Ladies and gentlemen, thank you for standing by. My name is Emma, your Chorus Call operator. Welcome, and thank you for joining the Audi Q2 2022 Investor Relations Conference Call and Webcast. Throughout today's recorded presentation, all participants are in a listen-only mode. The presentation will be followed by a question and answer session. If you'd like to ask a question, you may press star followed by one on your telephone keypad. Please press the star key followed by zero for operator assistance. I would now like to turn the conference over to Robert Schwarzl. Please go ahead, sir. Ladies and gentlemen, welcome to the Audi Investor Relations’ Conference Call for the Q2 2022. Thank you for dialing in. I have Jürgen Rittersberger, our CFO, and Oliver Hoffmann, Chief Technical Officer, with me. After their statements, you will be able to ask your questions. You can either ask your question via phone or use the form at our webcast page. We will first answer the questions on the phone. Please note the disclaimer on page two of our presentation. The slide deck is as usual available at the Audi Investor Relations website alongside quarterly update and the fact sheet for Q2. Now, without further ado, I hand over to Oli. Yeah. Robert, thank you very much. Ladies and gentlemen, we at Audi have made definite decisions. We are committed to a battery electric, connected, and increasingly automated future. Our roadmap to this future is called Vorsprung 2030, our strategy for the future of premium mobility. As of 2026, Audi will only launch full electric new models on the global market. In 2033, we will stop the production of vehicles with combustion engines, including PHEVs. We are just as clear and ambitious to our financial goals. We want to achieve high profitability with a return rate of over 11% in the long term. At the same time, we are investing strongly in the future. By 2026, we will be investing EUR 19 billion in electric mobility for our premium brands Audi, Bentley, Lamborghini, and Ducati. With overall investments coming in at almost EUR 40 billion, this means that nearly half of the total is going toward this future technology. On top of this, we will be making a comprehensive upfront investment in digitalization, electronic platforms, and autonomous driving functions through CARIAD. As you can see, we have a clear plan, and we are systematically pursuing this plan, no ifs, no buts. The key is our platform strategy. It enables us to bring highly efficient and attractive vehicles to the market, short and long term. This will be continued until 2033 for both fully electric models and models with conventional powertrains. We are in a decade of transition and have committed ourselves to fully all electric premium mobility. In certain regions of the earth and for specific customer segments, combustion engines will remain important for some time. That's why we decided on really dedicated platforms earlier than some of our competitors. This way, we can design our models without compromising the respective powertrain technology. We'll use the PPE for electric vehicles and the PPC for combustion models. Both platforms will have powertrain independent innovations with a unified or uniform electronic architecture and a state-of-the-art new infotainment system. In the case of PPE, the technological and efficiency benefits are enormous. We are creating advantages in weight, package, and body proportions. Another advantage is scalability. It allows us to produce a variety of models in the mid-range and luxury segment. Depending on battery size and wheelbase, we can make SUV and CUV models with high floors and low floor, such as the sedan, Sportback, and our unique Avant. With PPE, we will be—we will expand our portfolio from eight to more than 20 full electric Audi models by 2026. Already today, we are really attractive in the market. Our pioneer, the Audi e-tron, is the best-selling all-electric premium SUV in Europe. In 2018, it was the first all-electric Audi. Last year alone, we sold over 49,000 units. The e-tron will have comprehensive product improvements this year, it remains competitive. Next year, we will present our first PPE model, the Q6 e-tron. In 2024, this will be followed by the model family A6 e-tron, and I can tell you the production version looks even better than the concept car. Yet, we are already thinking beyond PPE with our SSP, the Scalable Systems Platform from the Volkswagen Group. The SSP is an electric, fully digital and highly scalable platform. Over 40 million vehicles will be based on the SSP. It will provide the key to fully automated driving, huge economies of scale and reduced development costs and production complexity. The first vehicle on the SSP platform will be the Project Trinity from Volkswagen. Shortly after, Audi will be the first group brand to launch a fully automated vehicle based on the SSP. Besides competitive hardware, electronic platforms and software are also vitally important. With