Ladies and gentlemen, welcome and thank you for joining the analyst and investor call regarding the Porsche AG H1 2025 results. This call will be hosted by Dr. Oliver Blume, Chairman of the Executive Board, and Dr. Jochen Breckner, Member of the Executive Board for Finance and IT. They will start by giving you a short recap of the previously released interest statement. Afterwards, we will jump directly into the question-and-answer session. Anyone who wishes to ask a question may press star and one on their touch-tone telephone. You will hear a tone to confirm that you have entered the queue. If you wish to remove yourself from the question queue, you may press star and two. Please press star key followed by zero for operator assistance in case of any technical difficulties. Participants are requested to use only handsets while asking a question. Please ensure that all other devices with which you may be watching the video stream in parallel are completely muted to avoid interference. In the interest of time, please limit yourself to one or two questions. At this time, it's my pleasure to hand over to Björn Scheib, Head of Investor Relations. Please go ahead, sir. Good morning and hello and welcome to all of our analysts and investors for this first half 2025 results of Porsche AG. My name is Björn Scheib, and with me is our CEO, Oliver Blume, and our CFO, Jochen Breckner. Today, we would like to give you a brief insight of our business performance of the first half of 2025. All materials such as the investor stack or half-year financial report are available in the investor section of the Porsche website. Before we begin, let me remind you that any forward-looking statement we will be making during this statement is subject to the risks and uncertainties mentioned in the safe harbor statement included in the Porsche materials. This intro will also be governed by this language. With that said, I'd like to hand over to Oli. Yeah, thank you very much, Björn. Good morning to everyone, and thank you for joining us today. Together with our CFO, Jochen Breckner, we'll walk you through Porsche's performance in the first half of 2025 and the strategic actions we are taking. Let me start with a big picture. Porsche continues to build on a strong foundation, a loyal customer base, a compelling and refreshed product portfolio, and one of the most iconic brands in the world. Our new product portfolio is resonating well. In the first half of 2025, we achieved record sales in North America and our overseas markets, counting over 70 markets there. We secured top ranking in JD Power's appeal study. The all-electric Macan and Taycan are performing strongly in Europe, where 57% of deliveries were electrified, including plug-in hybrids. This is exceeding our IPO target. Our demand on exclusive options and one-offs from Sonderwunsch remains exceptionally high, and, for example, paid-to-sample continues to exceed capacity. At the same time, we are facing significant global challenges. The macroeconomic and regulatory environment has deteriorated rapidly. In particular, the slower-than-expected ramp-up of e-mobility in key markets and exclusive segments is impacting our business more than others. We are experiencing a crisis of framework conditions, and our current performance does not meet our expectations, being very clear. Porsche stands for excellence in products and in business results. That remains our ambitions. We want the best sports cars, technologies, and innovations in the world to continue coming from our halls in the future. We have comprehensively analyzed the situations and drawn the necessary conclusions. Initial measures have already been initiated. Sharpening customer orientation in the product portfolio and rescaling our organization. Key elements of our new product strategy decided so far include a more flexible mix of ICE, plug-in hybrids, and BEV offerings, introduction of a combustion-powered B-SUV by decade's end, extended availability of Cayenne and Panamera ICE and hybrid variants, expansion of halo vehicles, exclusive and Sonderwunsch program. To rescale operations and strengthen resilience, we have already initiated key measures: comprehensive workforce reduction by 2029 as of 15%. This corresponds to around 1,900 direct and around 2,000 fixed-term roles, acceleration of road-to-20 initiatives to enhance cost saving. We are also taking decisive steps in China. We are making our dealer network more efficient. We continue to invest in high-demand locations, but where long-term profitability is no longer viable, we reduce our footprint from around 150 dealerships to about 100 by 2027. We are acting consistently in this regard. We are continuously evaluating further areas of action within the framework of our strategy to sustainably position Porsche for the future. Extraordinary expenses related to the strategic realignment and tariffs totaled approximately EUR 1.1 billion, with associated cash outflows of around EUR 500 million to date. These factors had a significant negative impact on our operating result and net cash flow in the first half of the year. While these measures in connection with our strategic realignment are currently heavily dilutive to our performance, they are critical investments aimed at strengthening our long-term profitability and resilience in response to a fundamentally transformed market environment. 