Ladies and gentlemen, welcome to the Schindler Conference Call and Live Webcast on Q3 Results 2025. I am Valentina, the Chorus Call operator. I would like to remind you that all participants will be in listen-only mode and the conference is being recorded. The presentation will be followed by a Q&A session. You can register for questions at any time by pressing star and one on your telephone. For operator assistance, please press star and zero. The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Lars Brorson, Head of Investor Relations. Please go ahead. Thank you, Valentina, and good morning, ladies and gentlemen. Welcome to our Q3 2025 Results Conference Call. My name is Lars Brorson, I'm Head of Investor Relations at Schindler. I'm here together with Paolo Compagna, our CEO, and Carla De Geyseleer, our CFO. As usual, Paolo will discuss the highlights of our quarterly results and our market outlook, and Carla will take us through the financials. After the presentation, we're happy to take your questions. We plan to close the call at 11:00 A.M. in an hour's time. With that, I hand over to Paolo. Paolo, please go ahead. Good morning, everyone. I'm pleased to be back to report on our performance in Q3, and as Lars said, let me start by giving you some highlights on slide number three. Firstly, let me say that we continue to face some growth headwinds in major new installation markets around the world, particularly in China. I will share our order trends in more detail shortly, but before, let me remind what we discussed back in February. A key pillar to our strategy of profitable growth is the pricing discipline, and we demonstrated it again this quarter on a few major projects where the economics were just not consistent with our return expectations. That said, we see good growth momentum in many parts of our organization, and particularly in modernization. Here, orders were up over 16% in the quarter despite the strong growth we had in Q3 last year, allowing us to show another quarter of order growth for the group. Second, revenues slowed in the quarter, down 0.5%, whilst our year-to-date revenue is up 0.8%. Also here, the headwind from China intensified in the quarter, but our backlog is growing, up 1.5 percentage points year on year in local currency, driven by our modernization business, and we are confident that continuing to expand our capacities, we will execute successfully on this backlog. I expect us to deliver our full year 2025 revenue guidance of a low single-digit growth, although this is likely to be a very low single digit, similar to what we delivered in 2024, as Carla will discuss. Third, we delivered another strong operating margin in Q3 at 13%, up 130 basis points from Q3 last year, and we are now able to revise our full year 2025 margin guidance, which we see coming in at around 12.5%. That compares to 12% previously. Carla will provide the detail on that, but I'm very pleased to see that the efficiency initiatives launched over the last couple of years are yielding their results. Now, beyond our financial performance, let me touch on some of the other highlights of the quarter. First, we are making very good progress on the rollout of our new U.S. mid-rise product. This product was launched in 2024, and we have now successfully delivered and handed over the first units, and our order intake so far in 2025 is exceeding our plans. You will remember that this product launch was about leveraging our standardized modular platform and enhancing our mid-rise offering in the commercial and high-end residential segment, a key pillar to our strategy in the U.S. market. Now, we are starting to see the results in terms of share gain in the U.S. mid-rise market, which is really encouraging. Onto modernization, where we continue to industrialize our operations and standardize our product portfolio, we are seeing very good traction with our standardized packages, which now make up close to 17% of our modernization business. That is not only driving growth but also enhancing our competitiveness and supporting our journey towards higher profitability in modernization going forward. On the topic of sustainability, I'm very pleased to announce that we are installing the industry's first-ever low-carbon emission steel elevator. The steel used in this elevator reduces carbon emissions up to 75% compared to conventional production and marks an important step towards our 2040 net zero target. I'm also proud that we have been recognized by Forbes again this year as being among the world's best employers. In the engineering and manufacturing sector, Schindler was ranked third globally. We have close to 70,000 employees, and attracting and retaining talent is absolutely essential to our competitiveness and overall health of the company. You can imagine this recognition is important for us. Moving to our market outlook for 2025 on slide four, we expect the service markets to continue to expand across all regions, with the lowest growth rate in the Americas and the highest in Asia-Pacific driven by India. The modernization markets continue to offer a clear growth opportunity across the world, with mid to high single-digit growth outside of China and growth well into double digits in China, with around 100,000 aging elevators approved this year for an upgrade within the government's equipment renewal program. To put the scale of this initiative into perspective, just imagine replacing all elevators in Australia in a single year. In new installation, we continue to expect the global market to decline by high single digits, mainly due to a low-teens contraction in China, where home starts by floor area continue to fall by close to 20% year on year in the January to September period, following three years of 20%+ declines. Home sales have dropped 5% overall, with only the four tier-one cities showing a slight increase, with all other cities facing steep declines. Across the EMEA region, in addition to good growth in countries such as Spain, now also the important German market appears to have found a bottom and is expected to gradually