Good day, and thank you for standing by. Welcome to the GEA Group AG Q3 2023 conference call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star one one on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star one one again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, Oliver Luckenbach, Head of IR. Please go ahead. Yeah, thank you very much, and good afternoon, ladies and gentlemen, and thank you for joining us today for our Q3 2023 earnings conference call. With me on the call are Stefan Klebert, our CEO, and Bernd Brinker, our new CFO. Stefan will begin today's call with the highlights of the Q3. Bernd will then cover the business and financial review, and afterwards, Stefan takes over again for the Outlook 2023. Afterwards, we open up the call for the Q&A session. Please be aware of the cautionary language that is included in our safe harbor statement, as in the material that we have distributed today. With that, I hand over to Stefan. Thank you very much, Oliver, and, good afternoon, everybody. It's my pleasure to welcome you to our conference call today, and also to introduce you to our new CFO, Bernd Brinker. Bernd has been appointed by the Supervisory Board with effect from October 16. He has taken over the responsibility for all the functions for Marcus. Bernd has over three decades of financial and capital market experience with global industrial groups, and was most recently, for a period of seven years, Group CFO at the publicly traded dormakaba Holding AG in Switzerland. I'm very happy that the Supervisory Board was keen in filling the position so fast. A decision for an interim solution is easier to make instead of waiting for the outcome of a month-long, full-fledged selection process. That is the reason why Bernd is initially appointed for one only year. I would like to thank our supervisory board that they were able to find a very good solution in a very short time and secure the services of Bernd after such short notice, after the very sad passing of Marcus. I'm convinced that Bernd, that with Bernd, GEA has gained an experienced CFO who will act in the best interest of the company. Dear Bernd, welcome on board once again, and all the best in your new role. Before starting with a review of our Q3 results, let me share some important news, which we have published yesterday evening. Yesterday, the executive board and the supervisory board have resolved that we will start another share buyback program in the amount of up to EUR 400 million until 2025. The first tranche of the program, worth EUR 150 million, starts tomorrow and will run over the next six months. All repurchased shares under this share buyback program will be canceled, and in addition, the current 8.2 million treasury shares, resulting from our previous EUR 300 million share buyback program, will also be canceled. So in total, we are talking about cancellation of worth about EUR 700 million. This news demonstrate our conviction in GEA's operating strength, its further development, and our Mission 26 targets. Furthermore, the share buyback program does not limit our growth opportunities. It has no limiting impact on our investments, on R&D spending, or potential acquisitions. Like the previous share buyback program, there is an ESG feature linked to the buyback. The first tranche will be featured with a donation for a GEA-specific project with Viva con Agua in Tanzania, which supplies clean drinking water to schools. I'm coming now to our Q3 results. In an environment of raising interest rates, geopolitical uncertainties, and adverse foreign exchange movements, GEA was able to demonstrate its resilience once again and delivered another quarter of solid organic sales growth and strong EBITDA margin expansion. Order intake has been heavily hit by translational FX. Organically, there is only a slight decline of 1.7% year-over-year. Reported sales have basically been flat year-over-year, but up by 6.9% organically, leading to a further improvement of our EBITDA before restructuring expenses by 4.2% to EUR 207 million. The respective EBITDA margin expanded further by 0.6 percentage points to 15.3%. Since Q1 2020, we have continuously increased our quarterly EBITDA margin year-over-year, and now in Q3 2023, it is the first time that we achieved a quarterly margin above 15% since Q4 2017. This is a fantastic achievement. And last but not least, we also increased our ROCE significantly by 3.3 percentage points to 33.9%. This is a level of capital efficiency GEA has never achieved before. With that, I hand over to Bernd. Thank you, Stefan. Good afternoon, ladies and gentlemen. As some of you may already know, I'm very familiar with GEA and its CEO due to my participation in the selection process for the CFO role back in 2018/2019, where I was one of the two finalists. Since then, GEA was already and always on my radar screen in terms of strategic development and performance. I'm impressed what the management team, under the leadership of Stefan and Marcus and Johannes, have achieved since 2019. And now I'm here to support and drive this journey in order to achieve the Mission 26 objectives and beyond. I'm very much looking forward to closely working not only with my GEA colleagues, but also with the investors and analyst community. I will now provide you with an overview of our business and financial performance in the Q3. As Stefan just highlighted, we were able to continue with the strong margin expansion in the Q3, but the top line, here I'm talking about order intake and sales, was adversely impacted by translational FX. Order intake declined by 9.1% to EUR 1.25 billion, but was only slightly down by 1.7% when looking at it organically. Three large orders with a total value of EUR 138 million were received in this quarter, in comparison to five large orders totaling EUR 128 million in Q3 2022. Q3 2023 was another quarter of strong organic sales growth. Sales was up by 6.9% year over year on an organic basis, driven by strong service and solid new machine sales growth. EBITDA before restructuring margin reached 15.3%, a significant 0.6 percentage points increase, and was driven by an improved gross margin and stable operating costs. Return on capital employed improved further due to the increase in EBIT before restructuring expenses, overcompensating the higher capital employed. All divisions contributed to this positive development, except for Food and Healthcare Technologies. Due to the strong cash generation in the quarter, our net liquidity remained basically flat year-over-year at EUR 233 million, even though we had a EUR 56 million cash outflow on the second tranche of our share buyback program in Q4 