Good afternoon, ladies and gentlemen, and welcome to the Heidelberger Druckmaschinen AG conference call for the publication of the Q1 results of the fiscal year 2023, 2024. At this time, all participants have been placed on a listen-only mode. The floor will be open for questions f``````ollowing the presentation. Let me now turn the floor over to your host, Dr. Ludger Monz. Please go ahead. Yeah, thank you very much. Good afternoon, ladies and gentlemen, welcome to Heidelberg's conference call on the first quarter results of fiscal year 2023, 2024. As you can see here in our slide, I would like to guide you through the agenda. I will start with providing a short summary of the results of our first quarter, and then, my colleague and CFO, Tanja von der Goltz, will take you through the financials. In the next section, I would like to share with you an interesting study on the future of packaging. I will talk in particular about sustainable packaging. Finally, we will conclude with our outlook for the current fiscal year before welcoming your questions. On this slide, which is slide number four, we have summarized the key results of our first quarter, results of fiscal year 2023, 2024. However, I, I will not go through the numbers. Instead, let me begin with a qualitative summary of our performance. As in previous quarters, the overall business environment was quite challenging. The influence of the sluggish economy and of inflation was clearly present and clearly felt. With that in mind, I really believe that Heidelberg managed the first quarter quite well. Orders received remained at a stable level compared to prior year, and we saw a significantly increased demand in the Asia Pacific region, as China slowly returns to economic normality and left the COVID-19 pandemic behind. On the other hand, the regions EMEA and Americas were comparatively slow. One reason for the slow development in EMEA and Americas might be the interest rates, which continued to rise and dampened growth. While sales increased by 3% compared to the prior year, we saw a significant improvement in the adjusted EBITDA margin. Please note that growth was even higher on a currency-adjusted basis. Tanja will talk about that in a minute, as we had some currency headwinds. No, tailwinds, actually, so. Okay, the EBITDA improvement was due to the mentioned stronger business in Asia Pacific, but also due to the price increases, which were unfortunately necessary to offset rising costs. The next quarters, we will benefit from our solid order backlog, which amounts to more than EUR 870 million. Nevertheless, we anticipate further cost increases, particularly when it comes to personnel expenses. Overall, we are encouraged by the first quarter results and confirm our guidance for the fiscal year. So much about the financial performance from my side. Before we delve into the financials, I'd like to highlight a few key developments in our packaging segment during the first quarter. Some of these developments had an immediate impact on our quarterly financials, while others will have a more strategic or a long-term effect. In April, Heidelberg started the financial year with a successful trade fair in China. The show was called Print China, and it was the first real positive sign in China after a long period of economic depression due to the COVID pandemic. As mentioned before, demand in China and Asia Pacific in general had some positive impact on the orders received during the first quarter of our business year. Especially our Packaging Solutions segment benefited from this development. As depicted on the right-hand side of this chart, we have been recording steady and robust growth in orders received in this segment. When comparing the average quarterly order intake of the last 12 months, we observed a substantial increase of 16.8% year-over-year in the packaging segment. Another highlight was the introduction of our new Boardmaster in May. This technology is aimed at customers in the high-volume folding carton market. With its impressive printing speed and significantly improved productivity, Boardmaster provides a highly competitive solution for these customers. The reliable production of high quality at lowest cost per unit is really basically the essence of the packaging segment. Going forward, we will build on the technology of Boardmaster and will broaden its application. Okay, so much about that. Let me move to an important event in June. We were pleased to open a new competence center for label printing in Switzerland. It is meant to be kind of a platform for exchange with customers and industry experts. Even though label printing is comparably, it's a comparably small market, it is of high strategic importance for Heidelberg. The segment is growing fast in terms of volume, and this is even more important, it is a pioneer of printing technology. digital printing already accounts for a substantial share of the printed label volume and is experiencing an above average growth. Heidelberg is well positioned in this market. We have been developing digital printing technology for almost 10 years and will continue to do so. Okay, so much about that. I would like to hand over to Tanja now for a detailed overview about the financial performance