Welcome to the Dürr conference call. Dr. Jochen Weyrauch, CEO, and Dietmar Heinrich, CFO of Dürr AG, will present the Dürr Group figures for the second quarter of 2023, followed by a Q&A session. I will now hand over to Andreas Schaller, Head of Investor Relations of Dürr AG. Yeah, thank you very much, Alan, ladies and gentlemen, good afternoon, good morning to those of you in the US. Welcome everybody to our half year and second quarter earnings conference call. With me on the call, just as just heard today, are our CEO, Jochen Weyrauch, and our CFO, Dietmar Heinrich. They will present the results for the second quarter and the first half of 2023, as well as the outlook, and will be happy to answer your questions afterwards. As always, our earnings presentation is available 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 it's my pleasure to hand over to our CEO. Jochen, please go ahead. Thank you, Andreas, for the short introduction. A very warm welcome also from my side to all participants on this call. As usual, I will start with the review of our performance in Q2. Thereafter, I will quickly recap the acquisition of BBS Automation, followed by some news about sustainability. I will briefly comment on the performance of our divisions before Dietmar will go into more details regarding the financials. At the end, we will have a look at the guidance for 2023 before we enter our Q&A session. The highlights of Q2 are on slide four. On group level, demand continues to look solid. There are remarkable differences between the automotive and the woodworking business. Overall, we saw strong sales and margin improvement in Q2. After the record first quarter, the order intake remained above EUR 1.1 billion in Q2. This was mainly driven by continued strong demand for automotive and e-mobility production equipment. On the other hand, order intake for HOMAG stabilized at a low level. Sales revenues grew by 9% year-on-year and 10% quarter-over-quarter to more than EUR 1.1 billion. The book-to-bill ratio for the quarter came in slightly above 1.0, and for the first half year, we are at 1.2. As a result, the order backlog remained high at EUR 4.4 billion. The composition of the backlog, however, shifting more towards automotive and environmental. The backlog at HOMAG continues to decline from the record level of last year. The EBIT margin before extraordinary effects rose to 5.6%. All divisions improved sequentially. Main drivers were the execution of projects at a more advanced execution stage and with higher margins, the removal of supply chain bottlenecks, and our continued focus on efficiency improvements. Free cash flow developed similar to last year. We expect solid cash generation in the coming quarters. Based on the developments of the 2Q, we confirm our outlook for 2023. On slide five, we see the key financial indicators for the 1H of 2023. Order intake was almost on the record level of last year. Sales revenues grew by 9% as more projects entered more advanced execution phases. EBIT before extraordinary effects increased by 23%. The margin improved from 4.3%- 4.9%. Net income rose by 38% accordingly. Finally, free cash flow came in at -EUR 6 million, which is not far from last year's level. We expect solid cash generation in the second half of the year and remain on track to reach the guidance. Let's look at the order intake on slide six. Automotive demand continued to be strong, and we recorded a triple-digit million order for highly sustainable e-mobility production equipment from a customer in Asia. In addition, we recorded some follow-on orders for production equipment for batteries. With respect to margins, we can clearly see a positive development, especially for services. On slide seven, we see the geographical distribution of order intake. Orders from China declined from the very high levels we saw in the past years. At the same time, other regions have been picking up or remained at their high levels, like, for example, the Americas. Our global footprint is a clear advantage for capturing demand. Now, let's turn to our recent M&A activity. On June 12th, we announced the acquisition of BBS Automation. After HOMAG in 2014, this is one of the most relevant acquisitions that we have done so far, and I would like to quickly recap why this is the case on slide nine. Together with Teamtechnik and Hekuma, which were acquired in 2021, we now create a truly global automation player. All businesses together are expected to generate sales of about EUR 500 million in 2023 on a pro forma level. As such, we are reaching our target size for the automation business already with the closing of this transaction, which is expected at the end of Q3 or the beginning of Q4. With the acquisition of BBS Automation, we do not only broaden our product portfolio in the high growth sectors, e-mobility, medtech, and consumer goods, but we also add a highly efficient engineering and production footprint in Asia, Europe, and North America. All in all, this acquisition is clearly in line with our