2022. So all in all, another solid quarter. Looking a bit deeper into the group performance. Order intake was negatively impacted by a EUR 96 million translational FX effect, which explains most of the year-over-year decline. In organic terms, the order intake declined by 1.7% year-over-year. Organic order intake growth at the two divisions, Separation and Flow, and Heating and Refrigeration Technologies, could not fully compensate the decline in the other divisions. From a customer industry perspective, Beverage and Pharma have been strong, with double-digit growth rates, while all other industries reported a decline. Given the strong order backlog at the end of Q2, sales grew solidly by 6.9% in organic terms. Service sales grew organically by an outstanding 12.2% year-over-year, driven by healthy growth across all divisions. This is now the sixth consecutive quarter with double-digit organic service sales growth. But also new machine sales have been solid, growing organically by 4% year-over-year in the quarter. The divisional performance has been, however, a bit mixed here. While the new machine business at Farm Technologies, Separation & Flow Technologies, and Heating & Refrigeration Technologies has been growing nicely organically, the other two divisions, Liquid & Powder Technologies, and Food & Healthcare Technologies, reported a decline. The service sales share, because of the strong service sales growth, was 36.2%, 1.6 percentage points higher than last year. The strong organic sales growth, combined with an increase in the gross margin and stable operating expenses, resulted in an EBITDA before restructuring expenses of EUR 207 million, an EUR 8 million improvement versus Q3 2022. When looking at the corresponding EBITDA margin, we achieved a significant year-over-year improvement of 0.6 percentage points. Now, let me continue with the figures for the division, Separation & Flow Technologies, which had a very strong quarter in terms of organic top line growth and profitability. Order intake declined by 4.6% year-over-year due to an adverse translational FX impact of EUR 38 million. In organic terms, the order intake has been growing by 5.8% year-over-year. This increase was driven by our bread and butter business, so orders below EUR 5 million. No order above EUR 5 million has been received in this quarter. From a customer industry perspective, beverage and marine, and to a lesser extent, energy, have been the growth contributors. Organic sales grew considerably by 11.1% year-over-year, driven by strong performance in both the service and new machine business. The service sales share increased on a very high level, further by 0.5 percentage points to 46.2% in the quarter. EBITDA before restructuring expenses increased by 7 to 102 million euros, and the corresponding EBITDA margin improved on a high level, further by 0.8 percentage points to 26.0%. Higher sales and a higher service sales share resulted in a notable increase in profitability. Let's move on to Liquid and Powder Technologies. Order intake decreased organically by 5.8% year-over-year. While the customer industry's new food, pharma, and especially beverage, showed a positive development in this quarter, it was not enough to offset the decline in dairy processing, food, and chemical, where orders have been delayed. Liquid and Powder Technologies has won 2 large orders totaling EUR 122 million this quarter, versus 5 large orders of EUR 128 million euro in Q3 2022. Both large orders were received from the customer industry beverage. Order backlog is almost unchanged from Q1 2023, at a record level of EUR 1.6 billion. Sales increased organically by 4% year-over-year. While service sales grew organically by an outstanding 20.3% year-over-year, the organic new machine sales decreased slightly by 0.3%. As in the first half of 2023, the high order backlog has not yet been processed, as many larger orders have longer project schedules and are still in the engineering phase. In addition, a few projects are executed at a lower pace due to customer-specific reasons, like delays in civil work on the customer side. This explains the muted new machine sales generation in the first nine months and is expected to lead to an acceleration of sales growth in the coming quarters. Due to the strong service sales growth, the service sales share increased by 3.1 percentage points to 23.7% in the quarter. Liquid and Powder Technologies has done a pretty good job in growing their service business over the last years. While service has only accounted for 21% of sales in fiscal year 2021, it stands now close to 24%. EBITDA before restructuring expenses declined by EUR 3 million year-over-year to EUR 46 million, resulting in a corresponding EBITDA margin of 10.5%, down from 11% in Q3 2022. This was driven by lower gross profit, resulting from lower sales volume and a less favorable product mix, while operating costs have remained stable year-over-year. Continuing with Food and Healthcare Technologies. Order intake was down organically by 4% year-over-year. In terms of customer industries, we have seen strong growth in pharma, which was supported through the receipt of one large order of EUR 16 million. The food industry, however, reported a decline. Sales declined organically by 4.3% year-over-year on the back of a very strong prior year quarter, with 13.3% organic sales growth. The new machine business declined by 9.1% year-over-year, whereas the service business has been growing by 6.4%. As a result, the service sales share increased by 3.5 percentage points to 34.4% in the quarter. EBITDA before restructuring expenses decreased significantly by EUR 12 million year-over-year, and the respective margin dropped from 11.1% in Q3 2022 to now 6.8% in the Q3 2023. Gross profit declined year-over-year, mainly due to a lower margin in the new machine business, because of insufficient passthrough of cost inflation to customers in some projects. Operating costs have only increased slightly and are almost on prior year's level. As we are still executing these projects, we will most likely see an impact on profitability, although also in the Q4 due to POC accounting, however, to a lesser extent than in Q3. We have taken steps to address the ineffective pricing strategy and underperformance, and we are quite optimistic that we will bring the business back on track within the first half of 2024. Moving to Farm Technologies. This division, the division with the strongest organic sales growth and margin expansion in this quarter. As you might remember, in the last conference calls, it was stated that GEA might see a temporary phase of normalization in order intake growth