Welcome to our investor and analyst call on the ad hoc release that we issued today around the planned spinoff of our automotive business. Thank you very much for being available on such short notice. Today's call is hosted by our CEO, Nikolai Setzer, our CFO, Olaf Schick, and Philipp von Hirschheydt, responsible for the Automotive group sector. A small reminder that both 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 question-and-answer session for our analysts. To provide a chance for all to ask questions, we would like to ask you to limit yourselves to no more than three questions. This will help us to conclude our call on time. With that, let me now hand over to you, Niko. Yeah, thank you, Max. Warm welcome as well from my side. Thanks for joining. Sorry as well again on short notice. However, this is an important day. You could see a very important day for Continental and for Continental's history. We made a decision this morning in the executive board, which is nothing else than after a strategic review to further pursue and work on a separation and a 100% spinoff of the Automotive group sector. What are we doing now? We continue our review by starting a further detailed analysis, which we want to have completed targeting until Q4 this year. However, in parallel, we are starting already to prepare for the implementation. All necessary steps which have to be prepared, we are going for as of now, targeting creation of two fully independent and listed companies, two very strong players in their fields. And we are clearly convinced, fully convinced that this is the logical step to what we see, and we will explain this later in the market. Strong changes after our capital markets day in December, where we still took a different decision, where we decided to crystallize the value within the group perimeter. That has changed. We are coming to a new judgment, and we see today that having two and create two independent companies give automotive the freedom is the right way for Continental AG, for the Continental company, the old and the new, as well as for automotive. What's the objective? The objective is nothing else than giving Philipp and his auto team the full entrepreneurial freedom they need. We come more in detail why. I say a few words as well in some minutes. What they need to be successful in this highly dynamic environment. So the pace and the scope, and we could see this morning, Japan, Nikkei has started with a historical day, 12% down. This was the first single day down that high since 1987. So which shows markets all over the world are changing rapidly, capital markets, but as well market demands, industry markets, and particularly the automotive market is changing. It affects everywhere. All our customers are affected very strongly on the automotive side. It touches all aspects and all technologies and as well many other fields. So the team needs now on both sides, on the automotive side as well as on tires and ContiTech, to be even more agile, needs more flexibility to adapt best to these dynamics which we see in the market. The good news is we already started this journey. We started the transformation and our transformation program, Transformation C, which we started in 2019. We already said we have to adapt to the market. We have taken bold decisions on the automotive as well as on the rubber side. We changed the manufacturing footprint over time. We started new additional measures. In the meantime, Philipp comes to that. The turnaround trajectory is clear and tangible, and our self-help measures bring us on the next level. They are executed as we speak. So we are combining now a strong foundation, which we set over that time, with strategic flexibility, which is needed in order to perform and get a key player on the automotive side. Strong and viable tires and ContiTech business, they remain under the umbrella of Continental. Within our detailed analysis, we will look obviously into this setup as well. In Q4, we want to take the further decisions how we continue. So very clear, if this all gets the necessary approvals, Continental will be a very different company at the end of 2025. And we will have two key players then, or three key players, if you will, in their industries, which are targeting, and that's the same for automotive in their business models to be best in class in performance. So there is a lot still to be defined, as I said. However, there are already key elements of this planned transaction. So we are now in the first stage in executing, that's for sure. However, we know already what we are preparing for. As said, those steps, preparation steps are now initiated. It's a 100% spinoff of Automotive group. So Continental will not keep any shares in that. It's targeted to have it completely spinoff, independent, publicly traded, listed by the end of 2025. That's our target date. Frankfurt Stock Exchange is what we are preparing for. And based on initial valuations, I mean, the next 12, 16 months, many things can change, in particular in those volatile markets. It's expected to qualify for the MDAX, the Automotive group, and obviously only once a regular review of the index is performed. And the value of automotive will be only defined once it's listed. That's clear. As the nature of a spinoff, no investment is needed for the shareholders and no proceeds for Conti. That's the nature of a spinoff. Looking into our first assumptions of one-time costs and tax effects, we're expecting a low- to mid-triple-digit EUR million number on the one-time cost and a low triple-digit EUR million number on the tax effects, which are coming there on top. So, and as well as in that regular nature, the shareholders will automatically receive based on their holding in Conti AG, then their holding in the new Continental, in the new automotive part. They're getting a new name, by the way. So in the future, if you have that new Continental and the new automotive name, I'm sure Philipp and team, they find a very exciting one, which is a further catalyst for the team to move energetically forward. The listing, as I said, planned is for the end of 2025. So to illustrate how is the company looking before and afterwards. So on the left side, you see us today. On the right side, you see that we, and looking on the figures, and you see on the new automotive, there is Conti contract manufacturing. This