Sebastian Vogel from UBS. Please go ahead. Hello, can you hear me? Yes, we can hear you. Thank you. Perfect. I've got also three questions. I would ask them one by one. Coming back to this CHF 11 million of the backlog amortization or the acquisition cost, sorry. If I would look just at the backlog amortization that I would guess is also coming with this transaction, can you remind me what that will be, and would this backlog amortization being done within one year, or given all the constraints you have, would that be spanning over one to two years? No. The backlog should be done within one year, the backlog amortization. The level around it, can you give us an indication, at least sort of a ballpark figure? No, we don't disclose this. Got it. When you earlier mentioned the PPA impact on the margins for the different segments, would it be possible to share there also the PPA level by segment, that we sort of can figure out what is the sort of underlying margin and what is the sort of PPA impact on the margin? You see the difference in the EBITDA and the EBIT. You see the impact on the profit and loss of this amortization. This is disclosed. Got it. By segment, by business group. That should be lower in the future, right? Yes, it should be lower. It's high in the beginning and it's the first three months it's the highest, and then it goes down, and I would say after one year then it stabilize on a certain level. Then depending on the different depreciation periods of the different assets, it will take up to 12 years. Got it. Now my last question, with regard to the structural costs, that you have shown there on slide 10. I wasn't getting 100% what was going into that one. Sort of can you elaborate on that? What were the sort of cost items that went into and how should we think of that one, going forward? The structural costs basically includes R&D and SG&A. Therefore, that is related, I assume, to the current situation, right, and therefore also something what we should expect for H2 and potentially H1 next year as well? Part of the increase in this, and I mentioned it, I think, when I showed the slide, part of the increase is related to volume because we have higher volume and a certain cost in there is volume -related. Another part is related to this extra cost that we have to ship out, to replace, to find new solutions, to replace current solutions, to overcome this shortage of material. This will continue in the second part of the year. Sorry, my last follow-up question there. Do you have sort of a split how these CHF 9 million should be split between the two drivers that you just outlined? Not precise number, but at least sort of it is like one- third, two- thirds or 50/50 or? Maybe two-thirds, one-third. Okay. Perfect. Great. Many thanks. Two-thirds would be related to extra costs to overcome these delays. I gave you a flavor on the development program which is happening at the moment to make sure that we can replace the missing material. This is a major effort of course. We have to be fast. Speed is of the essence here, but at the same time we don't wanna create a new quality problem out there in the field. As Kurt said, out of the CHF 9 million, two-thirds is related to development costs, and this and the work on replacing, substituting missing material. Got it. Really helpful. Many thanks. Thank you. The next question is from Andreas Meyer from Finanz und Wirtschaft. Please go ahead. Andreas, we can't hear you. Mr. Meyer, your line is open. We cannot hear you. Maybe you went on mute. Yes. Sorry. You hear me now? Yes. Okay. Thank you. Thanks. Sorry for that. In your cash flow statement, there is the position proceeds from disposals of property, plant, and equipment of CHF 22.6 million. Can you say what this is and how it impacts profit and loss for the first half of this year? This is the share of the real estate that was sold and where the new campus, Norbert Klapper explained in his presentation, will be built on. This is the land and the project that was originally started by Rieter, but it's now done by a third party, and this is the proceeds from this. Um, um, I think- I say for the first half year there is zero profit on this. It's a cash flow effect. It's not. Okay. Okay. A profit on it. Okay. All right. Thank you. Thank you, Andreas. The next question is from Sébastien Hoyez from Quaero Capital. Please go ahead. Hi. Thank you for this pre-presentation. Basic question, what you say on moving from customized component to standard hardware and software. I understand that there is a negative impact on the short term due to required investment to do so. Could you help us to understand the impact on your profitability in the midterm? Should we expect cost savings due to cheaper standard components? I mean, the strategy of doing the customized solutions in a highly integrated way were driven by the consideration to get minimum cost. Yeah. Moving from this customized, highly integrated solution to standard solutions, per se, in the first instance, will lead to an increase of cost. However, it gives you a different purchasing power. Yeah. At the end of the day, I expect it to be cost -neutral, the move that we are making here. Okay, thank you. The change that we're making here is driven by improving the security of supply. That is absolutely key. As I said, I guess the two things that I mentioned were balanced out. We will not see a big impact in terms of profitability. The next question is a follow-up question from Sebastian Vogel from UBS. Please go ahead. Hello, can you still hear me? Yes. Hello? Yes, we can hear you. Sorry. One last question from my side, a follow-up on the price adjustment clause. Just to be clear there, what are the sort of costs that are covered by this price adjustment? Is it just raw material? Is it also energy costs, shipping costs, labor cost and so on? Just to have a bit of a sense there, what are the sort of different cost items that are covered in these clauses? That would be great. Yeah. What we put in is 70% of the price of the machine, yeah, is related to the price adjustment clause. This covers, of course, material cost, logistics cost, and the annual rates of our people in the factories where we produce. That is the order of magnitude we're talking about. Got it. Perfect. Many thanks. We have a follow-up question from Walter Baumert from ZKB. Please go ahead. Thank you. Let's talk real estate. Is it realistic that, given the zoning of the land you wanna sell and the possibilities there, that CHF 