Dear ladies and gentlemen, welcome to the conference call of Continental regarding the H1 results 2021. At our customer's request, this conference will be recorded. As a reminder, all participants will be in a listen-only mode. After the presentation, there will be an opportunity to ask questions. If any participant has difficulties hearing the conference, please press star key followed by the zero on your telephone for operator assistance. May I now hand over to Bernard Wang, who will lead you through this conference. Please go ahead. Thank you, operator, and welcome everyone to our Q2 2021 results presentation. Today's call is hosted by our CFO, Wolfgang Schäfer. Also here in the room with us is Stefan Scholz, Head of Finance & Treasury. If you have not done so already, the press release and presentation of today's call are available for download on our investor relations website. Before starting, we'd like to remind everyone that this conference call is for investors and analysts only. If you do not belong to either of these groups, please kindly disconnect now. Following the presentation, we will conduct a Q&A session for the sell-side analysts. To provide a chance for all to ask questions, we would ask you to limit yourself to no more than three questions. This will help us conclude our call on time. With this, I would now like to hand you over to Wolfgang Schäfer. Thank you, Bernard. Let me begin today's presentation on slide three, starting on the left. On the whole, we had a solid second quarter with a year-on-year operating leverage of 39% at the group level. It was supported by the recovery in demand, continued cost discipline, and restructuring savings. However, the operational situation varied across the different group sectors. Starting in Automotive, the shortage of semiconductors continues to be a challenge, specifically restraining volume growth, higher supply chain costs, and operational inefficiencies due to volatile customer call-offs. Our teams continue to work closely with the customers and suppliers to minimize disruptions as much as possible. In parallel, we continue to win new business with innovative technologies, including a high-volume pillar-to-pillar display solution for more than EUR 1 billion of lifetime sales. In Rubber, sustained operational excellence delivered substantial growth and profitability. Tires was particularly strong due to volume recovery as well as double-digit year-on-year price mix development. ContiTech also performed well operationally, though margins were sequentially impacted by reduced and volatile OE volumes and by increased raw material headwinds. In powertrain, electrification technology almost tripled its sales versus a year ago. Additional bookings for e-axles and inverters will sustain this growth momentum. Switching to our current priorities, we do expect the semiconductor situation to improve over time. However, there still remains a considerable amount of uncertainty and volatility. New events like the COVID-related stoppages in Asia, specifically Malaysia, have constrained deliveries from multiple suppliers. The supply of semiconductors will remain therefore very tight in the coming months and continue into next year. Accordingly, we have lowered our growth expectation for global light vehicle production to 8%-10% versus 2020. Supply chain costs are incrementally worsening. The expected headwind from logistics for Automotive Technologies is now about EUR 200 million, and prices for electronics and commodity inputs are rising. We are working with our suppliers and customers to mitigate these challenges. However, the offsets will only become more effective starting in 2020. Inflationary effects are also affecting Rubber Technologies. Prices for butadiene and other oil-related materials have increased substantially, while natural rubber remains on a high level. Thus, we have increased our raw material headwind forecast for Rubber from EUR 350 million previously to now EUR 500 million. Put it in another way, the impact in H1 was about EUR 75 million, but it is expected to rise in H2 to around EUR 425 million. On the tech side, we continue to push innovation in strategically relevant fields. Examples include EV tires, user experience, as well as software with Continental and Elektrobit as the first suppliers in the market with an in-vehicle integration of Amazon's Alexa customer assistant. This complements well our offerings in high-performance computing, software, and integration services. It is also an extension of our collaboration with Amazon, coming on top of our already announced cooperation on the Continental Automotive Edge platform. Also, Vitesco recently launched their fourth generation EMR4.0 e-axle product. I come to that later. We remain on track with our cost reduction program to achieve our cost target of greater than EUR 1 billion gross cost savings from 2022 onwards. Agreements have been reached in nearly all locations and are in line with our communicated targets. To confirm the spin-off of Vitesco Technologies is set to be completed in September. Our teams are working hard to finalize the prospectus, which should be available early next month with a listing expected mid-September. Please note that the spin-off will result in a negative one-time impact on adjusted EBIT of around EUR 80 million. That is included now in the outlook for Automotive Technologies. This is due to an accounting treatment of the spin-off that will, upon its implementation, allocate profit generated by affected parts of Automotive Technologies to both discontinued operations and to the new segment, Contract Manufacturing. The accounting treatment has no effect on the net income. Let me use the next slide, now on slide four, to run you through some of our technology and business