is the part where we are still supplying out of the spinoff of Vitesco products, and we are manufacturing products for Vitesco. This is a ramping down business. However, it was still EUR 500 million at the end of 2023. That's why you see on the right side, Conti contract manufacturing is part of the future automotive. And with that, it adds from the EUR 20.3 billion, which is the core automotive business, plus the EUR 500 million to EUR 20.8 billion. So we are cutting the company basically exactly in half, EUR 28 billion on the Tires and ContiTech part, EUR 28 billion on the right side. And that holds true as well for people, 100,000 people left and right. So we have to be ensured we act in the best interest of our shareholders. That's why we will equip Automotive with a highly attractive profile and a very solid balance sheet. So you see only limited that is planned to bring in to Automotive to have it really capital market ready and being sure that this would be a successful spinoff. And even in that constellation, we see that though despite the split, the new-old Continental Tires and ContiTech would remain investment grade. So very solidly still as the company itself. So I already mentioned that there have been great reasons to go into, and one big reason were the challenges which we see on the automotive side in particular in the markets. So please, Philipp, you know it best firsthand, and you have it day by day. You are in that jungle out there. What's the current status? Yeah, warm welcome also from here, from the jungle. I'm very happy to be here. I mean, Niko, you mentioned already the challenges which we experience in the automotive sector already. We don't want to bore you, but I think it's important to reiterate how drastic the changes and the challenges are that we are experiencing. That's also even in the last eight months since we have had our capital market day, quite drastic. If you and we look at the market development, you see that we have an ever-increasing uncertainty. Battery electric vehicles, which used to be the safe bet just a few months ago, and last year it has been the case, they are not a safe bet anymore. The dynamic has completely shifted. We had in automotive, we are in a good position being powertrain agnostic. But of course, it matters for all of us which cars are being produced, and is it the one we are on? We also see very different customer requirements. We do see different pace and trajectory and digitalization across the different regions and across the world. That means for us, we do see also significant different growth opportunities. With Chinese OEMs expanding their business worldwide, we do see, particularly for us, new chances. On the other hand, we do see that new challenges which are coming. We do see price and cost pressure, which has been and is even in ever-increasing position and a key role in the automotive supply industry. For us and for successful players, I think it's clear that agility is fundamental to stay ahead of the curve. And we as a company need to be able to adapt to the changing market requirements. So we need to have a foundation where we as entrepreneurs, as we do see us, can act on. We want to be an accountable team, and we want to benefit from the different changes. We want to turn change into opportunity for our employees as well as for the capital market. With the spinoff of automotive, we are sure that we are going to create a second strong company outside of Continental. And with that, an opportunity for you to invest in a pure play, either on the automotive or on the rubber side. So let's have a first glance at the new Automotive group. You know that we are all in the middle of a transformation. But what we can see now is that we have made significant improvements over the last years. Although we know that we are still below our ambitions, that we want to get better, and our historic profitability has not been too exciting, we have diligently increased our profitability in each of the last three years. Year- after- year, since the big Semicon challenge in 2020, since 2021, we have increased year after year our profitability. And we are very sure that we are going to do that consistently again this year and the upcoming years. We do have a highly attractive and innovative product portfolio. We are sure that we can tap into new profit pools, and we do see that lots of attractive growth opportunities are in front of us. So we do see that we have, and we are best organized so that we can capitalize on all these improvements and that our margins are going to grow. The second one is we have been working to strengthen our competitiveness. We have very much focusing, and you remember that we explained that we have set up a strategy on lead, focus, and perform. We have very much working. We were very much focusing on the performance side. We see that now the right-sizing actions are showing results on the R&D side, as well as on the SG&A side, and also in the plants. We are continuously streamlining the organization with tangible effects. Strategically, we continue on the course we set during last year's capital market day. Our clear ambition is that we are becoming the market leader in our focus fields around the software-defined vehicle. So what we are doing is we are actively managing our portfolio. We are making progress on the bucket of EUR 1.4 billion, which we announced we are going to execute. We are going to improve. We are going to divest or we are going to close. So we made big steps forward. And on the UX side, we have also made the right advancements. So we have moved forward. We have carved out concepts developed and in place. But it is now time to change gears and to focus. And one thing which I always made very clear to the automotive team, we need to prioritize. In our business area, in our business field, in our business arena, we need to make very clear where we want to be good at and what needs to be done one step after the other. That's why we said we are now putting the spinoff as the clear first priority, which also means we are going to stop the carve-out of user experience. That's not due to any market environment, but because of a clear management direction to say we focus, we prioritize, and we perform. So we also know that the analysis of going to capital markets means for us, for our management team, to even more