in the first quarter. Thank you, Ludger. Good afternoon, everyone, and thank you also from my side for joining us today. Let's start by giving you a high-level overview of the financials of the first quarter. Thereafter, I will dive deeper into each section. Starting with orders received, which amounted to EUR 591 million, showing stability in a tough economic environment. Orders trended 3% lower compared to the prior year quarter. However, when adjusted for currency headwinds of EUR 80 million, orders received were on previous year's level. Of course, the Print China made a particular contribution to this stability. Now, moving on to net sales, which increased by around 3% compared to the first quarter of the last fiscal year. At constant currencies, net sales would have grown by 5% to EUR 556 million. Pricing had a positive impact on this, volume slightly increased year-over-year. The adjusted EBITDA increased to EUR 42 million in the first quarter, representing a margin of 7.7%. I want to clearly state at this point that there was no non-recurring effect to be adjusted for in the first quarter of this fiscal year. Whereas prior year included an adjustment of EUR 11 million from a property sale in St. Gallen, Switzerland, we excluded it from the prior year figure for the purpose of comparison. The year-over-year improvement of 310 basis points was mainly driven by a product and country mix effect, as well as price adjustments for our products. At the same time, our cost basis recorded a rather modest growth in the first quarter of this fiscal year. Let's finish this section by taking a closer look at the free cash flow. Operating cash flow improved year-over-year due to the higher profitability, partially offset, among others, by an increase in net working capital. Overall, the free cash flow was negative at minus EUR 27 million. The prior year comparable of minus EUR 1 million was positively affected by a cash inflow of around EUR 32 million from a property sale in Switzerland. In summary, free cash flow improved year-over-year when adjusted for this non-recurring effect in the prior year figure. Let's proceed to our segments on page eight. Packaging Solutions showed a significant increase of 24% in orders received compared to previous year. Orders received amounted to EUR 311 million in the first quarter. Within this segment, we saw a solid development across all regions, with Asia Pacific in the lead due to the order intake from the successful trade fair, Print China. A strong equipment business was also the reason for a positive development in net sales, totaling EUR 267 million, which reflected an increase of around 8% compared to the previous year's quarter. Now, moving on to our segment, Print Solutions. Orders received were 20% lower at EUR 277 million, as the commercial printing market was returning to normal, following catch-up effects from post-pandemic recovery already in the previous year's figures. Thanks to a solid order backlog, net sales remained at the level of orders received, totaling EUR 275 million, while also matching previous year's level. Our segment, Technology Solutions, recorded a decline in both orders received as well as net sales. Essentially, the expiration of a subsidy program in Germany and a slow reduction of high retail inventories caused a noticeable slowdown in purchases of charging technology. Now, let's take a closer look at the regions. EMEA recorded a weaker development in orders received, partially as a subsidy program expired in France. However, key markets in this region still showed a rather solid development year-over-year. Net sales benefited from a high order backlog of the previous quarters, and were slightly above prior-year quarter, totaling EUR 244 million. The region Asia Pacific, showed the strongest year-over-year performance, with orders received increasing by 32% to EUR 192 million. At constant currencies, orders received were even higher at strong EUR 207 million. While the underlying improvement was driven by a solid demand in the packaging segment, a successful trade fair in China supported orders received in the first quarter. Net sales also developed positively in Asia Pacific, increasing by 12% to EUR 125 million. North America, where orders received were down by 15% compared to a strong previous year. Packaging Solutions showed a sound start into the new fiscal year. This was also evident in sales, which increased by 10% to EUR 122 million, benefiting from a solid packaging backlog. Let's move on to our EBITDA bridge on page 10. Recovery in Asia Pacific and improved pricing led to an increase in revenues. Reported EBITDA in the first quarter of the last fiscal year included EUR 11 million of non-recurring income from a property sale in St. Gallen, Switzerland. Accordingly, the adjusted EBITDA last year amounted to EUR 24 million in the first quarter of last year. This fiscal year, the underlying operating improvement was driven by two factors. Firstly, was a sales volume, in sales volume-related increase in adjusted EBITDA of around EUR 5 million. Secondly, we saw an improvement in gross margin year-over-year, amounting to EUR 19 million. Both product and country mix effects, along with an enhanced utilization of the Chinese