CARIAD, we have taken the right path and pooled the software expertise on the various brands. The project is very ambitious, with thousands of digital experts, numerous acquisitions and higher vertical integration. Setbacks are inevitable along the way, but we are 100% committed and will develop the software and electronic architecture for our vehicles within the group. The next two years, we are launching multiple PPE and PPC models with a new premium software platform, and these vehicles already offer a uniform electronic architecture and extensive software innovations. This includes improved performance, thanks to high performance domain computers and 5G connectivity, a standardized, one infotainment platform with third-party app store, new navigation experience and comprehensive driver assistance functions, and the automotive cloud and over-the-air update and upgrade capability. One thing will always be clear now and in the future, no matter what the powertrain is, what the platform is, whether the car is self-driving or not, if you are in an Audi, then you must be able to feel it. Our customers should enjoy that unmistakable brand experience. For us, it's crucial to preserve this distinctive Audi DNA and to further develop it, and carry it into the future. Audi provides unique driving experience, strong vehicle dynamics and a progressive design. Due to this, our range is suitable for everyday driving with high charging performance. We will open new dimensions in the interior. The car will become a third space in which to live and work. A connected experience with a clear focus on safety and comfort. Audi drivers will experience our vehicles with all their senses, the sound, the touch, the look and the choice of sustainable materials. Ladies and gentlemen, at Audi, we are well prepared for the future. Our vehicles will be pioneers of premium mobility with clear features, now and in years to come. We work and think in new ways. We have a clear plan, ambitious goals, and considerable investments. With clear portfolio planning, launching 20 all-electric Audi models by 2026. With clear platform planning using PPE and PPC for the short term and the SSP for the long term. Simply, in the race for the future, we have Vorsprung durch Technik. Thank you very much for your attention, and now I will hand over to Jürgen Rittersberger. Thank you, Oliver. Very interesting insights into our product development and our future. Hello, everyone, and a warm welcome from my side as well. Now we go from the product outlook to the current developments. Today, we published our sales and financial figures for the first half of 2022. In the first six months of 2022, a challenging environment has continued to shape our business. The corona pandemic is not over, especially in China. Semiconductor shortages continued to challenge the industry. The war in Ukraine has been going for 155 days now with no end in sight to the horrific loss of life. The resulting geopolitical tensions challenge our planning. Raw material price volatility has been its highest in recent history. Rising inflation could weigh on consumer sentiment, and now we face potential energy supply issues. At the same time, we were able to implement measures to protect and enhance our profits. In the favorable market environment, we could considerably strengthen our pricing. We have also adjusted our sourcing to allow us to build as many cars as possible. We have continued to work on internal optimizations, streamlining processes, and keeping our fixed costs in check. We have been working on plans to mitigate the impact of a possible power shortage, which we hope we won't need. Despite the challenges we have had to face so far this year, we have been able to maintain a high level of profitability. With that, let us start by looking at the Audi brand deliveries. In the first six months of 2022, the Audi brand delivered 785,000 units, 20% fewer than in the prior year period. The decline was mostly driven by this limited supply of semiconductors as well as COVID-related lockdowns in China. Logistical issues have also limited our ability to quickly transport cars to certain regions. Our order bank remains strong despite inflationary fears. In the second quarter, we saw a sequential sales improvement of 4%. We expect these positive sales trends to continue in all of our main sales regions. Let's take a closer look. In the United States, deliveries declined by 31% to 84,000 units. This decline was driven by chip shortages as well as logistical challenges. With the gradual improvement of the inventory level in the still understocked market, we saw a strong sequential improvement of 35% in the last three months. The European deliveries declined by 13% in the first six months. Germany has proven to be a robust market with a slight year-over-year improvement.n Overall, we do see a slight positive trend in Europe. In China, there was an impact of the COVID lockdowns. Deliveries declined by 24%. However, we