recover going forward. The so-called Bauturbo initiative, a fast-track housing project recently approved by the German government, should be seen as a positive development overall as it aims to simplify planning, shorten approval times to three months, and allow flexibility in building rules to tackle the housing shortage in the coming quarters and years. Asia-Pacific, excluding China, is projected to grow by mid-single digits, led by India and Southeast Asia, with conditions improving in Australia, and the U.S. new installation market has shown remarkable strength, further increasing from a tough Q3 2024 comparison point. In addition, we saw better data coming from Brazil in Q3 2025, and we have therefore decided to revise our Americas new installation market outlook to stable from slight down previously. How did we perform in this market environment in the third quarter of the year? Turning now to slide five. Starting with service, our portfolio units continue to expand, showing the strongest growth in Asia-Pacific, excluding China. In Americas, we saw a slight decrease as a result of our increased selectivity when it comes to recaptures that we decided to pursue, as well as from softer conversions. As a reminder, we saw a decline in our NI orders in 2023, and this still has an impact given to the normally longer lead times, especially in North America. On modernization, we have maintained the strong momentum seen in the prior quarters and saw a double-digit growth across all regions, except for Asia-Pacific, excluding China, with fewer large projects booked in this particular quarter. Year to date, our mod growth in the region remains in double digits. Finally, on new installation, our global order volumes decreased by double digits due to China, where, as mentioned back in July, we are responding to the prolonged weakness in the NI market by resetting and repositioning our China business towards future growth opportunities. Outside of China, our NI orders grew mid-single digit, driven by an upswing in orders in our Europe South and South America zone, and it is worth flagging the comparison from quarter three last year, which was the best quarter in 2024 for NI, particularly due to our strong performance in the Americas. The U.S. continues to develop well, and as mentioned, we are pleased with the customer reception of our new mid-rise product. With that, let me turn over to Carla to walk us through our financial results in more details. Thank you very much, Paolo. Good morning, everybody. Pleased to take you through our financials related to quarter three. Let me start with slide seven. As a simple summary of the quarter, we continue to see headwinds to our top line, but we are executing very well on the bottom line. Starting with the headwinds at the top line, they are particularly severe in China, and we remain committed to our strategy of pricing discipline, as Paolo just mentioned. It is also important to note that FX headwinds are definitely not declining. We had a hit of over CHF 100 million this quarter to both the order intake and the revenue. I will elaborate on the top line trends shortly. Before doing so, let me point to three highlights for this quarter. Firstly, we had another very strong quarter in terms of operating margins, up 130 basis points for both reported and adjusted EBIT margin. We continue to make very good progress operationally, and that is obviously translating into a margin expansion, which is coming in slightly better than expected, which is also why we are revising our full-year margin guidance. Secondly, our operating cash flow improved both sequentially and compared to last year. Looking at the operating cash flow year to date, we are also up versus 2024, just shy of CHF 1 billion for the first three quarters and setting us up for another strong year for cash conversion. Finally, our net profit continues to increase versus last year in both absolute and margin terms, despite the decline in financial income as well as FX headwinds and higher restructuring costs. Moving to slide eight and taking a look at our top line development, let me first say that we do not see any material shift in order trends overall, even though growth in Q3 came in somewhat lower than in our first half. Large projects are lumpy, and we had fewer of them this quarter compared to the prior two quarters. If you look at the underlying trends by region and segments, there are two things that stand out. First, the continued steep decline in China. Second, the strength in modernization. On China here, our new installation orders declined by over 30% in value in quarter three, driving the group new installation orders down mid-single digits in the quarter and more than offsetting the growth we saw in new installation orders outside of China. Even as China became a smaller part of the overall group orders, it continues to materially impact our growth profile, notably in new installations. However, organic growth was still positive in the quarter due to the growth in service and modernization. In modernization, order intake was up 16.4% in quarter three, and this on a tough comparison versus quarter three last year when we grew at 20%. Growth was broad-based with strong double-digit growth in Europe and Americas, whilst China had a standout quarter up well over 50%. Year to date, China is up close to 40%. This strong order growth in modernization also presents some operational challenges for us in terms of scaling up our delivery capabilities. The execution of our mod backlog was not as efficient in quarter three as it could have been, which meant that revenue growth came in at mid-single digits in the quarter, albeit on a tough comparison from last year when mod revenue grew over 12%. The slightly longer backlog rotation times are also a reflection of the project mix in the backlog. That said, we expect mod revenue growth to accelerate in the coming quarters from the level that we have seen now in quarter three. It is still the new installation which is actually burdening our revenue growth, down 10% in Q3, driven by the steep decline