Welcome to the conference call on MTU Aero Engines first quarter results 2024. For your information, the management presentation, including the Q&A session, will be audio-taped and streamed live or made available on demand on the internet. By attending in the conference call, you grant permission for audio recordings intended for publication on the internet to be taken. The speakers of today's conference call are Mr. Lars Wagner, Chief Executive Officer, and Mr. Peter Kameritsch, Chief Financial Officer. Firstly, I would like to hand over to Mr. Thomas Franz, Vice President Investor Relations, for some introductory words. Thank you, Melanie, and also welcome from my side. Welcome to MTU's Q1 2024 results call. As usual, we will start with a review from Lars. Peter will then give a financial overview and take a look at our OEM and MRO segments. After that, Lars will share our view on expectations for 2024 and the outlook 2025. Then we will open the call for questions, and with that, I'll hand over to Lars for the review. All right, Thomas, thank you very much. Big welcome from my side as well. I usually start with a view on the market environment. As we all see and know, passenger traffic has now fully recovered and exceeded pre-pandemic levels by nearly 6% in February 2024. Out of that, domestic traffic was up almost 14% compared to 2019, and as the last part of the market expected to recover, international traffic has now also surpassed 2019 by roughly 1% based on strong recovery in Asia-Pacific regions. These figures are proof of the strong demand situation in the global aviation sector, with no slowdown expected. Dedicated cargo flights also remain strong, well above 2019 levels. This strong market demand is very encouraging and is a foundation for the great prospects ahead. Nevertheless, the ability to satisfy this demand is not fully under our control, as global aviation supply chains remain challenging. Even after significant increases in aircraft production rates since the corona crisis, there is still a lack of new aircraft on the market. For ourselves and our aftermarket in particular, this is not unfortunate per se, as airlines are keeping their older equipment longer in service than originally planned to serve the high traffic levels and passenger demand. This results in growing MRO and spare part demand. The challenge, in fact, is to digest these high volumes in a stressed supply environment. We see the impact of these supply chain hiccups in our MRO shops. A wide shortage of spare parts leads to significantly lower turnaround times, as final assembly has to wait until all parts are available ready. This slows the speed of inducting further engines into the shop and results in lead times for inductions. The implication is a reduced throughput, which reduces engine availability in the market. This causes airlines to focus on lighter work scope and deferral of LLPs and heavy maintenance wherever possible. In turn, the combination of these factors leads to lower orders for spare parts for large parts of the fleets in service. The result is a slower start of aftermarket sales, in particular for spare parts, even though the demand is there. Given the latest outlook on parts availability and signs of recovery on certain parts, we expect an acceleration of the aftermarket business in the second half year. So let's switch focus and move on to the GTF program. I'm sure you all followed last week's comments from RTX on that plan. I'm sure you all hoped for more information already at this stage, and this is totally understandable. Being fully aligned on the inspection plan and given the confidential nature of the topic, both in our dealing with Pratt and our dealings with airlines, we hope for your understanding that we are not able to provide more color on the program than our partner RTX did. The fleet management plan and the assumptions, as well as the financial assessment, remains unchanged. All aspects of the program remain in line with expectations. Please keep in mind that we see more opportunities than risks in the execution of this program. We are fully committed to doing our utmost to reduce the impact on airlines and to mitigate cost. One clear point here is the acceleration of the work in our shops. Currently, we are in the middle of implementing measures to reduce the TAT in our shops. We have identified multiple areas where we can further improve, and together with Pratt & Whitney, we will share these learnings with all network shops. This is key to optimize the scope of the fleet management plan alongside increased availability of full-life powder metal parts. Despite a strong focus on the GTF fleet management plan, we are happy to report progress on the other side of the GTF program, the new engine deliveries. On March 20th, we delivered the 1,000th PW1100G-JM engine, assembled and tested by MTU. We started with the very first final assemblies of GTF engines back in 2016 and since then have consistently ramped up our GTF assembly line at Munich site, and we expect to deliver around 240 GTF engines in 2024 with further growth in the next years. Returning to the general business and the demand situation. Even in the years of the