Good day, and welcome to today's revision of 2024 EBIT target conference call. This meeting is being recorded. At this time, I would like to hand the call over to Andreas Schaller, Head of Investor Relations. Please go ahead, sir. Yeah, thank you very much, Sergey. Ladies and gentlemen, good afternoon, and good morning to those of you in the U.S. Welcome, everybody, to today's conference call on the revision of our 2024 EBIT margin target. With me on the call today are our CEO, Jochen Weyrauch, and our CFO, Dietmar Heinrich. They will go through the most important messages, and we'll be happy to answer your questions afterwards. We prepared a short presentation that we published this morning on our investor relations website, and we assume that you have it in front of you. Please be aware of our disclaimer regarding forward-looking statements on slide two. Now, without further ado, I hand over to our CEO. Jochen, please go ahead. Thank you, Andreas, for the short introduction, and a warm welcome also from my side to all participants of this call. Let's kick off and have a look on chart three of the presentation. We informed the market yesterday evening with an ad hoc release and an associated press release that we will not reach our midterm target of 8% margin, EBIT margin before extraordinary effects in 2024. We came to this conclusion during a budget meeting when we reviewed the most recent estimates of the divisions, especially HOMAG, for 2024. We now expect the margin range for the Dürr Group of between 4.5% and 6.0% in 2024, and the sales growth of between 5% and 10% year-on-year for 2024, which includes the effect of the full-year consolidation of BBS Automation, as well as continued growth in other divisions. The 8% as general margin target for the group remains valid, but the achievement will depend on the timing of the HOMAG recovery and is expected earliest in 2026. The decision to postpone our 8% target has not been an easy one. We have defined it as a midterm target in early 2020 and made good progress since then. If we leave aside the high time of the pandemic, we have sticked to the target despite the challenging environment, as we do not like to change targets so easily and rather increase the efforts to get there. Now, we discovered that the headwind caused by the slowdown in the woodworking machinery market is simply too strong to be compensated by our other activities, even though they are running quite well, some even better than expected. We expect that due to the weak order intake in 2023, the sales revenues at HOMAG will decline by around 15% in 2024. The low demand environment also negatively affects the gross margin development and will lead to underutilization in 2024. The HOMAG management plans to take measures to stabilize the EBIT margin before extraordinary effects. These measures include flexible working time instruments, but also capacity adjustments. The target is to reduce costs, improve the resilience of the business, and to make sure that the EBIT margin does not decline below 2%, lowest in 2024. It is important for the management to do this in a fair manner, and that is why we will first discuss these measures with the employee representatives in the coming weeks before we get back to the public with further details. As such, we kindly ask for your understanding that we will not comment on any numbers regarding cost savings or restructuring charges during this call in order not to disturb our internal discussions. In any case, we do not expect restructuring charges to have an impact on our 2023 earnings, as they will likely be booked in 2024 after all the details will have been sorted out. At this stage, I would like to make a comment on how the new margin target range for 2024 should be interpreted. It is our understanding that the 8% target for 2024 was regarded as ambitious. The new target range focuses more on downside protection and includes some buffer on the low end. You might also ask how we arrived at the 2% minimum target for HOMAG in 2024. In our analysis, we also looked at the past performance of HOMAG in a downturn situation. 2020, in the early phase of Corona, we had a 13% sales revenue decline, and the EBIT margin before extraordinary effects declined to 2.4%. This was supported at that time by extensive support programs from the German government, including extended short-time work arrangements. Instruments like short-time work are also available today, but not at a comparable, comprehensive extent. On the other hand, we have made considerable progress in improving the performance at HOMAG since then. Despite the current situation, we remain very confident regarding the long-term prospect of the HOMAG business. The trends of increasing automation in furniture production and the industrialization of sustainable construction using wood remain intact. We are also confident that HOMAG can and will achieve an EBIT margin before extraordinary effects of 10% in a normal market environment. We still see significant potential by growing the service business and improving production efficiency with our investments in modern plants and production logistics. We will use the market downturn to further improve the efficiency and resilience to come back even stronger when the market returns. We would also like to make clear today that the weak order intake at HOMAG and the target change do not have an impact on the Group's performance in 2023. We consequently confirm our Group guidance for 2023, and have seen a strong improvement of the EBIT margin before extraordinary effects in Q3, to about 7% at sales revenues of around EUR 1.15 billion. We will present all