Ladies and gentlemen, thank you for standing by. Welcome and thank you for joining the Q3 Figures 2022 Conference Call of Nordex. 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 touchtone telephone. Please press the star key followed by zero for operator assistance. I would now like to turn the conference over to Felix Zander. Please go ahead. Thank you very much for the introduction. Good afternoon, ladies and gentlemen. Herewith, I would like to welcome you on behalf of Nordex to our investment analyst call today. Our CEO, José Luis Blanco, our CFO, Dr. Ilya Hartmann, and our CSO, Patxi Landa, will guide you through the presentation today, sharing the latest information about developments and financials with you. After the presentation, as you have heard, there will be a Q&A session. I would like to ask you to limit yourself to three questions, please. Now I would like to hand over to you, José Luis. Please go ahead. Thank you for the introduction, Felix. I would like to welcome you as well on behalf of the entire board. As Felix mentioned, CSO Patxi Landa, CFO Ilya Hartmann here with me today, guiding you through the presentation and answering your questions later on. We have prepared our usual agenda for today. As always, as usual, I would like to start with the executive summary for the first nine months of the year. Our order intake continues to show a healthy development, and we see a good number of additional orders in our pipeline. Prices and margins are improving. We book 1.4 GW in the third quarter, which means a cumulative order intake of 4.4 GW in the first three quarters, roughly the same as last year. As expected, our run rate of volumes and margins improve in the third quarter compared to the first half of 2022, partially on the back of improving installations. To be specific, in Q3, we book revenues of EUR 1.7 billion with an EBITDA margin of -1.5%, which means our revenue on the first nine months of the year reach around EUR 3.9 billion with an EBITDA margin of -5.2%. However, the market continues to remain challenging on the supply chain side despite some easing in terms of freight and commodity prices. As already discussed in our previous calls, supply chain disruptions have continued causing shortages in components and even in specialized vessels, which has affected our projects and installation schedules, leading to higher costs and liquidated damages discussion with our customers in the near term. In the medium term, we hope that situation will improve, and we can get more benefits of a stabilization in the commodity prices and higher price orders for our turbines covering the extra cost. Our working capital was again solid at -9.8%, and is better than our target of -7% by the end of this year. Regarding our installations, we have achieved almost our normal run rate again, but also leaves a higher number of installations to complete in Q4, which is always subject to weather risk in winter. Finally, given the current and still challenging market environment, we have tightened the EBITDA margin for 2022 to the lower end of the expected corridor at around -4%. At the same time, we strongly believe in the outlook for our industry, which remains promising and confirms our EBITDA target for our EBITDA margin of 8% under the requisites of a sustainable stable macro environment. With this, I would like to hand over to Patxi to discuss markets and order intake. Thank you very much, José Luis. As mentioned, looking at the orders, we sold 4.4 GW of new turbine contracts in the first nine months of the year, down 4% with respect to the same period last year. 69% of those orders came from Europe, with the largest markets being Germany, Finland, and Spain. 31% of the orders came from the Americas, with Brazil, Colombia, and the US being the largest markets. ASP grew to EUR 0.91 million per MW in Q3 2022, up from EUR 0.69 million per MW in the same quarter last year. A 32% increase year-on-year. Service sales grew 20% to EUR 398 million in the first nine months of the year, with an EBIT margin of 16.1%. Average availability of the fleet was 97.1%. Turbine order backlog grew 30% to EUR 6.5 billion at the end of September, and service order backlog grew 8% to EUR 3.2 billion for a combined order backlog of EUR 9.7 billion at the end of September 2022. With this, I hand over back to Ilya. Thank you, Patxi, and good afternoon also from my side. I would now like to guide you through the financials. On the first slide, income statement. We delivered sales of around EUR 3.9 billion at the end of the first nine months, similar to the previous year period. Our sales, as we expected, increased in a step-up mode over the first three quarters as our installations gathered pace. Let me point out that our sales improved by over 46% to over EUR 1.7 billion in the third quarter when compared to the previous quarter this year. Gross margin, as we see, stood at around 11% at the end of the first nine months, and we should remember that our gross margin during the year had been influenced by inflation pressures, supply chain disruptions, and in some cases, project delays. We expect an improvement sequentially once the external environment has stabilized again, and our higher margin project will start