pandemic, we did not stop investing into our capacity. We remained committed to our plans as we were confident that our industry would rebound. Today's demand environment proves that this was the right approach. In Zhuhai, we are progressing as planned. The second test cell is up and running, and the construction work for the second site is continuing. In 2023, MTU Maintenance Dallas moved into a significantly larger facility. Now we have accomplished another milestone with the certification of the test cell for CFM56 engines, opening additional opportunities for this location. MTU Maintenance Serbia, our newest site, is constantly ramping up its volume and capacity. This shop will be capable of performing over 10,000 repairs across 16 engine types for both the MTU Maintenance network and third-party customers. And finally, the previously mentioned new turbine disk center in Munich started production recently. These are only a few examples of our activities to position ourselves in the best possible way to take our share of the strong market developments. Let's move on to a financial topic. On April 23rd, we issued a new EUR 300 million promissory note. It was placed in two tranches, roughly 50% of the volume with a duration of three years and the remaining 50% with a duration of five years. The issuance of this promissory note is for general purposes, as growth in all business segments results in the need to establish higher liquidity reserves. One last thing before handing over to Peter for the financials. We are very happy to announce that we achieved a significant step forward with our geothermal project at our Munich site. We actually found thermal water with a temperature of 70°C at a depth of 2.6 km, and we expect to finish drilling work in the second half of 2024. The geothermal project will help us to cover roughly 80% of our heating needs at our Munich site and replaces gas. The total investment in the EUR mid-double-digit million range is expected to be amortized within seven years, depending on the gas prices. Through this project, we have achieved another milestone on our path to climate-neutral production facilities. This is for now the review for today, and I hand over to Peter. Yes, thanks, Lars, and also a warm welcome from my side. In the first quarter 2024, we achieved group revenues of almost EUR 1.7 billion, up 8% from last year. In US dollar terms, revenue were up 10%. EBITDA adjusted increased 3% to EUR 218 million and a margin of 13%. The margin was slightly down due to a less favorable business mix in commercial OEM and higher costs compared to the previous year. Net income adjusted remained stable at EUR 158 million. Free cash flow is EUR 60 million, reflecting higher working capital needs, which have been significantly influenced by higher workload and longer turnaround times in commercial MRO, which in turn has been driven by unstable supply chains. Let's look at the details in the business segment, and let me start with the OEM segment. Total OEM revenues increased slightly by 2% to EUR 575 million. Military revenues were up 21% to EUR 124 million, mainly due to some spillover effects from Q4 2023 and the ramp of NGFE revenues. Commercial business revenues in euros are slightly down by 3% to EUR 433 million. Please remember, in Q1 2023, commercial OEM included positive impacts from US dollar revaluation and hedging effects. We talked about this at the release of our Q1 2023 numbers. Further, the first quarter of last year was an extraordinarily strong quarter, especially in the aftermarket, whereas in a normal year, the first quarter typically is a bit softer. Organic OE revenues in US dollars were up in the 40% range in Q1 2024, mainly driven by higher GTF output, business jet, and GEnx deliveries based on higher production rates. Within these numbers, we saw a healthy volume of spare engines. Organic spare part sales in US dollars went down roughly 5%. As Lars described earlier, the impacts of ongoing constraints in the supply chain, in conjunction with the mentioned seasonality and comparison base, led to lower spare part sales. Main programs with reduced volumes were legacy Pratt engines as well as IGT, as GTF programs were prioritized within parts production. EBITDA adjusted in absolute numbers decreased by 8% to EUR 130 million, resulting in a margin of 23.4%. Higher military revenues, a more favorable business mix in new engine sales, and better fixed cost absorption due to higher workload partially compensated lower spare part sales and the higher cost base due to increased salary. Margin-wise, Q1 2023 certainly was outstanding in a tough comparison base. Remember, for the full-year, we had 22% margin in the OEM segment, and Q1 2023 was almost at 26%. Let's move on now to the commercial MRO segment. Reported MRO revenues increased 12% to EUR 1.1 billion, while US dollar revenues were up 14%. Revenues were at the lower end of our growth expectations, mainly due to longer turnaround time in MRO holding up further MRO activities. Within revenues, the GTF MRO share was stable at roughly 33%, which is below our full-year expectation of 40%-45%. We expect a further increase throughout the year in line with an increase in spare