the details with the Q3 numbers on ninth of November during our regular call. On slide four, we review the margin targets for the Group. As already mentioned, the 8% midterm target for the Group was set in early 2020. We later detailed targets on division level with 6% or more for the more construction-type systems, business of paint and final assembly systems and clean technology systems, and 10% or more for the machinery business of application technology, measuring and process systems, and HOMAG. We included the guidance for 2023 in the chart showing the margin development over the past years, and we can clearly see that all the divisions are on a good track to reach their individual targets in 2024, with the exception of HOMAG, as just discussed. With our diversified portfolio, we can partly compensate downturns in single divisions with a solid performance in others. This allows us also to invest countercyclical and strengthen businesses in the downturn to emerge stronger thereafter. On slide five, we see the development of HOMAG's order intake over the past quarters. We can clearly see the peak level in 2021 and the first half of 2022, with an average more than EUR 450 million order intake per quarter. This was driven by the high demand for furniture and kitchens during the Corona pandemic, when a lot of people stayed at home. In addition, some of HOMAG customers received subsidies to invest into equipment during this time. After the pandemic, the order intake declined by more than 30% to an average level of below EUR 320 million. We had originally assumed that this cyclical downturn would at least partially be compensated by a higher demand for construction and services, and that we would see a pickup in demand already in the second half of 2023. This is not the case. Demand from furniture producers declined stronger than expected, and the high interest rate environment slowed down investments in construction. The service business is still holding up well, but we have not seen the growth that we were looking for. Our estimate at this moment is that demand has stabilized on the current low levels, and that it will take until end of 2024 until we see a recovery in market demand. On the positive note, the margin development of the group in 2023 is not affected, and we made good progress in Q3. On slide six, we can see that the positive margin trend has continued, and that according to preliminary numbers, we reached an EBIT margin before extraordinary effects of about 7% and sales revenues of about EUR 1.15 billion. The results of the value before volume strategy are more and more visible in the automotive business, and the divisions, MPS and CTS, have recovered well from the high inflation and supply chain constraints. HOMAG still shows a strong margin as we are still working from high order backlog levels with a good utilization, and our proactive cost-saving measures are effective. We will present the final figures and the full picture on November 9. Based on the positive earnings development in Q3, we confirm the guidance for the group for 2023. We believe that we will see a strong finish in Q4, and will take care that we manage the slower market demand at HOMAG in a fair but consequent manner to further develop the strength and resilience of the business. Thank you very much for your attention. Now we're happy to answer any questions you might have. Thank you, sir. Ladies and gentlemen, if you wish, if you wish to ask a question at this time, please signal by pressing star one on your telephone keypad. Please make sure the mute function on your phone is switched off to allow your signal to reach our equipment. Again, please press star one to ask a question. We'll pause for just a moment to assemble the queue. Our first question comes from Sven Weier from UBS. Please go ahead. Your line is open. Yeah, good afternoon, and thanks for taking my questions. The first one is just trying to understand a little bit what has happened in the last couple of weeks because I guess we're not surprised that there is a negative impact on next year, given that the order intake at HOMAG has been weak for a while. I guess we've all been caught by surprise how deep the margin impact is next year, then, for HOMAG. It's down to 2% because I also had the impression in previous meetings that you were relatively comfortable, despite the order intake weakness, that you wouldn't have such a margin decline at HOMAG. Can you just help me understand a little bit more why there is such a major operating leverage that you still see for next year? Thanks, Sven, for the question. Yeah, what's happened in the last couple of weeks? First of all, we were, you know, there was a couple of trade shows. We were waiting for impact coming from those shows, and, well, you looked at Q3 now, where, you know, we will discuss in more detail during the conference call. This together with our budget planning process, where we sat together in our DMB meeting and figured out that the numbers were where they were, with respect to the fact that we cannot achieve the 8% target. The 2% you're mentioning is the number that we have chosen as the low end, as we're still analyzing measures to be implemented, to ideally, of course, end up above 2%. At the moment, this is the number also comparing to the past, the downturns that we have set as a minimum in the assumption, as the very low end. I was mentioning, we are now coming up with all the uncertainties that we have. I mean, we typically don't give a guidance for the following year, already in October, but we do this to create at least some comfort based on the fact that we had to take out our 