focus on our performance. We need to increase our profitability even further. We're talking about that we have since 2021, consequently increased our performance year after year, our profitability levels. And that's a clear path ahead. So the entire team is very clear that we are needing to do additional steps in order to get there. So on slide 8, I want to show you to you where we have come to and what we have been doing since the last capital markets day and what we are focusing on over the course of the next months and years. The trough is behind us, and we are working full steam ahead on our transformation program. If we start with operating leverage, what we see, our focus, our dedication has led to the fact that we have roughly closed three quarters of the pricing negotiations with our customers to date. In parallel, our sales team have been working on proving our position with Chinese OEMs, and we are very much convinced that we do have a great chance to expand our position at all Asian OEMs going forward. And by that, we are convinced that we are going to increase our resilience and positioning on the global markets. If we move to operational excellence, you see that we are leveraging all opportunities across the value chain. We have key results, including the reduction in the need for premium freights already executed. We have significantly improved our inventory levels, and we do see that turn rates are going to increase year to date, but also until year-end and further. We have a clear plan. We have a clear trajectory, and we have clear actions in place in order to reach an additional reduction of 1 percentage points in manufacturing costs by the end of 2025. You have heard of our fixed cost programs. We make very good progress here. We have just recently achieved union agreements here, specifically in Germany, which is our biggest people pool, where we do have most of our high costs. And we have now a clear plan and a clear agreement to execute all our objectives and targets until the end of 2024. So the pathway is very clear. For 2024, we are well on the way to achieve even over EUR 150 million savings. We have already reduced more than 1,500 headcounts, and we have already safeguarded a major part of the EUR 400 million savings, which we were targeting for 2025 already now. So we are going to be at the right size when we are going to conduct the spinoff. Then we have been looking over the course of the last weeks on R&D. Here, we already, and you're going to see that we have already brought in very solid results in H1 on both the headcount side as well as on the best cost share improvement. So that's made us very confident that we are going to even increase the target of when to come to a single-digit% of sales. We're confident that we are going to reach that already in 2027 instead of 2028, which we announced during the capital market day in December. Finally, if we look into how do we focus, how do we prioritize, how do we reduce complexity, one of the major topics which you need to master and manage in automotive. We have been extremely efficient and fast completing the dissolution of the business area Smart Mobility, which we did so already 1st of January this year. Now we will move to the next needed step. What we want to build up is we want to build up a powerhouse able to deliver to the Software-Defined Vehicle. That's why we are intending over the course of the next months to merge our software and central technology businesses together with the Architecture and Networking organization into a new organization, which we are going to call Architecture and Network Solutions. By that, we are going to create the next powerhouse for software and electronic solutions for the Software-Defined Vehicle. So you see there's a lot where we as a team, as the automotive team, are excited about. I'm personally extremely excited to show you all the opportunities which we are having ahead of us. The spinoff is and will be a clear catalyst for our organization, for our teams to move even faster further. We are going to unlock new potential. We are going to unlock new value, and we are very much convinced that this will bring the needed value to Continental and will be a better value for our shareholders than the current setup. So after explaining what we think, Olaf, what does this new spinoff or what does this spinoff mean for our new Continental? Thank you, Philipp. And yes, we heard now a lot about automotive, but equally important is obviously also how will new Continental look like. You're seeing this here on the page. And of course, after the spinoff, Continental will be the home of, on the left side, the Resilient Tires business, delivering benchmark value as before, and then ContiTech, our material solution powerhouse. So let's start with tires. Of course, with the strong positioning of tires, especially in the premium and ultra high-performance segments, we are confident that we can continue to leverage our strong brand and technological expertise. Combined with our industry-leading asset efficiency and operational excellence, we are aiming for continued strong value and cash generation, resilient in all market environments. And I think that's obviously very true for our tire sector. It is our clear ambition in tires to extend our current business by tapping into new profit pools and to maintain our margin outperformance. Our outstanding cost discipline will, of course, play a crucial part here, and I think we will continue that even more focused now in the new setup. Let's look at the right side. This is also true for ContiTech. The self-help measures we initiated at ContiTech have already brought significant improvements in our OESL business and our bottom line this year. That's setting the right foundations on their way to more independence. So clear message, the OESL carve-out will continue with full speed. The clear focus of ContiTech going forward is the industrial business. This was communicated before, increased industry share to 80%. We see ourselves well positioned to capture value in highly attractive growth markets such as energy management, construction, home, or off-highway mobility market. We are actively working to leveraging that position to be even more successful also in replacement business. Now, let's look forward. What's the timeline and next steps? Niko has already highlighted