highlights, starting with user experience. As we have discussed at our capital markets day in December, our transformation to a supplier of rich and immersive in-vehicle digital user experiences is well on the way, as seen here on this slide with some of our recent launches. Unique L and C-shaped display solutions will be introduced in the next month, both complemented with cockpit high-performance computers for advanced functions like OTA updates and driver monitoring. The recently announced high volume order for a pillar-to-pillar display solution is the latest addition. Our total order intake is now around EUR 5 billion in lifetime sales for new display solutions, with SOPs starting mid 2021. With customer demand for our innovative solution remaining high, we are confident that this figure will continue to grow. Continuing on slide five with a spotlight on our tire business. Recently, many investors have asked us if our tires can also be found on electric vehicles, yes, they can. Actually, we have been active in this market for a long time, being one of the first movers in our industry as the initial tire outfitter for the Tesla Model S. In the meantime, we have become a broadly positioned leader in the field. As you can see here on the slide, our tires are fitted onto many of the world's most popular EV brands and models, ranging from premium and sport cars and SUVs to volume models. Actually, the Ford Mustang Mach-E and the BYD Han are just the latest successes we have had. As EV share of vehicle grows, we expected that this list will continue growing as well. Now moving to powertrain, slide six. You're already familiar with our very successful EMR3 e-axle product, which can be found on over 20 vehicle models worldwide in more than 200,000 vehicles. With the introduction of the fourth generation of our e-axle, we have taken all our expertise and experience over the past decade and put it into the new EMR4. Its significantly expanded scalability provides customers with more flexibility so that one platform can cover small to large vehicles, from mass market to premium. We have improved on the best-in-class characteristics of the EMR3 by reducing weight by another 25% in the respective power classes and increasing efficiency by up to 5%. On top, the EMR3 embodies all of our learnings over four product generations regarding standardization and manufacturing efficiency, which will provide competitive economics for us and for our customers. Business acquisitions for EMR4 are on the way, and ContiTech looks forward to providing updates on this going forward. Let me now shift to our financials, starting on slide seven. Reported sales came in at EUR 9.9 billion, 50% above last year's comparable period, which, as you know, was heavily impacted by lockdowns in many of our geographies. Excluding negative exchange rate effects of EUR 173 million and changes in the scope of consolidation, organic growth was 55%. Due to the volume recovery and ongoing strict cost management, adjusted EBIT increased year-on-year by over EUR 1.3 billion, resulting in an adjusted EBIT margin of 7.2%. Without the application of IFRS 5, the adjusted EBIT margin for the group would have been 5.9%. Special effects totaled negative EUR 55 million. Nearly half of the amount is spin-off related. Net income after taxes increased year-on-year by almost EUR 1.3 billion- EUR 545 million. Trailing ROCE was at 4.8%, or 4.2% excluding IFRS 5. Free cash flow, excluding acquisitions, divestitures, and carve-out effects, came in at EUR 327 million, a significant improvement versus minus EUR 1.8 billion in Q2 2020, when the lockdowns impacted both profitability and working capital. Let me now move on to the performance by group sector, slide eight. In Automotive Technologies, we saw a strong year-on-year organic growth of 57%, thanks to the recovery in European and North American vehicle production. This number was about 8 percentage points ahead of the increase in global vehicle production. This growth drove a sizable improvement in profitability but was restrained by higher supply chain costs. The adjusted EBIT margin was negative 1.6%. Rubber Technologies, we achieved a very strong recovery in sales and adjusted EBIT. Organic growth was 50%. The adjusted EBIT margin reached 14.6%. The raw materials headwind in Q2 was still moderate with EUR 75 million. Powertrain Technologies achieved an organic growth of 64%. The continued robust demand for electrification technology products was the main driver here. This growth, as well as IFRS 5, helped the adjusted EBIT margin to increase from negative 16.3% in Q2 2020 to positive 9.5% in Q2 2021. Excluding IFRS 5, the margin would have been 3.5%. Slide nine, AMS. Sales came in at more than EUR 1.8 billion with solid organic growth of 63%. All product areas felt the impact of the semiconductor shortage, especially advanced driver assistance systems and electronic braking. The effect was most pronounced at European and North American customers. Reduced volumes affected the adjusted EBIT margin, which was -1.4%. In addition, higher year-on-year premium freight charges of around EUR 30 million and operational inefficiency caused by demand volatility influenced profitability. These factors diluted the operating leverage to 23%. ADAS R&D increased year-on-year by about EUR 25 million in Q2 and by about EUR 40 million in H1. We have revised our expected increase in advanced driver assistance systems R&D to about EUR 150 million-EUR 200 million for the full year, which means about EUR 60 million-EUR 70 million in quarters three and four each. Despite customers continuing to delay their sourcing decisions due to market uncertainties, AMS recorded an order intake of EUR 1.9 billion in the quarter. The biggest order wins were related to electronic brake