parts availability. EBITDA adjusted increased 26% to EUR 88 million, resulting in a strong margin of 7.7%. The higher EBITDA adjusted margin was the result of a better mix in independent business, while the material intensity on GTF MRO was lower. At this point, I would like to hand back to Lars for some words on our guidance 2024. All right. Thanks, Peter. As mentioned at the beginning of our presentation, the demand environment remains very encouraging. Supply chain and MRO capacity are factors that need to be managed and monitored. Nonetheless, the signs we receive from the market give us confidence that we will achieve the growth rates we communicated. This allows me to reconfirm our guidance issued with our full-year release in February. The group revenue expectations remain unchanged at EUR 7.3 -EUR 7.5 billion based on the U.S. FX assumption of $1.10 to euros. Within that, military revenues are expected to be up low to mid-teens, driven by solid deliveries and FCAS demonstrator work. Commercial OE will be up in the low to mid-20s, driven by higher production rates for the A320neo, A220, and E-Jets, and higher deliveries for Boeing 787 and business jets. Commercial spares are expected to grow in the low-teens range. Spare parts should benefit from further growth in air traffic, list price increase, as well as easing supply constraints. Commercial MRO will grow in the mid- to high-teens%. The GTF MRO share should increase to 40%-45%, mainly driven by the GTF fleet management plan. EBITDA adjusted margin should be above 12%. An FCF guidance of a low triple-digit million EUR number remains unchanged. Based on the settlements achieved with airline customers, timing of AOG compensation payments remains unclear for the time being. And finally, to complete the picture, also next year's ambition is unchanged: EUR 8 billion of revenues with EUR 1 billion EBIT in 2025. So 8-1-25. This marks, so far, the end of our presentation. Thank you for your attention, and we're now happy to answer your questions. Melanie, it's up to you. Thank you very much. We will now begin the question and answer session. If you'd like to ask a question, please press star one and one on your touchtone telephone. The operator will announce your name when it's your turn to ask a question. In case you wish to cancel 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 Ksenia Maslova from UBS. Please go ahead. Your line is open. Hi, everyone. Thanks for taking my question. If we can just start on spare parts, please. Thinking about the Q1 result, if you can please talk a little bit just how different programs in your portfolio performed in the quarter, like V2500, CF6, and GTF. And just a second question as well on spare parts. So you talk a lot about supply chain issues, delay in shop visits, and spares consumption. Can you please just elaborate on the nature of these supply chain issues? I'm particularly interested in programs outside of GTF and also any implications from GTF inspections that they are having on other programs as well. Thank you. I mean, Ksenia, Peter here. We don't split out spare parts program by program, but it's fair to say, as you mentioned in the call, that Pratt legacy engines are probably down, definitely. So that is the V2500, PW2000, downwards. PW1100, rather in a stable direction, I would say. And the widebodies, obviously, ramp up. So GEnx is growing. GP7000 is growing. IGT is a little bit down, as we mentioned also in the call. So I would say that is a little bit the picture here on the spare parts now. Any details on supply chain issues that you can share with us as well? I mean, I mean, the manufacturing of parts in direction of the PW1100 is a little bit the bottleneck. So one is powder production. The one is the different kind of production of these parts that's all focused on the GTF. And so some V2500 parts are not produced. And as Lars mentioned on the call, airlines know that. So they focus more on lighter workscopes. So we sell less spare parts because the parts availability is not there. So that is a pent-up demand that we will see recovery in the second half of the year once powder production starts ramping up for the parts. And we had in case there's one special case. In case of the V2500, we had also a fire in the facility of one supplier. That is also one specific item in the V2500 supply chain. That's not new. That has been in the past, recovering now as we speak. This V25 supplier continues in one queue this year. Did I get it correct? Yeah. Right. Right. Right. Okay. Perfect. It's very clear. Thank you so much for your time. Thanks. Thank you. We'll now move on to our next question. Our next question comes from the line of Ross Law from Morgan Stanley. Please go ahead. Your line is open. Hi, everyone. Morning. Thanks for taking my question. So first one on military, how big was the catch-up effect in that 21% growth rate? And secondly, just to go back to spare parts. So if revenues were down 5% and we assume pricing is still in the mid- to high single-digit range, is it right to conclude that volumes were down more like low- to mid-teens? And if so, how should we think about the phasing of that through the rest of the year? You've also