Ladies and gentlemen, welcome to the Schindler conference call on the Q3 results 2024 and live webcast. I'm Sandra, the Chorus Call operator. I would like to remind you that all participants have been 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 Lars Brorson, Head of Investor Relations. Please go ahead, sir. Thank you, Sandra. Good morning, ladies and gentlemen, and welcome to our third quarter 2024 results conference call. My name is Lars Brorson. I'm Head of Investor Relations at Schindler. I'm here together with Silvio Napoli, our Chairman and CEO, Paolo Compagna, our COO, and Carla De Geyseleer, our CFO. Silvio will provide a brief overview of the key messages this quarter. Paolo will discuss our market outlook and order intake in the quarter, and Carla will take us through the financials. After the presentation, we're happy to take your questions. We plan to close promptly at 11:00 A.M., and with that, I hand over to Silvio. Silvio, please go ahead. Thank you, Lars. Good morning, ladies and gentlemen. Thank you for joining us today for our Q3 2024 results conference. Let me start looking back for a second here. Since 2022, when we started the journey we're on, investors and analysts, i.e., you, came out with a concept of self-help agenda. Today, with our Q3 results, we are pleased to report that we are continuing to progress on this self-help agenda. First and foremost, on profitability, our primary objective. For the seventh consecutive quarter, we are improving our year-on-year EBIT margin. Now, with Q3 2024, we complement the continued bottom line improvement with top line progress, and this progress was achieved notwithstanding tough market conditions. On the one hand, the service and modernization markets continued to show robustness across the globe. On the other, NI markets present a mixed situation, with China continuing to decline but with other large markets accelerating the growth. India, Brazil, and the Middle East are the most prominent examples of this phenomenon, and I'm sure we're gonna come back to this later on in the market section. Now, looking at our performance, one of the highlights must be the takeoff of our modernization order intake, with a + 20% year-on-year increase in Q3 2024, of course, measured in local currency. The other, if not the highlight, has to be our plan to launch a share buyback program in the magnitude of CHF 100 million over a period of up to two years. This plan adds another dimension to our self-help agenda, which was so far focused on operational improvements. Allow me to say, this also shows how we continue listening to you, to your suggestions on how to enhance value creation for our investors. Very important, we take this step while remaining faithful to our fundamental principle of preserving a strong balance sheet, and I'm convinced that this is all the more important today at a juncture where we have growing uncertainty across the board and also in terms of capital access and market fluctuations. Now, talking of principles, please allow me to step aside for a moment from financial results and, express the fact that we were particularly pleased, and allow me to say proud, to realize that our progress was also recognized by external and non-financial institutions. And so we were honored that Schindler was ranked by Newsweek Statista as one of the top ten World's Most Trustworthy Companies in the Machines and Industrial Equipment sector. For those of you who may not be familiar with the study, it is based on an independent survey of more than 70,000 participants and 230,000 evaluations from customers, investors, and employees, and also including extensive social media analytics. Similarly, Schindler was ranked as one of Time magazine's World's 1,000 Best Companies in 2024, and this ranking is based on a formula, including employee satisfaction, revenue growth, as well as ESG KPIs. Now, before moving on, please allow me to add this, and this is to prevent any possible question or doubt. Schindler neither applied to nor paid for any of these studies. Now, back to our Q3 results, back to our progress. In Q3 2024, we recorded an order intake growth of +5.5% in local currency. This growth was consistent across all regions, with the exception of China. This progress in top line was also reflected in a revenue increase. In Q3 2024, Schindler delivered a growth of +2.6% in local currency. It is important to stress how this performance was achieved in spite of a massive, and in fact, accelerating foreign exchange impact, accounting for more than CHF 300 million for the first nine months of the year. Moving on to the other highlight, and as I said, improving our profitability is our primary objective, and I'm pleased to report that Schindler delivered an EBIT margin of 11.7% in Q3 2024. In terms of adjusted margin, the Q3 performance reached 12.6%, corresponding to 12.1%, excluding sale of assets. Finally, because cash is important, one more highlight of our progress is the significant operating cash flow improvement of + 27%, driven by both the operating profit improvement I mentioned before and improvement in net working capital management. In conclusion, Schindler continues to progress and to deliver on commitments. Now, to take a closer look at the markets and our performance, I give the floor to Paolo Compagna, our Chief Operating Officer. Paolo, please. Thank you, Silvio, and good morning, everyone. Allow me before we move on to discuss our market outlook and our order performance. I would like to emphasize once more the fact that we are a predominantly service company, with well over 60% of our revenue generated in the growing maintenance, repair, and modernization markets. While, in terms of our exposure to the new installation business in China, this accounts for only 8% of our group revenue. With this introduction, I would like to move to our global E&E outlook, market outlook for 2024, which, in our view, remains unchanged by business and by region. The global installed base keeps growing at a healthy pace, as the sizable NI volumes sold in previous years, in particular in Asia, are now being converted into service portfolio. In modernization, we have observed improved demand in the recent month in the U.S. and have decided to upgrade our full-year outlook for the Americas accordingly, while keeping it unchanged for the other regions. In China, an