gradually kicking in. As a result, our EBITDA reached around EUR -200 million at the end of the first nine months, with an EBITDA margin of -5.2%. As José Luis mentioned earlier, our margin in Q3 improved to -1.5% when compared to the -7.1% achieved in Q2. With that, we would jump to the balance sheet. Looking at it, the overall structure of the balance sheet remains essentially unchanged, with a solid liquidity level at the end of the third quarter. We closed that quarter with a cash level of around EUR 670 million. In addition, we have a cash facility of around EUR 90 million, which brings the total liquidity level to around EUR 760 million at the end of this reporting period today. We have a net cash position of just north of EUR 200 million, and the equity ratio is at 21% at the end of Q2, Q3, excuse me. Of course, also a result of the rights issue that we completed in that month. That already gets us to the working capital. Working capital ratio continues to be quite tight at -9.8%, similar to our earlier quarters, and the absolute number you will see of EUR -525 million. Overall, the working capital ratio remains below the guided number of, we call below -7% for this year, and that's how we maintain the guidance. Bringing us to the cash flow slide. Here we see cash flow from operating activities, EUR -360 million, roughly. Very much reflecting the negative operating results in the first nine months that were already mentioned. The cash flow from investing activities, we'll see that in a second, is largely at the level of the previous year and goes according to plan of the investment program. Then finally, our cash flow from financing activities, around EUR 340 million, of course, largely reflecting the cash proceeds from the rights issue in July. That, as I mentioned a second ago, is bringing us to the investment slide. Total investments of around EUR 125 million in the period. Basically, as I said, according to plan and in line with our CapEx guidance, which we maintain of around EUR 180 million for the current year. Focus also of those investments remained largely the same as mentioned in previous occasions. Main investment targets were, again, the blade production facilities in India and Spain and tooling and equipment for our higher installation levels. That already brings me to my last slide of the deck. As we have negative EBITDA guidance for the current year, we think it's better to track the net debt or net cash, if you will. As you can see, we continue to have a net cash level also helped by that rights issue that I mentioned already twice. To repeat, there is very little external senior debt left once we will have repaid the high yield bond early next year with the shareholder loan. Of course, that will reinforce the capital structure of the company again. One more time to repeat, equity ratio went up to 21% as a result of the transaction. Now, before I give it back to José Luis, three key takeaways. Operating performance in Q3 improved in line with our early expectation. Second, nonetheless, inflationary pressures on the back end of supply, installations and supply chain reliability issues continued to be a risk in Q3 was and in Q4 is to be monitored. Third, for the CFO, obviously, priorities for us in the office remain the same. Adequate risk management, strong working capital management, and maximum cash flow preservation in the month ahead. With that, I give it back to José Luis. Thank you, Ilya. Let me now explain our operational performance in the first nine months of the year. As you can see in the chart on this slide, our installation run rate was way slower in Q1 and Q2. Severely impacted and due to the unfortunate cybersecurity incident, as well as the consequential effects of the Ukraine war, as well as lockdowns in China. We hope to cover the shortfalls in Q3 and Q4. Thankfully, our run rate in Q3 has been almost back to normal, as you can see, but it does not cover the delays on the first half. This leaves a bigger installation profile for Q4, which also creates a risk of its own that we have to monitor from now to the end of the year. In total, we have erected 800 turbines in 17 countries with around 3.6 GW. Again, majority 74% in Europe, 14% Latin, 12% North America. Nacelle production, we are catching up and almost back to normal. We assemble about 1,000 turbines, similar to last year. Because of the higher nameplate, we exceeded 4.9 GW the previous year, that was 4.8. As you can see, quite an imbalance between what we are able to produce with some delays due to availability of components and what we were able to install due to the delay in the availability of components. Overall, the number of blades produced increased from 3,120 last year to 3,357 this year. Thereof, we produce roughly 26% in-house compared to 40% last year. This trend of higher outsourcing of blades is likely to remain in the future as we continue to reduce and to better manage the risk in the operations. Moving to the next slide, before we go to the usual guidance slide, I would like to briefly summarize the current policy and market developments and as well issues we are facing in the near term. We have seen some important and positive policy momentum in Germany and U.S. in the last