factory, compared to the lockdown in the previous year's quarter, contributed to this improvement. In addition to this, price adjustments had a positive impact, while our cost base showed rather moderate development in the first quarter. Particularly regarding personnel expenses, which were almost at previous-year level in the first quarter, we anticipate further increases. In total, adjusted EBITDA was at EUR 42 million, corresponding to an EBITDA margin of 7.7%. Since no non-recurring item was recorded in the first quarter, the adjusted EBITDA margin equals the reported EBITDA margin in the first quarter of this fiscal year. Moving on to the next chart on page 11. Based on the reported EBITDA shown on the previous page, EBIT increased accordingly by EUR 7 million, totaling EUR 23 million, as depreciation remained constant compared to the previous-year. The net financial result was slightly higher than in the comparable quarter of last fiscal year, resulting in net expenses of EUR 8 million. Interest expenses on financial liabilities remained at a very low level and actually slightly decreased to EUR 2 million. The largest component of the financial result relates to interest expenses on pension obligations and increased to EUR 6 million, reflecting a decrease in the present value of the pension obligations. This non-cash, cash effect caused a slight increase of the financial loss. As a result, earnings before tax increased by EUR 6 million to EUR 15 million. Shifting now on the next page, our focus to the net, net tax result. Also, almost at the same level, its composition has certainly undergone some changes. Looking at the right hand of the slide, the effective tax expenses on income were slightly lower year-over-year due to country mix effects. Conversely, deferred tax expenses rose to EUR 2 million after a deferred tax income of EUR 1 million last year. Essentially, this was driven by temporary differences on certain provisions. Corresponding to my previous explanation, net income increased to EUR 10 million compared to EUR 5 million last year. When divided by the number of shares, earnings per share improved to EUR 0.03 in the first quarter. Let's turn our attention to the transition from EBITDA to free cash flow. Starting with operating cash flow, though still negative, amounting to minus EUR 20 million, it improved by EUR 5 million year-over-year. First of all, operating cash flow was positively influenced by the reported EBITDA, which increased by EUR 7 million to EUR 42 million. However, a production-related increase in net working capital partially offset this development. While pension payments totaled EUR 8 million, other operating changes included cash outs for seasonal compensation components, such as annual bonuses. However, other operating changes increased to -EUR 19 million, as a non-recurring income from a property sale in Switzerland was reclassified into the investment cash flow. Technically, it was deducted from the operating cash flow and added to the investment cash flow. Last year, investment cash flow was strongly positive due to the cash inflow from the sale of a property in Switzerland, as aforementioned, amounting to EUR 32 million. This year's investment cash flow was at -EUR 7 million, as there were no non-recurring items recorded. Accordingly, free cash flow amounted to -EUR 27 million compared to -EUR 1 million last year. In summary, the free cash flow improved year-over-year when adjusted for this non-recurring effect in the prior year. Let's conclude this section with a look at some balance sheet figures captured on page 14. The net financial position was positive at EUR 80 million at the end of the 1st quarter, but decreased compared to prior year due to the negative free cash flow. Equity remained stable to the end of the last fiscal year, with a solid equity ratio of 23%. Net working capital increased slightly to EUR 534 million, as both finished and unfinished goods caused a slight increase in inventory. Now, let me conclude with a brief summary on our financials. Despite a challenging economic and geopolitical environment, Heidelberg demonstrated stability in the 1st quarter of this fiscal year. Particularly, the Packaging Solutions segment showed a positive development. Cash flow from operations was negative. It improved due to the higher profitability compared to prior year. Now I want to hand over to Ludger again. Oh, great. Thank you, Tanja. With the next slide, I would like to talk about a development and a subject which we feel is important for the packaging printing business and potentially also for, for Heidelberg. It's about a sustainable packaging. As I explained before, the packaging market is experiencing a structural growth and, therefore, holds significant importance for Heidelberg. The packaging business itself is being shaped by various mega trends. Alongside a growing global population and increasing prosperity in certain regions, sustainability emerges as a pivotal driver for this segment. Today, I would like to shed some light on the progress of sustainable packaging. Firstly, consumer behavior has undergone a fundamental shift, with a growing preference for sustainable packaging options over convenience. Customers are becoming more conscious