equipment renewal program worth RMB 300 billion was introduced in July, which covers, among different building technologies, also elevators. This will help releasing some of the pent-up demand for elevator modernizations, but we have not yet observed any meaningful impact of this program, as it is not yet fully effective in most of the major cities. In Spain, the new ITC regulation, effective July 1st, could affect up to 40% of the country's one million elevators, with a total program cost estimated by the authorities of more than EUR 700 million over the next seven years, which will include substantial outlays for equipment upgrades. In contrast, the mod market in Italy is coming off a peak, which was driven by various programs and incentives over the last years. In new installation, there's no major change in our market outlook for this year across all regions. The emerging markets that we have indicated before as bright spots in new installation continue to shine. In India, housing sales and launches have increased high single- digit so far this year, driven by premium residential. While in Brazil, apartment launches increased this year up to close to 20% over the past 12 months. In the U.S., the rate cut by the Fed last month resulted in an improved sentiment among home buyers and a marked reduction in average mortgages, but it's yet to translate into increased housing supply and hence, in higher demand for elevators. In China, in spite of the stimulus packages announced by the government, we keep the three minuses for the NI market, and we currently expect a mid-teens contraction in the E&E units sold this year. The measures introduced by the government are geared towards the absorption of the country's massive housing inventory, stabilizing home prices, and improving customer sentiment, but have had no tangible impact on the construction of new housing so far. We continue to monitor very closely all announcements and developments on that front, but the stimulus does look vastly different from the one from 15 years ago in terms of impact to our markets. Turning to slide number six, let's have a look at, on our order intake performance in the third quarter. Our service portfolio units continue to expand at a healthy pace, driven by strong NI conversions, in particular in China and Asia- Pacific, excluding China. I'm pleased to report that our modernization orders by value further accelerated globally in Q3, with double-digit growth across all regions. Elevating our year-to-date modernization growth to more than 10%. Particular strength was observed in Northern Europe, as well as in both North and South America. Our global new installation order volume decreased by slightly more than 5% overall due to the weak market conditions in China. Year- to- date, our orders were down just only slightly. Our performance in the Americas was the highlight of the quarter, with both North and South America growing double- digit, with solid growth recorded also in Asia- Pacific, excluding China. In EMEA, our order intake declined low single-digit in the quarter and stays flat year-to-date. With that, I'd like to hand over to Carla to lead us through the financials. Thank you very much, Paolo. Good morning, everybody. So let me start by saying that I'm pleased with our performance in the third quarter, and this for a couple of reasons. Firstly, our order intake returned to growth this quarter. In fact, Q3 saw the highest level of order growth in five quarters, and that's despite the headwinds that we continue to see in our new installation markets. Secondly, I'm also pleased to see our continued margin improvement. Quarter three marked the seventh consecutive quarter of expanding margins on a year-on-year basis. And last but not least, today we are announcing our intention to launch a share buyback program, which I will elaborate on later. So first, on the operating performance in the quarter, starting with slide eight. Let me touch on three highlights before going into more details on the following slide. Firstly, we had a solid quarter with growth in order intake reaching 5.5% in local currency, and that's the highest level of growth since the second quarter of 2023. And I'm particularly pleased to see the development of our modernization business, which has seen growth now accelerate since the beginning of the year. And I will come back to that in more detail, shortly. Secondly, our operating margins continue to expand, and we are firmly on track now to achieve our 11% Reported EBIT margin for the year as we have guided to, and despite higher restructuring charges this quarter and expect even higher again in quarter four. On an adjusted basis, operating margins are now above the 12% level. Thirdly, as we discussed after our H1 results, we are starting to see operating cash flow normalize after the volatility in net working capital during the prior quarters. Now, moving on to the next slide, order intake and revenue, and focusing on the left hand side of the slide. Order intake grew organically by 5%, and we saw a strong development in the modernization and the service orders, with modernization growing 20%, as Silvio highlighted, and service growing high single- digit this quarter. Let me spend a moment on the modernization business, because last year we have been very clear with you that we were not growing in line with the overall modernization market. But it's fair to say that we have worked hard to address the topic, and our efforts are starting to pay off. We have seen modernization orders growth accelerate this year from low single- digits in the first quarter to a high single- digit in the second one, and now 20% in quarter three. And importantly, the growth this quarter was broad-based, so all regions growing in the 10s or the 20s and without any outsized boost from major project orders. Now, as for the group backlog margin, this quarter, it was sequentially stable, and it continued to improve year-on-year. And I can also confirm that we continue to work down the legacy backlog, which is now less than 50%, 15% of the total backlog. Now, turning to the revenue growth on the right-hand side of the slide. Revenue growth came in at 2.6% in local currency in the quarter and 1.8% year-to-date, leaving us on track to deliver our full year guidance of low single-digit revenue growth. It is a rather familiar picture with revenue