quarter, Inflation Reduction Act. As well in Europe last week about tackling the real bottleneck of the industry in Europe, which is permitting. The recent announcements are quite meaningful for the demand in the medium term, where Nordex plays an important role. This could eventually compare to actual orders and a bigger market size in the next 2-3 years, benefiting key players like us in the marketplace. At the same time, we have to address some challenges in the short term that impact on our margins and profitability, as mentioned before, just to name a few. While commodity prices seems to be stabilizing, we continue to see price increases coming through in our supply chain for some components. In addition, some of smaller suppliers are struggling even more in this environment, which leads to higher price discussion and supply chain reliability and risk issues. Finally, we have also seen supply chain reliability in some components dropping sharply in the last few quarters compared to earlier times. This has affected our ability to deliver. Has affected our project schedule, has affected the project cost, has affected liquidated damages discussion with our customers in some cases. Moreover, as I mentioned earlier, we have a high installation target for Q4, and hence there is always a risk of installations spilling into 2023, always challenging to catch up in winter times. In the medium term, we are working to put these challenges behind us and further build on the quality of our order intake profile to help us to get to the 8% EBITDA margin. Okay. If we move to the guidance slide, having said that and considering the current market environment, we have tightened our guidance of the all-inclusive EBITDA margin at the lower end of the range at around minus 4% to reflect some of these risks better. All other KPIs remain unchanged. Let me also reiterate that our EBITDA margin includes all recurring and non-recurring costs, including reconfiguration costs from cybersecurity incident, asset sales, the disruption from Ukraine war, and COVID lockdowns in China. Finally, we confirm our strategic mid-term EBITDA margin of 8% as well once the macroeconomic environment has stabilized. Assumptions are as always. A stable order intake as we currently see. Stable margin of the order intake as we currently see. Stable cost base as we are starting to see. Reasonable disruptions in supply chain that we are working on to overcome. With this, I will hand over back to you, Felix, for Q&A. Thank you very much, gentlemen, for the presentation. Now I would like to hand over to you, operator, and please open the session for Q&A. Thank you. Ladies and gentlemen, at this time, we'll begin the question and answer session. Anyone who wishes to ask a question may press star followed by one on their touch-tone telephone. If you wish to remove yourself from the question queue, you may press star followed by two. In the interest of time, please limit yourself to three questions only. If you're using speaker equipment today, please lift the handset before making your selections. Anyone who has a question may press star followed by one at this time. One moment for the first question, please. The first question is from the line of Constantin Hesse with Jefferies. Please go ahead. Hi there. Can you hear me okay? Yes. Great. Thank you very much for taking my question. My first one is on margin. I just wanna talk a little bit about, you know, the magnitude of the margin improvement that we can expect from here on now in, you know, in relation to supply chain improvements. What are some of the key improvements that are still coming with regards to backlog? How much of, you know, your bad backlog have you already delivered? When should we start seeing, you know, some of these more significant price increases coming through? And then on margins in Q4, what is holding that back? Is that liquidated damages mainly? Thanks. That's the first one. You know, regarding margins in the backlog, there is always a lead time of approximately 18 months of the orders to flow through the P&L. Our order intake in the last quarter was landed at sustainable margin. Targeting the sustainable margin of 8% or above 8% EBITDA. This implies also that the cost base of the company or the unhedged cost base of the company will remain stable. We start to see that stability in the cost base, but still there are some topics that are volatile, like energy prices in Europe, and like some components that are affected by energy prices. Generally speaking, we see stability in the cost base. It is required as well that on top of stability on cost base, we get back slowly or not, or as fast as possible to reliability in the supply chain, in the industry in general. We are making progress. We are about to get there, but unfortunately we are not yet there. Regarding the Q4, maybe, Patxi, you can take it. Yes. From a margin perspective, from a new order margin perspective, we continue to increase margins as sold on an as sold basis compared to the previous quarters and especially compared to the previous year. This is on the basis of sustainable price increase of the turbines. As a consequence of this, the new orders that we are booking are all targeting above a midterm