after several quarters of very strong growth. At the same time, it was expressed that the company is not concerned about the impact of lower raw milk prices on the business. However, higher interest rates do lead to more expensive financing of equipment and might here and there have an adverse impact on the investment appetite of farmers. In this quarter, we have seen that the normalization of order intake continued with a slight organic decline of 1.3%. In reported terms, order intake has decreased by 14.3% year-over-year due to currency translation. Sales increased organically by an outstanding 21.9% year-over-year. This strong development was driven by an impressive organic new machine sales growth of 34.6% year-over-year, mainly driven by automated systems and a healthy service sales growth of 8.3% year-over-year. As a result of the very strong new machine business, the service sales ratio declined on a very high level by 5.1 percentage points to 42.7%. EBITDA increased strongly by EUR 7 million, and the according margin improved to 15.7% from 13.6% in Q3 2022. Gross profit has been significantly above prior year's level, driven by strong organic sales growth and better margins, which overcompensated the increase in operating costs. Finally, let's turn to Heating and Refrigeration Technologies. This division also delivered a very solid set of results. After a pause in Q2, the division continued its growth trajectory and achieved an organic order intake growth of 6.8% year-over-year. From a customer industry perspective, dairy processing and food were the main growth drivers. Good demand from customers for energy-efficient technologies continued, especially in heat pump solutions, including AddB etter solutions and district heating. The order backlog has further increased year-over-year and quarter-over-quarter to EUR 264 million. Organic sales increased strongly by 8.5% year-over-year and was driven by both the strong new machine and service sales growth. The service sales share increased by 1.4 percentage points to 37.1% because of the divestments. Adjusted for M&A, the service sales share remained stable. EBITDA rose by EUR 2 million to EUR 80 million, and the according margin improved from 11.5% in the Q3 2022 to now 13.1% this quarter. Gross profit was up year-over-year due to significantly better gross margin, which overcompensated the increase in operating costs. Closing the divisional chapter now with the overview on the EBITDA contribution. The first important message is that we have been able to increase our EBITDA before restructuring expenses by EUR 8 million, despite the significantly profit decline of Food and Healthcare Technologies and the weaker performance of Liquid and Powder Technologies in this quarter. This shows once again the resilience of our business model, due to our product diversification. And the second important message is that translational FX also has been a drag on our EBITDA. It has lowered our EBITDA by EUR 13 million in the quarter. Excluding this FX effect, as we have defined it in our full year guidance, our EBITDA would have improved by 21 million to EUR 220 million. Coming now to another important topic, which is net working capital. As you might remember, it was stated in the Q2 call that we are confident that the net working capital to sales ratio will come down over the next quarters and will be slightly below the guided corridor of 8%-10% by year-end. We made progress towards this target in the Q3. The net working capital to sales ratio improved from a year-over-year as well to on quarter perspective to now 8.3%. Net working capital in absolute terms has been nearly flat year-over-year at EUR 449 million. Higher advanced payments and lower trade receivables have almost fully offset the decline in trade payables and the increase in inventories. On a quarter-on-quarter perspective, the net working capital went down in absolute and relative terms from 8.5% of sales in Q2 2023 to 8.3% in Q3. The sequential net working capital reduction is driven by higher advanced payments as well as lower trade receivables and inventories. At 8.3% of sales, the net working capital ratio is within our guided corridor of 8%-10% of sales, and already closer to the target where we want to be at year-end. What really stood out in this quarter is the strong cash generation. 95% of our EBITDA before restructuring expenses has been converted into free cash flow before restructuring expenses in this quarter. But let's have a look on the details. Operating cash flow was EUR 236 million, which is significantly above prior year's quarterly figure of EUR 146 million. The increase is mainly explained by the change in net working capital. While Q3 2022 has seen a net working capital outflow of EUR 67 million, this quarter has generated an inflow of EUR 10 million. The step up in CapEx related outflow of EUR 7 million year over year to EUR 48 million, is absolutely in line with our full year 2023 guidance of around EUR 240 million. As a result, free cash flow is at EUR 187 million and substantially above prior year's quarterly number of EUR 103 million. Consequently, our free cash flow conversion ratio before restructuring, which is calculated over the last four quarters, has improved from 34% in Q2 to now 45%. It is still below our target corridor of 55%-65%, but clearly moving into the right direction. We are confident that free cash flow generation will continue to improve over the course of the Q4, but as we already stated in the previous analyst call, we do not expect to reach the lower end of our target corridor of 55%-65% at year-end. Net cash, including lease liabilities, increased from EUR 65 million at the end of the Q2 to EUR 233 million, driven by the net cash flow of EUR 168 million. With that, I hand back to Stefan for the outlook. Thank you, Bernd. Let's, let me now come to our outlook for the fiscal year 2023. Before coming to our well-known guidance slide, I would like to draw your attention to the performance of our guidance parameters in the first nine months. When looking at organic sales growth, EBITDA before restructuring expenses and ROCE, the latter two at constant currencies, we are well on track for our fiscal year 2023 guidance, which we have upgraded, just to remember you, at end of Q1. As a result of the strong development in the first nine months, we confirm our guidance, which we have, as I just said, upgraded in May. Organic sales is expected to grow organically by more than 8%, after 8.9% last year. For EBITDA, before restructuring expenses, we forecast to reach the upper part of the range of EUR 730 million-EUR 790 million, with a comparable margin of at