in China declining due to the continued slowdown of the Chinese new installation market, which is impacting our top line. That decline was more than offset by the good revenue development in service and modernization, growing high single-digits and low double- digits, respectively, this quarter. Now moving on to slide number 10. The EBIT reported margin came in at 11.7% in quarter three, up 140 basis points versus quarter three last year, while the EBIT adjusted margin came in at 12.6% this quarter. It's important to know to note, however, that the operating profit this quarter was boosted by CHF 14 million of gains from disposal of assets. So without these gains, our EBIT margin adjusted would have been 12.1%, up 100 basis points year-on-year. As for the drivers of the higher margin, price and mix continue to contribute positively, and so too, obviously, the procurement savings. But I'm also pleased to see that our initiative on SG&A efficiencies are starting to pay off, and I would expect this to provide further tailwind to margins in quarter four, and more importantly, into the next year. However, our Reported EBIT was also burdened by higher restructuring costs, which came in at CHF 80 million in quarter three, and I expect that to further increase in quarter four. Now, moving to slide 11, that gives you a bit of an insight into the net profit development, and you can see that net profit grew again, with our net profit margin now staying above the 9% level, which we reported last quarter. Below the operating profit line, we have seen a very good development of our financial income this year, partly due to active cash management, and I will elaborate on shortly, which when I discuss the buyback program. Now, moving to slide 12, where you see the development of the operating cash flow, so operating cash flow came in at CHF 257 million in the quarter, which is a good development compared to the level that we saw in quarter three last year, and also good development compared to quarter two this year. Overall, I would say that we are reaching a more normalized level for our quarterly operating cash flow in the CHF 250 million-CHF 300 million range, following the volatility in the prior quarters. I'm also pleased with the development in net working capital this year, including in quarter three, and that comes despite the headwinds that we are facing from lower down payments in our new installation business, as we work actively on improving our net working capital position, particularly inventories. Now, let's turn to page three. Silvio announced already our planned share buyback program. Let me first talk a little bit about our broader capital allocation strategy, because earlier this year, at our full year 2023 results call in February, you heard me talk about our active capital allocation strategy and how we aim to distribute capital to shareholders, while at the same time maintaining a strong balance sheet. At the time, we announced a change to our dividend policy, raising our payout ratio to a range of 50%-80%, and now we are adding a next step, a CHF 500 million share buyback program. So we believe that's the best next step in our capital allocation, and one that really recognized that the dividend yield on our share is below the broader average on the Swiss market, so we believe that you, as shareholders, deserve a better yield. At the same time, it's also a decision which allows us to maintain an active M&A strategy and maintain our strong balance sheet with a liquidity, let me remind you, excluding lease liabilities of CHF 3.8 billion, which represents approximately 1/3 of our balance sheet. In addition, we are also confident that we can continue to generate a healthy cash flow going forward. Now, some brief details on the program. It's a CHF 500 million buyback that will run for up to two years and cover both our registered shares and our participation certificates. It's clear that the repurchased shares will be canceled. Moving to the next slide, and also the last slide. Before we go to the Q&A, we confirm our 2024 guidance, expecting low single-digit revenue growth in local currencies and an EBIT reported margin of 11%. After the strong margin development so far, you may wonder why we are not raising our margin guidance. Let me clarify our expectations to the next quarter. Firstly, as I mentioned earlier, we expect to see a further step-up in restructuring costs in quarter four, as we have guided you to. Secondly, we also flagged with our H1 result that it's clear that the headwinds we have seen in our Chinese new installation business this year have not eased. Rather, they have accelerated, and that will add some uncertainty around our operating results over the coming quarters, and finally, there is always some uncertainty around the delivery of the backlog as we look into the final quarter of the year. But all in all, we are confident that we can deliver a Reported EBIT margin this year of at least 11%. Now, in conclusion, allow me to say that together with all the colleagues in the executive committee, we are very pleased with the progress on our self-help agenda. And this in what continues to be a very challenging and high market environment, and in many of our key regions. And we remain very grateful for the persistent commitment of the thousands of colleagues that serve our customers on a daily basis. And with that, I hand over to Lars. Thank you, Carla. We're now happy to take your questions. I'd kindly ask you to limit yourself to two questions only, given the limited time we have available. Thank you very much for that in advance, and with that, I hand back to the operator. Sandra, please. We will now begin the question- and- answer session. Anyone who wishes to ask a question may press star and one on the touch-tone telephone. You will hear a tone to confirm that you have entered a queue. If you wish to remove yourself from the question queue, you may press star and two. Questions on the phone are requested to disable the loudspeaker mode and eventually turn off the volume of the webcast while asking a question. Anyone who has a question may press star and one at this time. Our first question comes from Klas Bergelind from Citi. Please go ahead. Thank you. Hi, Silvio, Carla, Paolo, Lars. Klas at Citi. First, on the guidance for the year, I get what you said there, Carla, on the margin into