8% target. The 2% to be seen as the very, very low end as we are planning and taking measures looking forward. Yeah. Thank you for that. The follow-up question I had is just in terms of you having enough control of the HOMAG business, given the shareholder structure you have for the company. Do you feel you would need to have more control over the business to intervene earlier when something like this comes up? Do you feel there's enough control from a dual level? Yeah. Thanks also for that question. We do, as you know, we have a domination agreement. We are fully aligned with the management of HOMAG and actually, the way the governance in our business, and I think we were describing this also at an earlier stage, we run this business in a, what we call DMB structure, Dual Management Board structure. There, the CEO of HOMAG and the CFO HOMAG are participants in the meeting. Internally, we do not really differentiate in how we look at structures between Dürr Systems, Schenck, and HOMAG. I don't see this. The challenge at HOMAG is, of course, that we are running and, you know, I said we are confirming the guidance for the year. We're coming from a very, very high level, and we have to shift in almost no time to a different situation. This is, of course, a challenge. That has nothing to do with control or governance. This is just a very difficult task anyways. Maybe the final question I have is, I mean, is it still, for you, a long-term core business, or would you rule out that after the turnaround of HOMAG in the coming years, that this could actually become non-core? Yeah, I- Given that it's not the first time that something like this happens. Yes, at this stage, I would definitely rule this out because HOMAG is a core part of our business. HOMAG has been a significant contributor over the last two years to our bottom line, and it will do so in the future after we have come back. If you look at how the business is interwoven in many processes, meanwhile, look at I.T., look at our ERP backbones, look at purchasing, I can rule this out. Yes. Understood. Thank you very much, Jochen. Thank you. Thank you. We will now move to our next question from Philippe Lorrain from Societe Generale. Please go ahead. Your line is open. Yeah, good afternoon, gentlemen. Thanks for taking my question. I've got, like, two points. The first one is we had discussed some weak spots in service activities here and there during the second quarter call. How should we think about that now? Because you seem to indicate that service is doing all right, if not HOMAG. The second question is you mentioned in the ad hoc, but not in the press release, that the cyclical order decline has recently been accompanied by lower gross margins in new business. How should we exactly understand this statement? Thanks very much. Bonjour, Philippe. Thank you for your question on service. Service at this point, talking about HOMAG, for the group, service is growing. But for HOMAG, we were expecting service to grow this year. I would say you can look at it critical by saying it has not grown, but at least in a very difficult market environment, management has achieved service to run at least flat. So it's contributing well to bottom line, and we hope that service will grow then again next year to support. But service at HOMAG at this point is flat, which again, if we look at it, can already be seen as an achievement because some of our clients are pretty much running their production at very low levels. On the cyclical gross margin and the order intake in the gross margin, we will have to see. I mean, we have seen a little bit of a drop. On the other hand, we have risen prices significantly in the last 18 months. We will have to watch the next couple of months. I'm not so much concerned about the gross margin and equipment per se. It's really that we're clearly watching what is the volume in the market and how quickly will the market come back. Okay, so if I may just come back, like, on the two points. First, on the lower gross margin in new business. It's more like an assessment that you make on the fact that the pipeline at HOMAG in new business is actually a bit weaker. You expect that first, because of lower volumes, this will have an impact on the contribution margin first, because you've got some costs in there. Also second point is that probably then the price situation could be becoming, like, a little bit more adverse to you, but it's not something that you have, like, completely observed yet in your bookings. That's true. Absolutely true. Okay. Perfect. If I might come back as well on the service business, because you say that you would expect that to grow next year at HOMAG. I understand that this would, like, provide you some support on the margin development, and therefore, the 2% floor margin guidance that you're providing there looks actually, like, pretty conservative. Because if I'm not mistaken, in 2020, the contribution of service, because of the different lockdowns and so on, was not that great as well. Fair point, and let me comment simply. I would hate to see 2%. That's a good statement as well. Thank you very much. Thanks. See you later. Thank you. We'll now move to our next question from Nicolai Kempf, from Deutsche Bank. Yeah, good afternoon, gentlemen, Nicolai Kempf from Deutsche Bank. First one is, I know it's early, but any indication on free cash flow for next year? I mean, given that free cash flow was positive in 2020, and if it was just some similarities, is it fair to assume that free cash flow should also be positive next year? Yeah, Nikolai, basically, as you mentioned, we had a very good or a good cash flow development