mentioned an improvement in H2. Does that imply spares will be down again in Q2? Thanks. Well, regarding guidance, we don't give a specific spare parts guidance for Q2. But also, I mean, if you compare the numbers with our guidance, also our guidance in spare parts include a price increase. So we have to basically compare apples with apples. So if you compare our guidance to Q1, then the 5% down is the right number. But certainly, I mean, in the 5% down, if you add up price increases, then the number of spare parts or the organic decline is a little bit stronger. Sure. That's true. And the first question. Q2? Just on military in. Military, yes. The military was missing. So yeah, I mean, the growth was, let's say, EUR 20 million altogether. So what you can say, fair to say, is that so the NGFE revenues increased by EUR 10 million, and the spillover effect from Q4 2023 was also in the magnitude of EUR 10 million. So if you want to look at it like that, that the 20% growth is 10% organic growth and 10% spillover from Q4 2023. Great. Very clear. Thank you. Thanks. Thank you. We'll now move on to our next question. Our next question comes from the line of David Perry from JP Morgan. Please go ahead. Your line is open. Yes. Hi, Lars and Peter. So thanks for the detailed explanations. Apologies, I just do want to try and dig a bit deeper. So I think I understand what you're saying. My question would just be this: MTU clearly is a bit of an outlier in that the other companies haven't reported this negative print. And I understand your explanation. I just wonder, is there something about the parts you make or where you are in the chain on your engines that has meant you've been affected more in this quarter? The second question also on the spares and I know you didn't want to answer Ross's question about Q2, but I guess it would help us a bit just to try and understand how much will be needed in H2 versus H1. I don't know if you can make any qualitative comments or what trends you're seeing in April. Then, just changing topic, a third question. Any update on the GTF Advantage and the likely entry into service, please? Thank you so much. I mean, I wouldn't give a specific guidance. April looks to be a bit stronger, but I wouldn't give a specific guidance for Q2. I mean, what we expect is we expect an acceleration throughout the year. So sequentially, from quarter to quarter, we expect more spare part sales. As production capacity ramps up, powder metal production ramps up, and so the replacement effect, GTF versus legacy engines on the Pratt side, declines over the next quarters. So why are we an outlier? I would say it's not due to our parts universe that we manufacture. I mean, we are an RSP partner in the program. So in case of the V2500, we get 16% of all program share. Are these our parts, or are these Pratt parts? So can it differentiate what we manufacture or what our partners manufacture? So that's really, let's say, the footprint is the V2500 program, not our manufacturing universe. And I mean, we report differently. I mean, we report spare parts and others like RTX. They basically report MRO revenues. And the spare parts are only the cost. So if you look on our MRO revenues, MRO revenues are up 14%. But we have a second aftermarket footprint that is also the spare parts. So we sell the spare parts to the OEM. The OEM sells the spare parts to the MRO shops, and then finally, we report MRO revenues. And so that twofold aftermarket reporting is unique to the industry. So that's why you see the spare parts in our books on the OEM side and the MRO revenues on the other side. So the footprint is not so different compared to Pratt. Okay. Thank you. So. And then maybe on the advantage, David, it's progressing as planned. We are undergoing tremendous testing for that engine, and I'm still positive that we are going to see entry into service as previously announced in 2025. Yeah. And any idea when in 2025, Lars? I don't want to be specific. I mean, it's also a result of the testing. As soon as we know when all the certification work is done, but no updates yet. Okay. Thank you. Appreciate it. Thank you. We'll now move on to our next question. Our next question comes from the line of George Zhao from Bernstein. Please go ahead. Your line is open. Hi. Good morning, everyone. Morning. First on OEM margin. It seems like higher spare engine deliveries helped offset some of the weaker spares to keep the margins elevated in the quarter. So could you provide some color there? I mean, how high was the spare engine ratio in Q1 for GTF, and what was the effect of that on OEM margins? And secondly, coming back to the spares acceleration in H2, we talked about pent-up demand catching up, but is this still all dependent on the maintenance turnaround times coming down? Thanks. I mean, what was beneficial in the first quarter was, on the one hand, a better margin in the OE business. So as you mentioned it, a higher share of spare engines in Q1 2024. And the other tailwind, I would say, is the higher military business that was also supportive to margin. But we don't give an exact number how many spare engines have been delivered and so on. But it was certainly a significantly