profitability level of 8% EBITDA for the company. Thanks, Patxi. Sorry, I actually meant in Q4, what is holding back profitability? Because if I look at the new guidance, now you expect. Ah. Minus. Yeah, yeah. With even higher installations and still negative EBITDA, what is holding it back there? Sorry, Constantin. I think the challenge we have in Q4 is catching up in winter. I think we were substantially delayed in our project installation. As you saw in the presentation, there is a huge imbalance between number of nacelles produced and number of turbines installed. The nacelles we are slowly trying to recover, but this has a substantial timing effect. This is impacting installations and as a consequence, project costs, liquidated damages and weather risk. I mean, it's not the same to install 500 turbines in summer than 500 turbines in winter. This is the big risk we have in front of us. Plus, availability of some steel and electronic part components that are affecting our ability to connect turbines to the grid. We are working to overcome this issue eventually by year-end or beginning of next year. Those are the two big topics that are affecting margin. Plus, the proper planning that the projects that we are executing now were sold 18 months ago. Those projects were somehow deteriorated by all sorts of waves of cost increases. Okay, that's great. Thanks, José Luis. The second question would be on free cash flow. I'm trying to get some comfort on, you know, if you can get a grip now into Q4 going into Q1. I mean, you're now at EUR 292 net cash. Free cash flow has been pretty bad over the last few quarters. What gives you comfort that, you know, you can start, you know, seeing some positive flows in free cash flow? What gives you the comfort that at EUR 292 net cash, you know, that's a level that you know, you probably wouldn't necessarily have to see you having to go to the market again either via debt or via another capital raise? Thanks. I think I take this one, José Luis, okay. Yeah, fair question, Constantin. This is Ilya. No, I think we're confident in that regard. I think, for a number of reasons, and not only because we did the package in the past summer, but also when we now look and what we presented today, coming out of Q3 at a liquidity level of around EUR 750 million, a little north of that. And basically also seeing that we typically, and I've said this in previous calls, are doing recurrently better than the what we officially guide in numbers of working capital. So again, for reasons of caution, we keep the guidance today at minus EUR 7 or below. But what we see that there is, there's. As in the past, the track record going our way, so I would be more optimistic there. Then, of course, we're not talking about 2023 today. That is for the March conversation. Understanding, I think that's a common understanding for everyone on the call that 2023, though, being a transition year again for the industry and for Nordex, will clearly be better than 2022. I think when we talk about liquidity and how we feel about that, I repeat myself, we're confident on that. Okay, thanks. Lastly, just on the regulatory environment. I know, José Luis, you made some comments on it already, but are there any specific dates coming up or any potential catalysts that you guys are expecting that will be announced relatively soon, mainly in Europe? Because in the U.S., I think it is relatively clear. Thanks. I think the biggest impact for our industry is the European package about tackling permits. You know, the market is paying very high electricity prices. Everybody is eager to invest to somehow help society to address the energy shortages and the energy prices. Renewables is the key tool, and especially in Europe is wind. There is no lack of capital, there is no lack of technology to address the challenges. The main issue is permits that are somehow lagging behind governmental targets to meet European and country targets. I think the commission is together with member states are tackling the issue on all this legislation package that will be later on translated into state members' legislation. To put, you know, climate change at same level as any other environmental impact. Are setting times for approving permits. Are setting areas for fast-tracking permits. As you know fostering repowering. All sort of measures that are included in this this package that eventually should take effect. Not short-term but medium-term for sure. Are you hearing anything when you have your conversations? Our assumption is, you know, the market as you saw is low this year. The aggregated volume that was contracted was substantially reduced compared to last year. We start to see slight improvements in next year and definitely where we see kicking this off is in two years, in 2024 order intake. Driven by a bigger flow of permits in Europe and driven by the Inflation Reduction Act policy in the US. 2023 we don't see substantial increase. We should see some increase, or at least it's our assumption, but not materially. We do see that in 2024, yes. Okay. Thank you. The next question is from the line of Sean McLoughlin with HSBC. Please go ahead. Thank you. Good afternoon. My first question is around pricing. There's been a real step up in