least 14% and ROCE should exceed 32%. Please bear in mind that the guidance for EBITDA and for ROCE is based on constant exchange rates. With rising interest rates and growing geopolitical tensions, we are no longer in a booming environment. Nevertheless, we are still seeing many projects in our pipeline. Overall, we are confident that we can achieve a flattish organic order intake for the full year 2023, which confirms GEA resilience even in turbulent times. Let me close my presentation with this slide. In September, we have been awarded for the second time in a row with Manager Magazin Investors' Darling Award. As last year, we ranked first among the MDAX companies. This award is based on a comprehensive analysis of capital market communication, based on numerous criteria in the categories: reporting, investor relations, and capital market performance. The investors and analysts, thank you very much for voting for us. This is a motivation to keep on delivering on our promises, and this concludes our presentation. The next important date will be in March with our Q4 and full year 2023 figures. Now I hand back to Oliver for the Q&A session. Yeah, thank you very much, Stefan and Bernd, and, with that, over to you, operator. Please be so kind and start the Q&A. Thank you. As a reminder, to ask a question, you will need to press star one and one on your telephone and wait for your name to be announced. To withdraw your question, please press star one and one again. Please stand by while we compile the Q&A queue. Our first question comes from the line of Sven Weier from UBS. Please go ahead. Yeah, good afternoon. Thanks for taking my questions. The first one, Stefan, is 2024. I think you said in an interview today that you expect a decent 2024. I guess that includes also some sort of organic top line growth, even if it's probably quite a bit lower than this year. Now we can all do the math on the order intake, of course, right? And what you just said implies kind of flat numbers for Q4 sequentially, which is not enough to increase the organic. I was just wondering what you see in the pipeline. Do you see an acceleration of the order intake in the first half then, to achieve an organic top line growth? H ow do you see that rising next year on the top end? Thank you. Thank you, Sven, for this question. W e are living in a very volatile world, all the geopolitical issues, inflation, interest rate, it's, it's not so easy to predict. However, what I can clearly say, we see a very good pipeline. E verything we have, we can see in our CRM system looks, looks interesting and good. We see, of course, that, especially larger projects, customers have a tendency to postpone, to think twice, b ut there also might be upside potential once the situation, is maybe calming down a little bit in the environment, that we see more and more things, flipping in or again. It's not that we don't have a good picture for the future, it's more that we see that customers are thinking twice, that all the overall situation is postponing decisions. W e look with a certain optimism into 2024, a nd it's also right. E ven if we don't give the guidance for 2022, for 2024 today, it's clear that you can expect a further growth in sales next year. A lso we have, of course, also the intention to increase our profitability further. We are on track on our Mission 26 target, which where we promise to deliver more than 15% EBITDA, at least at the year 2026. We also promise to see organic growth between 4 and 6 percentage point per year. Now, two years in a row, we had a growth more than 8%, and that will not be the case next year, but it will still be a growth next year. That's very clear. Thank you, Stefan, for this. And I, I was just wanting to follow up, because on the large orders, I thought it was actually not so bad in Q3 sequentially, but it was also the base orders that were quite a bit softer. I s that more on the transactional business? What do you see there? Would you say there is a bit of a re-acceleration than in the first half on, on just on the base order side, which I know is also a lot driven by, of course, your service business. I thought that was also a bit, bit softer in, in Q3. Yeah. I mean, base orders might have a certain tendency to be maybe early cyclical, while larger orders might have a tendency to be more late cyclical. That is, that is maybe or mainly based by the decision-making processes. I mean, ou also know, Sven, that very often we see orders in the size of EUR 50 million, EUR 60 million, EUR 80 million, and we have many of them in our system and in our pipeline talking to customers, a nd of course, if some of these ideas come through and we get the orders, that will also make a difference and will boost the order intake. We, as I said, we are quite optimistic, but it's sometimes not so easy to predict, especially not if it is about a quarter, because a quarter is a very short period of time, and very seldom we can predict precisely when a customer is placing larger orders, because that is also following a lot of internal processes, approvals. Y ou also know that we only book the orders once we have got the down payment. It depends on the countries where it comes from. T here is... It's very difficult to, let's say, predict in which quarter is happening what, but what I simply can confirm again, we see a good future for GEA. As long as people need to eat and drink, we are in safe harbor, as long as we do not do any serious mistakes, which I don't see we do. Q uite optimistic view here. May I just lastly ask on the buyback? Because, I mean, this time you're going to cancel the shares, which I think is an important difference to the previous buyback, where I think you could use the treasury shares in M&A. S hould we take that as an additional sign that more bigger M&A is actually quite unlikely because you canceled the shares this time? Yeah. I mean, in the meantime, we also generated additional cash, and every week, every day, we are generating cash, and this will improve over the time, our firepower as well. T he share buyback is not at all that we say there is no opportunity for M&A. However, I mean, you feel that since years, we are very careful in what we do. We look really in detail to the companies. We also have to consider our multiple and the multiples of the potential targets. Do we have enough synergies to bridge that? W e still have sufficient significant firepower, minimum EUR 2 billion, which we could do without any capital increase activities. This is, I mean, gives us enough potential to do any M&A. Whenever we would have a decent target, we would be able to do that without losing investment grade, of