Good morning, ladies and gentlemen. This is Christian Herrmann speaking. On behalf of Daimler Truck, I'd like to welcome you on both telephone and the internet to our Q3 results global conference call. We are very happy to have with us today Jochen Götz, our CFO. Jochen will begin with an introduction directly followed by a Q&A session. The respective presentation can be found on the Daimler Truck IR website. On our request, this conference call will be recorded. The replay of the conference call will also be available as an on-demand audio webcast in the Investor Relations sections of the Daimler Truck website. I would like to remind you that this telephone conference is governed by the Safe Harbor wording you will find in our published results documents. Please note, our presentations contain forward-looking statements that reflect management's current views with respect to future events. Such statements are subject to many risks and uncertainties. If the assumptions underlying any of these statements prove incorrect, then actual results may be materially different from those expressed or implied by such statements. Forward-looking statements speak only to the date on which they are made. Now, with this, I would like to hand over to Jochen. Thanks, Christian. Good morning, ladies and gentlemen, and a warm welcome also from my side to our results call for the third quarter of 2022. With the pre-release of our third quarter preliminary results, you have already received the key financials for the third quarter. The Q3 results provide further tangible evidence that we are delivering against the ambitious target we set back in November 2021 at our Capital Markets Day. We are extremely focused on executing our improvement measures and showing progress in our main segments. This is despite the ongoing supply chain constraints and inflationary cost increases. We updated our guidance for Group revenue, Group EBIT, industrial business revenue, as well as the margin guidance for the segment Mercedes-Benz with the Q3 pre-release. Before we dive into additional details on the financial performance, I will first give you an overview on the recent key topics. Let me start with our business results in the third quarter. Adjusted EBIT for the Group was very strong with more than EUR 1.2 billion and a corresponding adjusted return on sales of the industrial business of 9.4%. Group EBIT amounted to EUR 1.2 billion, delivering earnings per share of 1.17 EUR for the quarter. Free cash flow of the industrial business was, as anticipated in the Q2 call, strong with EUR 592 million. Consequently, net industrial liquidity was EUR 6.2 billion at the end of Q3. To sum this up, despite the challenging business environment, the team at Daimler Truck delivered very strong financial results. A big thank you to all our Daimler Truck employees worldwide for their hard and successful work. We can be very proud of our achievements, especially in these times of uncertainty and ongoing challenges for all of us. Let me now give you a quick overview about the key highlights of the third quarter. Truck demand in our industrial segments continue to be strong despite a challenging macro environment. Overall pent-up demand remains high across regions, as seen, for example, in North America when we opened 2023 order books. Over the course of the year, production rose sharply despite ongoing supply bottlenecks. Although supply chain stress is slowly easing, it is still far away from a normal situation, and we expect this to continue in the quarters ahead. Our unit sales grew by 27%. Combined with positive pricing realization and continuing strong after-sales performance, we experienced significant top-line growth. Daimler Truck is clearly leading the North American truck market with benchmark market share performance and financial strength. This gets sometimes forgotten, especially when the markets focus on the European situation. At Daimler Truck North America, we presented the all-new Western Star 57X long-haul truck in the United States. This iconic truck is the latest family member of the X-Series product family, and it is designed primarily for the customers who travel on long-distance routes, especially in the small fleets segment or as owner-operators. Mercedes-Benz Trucks has now ignited the next stage for battery-powered heavy-duty long-haul transportation and presented the eActros LongHaul. The truck was awarded the 2023 Truck Innovation Award as the new industry prize for innovative trucks awarded by the International Truck of the Year jury. At the IAA Transportation in Hannover, Fuso unveiled the all-new next generation model of the all-electric light-duty truck, Fuso eCanter. In our joint venture, China joint venture, BFDA, we celebrated the first locally produced Mercedes-Benz truck. With the start of serious production, we are opening a new chapter in China. 10 years after the start of the business operations, BFDA is further expanding its presence and leveraging its potential for future profitable growth. Besides the product offering, very important, we keep on pushing with our sales health measures, including our active portfolio management. Just to highlight a few results. Our restructuring plan in Brazil and the intended relocation of the bus body shop to the Czech Republic are two of the major measures here. Now let's move on to the key market development in the third quarter. The North American heavy-duty truck market continues to show strong demand. In the first eight months of 2022, our market share remained at a very high level of 40.7%. The positive development is coming from a strong on-highway performance. The launch of our brand new vocational truck are not yet fully reflected here. We should start to see the benefits in 2023. After moving sideways year-over-year in the first half of 2022, the European heavy-duty truck market are now showing an upward trend in the third quarter. Our market share continues increasing compared to last year, standing at 19.6%. As the European heavy-duty truck market is developing favorably, we have adjusted our market guidance for the full year 2022. More on that later. Unit sales at Daimler Truck increased by 27% compared to the third quarter last year. As indicated earlier this year, we anticipated sequential quarter-over-quarter improvement during 2022, and still expect an ongoing positive development with a significantly better second half versus first half of 2022. Demand in the United States and Europe is very strong, but we are managing the order book very carefully. In North America, we opened the order book late and are very pleased with the order intake so far. September orders are a further testimony that there remains a tremendous level of pent-up demand. The positive trend also continued in October. In Europe, we saw a solid order intake in Q3. The order book is open for the first three quarters of 2023. Besides that, when looking at the order intake, you also need to consider our strong order backlog. At the end of Q3, it remained close to record high levels. Generally, an early warning indicator for slowing down demand would be material cancellations or move-outs of orders. We do not see that currently. In fact, customers are still asking for more trucks. We continue to make significant progress in transforming our product portfolio into zero-emission trucks and buses. From January until September