the fourth quarter, but I just want to focus on revenues a bit. You have solid orders up over 5%, but you're not changing the revenue guide. The delta versus expectations is across modernization and mod orders to sales are typically shorter lead time than for NI, but you're not changing the sales guide. So the question really, are you baking in some cautiousness on the backlog conversion into the fourth quarter? Do you expect China NI sales to sort of fall further sequentially? That's my first one. Thank you. Thank you, Klas. Carla, would you like to address this question? Yes, yes. Yes, thank you, Klas. First of all, you know, we have a lead time that is between 12 and 18 months before, you know, it translates into the revenue. That is number one. And secondly, of course, you know, we have always a bit of impact of China, and there we remain cautious. And of course, it's also not a secret that we are rather, you know, we always take a conservative position. So yeah, Silvio. No, that's correct. But on the- Your analysis is 100% correct. The backlog conversion is the uncertainty, because I like to stress, let's not only pin it down to China. Take Europe, Germany, today's news, right? Construction sites are slow. Developers have less cash. The order book are being reduced, so there is the, Let's put it this way, an uncertainty, as you say, our order book is strong, but so we are not in control of the speed of construction sites, which is very much dictated by our customers. So hence, the uncertainty regarding revenue. Thank you, Silvio. Just on the lead time, I know it's 12-18 months, but I'm just sort of focusing on modernization, which I think is quicker, where you have a lot of growth at the moment. So the modernization orders to revenues is shorter than the 12-18 month NI, right? This is correct. This is correct. Uh-huh. This order that just come now is just in Q3. While it is less than 12 months- Mm-hmm It is not three months or some of it will. Exactly. Okay. But, you know, that's exactly the point, Klas. All right. Very good. My second one is also modernization. You updated the market outlook for Americas, but I want to zoom in a little bit on your own performance here as you're growing strongly across the board, not only in Americas. Obviously, some of your peers have been growing faster than you, and now you're catching up here in a big way, which is great to see. I'm trying to understand for you what you've done in terms of the offering. More OEMs out there are introducing a modular concept to modernization, including partial modernization, which is improving both quotation and the time spent on the sites a lot. Are you introducing this offering now as well to the market, and is that driving the step up? I'm trying to understand the sort of self-help effort within modernization for Schindler. Thank you. Thank you, Klas. Paolo? Yeah. Thank you, Klas. A very good question. It's obvious that yes, we have accelerated our mod business, and you are observing it right. We have also, I wouldn't say adjusted, but enhanced our offering, including what we call Kits, and it is very much in line with what you are assuming, so we are offering solutions for the installed base, which then can be offered but as well installed in a much faster and more efficient time, so this offering is obviously supporting also our order intake together with many other actions. I'd like to repeat what Carla was mentioning before, the nicely developing order intake and modernization in this quarter was not even supported by larger projects, which once more underlines the importance of these many Kits applied to many units. Thank you. Thank you, Klas. The next question comes from Andre Kukhnin from UBS. Please go ahead. Good morning. Thank you very much for taking my questions. I'll actually start with one on modernization while we're on it, and wanted to ask about the margin potential of that business, as the volumes are now ramping up clearly, and, as you sort of mentioned, offering more kind of productized offering there, rather than dealing with this kind of on a project-by-project basis. Where do you think your modernization margins can go? Maybe on a more like a three-year view, with this positive growth trajectory and your self-help measures. Thank you, Andre. Let me just finish this next tab, and then Paolo will build up on this. In modernization, a bit like in NI, there is a bit of a. I wouldn't say there's decoupling, but clearly a differentiation to be made between China and the rest of the world. In China, let me start with the not-so-good news. We see mod pricing not developing well. In fact, we see mod pricing and margins with them declining parallel to NI, maybe not as fast, but following closely. Maybe let me elaborate for a second. Why is that? Well, in fact, and I was in China last week, so I can have some fresh information on this. You know, in China, there is a model whereby agents are used a lot, and it is, in fact, the same agents that used to sell lots of new installation and now sell modernization. There is, so far, not really a critical mass of mod-only agents. And so what do these people do? They cannot sell an NI, and as much as we work with them and to differentiate, and we try also to sell direct where we can with large customers. I'm afraid, by simple market dynamic, then the mod follows the same element of an NI because they're looking for more revenues to make up for an NI. That's China. For the rest of the world, in fact, the modernization margins are higher or depending on the region similar as an NI. And our goal is clearly to make them higher than an eye. So maybe Paolo would like to elaborate on where you see any improvement there. Yes. So the target is to work on the margins, as mentioned before, using more of these standard products, we call it Kits, and moving as much as possible away from this, as you were mentioning before, on the case-by-case or project-by-project approach. So this will also support margins. I'd like to add one component, which, for us is very important, that we apply modernization, what I would call the same pricing discipline we apply in new installation. Then it's obvious also here, very different, very different from region- to- region, from country- to- country. One could follow the trap of following iteration of, yeah, stepping away from price discipline. So with the price