course. It's very clear. Thank you, Stefan. Thank you, Sven. Thank you. We'll now move on to our next question. Our next question comes from the line of Klas Bergelind from Citi. Please go ahead. Yes. Hi. Hi, Stefan. I'm Bergelind, Klas at Citi. So a couple of questions from me. So, obviously, solid set of results. Orders looks solid in the key divisions, and we got a decent buyback. J ust on the guide for the year, you're leaving this unchanged. You're still guiding EBITDA towards upper end EUR 790 million, excluding FX, and say that FX is a negative EUR 25 million for the year. That's EUR 765 million all in. It would imply EUR 200 million of EBITDA, actually below in the Q4, and a margin of 13%-13.5%, and that's nearly 10% below consensus. W hen we look at it, the divisions, you're getting lower on LPT and FHT, but that's quite small. So my question is really on SFT, where the implied guide looks pretty weak. I know it's a lot of detail here, but it's important to understand if you left the guidance unchanged despite a strong Q3, indeed signaling a weaker Q4, or if you're leaving the guidance just as a conservative move on your behalf. I'll stop there. Thank you. Maybe I take that question. I mean, first of all, let me maybe explain in FHT, we also have a lot of POC contract, let's say, where we do POC. And that means that also we will see some of the things and issues kicking in in Q4 as well. W e could not book all provisions in Q3. This is simply because of the fact that also we do POC here for the larger projects in FHT. Well, what should I say with the guidance? I can tell you we are very optimistic that we will achieve our guidance. You know, that we have a certain policy that we rather like to underpromise and overdeliver. T hat's what I can say. We feel very good and very confident that we reach our guidance. Yeah. Yeah. No, I appreciate it, Stefan. It's just the, just the simple math backing out FX, it is quite a much weaker margin in the Q4. I guess, are you saying that you expect FHT to be the main sort of, you're conservative there, that being the main drag, rather than that you see other divisions sort of getting weaker quarter on quarter? I haven't. Maybe I don't know if I got your question right, because the sound quality is not so good here. I think as I mentioned, it's... I understood that you said, "Why don't we upgrade the guidance?" Because- Exactly. If we consider that FHT is on track again, then it would not be sufficient headroom in the guidance anymore. My argument was that FHT is also doing POC, and therefore, we also see some of these bad projects also kicking in in Q4, simply because of the fact we cannot build the provisions, and we need to digest it time by time with the POC sales. Therefore, all this together makes us confident that the guidance is still okay. Even if we know, and that, that's the chart I showed you. If you look at the nine-month numbers, it looks good. Yeah. Okay. No, and I apologize. We've got a lot of questions from investors today on, on the implied Q4, so that's why I, I asked the question. Sure. My second one is on the buyback. Obviously, Sven touched on it, but just if you could comment a little bit on, you know, the opportunities out there from an M&A point of view, you know, beyond the buyback, Stefan, you know, packaging, decanters. Whether you still see a healthy pipeline, or if there is anything that is sort of signaling that you're struggling to find targets, multiples are too high, et cetera. Which I would see the combination here of a buyback and bolt on M&A going forward. Thank you. Yeah, there's nothing, let's say, in the pipeline where we could expect that we do any significant or any meaningful M&A acquisition in due time. A s I said, I mean, of course, multiples are coming down, not only for GEA, also for other companies, and that appears to be a good opportunity to make M&A, b ut on the other hand, you know, a lot of very interesting companies, which would be interesting companies for us, are family-owned. They don't care so much about the multiples at the stock market right now. They are more long-term oriented. They have not a pressure to sell, a nd that is, at the end, that there are simply, in our industry segment, a very little number of significant targets at the market. That combined with our strategy that we always said, we can achieve Mission 26 without doing any acquisition. We don't need to do any stupid things. We are not under pressure to do any M&A, but we are very much open to do M&A at the moment we find the right target. But we are very, very selective, therefore, and what we also clearly considered when we sized the share buyback program, that it will not kill our ability to do significant M&A in the future as well. W e do both now. That's also something we perceived from you and a lot of your colleagues. "Why don't you do a share buyback?" was very often the question, and that also made us thinking, and we think it's a good capital allocation for the time being. It doesn't hinder us to do meaningful M&A in the future, but that all depends on having the right target and finding the right target, and that's in our industry segment, not so easy, and we are very selective. Yeah, I agree. That makes sense. One quick final one on the margin in FT. It's quite interesting to see that the service sales share is down by 5.5 percentage points, and despite you're improving the margin to this extent, there has been a remarkable improvement in the profitability of FT. Would you say that pricing is running ahead of cost here on this division, or is this an underlying improvement? Are you overearning, do you think, or is this an underlying improvement to the margin in PharmTech? Yeah, I mean, the improvement of margin in FT comes from various factors. First of all, I think last year was not the best year for FT. Yeah, we had also impacts from at least in the first quarter, you might remember, from the supply chain business, where we did not increase prices fast enough, though this is also something you have to take into consideration if you look at the growth of profitability. However, the team is doing a great job here. We have also extremely interesting growth that gives us a full workload in the production. That gives us over absorption in the production. Services is growing, digital solutions are growing, and that all together makes the profitability growing. That's also very, very good to see, especially for me, because you also might remember that when I started in 2018, a lot of questions were always: Why do you have Farm Technology? Why do you keep Farm Technology? To that time, Farm Technology was below 10% EBITDA, and