this year, we sold 624 battery electric trucks and buses. In the same period last year, we sold 308 zero-emission units. Year-to-date, orders for zero-emission vehicles increased to 1,705 units this year from 497 units in 2021. We are continuously expanding our portfolio of battery electric trucks. Our focus is on offering clear benefits to our customers. At the truck show in Hannover, we showcased a product portfolio of new fully electric vehicles for launch in the quarters ahead, including the eActros LongHaul with a range of around 500 km on a single battery charge and capable of megawatt charging with series production plan for 2024. The battery-electric Mercedes-Benz eActros 300 in a tractor version for flexible heavy-duty distribution transport coming in the second half of 2023. The announcement of the battery-electric Mercedes-Benz eAtego for the medium-duty segment and the next generation eCanter, the light-duty battery-electric from Fuso starting early in 2023. Now, let's have a closer look at our third quarter financials to provide you with all necessary additional information on the pre-released preliminary figures. Strong revenue growth on group level with a significant increase of 47% to EUR 13.5 billion in the third quarter 2022. It was mainly a result of a significant increase in unit sales, healthy pricing realization, and the ongoing strong after-sales business. FX through the translation effect from U.S. dollar to euro boosted revenue growth given our strong footprint in North America. Adjusted for positive FX effects, revenue increase was still significant at 36%. On the back of this major top-line drivers, group EBIT adjusted increased by 159% to more than EUR 1.2 billion, while group EBIT increased from EUR 375 million to around EUR 1.1 billion. Between those two reported values, we had adjusted items mainly for restructuring of the Brazilian business at Mercedes-Benz and follow-up M&A transactions connected to the spin-off. This was a clean quarter. EBIT adjusted is not significantly impacted by extraordinary items. Free cash flow of the industrial business increased from EUR -782 million in the third quarter last year to EUR +592 million for Q3 2022. Net industrial liquidity increased by 13% to EUR 6.2 billion at the end of the third quarter from EUR 5.5 billion at the end of the second quarter. Looking at our industrial segments, revenue increased significantly to EUR 13 billion with the same positive drivers as I already mentioned for the group. EBIT adjusted increased to EUR 1.2 billion, leading to a return on sales adjusted of 9.4%. Trucks North America achieved an EBIT adjusted of EUR 738 million and a return on sales adjusted of 12%. The strong volume growth was supported by a favorable sales mix and especially strong pricing through the second price increase we put in place in June. As already highlighted at the second quarter call, we continue to see the quarter-over-quarter improvement and now are back on the targeted profitability level. Daily part sales rose to another record level reflecting the intense fleet utilization, but also our well-performing service business. Material costs continue to increase, but we saw again a positive price cost mix for the quarter. With regard to Q4, we see another strong sales quarter. The return on sales adjusted between 10% and 12% for the full year 2022 is confirmed, and we expect our North American operations continue with benchmark market share performance and a strong financial position, despite the recently announced recall. Mercedes-Benz Trucks achieved an adjusted EBIT of EUR 474 million with an adjusted EBIT margin of 9.2%. Despite the ongoing supply chain constraints, we delivered an increase in unit sales volume and an increased after-sales revenue from our main European markets and Brazil. Net revenue improved due to optimized discounts and active pricing management. Our used truck business continued to deliver very strong results. Mercedes-Benz Trucks faced headwinds from inflationary pressure and further material cost increases. Supply constraints from semiconductors and freight still weigh as a bottleneck on the sales development. As updated with the pre-release two weeks ago, full-year guidance of adjusted return on sales for Mercedes-Benz Trucks is now expected within the range of 7%-9%. We expect this in the upper half of the range. Adjusted items of EUR -204 million were mainly related to our ongoing restructuring efforts in Brazil, the remainder being the restructuring in Europe and the spin-off related M&A costs. In Q4, we expect another quarter with high volumes. Truck Asia realized a return on sales adjusted of 2.6%, still significantly below the 8.3% one year ago, resulting in an EBIT adjusted of EUR 33 million. We saw strong market demand in international markets, leading to sales growth in Q3, while active parts allocation limited sales in Japan and India. Order backlog is currently extremely high, with fulfillment depending on upcoming parts allocation and supply constraints. Currently, supply issues are leading to an overall high-level stock at Truck Asia. After sales show a positive momentum in Q3 with a strong performance in both Japan and international markets. Ongoing cost headwinds from raw material and supply chain constraints impacted our gross profit. We do not expect the cost price gap will be closed in the coming quarters since price increases on existing orders are legally restricted in Japan. However, in India and international markets, we successfully implemented countermeasures through price increases in Q3. Year-over-year, the equity result from BFDA was still negative in Q3 due to the market and as a consequence of the volume reduction in China, as well as the positive non-recurring one-time effect in Q3 last year. As already guided at our last disclosure call, the upcoming Q4 versus Q3 should see a more or less flat development. With a return on sales adjusted corridor of 1%-3%, full-year guidance for Truck Asia remains unchanged. After the negative result in Q1 and Q2, Daimler Buses is back in the positive territory and generated an adjusted margin of +2.5% based on an adjusted EBIT of EUR 23 million. In Q3, we saw a strong market demand in Latin America and an improved sales situation in Europe, despite the still challenging supply chain. Increased coach sales from a very low level led to a stock clearance of new and used coaches. On the other hand, overall unfinished goods at Daimler Buses remain stable at a high level in Q3, but seasonally, typically for every fourth quarter, we expect to achieve significant destocking of our inventory towards the end of the year. Regarding our Daimler Buses after-sales business, we generated increasing revenues and contribution. Here, pricing was improved to counter the high raw material costs. Overall, we remain in a negative price cost situation due to longer lead times in the bus industry and the tender-driven business. The restructuring activities in Europe and the transformation investments go along by ongoing strict cost management. Summarized, EBIT performance of the group in the third quarter showed a significant improvement year-over-year. EBIT was EUR 1.3 billion, pricing and volume accounting for almost 90% of the improvement. FX, mainly U.S. dollar translation, made a positive contribution of EUR 245 million. Industrial performance was negative with EUR 546 million, where