higher share compared to other quarters. And that helped compensate the decline, the small decline in the spare parts business. But as I said in my introductory comments, so the 26% margin for the OEM segment, which we had in Q1 2023, was certainly not a typical quarter. So we had very low OE deliveries in Q1 2023, a rather higher spare parts consumption, a very low cost base. So Q1 was at 26%, while the full-year was at 22%. So that skews a little bit the comparison between these two quarters. Second. On the spares ratio. Yeah. I mean, sure. Sure. I mean, if you have shorter turnaround times, then you can consume let's say, you have more shop visits per year, and you consume more spare parts. And that is certainly our assumption on both sides of our aftermarket businesses. So we need better turnaround times to book more MRO revenues and also to sell more spare parts. I would say that is the precondition. All right. Thanks. Thank you. We'll now move on to our next question. Our next question comes from the line of Robert Stallard from Vertical Research. Please go ahead. Your line is open. Thanks so much. Good morning. Good morning. Lars, if I could, can we dig into the supply chain issue a bit more? Is it purely powdered metal or the lack of powdered metal that is holding everything up, or are there other issues that are swirling around that are slowing down the MRO business versus plan? And then secondly, for Peter on the EUR 300 million debt issue, do you expect to carry this sort of level of debt going forward, or longer term, do you expect to pay it down? Thank you. Right. I mean, clearly, on the Pratt programs, GTF and V25, powder metal is the predominant issue. In general, I would say it's squirreling around. With thousands of suppliers, you have an issue here and there every day. But given the importance of the powder metal, I would say, yes, it's correct. It's powder metal predominantly. All the other programs, IGT and what Peter mentioned, there you have rather a mixture of issues that are coming up and will be resolved or are resolved as we speak. So yeah. Regarding debt, I mean, what was the driver behind the EUR 300 million promissory note? I mean, that our business has grown significantly over the last two, three years. And I mean, the guidance for 2024 is between EUR 7.3 -EUR 7.5 billion of revenues. And typically, rating agencies look on the company and say, "Well, you need something like two months or 15% of revenues as liquidity on the balance sheet." And if you do the math, then we need something like EUR 1 billion of liquidity. And that was sort of a one-step measure to increase our level of liquidity as the business growth. It's not something like a preparation for a larger cash outflow or whatsoever. It's just following the growth of our business and bolstering our liquidity. Great. Thank you very much. Thank you. We'll now move on to our next question. Our next question comes from the line of Chloe Lemarie from Jefferies. Please go ahead. Your line is open. Yes. Thank you. Good morning. I have a couple. And if you allow me, I'll have to go back on the spare parts issue. So can you detail about what makes you really confident that in H2, you're going to have the increased availability of, obviously, the powdered metal, but also, I guess, the MRO capacity? Are there any specific facilities opening or extensions that we could track that could help us gain a bit more confidence in that H2 momentum? So that's the first. And the second is on the discussion with airlines that you're having. So how do you think you'll be able to fine-tune the free cash flow guide for 2024? Will this have to wait for H1 results, or will it remain rather volatile and you'll essentially update quite late in the year? Thank you. I think I can say something on the second question. I mean, if you listened to the RTX call last week, they confirmed that they have finalized nine settlement agreements with airlines. A lot of them are still pending. So I would rather, let's say, wait until H1. I think there we have more visibility and have digested then also, let's say, a view also on the other parts of our cash flow like working capital and so on. And then we will update you with a new picture of our cash flow forecast for 2024. Chloe, on the first question, both capacity and powder metal, we are remaining optimistic. On the one hand, there's a task force mode for both companies to increase A, capacity, but B, powder metal, which is under Pratt & Whitney. But I see the figures, how our partners ramp up on the other side of the Atlantic, and this is encouraging. It takes a while. It took a while. We knew that from the beginning. But capacity is there, and the output will grow significantly during this year and then even going into 2025. From a capacity standpoint, there's no specific item you can watch, but we grow capacity as we speak. Our three facilities, Hannover and EME Aero and Zhuhai, are ramping up. And the better the supply chain situation is, the shorter the lead times are, the more capacity we have for the GTF program. All that, I usually say, I see more opportunities than risk in that journey. So I stay confident we will get better every day, every