now we are, we are really on absolute great numbers, and we showed that we really could create a lot of value here for the companies and for the shareholders. Thank you, Stefan. Thank you, Claus. Thank you. We'll now move on to our next question. Our next question comes from the line of Sebastian Kuenne from RBC. Please go ahead. Yeah. Hi, gentlemen. I have two questions. One relates to currency and one to the project pipeline. In currency, in SFT and FT, when I do the calculation for the order intake, it looks like there's a negative currency impact of 10% for SFT and 13% for FT, and I was wondering whether that relates to regions where you sell and you have a very strong headwind, or whether this includes readjustment of the existing order book for currency effects? That would be my first question. Thank you. Okay, clearly, Bernd here. Hi, nice to meet you, Sebastian. Hi, Bernd. Clearly, we talk only about currency translation impacts, which are a result of, let's say, the translation of the numbers into our Euro environment. T here is no adjustment in terms of order behavior. That means you have an FT, you have a 13% currency effect, and when I look at the currency developments- Yeah. The yuan is down 12% year-on-year, Japanese yen, 11, dollar, 7, yeah, in Q3 versus Q3 on average. What currency was it that hit FT so hard? What we have in not only in FT but also in FT, we have the Argentina's peso. Yeah. We have the- Got it. The Chinese renminbi, and we have also, I, I believe, the Turkish Lira. Ah. In addition, in all our business, we have the U.S. dollar. Okay, that would explain it. Good. And then regarding project pipeline, you mentioned earlier, or, Stefan, you mentioned earlier that the higher interest rates affected Pharm investments. Regarding larger projects, do you see delays in the tender processes or even renegotiations at this point, where customers say, "Okay, I need to go back to the drawing table?" Or do you even see renegotiations of existing orders, or does that not happen at the moment? Thank you. Please stand by while our speakers reconnect. Customers are, let's say, terminating orders which have been placed. That's also, I would say, different to other machine building companies, where that might happen from time to time. Renegotiation for existing projects, we also do not see because there's a contract. We even see sometimes an opportunity to increase place orders in terms of value, when customers are coming up with additional ideas or additional wishes, that we can also generate additional sales from that. Normally, there is rather a tendency that a placed order is increasing over the time than decreasing. T he delay simply comes from the fact that customers are thinking twice, if it is the right time to invest, if the economy is stable enough, I mean, you know, all these uncertainties, and that is causing some delays or a lot of delays in large projects. I t's not that projects are canceled or customers are saying, "Now, we've spent 1.5 years to plan a new brewery, but now we made a decision to don't do the brewery." It's simply that they normally postpone it then. Yeah. Yeah. Thank you, Stefan. There was a disconnect of the phone line here. Okay. On the—in the first part, you said there is severe delays of projects, but no cancellation. It's just a push out. Absolutely. Is that correct? Yeah. That's what It is absolutely unusual, or I do not know if it definitely did not happen for any significant order since I'm here in GEA, that any order was canceled. T hat's normally also not what customers are doing. If the order is placed, we can be extremely sure that the order is executed. It might be sometimes that they say: "Okay, we do it a little bit later, or please postpone it a little bit." Things like that, or our building, whenever it is associated with a new building, we are not yet ready with the building because we have a lay-off three months in the building, b ut there is no risk, let's say, that this plays any significant role that customers are starting to cancel orders. Definitely not. Understood. Understood. Thank you very much. You're welcome. Thank you. We'll now move on to our next question. Our next question comes from the line of Max Yates from Morgan Stanley. Please go ahead. Hi, thank you. I just wanted to come back to the food and healthcare tech margin, and particularly that comment where you talk about in the release, that cost increases were not passed on to customers appropriately. C ould you explain kind of exactly what is happening there? Because I think kind of the commentary for most of this year has been that you've put up prices and kind of appropriately offset the cost. T his is obviously a slightly new comment. It's something that was in your backlog. I guess, how do we get confidence, or what exactly happened? So why did it happen? Was it slow to put up prices? Was it something else? Was it tougher market conditions that customers pushed back? Secondly, so how do we get confidence that this is an issue that's isolated just to this division, or is this something that we will likely see kind of unfold as you deliver on your backlog in other divisions? J ust fleshing that out would be really helpful. Thank you. Yeah. Maybe let me answer the second part first. We definitely don't see it in any other division. Where we saw it was in FT last year, in hygiene business. This is what we also explained, and we changed it extremely quickly and extremely good. Te hat's the reason why you see this year much, much better margins. If you also look at the improvements of our margins, even in times where personnel costs are going up, and if you look at the gross margins we are reporting, you see that we are really very good in executing and passing over prices. However, in FHT, you also know that we changed the company management of the division about one year ago, and there have been some really significant mistakes in the adaptation. You know, we have quite a decentralized management guiding system, that we have a lot of entrepreneurs in the organization. T his is nothing you see centrally. That's also the reason why you can see the vast majority of the company understood it. I also mentioned last year, I think here in the call, that we started very early in from this price increase. I personally did calls with all the top managers and encouraged them to increase prices. L ike it always is a huge organization, you might have some black sheeps sometimes who don't do that, and this is exactly what happened here, and we are about to fix it. We need to digest a little bit more in the Q4, as I said, simply because of the fact that we do POC here. It will not