around 80% came from headwinds from material cost increase and generally inflationary pressure. We delivered a positive price cost mix, which was even stronger than the second quarter. That said, the environment remains challenging due to the ongoing supply chain constraints. Due to higher inflationary cost headwinds, we are also facing higher selling and G&A expenses. As mentioned already in our Q3 results call, the achievement of our fixed cost target is therefore getting more and more challenging. The Others line includes a negative effect of BFDA of around EUR 100 million. Financial services achieved a positive EBIT contribution of EUR 33 million, with positive contribution from better interest margin and portfolio volume from phase two markets, partly offset by slightly higher cost of risk. Adjustments to the group EBIT, including EUR 158 million costs from a global restructuring efforts, mainly at Mercedes-Benz, and ongoing negative effects from the spin-off of around EUR 60 million. The strong EBIT performance of our industrial business was driven by both our key segments, Trucks North America and Mercedes-Benz, with EUR 388 million and EUR 360 million respectively. This demonstrates that our ambition of 12% in North America and 10% at Mercedes-Benz in a sunny market scenario is feasible. At Truck Asia, the cost price gap is not fully closed yet. For the business outside of China, the run rate is improving. The overall Truck Asia result is burdened by the negative BFDA at equity result. Year-over-year, EBIT contribution was therefore negative with EUR -74 million. Daimler Buses achieved a positive EBIT impact with EUR 17 million, returning to a positive profit contribution for the group, reflecting the hard work on fixed costs that Daimler Buses has delivered. At the reconciliation line in which we book our group participations like cellcentric and Proterra, our autonomous activity at Torc, and the eliminations improved by EUR 57 million, matching with an absolute amount of EUR -55 million in Q3, roughly our typical quarterly run rate. All in all, EBIT adjusted for the industrial business significantly increased to EUR 1.2 billion with a return on sales adjusted of 9.4%. Daimler Truck Financial Services continues to ramp up its business. Per Q3, 14 out of 16 markets are already gone live. Our financial services contract volume increased by 42% to EUR 24 billion in Q3, supported by positive FX effects in North and South America and the new phase two markets that have been added this year. EBIT adjusted increased to EUR 50 million due to the higher interest rates with higher contract volume, leading to a return on equity adjusted of 9.6%. G&A had a stronger negative impact compared to last year's quarter because of the required investment to ramp up the business as well as integration of the new markets. Credit quality remains on a high level, also with the newly added markets. For the remainder of 2022, we expect a more challenging market environment with increasing refinancing conditions and interest margins under pressure and credit risk should normalize in Q4 compared with the third quarter. The ongoing supply chain constraints continue to result in an inventory buildup in off-lease and new vehicles in Q3. That remains a major burden on the industrial cash flow. Both finished as well as unfinished stock levels are significantly above year-end 2022. Important to mention, every truck has a specific customer. At the end, as the efforts from trade receivables and trade payables almost offset one another, the negative working capital development of EUR -525 million comes only from an increase in inventories. What is more or less the same negative impact as in Q2. As net investment spending increased in the recent quarter, depreciation and amortization did not fully cover it. Our clear aim is to focus and limit CapEx spending more and more through our active portfolio management approach. As a result, CFBIT of the industrial business came in at EUR 875 million and adjusted for structuring measures and M&A transactions. It is CFBIT adjusted of EUR 953 million. Cash taxes of more than EUR 300 million also had a negative effect on the free cash flow as they doubled compared to last year's Q3. This led to a free cash flow of the industrial business without adjustments for M&A transaction and restructuring measures of EUR 592 million. Free cash flow adjusted of the industrial business stood at EUR 669 million. Based on this cash generation, net industrial liquidity increased quarter-over-quarter from EUR 5.5 billion - EUR 6.2 billion at the end of the third quarter. Full-year industrial free cash flow guidance on prior level is confirmed as we expect a strong Q4 cash generation. Before we go through the outlook for the full year 2022, please let me give you the following remarks. The following outlook of Daimler Truck, as at our last disclosure call, is still subject to exceptional degree of uncertainty due to any potential further development in the war in Ukraine and its impact on the global economy and the energy situation in Europe. Development of the very high inflationary pressure and the associated central bank increases in interest rates. Any potential further macroeconomic or geopolitical development and ongoing supply bottlenecks. However, we assume no major production downtimes due to missing parts or due to the unavailability of gas. The market guidance for the heavy-duty market in North America remains in a range of 255-295 thousand units for 2022. As mentioned before, due to the very favorable European market development, we are today lifting the full-year 2022 guidance for the European heavy-duty truck market from 240,000-280,000 units to now a range of 260,000-300,000 units. We adjusted the revenue guidance for the group and industrial business, mainly to the further strength of the USD and the overall FX development, the sustained positive development at Mercedes-Benz, and the overall favorable volume pricing and after-sales development. From previously EUR 48 million-EUR 50 million, now to EUR 50 million-EUR 52 million for the group, and from previously EUR 46 million-EUR 48 million to now EUR 48 million-EUR 50 million for the industrial business. Accordingly, the forecast for the group EBIT was updated from previously at prior level to now a slight increase on the back of an increased expectation for Daimler Truck Group revenue. EBIT adjusted guidance for the group is still unchanged with a significant increase year-over-year, and CapEx and R&D spending is unchanged at a slight increase versus last year. Unchanged is also the unit sales guidance of 500-520,000 units. For the adjusted return on sales for the industrial business, we still expect a range of 7%-9%. Industrial free cash flow as expected on prior year level. On a segment level, the return on sales adjustment guidance for Mercedes-Benz is now adjusted to 7%-9% from previously 6%-8%. As mentioned before, we expect this to be in the upper half of the corridor. All other segment guidance KPIs for 2022 remains unchanged. Let me conclude by bringing up this last slide that probably looks familiar to you. As you know from our past quarters, we like to finish our earnings calls with our strategic priorities. That's because after going through so many detailed figures, it helps to briefly look at the bigger picture. Our strategic ambitions at Daimler Truck remain