Ladies and gentlemen, thank you for standing by. I am Darcy, your Chorus Call operator. Welcome, and thank you for joining today's conference call on the half year figures 2023 of GFT Technologies SE. Throughout today's recorded presentation, all participants will be in a listen-only mode. The presentation will be followed by a question and answer session. If you would like to ask a question, you may press star followed by one on your touch-tone telephone. Please note, questions can only be asked via the telephone and not via the webcast. Please press the star key followed by zero for operator assistance. I would now like to turn the conference over to Andreas Herzog, Head of Investor Relations. Please go ahead. Thank you, operator. Ladies and gentlemen, good morning, and thank you for joining our call today on GFT's financial figures and our business development for the first six months, 2023. With me is our CEO, Marika Lulay, and our CFO, Jochen Ruetz. Both will guide you through our numbers and the outlook, and will, of course, be available for your questions afterwards. Some final housekeeping remarks: this webcast is being recorded, including the Q&A session, and will be available as replay on our website in the investor relations section. There you will also find the corresponding slides for download. Thanks for your attention. That should be enough from me, and Marika, the stage is yours. Thank you, Andreas, and thank you to everyone joining today. I also want to thank all our people around the world for their dedication and commitment, which is how we consistently deliver complex solutions to drive the digital transformation. Now, let's go straight to Slide 3. Well, after 2 years of enormous growth, beyond 20%, we now see a normalization. Despite the macroeconomic challenges, we grew 10% in the H1 compared to the H1 of 2022, and 5% sequentially from Q1 2023 to Q2 2023. Despite higher restructuring costs and currency exchange effects, we were able to protect our margins, and this clearly demonstrates our resilience and our pricing power. We delivered EUR 392 million in revenues and an Adjusted EBIT of EUR 31 million in the first 6 months. If you were to exclude the FX effects, the Adjusted EBIT has grown by 11% over previous year, which corresponds actually nicely to the 10% growth in revenues. Looking to the markets, except Brazil, Switzerland, and France, we grew organically in all other markets, and especially the growth in our core sector, banking, stood at healthy 11%. Also, the integration of targens, the acquisition we made in Germany in Q2 this year, we are on track, and we do see first joint opportunities, and our CFO, Jochen Ruetz, will later report on the effects of the first-time consolidation. Let's come to a people topic. Well, the whole management team of GFT is very proud that we are again recognized as a great place to work in almost all countries. Collectively, these countries represent 98% of our workforce, and you can see the result. In fact, our attrition has massively reduced. For sure, there is also a market effect, but it is as well a result of our efforts to be the employer of choice for highly demanded IT talents. Now, looking a bit into the future, being now 6 months into the year, we see clients deciding more short term and some project starts are delayed. Therefore, we decided to adjust the 2023 guidance slightly down to a revenue of EUR 810 million-EUR 820 million. We are confident that we can protect our margins. Hence, the Adjusted EBIT is guided at EUR 74 million-EUR 76 million, and if you exclude the negative FX effects from the H1 year, this EBIT margin is still in line with our initial guidance. We have a healthy pipeline which fits to the guidance, and we will continue to invest in cloud, data, AI, simply because these technologies create a huge addressable market for us. Also the market responds very nicely on that. Several market analysts see us as leader or market contender for advanced disruptive technologies to deliver complex business solutions. The most recent one is from ISG Provider Lens 2023, and they see us as a leader for data analytics and machine learning for Google Cloud in Europe. I'm personally very proud that GFT is part of the top league in this regards. Therefore, I have no doubt that the demand for our skills and solutions will continuously raise. This will drive our growth, and we will raise our market share globally within 2023 and beyond. Now, on Slide 4, I want to share some insights into what is currently the most prominent topic in our industry, artificial intelligence. Everybody talks about it. This hype has long ceased to be a hype. We have been developing intelligent AI solutions with our clients for several years now. In 2022, we already generated EUR 50 million with these technologies. Above all, we act as an enabler. With our platforms and our experience, we make the intelligent use of AI possible, and by this, we contribute to a significant productivity improvement. One example, for example, is the solution we built for Ford, the big car manufacturer in the U.S., which is a voice-activated system for industrial engineers and assembly line operators to report data to increase quality and productivity on the chain. For that, we have been awarded with the 2023 Manufacturing Leadership Award, and this clearly now opens doors for us to other industrial clients. In fact, ultimately, you need AI technology to get the most value out of the massive data, especially our banking clients are sitting on. Whether it is predictive AI or generative AI, in both cases, you need a modern data platform to feed AI algorithm. It's also true that AI projects tend to be rather smaller engagements, where building a modern data platform is complex and requires relevant budget spend. I will elaborate later a bit further about our plans regarding AI and data. Now let's turn to the actuals, and Jochen will guide you into the financial details of the half. Thank you, Marika. Let's directly move to Slide 6 and look at the H1 year key figures. Overall, we see solid sales and earnings growth. Revenue is, as Marika already mentioned, up 10% to nearly EUR 392 million. This includes EUR 10.2 million coming from our targens acquisition. Order backlog is down 7%, showing the shorter order cycles that we're experiencing in 2023 versus the very business-driven, high growth-driven year 2022, where clients were ready to hand out orders for a longer period. We're back to normal. However, order backlog and our pipeline well represent the guidance that we are giving and that we will talk about at the end of the presentation. EBITDA and EBIT Adjusted, both up 3% and 4%. On the Adjusted EBIT on the right side, third bullet point, you see two smaller bullet points. Major effects here have been capacity adjustments, which stood at -EUR 2.6 million, up EUR 1.2 million versus last year. FX effects, where we are down -EUR 1.1 million, whereas last year we had a positive +EUR 1.1 million. Alone from FX effects, we have a swing negatively of EUR 2.2 million. If we would exclude that, the EBIT-Adjusted growth would be