growth and profitability ambitions. On slide 10, we can see the complementary footprint of BBS, with locations in North America, Asia, and Europe. This clearly improves our market reach and brings us closer to our customers, and provides us access to efficient engineering resources worldwide. Slide 11 highlights the market growth potential over the next years and the most important drivers: increasing labor shortages and the need for near or onshoring to develop to developed nations. New assembly lines for EVs, including self-driving, safety, and comfort features, and the growing and aging world population, with increasing demand for high-grade medical care. All in all, we believe that the automation market will remain very attractive for years to come. To sum it up on slide 12, the acquisition of BBS Automation is a strategic driver of the transformation of the Dürr Group towards a broad-based capital goods player. It is highly synergetic with Teamtechnik and Hekuma, creates a leading automation platform for assembly and testing, provides access to high growth markets, and contributes positively to our growth and profitability targets. Let's continue with a quick update on sustainability. One of the drivers of our order intake is demand from automotive customers that want to reduce their carbon footprint, or even become carbon neutral with their paint shops. We've talked about our role as enabler of nearly carbon neutral society before. Today, I would like to give a brief update on the progress with the reduction of our own CO2 emissions. On Slide 14, we can see that we reduced our CO2 emissions by 51% in 2022, compared to the base year of 2019. Main drivers were the switch to green energy purchases, the buildup of own photovoltaic systems, and the modernization of heating. There is more to come. In 2023, we target to reach a reduction of more than 60% compared to 2019, by completely switching to green electricity. At the same time, we continue to invest into photovoltaic and increase our capacity to 6 MW peak. From then on, one of the key drivers will be the transition to emission-free vehicles in our company fleet. The car policy was already changed accordingly in 2022. All the measures we have implemented and the high level in reporting transparency are also reflected in ESG ratings. On Slide 15, we can see an overview of a number of important ESG ratings and how we, as a company, have been rated over the past two years. The improvement is clearly visible. Going forward, we will especially focus on ISS ESG and Sustainalytics, as we believe that not all our efforts are reflected there yet. Our ambition, clearly, is to be among the best-rated companies in our industry for all key ESG ratings. On Slide 16, we would like to refer you to our recent sustainability report, 2022. It was published on June 20th and includes all the details about our actions and performance in the area of sustainability. Now, let's have a look at the divisional development. We start with Paint and Final Assembly Systems on Slide 18. We continue to see high demand for our paint shops and received another large order from an EV startup in Asia. In addition, we reached a really groundbreaking agreement for long-term cooperation with Mercedes to establish carbon neutral paint shops. The cooperation agreement is a real milestone, as it underscores two things: our role as a key enabler for decarbonization of production, and the long-term orientation of our customers, who are looking for a stable partnership with Dürr when it comes to manage sustainable transformation. The first project will be the sustainable conversion of the large paint shop in Sindelfingen, Germany, starting next year. Sales revenues are picking up as expected, as the project volume and execution increases. In addition, we have seen solid service growth with strong margins. Both factors drove up margins in Q2. All in all, we are on a very good track based on strong demand and improving order backlog margins. Let's turn to Application Technology on Slide 19. Similar picture here. Order intake continues to be strong and was also driven by the sustainable EV project in Asia. Revenues grew at a comparable pace like at PFS. Main growth drivers were projects in Europe and China. EBIT margin before extraordinary effects improved quarter-on-quarter and was well above last year's level that was impacted by the lockdowns in China. We are on track for further profitable growth, and we'll focus on increasing service sales. Next is Clean Technology Systems on Slide 20. This division strongly improved compared to last year. Demand continued to be high, resulting in a 15% growth in incoming orders. A key driver were orders in North America for environmental technology. We also won two smaller follow-on projects in the area of battery production technology in Europe. Germany and U.S. remain the main contributors to revenue growth in the first half. Service sales was growing in line with overall sales. Margins improved significantly year-on-year. Cost