systems as well as for passive safety and sensorics. VNI is covered on slide 10. Just as in AMS, the semiconductor shortage affected all product areas, especially connected car networking. Regionally, we saw the most significant vehicle production stoppages among European and North American customers. These sectors restrained organic growth to 53%. Higher sales and an operating leverage of 36% helped drive the year-on-year margin increase to -1.8%. This was achieved despite higher logistic costs of around EUR 30 million and, like in Autonomous Mobility and Safety, operational inefficiencies from volatile demand. VNI recorded, again, a solid order intake of EUR 2.4 billion, including more than EUR 1 billion for our pillar-to-pillar digital display, as mentioned before. Other business wins include further bookings for head-up displays as well as new orders for telematics and commercial vehicle products. Moving to Rubber Technologies, starting with Tires, slide 11. Organic growth in the Tire business was up 55% versus the year ago period. FX remained a material headwind of 4% in Q2, primarily related to the stronger euro versus the dollar. The FX headwind is expected to recede in H2. Volume growth in Q2 was 43%, led by a broad market recovery for truck and passenger car replacement tires in North America and Europe, as well as pre-buy effects ahead of announced price increases. On the other hand, while OE demand is up year-on-year, it was down sequentially due to production stoppages. Price mix achieved plus 12%. This reflects the favorable business environment, particularly in EMEA and the Americas. Specifically, the main contributors were a higher share of ultra-high performance tires as well as price increases in replacement. This resulted in an adjusted EBIT of EUR 550 million, a margin of 17.8%. Please note, this includes a one-off and EBIT relevant tax benefit of EUR 25 million from South America, Brazil. Excluding this one-off effect, operating leverage was at 46%. Raw materials in Q2 accounted for a negative impact of EUR 50 million, balanced out by positive inventory revaluation effects. Different to H1, we expect a large headwind from raw materials in H2, as already discussed in prior calls, which is currently estimated to be about EUR 350 million. Given the magnitude of the increase, we anticipate that price mix will only be able to partly compensate. Moving to ContiTech, slide 12. ContiTech showed a very solid organic growth of 43%, supported by all segments. While OE grew strongly year-on-year, it declined sequentially due to the semiconductor shortage. In industrials and aftermarket, while demand remained stable overall, Surface Solutions and powertrain transmission continued to grow. China, once again, was our strongest growth driver. Volume growth, strong pricing, and further progress on restructuring supported the year-on-year margin increase to 8.2%. At 29%, operating leverage was affected by production volatility in the OE business and raw material headwinds of EUR 25 million. We expect pricing to only partly compensate for increasing raw material headwinds, which we expect to be about EUR 75 million in H2. Now Powertrain Technologies, slide 13. Sales of roughly EUR 1.8 billion were up organically by 64%. Electrification Technology sales of EUR 152 million tripled versus the year quarter, thanks to booming demand for e-axles and power electronics especially in Europe. Though Electrification Technology has not been limited by semiconductor supply constraints. Other business areas were affected as evidenced in the sequential sales drop of 8.5%. The adjusted EBIT margin achievement, 9.5% or 3.5% if I include IFRS 5. It mainly benefited from higher volumes, ongoing cost discipline. It is to come down in the second half of the year as comps get tougher. On page 16, let me conclude today's presentation with our updated outlook. As a reminder, all the parameters shown here are only for continuing operations. Let me explain some of the changes since our last update in May, starting with Automotive. We have lowered the revenue bandwidth to EUR 16 billion-EUR 16.5 billion to reflect our lower expectations for vehicle production. The adjusted EBIT margin has also been lowered to account for not only lower volumes, but mainly for higher anticipated supply chain costs and as well as the spin-off accounting treatment of EUR 80 million, which all are included in the 0.5%-1% bandwidth. In Rubber, the revenue bandwidth is now EUR 17.2 billion-EUR 17.8 billion, basically confirming our existing expectations. Based on our strong performance in H1 and market expectations for H2, including the updated raw material headwind of around EUR 500 million, we have lifted the adjusted EBIT margin bandwidth for Rubber to 12.5%-13%. The spin-off of Vitesco in September will result in some effects. This includes the creation of a new Contract Manufacturing group sector to account for what currently are intra-company sales. From spin-off completion to year-end, we expect Contract Manufacturing to contribute sales of around EUR 250 million with an adjusted EBIT margin of 2%-3%. Additionally, note that the net income for the fiscal year will include the result of discontinued operations, which mostly consists of powertrain up until the spin-off date. Lastly, we have made some minor adjustments to our expectations for financial result and PPA amortization. With this, I end today's presentation, and I open the line to your questions. Dear ladies and gentlemen, we will now begin our question and answer session. If you have a question for our speakers, please press zero and one on your telephone keypad now to enter the queue. Once your name has been announced, you can ask a question. If you find your question has answered before it's your turn to speak, you