in line with revenues, +11%, as already mentioned. Going further down, we see the EBT up 3% and the net income up 1%. Here we see the effects from the targens' acquisition, which is somewhat burdening, especially the EBT number. Let's move forward, Slide 7, and look at our key markets. Let's start on the right side at our sectors. We see all 3 sectors show growth. Industry and others growing 13% and still representing 10% of our overall business. A bit weaker growth on the insurance side, plus 1%. We believe this will speed up somewhat in the H2, but we will not see the same growth rates as in the last 2, 3 years. Bit more muted market at the moment for us. Banking up 11%, including targens'. Nevertheless, strong growth in our biggest sector in the H1 of 2023. Going to the left side, we see the clients by size on an annual basis. The biggest client is one client in the bigger than EUR 50 million bracket, which is, as everybody in this call, I think, by now knows, Deutsche Bank. It stood at 16% in the H1 year. I think it was 17% in the Q1, it's slowly coming down. For the full year, we expect Deutsche to represent 15% of our revenue. However, good growth at Deutsche at the moment, we will probably see growth in that account of roughly 20% in the full year 2023. Going to the right, the clients bigger than EUR 10 million are a bit weaker than last year, but the same development as in the Q1, same for clients above EUR 5 million. We add those three groups, they represent 62% of our overall revenue, a bit down versus last year, it was 64%. In other words, we have a bit more revenue coming from smaller clients, the two groups on the right, which represent 0-5 million in revenues. They represent 28% of our business, the funnel is stable and promising for the years to come. Let's go forward, Slide 8. Ongoing moderate sales increase in the Q2 of 2023. When we look at the revenues of Q2, it's EUR 200.9 billion. Again, EUR 10.2 million coming from newly acquired targens in Germany. If you take that out, we're pretty flat versus the Q1, as we had already indicated in our Q1 call. Nevertheless, including targens, we're up 9% versus the Q2 of last year, and we see the EBIT Adjusted down 8%, mainly because of the negative FX effects and the capacity adjustments. Comparing quarter-over-quarter, Q2 versus Q3, we see a 5% growth. Again, targens helped here a lot, and we see the decrease on the EBIT side. Here, the main reason is that now in April, all our salary increases kicked in, and we have roughly 30% salary increases 1st of January, and the other 70% are coming in April. The Q2 was destined to be the weakest quarter in the year 2023. The other 2 quarters, 3 and 4, will look better on the profitability side than the Q2. We look forward to the rest of the year. Main reason, again, is all salary increases are in. Price increases are scattered throughout the whole year of 2023, that's always putting some burden on the Q2. Going forward, Slide 9, revenues and earnings by business segment. Let's go segment by segment. Start with Americas, U.K. & APAC. On the revenue side, we're up 4%. There's only a minor FX effect this year. It was bigger last year. This year, it's minor. Growth coming mainly from the U.S. and Mexico, both driven by the banking sector. Let me also add, because it will be mentioned in the next line, we have had to move EUR 8 million of revenues from the U.K. to Poland because the client decided he wanted invoicing from the nearshore center itself. Therefore, U.K. is, and therefore the segment, Americas, U.K. & APAC, is burdened by EUR 8 million this year, and it is moving into the Continental Europe segment, where Poland is allocated. If we would eliminate that, the overall growth will not be 4% for Americas, U.K. & APAC. It would be 8%. Looking at EBIT Adjusted, this is also burdened by the move of the U.K. business to Poland, which is high margin. On top of nearly all FX effects, the majority of the capacity adjustments happened in Americas, U.K. & APAC. Last but not least, the performance in Brazil, which was somewhat weaker than last year, was also burdening this business segment. That's why the EBIT Adjusted reduced by 6 percentage points. Going to Continental Europe, we're up 18%, of course, supported by two special effects. First, newly acquired targens is included, and we moved EUR 8 million from U.K. to Poland. If you take that out, growth organically in Continental Europe would be 5%. So okay-ish, but not as good as the 18 I indicated. Similar on the margin side, EBIT Adjusted is up 25%. Here, the first time, consolidation of targens is helping, contributing EUR 1 million of EBIT Adjusted and the move of profitable projects from the U.K. It's a bit overstated, but overall, Continental Europe is doing well at the moment. Overall in the group, we see 7% organic growth, 10% overall growth, and the EBIT Adjusted number up four percentage points, as already indicated on the slides before. This brings us to Slide 10, revenue by markets. Let's start with Brazil. Brazil is down 6%. I think we've been talking about it a lot in the Q1. It is down 6% in EUR and in local currency, so there's no major currency effect on the Brazilian side. It's simply the change in government that we saw at the end of 2022 had our clients reduce their IT spending. They are sitting with their money on the sidelines, and they are waiting what will happen on the political playing field. However, by mid-Q2, the mood started shifting, and in June, our revenues were already par with last year, and since July, growth is back. We are still limited, but Brazil is coming back in the H2 year, and we expect growth coming, especially in Q4. Second market to mention is the U.K., down 8%. As I stated, EUR 8 million moved to Poland. If you would add that back, or take it out last year, we would see a growth of 5% in the U.K. domestic market, simply for that move of business. It looks negative at the moment. Germany, already mentioned a couple of times, heavy growth of 43%, supported by the targens acquisition, contributing EUR 10.2 million. Last but not least, U.S. and Mexico, our fastest growing markets at the moment, up 35% in the U.S. and 63% in Mexico. Let's move forward. Slide 11, income statement. Not so much to talk about. All ratios are pretty normal and stable. Maybe just a quick comment on the line, other operating expenses, which is including the negative FX effects, number one. Second, we see a comeback of travel. Travel costs are higher than last year, partially paid by clients, partially GFT travel. We're not back to 2019, but we are above what we have seen in the H1 of 2021, 2022. Therefore, comeback of travel. Last but not least, SaaS licenses are getting more expensive. Well, we talked to software companies, too, right? They are increasing prices, and in our case, we show those cost increases in the other operating expenses. Other comment to make here is the income taxes. Here, we are seeing 30% tax rate right now, and it's pretty much what we expect for the full year. Maybe we can get down to 29, but it will be somewhere between 29%-30% on a full year basis. This