inflation was successfully compensated by price increases. Demand in North America has picked up considerably, and service margins went up. Overall, we're very pleased with the development at the division CTS and see potential for further profitable growth. On Slide 21, we can see the summary of developments at the Measuring and Process Systems division. Order intake was close to the high level of the prior year. Demand was driven by North America and Asia. Sales revenues and EBIT margin strongly recovered as supply chain bottlenecks eased and utilization improved. The service share was above 30%, and the margin is very solid. Within MPS, the filling appliance business is running very well. We supply equipment that fills liquids into heat pumps during the production process. Demand for heat pumps is currently very high, demand and margins of this business are very good. All in all, MPS is on a clear recovery path with the normalization of the supply chain and solid demand. Last but not least, let's take a look at HOMAG on Slide 22. During our Q1 conference call, I mentioned the trade fair LIGNA in Hanover. I was there to get an impression of the interest and the mood of the customers. I was very impressed by the exhibition stand of HOMAG, WEINMANN, and our Danish subsidiary, System TM and Kallesoe. Customers were very interested to learn about the innovations that HOMAG, as the market leader, was presenting. I'm sure the innovations shown will additionally drive CapEx spending when the macro picture will become more favorable again. In our view, the underlying demand is not too bad, driven by the need for more automation and the lack of skilled workforce. However, orders are still muted as customers delay investment decisions in light of the subdued demand for furniture and houses due to inflation and high interest rates. We are confident that the market will pick up again, but the timing and speed is still unclear. Our order intake in the second quarter reflected the situation I just described and stabilized on a lower level. Sales revenues reached a level close to the prior year, driven by the still very high backlog. The EBIT margin before extraordinary effects improved quarter on quarter. The service share and margin remained muted as production volumes at our customers are at low levels. In order to strengthen our resilience in this slow demand environment, we are implementing strict cost-saving measures and are ready to use available flexibilities, such as overtime accounts, to balance potential lower utilization. Overall, we consider the demand weakness as temporary. We will continue to focus on margin improvements and resilience of the business while keeping the long-term growth potential in mind. Now, let's move on to the service business on Slide 23. Service sales grew sequentially, but a bit slower than the overall sales level. As such, the service share declined slightly to 27.3%. The good news is that the service margin continued to increase. Our clear focus for the rest of the year is to increase service sales as a driver for further margin development. Now, Dietmar, I hand over to you for the financials. Yeah. Thank you, Jochen, welcome. Welcome to everybody, also from my side. I start that with the next slide, where you can see the overview. You can see after the slow first quarter, that actually we saw a strong positive momentum for sales and margins in the second quarter. As such, we are moving into the right direction to reach our goals for 2023. Let's have a closer look at the financial details on the next slide. On Slide 26, we can see the revenue development over the last six quarters. Sales in the second quarter improved both sequentially and year-on-year. We actually expect this trend to continue in the second half of the year. Main driver is the growing automotive business, with more projects entering advanced execution phases. Regarding the geographical contribution, we can see that the Americas gained share, which is not surprising, as the order intake has improved a lot during last year. China, on the contrary, gave away a bit of share. The overall distribution reflects solid geographical diversification and balance. Let's move to EBIT on slide 27. We can clearly see a strong improvement in the second quarter compared to the first quarter, and especially compared with the second quarter of 2022, when we had a dip in EBIT due to the lockdowns in China. Gross profit was the main driver of the margin improvement. Important factors to mention in this context are the improved supply chain, the high service margin, and the realization of better project margins. The overhead costs grew about in line with sales. We actually expect this positive development to continue in the second half of the year. On slide 28, we can see the free cash flow development. It looks actually quite similar to last year: strong first quarter and a decline in the second quarter. Main reasons behind this development are timing effects. In Q2, the bonus is paid, and this year