in China, which was down over 20%. With mod and service both growing mid-single digit, that left the total group revenue down half a percentage point in the quarter, but up 0.8% year to date. As of the quarter end, our backlog was up 1.5% in local currencies, driven by mod, driven by service, which had backlogs up mid-teens and mid-single digits, respectively. Our backlog in new installations declined by low single digits. In terms of backlog margin, this quarter was slightly down sequentially, but still clearly up year on year. The weaker sequential development was entirely due to the tariffs being reflected in our U.S. backlog. As our backlog gets repriced over time, you will see the offset to backlog margins, and importantly, excluding the tariff impact, backlog margins continue to improve, also sequentially. Moving on to slide nine and looking at our EBIT performance, as I shared already, it's a really strong development now to 13% reported margin in quarter three and 13.9% on an adjusted basis. Now, the operational improvement of CHF 35 million this quarter primarily reflects the good progress in SG&A savings, but also next to that, the procurement savings continue to deliver. Price and mix were contributors, but less so than the efficiency savings this quarter. Our reported EBIT was burdened by CHF 25 million of adjustments in quarter three, of which CHF 21 million of restructuring costs, translating to minus -CHF 2 million in our Q3 EBIT bridge compared to last year and - CHF 13 million in our year-to-date bridge compared to last year. Now, taking a look at the net profit on slide 10, net profit grew to CHF 265 million in quarter three, reflecting a 9.9% margin and to CHF 796 million year to date with a margin of 9.8% despite lower interest income, despite higher restructuring costs, and despite one-time financial gains in last year's. We are very pleased with this result. Moving to the operating cash flow on the next slide, our operating cash flow grew in the quarter as well as on a year-to-date basis. Operating cash flow reached now CHF 967 million for the first three quarters of the year, and that sets us on the path to deliver another strong performance. It's coming from our operating earnings, supported by higher non-cash impacts offsetting a minor headwind of networking capital after the strong improvement in 2024 and the missing positive net cash flow from financing income. That brings me to the guidance for the remainder of the year. As Paolo mentioned already, we are now specifying our full-year EBIT reported margin guidance at 12.5%. This compares to the previous 12%. As Paolo and I have discussed, this revision comes primarily on the back of the efficiency initiatives that we have been executing and which are yielding savings slightly ahead of our expectations. We also now have an increased visibility on the impact of the tariffs this year, while the measures also taken to restructure our Chinese operations are partly offsetting the end market headwinds that we are facing here. Finally, the mixed headwinds associated with growth in modernization in H2 are somewhat less than we expected in July at the time of our H1 result. On mix, it is also important to recognize that we are benefiting from the continued outgrowth in our service business. This revision to our full-year 2025 guidance also implies that we expect to see continued strong margin improvement year on year in the final quarter of the year. Now, a small word on tariffs, which I think we have managed well so far in 2025. The U.S. tariff costs are now reflected in our backlog, as I just mentioned. We will continue to work on this hard in the coming period to mitigate the impact, including making price adjustments to offset the impact. It is fair to say that the U.S. tariff environment remains very dynamic, so let me give three additional comments as we see the impact today. First of all, you will recall that with our H1 results in July, we provided you with an estimated annual gross tariff impact of approximately CHF 30 million. What happened since then? Since then, we have had the changes to the reciprocal tariffs, which has taken U.S. tariff levels on Switzerland to 39%. That takes our estimated impact to CHF 35 million from the initially CHF 30 million. We also had the expansion of the Section 232 tariff list in mid-August, but that had no material impact on our estimate. Finally, we had the recent escalations by the U.S., including a possible 100% tariff on Chinese imports starting 1st November. If this were to be implemented, that would take the annual gross tariff impact to CHF 72 million. We will come back in February with our full-year 2025 results and update you then on the 2026 impact. I expect us to make good progress on continuing to offset the tariff impact with our mitigating actions. With regard to the 2025 revenue outlook, I confirm that we expect to deliver on our full-year 2025 revenue guidance of low single-digit growth, albeit this is likely to be very low single digits, so similar to 2024. In conclusion, let me take the opportunity to thank all our colleagues around the world for their efforts so far in 2025, not at least our colleagues in the field who are operating in some exceptionally challenging circumstances in many places around the world. It is a clear testimony of their contribution to our strong results in the third quarter of this year. With that, I hand back to Lars. Thank you, Carla. With that, Paolo and Carla are now happy to take your questions. Can I ask you, please, to limit yourself to two questions only, given the limited time we have available? With that, operator, please. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their telephone. You will hear a tone to confirm that you have entered the queue. If you wish to remove yourself from the question queue, you may press star and two. Questioners on the phone are requested to disable the loudspeaker mode and eventually turn off the volume from the webcast while asking a question. Anyone who has a question may press star and one at this time. The first question comes from Daniela Costa from Goldman Sachs. Please go ahead. Hi, good morning. Thank you for taking my questions. I will have two, but I'll ask them one at a time. The first one is regarding your organic order growth rate today, quite a bit lower, I guess, than one of your peers yesterday. I understand from what you said, a much bigger drop in China from you. Can you talk to what extent that is just the original or the product mix, or was it more an intended effort to try to control your backlog margin or something else? I'll start there. Good morning, Daniela. Paolo here. Very clear, China order intake in the quarter is driven by two factors. One is obviously our clear dedication in pricing discipline, that we watch out what we take into the books as part of our China program we discussed with you back in February. The second one is also a quarter in which we still see a decline in the market, and we just follow here the trend. This has impacted our Q3 numbers for the China order intake. In terms of the America service trend, which seems sort of weak and down, can you elaborate a little bit? From one side, you're upgrading on the original equipment, but the delivery on the service side seems a little bit on the weak side. What's going on on the service? Yeah. Let me elaborate on the topics. Our upgrade is on new installation. Going forward, we were not conservative. We were back in July looking at the market trends, and we saw some signs of cooling down in North and South America, which, for the reasons discussed, we say the market might stay stable. Especially as in North America, we don't see yet a significant negative trend which would require this adjustment downwards on new installation. Your question was about service, and let me elaborate on this one. Here is a mix of two factors, and also a bit different between North and South America. What we see in Q3 in this quarter is a combination of two things. Number one, in the recaptures, we call it recoveries. These are the new service contracts we take on board. We move to a more diligent way of assessing their economics. This led now in a comparison quarter to quarter, as a quarter to the quarter, to a slightly negative trend. The second one is that you might remember in 2023, we were facing a couple of quarters with a slower NI, new installation order intake. What we see now is the combination of the slower conversions, which means other contracts, right, which come into service after the new installation is finished. Due to the lead time of the NI or the backlog from 2023, the combination of these two factors leads to this mathematical slow Q3 in service Americas. Correct. Thank you very much for the explanation. Thank you, Daniela. The next question comes from Andre Kukhnin from UBS. Please go ahead. Yes, good morning. Thank you very much for taking my questions. I've got two, and one of them actually dovetails nicely with what Daniela asked about just now. I'll start with that. I wanted to also ask about the dynamics between modernization and service growth in North America, but also in Europe, where you're seeing such a substantial divergence. I presume at some point, this strong growth in modernization and all those projects that you execute on in mod will help converting into service. Is that the case? Could you give us some idea on the kind of lead time on that? Maybe, sorry to pile them on, but while we're on service, could you give us an idea of what the unit growth was for you globally in the quarter? Thank you, Andre. Good morning. Let me elaborate on both. Number one was about modernization, how it works into service. Here, obviously, yes, modernization captures as long as they are outside of our portfolio would obviously lead to portfolio gains. Here, the answer is yes, there will be a certain positive contribution to the portfolio, and that's clearly one of our targets. This being said, the second part of the first question was about lead times. I must say a bit different geography by geography, but actually, the overall trend is that the lead times on modernization are also going up. It means the time to convert this modernization, I repeat, outside of portfolio. It's not the entire modernization put at portfolio, but the portion which adds portfolio might start to contribute between the end of 2026 and going forward. There is a positive momentum, yes. There is a time in between, yes. We expect to contribute from Q4 next year going forward. The second question was about the growth in the portfolio, which we can share on a good low single-digit number. Great. Thank you. I appreciate there's more than one question already, so I'll just ask a short one. On the tariffs and the backlog repricing, could you confirm that this is just purely mechanical? It's kind of triggering the escalation clauses that are already in contracts, and it's just a matter of working through that, or are there new negotiations to be had with customers? Yes, Andrei. We have done, as we shared in July, a little program on it, which is showing good effect. Carla, we might elaborate on that. Yeah, you are absolutely right. Hi, Andre. Thanks for the question. Yes, I confirm it's rather a mechanical exercise that you need to work through. There is a pricing towards the customer, and there is also a piece in our supplier management side. Great. Thank you very much. Thank you. Thank you, Andrei. The next question comes from Vivek Midha from Citi. Please go ahead. Thank you very much, everyone, and good morning. I have two questions. My first is a follow-up around your comment around the margin drag from modernization growth not being as large as you thought. Is that because of that slower conversion of modernization growth that you highlighted, which potentially might then have more of an impact in 2026? Or is it also because of the improved modernization profitability as you've grown? Thank you. Let me. Good me. Good morning. It is a bit of a combination between the margin and the rollout of the backlog, and I will leave Carla to come to those details. Actually, the margin within modernization is