the order intake ASP this quarter over previous quarters, and it sounds like we have to wait probably till maybe end of 2023 or even early 2024 before we see that delivered. Should we assume that the orders that you booked in the first half of the year were not meeting that 8% EBITDA margin level? At which point did you, let's say, change strategy to focus on that higher pricing? That's the first question. I think we were always selling since couple of quarters ago, even Q4 last year, at sustainable margins. Unfortunately, the cost base of the company was severely deteriorated by Ukraine consequential impact, by the lockdowns in China, and to a certain extent, the effects of the cyberattack. The main deterioration of the backlog on the cost side was coming from the consequential effects of Ukraine. We started to see stabilization in the cost base of the company in the last month, I will say. Last month, or even I would say last quarter, we saw that the orders were coming above the sustainable margin, but the cost base of the company at this time doesn't deteriorate. Contrary to what happened in the previous three quarters, where the cost base or the non-hedged cost base of the company was deteriorating. You are right. Those orders are gonna flow through the PNL 12-18 months. If the situation in the cost base stays stable, once those orders flow through the PNL, we should be landing those margins. Yeah. Thank you. I suppose then a follow on is just thinking about your cost position in 2023. I mean, we've seen some of your competitors restructuring. I mean, is there a case to be made for you lowering your costs, your break-even cost base in 2023 as you look at, you know, flat at best, deliveries, and yeah, on a higher cost base? Okay. I think it's true that we are in terms of activity selling less MWs, and we are planning for next year, slightly less activity compared to this year. With that being said, we went already through our restructuring. We closed two plants this year. At this stage, it's true that we might run with a slight underutilization, but as we have grounded expectations for the market to recover in 2024, we don't think it's gonna be very appropriate to cut now this underutilization and growing the year after. We have very much a reasonable capacity, which allow us to deal with flexibility and which allow us to be prepared for future volume growth. Thank you. My final question just around that is on the US. I think there's a view that US order intake should pick up at some point into next year. I mean, how are you positioned there to capture that growth? Just thinking about some of your, maybe your capacity requirements in the US over the next two to three years. I mean, we are in the study, the analysis phase. Definitely the market is gonna be a substantial market, and we want to be part of that. It's slightly too early to say in what form. Just for you to know regarding additional investments, shouldn't be that big, because we have a nacelle manufacturing facility in West Branch, Iowa, where we are analyzing to produce nacelles to meet the Inflation Reduction Act requirements. We have a blade factory in Mexico that we are assessing if that could qualify or not. Too early to say. We are analyzing the possibility to bring local concrete towers to Mexico. Long story short, we have a plan to participate in that market. Too early to be more specific in how. Regarding order intake, we don't see yet the order intake coming as the PTCs or the legislation gives such a long horizon. Customers are not in a rush. The rush will come and we want to participate in that. I don't think we'll take extraordinary or substantial extraordinary investments for us to participate in that. That's very helpful. Thank you. The next question comes from the line of Ben Sheridan with Bank of America. Please go ahead. Yeah, morning. Thank you for the question. The first question I had was on the loss in the corporate HQ line in Q3. Obviously it looked like it started to increase in Q2, but it was just a massive number in Q3. Could you help us understand exactly what is in that loss and how we should think about that going forwards? Secondly, services was very strong in the quarter, particularly from a revenue growth perspective. Can you talk about the drivers of that? How much was inflation, how much was underlying volume growth? And how we should think about that moving forwards. Thank you. Let me take the services and then you take. The first one. The first one. Regarding services, we were always signaling that provided the order intake you know keeps developing as it is developing. The service business would go double digit. Of course there is an inflation, but mostly expected for next year, not that much for this year. Well, some as well for this year, but the majority will come for next year. The result is very much a huge amount of Delta 4000 that we are connecting to the grid and starting services activities on those machines. Usually the timing is year one, you grow the supply chain. Year two, you grow the installation. Year three, you start to grow the services activity. I think the other one, which I think, or for the corporate, we also not allocated. Basically, without going into too much detail