to unlock our profit potential and to lead sustainable transformation. To do so, we will continue to manage our environment and to increase our resilience. We will continue to accelerate our zero-emission product portfolio and autonomous trucking. We'll continue to leverage our people, our culture, and our ESG strategies. We work on this with full focus and dedication every day. We are making good progress as this past quarter clearly shows. Our earnings are on track to our profitability ambition for 2025. In terms of transformation, we are proud to now have already eight electric trucks and bus models in series production in all our key regions, the Americas, Europe, and in Asia. In sum, I think it's fair to say. At Daimler Truck, we have a clear plan going forward, and we are well underway. With that, I would like to thank you very much, and I'm now looking forward to your questions. If you want to raise a question, please dial zero one on your telephone keypad to enter the queue. If you want to withdraw your question, please dial zero two on your telephone keypad. Once your name has been announced, you can ask a question. The first question is coming from Nicolai Kempf at Deutsche Bank. Your line is now open. Yes, good morning. It's Nicolai speaking from Deutsche Bank. Two questions from my side. The first one on the orders. Can you highlight until which quarter you've opened the order books in both Europe and North America? Hi, Nicolai. Good morning. Well, as I said, in Europe, we have opened the order book until the Q3. Q4 for 2023 is not open. Also keep in mind that we did not fully open the first three quarters, so we are somehow restricted order intakes on that one because we want to have some room to maneuver. On the U.S., the order book is open the full year. We are here in very intense discussions with our big customers. We had discussions about what's their overall need for next year, and we basically have changed to a kind of a reservation model. They know now, they get their orders as long as we can deliver from a production volume, and they have not put everything right now in the order book. The order book is open in the U.S. for the full year. Okay. Understood. Thanks. My second question is on Mercedes, which was clearly the positive surprise in this quarter. How much of this is kind of self-help, and how much would you attribute to the favorable market conditions, meaning volume and pricing? Well, I think the biggest effect, if you look from a quarter-by-quarter development, is clearly that we were capable to close this cost-price gap. You might remember that in the first half we had a challenge that the cost increase was much faster than the price increases. We initiated price increases in the first half already, but the full impact now comes in the second half. That's the big lever on Mercedes. However, it's also fair to say, if you look on the development on after sales and how we fixed the used business, that here the self-help measures also continued to do that, too, to quite some extent. Understood. Thank you, and congrats to the good results. Thanks. The next question is coming from Himanshu Agarwal at Jefferies. Hi. Himanshu from Jefferies. Thanks for taking my question. The first one is on the rising interest cost that you mentioned in FinCo. I believe it will be passed through to your customers and your margin spread should remain the same going forward. Just wanted to confirm that. Also, are you seeing any change in customer behavior due to increase in lease cost? That's my first question. On the interest cost, I think there are two aspects. One is on the financial services side. There we do see an increase, but as you rightfully said, we pass that through to the customer. For the customer itself, obviously it's an increase in cost. On the truck side itself, generally speaking, higher interest for capital goods is always a challenge. When we talk to a customer, especially in the United States, they're well aware of that. They are able to pass it through to their customers. With that, they don't see a major impact out of the interest cost. It's really the big topic in the United States, the pent-up demand. What we are hearing from customers on a regular basis is they are saying, "Our trucks are getting older and older, and the operational costs are getting higher and higher. Therefore, we need urgently new trucks despite the fact that financing is more expensive than it was a year ago. Mm-hmm. Understood. Thank you. Second one is slightly a longer term question on Euro 7. Yesterday, European Commission presented a proposal on Euro 7, which if passed could significantly increase the cost for the industry. Any thoughts you could share on the introduction of Euro 7 and potential costs? If it would make more sense to outsource the engine component like you have done in medium duty to save some cost and focus on electrification. Yeah. Well, we received they call it a draft of the Euro 7. You might know that's now under discussion not only on the European level but also on the local level. Well, it's a tough regulation. We would love to see more towards zero emission instead of improving the diesel regulations. We are not too happy with that, but we are discussing with the respective authorities about the concrete outcome of that. That means for us as an industry, we have to spend more on diesel because that will be, in that area, still the main volume. That's one thing what we see. Regarding your second question, when it comes to heavy duty. Heavy duty other than medium duty is our core business. From an engine perspective, we are the clear leader volume-wise, and we have a benchmark engine. Therefore, we continue to invest in this engine. At that point of time, it's for us not an option to outsource that similar like on the medium duty. Actually it's rather the other way around. We are going more for last man standing approach because, given the volume we can produce on heavy-duty, it's hard for everyone else to match that. It might be that some of the other manufacturers, the smaller ones, have a problem to come to the next Euro 7 regulation on their heavy-duty side and might have an interest in our engine. Sorry, just to follow up on that. If you focus on heavy duty and continue to invest, so wouldn't your engines be more expensive for other regions like in, if you export those to North America, because there the rules are less stringent versus Europe? Well, that could be an option, but at the moment we have to fulfill all of the regulations worldwide, and we try obviously to fulfill the demand of our customers in all major regions. It's an option to be flexible on that one. Mm-hmm. Okay. Thank you. The next question comes from Tom Narayan at RBC. Hi, yes. Tom Narayan, RBC. Thanks for taking the question, Jochen Götz. My first question on Mercedes-Benz, just wondering if you could break out as much as you could, the on slide 25, the EUR 669 million of volume price mix. Just trying to understand how much is really coming from price mix, and if that was enough to offset. It sounds like it was. It looks like the EUR 198 million of, I think that's mostly cost inflation. Just more high level, you know, you guys posted a 9.2% EBIT margin here on Mercedes-Benz Trucks, and this is. I think it seems like a very important moment. It's a really impressive figure, and yet, you know, the stock trades at such a discount