month, every semester. Right. Thank you. Thank you. We'll now move on to our next question. Our next question comes from the line of Ben Heelan from Bank of America. Please go ahead. Your line is open. Yes. Morning, guys. Thank you for the question. I wanted to ask about the comment you made around airlines focusing on light shop visits, and that's driving a deferral of LLPs and heavy maintenance because it seems to be slightly counter to what some of the other OEMs have talked about. So is that based around a specific program? Is that GTF-specific? Are you seeing that across your MRO business? If you could just help us understand kind of how broad that issue is. And is it a brand new issue? Is it something that's been going on for three to six months? And then. That's a short one. That's the V25 specifically. It's a V2500 specifically. Any color as to what's driving that? Because it seems very counter to what Safran have seen on the CFM56. Just wondering if there's something specific there. Yeah. I mean, if you I mean, at Pratt, all eyes, all production, whatever is necessary, is focused into the direction of the GTF. And so V2500 parts production suffers a little bit from the focus, which is given for a good reason on the GTF program. And so if you have limited availability of LLPs in case of the V2500, and if you want to I mean, airlines need, obviously, capacity and need lift, and they want the engine back as soon as possible. And if there is the risk that the engine stands in the MRO shop and has to wait because parts supply is shaky, so they do rather, let's say, quick turns or short shop visits and get the engine back quicker. And so the heavy shop is then postponed into the future. That's a very individual decision. If you have, let's say, still green time on the engine, you can do that. Obviously, if you don't have green time, you don't do that. But we see that in some cases. That's preventing higher, let's say, spare part sales for the V2500 currently. Okay. Okay. That's super clear. Thank you. And then on some of the legacy engines like CF6 PW2000, it sounds as though that they were weak in Q1. Is that what we should expect, and is that baked into your full-year guide that those engines will remain weak from a volume perspective going forward? Yeah. PW2000 is slightly down, and CF6 is rather flatish. So that is, I mean, what we baked into our guidance is more or less flatish development in 2024. So that's not so far away from our full-year estimation. Okay. Okay. And then final one. Capitalized R&D stepped up in the quarter by about 50%. Is there any particular driver around that, and is there any view on how we should see that playing out for the full-year? Thank you. No. This is always a little bit lumpy. So what we did is for the we paid one R&D payment in the first quarter. That was something like a mid-to-high single-digit number we paid for. I mean, what we typically do is I mean, we have a EUR 17,000 or 17% or 18% program share on the GTF programs, and we have to share also, obviously, 17%-18% of all R&D costs. And if we don't do the R&D ourselves, we have to pay compensation payment. And whenever we do that compensation payment, that is directly capitalized. And in that quarter, it was one compensation payment towards Pratt & Whitney. And that makes the increase so steep. Yeah. But there's nothing big behind that, so. Okay. Very clear. Thank you, Peter. Thank you. We'll now move on to our next question. Our next question comes from the line of Victor Allard from Goldman Sachs. Please go ahead. Your line is open. Thanks very much. Good morning. Question on Zhuhai. You gave an update during your presentation on the ramp-up in the region with the planned entry into service of the new Nanjing Disassembly and Assembly Facility, if I'm not wrong. I was wondering what the run-rate contribution at EBIT could look like over the medium term once you are fully ramped up. Yeah. Absolutely. I mean, the new facility Lars just spoke about that will be up and running in the beginning of 2025, probably. And then we're going to ramp up the shop. I mean, the first increase is something like a little bit below 300 shop visits annually regarding capacity. So it can be something mid-double-digit number, mid-double-digit EBIT for 100%. So it's, I would say, a low- to mid-double-digit contribution to our MRO EBIT if the facility has fully ramped up. So towards the, let's say, end of that decade, I mean, it starts 2025, will be probably fully utilized 2028, 2029, so in that direction. And there we're going to have a low- to mid-double-digit number EBIT contribution, which is I mean, we take 50% of the net income of Zhuhai into our MRO EBITDA. Okay. Super helpful. Thank you. Thank you. Once again, if you'd like to ask a question, please press star one and one on your touchtone telephone. In case you wish to cancel your question, please press star 1 and 1 again. We'll now move on to our next question. Our next question comes from the line of Christophe Menard from Deutsche Bank. Please go ahead. Your line is open. Yes. Good morning. Thank you. Good morning. I had two questions. The first one, again, sorry to come back on that spare part and powder metal issue. But