here of the segment reporting, which we typically don't do on the call, but on one-on-ones. Basically, what we're seeing here is those costs that we cannot directly assign to a specific project or customer in terms of service in both projects. We have things like more overheads, some OpEx increase and general corporate expenses as well. Also, you would see some of those LDs there that we're not allocating to a specific customer or project when we, for example, do a field repair campaign during the year. All these things would go into that. Can I just follow up quickly on that? I'm not sure I understand why costs couldn't be allocated to a particular project or a particular customer. If you're dealing with liquidated damages, just as one example, why can't you allocate that? Well, of course, you could always in the consequence, but sometimes an issue, let's say, is overarching, goes across several customers, comes from one root cause, let's say, and a specific José Luis would be the technical guy there. Basically, if you have something that goes back to, making up the example, a generator, then that basically can always allocate that to a specific contract because they all execute in specific contracts. We're also viewing them as topics that we cluster by the reason, by the rationale why it is caused. That's more of a fair question, but this is how we classify this internally. Okay. I shouldn't think of this as [crosstalk] This is just a function of the challenging environment you are facing and you're just allocating some of these costs. Okay. Very much so. Okay. Very much. Okay. Very clear. Thank you. The next question comes from the line of William Mackie with Kepler Cheuvreux. Please go ahead. Good afternoon. Thanks. First of all, I wanted to pick up on the comments you mentioned, Patxi, about having good orders in the pipeline. Can we just color in the prospects for order intake between Europe, North America and LATAM? I mean, when we think about Europe, you've got a very high base of comparison, whereas in North America, things seem to be at least on hold. How should we expect the pipeline to materialize into orders booked in Q4? Yes. What we can say is that we will continue with a good trend from volume perspective. As mentioned before by José Luis, we don't see recovery in the North American market in the short term. We continue to see a relatively flattish market in 2023. What we are seeing and what we are pursuing actively is to get very disciplined on the pricing and on the margins with which we sell the new order. From a volume perspective, and this is by no means a guidance towards the end of the year, but we will continue with a good momentum, probably not as good as it was Q4 last year, but still good in terms of volume and the focus on increasing prices and margins of the new orders we take. Then regionally speaking, as I said before, North America we don't see picking up. We don't see regulatory changes providing tailwinds short enough to see meaningful volume increases in the market in Europe in 2023. From that perspective, a relatively flattish expectation of the market also for next year. Following up from that, in your release, you use the term you're working to reformulate contracts. I mean, we all seem to be focused on price, which is a rather simple measure, but what other additional actions can you take, I mean, to pass the risk through to your customers? To what extent are you able to incorporate indexation or other measures, that then enable a pass-through of risk to your customer base to avoid a 2022 again in the future? That is precisely the point. Terms and conditions of the contract are equally important as pricing t o minimize the risk exposure of the company. We have, through the painful learnings that we have seen over the last quarters, what we are doing is to try to rebalance the risk we take with both suppliers and customers and try to de-risk as much as we can the backlog for the company. For that matter, what we do is to entertain discussions with customers in that regard. Successfully, I would say, partially successful. The discussion is not just with customers, it's at political level as well, with governments, with society. The situation that the sector was is a result of the previous mindset of the world 2010, 2020 caused a lot of instability. Everybody was asking for a fixed CapEx to deploy fixed capital. The banks wanted a fixed CapEx and the sector was pushing too much risk into our chain of the supply chain. In our case, we don't see it going forward. We cannot commit with fixed CapEx for delivering in three years, and the customers of our customers need to understand that. Governments need to understand that we just seeking for a more balanced risk reward among the different participants in the supply chain. Thank you. My final question would relate to the growing imbalance between your total production measured in MWs and your total installations. At this point in the year, you've produced about 40% more than you have installed. I understand the delays and the creation of delays in Q1 and Q2, but do you not see or should we expect that you need to now drop your production rates, well, at least significantly below your installation rates for a couple