to your closest North American peer. I would guess you think your stock is undervalued, but wondering, you know, what you think may be behind this and maybe what you can do to communicate this. And then on North America truck, wondering if you could give any color on what you're seeing on 2023. I know there's a lot of uncertainty, but two of your other peers have already given, I think, flattish type outlooks for 2023 in North America. I know you're not providing your market outlook there on this call, but maybe in the next one. But just love to hear anything you could say on how North America could potentially look. Thanks. Okay. Well, let me start with the last one. Well, I said in my speech several times there's a high level of uncertainty at the moment for 2023, and it's true for North America, it's the same too for Europe. What do we see at the moment? If you come from a pure demand perspective, and I mentioned that and I can only repeat what I already said, we are really in close contact with all of the big fleets in the United States, and basically there's one thing in common. They all have a higher demand than in 2022. Demand for the U.S. will not be the problem from today's perspective for 2023. It will be, from today's perspective, the same discussion like this year, how much trucks can we reduce and how stable will be the supply chain. What we see at the moment is it's getting better on the chips but still a problem. Overall, the supply chain is somehow broken. We have plenty of parts where we have to discuss how we can safeguard the volume for next year. That's what we see at the moment. Again, high demand like this year, the supply chain will determine at the end the size of the market. We will give guidance, concrete guidance latest with our annual press conference beginning of next year. Regarding the stock price, well, I think probably you can do more on stock price than we can do directly. I... There's one reason why I also mentioned that we have a super strong North American business, because for obvious reasons, there's a lot of focus on Europe, and you mentioned it earlier. The improvement here is important, and I think we made already quite some progress on that one. It's also clear that we have a leading North American business with quite impressive profitability. Our peers in the U.S. have a clear advantage being in the U.S. stock market. Then on the last question, on the volume price mix, on Mercedes-Benz. Yeah, pricing, as I said earlier, it's true for North America and it's true for Europe. It's the main topic. We were able to more than offset the cost increase in Q3. The story I told right from the beginning, in the first half, costs are higher than revenue because there's a time delay until the price increases hit the P&L, and that changed now into Q3. Now we see the full leverage of the price increases. We still see a further increase in cost, but we had a positive price cost mix in 2022 in the third quarter, and that's one of the main drivers for the development. We also have a quite good development on the service business, not only in Europe, but also North America. That's another big driver. Great. Thanks. Great job on, Mercedes-Benz. Thanks. Thanks. The next question is coming from Miguel Borrega at BNP Paribas. Hi. Good morning, everyone. Thanks for taking my questions. The first one, just wanted to get some of your thoughts for 2023. I know it's still early, but do you think adjusted margins could expand further at Mercedes-Benz? Just taking into account that there were a couple of one-offs in the first half. You know, if you take the midpoint, the 8%, do you think you can do better next year? And just a couple of breakdown on what comes after this year. Is it more pricing, more fixed cost reduction? Some comments would be great. Thank you. I mean, thanks for the question. Well, as you know, I will not give a guidance on a specific segment at a point of time. Let me explain what I see more general in Europe. We just talked about the North American market. From a market perspective in Europe, we expect another year in 2023, similar like 2022, and with that also similar like United States. The size of the market, and that obviously is the main drive or one of the main drivers for the profitability as well, will be determined on the supply chain. We have the same situation in Europe and in North America. Chips is still a challenge in other parts as well. That's one big source of uncertainty, and it's also the reason that at that point of time we're not giving a guidance. We continue to work on our self-help measures. We announced Brazil. We work on some measures on the sales side as well. We will hear more about that in Q4. We have to further increase our recurring revenues on the service side. I think we did a good job in the course of 2022, but there's more to come in 2023. We have to maintain our cost discipline also in 2023. These are the elements for what we are working on. Markets and the guidance regarding profitability we will give next year. One thing to keep in mind when you think about the segment Mercedes-Benz, because we focus a lot on Europe and, it's the bigger portion of that, but there's also the Latin American business. I want to remind you that in 2022, in Brazil, we are facing or we're moving towards the Euro 6 regulation, and we see a pre-buy effect in Brazil, so a super strong market in 2022. In 2023, after the implementation, we expect the normal effect after a pre-buy rather low market. That's from a Mercedes-Benz business model, that's a burden if you compare 2022 with 2023. Then more general, talking, but at the end it's similar. If you look from an overall perspective, let's start from small to big. On the bus side, we expect that the coach markets come back in 2023, not fully, but that will be a driver for uplift and profitability. In Asia, I talked about that, we are not able to pass through prices to the customers because of the legal restriction in Japan. That will change at least in the second half of 2023. China is a big unknown from today's perspective. You have foreseen the outcome of the discussion of the Communist Party. COVID seems to continue. Therefore, we do not expect a huge uplift in China for next year. Europe, I talked about, and in North America, I also said what we expect from a market perspective, and here we are from an overall profitability perspective in Q3 already on a very good level. That's all I can say for the moment, but should give you some flavor for next year. That's great. Thank you. On autonomous, we've heard one of the main players shutting down. Can you please, you know, give us some update on the recent milestones of Waymo and Torc, just to confirm your commitment long-term, and perhaps give us a sense on the quarterly cash burn for Torc and autonomous more broadly? Thank you. Yeah. Let me start with Waymo. We have the partnership with Waymo in place. I would say it's a quite good and close collaboration to jointly develop here the redundant chassis, which is a precondition for autonomous driving. No changes here. On the Torc, it's right that the former CEO, Michael Fleming, stepped down from the CEO position. We also have the successor who is now for quite some time in the business, so knows it very well, and very close collaboration already in the past with Torc. Well, it's a very smooth handover. No problem on that one. The major