some elements of that. After today's announcement, which is a big day for Continental, we have now a clear plan worked out with milestones, and we will implement this with full commitment and with full confidence. We are working now after this first part of the feasibility study that we have completed and decided on today this morning, looking at other red flags, looking at tax impacts, what's the legal structure, what does it mean to separate, what is the funding structure, and so on. We are going now in the next phase of the detailed analysis, individual transaction steps, financial effects, and detail that out until the fourth quarter. Then at the same time, we're also working on the details of the new structure of Continental or of New Continental. So both, we are planning to take a decision on New Continental structure and of the details of the spinoff within Q4. In parallel, we will start to prepare as of today all steps for listing already now so that we can meet the timeline that we are envisaging, which means shareholder approval to be obtained at the AGM in April next year, and then followed by capital market days, and then a listing on the Frankfurt Stock Exchange for automotive targeted by the end of 2025. All right. Thanks, Olaf, Philipp. So clear messages. However, this is just the start. It will be a journey. It's what we said, end of 2025, where there will be more details to come. It's just the beginning. We will not have, once you come later with your questions, we might not have all answers on those questions, but be ensured we're actively working on them, and we're working as a team diligently, and this has clear focus and priority on what we as a team will do in the next months and until the end of 2025. More details to come. I said, you've seen the roadmap. Next milestone is then in Q4. Until Q4, once we then take the decisions and we move forward, we're clearly, again, fully convinced that this is the next logical step to what we see in the market on the one hand, on the other hand, how we see automotive ready for the capital market until the end of 2025 with all the measures. Philipp has shown the overview of the five leverages, so to say, to get Automotive upwards from where we are to continue slowly but surely the more fast, but surely the turnaround trajectory, which is clear and tangible. That allows us then, and that's what we are convinced to unlock, conveys full potential for both sides, as said, and as well for our stakeholders, for employees, for customers, for our suppliers, and of course, for you, the capital markets. To sum it up, we promise full focus on this creation of two strong, independent, and listed players. It is in challenging times, in very challenging times. However, turn change into opportunity, Philipp has said this. We are not alone out there. That's as well true for the other companies. We have to do our homework and do the best in order to leverage and crystallize the value we are absolutely convinced this company has. The three sectors have. We have to unlock it by full focus on this execution. And still, this can only fly once we perform. We are very well aware of that. We are condemned to perform. And that's what we are discussing day by day with the teams. And we have the experience of spinoffs or bringing businesses standalone. And in each of those processes, we have seen a catalyst and teams running even faster once they know it is for getting more entrepreneurial spirit, for getting more entrepreneurial freedom to act and having the future in their hands. So this is, from our base, clearly the target. And this is the opportunity to unlock the embedded potential in Continental. With that, we open the call for questions. The first question comes from Tim Rokossa, Deutsche Bank. The floor is yours. Yeah, good afternoon, gentlemen. Thank you for hosting this call immediately after the announcement. I'm limiting myself to three questions, although I have a lot more, but I'm not quite sure how much you can actually answer, very much to your point, Niko. As you said, that is a very different decision to December last year. Philipp, you said the restructuring is on track. It's bearing first fruits. There were arguably lots of structural issues and crises globally already late last year. I'm still really curious to understand what really changed your view here, Niko, the two of us were discussing about this for, I don't know, seven, eight years already. Is that something that you see in your order intake? Is it something you see in discussions with your clients, in your trajectory on the margin side, these type of things? And then secondly, also something related to that, is it fair to assume that you will reflect back on the midterm targets in autos before the spinoff, or do you believe that you can go into the spinoff with these midterm targets that you already have out there? And as a third question, then, Olaf, that probably goes to you. I know that you can't give us the exact numbers yet, but is it fair to assume that Vitesco is kind of the role model here on a debt structure perspective, which means the auto business probably comes net cash, and the tire side is the one that gets levered up? Thank you very much. Okay, yeah, thank you, Tim. And looking seven, eight years back, I would say maybe five years once we have 2019 and 2020 going a little bit more recent, there are the two elements. The one part, and I think Philipp has mentioned this, and the team is really talking in the last six months, not from just the transformation of the market or a change. They are talking disruptions. On a day-by-day basis, we see very different acting customers. We see a speed which is asked from us, which is simply a different one what we've seen before. And so we are very aligned, and you have seen us in the management team, and I was in lead before in automotive, and we are working very close. Only the fast players which are taking fast decisions right now at the customer base, they will win for the future. So we are clearly convinced that with the team, with the strong team, and Philipp will set up his team for the spinoff, he will obviously go as well in the next step in bringing the best people in place which are needed for this transformation. This is a great opportunity to get even faster what we desperately needed. In all metrics as well, on the order intake