did see a strong sequential rebound in May and June. In June, sales were above the prior year level for the first time in 2022. We are optimistic about recovering some of the lost volumes in the remainder of the year. In the first quarter, we started delivering models produced by the second China joint venture with SAIC. In June, we also began construction of our PPE factory in Changchun, which will allow us to bring even more premium BEVs to our Chinese customers. In the first six months, our worldwide BEVs deliveries reached 50,000 units, a 53% year-on-year increase. The Audi Q4 e-tron deliveries have exceeded 18,000 units so far. The production volume for the year is already sold out. The e-tron GT deliveries have increased to 5,700 units. Audi e-tron sales were mostly stable with 24,000 cars, and we are looking forward to the major upgrade of our BEV pioneer towards the end of the year. We would have had even larger growth with our BEV deliveries, but the semiconductor shortages limited our ability to meet the very strong demand. The share of fully electric vehicles reached 6.4% in the first half of 2022. Additionally, we have delivered around 31,000 Audi plug-in hybrids. For the full year, we aim to considerably increase our BEV deliveries. Before we look now at the financial figures in detail, please note that Bentley has been consolidated since January 1st 2022, and therefore was not included in the prior year figures. Our revenue for the first six months of 2022 came in at EUR 29.9 billion, which is 2.2% above the prior year figure. Excluding the revenues from Bentley, the figure would come in 3.6% below the prior year. The main driver behind the solid revenue development, despite substantially lower deliveries, was improved pricing and reduced incentives, and we have also seen strong growth of our original parts business. Our Roadmap E is well on track. BEV revenues increased by 63% in the first six months. Together with the revenue from our low emission plug-in hybrids, the revenue conforming with the EU taxonomy amounted to 12.3%. Operating profit in the first six months of 2022 reached an impressive EUR 4.9 billion with a 16.5% margin. Let's take a closer look at the main driver, drivers behind this operating result. We saw a positive year-on-year effect from market and pricing of EUR 2.1 billion. While volumes declined substantially, our pricing performance remained strong with a year-on-year contribution of around EUR 700 million. The benefit of a strong used car market contributed a further EUR 500 million in residual value effects. Furthermore, we saw a higher contribution from our subsidiaries, Lamborghini and Ducati, as well as from the newly consolidated Bentley brands. Our Original Parts Business also had a positive contribution. In the first six months of 2022 alone, the raw material hedge effect amounted to a positive value of EUR 382 million. The combination of tight supply chains and escalating geopolitical events have caused raw material prices to skyrocket in the first quarter of 2022. This led to a strong tailwind of EUR 1.2 billion. In the second quarter, the prices came down, significantly. For example, at the end of March, the price of nickel was 61% higher than in the beginning of the year. By the end of June, it was only 18% above what it was on January 1st. This development led to a negative effect of EUR 866 million in the second quarter. In total, the operating result effect stood at EUR 382 million in the first six months of 2022. With continued geopolitical tensions and volatile price development, it is impossible to predict how our hedging positions will be valued on any given day. Our current full year planning does not include any significant raw material hedge effects. In a year-on-year comparison, the effect of raw material hedges and foreign exchange rates came to a - EUR 139 million. Our product costs worsened by EUR 300 million compared to the prior year level. This development was mostly driven by higher energy and raw material prices, as well as supply risks. We expect an even greater negative impact in the second half of the year. The effect of fixed costs and other items amounted to a positive EUR 188 million. Adjusted for the Bentley consolidation, our fixed costs outside of technical development declined slightly, building on the downward trend from the previous periods. Year-on-year, our R&D costs increased despite higher capitalization rate, mainly due to the Bentley consolidation. The operating profit before special items came to EUR 4.965 billion. The corresponding margin was 16.6%. Special items related to the diesel issue came to -EUR 32 million. The reported operating margin is therefore 16.5%. A substantial portion of our Chinese business performance is included in our financial results. In the first quarter, profit from our Chinese operations reached EUR 431 million. Added to the operating results, this would imply a 1.4 percentage points higher margin. The year-on-year