2025 is our year of transition. We expect to reach the low point this year and begin to see positive momentum from 2026 onward. Jochen, will you take us through our financials? Please, Jochen, it's up to you. Yeah, Oliver, thank you very much. Also, good morning from my side. Thanks for everyone for dialing in and your interest in our numbers. It's a pleasure to present our results for the first half of 2025. In H1, Porsche delivered 146,000 vehicles with sales of approximately 135,000 units, reflecting an 11% year-on-year decline. Despite headwinds, the Macan stood out as the top-selling model with over 43,000 units, including 25,000 fully electric vehicles. You can see the all-electric Macan is gaining strong traction in slowly emerging BEV-exclusive markets, highlighting its strategic importance and market appeal. The BEV and the ICE Macan performed strongly and became our best-selling model. Given these adverse market conditions, incoming orders remain robust, reflecting strong brand desirability and a favorable product mix. Demand for individualization options remains unchanged high. Due to positive pricing and growth in financial services, group revenues declined underproportionally by 7% to EUR 18.2 billion. As Oli outlined before, we accounted for extraordinary expenses in connection with our strategic realignment and tariffs of approximately EUR 1.1 billion, of which around EUR 500 million resulted from battery-related impairments and operations, and around EUR 400 million from U.S. import tariffs. As a result, Porsche's group operating profit decreased to EUR 1 billion in the first half of 2025, with an operating return on sales of 5.5%. The operating result in our automotive segment was EUR 800 million, translating to a return on sales of 5.2%. Nearly all of the extraordinary charges previously outlined were concentrated in this segment. P&L accounted R&D expenses increased by EUR 200 million- EUR 1.3 billion due to a significantly lower capitalization ratio of 46% and higher depreciation of formula-capitalized R&D. Net cash flow from automotive activities amounted to EUR 400 million and includes extraordinary outflows of around EUR 500 million in connection with the strategic realignment and tariffs. With that, let me turn to the outlook. We plan to continue our model offensive and customer-focused product strategy. Porsche remains well-positioned from both a product and pricing perspective. There are also no changes to our underlying assumptions regarding our unit sales, supply chain conditions, and cost trends. Based on this framework, Porsche would have been in a position to reaffirm its original outlook despite ongoing market headwinds. Porsche remains a strong advocate for dialogue, open markets, and stable trade relations. These are fundamental to a competitive economy, especially for the automotive industry and our company. Following the EU-U.S. agreement on U.S. tariffs reached Sunday, we have revised our 2025 outlook to reflect both the newly announced and previously excluded June tariff measures. Our updated forecast now incorporates the 15% import tariffs expected as effective from August 1, alongside potential mitigation strategies. These include pricing adjustments designed to partially offset the financial impact. As a result, we expect group revenue in the range of EUR 37 billion-EUR 38 billion, unchanged from our previous guidance. At the lower end of the bandwidth, we anticipate a group return on sales of 5% and an automotive net cash flow margin of around 3%. At the upper end of the bandwidth, the group return on sales is expected to reach 7% and an automotive net cash flow margin of 5%. This upper end remains well within the range of our initial guidance from the end of April. The full-year return on sales outlook includes expected extraordinary expenses in connection with our strategic realignment initiatives of around EUR 1.3 billion and expected tariff burdens in the high triple-digit millions. The fiscal year automotive net cash flow margin outlook includes expected outflows in connection with our strategic realignment initiatives of around EUR 500 million and tariff payments in the mid to high triple-digit millions. Additionally, we maintain a robust currency hedging strategy with substantial exposure already secured for 2025 and partially also beyond. Considering the geopolitical and industrial dynamics, our strategic realignment activities will be expanded to increase our financial resilience. In addition to these immediate measures, as Oliver mentioned earlier, management and works council will negotiate an additional structural package in the second half of the year. These efforts are aimed