can dial zero and two to cancel your question. If you're using speaker equipment today, please lift the handset before making your selection. One moment, please, for the first question. Our first question is from Tom Narayan, RBC. The line is now open for you. Hi. Yes, Tom Narayan, RBC. Thanks for taking the question. First, on tires, how does Q2's replacement to OE ratio compare to historical levels? My sense is that it was probably above normal given the soft OE tire market, and this might have boosted margins for tires. Second, a number of automakers over the past few months have made statements suggesting they want to insource EV components like E-motors, inverters, and others. How concerning is this for your powertrain business? Lastly, Michelin is benefiting from its exposure to high-margin specialty tire businesses, including mining, ag, and construction. Are these end markets something Continental would like to grow bigger into? Thanks. Thank you for the question. First, replacement OE was somewhat lower in Q2, but the question is, what do you compare it to? Which quarter you compare it to? Over the average of the last year, it was a little bit lower. It has helped the margin, yes, but it's not the main driver of our margin improvement, what we have seen. Insourcing of the EV components, what we are finding out in the discussions with the OEs, yes, there are OEs which are considering to insource, but what they are considering to insource is mostly, in the big majority, in the big volumes, is the assembly of the products which in the end make up an e-axle. We still have the discussions ongoing on delivering, in principle, the design and delivering as well the overall product, and some of them might do the final assembly on their own. This is our actual takeaway. We are not talking about DC-DC converters and other products, which anyway seem to be a product which the majority of the OEs wants to buy from suppliers. Finally, correct me, we envy Michelin for their specialty tire business, specifically with these very big mining tires. Though this market, specifically the latter one, is very much taken with many years of buildup by Michelin, and I think Bridgestone is very strong there as well. Nevertheless, yes, the off-road tire market is something we started already two, three years ago to stronger focus on. We have a production facility in our Portugal factory. We have a production site in Sri Lanka where we are producing for these segments, among other smaller production spots. Yes, we are trying to grow there faster. If there would be a possibility, I would not include as well with some external M&A. At the moment, we don't see any opportunity there. Okay. Thank you. Our next question is by Gabriel Adler of Citi. The line is now open for you. Thank you very much for taking my question. It's Gabriel from Citi. My first question is on cost inflation. In the auto business, how confident are you of recovering some of that increased input cost you mentioned for electronic components? Given that prices are continuing to rise, do you think even if you take into account what you may recover by passing through to customers, will it still pose an incremental cost headwind next year? Then my second question is on tires again, on price mix. Maybe you could just comment, please, on how you expect price mix to develop in the second half. Do you expect to fully compensate raw materials on a full-year basis, even if you can't manage it for the second half in isolation? Thank you. Well, the price increases in Automotive, which we are seeing on the one hand side on semiconductors, on the other hand side as well on other raw materials and parts which we are buying, is something which, in the at least midterm, we cannot carry on our own P&L. We have to pass it over to the customer. There's no question to that. At the moment, though, the discussions with our customers are still concentrating on delivering the right volume at the right time, and the sufficient volume, what they want to get from us. The discussion about this price compensation, which we see in our input cost, is something which will start soon, but did not really start at the moment. To your second question, price mix for tires. We expect price mix to continue positively in the second half of the year, our guidance basically includes a 3%-4% price mix increase in the second half of the year. Actually, if you do the actual numbers to the midpoint of the guidance, will show you that there is no significant volume growth expected, but the main increase in the top line, which would come out of such an arithmetic is price mix. Just to continue on that, because this would be or will be one of the other questions, this comparison, if you take this EUR 300 million additional raw material cost, which we will see in the second half of the year, this is 5%-6%. Therefore, there is an uncompensated part still in the second half of the year, which is roughly 3.5%-4% of raw material price increase hitting the P&L on the one hand side, and price mix improvement on the other hand side. This is something which most probably should come in the beginning of 2022. We don't have any reason to assume that we cannot pass it on, but there will be a time lag in between the year 2021 and 2022 passover. Expected 3%-4% is in the price mix with an EBIT effect of 2%-3%. Okay, thank you. Could I just follow up on the cost side of things? Is the reduction in the ADAS R&D in any way related to the cost pressures you're seeing elsewhere in the business? Are you finding ways to reduce the R&D requirement for ADAS to offset other cost pressures, or were there real savings there on the ADAS side? The reason that this number is not as high as we thought in the beginning of the year is that part of it, as we discussed, and