harm our guidance or our overall profitability, because on the other hand, we have some outperformers. And next year, I'm very optimistic that we can get rid of that. Okay. Thank you. M y second question, I mean, obviously, you mentioned that we're in a kind of volatile world and volatile environment, which is absolutely fair. W hat I wanted to understand is, obviously, for next year, there are a range of outcomes in terms of the global economy, what happens in Europe. I just wanted to understand, at this stage of sort of sales growth, whether you grow a bit, whether you're flat, whether you're down a bit, I don't know, it's difficult to say. Are there any kind of immediate cost actions that you're taking across the business to prepare for what looks like at least a slower year of growth, versus what we've had in the last couple of years? Yeah, really. I mean, first of all, let me repeat what I already said. Also for 2024, you can expect that GEA is growing, and you can expect that GEA is improving the margin further. That's a very clear statement, even if we don't give concrete guidance today. Of course, we are also looking at our costs. We are also doing workshops at the moment already. Where can we take our costs? Where do we see based on the order index we do this year already some slowdown? Where do we have overcapacity? This is exactly what we are doing and where we are managing the costs very early and very proactively, so that this gives me really confident that we continue our good journey over next year in a more rough environment compared what we saw in the last two years. Thank you very much. Just very quick final one. Just in terms of the conversations that you're having with customers around price rises, obviously, there's a lot of moving parts. Some of the raw materials are coming down, wages are still going up. Are you seeing in any of your segments kind of customers, particularly, I don't know, things where demand is clearly slowing on orders like FT. Are you seeing customers now actually starting to kind of push back on price and in some cases demand lower prices? Or any comments on what you're seeing there would be helpful. Thank you. Yeah. I mean, it's always a discussion, negotiation about prices with customers. Of course, when inflation kicked in, every customer made a very clear understanding that prices need to go up significantly. That was also a good opportunity we used in the vast majority of our organization, and we did it very successfully. Of course, there is a discussion going on. Of course, we also say to our suppliers, what comes up needs to go down. But it always has something to do with the market position, with your market value, with the performance of the organization. W e also have a very clear message out. We do not buy any order intake by prices. We keep the prices up. We. And we have a significant market position, like, you know, so we will definitely not start to enter any price wars. We will also not participate in price wars, and we keep the prices where they are. That's very helpful. Thank you. Thank you. We'll now move on to our next question. Our next question comes from the line of Akash Gupta, JPMorgan. Please go ahead. Yes. Hi, good afternoon, everybody, and thanks for your time. The first one I have is on duration of your backlog. If I look at on absolute basis, your backlog is down 2% year-on-year, as some of which could be due to FX. But when we look at the phasing of this backlog and are more keen to understand, like the visibility that you have from Q3 backlog for 2024, and we compare that same point last year for 2023, can you talk about how does the duration of the backlog compares versus earlier period? Also on the back of like, you know, we have seen some slowdown in base orders, but the larger orders are still doing okay. I want to know how the duration of backlog has changed versus four quarters ago. That's question number one. I mean, you are right that the backlog is slightly below the previous year, b ut if backlog is like, you know, Akash, it's in our company, over the mix of the longer lasting projects and the medium and short lasting projects. I t also could be that a backlog which is 2% lower than the year before gives us a longer duration of workload simply because of the phasing of the projects which are in. T hat's difficult to answer the question, but as I said, we expect also for next year. You can imagine that we are already in the budgeting process, quite advanced, and that we see additional good growth also for next year. That should make you optimistic that the order backlog is a good starting point. I also need to mention that at the end of last year, the backlog was extremely high. It was also a very good one compared to the years before. Sorry, the line was not clear. Maybe I'll follow up with Oliver after the call. The second one I have is on LPT service growth. You had 20%, which was a very strong number and a bit of acceleration versus what we have seen in LPT as service growth earlier in the quarter. Maybe if you can talk about what driving this very high service growth in LPT. A re there any refurbishment projects, or this is simply like, what type of service it is when it comes to 20% growth in Q3? Very good question, Akash. Thanks for that. I mean, in LPT, it's also that we brought a new manager here for service, like you might remember. W hat is our main driver here are service contracts, yeah. This is, it's a different business, LPT, compared to SFT, and SFT is mainly based on spare parts, a nd LPT, the significant growth we see is mainly based now on service contracts and also on a very active approach of customers of the installed base we never contacted actively. Thank you. The final one I have is more of a housekeeping question. We saw that corporate cost in Q3 was quite favorable compared to last year. If I look at year to date, it's like EUR 7-8 million lower than last year. Any comment on where should we end up on full year corporate cost? Thank you. What we expect from full year is EUR 66 million. You're right, there were some lower cost for Q3. This is on one side, we saved some money compared to original expectations, and there were also some allocation into the businesses, which were different in the past. Thank you. Thank you. We'll now move on to our next question. Our next question comes from the line of Debashis Chand from Société Générale. Please go ahead. Hi, thanks for taking my questions. Sorry, the line is pretty bad after the disconnection, so apologies if there are duplication of questions. I just want to come back on pricing. So just, given the high interest rate environment and wage