of quarters, to adjust that imbalance and to correct the working capital levels? No. It's the other way around, because we have contractual commitments, where we have Ex Works milestones to fulfill. What we need is to catch up with installations, which is a substantial challenge, 'cause we need to install substantially more than the previous plan to catch up the delays, and we need to do that in winter times. This is really challenging. This is one of the biggest risks we see in front of us, but not from a production point of view, we are gonna see stability in the next quarters because we need to deliver our backlog as per our contractual agreements, and we have Ex Works availability of products as a contract milestone. Understood. What proportion of your backlog would you say is still running on a very tight or late timeline and therefore subject to LDs? Well, that's difficult to quantify, but you know, if you very much do a quick math between that imbalance, you could very much figure out that imbalance could be having a risk of LDs. Thank you very much. The next question comes from the line of Kulwinder Rajpal with AlphaValue. Please go ahead. Mr. Kulwinder, can you hear us, please? You're next in the queue. Can you? Yes, of course, sir. Please go ahead. Yeah. Hello. Good afternoon, gentlemen. Thank you for taking my questions. Could you please remind us how much of your cost base is freight costs? Given the recent softening in freight rates, how should we think about their impact on your near and medium-term profitability? I have a follow-up. Regarding the freight costs, you know, in previous calls, we mentioned that we were trying to implement hedging policies, and one of the hedging policies was back-to-back. Try to contract the freight at the same time we contracted the TSA. We said freight and installations, we will try to do back-to-back. Of course, we don't succeed in all the orders and that could potentially bring some potential upside. Containers, we as well saw drop in the price of the containers. That will potentially be some upside. But we have as well headwinds in the electricity, in other commodities. I think it's too early to celebrate from our point of view that the cost is gonna bring potential upside in profitability. Okay. Understood. Thank you. Second, just to gain some clarity on project slippage, how should we think about the risk going into 2023? Given some slippage, could you please give us your thoughts on the pace of installations that we see under a more normalized scenario versus under a scenario where there is slippage beyond Q4, that is into 2023? Risk of a slippage to 2023 is not minor. One is operationally, we need to install those turbines, or there is availability of certain electronic components to connect those turbines to the grid, which we have a plan to overcome the backlog eventually in the next couple of weeks. This might slip as well to next year. Eventually, the situation should be normalized for sure in the next year, I mean, before, you know, as soon as normal weather is back. Let me put it the other way around. It's always easier to catch up in spring or in summer than to catch up in winter. The risk is catching up in winter. Okay. Understood. Thank you. Less costly as well. Ladies and gentlemen, if you would like to ask a question, please press the star followed by the one on your telephone. We have a follow-up question with Mr. Constantin Hesse with Jefferies. Please go ahead. I just want to drill a little bit further on margins. If I think looking into next year, are we looking at a rather linear improvement or is it rather gonna be something like a hockey stick in your view? You know, could we be talking about 5%-6% EBITDA margin in Q4 next year? Thanks. I mean, let's be cautious. Definitely what we are saying is that, what we are selling now, we expect to land above 8% EBITDA in 18 months. Should that be linear from where we are to there? Maybe. That's an assumption. I don't see a huge hockey stick. I mean, every quarter, every year has always quarterly effects because usually winter is less activity than summer. Summer you have better profitability than winter in a stabilized environment because of the activity itself. But other than the seasonal effects, yes, the quality of the backlog improves linearly. Okay. Fine. By the end of 2023, we would be looking at the orders you took in Q2 and Q3 this year. It could be a fair assumption that you could be, I mean, still below the 8%, but relatively closer than, let's say above- I would say more towards Q4, because as I mentioned before, the cost base of the company is stable. Just for few weeks, until few weeks, the cost base of the company was deteriorating. It's true that the last one or two months, the cost base of the company is stable, and if we take in consideration that the lead time to process orders is 18 months, 18 months is more towards the end of next year. Fine. Thanks. Then the second question would be on competition. I mean, initially the conversations were always that, you know, the Chinese would not be able to catch up with the Western players because they would have to build the supply chain locally and the Western players had already built a very efficient supply chain, therefore, you