you might remember, is as well as going into cooperations, potentially doing even partnerships. The discussions on that side are some were more delayed than we had expected in the beginning. This is the main reason. A little bit of it is as well availability of engineering capacity, but the major part is these somewhat delayed partnerships. Okay, we could see some of that come back in 2022? Yes. Correct. Okay. Thank you very much. I will pass it back. The next question is by Thomas Besson, Kepler Cheuvreux. The line is now open for you. Thank you very much. It's Thomas Besson at Kepler Cheuvreux. I'll have three questions, please. First, I'd like to have a few more comments, please, on the level of car dealer inventories by region and on the pricing environment by region, if that's possible, given how strong price mix has been for you and competitors in the first half. The second question would be about the Contract Manufacturing group that you're creating as of now. What kind of revenues should we expect and contribution margin should we expect for 2022? Is it the right assumption to just double the H2 2021 for 2022, or is it going to be declining already versus the two times H2 2021? Lastly, you've mentioned the CapEx of around 7% for the year. You've had your lowest level of CapEx for almost a decade in H1. Are you really going to spend double-digit CapEx in H2, or should we think that around 7% may mean 6% or 5.5%? Thank you. Thomas, to start with the latter one, I think the around 7% is the maximum we will spend this year. There's a good chance that we achieve a number which is lower, probably in the range which you were mentioning. The car dealer inventory in all regions, and we are talking about, I'm not so sure if your question goes on inventories. For tires. For tires. For tires or Yeah, for tires. It was on the tire. Yeah. Okay, low in Europe and too low in the U.S., actually. We are fighting to get the tires in time to the dealers, which have very low inventory. In the end, good situation. Our delivery rate should be even higher than it is at the moment. It's at a lower point than normal, just because we cannot deliver the tires. We cannot produce the tires at the moment, always in that range and time, and obviously not only us, and this is one of the reasons why the pricing is in good shape. Pricing by region. U.S., very strong. Further, Europe, strong. China, good. No change to what we had reported in the years before for China. Overall, good pricing environment. This is the reason why I mentioned that price mix expectation in our Tire guidance is still 3%-4% for the second half of this year. Actually, there is a bigger part of this is price increases. As I mentioned as well, we think this has an P&L effect of 3%-4% or 2%-3%. You see there is a high element of price increase in there, and not even so much more mix. We are confident we can pass it over, but there are limits, and this is why we will not compensate fully this high amount of raw material price P&L hit, which we see in the second half of the year. Contract Manufacturing. To make it even more complicated in our reporting, we have now the EUR 80 million for the Automotive segment. We have introduced now the Contract Manufacturing. As soon as we have completed the spinoff, we have to change our reporting again, different than it is in the guidance. At the moment, we have to include in our guidance for existing segments the whole effect of the spinoff. The Automotive Segment is now including this EUR 80 million profit shift, which goes directly into the net profits. For the Contract Manufacturing, as this is not a segment which in the actual numbers is existing, we can only report on those numbers which will be shown after the spinoff is done. The numbers we are talking about here are those numbers starting mid of September to December. As soon as we have done the spinoff, the Contract Manufacturing will, though, be changed to report about a backward total year Contract Manufacturing number. This number will be around EUR 600 million-EUR 700 million. This number now, Thomas, is strongly decreasing over the next two, three years because we are more and more shifting those production sites at Conti which are producing for Vitesco and those at the same, by the way, at Vitesco which are producing for Conti, we will shift them to where they belong, to those legal units where they belong to. The profit margin will be quite low as the transfer prices will allow for some margin, but not for a significantly high margin. I am not sure if this was more confusing than helping, unfortunately, this is IFRS 5 and 8, and we have to follow that. May I just make sure I understood correctly? Maybe I'm dumber than average, but at least it will be clear for everyone. Do I understand correctly that this contract manufacturing only starts after the spinoff mid-September? You are going to retroactively say it's EUR 700 million of revenue this year compared with what you were talking about. Is that correct? Well, our guidance stated Contract Manufacturing sales and profit volume is the volume we expect starting after spinoff under year end. Yes. As soon as we have done the spinoff, we will report the Contract Manufacturing for the whole year. Okay. There is type of a synthetic number which assumes that Contract Manufacturing was already done from January to mid of September. Okay. [crosstalk] T hen will increase. Okay, clear. Okay. Pro forma number. Okay. Thank you very much, Wolfgang. Yep. Our next question is by Horst Schneider, Bank of America. The line is now open for you. Good afternoon. Thanks for taking also my questions. First question that I have relates to the raw material price increase that burdens Vitesco Technologies. Maybe I missed it, and sorry for that, but can you