decrease of 24% was mainly driven by the corona related lockdowns in major Chinese cities. As you can see, even in challenging conditions, Audi could build on its strong product substance and achieve a very strong performance. Looking at the investment levels, we see that cash R&D increased by 8%. The increase was mainly driven by the Bentley consolidation. The R&D ratio of 7% is at the top end of our strategic target corridor. The slight increase from 47% to 49% in the R&D capitalization reflects the status of the product development cycle. We continue with our CapEx discipline without under-investing in our core businesses. At EUR 847 million, CapEx is 39% above the prior year figure, reflecting the scheduled investments in best production capacities as well as Bentley consolidation. CapEx accounts for 2.8% of revenues. In 2022, our capital expenditures will follow the usual seasonal pattern with higher outlay in the second half of the year. With a net cash flow of EUR 2.6 billion in the first six months of 2022, we saw the following effects. We saw a 26% increase in the gross cash flow driven by the strong operating performance. At the same time, working capital increased substantially, driven mostly by inventories. The consolidation of some national sales companies took effect with a corresponding cash outflow. Accelerated investments in BEV production capacities slightly burdened our cash flow. Another positive effect is the first time consolidation of Bentley. The prior year net cash flow was exceptionally strong, influenced by positive working capital effects and prior period cash inflows. The EUR 2.6 billion net cash flow is a solid figure, and it once again illustrates Audi's strong ability to generate cash. As I mentioned before, we saw an increase in working capital, especially in our inventories, which grew by 17% compared to the extremely low prior year-end level. This will also allow us to satisfy customer demands. The balance sheet inventories amounted to EUR 8.3 billion at the end of June. Challenges in the worldwide logistics led to increase in the new and used car inventories despite the strong demand. Unfinished goods and raw materials inventories temporarily increased as well. Looking at the performance of the brands in the first six months, Ducati has shown a very strong performance. Despite the decline in deliveries by 4% compared to the very strong prior year figure, revenue increased by 5%, thanks to the improved mix and pricing. With a EUR 68 million operating results, Ducati achieved a strong 12.6 return on sales. Lamborghini delivered 5,090 cars in the first six months of 2022, which is 5% above the prior year level. Revenue grew by an impressive 31% to EUR 1.3 billion. This was due to volume growth, favorable mix and personalization, as well as positive exchange rate effects. With an operating result of EUR 425 million, the return on sales reached 32% in the first six months of 2022, reflecting strong product margins. This continues the positive trend set in the first quarter. Bentley has joined the Premium Brand Group as of January 1st. It has been consolidated with the Audi Group. The prior year figures are therefore not included in the Audi Group financials. Bentley deliveries grew by 3% to 7,398 units. The revenue grew by 29%. This was driven by volume growth, price and mix improvements, individualization, as well as foreign exchange rate effects. In the first six months of 2022, Bentley has achieved its best ever operating results with EUR 398 million, and the corresponding return on sales reaching 23.3%. Our luxury brands tend to have a very strong first six months of the year with a slightly weaker performance towards the year-end. Nevertheless, we expect a record full year performance from Bentley and Lamborghini. The overall Audi Group full year guidance remains mostly unchanged. As of today, we expect automotive deliveries to customers to be between 1.8 and 1.9 million cars, including Lamborghini and Bentley. Volume growth is subject to the supply of semiconductors, potential energy supply constraints, especially for our German sites, as well as COVID related lockdowns in China, alongside macroeconomic uncertainties. Nevertheless, we expect strong sales acceleration in the second half of the year in our most likely scenario. Revenue should come in between EUR 62 billion and EUR 65 billion. Operating return on sales is expected to be between 9% and 11%. This clearly implies a considerably weaker second half of the year despite the improvements in chip supply. However, we did see various non-recurring effects in the first half of 2022, like raw material hedge effects and the redesignation of the ruble, or strong positive effects from residual value developments. The luxury brands have a stronger first half of the year. At the same time, even though we count on a higher volume in the second half of the year, we expect increases in raw material prices that could burden our product costs