not deteriorating. The opposite is the case. Your observation we are improving on modernization margins is right. Is this one of the reasons for having a slower conversion into operating revenue? It is not the case. Carla, please, would you like to elaborate on this one? I want to be clear. I mean, we have the strong growth in the order intake and a slower realization of the projects itself. We don't have pressure on the mod margin. Just to be very, very clear there. Yeah, fully understood. Thank you. My next question is just looking at the headcount, the number of employees. It looks like it's gone down by over 1,000 relative to the second quarter. Is that the effect of your efforts to reposition in China, or is there something else driving that reduction in the headcount? Thank you. Vivek, that's a very good observation. Yes, we announced back in July that we are repositioning our especially new installation business in China. What you see in the overall numbers is mostly that. That's true. Yeah, this comes on the combination. If you look at a year on year versus December, it comes on top of the initiative that we took to reduce our cost levels, mainly in the back office, in the indirect part of the headcount. That is actually what you see coming through. We are just executing on this. It's the combination of the two. Okay, thank you very much. The next question comes from James Moore from Rothschild & Co Redburn. Please go ahead. Yeah, morning, everyone. Paolo, Carla. Could I ask one on service? If we're talking about a sort of 5% constant currency growth for service, would it be possible to split that between maintenance and repair? Are they at a similar pace? If they're at a similar pace and we're at 5% maintenance growth, is that to say with your good low single-digit comment, 2.5% unit growth and 2.5% price? I ask because I'd like to unpack that to another level if I could. Behind the price piece, would it be possible to say how much of that is kind of a wage escalator pass-through versus any other form of premium over and above that, whether digital or other initiatives? Behind the unit growth, is that basically just the past orders coming through? Have you got any conversion topics? Like, is conversion getting better or worse? Have you got any win-loss retention topics? How do you think about maintenance growth going forward for the next couple of years? James, good morning. How are you? Good question with some components into it. Let me combine them. On the first part of your question, service, repair, without going to the details of both, as we never do, but it's obvious that both are growing together. As repair, you can only execute on the portfolio you have and with the customers we are happy to serve. There is obviously a certain correlation between the repair business expansion and the portfolio growth itself. This is very fair to be assumed. Second part of the first question, are there components of digitalization, monetization of the digital business? Surely, yes. As we announced also previously, we continue our efforts in digitalizing for our customers our services. We don't only digitalize for ourselves, for the beauty of technology. We also have an increased and steadily increasing offering on digital services for our customers, which obviously, yes, starts to get some traction and contributes to this overall picture. That's absolutely right. Your second question, how we expect this all service repair digitalization business to move? Here, we expect, as mentioned before, that we see at least a steady continuation of this growth in which we absolutely want to participate. Thanks, Paolo. Could I just follow up on the NI margin for the new equipment? My sense was you were doing better than others in China, and you had some topics in the West, which you're addressing with your standardization program. We've seen some procurement savings, and I'm sure next year is more about efficiency savings. You're doing amazing things there. Are you seeing a scenario in which the NI margin is down year on year? Is it that the Chinese revenue decline is more than offsetting some of the organic actions on the other side or vice versa? James, your first assumption, I don't like to comment on this. I don't have it. In terms of margins in new installation, let me share in all clarity that our efforts in improving efficiency in the field, and we have talked about, you know, now the last couple of years and intensified last year and this year, as now we start to see really traction in the field. This improvement of margins in new installation in the execution we see everywhere. Now, to distinguish between China specific and the rest of the world, I would say the improvement in the execution is everywhere the same. To assume that the picture has reverted between the rest of the world and China, I would say China is more under pressure in terms of margins than the rest of the world. I think I follow. Thanks, Paolo. The next question comes from Rizk Maidi from Jefferies. Please go ahead. Oh, yes. Good morning, Paolo. And Paola, thanks for your time. Just maybe start with a clarification on the full-year guidance on when it comes to revenues. I think now we're talking about very low single digits, which also means very low single digits for the Q4. How should we think about this? Is still these bottlenecks when it comes to modernization still going to be there? How should we also think about the service growth in America? You talked about recapture, weak NI back in 2023. Does that still mean that it's going to be a drag again in Q4 and potentially even 2026? Thank you. Thank you, Rizk. Let me start maybe with the second part on the service in the Americas. Obviously, right to observe that we are now on a level which we also compare to previous year growth rates, right? Is it expected to stay at that level? Maybe we will see not now in the next quarter, but we expect in the quarters to come to see growth again, also more growth again, also in service in Americas. When we get our backlog executed, and as I was sharing before, we see certain