during the last years. We also strive to achieve this, this year. From an overall perspective, yes, our steering next year is targeting to again generate positive free cash flow. Okay, great. My second one, the top-line growth, 5%-10%, of course, including BBS. How much of that would you say is organic, or what kind of organic growth you're aiming for next year? Yep. Jochen. Okay. Go ahead. Okay, I will do. You can roughly say it's half, half. Okay, great. Maybe just final, quick one. You did say that you're expecting a recovery of the HOMAG or woodworking market by the end of next year. What's gonna be driving that? Why do you have confidence that the market will recover next year again? Yeah, of course, you know, we're watching different indicators. We're talking to clients, which is an interesting one right now. We know a number of projects that are postponed. Plus, of course, we're counting, especially if you look at the housing market, because also, and that's one element that, of course, hit us this year as well. The wooden houses trend, which we underline again, that this is intact. I mean, if you look forward at the demand in Western countries, but also beyond for living space, and it is very clear that for sustainability reasons and the reasons of when you increase the density of living in existing quarters, this only will be done by wooden construction and pre-manufactured wooden construction, that this will come back. You see already discussions obviously in Germany, but other markets as well, to support the increase of apartments and houses. That's altogether gives us the, you know, the conviction at this point that it is very likely end of next year. Actually, we hope that we will see some positive signs before, but at the moment, we are counting for Q4 2024 to see a real pickup. To be quite frank, there is uncertainty in it. Okay. Thank you. Thank you. As a reminder, to ask a question, please signal by pressing star one. We'll pause for just a moment to allow you to signal. It seems we have, oh, apologies. We have a question from Christoph Bliffert from BNP Paribas. Please go ahead. Good afternoon, and thanks for taking my question. I have two questions on HOMAG, please. It would be helpful if you could give us some indication for the minimum revenue level in HOMAG in order to reach your 10% EBIT margin target in 2026. If you could remind us on the revenue split in HOMAG, so furniture versus construction, this would be helpful as well. Thank you. Thanks, Christoph, for the question. On the minimum volume for 2026, we cannot comment at this point because this would assume a certain sales mix, which, you know, is difficult to impossible to say right now. Plus, have to keep in mind that just comparing volumes in this market environment is not easy, as internally, we are rather looking at production volumes rather than sales numbers because of the inflation that has taken place. If you compare, for example, the trough in 2020 or 2019 versus any trough now, it is very difficult to make assumptions on numbers in terms of euros. This would be very difficult to say right now. A revenue split between woodworking and between our solid wood business and our furniture business is roughly, on the total volume, our wooden houses business is roughly 10%. Okay. One follow-up, if I may. Is there a difference in profitability, furniture versus construction? The profitability in average of our solid wood business is slightly higher than the furniture business. Excellent. Thanks a lot. Thank you. We'll now take a follow-up question from Philippe Lorrain from Societe Generale. Please go ahead. Thanks for taking the follow-up. It's just to come back on the point that you were raising on price levels and why you can't really say how much revenue you need to do 10% touch of EBIT margin by 2026. It's just like if we compare, you know, the order intake run rate right now of slightly below EUR 320 million. I remember at some point in the past, we were mentioning a quarterly order run rate of EUR 300 million as being like a normalized level. We had some growth and so on. You raised the prices in between. If you look just at the absolute level, because I appreciate that speaking out the price effect since the crisis is perhaps a difficult exercise. Mm-hmm. How would you volume-wise compare, you know, the current level that we have versus what we had pre-2020, so pre-pandemic? Is it below? Is it exactly above, is it on par? If I understand, Philippe, your question right, you want to basically understand how much of an inflation effect we have in the volume? How much basically you have to deduct from the order intake now, if you wanted to compare numbers, right? Yes, you are understand exactly my question. Thanks. I would say if you assume roughly 10%, that should be around the figure 10, a little bit more, roughly 10%. Okay. That's a great insight. Thank you very much. Mm-hmm. Thank you. It seems there are currently no further questions in the queue. With this, I'd like to hand the call back over to Andreas Schaller for any additional closing remarks. Yeah. Thank you very much for joining the call on such a short notice. I hope we could give, provide some further insights, especially also on how the new guidance targets should be looked at. If you have any further questions, please don't hesitate to contact me or the Investor Relations team, and otherwise, we will talk again then on latest on November 9th, when we publish the Q3 earnings. Thank you very much for your participation, and have a good day. Thank you. This concludes today's conference call. Thank you for your participation. You may now disconnect.