maybe say or repeat what was the burden from that in Q1, H1, and what you expect the burden to be in H2? That's the first question. Second question is more on some better sequential guidance, basically. I realize that you took down the market assumption, what is now expectation volume-wise Q3 and then Q4? Is it more flattish Q3 and then a strong increase in Q4? I assume that the outperformance again will be around zero then in H2. The last one that I have that relates again to margin strength in automotive, because it's not getting stronger as I personally hope for, probably also as you personally hope for. I remember at the CMD we talked all the time about best ownership reviews, et cetera. What's now the management answer to this kind of margin crisis? Is it that you're going to do more disposals, or you consider more disposals, or that you have got to step up again the restructuring efforts in automotive? Raw material burden in H2 Automotive, I understood. You didn't miss anything, Horst. I did not quantify that number, but if you think of something in the very low triple-digit numbers, so around EUR 100 million, probably a little bit more, including chip prices, including other raw material price increases, I think that will be a number which is built into our guidance volume. That is full year now, the EUR 100 million you talk about. No, this is H2. Okay. H2. In the beginning of the year, the number first half is significantly lower. [crosstalk] anyway, and for the rest as well. We are always talking, when does it hit our P&L? Not when the raw material price is going to increase. Q3 versus Q4, your assumption is right that the Q4 is the one which will see the stronger increase. Q3 will be somewhat in between Q1 and Q2 numbers as far as the top line is concerned. Only Q4 will then show the higher increase. Very similar, I think, to what other markets observers, IHS or so, are expecting. Finally, I agree that we would like to see better improvement in the profit margin of automotive. I think we talked in the presentation, we talked about the reasons. If you want to do a bridge from H1- H2, and again, if you go to the implied midpoint of our guidance, there is a strong increase in sales of EUR 500 million. We just discussed it, more of it to come in Q4 than in Q3. If you take, I'd say, a 30% or so leverage on that, about EUR 150 million, EUR 160 million, EUR 70 million. We have this EUR 100-plus million material against it. We have the EUR 100-plus million advanced driver assistance system, additional R&D into account. We have this EUR 80 million of Automotive accounting change because of the spinoff. If you add all this up, we get to this guidance as we have it sitting here on the paper. We are doing the review, Horst. This is what we have committed to. We talk about it now on a quarterly basis with the executive board, but there is nothing to report on that at the moment. All right. Thank you. Yep. The next question is by Sascha Gommel, Jefferies. The line is now open for you. Good afternoon. Thank you for taking my questions as well. First one would actually be a bit of follow-up on Horst's question on the restructuring in Automotive. Given where the margin is right now, how much of the EUR 1 billion restructuring program has actually been implemented already, and how far through are you, i.e., how many benefits do we see in the current margin level? That would be the first question. There's a few parts. The majority of the program as it was discussed was the negotiation now on each single location, down to the 80 or so locations. Most of it is done, and it is starting to be implemented. First people have been affected, about I think one quarter of the total number of people which we mentioned has been affected as an indicator. The cost effect of this, obviously, is then only starting to be seen, I think, in Q4, and then next year until we get to this EUR 1 billion or EUR 850 million, excluding Vitesco in 2023. At the moment, all the negotiations and everything we can achieve, I think, is targeting in that direction with EUR 850 million for Conti without Vitesco. Understood. Very clear. The second question is on your order intake in AMS. It has been quite weak for a few quarters now, and I was just wondering if this is kind of broadly across all the businesses, or what the reason is for that, and given that there is quite some M&A now in the ADAS space with Qualcomm now bidding for Veoneer, do you think you might need to strengthen your ADAS business through M&A as well? The last question. Do you think, or what was the question? I basically linked the order weakness maybe with your ADAS business, and if you think you need to do M&A given that there is now consolidation happening. Oh, I see. No, we don't think. If you think of a consolidation, bigger consolidation in the automotive industry as we saw one announcement recently, we don't believe that this would be helpful for our business. We think that these tech additions to it, as we discussed when we talked about these EUR 200 million- EUR 250 million additional R&D in specifically vision, in high-performance computing and artificial intelligence, those three areas, this is what is for the business, the right boost to get to the targeted volumes in the years to come. This is what we are concentrating on. I don't think it would be helpful to do any larger M&A transaction with very high multiples to basically buy an order book with customers, which we anyway know and have. That's helpful. Thanks. Last question, just a technicality. You raised your midpoint of the EBIT guidance by about EUR 100 million, but you left your cash flow unchanged. Any reason why you didn't also raise the cash flow range by EUR 100 million? This is, I would say, in the range of the volatility of finding