inflation still material headwind, I just want to know, like, how do you see your visibility to increase prices next year? P erhaps if you could highlight other levers you have at your disposal to improve margins, if there is less support from pricing next year. Yeah, of course. I mean, we also continue to increase prices next year. It is, of course, not any more possible in such a huge rate, like it was possible in the last year or the before last year when we started. I t's very clear, the costs which will increase in our house, is something we need to pass on to our customers. It's very clear, and normally there is also a clear acceptance for that. Y ou should not not worry about prices, because we have been also, despite some very few exceptions, quite successful in bringing prices up. Thank you. I have another follow-up on SFT margins. We already were flagged in the Q2 conference call, and the comment was like, you will be able to get the margins back on track by end of this year, b ut now it looks like it has been pushed to the first half of 2024. H as anything materially changed over the last three months when you have looked at these projects in the backlog, which maybe you may not have missed, seen in the Q2? No, but, Debashish, this is what I just said. The impact or the reason why we also will see some impact also in the Q4 is simply based by the fact that we have POC contracts here, where we can't, where we are not allowed to build sufficient provision, let's say, at the moment we recognize it. W e have to digest it while we are executing the project in the POC sales. But, this will not have a significant impact anymore in the first half year next year. Thanks a lot. Thank you. We'll now move on to our next question. Our next question comes from the line of Christoph Dolleschal from HSBC. Please go ahead. Hey, good afternoon, gentlemen. Three questions, if I may. The first one is on LPT. You need to explain to me a bit more why the margin is down. You're saying it is due to lower sales, or I mean, less favorable product mix. At the other side, the service share is significantly up. C an you elaborate a bit more, whether you probably also were buying contracts? Because you said you brought in new management on the service side. That would be the first one. Well, I mean, LPT is always a mix of the projects we execute here. I n the project business, you always have sometimes projects which are ending up much better than calculated, and sometimes you also have projects which are not creating at the end the margin you expected. A lso here, we have this year one single project at aviation, which was quite significant, a nd that might have an impact on the overall margin. T his is nothing which is, let's say, something which could be an underlying problem. Okay. Thank you. Then the second one would be on SFT and the margin now topping at 26%. Well, would you see 26% as topping, or is there some more room going forward? Because you also elaborated on being able to grow the margin in the group next year. I like that question. Yeah, I always, I mean, it's first of all, I think it's a fantastic margin, and there are some competitors who I think are really breathless when they see this, this margin, how we ever can end up with a margin of that. Nevertheless, I think there is always opportunity to improve in any company, in any business, b ut I would say this is, this is really a fantastic margin, though. If we can keep that or slightly further increase, I think everybody should be happy because this is really outstanding. This is, this is excellent. Yeah, thank you. I could have phrased the question differently, but I wanted to phrase it positively. I was rather thinking, like, whether... But it's a good answer that you're saying you, you're happy to keep it. A more general one on the key customer industries, and basically following up on what some of my predecessors said. Could you give us a bit more of a general picture where you see your key customer industries performing? Because if I look at your orders from, let's say, the food and beverage guys, it is a bit of a mix and somewhat inconsistent picture, because some of your divisions have growing business, others not so. Can you rather give us a more general view on which industries you see as currently being more in trouble? Also, you mentioned some delays on some of the projects. Which key customer industries are that specifically? Yeah, I mean, let's say that that's also a good thing of GEA, that we are in a lot of markets, and you always have some swings upwards and downwards. And it is, let's say, always, this little balancing. So beverage is really good, but you also might remember that during COVID times, beverage was significantly down, especially the beer market collapsed because of the close of all this, restaurant, pubs, and bars. Pharma has been strong. I personally think that pharma continues to be strong because there is a, a increasing need, a increasing middle class. There is a lot of R&D going on in pharma, which also will help us. Dairy processing is a normalization, I would say, after a very strong year. That's also the same for dairy farming, where we see a little bit a decline that was this year, which was based on mainly lower milk prices, b ut we also see that there's a turnaround here, that milk prices are going up. If we now see sooner or later decreasing interest rates, all the dairy farming will pick up again. We see marine is interesting and dynamic. And we also are quite optimistic that also the new food topic will after a kind of normalization come back in 2024, latest 2025. That all in all we see more, let's say, more upside potential here in the medium to long term. Okay. Thanks very much, gentlemen. Thank you. Thank you. Very much. There are no further questions at this time, so I'll hand the call back to Stefan Klebert for closing remarks. Yes, thank you, operator. So thanks for your interest, thanks for your good questions, and for participating in our call. Let me just summarize the key takeaways. I think I hope that we have been able to show that we have a very good operating performance. Also, in Q3, we have in six years, the first quarter where we generated a margin above 15%, and we are very well on track to achieve our upgraded guidance for the year 2023. The announcement of the share buyback shows our confidence in our markets and also in the performance of the company, and that we are on track on Mission 2026. We also see further organic sales growth and margin improvement next year. And with that, I close the call. This concludes today's conference call. Thank you for participating. You may now disconnect.