of the environmental impact of their purchases and actively seek for eco-friendly alternatives. Studies consistently demonstrate that products packaged in sustainable materials have advantages over those packaged in plastics. Paper is perceived positively as an eco-friendly and sustainable material. Secondly, in major economies, regulatory frameworks, more and more require sustainable packaging. The global regulatory landscape is increasingly focused on reducing plastic waste and promoting sustainability. Thirdly, fiber-based packaging excels in terms of recycling. It also has a better carbon footprint. Lastly, advancements in paper technology are promoting brand owners to replace polymer or plastic-based packaging with fiber-based alternatives. The perception of paper packaging is inferior in terms of strength and protection. That perception is changing. There is quite some technological innovation in this field, as high-performance paper-based materials are being improved and preserved and protect products very effectively. With these changes, polymer-based packaging is expected to lose market share, while fiber-based packaging and other sustainable materials are predicted to emerge as winners, according to the studies, and as you can see on the right-hand side of this slide. Heidelberg aims at further strengthening its position in the packaging printing market, as presented to you in the very beginning. I believe we are in a good position because we understand both the customer requirements and the printing technologies for paper substrates. Much about subject of sustainable packaging. Let us finally turn to the guidance for the current fiscal year. As pointed out, the economic development continues to be volatile, while increasing interest rates still contribute to stagnant global growth. It looks like inflation starts to slow down and lose steam, somewhat at least. This could potentially lead to a gradual improvement of cost pressures. When it comes to our industry, we are confident that Heidelberg's strategic position will enable us to balance the different dynamics of different regions, on the one hand, and different segments on the other hand, with, within the printing industry and throughout the year. Our diversified approach, with, 50% of sales generated from packaging printing, will allow us to balance, weaker segments and will thus play a key role in ensuring a stable top-line development during this fiscal year. Moreover, we remain committed, to focusing on increasing our prices to offset anticipated rises in personnel costs in the coming quarters. However, the successful first quarter has provided us with a solid foundation, allowing us to reaffirm our guidance for the current fiscal year. Ladies and gentlemen, that concludes the presentation, and we're now looking forward to your questions. I hand back to the moderator to explain the procedure. Thank you very much. Ladies and gentlemen, if you would like to ask a question, please press 9 and the star key on your telephone keypad. In case you wish to cancel your question, press 9 and the star key again. Please press 9 and the star key now to state your question. The first question comes from Stefan Augustin. Please go ahead. Yes, hello. Thank you very much for the presentation, which is elaborating on a lot of details, so we don't ask those questions and can, can come back to more strategic ones. I would be interested if you can elaborate a little bit from what has happened between the balance sheet press conference and today on the journey to the cash flow improvement program. What's, let's say, what's currently in the pipeline and, we can expect going forward? Yeah. Stefan, thank you for your question. You know, you call it cash flow improvement program. We call it value creation program, because, yes, the cash flow certainly is one of the most important parameters we try to optimize. There's actually not too much news. This is why we did not go into further detail. What we've done in the meantime is to dive deeper into the details. We've analyzed and quantified certain options we have. We are still in the analysis phase to figure out the best opportunities we have for improvement of our cost structures, of our organizational structures, our processes, our organizational structure. It's really a, a large package of things we look at. It's more than a cost-cutting program. That's actually only a small part of it, so it's more about the, the overall structure. Again, I apologize for not having more details for the time being. Oh, fine. That's, that's fine so far. We know there's still something coming up. The next one would be mainly on the progress on the recurring revenue, or let's call it subscription part in the US. Is that taking, let's say, more ground and processes run smoother? Overall, yes, it's, it's improving. You are asking specifically for the U.S., is that right? Well, if you-- to my understanding, this is so far the, the, the country where you have the joint venture with Munich Re, and I'm not aware that this has been extrapolated to other countries in that combination. But if you have done so, that would be, let's say, an, an interesting information. That's actually not a joint venture. It's a collaboration with