the working capital at year-end, and we said we leave it where it is. We talked about in another question, I think from Thomas, about the potential investments, and it might be that there are some changes. Again, let's see how Q4 is going and how working capital is developing there. Very clear. Thank you. The next question is by José Maria Asumendi, JPM. The line is now open for you. Thanks very much, José. JPM. Hello. Welcome. A couple of questions, please. The first one, can you give us an update, please, on the restructuring of the Tire division? How far have you got there? Any update on the state of the cost structure of the Tire division? Second, again, on the Automotive division, obviously the comparison with the other peers out there is quite substantial in terms of margins. The question is a bit more medium, longer run. What are the levers to basically improve the profitability, let’s say, one or two years out? What is the normalized margin of VNI and AMS? How do you see these divisions, let’s say, on a 12-18 month view? Thank you. Restructuring tires is on its way. The negotiations, as you know, with Aachen are terminated, are signed. Final closure to be done end of next year. We have now a voluntary leave program installed as production can be reduced if people would voluntarily leave. At the moment, it seems that there is more than we expected of people taking this, so this might add to the fact that the cost benefit, at least partially, is a little bit earlier than we thought. Overall, it's running in the right direction and the target of next year closure is now written in contract and should be not any possibility to further delay that. While the Automotive target is the 6%-8%, though I know we are far away from that. Our guidance makes us far away from that. What are the levers? Well, one thing is if you just take out these additional costs, which at the moment we see with extra freight, with the material, additional material costs, which as we discussed in the beginning, cannot be something which stays on our P&L all the time and when the top line is no longer restricted with these chip deliveries. We are the biggest deliverer, I think, of all suppliers of electronics to the automotive industry. No wonder that we are more affected than others with this chip undersupply. Plus obviously Transformation C, plus all the other actions which we are working on. I think, if you want bigger blocks, Transformation C, it is all the go away of this cost burden, which we get through the chip crisis. That's very helpful. Just one final follow-up. Slide four has, I think, very interesting images and basically of the product launches you have on display in the coming years, which is the work you've done basically for the past year as well. How does this help the growth in the auto division? Is there a way to quantify this? It looks very encouraging. It looks like you're into key vehicles. You're offering all the display shapes out there in the market. How does this help the auto growth? Can we quantify this maybe in a number or in any form? Well, it's the EUR 5 billion of ordered lifetime sales. I think this should give you already an idea. As you know, lifetime sales is something which is a four to six-year lifetime normally assumed in these numbers. This is, if you do the math, this is the type of annual additional sales which comes out of it. By the way, to add that it is interesting to see that these type of displays are really something which goes to companies like us, to the established suppliers of many discussions with investors. It's not a typical thing which then goes to the consumer electronics industry. The answer obviously is no. Stays with us. The mechanics here, the electronics are obviously as well possible in many cases for the consumer electronic guys. The mechanics here with these very thin displays, where room which they take as well as weight is of high importance, is something where we have, I think, a big advantage and a big USP versus other players in the market. José, if I can add on, if you remember from Capital Markets Day, we talked about user experience. I think you yourself also hosted the session, right? Display solutions was a key growth area we pegged at doing 30% plus outperformance in the next years. What you see here in pictures and in numbers is the proof behind the pudding. Exactly. Very helpful. Thank you. The next question is by Giulio Pescatore from Exane. The line is now open for you. Hi, thanks for taking my question. The first one on the light vehicle production. I know that a lot of the focus is still on H2, but you did mention that you expect the impact to last until well into next year. Can you maybe share your expectations with regard to light vehicle production recovery next year? What are you expecting in terms of market growth? What we do expect that though we say the chip shortage is continuing, that it would not be by far such a limiting factor as we see it now, and we do expect quite a significant growth next year. If you look at the IHS numbers for 2022, I think at the moment this is something which is close to our expectations. Okay. Thank you. The second one on Vitesco. Can you help us a bit with, I know there is no formal guidance, but can you maybe help us understand if the current level of margins is sustainable or maybe there is scope for upside in H2? Maybe can we talk about margins without IFRS 5, so around about 3.5%? I do now any future-looking statements for Vitesco, we have still to put them in the prospectus, which I should not do. The IFRS 5 effect is obviously, if you look at the Continental numbers, is boosting their profitability, as you rightly stated. If you look at the Vitesco numbers, which they are talking about when they present their numbers, Vitesco does