we had a change in other tax-related liabilities. Compared with the first half of last year, we recorded, actually a higher EBIT, but also more CapEx and tax payments. Seasonally, the second half of the year is when we generate most of the cash flow. As such, actually, we are confident that we are on track to reach our guidance of EUR 50 million-EUR 100 million free cash flow for the whole year 2023. The net working capital development can be seen on slide 29. Net working capital remained relatively stable despite the 9% growth in sales. Looking at the most important drivers, I would like to highlight that inventories declined from the higher levels at the end of Q1. As such, we believe that the inventory peak is now behind us. Total contract liabilities also declined from the high level at the end of the first quarter, which reflects the acceleration of project execution. The days working capital stayed at a low level of 34 days, and we continue to manage net working capital very carefully and focus on the reduction of inventories. On slide 30, we can see that the net debt at the end of the second quarter of this year was just about the same level compared with the end of Q2 last year. The increase in net debt quarter-on-quarter is mainly due to the dividend payment in May and the free cash flow development as outlined. Net debt includes EUR 95 million of leasing liabilities, and leverage stands at 0.3. Our balance sheet is strong and has enough capacity for the acquisition of BBS Automation that Jochen actually explained in detail before. On page 31, you can see that our preparations for the acquisition of BBS Automation are already visible as well. Available funds now include a bridge loan of EUR 500 million that is currently not utilized and is maturing in 2025. We have a very comfortable liquidity headroom to grow our business. We assume that we will partly use our liquidity to finance the acquisition of BBS Automation. The rest will be covered by the bridge loan, we target to refinance this portion in early 2024 by more long-term and attractive instrument. Yeah, with these explanations to the financial side, I would like to hand back to Jochen for the outlook. Thank you, Dietmar. Slide 33, we can see the expected growth rate of battery electric vehicle production volumes over the next years. More and more new models are coming to the market, technologies are getting better, and the prices are coming down. This should attract additional buyers and continue to spur demand. Alongside the increase in battery electric vehicle production volumes, established car manufacturers are spending more and more money in order to modernize and decarbonize their production. This is another important driver of demand for our products. Let's look on our guidance for 2023 on slide 34. We confirm our targets for 23, with the adjustments made for the net financial status when we announced the acquisition of BBS Automation. With respect to the order intake, we see the chance to reach the upper end of the guidance. For the other items, we would like to see the further development in the third quarter before giving indications regarding the potential outcome within the expected target ranges. On slide 35, we can see the breakdown of the guidance by divisions. There is no change to these targets at this stage. We see that some divisions are making better progress than others, but also here, we would like to see the further development in Q3. Let me also remind you of our midterm strategy for profitable growth on slide 36. We target to grow revenues with a compound annual growth rate of 5%-6% and reach more than EUR 6 billion by 2030. The acquisition of BBS Automation is an important milestone on this path, as it accelerates growth in automation, which is an attractive market regarding both the market and the margin potential, and supports our targets of 8% EBIT margin before extraordinary effects, and return on capital employed of 25%. Let's summarize on slide 38. Looking at the first half year, order intake and backlog are on high levels. Sales revenues growth was solid in Q2, and we are on track to reach the full year guidance. We saw a strong increase of the EBIT margin in Q2, and expect further improvements in the second half of the year. All in all, we've made progress towards our 2023 targets and confirm our guidance. Thank you very much for your attention. We're happy to answer any questions you might have. Thank you. If you'd like to ask a question, please press star one on your telephone keypad. To withdraw your question, please press star two. We'll pause for just a moment to allow everyone an opportunity to signal for questions. We'll take our first question from Nicolai Kempf, from Deutsche Bank. Your line is open. Please go ahead. Yes, good afternoon, gentlemen. It's Nicolai Kempf speaking from Deutsche Bank. I have two questions. The first one is on the full year guidance and especially your profitability. I mean, you have highlighted that the first half profitability is below