considerably. Despite the strong fixed cost discipline, the usual seasonality tends to weigh on the second half of the year as well. Given these expectations, the 9%-11% operating margin is realistic. However, we do expect to finish the year toward the top end of our return on sales guidance. We now expect the R&D ratio to be slightly above the strategic target corridor of 6%-7%. CapEx ratio is anticipated to be within the respective strategic target corridor, despite the inclusion of Audi FAW NEV Company. CapEx has an especially pronounced seasonal pattern with major outflows in Q4. We guide for the net cash flow between EUR 4.5 billion and EUR 5.5 billion. The return on investment is expected to come in between 17% and 20%. As you can see, despite the challenges we still face, Audi is on course to deliver a solid result in a very turbulent year. Thanks for listening. Now Oliver and I looking forward to your questions. Thank you, Oliver. Thank you, Jürgen. Emma, I guess we can now start the Q&A session. Ladies and gentlemen, at this time, we will begin the question and answer session. Anyone who wishes to ask a question may press star followed by one on their touch-tone telephone. If you wish to remove yourself from the question queue, you may press star followed by two. As a reminder, that's star followed by one to ask a question. One moment for the first question, please. Okay, thank you. The first question comes from Tom Narayan from RBC. Tom, please, go on. Hi. Yes, Tom Narayan, RBC. Thanks for taking the questions. The first one, and maybe apologies for asking this one, but how do you see the recent management changes at VW Group impacting operations at Audi? From the VW Group conference call, it appears that software and electrification plans as already prescribed are still in order. On that topic, there was some reporting that delays at Artemis, EVs, and Bentley, specifically owing to software issues, and just love to hear if there's any commentary on those reports. Then the second question, you're hearing a mixed bag from different OEMs on semis for H2. You know, yesterday Stellantis said they expected H2 to be similar to H1 on semis availability. It's kind of a negative view. Renault this morning said they saw an improvement in May and June. Your guidance calls for an improvement in H2 versus H1 on deliveries. Just could you help us understand maybe what you're seeing here on the semi situation? Thank you. Okay, Tom, thanks for your question, but please understand that I won't comment on the management changes in the group. This is a topic that you should ask the colleagues from VW and Porsche. Sorry. I take your third question, and then I will hand over to Oliver. At the moment, we expect a slight improvement in the semiconductor situation in the second half of the year, and therefore, we are very confident that we can increase our deliveries, roughly to one million cars. There's a second effect coming from China. As you know, in the first half of the year, there are lockdowns in major Chinese cities, and now we see recovery in May and June, especially in China. We are very confident that this development will continue now in the second half of the year. Tom, maybe I can add something in terms of product strategy. We have a very clear product strategy within the group. The next year, we will present our first model, the Q6 e-tron, based on the PPE platform, with a very modern E³ platform and with a modular architecture as a backbone for our new E models. This platform is developed together with Porsche, so with a high range of premium and luxury cars. We will present the cars at the end of next year. We have a global rollout of the platform, including China, where we will produce three of these models in our new NEV company in the north of China. Therefore, we have a very clear strategy on the product side, including software, infotainment, and digitalization. Thank you, Tom. I think we have to wait for this cool product to come. It's not really long time. If we see them, I've seen them, and we can really expect some cool Audis to come in the next year. Maybe, Robert, if we can add something. We had a first so-called, sneak preview with worldwide journalists and dealers, more than 2,000 dealers. We had this sneak preview with our PPE, but also with the PPC cars. We got a very positive feedback in terms of design, but also in terms of infotainment, of range for the EV cars. We are looking very positive in the future to present these cars. Okay, Tom. Anything open from your side? No, that's good. Thank you. Yeah, thank you. I'll pick the next question. The next question would come from Stephen Reitman from Société Générale. Stephen, please go ahead. Thank you. Thank you very much. Thanks for taking the questions and doing this call. I had some questions about Lamborghini and Bentley. I fully understand what you're saying about the seasonality between first half and second half being a traditional thing, and I think that was very