side, as you mentioned, to be even more close to customer-centric, having the right part, taking the steps and deciding this quickly. The other part which is important as well, we are half a year later than at the CMD. We have shown self-help measures which are very, very substantial programs where Philipp is implementing, which are very structural. We needed agreements with the employee representative. We needed to implement those strategies on the R&D side. He has shown this is taking off now. So we are half a year ahead. We have a different position now than we had three or four years. Remember in the Semicon time where the company has all hands on deck on Semicon going through the cycle, we have been on the profitability at that point of time. So we improved every year. We have been negative coming out of 2020 and then not improved fast enough, yes, and that's what we've shown on capital market, but it needed all efforts to getting upwards. We are now convinced that in 2025, end of 2025, we are capital market ready. Olaf will say what it needs as well from the capital structure somehow. As you said, we cannot define this now, but we are now convinced that we can go that step. That's changed in this half a year, and I cover as well the midterm targets part. I mean, for the time being, targets are the same as it's. What is mandatory is, as I mentioned, that Philipp and the team, we need to perform. We need to perform on order. We need to further improve and make this company more viable. And for sure, once we are getting them on the roadshow, they will look into their future at that point of time, and they will come with their new automotive midterm targets and come with their strategy. But until then, it's clear we are executing what we have. We have no reason to change our plan and our measures. And even more on the market, we have to adjust then on those. Vitesco has a blueprint and capital structure. Yeah, thank you, Tim, for the question. First of all, both companies, Continental and automotive, will be positioned with a strong balance sheet and sufficient liquidity. So they are resilient. I think that's absolutely clear, in particular for the automotive side. We will ensure that we need to be able on both sides to finance future growth. The exact allocation of debt, including pension obligations and liquidity, is part then of the detailed analysis for the next phase. But of course, look, Vitesco is a successful example, and Continental has experience in that transaction. So that's also clear. Then other than that, capital market readiness means we need to perform quarter by quarter. Until then, we will need to continue very resolute in our cost efficiency programs, automotive, but also on the other side, new Continental. And we have a lot of initiatives going. We need to counter measures even more consequent to be implemented in difficult times, and we're doing that. Thank you very much for that. I think you'll have to do a few more explaining things around the timing as to why exactly now and not eight months ago, Niko. But good luck for this move. I think it's exactly the right one, and I'm sure it took a lot of courage. Super interesting. Thank you. Thank you. More than happy to discuss this further. Next question comes from Thomas Besson, Kepler Cheuvreux. Go ahead. Thank you very much. I'll take a slightly different angle from Tim, but getting to the same thing in the end. I mean, I've been covering Conti for a long time, and I've heard you and your predecessors talking about the advantage of having a balanced organization, one very cash-generative and stable business funding the growth of a totally different business that you're now thinking about separating. So I mean, I understand we live in different dynamic markets, but can you explain maybe the dynamic at board level that may have led to this new decision? Because between refocusing automotive and separating it, that's a big gap. And can you confirm that you have already secured union support for this full separation? Because if I were an automotive employee of the future automotive business, I would feel differently from being separated than being still part of the same organization. And then my second question is on the timeline. Of course, COVID took place in 2020, so it did play a role. But you had announced the separation of Vitesco, I think, in October 2019, and the company was effectively listed in September 2021. So is it too short, or you think effectively it's doable to execute on the full spinoff by Q4 next year? And my last question is more for Philipp. I'd like to understand why you've stopped user experience separation. Well, it seemed to be one of the most important moves in December 2023. Thank you. Okay, maybe swiftly starting with number six, comparing with the Vitesco carve-out and the timing, what you see, Automotive is now already a group sector. Vitesco at that point of time was still part of Automotive. It was as well central functions within Automotive, common plans, structure. We had R&D, purchasing was together, and so on. That is this time by far a different part. Automotive, not just from the financial side, is as well publicly with its data, so to say, but as well within the company. This is very different. Of course, as Olaf has said, we have to respect annual shareholder meeting timing. We have to prepare for spinoff reports, and we do have to do all those diligence, but we don't have to perform what we did on Vitesco, which was a very difficult task to carve out and adjust. We have introduced contract manufacturing in order to really reduce the negative synergies and making sure that we are capable to bring Vitesco viable to the stock market. So that's the change. That's why we are confident that we can achieve those timing, assuming that we get all the approvals until end of 2025. And maybe if I may add, Niko, that's why what I said, we are starting today with the preparation, even though we have not the final decision taking in Q4 yet, right? Because otherwise we wouldn't be able to achieve it. We are starting now. And that leads me to question seven. We also need to be able to prioritize. Exactly. As I said, that's where we need to say what are we capable of and what needs to be done and what is our highest priority. Our highest priority is now to be able to stick to the timeplan, which means next year. And