the full year level, and you expect that this margin will improve in Q3 and Q4. Can you just have a bit more color, will this already see another improvement in Q3 or is it very Q4 heavy? Can you just kind of tell us a bit what are the key drivers behind this? Okay. That was the first question, or was it the two questions together, Nicolai? That was just the first question. I can also take my second. Can we first answer the first one, or do you want to mention your second right away? I can also ask the second one as well. My second one. Okay. Would be on the order of Mercedes-Benz. I think it's a great order and great achievement. I mean, you have mentioned the midterm target margin, about 8%. Can we assume that this project is in line with these targets? Okay, good questions. On the first one, on the full year guidance. I mean, it's not untypical or pretty standard in our case, that our business is a bit back-end loaded, and we will see the same this year. Of course, last year was a little bit special with COVID lockdowns in Q2, et cetera. Picture was even a bit stronger, loaded backwards towards the end of the year. We will see a similar picture. Volume will pick up, and that drives profitability. This really makes us confident based on the fact that our second quarter was pretty much already at close to the guidance pocket, if you will, and the second, the third and fourth quarter will become better. This is what makes us confident to be within the guidance. To precise this more, you know, where within this guidance is still a bit early as there's so much momentum in different directions. We will be closing the BBS deal end of Q3, beginning of Q4. So the picture in a few months will be a bit clearer, but again, we confirm to come up within the guidance range for EBIT. On the Mercedes-Benz order, absolutely, and thanks for mentioning it, as I was personally involved big time for more than a year, I must say. This, to me, first of all, I can answer your question. Yes, it is in line with the 8% target, as the customer really values a different approach here. It is not the typical, you know, open bid order. Here, we're really working together in a development and strategic partnership to build sustainable paint shop for the customer in, from a different angle, as done before. This is why this is so important for us. Besides the significant order value that we will see at the end of the day, this is really a different approach of realizing optimal projects together. As the customer has understood that in the end, he can save more money with a strategic cooperation that gives him the optimal solution, rather than going the, you know, say, the typical industry approach of classic bidding process. That's it. Thank you. Thank you, Nicolai. We will take our next question from Michał Majeski from PTE Alliance Posta. Your line is open. Please go ahead. Good afternoon. My question follows topic of Mercedes-Benz. Is about this long-term cooperation on carbon neutral paint shops. The question is, which party provides more know-how to this, to this JV? If it's Mercedes-Benz, do you see risk that the, the company might be unwilling to share it with, with other OEMs? On the other hand, do you see the risk that the, the other OEMs, might be, might now give more orders to, to your competitors, or, or maybe the technology is so unique that they will be forced to, to, to cooperate with, with you? Yeah. Thanks, Michael, for the question. A couple of comments on it. First of all, the know-how that I would never make us more relevant than one of our customers, I must say. This strategic partnership really lives from the experience of the customer in operation of facilities. We are building facilities, and we are commissioning facilities, but our customers, of course, have a lot of experience in running the facilities. This experience combined provides the best solution in the end. This is where this partnership lives from. Of course, we always treat confident information very careful with customers. There might be some new ideas and inventions coming up from that partnership, which we will deal with in exactly that way. However, we are using similar technologies already in other projects. As announced, the project that we booked in June in Asia will also be a completely CO2 neutral paint shop. There is a high demand from various customers in that respect, and we will continue to supply to customers. I don't see really a risk that other customers would take this very important strategic partnership in a way that they naturally would try to walk away from us. However, I'm in the automotive business now for a number of decades. Automotive customers always create competition, so one way or another. We believe that we have a lot to show. As I mentioned, in a, in a few calls before and, and, and constantly, for us, sustainability, on the one hand, of course, is to make our contribution, to the climate targets. On the other hand, we've really taken it, on early on as also a strong driver for our