players all stayed on board, nothing critical. Michael will also be still a shareholder and will be still on the board of Torc, so he's not moving out, but he changed basically seats. From that angle, we continue, and I do not disclose the quarterly spending on autonomous at that point of time. The next question is coming from Michael Jacks at Bank of America. Hi. Good morning, Jochen Götz and team. Thanks for the presentation. My first question is three in one. On the cost inflation pricing balance, if raw material prices were to remain at the current level, is it fair to assume that inflation impact from raw mats should peak in the fourth quarter? The second part of that question is, are you able to comment at this stage on the potential magnitude of wage cost inflation into next year in terms of how we should think about that? The third part of that question is, do you think it's fair to assume now that pricing has peaked? First on the inflation side, I think we have two developments. The one development is, call it the general inflation, and you all see that it is a burden already for 2022, and it will be further burden for 2023. I also said already in the Q2, this inflationary cost increase has to be compensated by pricing. I think we showed in the Q3 that it's possible, and we continue and plan for that for the full year in 2023 as well. On the raw material, it's slightly different. You're seeing that the raw material come to a top even slightly, depending on the material, even going down now. Keep in mind that we have the time delay until cost increases hit our P&L. I explained it in the past, depending on the material and contract, it's between six and 18 months. Despite the fact that raw material is going down in some areas, we still see an increase on our P&L when it comes to raw material. That's what I see at the moment. On the wage increases, well, in Germany, we are currently in discussions. The unions have asked, or asked is probably the wrong word. They want to force us to 8% increase. Some negotiation in other industry are finalized, and the number between 6% and 6.5%. I would say something in that ballpark is a topic we have to consider for 2023, and we are doing that. As I said earlier, that's part of our pricing strategy as well. Talking about pricing, on the one hand, we have optimized our pricing not only because of raw material and inflation, but also the way we address customer, how we do the customer mix. You also might remember that we made a conscious decision to reallocate chips from one region to the other because of pricing power and margin strength. That will continue. There's no change on that. If raw material goes away and would see a long-term significant drop, that will be for sure a pricing discussion. For an example, in the U.S., we acted on that, but at the same time we were also able to increase the sustainable price increase. It's more a change of, call it, the headline, but the pricing level itself is the same. From today's perspective, we believe we have a good and solid pricing level, and we want to maintain that in the course of 2023. Understood. Thank you. My final question is on the Mercedes-Benz Trucks. If you could perhaps just remind us on what the cumulative amount of fixed cost savings realized there to date is relative to your plan and what we should expect going into 2023? Yeah. Well, if you look on the fixed cost, it's a little bit similar, like I said already in Q2. When I talk about fixed cost these days, basically in Mercedes-Benz we have three layer of cost. We have one layer, what we call the sustainable underlying fixed cost development, and there we work on our measures to bring the cost down. It's a challenging undertaking to be very open, but that's one of the main levers we have to improve for the long-term sustainable high profitability. Then we have a second layer, which I call the post spin-off costs. Well, we were aware of when we did the spin-off that some of the problems we cannot solve within 12 months, and the IT system landscape is one of that. What we are doing at the moment is basically going through the systems one by one and separately from the Mercedes. That's a cost increase for 2023, and that will be a burden in 2022, and it will be also a burden for 2023. The last one is when we set our cost targets initially, we were in a no or low inflationary environment. That has changed totally in the course of the year 2022. This portion of the cost has to be and is at the moment passed through to pricing. If we now look into 2023, as I said, post spin-off will continue in 2023. Inflation from today's perspective will also continue. On the cost side, we have to work on our structural measures. The announcement in Brazil is one of a big lever to bring costs in, down in the Mercedes-Benz segment. That's the way you could think about it. Great. Thank you very much. The next question is coming from Daniela Costa at Goldman Sachs. Hi. Good morning. Hopefully you can hear me. I only have two things left. One was just a bit further on the points on aftermarket in Mercedes-Benz, which we mentioned has one of the reasons also for the strong margins. Can you tell us, like, where are we in percentage of sales in aftermarket versus where we were like a year ago, for example? I believe there were some actions like increasing your service points and other things. You talked at IPO. Just a little bit more color in exactly what is it. Is it just the market has had a lot of demand on aftermarket, or you think there's like some more structural to it and how much you would quantify the structural improvement within this margin now? The second one is just regarding the model for sale of EVs. I think some of your competitors have started to be a bit more vocal about things like pay per use, given the high upfront cost of the trucks. I wonder what your thoughts are on how the sales process for EVs is different to maybe ICEs and how that what implications does it have for your cost structure going forward or sort of FinCo, et cetera. Thank you. Yeah, thanks. Thanks, Daniela, for your questions. I start with the second one on the EV side. From my perspective, I think we have to differentiate between the quality ramp-up phase of EVs and then the sustainable high volume, which we see probably in the second half of this decade. The same is true for fuel cell as well, just as a side remark. What we see at the beginning, there's uncertainty on the customer side, and for that, there's a higher interest for lease contract instead of buying or financing a truck. Or in some cases, we even handed over trucks. We did it, for example, in the U.S., where we kept it on our balance sheet and the customer can use it. We do not even sell that, which is important also to understand. When you look on sales numbers, you see in the United States, we have more trucks in customer hands than we have in the sales. In short, I believe at the beginning there is more interest in taking more risks from our side to ramp up the EV. The mid and long term, I believe we will have similar business models as we have today. There's one discussion, but too early to judge, I would say. Because charging becomes more important and access to charging stations might be more important. That's a discussion we have to have, but not finalized. Does it make sense to offer a full package which not only includes the truck but also access