that's why we decided or needed to decide to stop the carve-out of UX. And then once we are listed, we will relook at it and think about what would be then the next timeframe. Yeah. Can you confirm having secured the needed support for the separation? So we decided as the executive board this morning, we had later a supervisory board meeting where we informed what we will do. We have shown the next steps and have commonly discussed as well the path forward. One part is clear as well. If this question comes, the major shareholder is part of our supervisory board. Obviously, this whole spinoff cannot take place without the consent of the IHO or of Mr. Schaeffler. And the AGM obviously is the part, and you must support it strongly. Otherwise, this will not come. Talking about balanced org and now thinking separation, yes, this is a debate. Tim said before, having this since 4 years, 5 years, we have this debate since 15 years. It is an advantage to have value and growth within one company. Yes. We clearly see this. We have it, by the way, as well within automotive. Philipp sees clearly, and as we mentioned, we have strong value business and growth businesses. Yes. However, we see right now, in order to crystallize this value, we clearly believe that standalone automotive is stronger in doing that. We see from the timing standpoint, and that's what I mentioned as well for Tim's question. One part is the market, which needs a strong and fast decision-making process within Philipp. The other part is being ready to be able to develop on value and growth on your own. And that's what we believe is automotive ready in 2025, to have this balance within an automotive sector and then an automotive company. That's why we decided in the board differently than we decided before. You simply need to have the team ready to do so. That's the important thing. Exactly. Thank you. Sorry, Niko, my question was not about the agreement of Mr. Schaeffler that I assumed you had, but on your employees, unions, union representatives. Yeah, they are part as well in the supervisory board as well. In Germany, you have the 10 shareholder representatives and the 10 representatives from the employees or the unions. Philipp already mentioned before that on our former restructuring parts, which we had in automotive, we have the employee representatives, which you are agreeing there. Yes, we see and the discussions which we had so far, it is there. There was a question before about the role model of Vitesco. We have shown in Vitesco that it's as well good for the employees. We have shown that such a separation, if it's a catalyst, and if we are doing it in the right way and we are convinced that this works, then it's a catalyst as well for the employees to create a strong sector. And we have done, and the proof was given that this was the right decision for Vitesco, and we are convinced we can do the same here on automotive. So this has a positive legacy, so to say, with that. And that is a convincing part as well for that part of the company. Thank you. The next question comes from George Galliers, Goldman Sachs. Yeah, good afternoon, and thank you for taking my questions. The first question I had was with respect to the automotive business and whether you could give us any insight into what kind of level of global light vehicle production do you need to see for that business to be cash flow breakeven? And after you've implemented the next steps you've laid out in slide 8, does that total light vehicle production change materially as a consequence of those measures? The second question I had was with respect to the remaining curve. Obviously, this will be a very cash-generative business. I think you've said more than 60% cash conversion in the past. Above and beyond the 7%-8% CapEx requirement, which I think you gave at the Capital Markets Day last year, what do you intend to do with that cash? Are there areas where you are seeking to grow and where you might pursue M&A, or is it reasonable to conclude that a high percentage of that cash will be returned to shareholders? Then finally, with respect to increasing the share of the business with Asian OEMs, can you just give us some insight into what are the key initiatives to win here? Is it improvements in the tech offering? Is it a more competitive cost position? Is it increased flexibility on your behalf? Or there are other factors that will help you to grow your business there? Thank you very much. So for the first part, a quick answer. I mean, growth should be standalone then for the new automotive, but already now, and I mentioned that at the beginning, the midterm targets are still valid for each part of the company. Those were based on Standard & Poor's projection of light vehicle production going forward, which is very, very limited growth, as we all know. Based on those assumptions, on those light vehicle production going forward, we have set up our target, 6%-8% adjusted EBIT margin, which would lead to positive cash, clearly positive cash for automotive. Just one remark, the level of light vehicle production, and that is then what Philipp answers on the third part, is the one part. It's more important that the right vehicles are built with our technology to make this clear. For the remaining core, again, we will define as well the structure and the capital market strategy going forward. What are we doing on the CapEx side as well? What are we doing with cash, which we are producing in this new facility, remains to be seen for sure. That's what we mentioned as well before. Once we don't have, we don't see on the M&A side something to pursue, and we are pursuing the opposite on ContiTech right now. So OESL, the automotive business from ContiTech, is on its way to get carved out and to get then potentially divested, which is one strategic opportunity. Of course, we are always looking on the M&A side, but if we don't find M&A parts and we have additional cash, then we have to give it to the shareholders. If we don't find other ideas, this is the first strategy which we would apply. So coming to the third part, Philipp. Yeah. I mean, we have a multi-dimensional approach. First of all, what we are doing is we are working on a significant increase in resilience of our Chinese business. We do see significant chances to support the Chinese OEMs on their trajectory into the rest of the world, where