business. This is why we're developing sustainable technologies, and, the recent past confirms that we're on the right path. All in all, should we expect the share of Mercedes-Benz in your PFS business should grow? Oh, definitely. Okay. Okay, thank you. Mm-hmm. We will take our next question from Christian Glowa from Hauck & Aufhäuser Investment Banking. Your line is open. Please go ahead. Yeah. Hi there. Good afternoon. I've two questions left, please. My first one also would be on the Mercedes-Benz Cooperation. Is it possible for you, please, to quantify that cooperation in terms of order intake or sales over the next five years? That would be my first question. My second one is, you mentioned that you are going to implement further cost streamlining measures at HOMAG. Can you specify, please, these measurements and give us an idea about the targeted annual cost savings here? That will be it. Thank you. Thank you, Christian, for the question. On Mercedes-Benz, to be perfectly precise, we have announced a strategic partnership and physical orders to follow. We are extremely confident that we will have the first order beginning of the year for Sindelfingen, and then there is at least two more paint shops in discussion. In a conservative way, altogether could be at least a high EUR triple-digit million number. This on Mercedes-Benz. On the cost measures, HOMAG, actually, we have support As a group, we are supporting the cost measures also in the group for all the divisions and the headquarters. We have launched a program to save on spending, and I would expect this to be at least in the higher EUR single digit million range for the year. Okay. Clear. Thank you. Mm-hmm. As a reminder, ladies and gentlemen, please press star one to ask for questions. We'll take our next question from Philippe Lorrain, from Société Générale. Your line is open. Please go ahead. Yes, good afternoon, gentlemen. A couple of questions actually from my side. Just a follow-up to Christian's question on the effect from the cooperation with Mercedes-Benz. When you mentioned, in total, the high triple digit million number, I understand that's for three combined orders. Is it true to consider as well that these are not automatically like completely new orders, but you would have had a chance anyway to get them from the customer? Thank you, Philippe, welcome back, by the way. The Mercedes-Benz order is, huh, it's somewhere between, or the projects we're talking about, somewhere between greenfield and brownfield. The first one would be pretty much a greenfield in a brownfield. This one, at least, could have been done by any other supplier, too, who would be capable. Because I understand your, your remark in a way that in, in traditional brownfields, as there's already existing equipment, for example, from us, that typically the original supplier has a much better position to get the brownfield job because he has all the drawings, all the knowledge, and et cetera, et cetera. This is not the case in this case, because this is basically a greenfield set up in an existing site. The reason why we've been avoiding this has not really been influenced by the fact that the old paint shop, which in the end will be torn down, has been supplied by by Dürr. Mm-hmm. Okay, fair, fair, fair point. Now I've got, like, 1 question or like, basically like, a couple of questions related to BBS Automation. Yeah. Would you have a high-level update on your midterm outlook regarding sales and, and perhaps the margin targets, including BBS Automation? The related question to that is, are there, at this stage, any impediments to getting the deal done, or is it like, just like a walk in the park kind of process right now? On the second part of the question first, we're well in line with the closing conditions. At this point, we don't see any obstacle, and actually, you know, main part of the closing activities is antitrust approvals, and also here, all the lights are green at the moment. The combined outlook, we have not yet shown too much about it, but what we said earlier was that BBS, on a standalone basis, The target actually for 2026 as a perspective, is to be, to come from the EUR 300 million pro forma for the year to grow the business to about EUR 400 million-EUR 450 million, with an EBITDA range of, say, 13%-15%. Yes. I think that actually, like, from your slide back, like, at the time of the acquisition. Yeah. I was just wondering, if I add, like, BBS and take into account that you are guiding, I think, for growth businesses to contribute EUR 1.3 billion-EUR 1.5 billion sales by 2030. Part of the, that range of EUR 1.3 billion-EUR 1.5 billion was, basically, counting for M&A as well. Yeah. I, I guess that, that range dynamically probably moves up by, let's say, like at least EUR 200 million, EUR 300 million? Yeah, that's a, that's a good approach, Philip. I mean, if you look at the automation business in an isolated way for a second before putting all the numbers together, as I mentioned, and as we reported, we wanted EUR 500 million