discipline we apply, repeating Silvio, our aim is to further improve on the mod margins and, yes, with a bit of a caveat around China, as mentioned before. Thank you. If I may just follow up on this, on the China situation with agents competing for mod. I think historically, you were one of the kind of lesser users of those third-party agents or distributors. Does that mean that your install base and maintenance base there is more protected from that phenomenon or not? Andre, thank you. Allow me here to briefly discuss that agents and distributors- Mm-hmm. -are, in fact, not exactly the same model. Agents work on project- by- project, client- by- client, and so you sell projects specifically. Distributors, in fact, they buy bulk, and so you would have a contract whereby you agree upfront on large orders, usually at a standard price, which then gets adjusted at a later stage, depending on final specs. So, in both distributors would typically offer a lower conversion rate to maintenance than agents. Yes, it is true. Based on our market intelligence, it would seem that we have traditionally used much less of distributors in the past than our competitors. Agents in the past, until not so long ago, were indeed a... They still are, offering a higher conversion rate with distributors. However, I must say this is part of the China model and issue at the moment, that this is also becoming a challenge because some agents, to make up for the drop in revenue NI, do also now enter the maintenance business. And clearly, digitization, differentiation, all things that now we try to deploy is to establish a differentiation versus what they can offer, in fact, as an ISP versus what an OEM can face. So yes, we do have some protection working with agents. The best is just to sell direct. But that is the situation today, which also explains why service margins in China and conversion rates are lower than anywhere else in the world. Thank you. If I may, just one second question, Lars. I promise I'll go back to queue on the next, next call. I just wanted to really ask about, at this stage of the year, about any early indications you could give about the end markets demand outlook for 2025. You talked about China clearly down in the past, so we have some developments there. Does that change your view at all, and is there anything you can offer in terms of comments for the rest of the world, please, in terms of new installations? Andre, truly, we're not prepared to give no indication on market 2025. We'll do that in February. Perhaps, since you mentioned China, it is fair to say, this is a reconfirmation, that we so far don't see any signs of the Chinese market having reached its bottom. I appreciate there was announcement by the government this week. We'll read them carefully. We still need to understand what the impact would be. I think it's probably too early now to provide an assessment. So if you don't mind... By the way, I'll maybe when we speak in February, I'd love to hear your views on what this means on a macro level. But so far, we- Sure. This is to come in. I understand. Thank you very much for your time. Thank you, Andre. The next question comes from John Kim from Deutsche Bank. Please go ahead. Hi, it's John from Deutsche. Good morning. Could we shift and talk a bit about your installed base? What sort of unit growth are you seeing in Q3, and how much of that is organic versus acquired? Also, previously when we spoke, we were talking about kind of price-cost dynamics on the service element with inflation and price increases a bit mistimed. I'm wondering if you can comment on that. Thank you. ... Thank you, John. Carla? Yes, thank you, John. We can say that our portfolio develops healthy. It's single-digit, and so it continues in line with what we have seen in the past, so very solidly. Okay, and then on price cost? Maybe, John, also important, you know, it's organically because, yeah, you see that in organic- Okay is also pretty low. Sorry, can you repeat your second question? Price increases versus underlying wage inflation and core maintenance? Uh- How that's trending. Yeah, I must say, our price development is also positive and is definitely offsetting when it comes to maintenance. The major inflation is actually the labor, so that we have seen. So yeah, it's not only from a portfolio unit perspective, but also I think from a value perspective that we keep on trending positively. John, let me build on Carla's answer to say this. I think you heard me say in the past, we really work by the mantra, pricing plus efficiency has to be higher than inflation. You correctly referred to labor inflation as being a major challenge and headwind in terms of everything we do, but maintenance in particular. Overall, we are holding well, so we're delivering on this price efficiency. It is fair to say that the pressure is increasing, and in most countries we have this automatic clause for adjustment of pricing as a result of labor inflation, but clearly this is one of our watch point on which we've been doing well so far. But you're right to point out this as one of the challenges to be looked at very carefully going forward. Great. Thank you. Thank you, John. The next question comes from Vlad Sergievsky from Barclays. Please, go ahead. Yes, good morning. Thank you very much for the opportunity. First of all, I would like to ask about net income composition. There is a rise in non-controlling interest in the PNL this quarter. On my calculations, it's about 8%-9% of total net income. Could you possibly remind us, is there any particular region this non-controlling interest is related to? You refer to the non-interest financial income? Sorry, I'm referring to non-controlling or minority interest in the PNL. I will have to come back to that question. Yeah. So I will come back to that question. Okay. Vlad. Yeah. Understood. No problem, Carla. And maybe the second question would be the backlog trajectory. The backlog is down this quarter by about CHF 450 million. It's about 5% sequentially, despite book-to-bill being actually very close to one healthy book-to-bill. Is there any reason for that outside of just currency headwinds or it's all currency? Sorry, Vlad, I come back to your first question now because, you know, I know what you referred to, so, so sorry for that. This is actually dividends that we received on a financial assets, you know, actually, and, to be honest with you, a stake that we hold in Korea. Yeah. So sorry for that. I was a bit slow. I apologize. So- No worries at all, Carla. Thanks very much for the clarification. And maybe on the backlog commentary, if you have any. So this, Carla, sorry, what you were looking for the answer to this. Yeah. The answer is the reason for the backlog reduction. Is it only foreign exchange driven or are there other elements? I think, Vlad, this is a pretty question. Well, it is actually... To be honest with you, it is flat. In actual rates, we have a slight uptake in the unfilled order balance. Yeah. So, yes, I'm- It's currency. 