to charging? It could, in theory, also include energy. It's an ongoing discussion, and that's what you're referring to with the competitors as well, not finally decided. The second one on the service side. Well, as I said earlier, if you look on the service development in Mercedes-Benz, I think, year-over-year we are really pleased with the development. The problem is, therefore I'm a little bit hesitant to give out the numbers right now, in relation to sales, because we saw a significant increase in sales. Even if we have a strong increase in aftermarket, but a stronger increase on the new trucks, given the market and the price increase, the relative number would go slightly down. But it's really important to understand that the absolute profit on the aftermarket was really a significant uplift compared to 2021. The reason for that is, one is we are working on our service contract strategy. I think that was one of the topics we mentioned earlier at the Capital Markets Day. We increased already our penetration. Not only penetration, but also the content, what's technically covered in the service contract. That's one lever. The other lever is, own retail. Own retail strategy in Germany, and also in Europe, and we'll hear more about that in the fourth quarter. That's the second lever. Then the third one also, to be very honest here, the fact that customers are not able to fulfill the full demand on new trucks means their trucks they are up and running are older and getting older and older and need more repair and maintenance. That's also a lever for the good development, but we don't see that as the major one. It's one thing which contributed to the positive development. Got it. Thanks. The next question is coming from Klas Bergelind at Citi. Thank you. Hi, Jochen. Klas at Citi. The first one I have is on Mercedes-Benz. Sorry to come back to this, but it seems like non-volume FX was the key driver. I wanted to ask you about mix and FX outside of the market. Did we see a boost this quarter from you prioritizing heavy duty versus medium duty on the semi side? I know you have some larger share of medium duty versus some of your peers, so the product mix can be more marked sometimes. The reason for asking this, Jochen, is on the industrial performance on slide 25. It's still negative around EUR 200 million, not too different versus the second quarter. I was just wondering if product mix also was a contributor within the volume price mix component. I'll start there. Okay. Yeah, Klas, thanks for your question. Well, product mix. Well, if you're restricted on chips, obviously you allocate it to the areas where you get the most bang for the buck, as us Americans like to say. That's part of the story, that first of all, we want to make sure that we can fulfill the heavy duty demand. There are two other elements I want to mention. We have quite a different structure within Europe when it comes to margins. What we also implemented in the course of 2021 already and now see the impact in 2022, that we also allocate not only between heavy duty and medium duty, but also between the markets. Obviously, we're delivering, in relative terms, more trucks to the markets where we have higher margins. We include in this consideration also the margins we are doing on the financial services. That's one thing. The other one in, which is also mix, is that we have a very close eye also on customer structure. Well, it's a difference on big fleets versus, call it owner-operator business or smaller fleets when it comes to margin. Also here we optimize our mix in the year 2022, and we'll continue with that in 2023. I would say these topics are sustainable uplift potential for margins. Yeah. No, that's very clear. Just to follow up on the EUR 198 million industrial performance, though. You said that you're more than compensating for cost inflation. Are you saying you're more than compensating on raw mats, but within the industrial performance you have other cost inflation like logistics, et cetera, that is sort of explaining the negative delta? Yeah. For Mercedes-Benz it would be the raw material which we cover. Still a negative industrial performance of around EUR 200 million Mercedes-Benz. Yep. My second one is on the surcharges in North America impacting P&L positively today. Are these now list price level for orders you take now for next year delivery? I'm trying to understand the risk to pricing should we see a softer market next year. Inventory levels at the retail level pretty low, but this was obviously North America, it can be a volatile market. A comment on pricing on your orders, particularly North America, would be helpful. Yeah, sure. Well, I would start again, coming from customer demand. We had recently a big event where basically all the big fleets of the United States were invited. We do it once a year, and it's a good opportunity for my colleagues in North America to have a direct conversation with the customers. What's the general feedback? I shared earlier they are saying all demand is higher than in 2022, and they were well aware of that supply chain is the big issue also for 2023. But they also understand, or they also made it very clear that the trucks are getting older and older. Even if they pay a higher price, it's a benefit for them because they save mainly on repair and maintenance if the trucks are too old. That's what they are telling us. Pricing is not the biggest issue. It's still the biggest issue is supply. From that angle, we believe we can maintain the pricing level. I mentioned earlier, we reduced the surcharge on raw material in the U.S. already, but added a modular price escalator, which basically means at the end we have the same price level. As long as demand remains strong, and that's what we see at the moment, we also believe pricing will remain strong in the course of 2023. Okay. Very quick final one on energy and supplier compensation. It feels like you're still comfortable around the midpoint of the 7%-9% industrial margin for the year. It implies that industrial margin will go slightly backwards into year-end, I think. Is that because you think energy inflation compensating for supplier inflation will impact you later into the fourth quarter? Yeah. As I said, we have a time delay when it comes to raw material input price increases, so we expect some cost increases here in the Q4. When it comes to supplier compensation, that's a good point. We watch very carefully, not only obviously pricing discussion, but also how the financial situation of some of our, call it small and mid-sized supplier looks like. At the moment, it seems to be very stable, but we have a very close eye on that because the longer we have these problems with high inflation, with high energy costs, some of the smaller ones can get into trouble. That's one thing. Energy, you're right. It comes with a time delay. The energy suppliers, they are also hedged and they have a time delay before they pass through the prices towards us, and we are hedged as well. That's another driver for the fourth quarter development. Thank you. The next question is coming from José Asumendi at JP Morgan. Hi, Jochen Götz. José Asumendi. Three items please. The first one on the European market. We have a very strong order backlog into next year. I know you don't want to give guidance for 2023. That's completely fine. Have you got visibility all the way until June, July next