to support our financial resilience and future earnings and cash flow. Before closing, let me briefly touch on our capital allocation strategy. Due to additional product initiatives tied to our strategic realignment, we expect R&D spending to peak this year and next before declining. Our strong cash conversion is expected to underpin our commitment to a 50% dividend payout. We plan to maintain automotive net liquidity within our target range of 15%-20% of segment revenue. With that, I hand over to Oliver. Thank you very much. Yeah, thank you, Jochen, for the insights. As you can see, our first half of 2025 performance was shaped by persistent macroeconomic and geopolitical headwinds alongside a proactive strategic realignment. We are using it to move Porsche forward. We are rescaling and recalibrating our company. That puts additional pressure on our results, but we are willing to accept that. Our goal is clear: to sharpen our brand, to make our products even more individual, more exclusive, and more desirable, and to position Porsche for strong and long-term profitability. We expect to move through the lowest point this year and begin to see positive momentum from 2026 onward. A more balanced drivetrain portfolio from 2028 onward will enhance market positioning and underpin sustainable long-term growth. Thank you very much. With this, I would like to hand over to Björn. Thank you, Oli, and thank you, Jochen. We will now begin with the Q&A session. Ladies and gentlemen, in the interest of time, please limit yourself to one or two questions. Anyone of you who wishes to ask a question may press star and one on their touchphone telephone now. We will begin with the Q&A session. First in the row will be Tim Rokossa of Deutsche Bank. Second in the row will be José from JP Morgan. Tim, the line is open. Thank you very much, Björn, and hi, Oli and Jochen. Oli, I think the first question goes to you. As you already said, the key here to understand for investors is clearly, is this really the trough for Porsche? We already discussed this during the Volkswagen call. The Porsche business is in the unusual situation of actually having a very good product portfolio already that customers want to buy, but there is no growth and margins are very weak because of everything that is going on in the world. How can we get confidence that this is indeed the turning point? Is the efficiency program sufficiently done? Is the ramp-up now all on time? Is it really just "on getting a bit more clarity on the tariff situation now and then hopefully China not getting much worse" or which stars have to align for this to really be the trough? Related to that, given how big of the impact it is, where do we stand on the tariff situation in your view? Is this deal it, or is there a chance for a more company or industry-specific deal that includes export or investment credits? Ola sounded pretty downbeat on that possibility on his call just now. Jochen, to you, thinking about the performance program, actually, where do we stand regarding that in terms of financial impact? How many people have signed already? How much are still due? Is there a phase two? How should we think about the performance program at this point? Thank you, guys. Yeah, Tim, thanks for your questions. I would like to start with the first one. In terms of are we touching the bottom this year? To be very clear, we think yes, because we are in the middle of our restructuring and realignment program. We have taken important decisions on our product portfolio. The current one, as you mentioned, is performing quite well, but at the end, it depends also on the markets. We are continuing this year with the 911 Turbo S, then next year with the electric Cayenne, followed by the electric 718, and much more in the row. We think on this point and with more flexibility in the future, we are very well positioned. On the other side, we need to rescale our company because 20% from China are missing, and we expect, let's say, won't come back. Therefore, our task now is to adapt our business in China, being still profitable on a volume level of around 40,000 units. We think this will be able. We improve our products, especially in terms of software, being with this in the market in 2026. Then we will come with very special offers for the electric Cayenne in the market, and we improve our exclusive business in China, especially for the two-door sports cars, what we have not done so far in the past. There we see special potential also with city showrooms in the big mega cities of China. Lower volume, but much more value-oriented. I think we will come back in China. In terms of tariffs, I agree with what Ola said, that we won't have a specific automotive deal. We have had a lot of meetings there with the Minister of Trade, but I think we will continue also with talks on a very attractive investment package coming from the Volkswagen Group with the many brands with which we are acting in the U.S. Maybe there would be an opportunity also to make a separate deal, which