80 basis points is indeed, you know, currency effect. Yes. Okay. Thank you very much. That's very clear. Pleasure. Thank you for the question. Thank you, Vlad. ... Vlad. The next question comes from Martin Hüsler from ZKB. Please go ahead. Yes, good morning, and thank you for taking my question. I have a question, maybe a ballpark. If we look at the improvement you did in the nine months, and give or take 100 basis points improvement in Adjusted EBIT margin, I wonder if you would break this down into the three factors that you were mentioning: pricing, efficiency, and mix. How is the contribution of those three factors? And added to that, if we go for the next step now from here to the 13%, maybe next or the year after the next year, which part will contribute most to that? Thank you, Martin. Carla? Yes. Thank you, Martin, for the question. In fact, well, the expectations to go to the 13% midterm and the development there that we target is not that much different from, you know, what we have seen here now in the year. Because a big part of the contribution is coming in first instance from the supply chain recovery and the procurement savings. And that will also remain quite an important one going forward. And the second one, of course, is the SG&A. The SG&A efficiency, there, I mean, we see the first elements coming through now in the last quarter, and we expect obviously that to take up in the period up to the midterm target. And thirdly, the NI and mod efficiency that we are working on, that was also rather, I would say, minimal in the last quarter. But we have very good signs that we are on the track, you know, to deliver more in the coming period. And of course, mix, yes, it has an impact, but it is definitely not a major part of the improvement that we are targeting. We have also been very clear already in the past that we are not banking on the mix, and that we rather go for, you know, what Silvio calls nicely our self-help agenda. What you definitely should take into consideration is, of course, you know, labor inflation. That is one of the major headwinds, given, of course, our labor intense business, but obviously that is also taken into consideration here. Another way to look at it, Carla, is to say so far, if I could say, the probably the impact on our improvement was pricing, efficiency, and mix in order. Going forward, this order will change into efficiency, pricing, and mix will remain third. Mix will also remain third. Why? Because we still hope going forward, the NI business will come back, if not in China, at least in the rest of the world, with a modular platform being completely rolled out across the world. So this is. We definitely need to secure this transition, and that's why, as I mentioned since the beginning of the year, efficiency has to be our key focus and will certainly be the measure of our success going forward. Thank you. Very clear. And then a very short one on this, divestment gain on this asset. I was just wondering, first of all, was this divest in Hong Kong or was this other assets? And do you have further divestments in mind for, let's say, the next quarter? First of all, it's a bucket. It's a combination of different elements. So and of course, you know, the divestments are part of it, but it's not the only part. And look, I mean- But allow me to say, it's not Hong Kong, right? So to be clear. No, no, no. Of course not. So joy to say- No, no, no. Hong Kong, God forbid! There is no question here. Yeah ... to divest Hong Kong, just to say. Yes, since it was mentioned, just that, yes. Of course not- Okay ... because it's Yes. Please, say yes. ... it's a key- Yeah ... component of our business in Hong Kong. Sure. And when it comes to other potential divestments, look, we constantly look at the portfolio, and it is clear, I mean, if there are markets where we believe, you know, that the future is not rosy, we will definitely not hesitate to divest these. Yeah. That's right. Whenever we find that we have no, if you want, right to win, that the local codes don't correspond to our products or that we have subcritical market share, we then rather divest. And we have been very methodical since the beginning of 2022, and we'll continue to do so. Clearly, with time, I like to believe less and less candidates will be there, but also it's a clear message to our operating units that either they meet a certain standard in a relatively short time period, or then divestment is actually a possibility. But clearly, our objective is to make sure that wherever there is a potential, wherever there is a market, we recover and the situation. Actually, we've been doing so successfully in many markets over the last three years. Okay, well understood. Thanks a lot. Thank you. The next question comes from Martin Flueckiger from Kepler Cheuvreux. Please go ahead. Good morning, ladies and gentlemen. Thanks for taking my question. Just a follow-up on the previous question because can you just remind us about the timing of that divestment? And did I understand correctly that it was taking place in China, and that I heard correctly that Carla was talking about a positive one-time gain of CHF 40 million? That would be my first clarification question. And also building up on that, did I understand correctly that it's part of Adjusted EBIT? Why was it not reported as an exceptional item? Thanks so much. Okay. First of all, just to be very clear, the CHF 14 million gain relates to disposal of different assets. That is number one, and yes, one of which is a divestment. It is not in China, also to be very clear. Why did we not take this in adjustment? That is because, first of all, these are operational assets. And secondly, I mean, the amount is also not that significant. And