brings us to Slide 12, the cash flow analysis. On the very right of the graph, we see the net cash at the end of June of this year. It is -EUR 38.7 million. A steep decline since the beginning of the year, where we started positive with EUR 35 million. Main reason being we acquired targens in between, and you see in the cash flow investing activities, the cash out for the targens acquisition, which was EUR 46 million. What is most interesting is, as always, the operating cash flow, which I repeat what we said in Q1, and I will repeat it again in three and four. We had a special item at the beginning of the year, a pass-through payment for our Italian clients of EUR 14 million. We received it briefly before Christmas of last year, and it moved out of our accounts at the beginning of January. Therefore, our operating cash flow will look burdened by those EUR 14 million throughout the whole year. If we eliminate that, we're plus EUR 4 million, which is still not a great operating cash flow. It's in line with previous year and client behavior at the moment. On a full year basis, we still see operating cash flows to be EUR 50 million-EUR 55 million, minus this special one-off item of EUR 14 million. Moving forward, Slide 13, that's a quick one. Balance sheet. Although the balance sheet expanded, it's a simple event here. It is the targens acquisition and the first time consolidation. That's why all numbers moved up somewhat. Equity ratio is stable at 40%, and on all other numbers, if you have questions, please do it in the Q&A session later. Nothing more to comment actively from my side at the moment. Which brings me to Slide 14. Let's start with the employee numbers on the left. 9,008 FTEs at the end of June. This is up 2% versus the end of last quarter, and this is mainly impacted again by the targens acquisition. The GFT team was more or less stable, just like the GFT revenue was more or less stable, and then targens came on top. Contractor numbers are slightly down to 1,160. Last year, it was 1,275. We are using efficiencies in our own teams and replacing some of the freelancers despite ongoing growth. Utilization, 89% in Q2, 89.5 to be precise, below 90. That's where it hurts. It was the hurting point of the H1 year. Obviously, we had foreseen more revenues, especially in January, February, March. We came into the year with a big, bigger team than in the end our revenues were generating, and that's what led to the capacity adjustments we already reported on. This is the trigger for the below 90% utilization. Good news is, since June, we're again above 90% and further improving for the coming months. We're back on normal territory, and we should see up to 91% in the H2 year in the best months. The average for the year will again be above 90%. The last KPI on the slide on the very right, it's a steep decline line on attrition. We still see the peak of the year 2022, and to be honest, of the last 20 years at GFT, nearly 20% attrition, at the end of the Q2 last year. Now we've come down to 12.3. Obviously, a strong decline here. We believe somewhere between 11% and 12%, it will stabilize. Just as, just to remember, during COVID, the low point was 10%, or kind of the natural low point, because COVID was probably the, the driver to not move jobs. we believe 11%-12% is probably a stable number we will see for some months, and then hopefully a pickup because the market comes back. That's it. Back to you, Marika. Thank you very much, Jochen. Let's move to our strategic drivers on Slide 16, where the short summary is, all continues to be the same as the previous quarters. Our goals remain unchanged. We are on track. What's important to note is that despite all the hype around AI, in fact, cloud technologies and next-generation platforms are still the main growth driver for our business. In terms of market behavior, we continue to see transformational deals, but in the past, the focus was mainly on business transformation and business benefits, whereas now, clients focus more on massive cost takeouts. We see a trend moving away from large, big bang approaches towards continuous modernization. The focus, if you sum both trends up, is now more on faster return on investments. Actually, both trends are in favor, in our favor, as they require a company to be agile at scale. This is who we are. Our tech expertise, our global scale, our partner ecosystem, all interwoven with an agile management style, remains being the competitive advantage. I think this is our recipe for our ability to grow despite market challenges, and therefore being resilient at the same time. Just a few days ago, we have been informed by another market analyst that we are recognized as a leader for digital banking on a global scale. It will become public in a few weeks, hence I cannot tell you more. This clearly proves that our positioning and our ability to deliver real results is well recognized in the market, in the current market circumstances, and it does pay off. Now let's talk about what comes next on Slide 17. Some of you may know my mantra of being able to catch the right wave. There are so many hypes in the IT sector that it is an art to identify the one which is really hitting the ground. We, GFT, want nothing less than delivering real results with real benefits for our clients. Our approach is to identify future trends, then look for strong partners to build an ecosystem and develop reusable assets so we can speed up the delivery for our clients. You can see the assets we've developed on this chart, like Cloud Services Framework for the cloud business, our solution to speed up next-gen platforms for banking with BankLiteX or BankStart. Obviously, the wave which is taking off right now is the AI wave with the launch of large language models. Now, we are convinced that large language models, over time, will become a commodity infrastructure. What is essential is the right governance of those models and the right use cases with the proper return on invest, with a full integration into the IT landscape of our clients. To build the right use case, you need to combine functional and domain know-how, plus tech competence. Given the strong return on invest focus our clients have for any tech investment, we have decided to build a marketplace for AI and data solutions called AI.DA, which will provide use cases, methodology, reference architectures, but also pre-built solutions. The idea is that our clients could then pick what they need, like choosing from a menu card, and de-risk their route to success. The launch for this marketplace is planned for end September this year, and we expect first financial success already in 2024. We also already see the next wave after the AI wave, which is all about digital money. Since already 1.5 years, together with a partner, we are investing into a messaging platform to enable cross-border exchange of digital currencies. It is called UDPN, Universal Digital Payments Network. We launched UDPN beginning of this year in Davos, and since, we have been able to convince several tier 1 banks to build more than 10 use cases and test the technology in a