evident. Already, we could see some evidence in the first half of 2021 at Lamborghini. I'm just looking at the margin development in the second quarter, specifically, because you've only really talked about the first half. The margin development has been incredibly strong at Lamborghini. I see we've gone from 30.1% in Q1 to 33.4%, giving the 31.9% margin for the first half. At Bentley as well, you've gone from a margin of 20.9% to 25.5% in the second quarter. So again, a very, very strong performance. What I'd like to understand is, to what extent these companies are still being held back by semiconductor shortages, and would better semiconductor availability in the second half of the year be sort of as a countermeasure to the sort of cyclicality factors you say that are normally in these businesses. I'm also looking at the production and delivery figures for both brands, and clearly, the production is higher than deliveries to customers in both cases by quite a considerable amount. What I'd like to know is, has that production been wholesaled and been registered or been recognized within your revenue and profitability? Is that still to come in the second half of the year when those cars are actually wholesaled and invoiced? Thank you very much. Okay, Stephen. A lot of questions. Thanks. So first of all, we are very happy with the performance of our luxury brands, Bentley and Lamborghini, especially in the first half of the year. I think impressive figures for return on sales with roughly 32% for Lamborghini and 23% for Bentley. But as you mentioned, there is a normal seasonal pattern, especially for our luxury brands. Normally, the second half of the year is significantly weaker than the first half of the year. In addition, there are, of course, also some headwinds for Lamborghini and Bentley, especially if it comes to the material costs. We expect significantly higher material costs in the second half of the year. Your question regarding volume and wholesale, yeah, there is a difference between production and wholesale, and of course, the difference will be wholesale now in the second half of the year. But we will see the same or even stronger effect at the end of the year, where we will shift some production or wholesale then to the next year, to the beginning of 2023. This is also a normal effect at the year-end, especially for the luxury brands. All right. I have answered most of your questions. Yeah. As I say, what is interesting is the run rate is still considerably higher than your sort of medium-term targets for 2025 for both brands, really, or to 2030, rather, for both brands. The really good news is we still have a very, very strong order intake for both brands. The order book for both brands is on a record level. We are very, very confident that we can write this record story also into the future. Were these brands constrained by semiconductor shortages in the first half, or were they prioritized within the Volkswagen Group and so were able to produce? Yeah. Maybe more? The luxury brands are not affected by semiconductor shortages because they are fully supplied and prioritized within the group because we are prioritizing, as you may know, the margins with the cars with the highest contribution margins. Of course, the contribution margin of Lamborghini and Bentley is fantastic. Could you also, as a second question then, talking about your BEVs, could you make an estimate of where you think your installed capacity on BEV is going to be at the end of this year? Uh. Sorry for- It was about a BEV co-production capacity at the end of the year. Yeah. Yeah. Yeah. We expect in the second half of the year a considerable increase in our BEV deliveries, in our BEV production. But nevertheless, there are still limitations due to the semiconductor situation. The production capacity in Zwickau is also limited. At the moment, there's a very strong demand, especially for our Q4 e-tron. It is sold out, more or less for the remainder of the year, and the order book is completely full. There's really a strong demand, and the bottleneck is more on the supply side. Okay. Are you looking at any extra plants, or what are capacities in China as well. Overall, where do you think your capacity is going to be in terms of how many hundreds of thousands of units you think you can be able to produce then going into 2023? Of course, we are looking for options to optimize and to increase our production capacity because as I mentioned before, the demand for our battery electric vehicles is still very high. For example, we are now investing and building the factory, our BEV factory in Changchun, the so-called NEV company. Thank you very much. Okay. Thank you, Stephen. I guess we got all your questions, and I will jump to the next one. The next question comes from Daniel Röska from Bernstein. Please, Daniel, go ahead. Good morning to them. Thanks very much for taking my question. I'll try to follow up on some of the themes we've heard already. You