but I just pointed out, because we don't want to mislead you when it comes, you know, to the expectations for the following quarters. So that is the reason. Okay, but sorry, just for the acoustics, we're talking about one four or four zero in terms of the amount? The total gain on disposal of assets is CHF 14 million. Yeah. Okay, and it's included in Adjusted EBIT? Well, I mean, it is definitely included, yes, in the Adjusted EBIT. It is not an adjustment, so it just flows through also, you know, to the- Okay. Yeah. ... Very helpful. Thank you so much. Thank you, Martin. The next question comes from Miguel Borrega from BNP Paribas. Please go ahead. Hi, good morning, everyone. Thanks for taking my questions. I've got two. The first one, I just wanted to confirm the guidance you gave last quarter was not factoring in this disposal. So when you guided for Adjusted EBIT to be 70 basis points higher than Reported EBIT, and the second half, Adjusted EBIT, 50 basis points higher, 50/50, we now need to add this CHF 14 million, correct? Yes, but to be very clear, we guide on EBIT. And you also know that we are very active on reducing our SG&A and hence, you know, our indirect headcount. So we took already part of the restructuring cost in Q3, but you can expect higher restructuring costs in Q4. That is number one. Secondly, I also pointed out that we still have the backlog topic, what we called our cost-dilutive backlog. We also try to work consistently through and as fast as we can, so that is a bit sometimes unknown. And then thirdly, China is not a major one, but it's also very difficult, you know, to really predict precisely the impact of the volatility there in the Chinese market. And these elements together, by the way, also, if you look at the FX, the FX impact also intensified in quarter three. So let's see what that also will bring in in quarter four. So that, of course, has also an impact on your absolute profit. Okay. I was just trying to understand what changed from last quarter to this quarter. Essentially, you mentioned FX, but in terms of the difference between Adjusted EBIT and Reported EBIT, now we've got the CHF 14 million gain in Adjusted EBIT, so that should be added to the full year guidance, right? Well, I mean, yes, but you have also the other elements that I say that will also play, I mean, a bit of volatility in China, a bit of volatility of working through your dilutive backlog. So yes. So... Okay. Thank you. And then my last question, maybe can you give us a sense of how much new equipment represent as a percentage of Adjusted EBIT at the moment? Thank you very much. No, we actually never go, you know, into the different segments. So, yeah, we don't give that kind of detail. Thank you. Oh, you have an additional question? Thank you, Miguel. We move on to the next, please. Nick? The next question comes from Nick Housden from RBC. Please go ahead. Hi, everyone. Thanks for taking my questions. The first one is on, I guess, the renewed capital allocation framework. And I guess I'm curious as to whether, as you're having, you know, the internal discussions, you're expecting some kind of an acceleration in bolt-on M&A, I guess, just as the service market tilts towards connected units and away from the skill set where the ISPs can compete a lot. And if there isn't an acceleration in bolt-on M&A, would that mean that the buyback could potentially become a recurring thing? Thank you. Nick, thank you. At least one question on something that I thought was long in the making and high on the agenda of our investors, so I'm pleased as this one question comes up. I'll let Carla answer, which one element that we do have, just to give a sense, right? We do have every year between CHF 100 million and 150 million of M&As. That continues. We only do it where it makes sense, where price makes sense, which is very much a question of market, country, and also for us, portfolio density, accrual. That, for us, is absolutely key. That we never stop. Now, for the possible next steps, please, Carla. Nick, yeah, so thank you for touching on this interesting step in terms of capital allocation. I think it's step by step. As I said, first of all, you know, we take your feedback very seriously, and of course, you know, we reflect on it and we made now the second step when it comes to the capital allocation after the increase of the payout ratio. Now, you know, doing a buyback, I mean, we take it step by step. For us, it's always important to keep a balance between a good shareholder return, number one, and keeping our strong balance sheets, so that, you know, we remain in a good position when we see attractive acquisition targets. That's great. Thanks. And, Silvio, maybe a more strategic question. So, you know, as you referred to at the beginning of the call, it's been two years of very good operational improvement, and there's been quite a bit of drastic action that's gone into that, and obviously, there's the CHF 80 million of restructuring plans for this year as well, contributing. So as you see it now, you know, taking a step back, what are the big areas that are left in terms of closing the gap in operational performance versus the peers where, I mean, obviously the best-in-class operating margin is? Now about 500 basis points above what you're targeting for the full year. Thanks. Thank you, Nick. Happy to address it, and I'm sure we have a chance to go deeper into that when we meet in February for our results 2024 and plan 2025. Today, the situation remains such that in spite of our progress, clearly the key difference is NI margins. NI margins, and to go with it, is efficiency. We still have too much variability in terms of performance across different markets, different countries, and even within countries across branches. So what we're focusing on, and Paolo in particular with his team, is process execution, process discipline. And this is now a machine that is being deployed, and it's there is, in fact, going back to the self-help agenda, not much magic. Because we see within a company, we have champions that even with the old product platform, we're doing very well. And now with the new one, we're gonna make sure that we use it as a snowplow effect, that not only do we introduce a new product that will render supply chain and design much more effective, but then this should also will have to be reflected also in the