sandbox environment. We expect next year to see few focused implementations in real life. Having said this, it is a long play. We simply want to be ready when central banks are launching the e-currencies. We expect this will happen within the next 3 years, clearly, especially with UDPN, it is also a way for us to move into transaction-based revenue models in the future. Let's come to our outlook. As I already mentioned, our guidance in the beginning, I will go fast here. We see continuous growth ahead of us in the range of 11%-12% for the full year, reaching EUR 10 million-EUR 20 million, it is a slight reduction against our initial guidance from February this year. In line with this, our EBIT Adjusted will grow 10%-13%, which leads to a range between EUR 74 million-EUR 76 million. We estimate the EBIT will be in the range of EUR 68 million-EUR 70 million. Let's finally come to the last Slide 19, and I'm delighted to invite you to our Capital Markets Day on October 5th in Frankfurt. You will receive first-hand insights regarding latest market trends and also GFT's midterm perspective. Besides Jochen Ruetz and myself, also our colleagues from the group, Executive Board, Chris Ortiz and Marco Santos, as well as other leading technical specialists, will participate. They will provide you with background information on platform modernization, next-gen banking, and our AI.DA platform. Just click here or contact Andreas Herzog, our Head of Investor Relations, who will send you then for sure, the details. Thank you for listening so far, and now we are looking forward to your questions. Thank you. Ladies and gentlemen, at this time, we will begin the question-and-answer session. Please note, questions can only be asked via the telephone and not via the webcast. Anyone who wishes to ask a question may press star followed by one on their touchtone telephone. If you wish to remove yourself from the question queue, you may press star followed by two. If you're using speaker equipment today, please lift the handset before making your selections. Your first question comes from Andreas Wolf, from Warburg Research. Please go ahead. Hi, good morning. It's Andreas Wolf, Warburg Research. My first question is on the type of clients which are currently a bit more hesitant to carry out IT projects. I've seen that insurance is flattish in H1 or has been flattish so far. Could you provide more insight into the type of clients? Then the magnitude of price increases, or maybe the phasing, that would be the right question, actually. When did you start with the price increases, and until when should we expect those to last? The third is on wage increases. By how much was the cost per employee increased on average? I believe this will vary country by country, but maybe you could provide some insight here. Is this basically in line with inflation, a bit below, a bit above? Thank you. Thank you, Mr. Wolf. Let me answer your first question. The clients who are more hesitant, again, it's all a relative saying. They're more hesitant than we expected when we entered into the year. I mean, in total, a 10%, 11% growth is not bad in this market. It is actually above market average. We had higher expectations with our banking clients, who grew 11%. We thought they're gonna grow more, but we do see that they slow down some projects. Certainly, the SVB bailout in the U.S., the problems some fintechs had made the banks slow down a bit because they feel less pressure, and they also became a bit more cautious. We expect this will continue in 2023. They all wait how things are going. They all wait whether the Fed has now, let's say, reached the top level of interest increases. We look forward in 2024 to then see even more demand going up. Overall, the demand for digitization has not changed. It's simply clients became a bit more cautious. On the insurance side is a different picture. In the insurance side, we were mainly involved into large transformation programs, which have been delivered. Clients do not have not started big new transformation programs yet, rather smaller ones. This is more, I would say, a seasonality effect on the insurance side. Industry others is still too small. I would not go here for principal market trends. Your second question on the price increases, well, the answer is we have done, we will do, and we will continue to do. We increased the first prices already last year, then for January first, some we increased for April first, and we still have some clients where for contractual reasons we could not increase. We are now negotiating price increases for 2024. It's ongoing and constant focus. Wage increases, I hand over to Jochen. Wage increase, indeed, is country by country, as you said. Average in the group is between 6% and 6.5%, somewhere in between. Thank you. Welcome. Thank you. Your next question comes from Wolfgang Specht from Berenberg. Please go ahead. Yes, hello, good morning. 3 follow-ups from my side. First, a little bit on the situation in Brazil. You gave us notice about a visible turnaround, start of in June and progressing in July. How can you be sure that this turnaround will be stable going into H2? The first question. The second question, maybe on the M&A front, inside of Target, it has not been very active in the past, let's say, 2 to 3 years. Have you already noticed that price tags for suitable assets are coming down, given the correction on the listed side? Are, let's say, private assets still somewhat overpriced? Final question is on personnel. We saw, the number, or the share of freelancers going down. Is this done intentionally, or is it just effect of the current trading environment? Thank you, Mr. Specht. Let me start on Brazil. How can you be sure? Well, you know, if whoever can predict the future, I think, is the one who found who found the gems. One reason we are confident that the turnaround is coming is that we have seen June developing into the right direction. We see our pipeline growing. We have started winning new business in existing clients and in new clients. All these signals, which we've seen within Q2, and especially in June and also in July, and we continue to see it in August, makes us confident that Brazil will be back on the growth path sequentially. Having said that, we do not expect that Brazil year-over-year will show a growth. Given that the, that they, let's say, were reducing revenue since Q3 last year, ending Brazil at a 0% growth would actually be a very good result for this year. Then let's see how next year goes. The next two questions will be answered by Jochen. Let me pick them up. M&A, price, price tags down, question mark? Well, we, our statistics for sure are limited because the number of companies we look at is limited. We don't see major comedowns of price tags, to be honest, in the private market, despite that the companies in the stock-listed market have all reduced somewhat. Usually, the private price tags are anyway smaller companies, and therefore the price tags have been somewhat lower, but we didn't see a major change yet. Again, we've not been deep in the market over the last six months