has nothing to do with the tariffs, but beside of this, which can support at the end also our activities. We waited for the deal in between U.S. and EU. Now we have clarity, and then we will continue with our offers in the U.S. I hand over to Jochen to the second part of your question. Yeah, Oli, thanks. And Tim, thanks for the question. Our strategic realignment measures are really targeted and consistently executed and are designed to strengthen our financial resilience and position for, yeah, let's call it sustainable value creation. Now, on the concrete point that you were mentioning in terms of positions where we communicated that we will reduce them at Porsche, we are very well on the way, achieving good progress. We communicated that we will not extend around 2,000 fixed-term contract positions. Most of these have already expired. The remainder will, or the biggest part of the remainder will, expire in 2025. On top of that, we decided that we wanted to reduce an additional 1,900 positions for what we call the indirect personnel. So that's mainly R&D and SG&A stuff in the company. We do that in a socially acceptable way with the programs where we help the people to leave the company. The demand and the interest in these programs is in line with what we've expected so that we are really confident that we will achieve the target of reducing the indirect workforce by the 1,900 FTEs by 2029. The latter comes with a cost because we need the programs to make the people move. We had communicated at the beginning of the year that we see a EUR 300 million burden for the full year for these programs. That's still our estimate. In the first half of the year, we have booked around EUR 100 million of these expenses. Jochen, Oli, thank you. Next in the row is José from JP Morgan. Thereafter, we have Harald of Citi. Good morning. It's José from JP Morgan. Just a couple of questions, please. Can you first comment on the speed of change and how quickly can you reset some of the product portfolio within the Porsche product lineup that needs to be reaccelerated and reboosted in the next, let's say, 12-16 months? How quickly can you do this? What is the sense of urgency within the house? Also, maybe for Oliver, for you, when you look at China, which vehicles do you think resonate with customers? Which ones do you think, at a difficult point for the business in China, which vehicles are for you absolute core pillar for the profitability of the business model in China? What are you looking to launch again in the region to reengage customers in that sales momentum? Thank you. Okay, José. Let me start with our product portfolio. First of all, we have a complete new product portfolio, which is performing quite well in the markets. Also, when you look to electromobility, this works for Porsche. We achieved in Europe, for example, 36% BEVs in the first half of this year and 57% electrified vehicles, including the plug-in hybrids. That is higher than what we expected in the IPO period. We are over 50% in Europe. The products are well accepted, but the overall market volume is much lower than we expected years ago. That puts our business under pressure in terms of our investments we have done internally in terms of capacity, but also in our supply chain. That costs money. That is the first aspect. What we are doing, we adapt now, and we call it kind of hatching. What we have done already in the Cayenne segment with a combustion engine hybrid, and now from next year on, a fully electric Cayenne. The same we will do now in the B SUV segment. There we have the electric Macan, which is performing in its segment quite well with over 30% market share, which is huge, but on a lower volume than expected. Now we will add again a combustion engine and a very performant hybrid in this segment from the end of the decade. In our two-door sports car segment, we are coming with new derivatives. We are investing currently. There we will be a bit quicker. With the lineup we do have now with the 911 Turbo S, having brought in order the battery issue there, we will have our icon in the market. Continued by the Cayenne, then we will bring the 718. Our product portfolio is well balanced. Now with more investments, even more flexible than before in all segments. That is a positive perspective in medium and long term. In terms of China, we count on the very successful Cayenne and Panamera. Always. These both products with combustion engine and hybrid were very successful. What we are doing now is making them even more attractive with special Chinese digital offers, which we developed in China for China and also with abilities for autonomous driving. We count on more exclusivity. The past business in China was more to send pre-configurated cars to China, sell them easily. Now the market has changed. Now we are counting more than in other regions of the world for exclusivity. For the 911, installing city showrooms and promoting especially the opportunities we do have in exclusivity with more than 1,000 options. There we