not have this effect obviously. IFRS 5 is only to be applied at the company which is doing the spin-off and not at the company which is spinned off. Their numbers are reflecting the type of real world without the IFRS numbers. The IFRS effect in Vitesco, in powertrain I have to say, not in Vitesco, in our powertrain numbers, is stopped depreciation is EUR 130 million in the first half year. Okay. There is no reason why the current level of margins shouldn't be sustainable in H2, removing IFRS 5. If you take out the reported numbers and then deduct the EUR 130 million, this is what we would say is the operational profit. Actually, if you look at Vitesco numbers, Vitesco numbers would not include those figures. Okay, thank you. Maybe just one last clarification. The order intake number for Vitesco, so the EUR 900 million for electrification technologies, that's a Q2 number or an H1 number? It's a Q2 number. Do you have a number for H1 then? It's about EUR 1.3 billion-EUR 1.4 billion, thereabouts. Perfect. Thank you very much. The next question is by Tim Rokossa, Deutsche Bank. The line is now open for you. Yeah. Thank you very much, Wolfgang and Bernard. Thank you for taking my questions. The first one will just be on the semi shortage again. We're hearing from a couple of semi guys and OEMs that this will last well into next year. The big question for the sector overall is obviously when there will eventually be some sort of major restocking. You look at your own order situation, when you talk to your suppliers, do you feel there's any chance we're going to see some restocking in the next couple of months or even quarters, or will this remain a very tight situation with basically using up whatever you get on a daily basis for the time being? Secondly, we think about the Automotive performance, this goes a bit into also what Horst said and asked you. For how long do you let this run? You're not, at least seemingly as an external observer, you're not making any progress when it comes to the majority of your decisions that you have taken in these divisions. Do you give this another year or two years? Should we then prepare for another strategic review of that division once the Vitesco spin-off is done? Or do you really feel like you're on the right track, and this is just given all the external factors, we're not able to see that in your numbers yet, but it will come, and we just need to be a bit more patient here? Then as a last thing, more of a statement than a question. I think if you want to make it easier for investors to follow your stock and your company and to do the work again, you might want to think about a restart of what you show us on the accounting side of things. You just said yourself this is incredibly complex, and it seems to be getting more difficult with more and more one-offs every single quarter. The last thing you want is obviously to make it very painful for investors to follow your company. Maybe that's something that you could think about strategically in your reviews later this year. Thank you. Well, to start with, it's not one, Tim. I think as soon as the spin-off is done, we come back to more simple reporting. This at the moment is a distortion, which I fully understand is complicated. I mentioned it before, should be gone, I think, when we have done the spin-off, and then as we announced already, we will do the reporting, including advanced driver assistance systems starting next year, with those numbers, I think, which are relevant and which you appreciate to hear and hopefully, and I'm sure it will get better. Restocking for semiconductors is still not a discussion. The discussion at the moment is just get sufficient numbers and, well, this is basically coming back to when do we have sufficient supply, and only then we would start to do the restocking. I think this goes well into next year before this situation is done. What we hear from the OE regarding demand from their customers versus what we hear from and get as information from our suppliers regarding their additional capacities, there still will be a gap at least in the beginning of 2022, probably longer in 2022. Only when that is closed, restocking will start. Our patience with Automotive, as I mentioned before, I think when these special effects are gone, when the Transformation C is working and when the top line is no longer burdened with the effect of this chip shortage, we will see a significant positive leverage, which should get the Automotive business into 6%-8%. We will not look indefinitely on this situation. This is very clear. Thank you. Our next question is by Philipp Koenig, Goldman Sachs. The line is now open for you. Thanks for taking my questions. I have two questions. The first one is on your slide on the EV tires. You're obviously taking a lot of share in that segment. Could you maybe share how your market share in EV tires kind of compares to your share in the overall market? Also if there's a large difference in the profitability between EV and normal tires. My second question is on the R&D. You changed your outlook on the R&D into ADAS for this year. You lowered it by EUR 50 million, now you're expecting EUR 150 million-EUR 200 million of R&D into ADAS. Are you just investing less into the space, or can we just expect the delta to shift into next year, that you'll spend more into ADAS in 2022? Thank you. First, market share of the EV tires is not so different from what we do have in the rest of our passenger car tire business. Pricing is more attractive and margin is as well more attractive than on an average tire of the same size. For the advanced driver-assistance system, additional R&D, well, we will need this money to fill those deficiencies, which we think we have in vision, in cloud computing, in artificial intelligence.