at the moment, I mean, Pratt is producing some of those parts, and there are not enough for the GTF servicing. So are you confident that they will be able to produce enough of those parts to help you service those GTF, I mean, in the future? Because at the moment, it seems that everything is dedicated to serial production rather than GTF servicing. Correct me if I'm wrong. The second question is more on the, I would say, on the cargo. And one of your competitors mentioned that there was some sort of a cargo boost to expect on MRO in the rest of the year. Are you seeing the same? Does it mean that for the legacy engines, you will see a bounce in the rest of the year? The last question is more a broad question. I mean, we've been seeing, again, some of your competitors talking positively about the progress they're making on the RISE program and the 20% reduction in fuel consumption. Do you think that your recent R&D is helping you develop a product that could match their own developments? I mean, we know that you're obviously developing products, but how has this changed over the last few months? Thank you. Maybe I take the freighter question first. I mean, we have, obviously, several freighter customers in our MRO universe. What we expect is we expect significant growth coming from the GE90 program over the next years, not only 2024, but also going into the next years. There we think we, as I said, we see significant growth. The CF6 is rather we see rather flatish development. And then the other two questions, Christophe. The first one is clearly yes. I'm confident that we will support both OE but also MRO side on the powder metal. This is the exercise that Pratt is doing, and I see promising evolutions in these output numbers. However, it's clear yet it's not enough. And there's a walk to do in the course of this year and going into 2025. I repeat again what Raytheon also shared. I mean, all the OE deliveries are delivered with unlimited life discs. And we continue to increase putting in these unlimited life discs into the MRO, but not to 100% content. So this is still a challenge, but the answer is clear, yes. And then thirdly, on your R&D question, yeah, also here, we are confident. I mean, this is technology work on both sides of the Atlantic, on RISE and on the GTF second generation, MTU and Pratt thinking about both evolutionary and also revolutionary technology elements. And don't forget that the introduction of the service is somewhere middle of next decade or maybe a little bit later. So there's still some time to go. And these technology solutions, they need to give a significant reduction of SFC and hence emission. And we are the one company that is focusing on more than only CO2. So this is revolutionary. As you know, we are focusing on all three kinds of emission. This is technology work, but we continue to invest, and we are looking very positively in this R&D work. Thank you very much. Thank you. Thank you. We'll now move on to our next question. Our next question comes from the line of Olfa Taamallah from Oddo BHF. Please go ahead. Your line is open. Thank you. Hi, Lars, Peter. Could you please comment further on the free cash flow performance in Q1? And wondering if it does include some compensation to Engine Alliance and if you can give a number. And how should we think about the ramp-up in compensation over the coming quarters? Thank you. If I can give you a number, it was zero. In Q1, so we paid EUR 0 to Alliance. So the whole, as I said before, the whole negotiation process took a little bit longer. So payments probably moved a little bit from the rise. I mean, the free cash flow was dragged down by rather working capital increase we see in the OEM segment and the MRO segment. So with a focus more on the MRO segment, I mean, we have, as we mentioned several times, longer turnaround times due to the supply chain issues. So we have more work in progress in the shops, and you see that in the working capital, in the receivable line, basically, because all unfinished engines in the MRO shop, they are accounted for as a so-called POC receivable. So you see it in that line, not in the inventory line. That is what we're saying. Sorry. Just to follow up on that because, I mean, we had some communication from Alliance that we have received already, I mean, some compensation. Does it mean that we should expect some lags between what Pratt is paying and what you pay as compensation? Yeah. I mean, maybe they have received something in April, or there is a timing difference between when Pratt pays and when we get the invoice. But as I said, we as MTU have not paid EUR 1. So that is not the reason for the weaker cash flow. So that will accelerate throughout the year with, I would say, a stronger focus in H2. There will be a stronger cash outflow for these settlement agreements with the Alliance. Very clear. Thank you. Thank you. There are no further questions at this time, so I'll hand the call back to Thomas for closing remarks. Thank you, Melanie. This finishes our call for today. Thanks, Lars. Thanks, Peter. Thank you to all participants and for your questions. Enjoy the rest of the day. Bye-bye. Thank you. You may all now disconnect. Goodbye.