because we've been busy in integrating our targens acquisition, so maybe that is not fully representing what the market looks like. Freelancers down, that's a logic development in GFT. Whenever we see our utilization come down, of course, first, on the list to be replaced by our own people in projects would be freelancers, and that's why we breathe with the freelancer number. That's therefore a normal situation, that freelancers go down somewhat when we are hitting our utilization numbers. They will come back once our people are fully utilized again, which would be 1%, 1.5% more than what we've seen in the H1 year. Therefore, normal development, we've seen that throughout all the years and just normal behavior by our staffing teams in the H1 of 2023. Thanks a lot. Welcome. Next one, please. Thank you. The next question comes from Knud Hinkel from Pareto Securities. Please go ahead. Hey, good morning. Thank you for taking my questions. I have 5-- or 4, 4, I think 4. First one on, on Deutsche Bank, very encouraging development here. You said that you expect 20% growth during 2023. So maybe you can add a little bit more color what's behind that growth, growth outlook. Secondly, on Brazil, I would like to understand, are you serving more local players in Brazil? Or do you serve Europe- subsidiaries that are active in Brazil, subsidiaries of European and U.S. banks? That would be my second question. Thirdly, as, as FX has hurt in the H1 of the year, I, I understand that you the project cycles become shorter, you mentioned that, but probably there are also some multi-year projects in foreign countries. Do you tend to hedge these currency exposure come with these projects, or don't you do that? That would be my third question. The last one, you said you are growing by 10% in the H1 of the year, and you, you think that is the kind of normal level of growth. Is Is that a growth level that would you that you would expect also for the coming years as a baseline, let's say? Put it like that. Thanks. Thank you, Mr. Hinkel. I think I'll even try to answer your FX question, although. Jochen is looking at me from the side. So let me first go on your Deutsche Bank question. First of all, in the H1, we delivered, we supported Deutsche Bank in delivering the huge Postbank migration. The project was called Unity. This clearly drove a bit our growth, because the project was delivered by June, July, the last wave. We had to keep the team in full force, which was originally planned a bit different. The big growth actually also comes from the GCP Google Cloud transformation Deutsche Bank is undergoing, which is their investment into a new modern platform, and we are one of their main partners on that, and we do it obviously quite well, hence they keep working with us. On the Brazil side, the answer is yes and yes. We work for both. We work for international subsidiaries. That's actually how we started. Actually, the how we really started more than 10 years ago, but now, again, we go into history, was actually Bradesco, which is a Brazilian bank. Then for years, we only worked for subsidiaries of international banks. Over the last 3, 4 years, we also moved into the local market. We work for Itaú, which is the largest bank for the bourse, for the exchange in Brazil, B3, for BV, Votorantim, and for many local banks, but also for some industrial clients. I would say today it's pretty mixed. We simply work for both types. On the currency exchange hedge in terms of multi-year contracts, we actually don't do that, simply because it's a, it's a complicated clause, to be honest, and main, the main clients of us are banks, and they are experts in trying to then master those clauses. We rather deal with, honestly, if needed, price increases, if things go really into the most wrong direction. We do not have that many multi-year contracts, to be honest, so it's not a big problem. Honestly speaking, it was a bigger problem for us, the wage increases for the last two years. There, we really suffered, and we really had to work hard to convince our clients to accept price increases. The currency exchange effects, often we suffer in one market, and then we win on that in another market. It's not a big topic, but maybe Jochen can comment on that. Then the last question before Jochen comments on the FX. Normal growth, again, when you look into, for example, Gartner, they usually predict a market growth around 8% in our concrete sectors like banking, insurance. Other market analysts project a 5%-6% growth in the overall IT services market. When I say 10% and call it normal, it's a bit, let's say, it's a bit of an understatement. It is twice the market growth, but I would consider that for GFT. That's what we should achieve and we can achieve. If things go really well, probably it's 15%. We've seen the last two years, we reached even 20, 25, but I definitely consider the last two years as being very special. The zero interest, the huge demand for digitalization all drove it up. I think if you consider 10%-15%, it's probably a fair assumption. Jochen, do you want to comment on the FX? Maybe two more sentences on the FX side. The FX effect mainly arise from time delays between booking revenues and getting money into the bank. We book the revenues whenever the month is closed. IFRS asked us to, right? Percentage of completion method. It takes somewhat between 45 and 90 days for the money to come, and there is an FX change in that time period. This was mainly against us in the H1 year. We booked the revenues, we had a, a deviation in FX, which was not beneficial to us. You can't hedge that. If you hedge that, you have to hedge all your revenue volume in those countries with a non-euro FX, and that would be too expensive. We would only hedge for true relationships between GFT countries, delivery from Poland to the U.K., we might hedge that, but not all client invoices. That's why we will have to live with some, well, minimum layer of FX effect, sometimes positive, like last year, and sometimes negative, like this year, with -EUR 1 million. Okay. Thanks a lot. You're welcome. Next, please. Thank you. Your next question comes from Nicole Winkler from Hauck Aufhäuser Lampe. Please go ahead. Thank you for taking my questions. Hello, everybody. I have 4 questions. First, looking at the order backlog, which further decreased in the Q2, does the order backlog already include targens? If this is the case, would this mean that the underlying order intake is even weaker? Can you give us some color here? The 2nd question would be, could you elaborate on the negative working capital effects related to the fixed price projects? The 3rd one is, what do you expect for the U.S. business in the H2 of the year after the growth rate slowed down in the Q2 compared to the Q1 this year? The last one is looking at these project postponements, what do you expect for the H2 of this year, and what makes you confident that these should not be postponed until 2024? How much of this risk did you include in your guidance? Thank you. Could you please repeat the last question? We missed the detail, which is probably the most