we are being seen as a very good partner helping them into this. We have also invested into our Japanese team and have built up new forces as well developed and are working on strategic partnerships with Japanese OEMs. And also on the Korean side, we do have already for long a very profound and attractive footprint in Korea, where we do see that we have significantly more chances to much if we focus more on these customers going forward. I mean, you have seen how some of these have had, despite all the challenges, a significant growth and additional potential going forward. And that's where we are going and needing focus on means local for local. We are going to attract interest while localizing teams, while localizing R&D, and while localizing also decision power going forward. Great. Thank you. You're welcome. Horst, it's the next one in line. Yes. Horst Schneider, Bank of America. The floor is open. Yes. Good afternoon. Thanks for taking my question. Just a few left. More into the detail. Is it already? I mean, I can imagine for you it's difficult to answer this question, but the Schaeffler family, do they intend to hold stakes in both companies or is anything changing with the spinoff also in the ownership structure in one or the other company? That's question number one. Then you say in the presentation that automotive is going to have limited net debt. Can you maybe quantify that with any regard? So I don't know. Will it have? I know it says some net debt will be with automotive, of course, but can you maybe quantify that to some extent? And the last question that I have is now that UX is basically staying on board. And you also mentioned that in your speech, basically, that the environment is getting much, much more difficult. All the targets that have been communicated for automotive, they are still intact. So that means midterm, 6%-8% EBIT margin on cash flow. I think, of course, you cannot make any statement, but all the profit targets remain intact as they are. Thank you. Yeah. Thanks, Horst, for asking questions, which you know already were difficult to be answered for us. Yes. The first part I already said, obviously, this all will not fly without the consent of Schaeffler and the IHO, which will then happen on the annual shareholder meeting. The future structure, and I mean, automatically in the spinoff, they would have the same shares in the new core as in the remaining core. How it will future going forward, we have to wait until this time will come. Obviously, there will be announcements then around the roadshow how the structure will follow suit. Same what's true for debt. Very limited debt is already a good indication. You can see, and that comes then to the last, the third bullet points. Yes, we mentioned before, for the time being, we stick to our midterm targets. We have no reason now to deviate. The measures are in place. We are going there. However, in the roadshow, once the new company is there at that point of time, this company will set its midterm targets based on the current environment and what we see there. And I mean, Philipp has mentioned this. You're staying on board, yes, for the time being. However, new automotive has each opportunity then later on to continue. Once the spinoff is there, we have set the preparation already to continue with the carve-out and see the logic, industrial logic is still there. It can be then pursued later on if still deemed reasonable at that point of time or value accretive, let's put it that way. I just understood the logic for carving out UX was that you need to make significant investments, right? Because you're ramping up this significant display business for the various customers. So that means that they're going to be upfront the more significant CapEx burden. Is that right? Or? That is correct. Yeah. Yes. Okay. All right. This reasoning is then a different one at that point of time. You're right. Yeah. Okay. The structure, final structure basically of automotive, then that is also something you still need to elaborate. So when you basically plan the, I don't know, the equity story, then you're also going to outline again what the future, I mean, the real long-term target is going to be, and also what's the long-term vision basically of automotive. That is not yet clear at this point of time. You could still take the decision that some parts are needed or not needed, but that will be basically then defined within the next year. Is that correct? Or? Yes. Right. Yes. Okay. All right. Excellent. Thank you. I mean, we will always take very consequent review of the portfolio. And the same is true for automotive after the spinoff. A lot of preparations for the UX carve-out have been put on hold, and they can be revived anytime after the spinoff. Yes. Yes. All right. Thank you. Thanks, Horst. The next question comes from Harry Martin, Bernstein. Hi. Good afternoon, everyone. So the first question I had was from the press release comments about the rationale for the transaction in terms of creating competitive opportunities for the automotive business. Could you explain a little bit more into what that means? And is that the indication that the independent entity would more readily take part in M&A in either direction? The second question, just a quick one on the carve-out cost, low- to mid-triple-digit EUR millions. The Vitesco transaction was more than EUR 300 million in cash cost over three years and for a much smaller entity. So is the answer to that the same as the timing? It's actually sort of an easier separation process or any other help on that one. And then finally, could you just outline some of the synergies that there would be between separating the businesses? How meaningful are connected tires and sensors and the fleet management solutions, which I believe sit within the Automotive business, but potentially would be more synergistic to the Tires business if you look at how some of the peers are also invested in fleet management assets? Thank you very much. Yeah. Starting with the last one, nothing prevents Tires and Automotive teams. They know each other very well. We are working strongly together to continue such projects and partner together. That is coming as well to the first part, competitive ops. This is as well a great opportunity for Automotive being independent. You can easier partner, you can decide, and you're more