mentioned about a million cars. I think it's a little bit more than 1 million cars you're implying for the second half. That's more than 180 cars per month. That's more than the premium group has done in most months in its history. I'm just wondering how we kind of combine that, basically producing at the highest level for the next six months with your comments on, "Well, there may be some chip shortages." Is, you know, your underlying production capacity just significantly higher than it was pre-pandemic? I'm just trying to square that circle somehow. Then you already talked about a little bit about CARIAD. Could I here ask just, you know, what would happen if the 1.2 system faces some more delays? You know, are there any options to kind of de-scope more items from 1.2, right? What are the contingency measures on that, kind of path to get to the PPE platform? Then thirdly, just out of interest almost, you know, Porsche is developing its two-seater platform for the 718. Is that something, you know, you may look at as well for future Audis? Is there enough commonality on that platform for you that it makes sense, or is that really just very specific to Porsche at that point? Thanks. Hello, Daniel. Thanks for your questions. I would take your first questions, the one million cars. Of course, it's an ambitious plan for the second half of the year, but from my point of view, it's possible. You have to take into account that a significant part of this volume is in China, in our joint ventures. As you may know, and as I mentioned in my speech, there is a strong recovery expected for the Chinese market after the semiconductor lockdowns in China. It's not only production capacity in our German factories. It's especially also the production capacity in our Chinese joint ventures. Okay. The second question was about the E³ 1.2 platform and the development and yeah, what we are doing with the—what’s your fallback plan? We're all hoping, right, for the Q4 e-tron to be presented, you know, late next year and then into 2024. You know, how much risk buffer, what other options are there, right, if kind of the performance from CARIAD continues as it has? No. First of all, we are on track with the 1.2. Frankly speaking, we had a status drive and a status review yesterday together with Porsche, and we are on track with the 1.2. We are also happy about the collaboration model with CARIAD for the 1.2. We are really looking forward to launch the cars or to present the cars next year, starting with the Q6. To be honest, we are on track. It's ambitious, but we are on track with the E³ 1.2. There is no fallback because there must be no fallback solution. That's my answer regarding the E³ 1.2. Also the collaboration model with CARIAD for the E³ 1.2 is established and we are happy with the collaboration model. Your third question was about the Porsche Audi platform strategy. We are partnering with the J1 platform already with Porsche, and you wanted to know if there are any further options to partner up with Porsche within our platform strategy, right? Yeah. Specifically on the 718 two-seater. There is still no model for this platform planned at Audi. In terms of the J1 platform, it's something similar like our e-tron. These were solitary platforms to speed up and to be fast, to launch fully electric cars. Now, with PPE, we have a clear strategy for our upcoming model lineup at Porsche and Audi with SUVs, CUVs, as we mentioned before, but also for the next A6. Regarding the Porsche 718, there's nothing planned on the Audi side. We have a clear portfolio strategy within the group, based on SSP, for the upcoming models starting in the middle of the decade. Okay, Daniel. Thanks. I think we got it now. Anything left from your side? Well, maybe just out of interest, will the J1 platform go on to PPE or onto SSP directly? All this model lineup, the e-tron, our pioneer, the J1 platform, this all will go to a clear platform strategy based on SSP. That means SSP platforms and modules for all brands within the group. Mm-hmm. Very clear. Okay. Thank you. Now I can take the next question. Next question come from Daniel Schwarz from Stifel. Daniel, please go ahead. Yeah. Thank you for taking my question. The first one is to Oliver Hoffmann. How many software engineers do you employ right now, and how many of the Audi engineers are temporarily working for CARIAD? And is the salary structure at CARIAD the same as within the Volkswagen divisions and Audi, or can a software engineer make more money at CARIAD than, for example, at Audi? The second question is to Jürgen Rittersberger. It is a follow-up to Stephen’s earlier question. I do not fully understand. Given the long wait time for Lamborghini and for Bentley, what causes the seasonality that makes the second half weaker or less profitable than the first half? Thank you. Maybe we start with the second question. I would hand over to Jürgen. As I mentioned before, it's the normal seasonal pattern that we see for our luxury