important. Yeah, these unplanned project postponements you were commenting on, what do you expect for the H2 of this year, and what makes you confident that these project postponements would not, yeah, would last until 2024? How much of this risk, these projects, are coming in 2024 is already included in the new guidance? All right, let me start with the order backlog. targens, of course, is included. It is mainly a deviation in, in the sentiment in the market. A year ago, clients learned pretty fast that they have to come to all their IT service providers and ask for resources early. Ideally, even commit in case order backlog to projects early, so we could hire the people. This year, the market is more relaxed in that respect because there is some companies like us, right? Our underutilization shows it, or our weaker utilization, where people are ready to work on new contracts fast. Which means clients are not handing out as many and long-term contracts as they did a year ago. It is a problem in the comparison to last year, where we simply had a different market sentiment. That's why currently the order backlog is lower. Nevertheless, our pipeline is just as strong as in the year before. Pipeline does, of course, include also not signed projects, but which are heavily expected to come to our benefit, therefore we are feeling okay with the order backlog, but nevertheless, it is somewhat lower than a year ago. Working capital-related fixed price, yeah, when you look at the balance sheet, contract assets, contract liabilities have moved. Nevertheless, it was not the driving force, right? It was all the different aspects we had. I think contract liabilities, or the saldo of assets and liabilities cost us EUR 5 million in the H1 year in working capital, which of course, was a burden, but nevertheless, it's, it's the normal deviation to a previous year. Therefore, nothing special changed on contract assets. It's just a bit a different setup than a year ago. Marika? Your question on the U.S. growth, yes, technically it will slow down simply because we had sequential growth in 2022. Then when you have the numbers for this year, you have to do the mathematics always on higher base. Technically, the growth will slow down. Factually, we will continue to grow in the U.S. We do not commit for the full year on individual markets, but as a fact, U.S. will definitely grow, probably the largest in GFT in terms of the market. Your question with regards to unplanned project postponement, are they included in the guidance? As much as we can include that, yes, we have already August, let's be clear. Most projects already are ordered for the H2. We still have some projects outstanding, hence we came up with a range of EUR 810-EUR 820, because that's exactly what makes it a bit more insecure. In previous years, we always made a point guidance, because we see that risk. Therefore, it really depends a bit whether the project starts four weeks later or earlier, which makes a difference for the whole year, simply because we already have, as I said, August. That's all. We do not see much more risk, to be honest. Thank you very much. You're welcome. Next one, please. Thank you. Your next question comes from Lukas Spang from Tigris Capital. Please go ahead. Yes. Hi, good morning. I would like to follow on more on the guidance topic. Maybe you can elaborate a little bit more in detail where the gap from the new guidance compared to the last guidance is coming from. This EUR 30 million-EUR 40 million, can you explain this gap a little bit more detailed, you know, maybe also in terms of the several industries or technologies or, yeah, to get a better feeling, where are you more cautious compared to the first guidance? Then I would do it one by one. Okay, Mr. Spang, let me comment. Obviously, the sizes are different, the markets which are definitely behind our expectations, especially compared to February, is Switzerland. It's not a big market in GFT, but it's heavily below. It is the U.S., which we had even higher growth aspirations, much higher growth aspirations. Brazil, we had growth aspirations in Brazil. We knew it was a more difficult year, hence, you might remember our total guidance for 2023 was +16% growth, which was considerably below the 2022 performance. We took that into account, but it came harder than we thought. It was Switzerland, small market, big market, Brazil, our biggest market, not growing at all, reducing in Q1, reducing in, yeah, reducing in Q1, and then Q2 become stable. The U.S., less than we thought, still good, but less than we thought. Canada, also a bit less than we thought. We had a big deal, which we had won in Q2 in Canada, which alone would have stood for EUR 10 million-EUR 12 million, just to give you a feel. The client decided to completely undo the outsourcing and not do it at all. Nothing to do with us, it's a client decision, a business decision, which we fully respect. We had, I would say, operational topics, markets not developing as much, and then we had this one project. Probably EUR 30 million, EUR 25 million-EUR 30 million were, let's say, less pipeline than we thought, and then EUR 10 million-EUR 12 million came from a pipeline we had, but then it simply moved out. Now, this can always happen, to be honest, but as usual, it's then the combination of all of that. Then, as I keep joking, the year is always too short. It ends on 31st of December, so whenever something like this happens in Q1, Q2, you simply cannot make up for that. Yeah. On the pipeline topic, if I remember the Q1 call, you also said that the pipeline is backing the, or confirming the guidance for 2023, and you now repeated this, this fact, for the new guidance. What makes you sure that this will not happen again during the course of the year, that the pipeline is getting worse and there is raising some risk concerning the guidance? Mr. Spang, I fully understand that you challenge me on that, again, when, when we, and, and I really understand it. I mean, when we gave the guidance in February, it was not that we thought it's a walk in the park, and we were already planning, let's say, for a, for a, for an increase. We really felt we have enough pipeline, we have enough good talks with the clients. Even Brazil, which was going down in Q4, the message was: "Yeah, we'll come back within Q2 in the beginning." We thought it's a January, February effect, and that's it. Actually, our internal plans, which we put together the first time in September, before, were even higher. We thought we had accommodated to, to the market trends enough for the guidance we gave. When we went into the Q1 numbers, we obviously saw Q1, and you may remember I started saying it is ambitious. We still were, were seeing that we could get close, especially as we had a large outsourcing project in front of us. There were some warning signals, but it was still early, and then we simply said: "Well, let's not give up. Let's still believe in, and let's work on." During Q2, as much as we saw Brazil stabilizing, we also, when we talked to our clients, we saw projects delaying within Q2, which started