delays in delivering on the project, which then it's a question of time. We will come back on that. Therefore, if you ask specific on Q4, we expect to be on that level. Going forward, we would also expect to see growth rates again also in Americas. Talking now the order, sorry, revenue for the full year, we expect Q4 to be in line with our plans. Hence, if we see the year-to-date numbers and the Q3, we like to be super transparent in what would be the full-year expectation. We don't worsen it, but we also don't see room to get euphoric on additional revenues. To your observation, is it a timing issue? Is it projects and kind of delays? Yes. Why we still are quite confident for the future to come is that the backlog is promising. We are building up resources to execute on modernization. Your observation is absolutely spot on. With the time, and we will see also this OR then picking up. Carla, anything you'd like to add? No, I think I confirm perfectly. I think we are complete. Thank you very much. The second one is really just to understand your cost efficiency. We're now getting towards year-end. Maybe if we could just, and please correct me if I'm missing anything, but my understanding is you're running with different programs. One of them is procurement, the other one is SG&A. There's an FTE sort of reduction or repositioning of your China business. Maybe can we talk about what has been achieved year to date, and how should we think about each component heading into 2026? Thank you. Thank you very much for the question. I will take it. First of all, the plan has not changed. We are still working on the same four building blocks that we have always been super transparent on. First of all, starting with the procurement and the supply chain savings, that is the more mature one. This is now the second year that it continues to fully deliver, and that is also the one with the biggest impact. What clearly scaled up during the first three quarters is the second initiative, the reduction of the SG&A cost. Of course, driving efficiency in the back office, that's what you see also coming through in the headcount reduction. We started with that in quarter four last year, and that is now really delivering. That will also, I would say, continue to deliver, obviously not with the same incremental savings, but we have not completely come to an end of that initiative. What is rather new, I would say, in quarter three is that we have also been focusing on driving efficiency in the new installations and the modernization business. That is the third initiative where we see now in quarter three the first benefits coming through. That is, in a nutshell, what is also flowing through to the bottom line. Immediately making the step a bit to the period to come, we definitely still have potential for these building blocks, and there will still be significant amounts coming through. However, the composition will change because, as I said, the procurement saving becomes more mature, so their relative weight will decline. Of course, also going forward with the SG&A. If we execute according to plan, the incremental savings coming from the efficiency in the NI and the modernization will further increase. Also on top of that, efficiency in our service business. That is, in a nutshell, what is happening and what will or what is expected to happen going forward. What is also interesting to see is that we came now to a situation where the efficiencies are actually really offsetting the inflationary effects and becoming even more important than some of the pricing elements in some of the areas. That was the whole initial target why we have set up these four building plans. That's why you see the nice uptake in the margins and in the profits. Does that answer your question? Yes, thank you very much. Thank you. Thank you, Rizk. Next question, please, operator. The next question comes from Vlad Sergievskiy from Barclays. Please go ahead. Yes, good morning. Thank you very much for the opportunity. I'll ask two and start with modernization. You disclosed standardized modernization solution, what, 17% of total modernization orders now. Do you think there is a natural limit of how big standard solutions could be in the future compared to the total modernization market? Are those standardized solutions opening new market niches for you in any way? Are they addressing customers that would have perhaps otherwise not ordered modernization at all or ordered it a bit later? Good morning. To the first part, is there a limitation in the creation of standard solutions? There will be a logical limitation one day as if you recognize that in installed-base there is a kind of 160 years of elevator technologies built many, many times in many countries by very local companies. You have 10,000 different elevators to be modernized. Let's talk facts. With that, you can imagine you cannot have a standard solution for 10,000 different elevators around the globe. You are going to fix it by a group of similar technologies you can address. To your first part of your question, is there a limitation? Yes. Are we already there? No. To the second part, does it open new opportunities? I personally believe yes. When you get to a standard solution which could offer to a customer to improve safety, quality, and also maybe user experience by having affordable costs, I think there might be a group of customers who today can only go for a full replacement of the elevator, which comes with certain costs and also civil works around it, now having this opportunity. To the second question, I personally believe there might be a segment. Is it incredibly big? I think it depends from country to country. Coming back to my first part of the answer, in some countries, we have a bigger number of local products, as we call them, and we have some countries with less number of local products. In those countries, this opportunity might be bigger. Excellent. That's very clear. The second one is on the sales mix. Sales mix has been a tailwind to profitability for quite some years. Is there a chance that this tailwind eases or completely stops in 2026 when mod growth accelerates, when perhaps new equipment declines, slows, and maybe grows outside of China, and service keeps growing as it does? This mix will change. Will it go as fast as you point out? I don't think so. We definitely have that calculated in our plans. So yes. Excellent. Thank you very much for the answer. 