for the automation business, which we already reached today. If you assume. Mm-hmm. The growth target of, say, you know, if you follow the market of about 10%, you can extrapolate it. Let's be prudent and say there would be EUR 700+ million, at least in 2030, technically more. That adds the number you were just referring. On the other hand, obviously, we have the two other businesses. We have the, what we call the Construction Elements business, which is the wooden houses, where we still believe that the potential is there, that we can achieve the volume. However, we are going through a little bit of a challenge period, as I mentioned, interest rates, construction cost, et cetera. Also on the battery side, where we said, I think the number was EUR 300 million-EUR 500 million there. We are well underway as well. I hope that at some point, we would be in a position to lift the overall number, but that would be too early right now. Okay, perfect. Understood. Thank you very much. Thank you. Once again, ladies and gentlemen, please press star one to ask for question. We'll pause for just a moment to allow everyone an opportunity to signal for questions. We will take our next question from Elisabeth Weisenhorn from Portikus Investment. Your line is open. Please go ahead. Yes, hello. Could you please also elaborate a little bit more on HOMAG and the wood business? How many backlog, how much backlog do you still have? What are margins on any business coming in? You, as I remember, you were planning a big expansion there. Yeah, how, how, how is, I mean, the EUR 9 million saving, it's nice, but it's not really so big, huh? How do you tackle these expansion plans? Yeah, that's about it. Thank you, Elizabeth. The backlog of HOMAG is still above EUR 900 million, so historically, still good. Looking at, you know, the last two years, obviously, and with the, the sales now picking up, it's, it's shrinking, and that's why we're taking measures. You know, the cost-saving measures are one issue. On the other hand, we're using flexible time accounts, et cetera. There's a couple more measures that help us to overcome a temporary slowdown on the order base. What I did not perfectly get, I'm just looking at Dietmar. He might have understood better, Yeah, on the expansion part. Yeah. I think, Elizabeth, you're referring to the CapEx program at HOMAG that we launched, actually. We had a focus now during this year and last year on production efficiency improvement, some expansion in the Construction Elements Solutions. We almost completed the logistics center that is building the base for improvement in the production and shop floor. The focus is clear on efficiency and productivity improvements in that regard. Yes, we also did some streamlining then to balance this with the current order intake development. Okay. The utilization rate now is how? Still very high than. Yeah. More than EUR 400 million in sales per quarter. It's a little bit. The overall picture is, as I said, then in certain areas, the shop load is already showing some decline with the lower order intake. As Jochen outlined, if you take the more than EUR 900 million order impact, you take the guidance of order intake, then calculate the remainder of the second half of the year, you will still realize that we are actually expecting, towards the end of the year, still to have a significant order backlog level that is giving us, yeah, let's say, at least, a proper moving into the next year. Okay. The next thing I was also asking is a margin of new business in this woodworking area. You're talking about the the margin of the new equipment for HOMAG? Yeah. I mean, the business you're taking in, yeah. So. Yeah. That we, that. Yeah. It's not, that deal is not really running again the problem, that in, softer periods, they're taking in business with low margin, and you're not getting out of the, of this, of this, problem. Yeah. What you're referring to, Elizabeth, is, typically this happens more, or traditionally happened more on the automotive side, that we were taking. Mm-hmm. large orders at low margins. That's not been so much an issue, at HOMAG, and we were just looking at to compare the complete year of 2022 against 2023 now. For new equipment, we are within 1%, of, of a range, so there is no real reduction in the order intake margins for new equipment. It's more an issue of volume now. Thank you. Okay. We will take our next question from Peter Rothenaicher from Baader Bank AG. Your line is open. Please go ahead. Yes, hello. Some further questions on HOMAG. You had in the second quarter, obviously, the problem that the service business was coming down. Looking into the overall environment, I feel that this will not really improve. What is your view on here? With that, with lower service business and then here some negative margin impact, do you still think that your target of 10% margin at HOMAG and even the 9% for this year is still realistic? Yeah. Peter, thanks for the question. First of all, on the service business. True, the