now, but actually you lose 4-8 weeks. I would say in total, the foresight into the market was more foggy than we had expected, again, you have only two choices. You either go extremely conservative, and then you raise during the year, or you try to get it right, you probably never can get it right. Now, your main question is: Well, can we now trust the guidance? You can. It is already August. Most projects have already started. Client contracts are negotiated. Price increases have been agreed and executed, which also was still open in February. We still had to close them. We were able to do it. We have much better visibility now into our pipeline than we actually had at the beginning of the year. Maybe then moving more to the bottom line, also, if you, if you look at the new Adjusted EBIT guidance of EUR 74 million-EUR 76 million, it's still good way to go with at least EUR 43 million, compared to the EUR 31 million in the H1 of the year. Where does this come from? Is it just higher sales in, in the H2 of the year, or, also, some, some mix effects, or where's the, the higher, earnings comes from compared to H1? Yeah, it, it's both. It's a bit, we have better months in front of us, more billable days. We have better utilization, which is probably the biggest driver. Simply, we have executed all capacity adjustments in Q2, so we do not expect any further capacity adjustments beyond normal. Okay. Yep, good luck for H2. Thanks. Thank you very much. Thank you. Your next question comes from Stefan Winterling, from ISAR Holding. Please go ahead. Good morning. Thanks for taking the question. Congratulations on a successful and very solid H1 year in difficult times. On the new business lines, could you elaborate on the revenue model, on the type of services or products you will probably offer, the AI library and the currency platform? Are you moving effectively into a product business? Will this be through platforms, through libraries? Especially, what kind of revenue model are you thinking about, and what's the timeline? How tangible are these business lines? My standard question on Asia. Hong Kong is down, Singapore is flat. I fully appreciate the growth market is North America, is the U.S., what are your plans on Asia? It doesn't feel like it has a critical size yet, especially in such a situation, if you have a revenue decline, the organization is not fully utilized. What, what's happening in Asia? Europe, my understanding was that sort of the cloud move, that was U.S. first, and then regulation and data protection, and so on, Europe would be following. Is Europe following? Do you see cloud projects in Europe now? Last question on the U.S.: What kind of market position how do you have in the U.S.? How are you perceived by your clients? Are you the junior partner of a big IT service company in big projects? Are you the leading IT service provider for smaller, mid-sized banks? If you could, provide some, the meat on the bone, shed some light on your market position, on your perception in the U.S. Thank you. Thank you, Mr. Winterling. All questions for me. I would park your first one, because I could go long on this, and let me go with your other three first, and then I come back to your first. Asia, yes, we've seen Hong Kong going down, Singapore up. It's mainly because we show the revenues in the countries where we contract with the clients. The Mox Bank, a bank, which is a subsidiary of Standard Chartered, we are servicing in Hong Kong, simply has gone live, is in full production, hence the team reduced. We also work for Standard Chartered in Singapore, for the Trust Bank, which is another digital bank from Standard Chartered, and that actually started with one year later, so it's now in full force. It also went live, hence those revenues went up. It's true that we do not yet have critical mass in Asia. I should have mentioned, by the way, when Mr. Spang asked me about the, the regions, although APAC was heavily going down, we had expected no growth in APAC for this year, to be honest, because we knew that one project was delivered, hence to replace those revenues was already the challenge. Overall, we rather see a reduction in APAC by 15%, revenues comparing year-over-year. Reason is that we are heavily focused in APAC on banking, on digital banking, which is good, in terms of positioning, but obviously, if then, you get hit by, let's say, budget cuts, it cuts you harder. We are currently doing everything to, let's say, diversify in clients, potentially even into another sector. Definitely, APAC for us is more than just Singapore, Hong Kong, as a market. As much we contract out of those markets, but we also support markets like Malaysia. We even have first talks in KSA, in Saudi Arabia, or in other countries. It's also true that because of these effects in APAC, we had to do capacity adjustments in Vietnam, because Vietnam is the country we use to serve the APAC market. However, this all has been executed in Q2. Hence, we believe even with the foreseen reduction, total reduction in APAC for the rest of the year, we are stable now. We will continue to focus on the APAC market, diversify and then grow. It's a multi-year project. Again, we entered this market in 2018, so it's one of our most youngest markets. Your question whether cloud comes to Europe, yes, it does. It did. Across all countries, we do see cloud projects. I do not yet have the number at hand, how many percentage of our projects are cloud-based in Europe versus U.S., but I would say in terms of a technology trend, it has fully reached all markets in the world. Fourth, your question, how we are positioned? Let me first say who we are not. We are not a service partner to other IT companies. We don't. We are usually the leader. Maybe we are a co-partner with other companies, because most of our clients, and this comes to your second question, which was: Which type of clients, rather small, mid-sized, rather Tier 1, Tier 2, Tier 3? I would say it's rather Tier 1 to Tier 2, maybe Tier 3, but not Tier 4. To just prove it, J.P. Morgan, not less than the biggest bank of the world, has chosen us to drive their digital transformation based on Thought Machine. We also work for asset managers, other capital market clients, but also for private equities like Cerberus or Blackstone. I would say we are rather positioned in the upper part of the market and rather compete against the top league. We are definitely not a service supplier to other IT companies, as much as we sometimes have to partner, which are called co-opetition. I think it's usually not a choice by the partners, neither from us nor from our competitor, but by the client. Therefore we try to, let's say, do that extremely seldom. Back to your first question, which is obviously the main question we will focus on our Capital Markets Day to share with you the details on our new platform. As you rightly so said, how much of that is tangible, can be reused? What are the business revenue models? For sure, with those platforms, like also UDPN, we want to move slowly GFT over time into more asset-based pricing, more transaction-based pricing