know, it'll be tougher to build a base there. It seems like, you know, some of these players are making quite some good movements into the West here. Just in terms of competition, what are you seeing from Chinese players? Let's do this together with Patxi. I will differentiate North America and Europe for different reasons, or Western Europe for different reasons, we don't see them. Western Europe is our biggest volume in order intake, in services. Why not Western Europe? Because the market is so capillary. I mean, we do 200 projects with 150 customers, small size, mid-size projects, which the configuration of the market is not that interesting for the Chinese players. The regulation is very complicated, very different regulations from country to country, from even from region to region within the country. Very complicated regulation that makes difficult the cost of doing business. The cost of doing business in Europe is gonna be the same for a Chinese or for a European, and we have the proven track record. I think our customers are more focused on reliable partners to secure the ability to deliver than any other thing. U.S., the Inflation Reduction Act calls for local production and for the Americans, energy is not a question of price, it's a question of national security and energy independence. That's the main driver for the volume in America, so we don't see a threat in that market. Maybe the other geographies where we operate, which are not as big as Europe, but maybe in those other geographies, we might see them. We do see them, and specifically in Latin America and South Africa, where for the Chinese is not so complicated to do business. We see them, let's qualify this from an order of magnitude. South Africa, we see them as one of the players. Latin America still, they're not mainstream. However, we can expect that in the medium term, they may become mainstream in those markets as well. That is affecting 20% of our markets. Exactly. Of the addressable markets for us. Of the addressable markets. Today, I would say that is affecting 10% of the 20%, so it's a 2% impact at this point in time. Got you. Thanks, José Luis. The next question comes from the line of Lucian Cawthron with CapeView Capital. Please go ahead. Hi, guys. Can you hear me? Yes, we can. Perfect. Thanks for the presentation. Just a quick question on provisions. The additions for the nine months were kind of EUR 52 or EUR 51 million. As of the first half they were, I think, around EUR 93 million. It's kind of actually negative in the quarter. I'd just like to know, firstly, what's the reason for this? Then secondly, just kind of going forward, we've seen the kind of across the peer group, the warranty provisions have been increasing. If we look at kind of obviously quarter by quarter for yourselves, like probably kind of between 3% and 6% this year for sales. Yeah. How should we kind of think about them going forward, obviously with this kind of negative addition in the quarter? Yeah. I think from the provision, for example, so in the second reporting one, we're seeing the decrease in the provision is now that we're turning some of those provisions into actual costs because we're executing those repairs. That's where that change would come from. I think the broader question is always for the industry whether with all the issues already taken into account fully. For us, I would say this is now a recurrent executing of those things that we have been detecting, as I earlier mentioned on these in-field repairs. That would be the key reason for the change. I'm not sure, José Luis, if you want to add anything to that. No. No, that's very much it. Does that mean going forward, we should kind of expect low provisions? No, stable, no? Oh. Stable provisions. Yeah. We're not foreseeing any substantial changes for now. I mean, that always goes hand in hand with what we see in the field. We're not foreseeing right now any substantial change there. Okay. Thank you. Okay. Thank you, Felix. Again, I think this was the last question for today, and I would like to thank you for your participation. As you know, I always take the opportunity to hand over for José, to José Luis for his final remarks. Please go ahead, José Luis. Thank you again. Thank you very much for all your questions. Thank you, Felix. Finally, as always, let us outline our key takeaways from this quarter. First is that policy momentum continues in the right direction, which will greatly support the growth of renewables. Second, our order intake remains solid with increasing prices and margins. Our operational performance in the first three quarters has improved, but short-term challenges remain a burden. Higher installation profile and supply chain reliability remain a near-term challenge as we go into the next quarter. To reflect this risk, we have tightened our margin guidance to the lower end of the expected range while we confirm our mid-term EBITDA margin of 8%. Once again, macro environment further stabilizes, which we start to see. Thank you for your participation in the call, and wish you a nice afternoon. Ladies and gentlemen, the conference is now concluded, and you may disconnect your telephone. Thank you for joining and have a pleasant day. Good night.