demand has gone down and to some extent, and it's currently, it's very difficult to say when it will-- I mean, going down means it's gone down just a little bit. It just did not go up the way we were expecting it to be. Nevertheless, there is some areas where, you know, that have been hit a bit harder, like flooring, where customers are not running so much of spare parts, et cetera, because production is down. All in all, if you look at the overall service rates, I think we're only down EUR a few million compared to the first half of last year. Nevertheless, we were planning for more. We were building up, to some extent, also, capacities. Nevertheless, on the other hand, in some cases, we're still not fulfilling all the service requests from customers as the personnel that commissions the new machines, and we're still on record, or we're on record levels of shipments of new machines as we speak. Sometimes we also still suffer a little bit from a lack of capacity of personnel to be shifted into the service business. All in all, only slightly below last year in terms of service overall, but below our expectations. We have to see how the coming months will work. On the targets, at this point, very difficult to comment on the 10%. We will revise this when we build our budget. The 9% for the year, we will see how the year turns out, I must say. Staying at HOMAG, how do you see opportunities in China? China has been difficult over the recent, 12 months. Do you already see here now a recovery? Are you still optimistic here for long-term opportunities? Yeah, can I comment on this? Mm-hmm. Yeah. Thanks, Peter. We had, you know, this year looks very weak because compared to last year, where we had a big order, we have not booked that yet. We are currently negotiating at least one larger order and are quite optimistic at this point. The picture might change, hopefully, relatively soon. The overall situation in China, I would say is average. I'm, maybe because I'm, I'm a salesperson by nature, I tend to be more on the optimistic side. Nevertheless, I believe that there will, you know, the Chinese government will continue to implement measures that will, maybe not immediately, but in the midterm, bring back China on a growth path. I've just been to China. There is still some insecurity with people, you know, as an experience from the COVID lockdowns last year. Nevertheless, this is why I said there is still, you know, people feel a bit insecure, and this is why, you know, not so much investments are made. I believe that not as quickly as we were all hoping after the end of the pandemic, but slowly and gradually, China will pick up pace again, we have clear plans to further localize in China. We absolutely know that we have to move more often footprint into China to support our competitiveness in the mid and long term. Talking for HOMAG. Okay, thank you. One question to Mr. Heinrich regarding the financial result, which was surprisingly good for me in the second quarter, almost balanced. Is there a special reason for this? How do you see it to develop in the upcoming quarter? I know there will be then the effect of the BBS financing, but what can we expect then for the upcoming quarters and looking also into 2024? Yeah, first of all, when looking to the current results, I'm sure you're aware that we did this promissory note two times loan in April. We actually have the cash on hand, and we reinvested it, and we could got a good contribution from this one in regard to the interest rate development, and in regard. That's on one side for the financial result, as we said, in regard to the takeover of the BBS company, everything is organized, we will of course, see then a higher debt. As outlined, we expect that we will partially at least use already available funds then, or cash, then for this. Nevertheless, you will see finally an increase in the financial costs then being derived from this. Overall, we managed the free cash flow as well. As you heard, we reiterated the cash flow guidance also for this year, so we also continue then to work on the debt level then when looking forward. Mm. as a, a rough guideline for 2024, would it fair to, to assume financial result of, of around -EUR 22 million? Could this be a fair number? I would say for the full year, around 25, minus 25, something like that could be. I see. Right. Yeah. Okay. Thank you. We have no further questions, and I would like to turn the call over back to speakers for additional or closing remarks. Yeah, thank you very much, Alan, thank you very much to all of you for attending our Q2 and half year call today. In case you have further questions, please do not hesitate to contact the investor relations team. Yeah, we will be on conferences in September. Until then, in case you still have a summer holiday in front of you, we hope that you can relax and enjoy the time, and if there are any further questions, just let us know. Okay. Thank you for your participation. Thank you. Thank you for joining today's call. You may now disconnect.