to, let's say, to decouple us a bit from the classic, let's say, T&M type of calculations. I want to set expectations here, right? This is a very long play, and it will take a time until you see the real effect on the bottom line, simply because of the sheer size of GFT's business. It's more a strategic move. It's definitely more a positioning move. We want to position us as a partner who brings more than just skills, who brings more than just references, who also brings, let's say, in German, you would say, who brings pieces with us so we can shorten the route to success for our clients. If you are more interested, I would really invite you to our Capital Markets Day. There, we will go a bit more into detail. I hope this answered all your questions. Yes, it did. Thanks a lot. Okay, [Mr. Sauer], I think you're the next one. Hello, can you hear me? Yes. Yes, we can. Oh, okay. Great. Thanks. Thanks. I just have a one follow-up question, and thanks for, for answering all the questions. You I saw that you took up a bank loan for the Targens acquisition in the H1 of the year. I was wondering if you would share the interest rate that you're paying on that? Yeah. Well, it. We, we used our facilities that we had in place, and we extended it just a bit, EUR 10 million, because we see ourselves paying everything back until the end of the year, so being close to net cash zero again. I think the current interest rate is rough. We have a pickup of roughly 1% on the Euribor rate. That's where we stand. That would make it roughly 3.5% right now, but on the move into the wrong direction as interest rates are growing. Great. Thank you. I think Andreas Wolf has another follow-up. Please go ahead. Yes, thank you. I have one for Jochen. It's whether you need to further increase wages to keep attrition at current levels, or is it doable without that? Currently not. As I said, the kind of natural zero point was 10% attrition during COVID, which was also going along with lower wage increases than we have experienced in 2022 and 2023. Therefore, currently, no, we don't see that. We can do the hirings based on the salary levels that we have established right now. Okay, thank you. I also have one for Marika. Since investors are concerned about the impact of AI on IT services, you, you, you've mentioned the opportunities that you see, but do you also see an impact on the overall market? I think that's my view. There is that much shortage in the IT personnel space that even a reduction, which I don't believe will happen, will not be felt. What's, what's your thought? Thank you. Do you mean the impact because programmers will be replaced by AI, or is it the direction? Yeah, yeah. you think that there might be- Because. Oh, okay. Because. Yeah, yeah ... ChatGPT might be coding on its own. Yeah, yeah. For sure. I mean, just to be more hot, I think research people would be first in danger. I think so, too. Actually, a bit more... I think so, too, but maybe just to change your thoughts on AI, I think. Yeah. First of all, and by the way, this also goes along the research topic. Everything and be a bit more generic here. Everything around content creation obviously can be potentially sped up with using large language models like GPT. I think it's very important to first differentiate ChatGPT from GPT. Large language models can be used to generate content, whether this might help you in your research, because you simply use that to provide the research, or whether programmers use it to provision code. In all cases, you need a human person to qualify the quality of what is produced. You probably can simply speed up the preparation, and you can speed up maybe rather the work of junior people, to be honest, but you will need a lot of senior people to then do the quality check and finalize it. I think the real challenge will be that all the non-decision, let's say, all the non-decision based business, where you simply prepare stuff, whether it's coding, whether it's documents, whether it's emails, whether it's customer interaction, can be prepared by those large language models, and then a quality check has to happen. I think the real challenge we will all face in the future is juniors are often used to do those jobs, to be trained, and then to become a senior later. If all those jobs are done by AI, who is training the people to become seniors? I think that's a very intellectual and interesting question for the future. I think this question will come up. However, currently, the systems are. We use GPT for some coding, coding, let's say, exercises. Actually, it's impressive. The quality is relatively good, and yes, it speeds up the productivity by factor, I don't know, 10, 20. When you go into a large engagement, then it's not that 100% of the time for the engagement is about coding. Maybe only 10%, 15% of the effort we have along an engagement is about coding. You only optimize that part. Therefore, I have no fear that it would actually endanger our business in principle. However, it will change the way we work. It will definitely will change, let's say, the roles in a project. It will take, still take a bit of time, because in our business, we have to get the clients to agree to allow us to use large language models, because currently, you would still post the code back into the model, and that could constitute intellectual property infringement. Hence, beside that, you technically could do it, still, clients have to agree so that you can use it. We have tested it, and it works quite fine. Again, it does not speed up the projects by factor 10, but because it only improves the coding preparation part. That is actually quite interesting. Same goes for customer interaction, customer interfacing, research, reports. They can all be produced much faster, PowerPoint presentations, or whatever, but still, somebody must control it and must govern that. Great. Thank you for the insight. Another follow-up by Knud Hinkel. Go ahead. Thank you very much. A quick question on attrition. What, what is the, from your point of view, the optimal level of attrition? We saw about 20% in the past, now it's going to 10%. There are a lot of moving parts, so you need more freelancers if attrition goes up and so on and so forth. What is, what is, what is the best for GFT? What, what level of attrition? Yeah, with the experience from the past, it is impossible to think about one-digit numbers anyway. We would say between 12 and 15, we could easily live with and manage with the teams we have. We have managed 20%, right? Grew by more than 20% revenue and people-wise. The sweet spot would be somewhere between 12 and 15%. Okay, thanks. I think we're done with questions. Operator? As it seems, there are no further questions left. Let me thank you for your participation, your high interest, and your very good questions. Well, if there are still some questions left open, please do not hesitate to contact our IR team. Thanks again. Have a nice day, and goodbye. Bye-bye. Ladies and gentlemen, the conference is now concluded, and you may disconnect your telephone. Thank you for joining, and have a pleasant day. Goodbye.