attractive as well for partners going forward. So the first and the last one are going closely together. So the M&A part, I would say, is more a partnering part and going with players of the ecosystem, which we are seeing, which is on the software side, on the business model side, and so on, which holds then as well the link to tires. For the carve-out costs, too early to judge, but just when you have Olaf will comment more, but just to say it's all the easier. I mentioned before, Vitesco was carved out of automotive, was clearly when it comes to central functions, automotive more difficult. This is not existing now. We have in the meantime an integrated auto player, integrated to the extent that the group functions are not there, but within auto, it's a player. There's nothing to be carved out. So that's easier once it comes to the cost. Again, it's too early to judge. That's what we are doing in our detailed analysis, but the carve-out itself, obviously, as auto is already carved out, is easier than on the Vitesco side. Yeah. And onto the carve-out costs. I mean, Niko, you showed it on your page when you introduced it. That's all we can say. Obviously, it is an easier transaction than the Vitesco example. So we are reviewing, obviously, and seeing where we can save costs, but we have now provided the required budgets to move ahead and implement in time. Thank you very much. Thank you, Harry. So the next question comes from JP Morgan. The line is open. Thank you very much, Nikolai, team. Congrats on another transformation announcement. Just a couple of questions, please. Can you put the free cash flow of the automotive division into perspective going back to the years and how you're thinking about it for the next two? And also let's say auto business day one, how do you think about the balance sheet? How do you think about that net cash position or capitalization of the balance sheet? Thank you so much. Yeah. We might say the same, repeat ourselves a little bit. Free cash flow auto, we ask for your patience. This will come once we're moving closer. It highly depends, obviously, on how automotive will now perform at that point of time once the roadshow will be performed next year. As we said before, on our targets and our curve and our midterm target, clearly, automotive with being as well going towards two midterm targets is supposed to be free cash flow positive and being itself capital market ready. That's our assumption. That's what we are moving forward to which extent and how does it look like? This is what we will do then once we are getting closer to the spinoff date. And that is the same for the balance sheet, as said before from Olaf. Again, very limited debt from what we see right now. We clearly want to make sure that automotive will be very attractive and will be solidly has a solid balance sheet to move forward. How much and how attractive at that point of time clearly depends then from the performance, and we will see this then over time. Okay. We'll be more patient on this front. And then as we think about CapEx on absolute levels, let's see, do you have visibility here that maybe CapEx peaks in the next two years or three years in terms of the planning? I would say CapEx is not substantially changing, and there is no change now to be foreseen. And looking on our storyline, the CapEx is not the main part. Obviously, we limit CapEx as much as we can on all levels. The clear improvement measures, which Philipp and the teams are doing, are on the fixed cost part, less on the depreciation part, so to say, where we see then the CapEx and then the cash part. It's clearly on the R&D side, getting R&D in single-digit territory. That's what Philipp mentioned before. Team is committed on the way to reduce fixed costs on their administration side, but of course, limiting as well all CapEx in a way to get more efficient there, particularly let me say on all areas, but there is no change in strategy there or planning. Thank you. Next question comes from Edoardo Spina, HSBC. Line is open. Hi. Thank you very much. I have two quick questions. If I can clarify on previous answers. First, on the spinoff itself, is it like final? Can we consider it to be 100% final before the vote of the board? Does it mean that only the details have to be decided there, but the decision is, let's say, 100% confirmed? And also, could that affect the timeline for the spinoff? And the second question is on the tax effects. You mentioned low triple digit. Can you please clarify what you mean? Is this the effect, the tax effect of the carve-out cost? Is it other effects? Is it a benefit or a headwind? Thank you. The second part is clearly an effect of the transaction. This happened as well on the Vitesco side. We assume that due to the carve-out, there will be tax implications to come. And this would be then a headwind because those are costs, including real estate transfer tax relating to this transaction. To the first part, as we said, this is the first substantial part of the feasibility analysis now concluded, decision taken from a capital market law perspective. We have to disclose this. So we went out today. The next phase is now finalization of structure and transaction steps for Continental New and for automotive, including all financial effects, reflection, and financial statements of the entities involved. So it's not 100%, but we are working on that, and we will decide that in Q4. But again, we are taking all measures and planning all steps for the preparation of the listing of automotive by end of 2025, starting today, to be able to meet the timeline. Even though I know there are still questions on the line, I hope you understand that today is a very tough time today. And thank you to the three of you that you made the time to have an hour with the investors and analysts. Again, I know there are still questions outstanding, so please, the questions that have not been answered yet, please send them over to us, to the IR team. We're very happy to be available for you guys. And with that, given a lot of time, thank you very much. Also, thank you, operator. Thanks for participating in today's call, especially given the short lead time. Again, we're always there for you as the Continental IR team, happy to be there if you have any remaining questions. And with that, I would like to conclude today's call. Thank you and goodbye.