Munich Re, and that's actually global. We can-- and this is actually the idea behind it, and that's why we are working with Munich Re, because they have a global footprint. That collaboration with Munich Re allows us to use the subscription model globally. As a matter of fact, how should I say? The majority is probably in Europe right now, but I don't have a split at hand. You know, I would, the way I look at it is this: subscription helps us, as you know, to increase recurring revenue. It turns out that some customers really like it, and it's not so much because of the financing part of it. It's more that we fold in service and support. We support customers with improving their productivity, and that's the part which is really interesting for more and more customers. This is what we see, that, that's actually gaining speed. As, as I always say, you know, we will probably not sell more machines because of that, because the demand for printing machines will, will not go up just because we have a subscription model. The recurring part of our revenue will go up, which is good because it gives us stability, and it, it might be more attractive than, than other financing options. In the, the mix of what we have to offer, that certainly also plays a role and makes us a bit more competitive. You probably have seen the numbers on our recurring revenue, which grew steadily and now has reached, I believe, it's 14%. That's a good level, and it will continue to, to rise. Lastly, when, let's say, the, the most of the technology solutions is, is in the Wallbox business, and some, some other participants in the Wallbox market are talking about that the destocking comes largely to an end. Also, you have, if I understood that correct, more products in the pipeline than just the Wallbox, and there's also the idea to move into other countries. When we now look into the next quarters, can we have already the assumption that either the regional expansion or the expansion on the product side will actually lead to an improvement of the sales level? A very good question. I hope so. I mean, as a matter of fact, the business remains to be slow. This is why I wouldn't expect too much. It is certainly right that hopefully, we've seen now the minimum, and we are now moving upwards. I mean, in Germany, the effect of the subsidy program was so massive. It was massively positive while it was going on, and it basically shut down the market for a year after it was finished. Which shows again that subsidy programs, well, that's a double-edged sword, so it's not only good. That's a different subject. I believe that now things are normalizing. We, a- as you, probably have read, we have just launched a new product variant for a Wallbox with a solar function. That's actually a nice option for customers who already have a photovoltaic system in their house. Yeah, we hope that this will help a little bit. However, that's smaller steps. I believe it's more important to now expand geographically, which we have started. We already see a little bit of that, but that will certainly grow. That's the, the short- and midterm expectation I would have. Longer term, we think about how to further develop this business in terms of business models, business, business approach, product portfolio and things like that, but it's far too early to talk about that. Okay. Thank you very much. I will go back in the queue. You're welcome. Thank you. Thanks. The next question comes from Peter Rothenbuecher. Please go ahead. Yes, hello, good afternoon. I would like to continue with Technology Solutions. The performance in the first quarter was, was really disastrous in terms of sales, but, but also regarding profitability, you're showing a loss of more than EUR 5 million in EBITDA. You mentioned you do not expect a strong turnaround here. Does this mean that we have to expect also comparable losses for the upcoming quarters? I'm afraid that's what we have to expect. Look, there, there is a reason why, first of all, we, we have a negative result, and secondly, of all, why we actually accept that. The reason is that we believe that this business really has a future. We believe in the, the, the market, because it's, it's driven by, by fundamental trends, like, you know, the, the electromobility. We are sure that this market will come back, and this is why we continue to invest. The continued investment results in a negative result, negative EBIT for this business. That's simply the context and again, we believe in this, and we believe that the business will come back, and this is why we, for the time being, accept that we lose money in this. I, I'm pretty sure that it'll pay back later. Yeah, that's the, the situation. Also the business from the activities you took over from EnBW. Is there any noteworthy sales already? When do you expect here to see here more significant impact? The product is available. That's, actually, it's a good product. I, I believe this is more a matter of finding partners or of adapting the business model. Now we are talking about public parking, parking lots, and, you know, this is not so much about selling hardware. This is rather about providing a charging infrastructure and not only providing infrastructure but also providing the services