brands. Especially at the year-end with the logistics and logistics chains, it's normal that a significant part of the wholesale can't be realized at the year-end, especially in November and December. We see normally, a strong shift into the next year at the year-end. In addition, in the second quarter, there is the holiday season, and the holiday season has a significantly higher impact for the luxury brands. In addition, especially for Lambo, there are some limitations, some constraints regarding capacity. That's also the reason that a significant part of the order bank is transferred also to the next year. I hope that would answer your questions. Yes. Thank you. Regarding your question about engineers in the CARIAD, we have above 1,000 engineers working for CARIAD. This is, to be honest, not a temporary situation. They stick to the CARIAD and, as you know, within the group, there is a chance to go back. In total, we have about 1,000 engineers, Audi engineers working in CARIAD. At the brand side, but also especially on CARIAD side, we are constantly adding talent and know-how. This is not just an organic growth. We are working also on the acquisition side together with a team of Jürgen Rittersberger. We have, if you say, one culture approach in the group also for CARIAD. As I mentioned before, we are happy with the collaboration model on the software side together with CARIAD and the other brands within the group. Mm-hmm. There's a good exchange between the VW Group companies, where the tasks are. We put the know-how, and yeah, it makes sense that our engineers are working for CARIAD and developing the platforms further. Daniel, is there anything left from your side, or was it sufficient, the answers? Just to understand. Besides the 1,000 engineers that are working for CARIAD, how many software engineers are working directly for Audi? You can't count the engineers working for Audi. As you know, this is a platform solution, so the 1,000 people are working for E³ or electronic architectures, but they are working also on the infotainment side. We have one infotainment approach for the whole group, and you can't count engineers working just for one brand, as an example, Audi. They are working on platform solutions within the CARIAD. Oh, okay. Understood. Thank you. Okay. Thanks a lot. We take the next one. The next question comes from José Asumendi, JP Morgan. José, it's your turn. Please go on. Thank you very much. I wanted to follow up, please, on basically pricing discipline in the next years, next quarters, and how you thought about pricing power of the, specifically of the Audi brand over the past five years. How you compare that over the next cycle, where you have the opportunity to keep the level of inventory lower, make a much better balance between supply and demand. What does this mean for you in terms of inventories, maybe across regions like Europe, North America and China? Thank you. Good. First, your first question is regarding pricing. I'm very confident that we can maintain our very solid, very good pricing position for the remainder of the year and also for the beginning of next year. Why I'm so confident? At the moment, there's still a very, very strong demand. Our order books are very well filled. On the other hand, we see still some supply issues. The balance between demand and supply is still on the demand side. That's from my personal point of view, it's the best position for us, the best basis for us to maintain our very, very good pricing position as I mentioned for this year and also for the beginning of next year. You have your second question? We wanted also to know about what's the implication on inventories, especially in the three major regions. At the moment, in June, we saw a peak in our inventories. There are many reasons, many different reasons. One was this, we have some disruptions in the supply chain, for example, between Europe and North America. As you may know, there are problems with two ships. We expect that this situation will normalize in the second half of the year. At the moment, our expectation is that we will see at the end of the year significantly lower inventories. To say, we expect also a normalization of working capital. Thank you. Yeah. You have another question? Is it sufficient, answered your question, José? That was great. Thank you so much. That was brilliant. Thank you very much. Thanks, José. Thank you. I'm looking on our question queue. I see no more further questions. Since we haven't got any questions left, we are nearly on time. I will now close the call. Thanks to everybody for asking your questions. To Jürgen and Oliver, answering them. We'll close this call. We'll wish you a nice weekend or if you are that lucky, great holidays. Thanks a lot. See you at the next quarter. Bye-bye. Thank you. Thank you. Bye-bye. Ladies and gentlemen, the conference is now concluded and you may disconnect your telephone. Thank you very much for joining, and have a pleasant day. Goodbye.