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. I've got two, and I'll take one at a time. First one is for Carla. Just coming back to your general comments regarding incremental cost savings from restructuring your operational efficiency going forward, I was wondering whether you could quantify those for 2025 and 2026 to basically understand whether there's been any changes. That's my first question. I'll come back to the second one. As I said, there are no changes in the components that are driving these cost savings, but the relative weight of the components, that of course changes because, as I said, if you talk about procurement and supply chain, it's a very mature initiative. Your incremental obviously decreases. This year, we put a lot of focus on the SG&A savings, and together with that, we start up more and more the efficiency driving the efficiency in the new installation and in the modernization. For going forward, we still have a significant incremental amount of potential sitting there, and we will work through that as we did over the last two years. Okay, thanks. My second question is regarding the press reports with respect to TK Elevator being either up for sale or going for an IPO possibly. I was just wondering, thinking back, if I remember correctly, to 2020, I seem to remember press reports regarding Schindler's Board making statements about potentially suing Kone at the time if the deal had gone through, which of course it didn't. I was just wondering, if a major competitor were to take over TK Elevator, and I suppose Schindler is also interested, just thinking if a major competitor were to get the bid, would Schindler's Board again consider legal actions? Martin, let me take this one. First of all, we don't intend to comment on competitors' decision about what they do or don't do on M&As. As you know, we never disclose our M&As and what we do there. I must say what the reaction will be in the market, no one can predict. What will happen may be also difficult to predict. With that, I must say, let's see what happens. With regard to ourselves, I mean, we always look at acquisitions which happen, and we look at our own opportunities in smaller and mid-size and large acquisitions. I would say there's no answer to your question in the form of what will be a reaction. The market will show what happens. Okay, thanks. The next question comes from Walter Bamert from Zürcher Kantonalbank. Please go ahead. Thank you very much. Hello, everybody. Could you please comment which part of the 130 basis point margin improvement stems from the positive mix effect? It is not a major, it is not the major part. We don't give the exact breakdown, but if you're just, I would say, approximately, up to 1/3, approximately, is a mix effect. Yes, yes. I also reconfirm we are very clear on that, and it's also part of our plans going forward if the mix effect changes. Perfect. Nevertheless, coming back to the M&A question, and just generic, what's your assessment of the Asian market, which is still somewhat more fragmented? Do you think there is still room for globalization of those players, or do you expect that the markets will remain fragmented somewhat? None of us, Walter, has a glass sphere to look at for the future. If we would have, we would have to stop the call, go and make some decisions. This being said, obviously, when you look into a fragmented but interesting market, which you say, if you say AP is it, and it is, one could assume things could happen in the next years to come. This would be maybe my careful assumption. We talk about a still promising market, promising market for the future. Yes, as you rightly assess, there's a high fragmentation in that specific part of the world still. Therefore, one could assume there will be some movements, whatever type, difficult to say. When it happens, difficult to say. Could it happen? I would not exclude it, but it's a very personal assumption away from any detailed study. Thank you very much for your personal assumption. Thank you. Welcome. The next question comes from John Kim from Deutsche Bank. Please go ahead. Hi, good morning. I'm wondering if we could go back to the order backlog and the revenue delivery in Q3. If I remember correctly, there was going to be a bit of legacy overhang on Q3 and Q4 deliveries and negative mix from Chinese exposure. Did Q3 progress as planned, or were there delays to that mix or margin delivery set, I suppose? Yeah, John, good morning. To Q3 specifically, the revenue development might have been partially impacted by some projects which see a bit of a delayed execution. Obviously, when it comes to an installation and larger modernization jobs, if you got a job which then is not completed for whatever reason, and often, you know how it goes on the construction site, you might even see it in the books. This has for sure an impact in Q3. Therefore, I was mentioning before, going forward, this will be flattened out by itself as the jobs will be completed, will be then built, and then it moves on. Your assumption is right, I think, in saying in Q3, there is a certain impact by larger projects not completed. Yeah. Okay. Just as a quick follow-up to a comment you made about modular, in terms of supply chain OpEx and perhaps CapEx, do you have what you need to deliver your backlog in modernization, or is further investment needed from here, you think? We shared in February, you remember when we were sharing our dedication now to move on the modernization business. With some of you, we were even discussing in detail what is behind. One part was the development, production, and rollout of those standardized, we call it packages, we call it kits, right? Here, the investment in supply chain, supplier base has