which are around. For the time being, that's something we need to do with partners, and that's what we are looking into, right? Strategically, I believe that's the right direction. It's just that we are not at the point where this would result in significant business. Regarding your two main segments, Print Solutions and Packaging Solutions. Packaging Solutions, you, you had a really strong order intake and also in terms of sales, a favorable development. When I look on the EBITDA of the segment, it's surprisingly lower than in the previous years, and in particularly, much lower than the result of Print Solutions. Can you explain this? Are these products generally less profitable? Maybe, Tanja, you can take that one. Yeah, I'll jump in. Thank you for, for your question. Actually, there are two effects which you can see from the development of the EBITDA margin. Actually, one is just from the pure operational development, a second one stems from the allocation of cost. Taking a look at the operational development, actually, during the first quarter, both segments were able to improve their gross margin. The Print Solutions exhibited a relatively stronger improvement as it benefited from a product mix effect. The second effect is about how we allocate the cost. Actually, the allocation of cost, it refers to the overhead cost, for example, and this allocation is done on the budgeted, on the planned figures for the year. Then, during a financial year, the segment's quarterly sales share may deviate from our initial assumptions regarding the sales share, we anticipate for the entire year. This then leads to deviations in the quarterly margins. Actually, we expect that these fluctuations will balance out over the course of the year, if we meet our budgeted figures for, for the segments accordingly. Mm. Overall, do we have to, to expect that the profitability of Packaging Solutions, so I do not, not, talk now about the, the overhead, aspect, but, but operating profitability, cross margins, et cetera, are, in general, lower for Packaging Solutions? No. Not, not really. No. We would say it's about the same level, no? Yeah. No major differences. I really believe that's a more technical thing and as Tanja just explained. In terms of the mix, does this mean, production of Packaging Solutions is mainly based in Germany, while Print Solutions have a bigger share of local production in China? No, that's an overinterpretation, I believe. That's. Yeah, and, and we do have differences, in the, actually, higher, share in services. Also, sometimes also more complex machines, with, a more profit, profitable configuration on our side, so to speak. My last question is then on the Print China, which you mentioned had a, a good impact on, on order intake. Could you quantify about what did come around from the Print China, and will there be seen another effect then in the second quarter? Actually, in the first quarter, it contributed EUR 100 million toward the order intake. We expect a high double-digit figure also in the second quarter. Okay, thank you. You're welcome. The next question comes from Tore Fangmann. Please go ahead. Hi. Good afternoon. Thank you for taking my question. I was wondering, given the strong margin development in Q1, could you share more about your expectations regarding potential threats to the profitability in the remainder of the year? Thank you. Yeah, I mean, regarding profitability, cost development will be most crucial, right? What we managed well over the, not only this quarter, but also the, the previous quarters, was to compensate cost increases by price increases. Also going forward, it is essential that we achieve this also in the future. As we look at it right now, I, I believe that's actually given. It, it looks like we can also compensate for cost increases by price increases in the future. This is why I, I hope that we can maintain that level. Confirm the guidance. Yeah, this is why we also confirm the guidance, right? Mm-hmm. Okay. No, because I was thinking, I mean, you know, how we analysts work, we directly can smell like a potential, even upside maybe to the margins for the year, if you don't see the major risk there. but look at where we are now and what we are expecting, I mean, it's still 9 months to go, and so we believe that we will end up within the guidance on last year's level. Okay, great. Thank you. At the moment, there seem to be no further questions. If you would like to state another question, please press 9 and the star key on your telephone now. I will leave the line open for a couple more moments. There seem to be no further questions, let me hand back over to your host for some closing remarks. Yeah, thank you very much. Dear ladies and gentlemen, thank you for your interest in Heidelberg. We always appreciate talking to you and answering your questions. If you have further questions, please do not hesitate to contact us, Maximilian Biber is always there, easily reachable, you can also reach out to Tanja or myself. Yeah, having said that, for those of you who still have their summer vacation in front of them, wish you good time. Other than that, I'm looking forward, we are looking forward to talking to you again after our second quarter. Have a good time. Bye-bye.