year? This will basically imply, you know, on a flat market assumption next year for heavy duty, the market basically contracting severely in the second half. Is this roughly your understanding? Second, I look at your share price. It's just not giving you the benefit of all the cost cutting, all the benefit, all the work you're doing on Mercedes-Benz Trucks in 2022. You have, you know, you have told us through the year a lot of actions you're taking, right? Like cutting some of the product lines, including the sale of aftermarket, including pricing. Can you just give us a quick summary of what is yet to come? I look at this 4% margin improvement that you used to have, 50% personal and 50% non-personnel actions. How much of this 4% is still coming in 2023? Can you just give us some hints there? Is it three-quarters or 50% of that still yet to come? Finally, North America. As you roll out electric trucks, what are you doing to localize battery assembly, battery production, raw materials, et cetera, et cetera, to be able to comply with incentives in the coming years? Thank you. Okay, José, thanks for your questions. Well, from a European market, as I said, we don't give full guidance at that point of time. What I can say that's similar to the U.S., that the discussions with the customer lead to another strong market. You're right, with the order backlog and the reach of the order backlog, we have already visibility until the Q3 next year. That's always good to have that. Also important that we baked into this order backlog additional pricing for Europe as well. That's good. You also know that in our industry, if recession really would kick in and you look at basically the same indicators we are looking at, it could change any moment. Therefore, we are a little bit hesitant to predict at that point of time how the market could look like. At the moment, it looks good, and I can only confirm no move-outs, no cancellations, not in Europe, not in North America, but it can change any day. Customers are not saying that at the moment, but I wanna be really clear and transparent here. That's something we watch very carefully. At today's perspective, it seems to be very stable. On the Mercedes-Benz side, we were having. As I said, a lot of things already have happened. On the aftermarket, there's still a way to go. On the cost side, there's still a way to go. From a margin perspective, if you look on the margins we have now in Q3, we were nearly on the level where we should be. We will continue on these measures, but at that point of time, I would not give any specific numbers for 2023. Finally on North America, battery production or call it the whole e-drivetrain is one of the major discussions internally at the moment. What we are basically doing is. We are looking on all components which are relevant for the e-drivetrain. Starts obviously with the cells, with the modules, with the battery pack, the battery itself, battery management system, but also E-motors, inverters, E-axle and cables, everything we need. We are looking at each and every of these components and think about can we differentiate in technology, which means safety, longevity, or can we differentiate in cost? Depending on the outcome of that, we decide if we go for an in-house solution or we go for a buy solution. It's rather clear that battery is a key element of discussion at the moment. We are evaluating at the moment different options we have, but it's too early to announce everything on that. Stay tuned. I can assure you it's a very intense discussion we have these days about the right battery strategy. Looking forward. Thank you. Thanks. The next question is coming from Jonathan Day at HSBC. Hi. Good morning. I was wondering if you could just, perhaps elaborate a little bit more on your comments about the supply chain being broken, in the U.S. Also along those lines as well, perhaps talk a little bit more about how you see the sort of pent-up demand situation, how long you see that pent-up demand situation lasting for. Now, I know it's probably a function of the overall sort of market development and supply chain as well, but just wondering if you could perhaps elaborate on that. Then finally, whether you could give a little bit of an update on how things are going on the hydrogen fuel cell side. Thank you. Yep. Okay. Thanks, thanks for your questions. Well, on the supply chain, what I mean with broken is, well, if you look at a complex product like a truck, you have all the normal times always some parts which are restricted or missing. So that's normal business. Well, first with COVID, a lot of investments went down, also on the supplier side. Then we had the semiconductor issue. And then all of a sudden, the market picked up significantly and have a super strong demand. So the not taken investments a couple of years back, now some of the suppliers, especially all the mid and smaller ones, are not able to ramp up as fast as we need to. And that's what I meant with broken supply chain. It's not that you are facing one or two items. It's basically like pouring water out of a wall. There's one topic you can put your finger in, and the next one as well, but you only have 10 fingers. At one point of time, water is pouring all over the place. That's what's happening. I think we managed that so far really okay-ish. We have to be clear, it's not that just the chips is the problem. It's really much broader meanwhile. It's electric parts, it's tires, and sometimes it's nuts and bolts. And that's something which will continue as long as we see the super strong demand. Which brings me then to your pent-up demand. Well, 2021, 2020 with COVID, a lot of big customers in the U.S. have not ordered for good reasons. In 2021, strong demands were not fulfilled because of what I just said of the supply chain. The same happens in 2022. From today's perspective, there's a high likelihood that it happens also in 2023. If you think about how old the average age of the fleet is, meanwhile, if you're not able in three years in a row to fully fulfill the demand of a customer, that shows how big the problem on the pent-up demand is. That's the number one discussion in the complaints we get from customers. They are saying, "Because you are not able to deliver, I have much higher operational costs." Well, I can't pass it through. That's the good news. But on the long term, I want to be an as efficient fleet running as possible. There's really huge pent-up demand. I said it earlier, I would say meanwhile, we have basically half a year of pent-up demand in the United States. Okay. On the hydrogen, not too much to report on the quarter. Good thing is we are moving forward with our planned location here in Germany to build up the mass production for the fuel cell. That's a big step in the right direction. Pleased here. We also start to build up the first prototypes on fuel cell trucks as well. I would say nothing special to mention except everything is working according to plan at that point of time. Great. Thank you very much. This has been the last question in the queue. Thanks a lot, ladies and gentlemen, for being with us, today. Thanks a lot, Jochen, for answering, the questions. Now, as always, IR remains at your disposal to answer any further questions you might have. We are looking forward to staying in contact with you and seeing you soon. Have a great day and stay healthy. Thank you and goodbye.