been done. Is there any major investment? Not specifically, but I like also in all transparency to share that we continue to invest and develop on our supply chain as obviously with the modernization piece growing and the new installation piece being what it is. It's a kind of logical consequence that you keep developing, we call it upgrading internally, the supply chain. We work now with an internal program in upgrading our supply chain. We don't talk much about it, but this takes place. Does it come with major investments? No. Is it partially in the one or the other supply chain? You know, we have different in different continents. There will be some adjustments, but no major investments. Yes, what we deliver now, we are ready to deliver, and this work has been done, was part of our program in the last 12 months backwards. Okay, thank you. The next question comes from Kalwinder Rajpal from Alpha Value. Please go ahead. Good morning, everyone. Thank you for taking the question. I just wanted to come back on mod orders in China. If I heard Carla correctly, she said 50% growth in Q3 and 40% year-to-date. Would it be fair to assume that this business faces tough comps as we go into 2026? Any commentary on growth in the mod market in China in 2026 will be helpful. Just tied to it, is the share of standardized mod higher in China compared to other geographies? Let me take your question. Good morning. China mod 26, modernization business in China is growing nicely, as shared before, and we don't see any change in trend at all. As I mentioned before, there are even some governmental programs which are supposed to give some support, and we will also participate there. Allow me also here a very personal note. We have seen in the past also massive supportive programs in new installations in China, which afterwards came with a limited real impact. Now the modernization ones are out. We have still to see what is the real impact. This said, I must say that beside this stimulus, the modernization business in China is going well and is supposed to continue going well. On the second part of your question, which is the percentage of the packages in China, here we must say we have to see the market. If I would say percentage-wise in that specific market, you could say yes. However, it's logical that in more mature markets in which for longer decades, more products were installed, one could assume that the number of kits, so of standard solution kits, is higher than in a country in which, grosso modo, you can say you have more of a homogeneic market in terms of technology, right, in terms of installed base. Therefore, is it strategically different? No. In number of pieces of solutions, yes. I hope this answers your question. It's a bit technical, but unfortunately, in that case, it's a technical background. Yes, absolutely. Just to come back on wage inflation, I wanted to understand the assumptions for your wage inflation in 2025 and 2026. That was a bit of a disturbed connection here. I think it was a question about wage inflation. Yeah, wage inflation, the assumptions in 2025, and how should we think about it in 2026? Thank you for the question. Wage inflation in 2026, I think it will be on a level that is comparable with 2025. That is how we currently see it. Thank you, Kulwinder. We'll take one last question from Rizk. Thank you, Kulwinder. We'll take one last question, please. We now have a follow-up question from Rizk Maidi from Jefferies. Please go ahead. Yes, thank you. I'll be very brief. Just clarifying some of the points, just on China new installations. Am I correct in thinking that the orders here are down 30%? I think in the P&L, you talked about a 20% decline. Perhaps a little bit more drag here going forward. More generally, we're now four years into this downturn. We thought pricing is not going to be as bad because local players, competitors, including yourself, are doing much lower margins in this downturn than in previous ones. It feels like it's not getting any better. I'm just wondering, who is actually taking on these badly priced sort of projects? Number two, how should we think about and also pricing process. Do You see it by geography? How are you thinking about 2026 here? Thanks. Let me take this one, which is a complex follow-up question. Let me start with this decline in order intake, which I always have to remind might be different between units and value. In units, the market is down, as you assume, close to 30%, and in value even above that. For us, your assumption is right. It's a bit of a mismatch between units and value, but in value, it has declined a lot. Part of your second question, who is taking on all these bad jobs? I cannot talk about who is taking bad, big jobs. However, as we see it also in our numbers, the pricing in China was very tough in the last years. You are fully right. To be very optimistic about pricing in China is not us. If you ask me, how do we look going forward? We would hope to see a stabilization of the pricing. If we get there, it's already an improvement. Till now, pricing has shown to be very tough. As soon as we get to a stabilization of the pricing, one could say from that point, we can start all to work on it. This is what we see for 2026, right? We don't expect any special magic. Carla was referring to our plans for 2026. When we meet in February, you will look, you know us. We are always very, we try to be and are very down to earth in our plans. In China, there's no euphoric assumption for what will happen in 2026. I hope this answered your question. Yes, thank you very much. Thanks for your time. Thank you very much. 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. Thank you, operator, and thank you all very much for attending the call today. Please feel free to reach out to me for any follow-ups you might have. The next scheduled event is the presentation of our full-year results on the 11th of February, 2026. You'll also find our reporting calendar for 2026 at the back of our presentation today. With that, thank you all 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.