way we install and maintain these units across every country. That, of course, is for the main residential, but the same concept applies for everything we do. And building onto that, the same basic class player has also higher efficiency in term of overhead, and so that's what Carla referred before, hence our substantial investment in restructuring, which are a step into this year, but depending how the market develops, might even continue into the years forward. Thank you very much. Thank you, Nick. The next question comes from Ben Heelan from Bank of America. Please, go ahead. Yes, morning. Sir, for fitting me in, I wanted to ask a question on your comments in the presentation around green shoots in the Americas, and if you could isolate just what you've seen, where there's been some inflections, if that's what you've seen. That would be the first one. And the second one, obviously, you've given us the guidance for restructuring into in 2024. Do you have any early views on how to think about restructuring costs in 2025? Thank you. Good. So maybe let's start with the first and second question. 2025, Ben, if you don't mind, we're not in a position yet to give a figure for 2025, but definitely look forward to discussing it and sharing a plan when we meet in February. Regarding the green shoots in Americas, Paolo, please. Yeah. Our comments in the presentation, Ben, refers very much to also to the U.S. market, in which remember the last. In previous periods, we were indicating, and very much last year, heavily decline in the NI sector as a new installation sector. So what we see now is, and I think we were referring this in the half year closing. After the stabilization, we start to see really bit more than just a positive sentiment, also in residential, but also in commercial. Very, very first projects coming back. And, by the way, the latest decision by the Fed do support this trend. This is what, yeah, invites us to look more positive into the future than we and also me personally would have done in Q1 of this year, so therefore, let's say the future looks better than the past has been in the U.S., especially, and Brazil, it was strong all the time, and what we see in Brazil in the new installation is even an acceleration of the new installation, with incredible demand on residential. By the way, all segments, you can say low end, as up to premium, and if at all in Brazil at the moment, the limitation is more in installation capacity of ourselves, of the industry, rather than in the market, and this both together led us to this comment. Very clear. Thank you. Thank you, Ben. Ben, thank you. The last question for today's call comes from Rizk Maidi from Jefferies. Please go ahead. Yes, good morning. Thanks for fitting me in. Just two quick ones, really. Silvio, we've seen some other... Just the first question is really on the maintenance pricing, and we've seen some other industries that are a bit sort of labor-intensive, that their maintenance pricing contracts is based on CPI rather than the normal sort of wage inflation. We've seen them a little bit struggling because we've seen a bit of a mismatch between the CPI levels and the one in roughly at 2%, and then wage inflation running at 4%. I'm just wondering whether you could just shed some light on how you think about your maintenance pricing and what is it sort of based off? Thank you so much. Paolo, would you like to address that? Yes, very good question. Allow me to give a bit of color. When we look at maintenance business, we got the component of the wage and wage inflation and compensation by indexes, as Carla mentioned before. There's a second big component, which is the old part regarding efficiency, methods, and all that. Let me add a third one, which is the increasing digitalization of the maintenance coming with what we have also referred previously with all the connectivity and digital services. By the way, they also help and contribute to efficiency. So now- ... Without going too much in comparison to other industries or to competitors, what we do, and I repeat, we don't aim to do, we do, is to leverage and to combine the pricing you might get by indexes, wage inflation, compensation, and that with very clear efficiency measures. I repeat myself, one's method and the second one coming from digitalization with increased connected base. Understood. Thank you, and the second one is just maybe for you, Silvio, since you just came back from China, just your overall views on the recent stimulus announcements, the RMB 300 billion sort of program introduced. Do you think it's gonna help, you know, new equipment in the midterm, i.e., getting those work-in-progress projects over the finish line? And what it also could mean to the modernization market there. Thank you. Thank you, Rizk. In fact, this announcement occurred after our return, so I came back on Friday, and this came today and yesterday. There were some first signals last week. So as I mentioned earlier, it's a bit early to assess. So far, I'd like to stress, there is no recovery visible nor in sight. Those measures definitely would provide some type of help. The question that is still out there, and I think we all need to study it a bit closer, is how this will be implemented. You saw that it is not the type of bazooka intervention. It is one that is supposed to percolate through provincial governments, through local banks, and then go into specific projects with the main idea to somehow clear the inventory. Now, that in itself comes across as intensive and complex. So in terms of speed, there's a question open, but, you know, I've been in China long enough to know that sometimes you're surprised. But so far, there is no sufficient indication, neither on the understanding of how this would work nor on any impact on the market so far. Thank you very much. Thank you. Ladies and gentlemen, that was the last question. I would now like to turn the conference back over to Lars Brorson for any closing remarks. Very good. Thank you, Sandra. Thank you very much, everybody, for attending today's call. Please feel free to reach out to me in Investor Relations for any follow-ups you might have. Next scheduled event is the presentation of our full year results, as Silvio said, on February 12th, 2025, rather, sorry. With that, thank you very much and goodbye. 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.