3,000 per square meter is realistic? Would all the proceeds net of a, let's say, 20% tax go into the balance sheet of Rieter? Because there is, sir, almost no book value attributed to that land currently. Today we are not in a position to talk about the price of the land that we think we can get. We have only started the process. We will send teasers out now, and we will see the response of the market. It's too early to talk about money here. The taxation and the book value of it? The land is owned by Rieter for a long time, so you can imagine that the book value is not that big in the books anymore. Yeah. What I say, close to zero, and the tax would be around the Zürich minimum tax on land for 20% or even less? Yes, it depends. If you would assume that there is any Umzonung, so it would go into it. Okay. In a different way, but then you have to have additional charges on this. You cannot say it like an easy 20% or below. Okay. As you are in an early stage of the disposal, you probably also don't wanna comment on the timeframe? No, I guess it's we will see what the response is gonna be after the summer break. Teasers will go out this week. That is the plan. Then we will assess what came back and what the next step of the process is gonna look like. Yeah. Okay. I don't think we will complete this by the end of the year. From today's perspective, it will take longer. Okay, thank you for the information. The next question is from Rolf Renders from AMG. Please go ahead. Yes. Good morning, gentlemen. Thanks for taking my question. You're welcome. Can you please elaborate on the plans and the financing again for the campus? Campus financing. The financing of the campus. Yeah. The order of magnitude of some figures which will be involved. Yeah. We once communicated the whole campus. The investment volume is around CHF 90 million. This is still true. Basically it will be purpose-built for us by a third party. We sold, as you just heard, the land and the starter project to this third party to do it. Okay, thank you. For the fiscal year 2021, you paid a dividend of CHF 4. Now, given these challenges you have this year, what are your expectations for the dividend for this year? Rolf, I'm gonna read my standard answer to you now. Where do I have it? Yeah. You know that an attractive dividend is important to us. You know our policy to pay a minimum of 40% out of the net profit that we generate, but obviously the decision will be made in spring next year by the AGM. Okay, thank you. I remember a presentation of you, which involved Faro, which had actually the prospects of very good years ahead. Now of course, this was not to be foreseen, what we are now, but should I then conclude that this is just a hiccup and that the good years are just postponed? What's your view on that? I guess it is fair to say that the fat years take a break this year. What has to happen before we can continue with the fat years is that we have to overcome the challenges which are around at the moment. We discussed them during this call and in the presentation. What is important to us is that the underlying trend of the spinning industry leaving China and at the same time making investments into the Chinese capacities which are supposed to stay. This trend is still intact and it will continue for a couple of years because the capacity which stands in China, the spinning capacity, is so big that it will take years to accomplish what the industry has started to do. That is the underlying rationale, and this has not changed. We see it in our numbers. We see it in the countries where we are working. We hear it from our customers. This will go on. That's great. Thank you. Next question is a follow-up from Christian Arnold from Stifel. Please go ahead. Yes, thank you. Could you remind me on the square meters, the amount of square meters that your campus is based on? 38,000 sq m. 38,000 sq m. This proceeds from disposal and purchase of other non-current assets of plant and equipment is CHF 22.6 million. That is actually linked to the 38,000 sq m. Is there some additional assets I should think of? We sold the project, not only the land, yeah. We sold the project in the state that we had pursued it so far. Okay. The remaining land you are going to sell, do you expect that you have to do here some cleaning work first, some extraordinary expenses? Because this has been industrial land for hundreds of years. We will not do any of that. We will make it part of the process. Potential things to be done, in that direction will be part of the process. We will not do that work upfront. Thank you. The next question is a follow-up from Sébastien Hoyez from Quaero. Please go ahead. Thank you. Two follow-up questions. First, you mentioned price increase of 15% earlier this year, and now you're talking about 20%. We understand that you were able to increase your price by 5% additional 5%. We are seeing some costs who are now going downwards. So could we see at some stage a positive impact on your margins, or will you give back that to your clients? I mean, for the customers who have signed the price adjustment clause with us, if we really have a cost advantage compared to the time when we signed the contract, these customers will benefit from it, yeah. For all other customers who have not signed such a clause, we will see the benefit in our margin. Okay, it's clear. Second question is getting some news on the Egyptian contracts. I had in mind deliveries starting from H2 this year, and then in 2023. Could you help us to understand the time frame? Also, it was a contract you won long time ago and you mention in your order book only CHF 200 million of orders which may be problematic. We understood that you have successfully renegotiated terms with your Egyptian client. The expected margins on this contract. To answer the first part of the question, shipments have started in half -year one, so we are executing the contract. Regarding the margin, I'm not concerned about the margin in this contract. We have sourced the material required in earlier days, so our margin in this contract is not in danger. That's great. Thank you. That was the last question. All right. Thank you very much. Thank you very much for being with us this morning. Thank you very much for your attention and for the lively discussion that we had. We very much appreciated that you were with us, and we thank you for your interest in Rieter, and we wish you a wonderful summer break. I hope it will start soon for you. Thanks a lot. Thank you.