think, and the first response in the market was very positive in the Shanghai Auto Show, that we can hit the taste of the Chinese customers. In terms of electromobility, the luxury segment still does not exist. We think with our new Cayenne, which is a completely new world in the automotive industry for electromobility in terms of performance, driving abilities, but also a completely new design, interior, exterior, completely new infotainment, and the offerings of automated driving functions, we think there is a great opportunity. Summing up, Cayenne and Panamera are still important in China with new offers in terms of infotainment, then 911 exclusivity, and the third pillar will be still electromobility with our approach with the new Cayenne from the next year onwards. Thank you very much. Very good. The next in the row then will be Harald of Citi, and he will be followed by Patrick of UBS. Thank you, Björn. Can you hear me? Sure. Loud and clear. Nice. Two quick questions. One, just on the structural packages and stuff like that, I just wanted to understand from you guys, I mean, how you're looking at the second quarter and where Porsche is today, right? You have reported 2.6% margin. If we exclude some of those exceptionals, specifically the non-tariff exceptionals, you are still doing over 10% margin on an underlying basis in the business. In the past, you have always said you think Porsche should get back to 15%-17%. Can you give us some idea, particularly with regard to the structural realignment, how do we go back from the 10% underlying back to that 15%-17% and some sort of potential timeline? My second question is, and I think a reasonable question. Oliver, I know you have been super close to the tariff negotiations and obviously the meetings that you have. It is clear that some European countries are not as happy with the new EU-U.S. deal as other countries. Do you foresee any risks at all to the framework agreement that was announced over the weekend? Thank you. Harold, thank you very much. Let me start with the question on Q2 and also on the question of the midterm ambition of the 15%-17%. So you're right. Q2 margin was 2.6%, and that was pretty much under pressure due to some special expenses. We had EUR 1.1 billion reposted in H1, so in the first half of the year for tariffs, but also for our strategic realignment when it comes to products and when it comes to the product strategy, as well as the organizational structure realignment that we are doing. On an operational level, we are running on a well above that return on sales level for sure, and that's also our ambition. The strategic realignments that we are doing are taking some time until you will see the full positive momentum and the full positive impacts. The ambition remains that we will definitely come back to two-digit return on sales numbers. We will see the trough this year with the lowest point in terms of the seasonality over the years. We are currently assessing the timing when we will reach the old ambition, which is still a valid one. As we said, it's going to be tough in the few years to come to reach that level. The strategical realignments are very important. We are convinced that they will pay off at the end of the day. Therefore, we are pushing the company in that direction. Harold, coming to your point. On On tariffs on the EU level. To compare the situation before with a new deal. It's not only about the 15%. We have data of 22.5% in between. Europe and U.S. In a negative direction. Talking about the 15% in the U.S., because Porsche has got a 100% export business, for us, it's 12.5% higher than before. There we are in the position that we have the opportunity on pricing. Our segment is not so sensitive. We have the products and the power in the market. This is shown by the record sales, 11% higher in the first half of this year than last year. Our product momentum is there. We have a huge fan base in the U.S. It's our biggest single market. We see pricing opportunities to compensate part of the tariffs. On the other side, while we are not expecting a specific automotive deal beside the tariffs, we continue with our activities offering this huge investment package from Volkswagen Group with our in-America acting brands like Volkswagen, Audi, but also Scout International and our technology investments into Rivian, where Porsche also is a part of it. To use this for special separate deals, which can compensate part of the tariffs. There we will continue to do so. Now we have clarity on the tariff level. Maybe there will be opportunity beside of this, not linked to the tariffs. Thank you, Olli. Sorry, can I just clarify? Sorry, Olli. My question was really, do you see any political danger in Europe that the deal does not get completed at 15%? France particularly seems to be unhappy with the deal. Do you see any of such risks? I think nobody is happy. Higher tariffs also is bad for our business sheet. Each company now has to find its position in the new situation. At Porsche, we have very clear what we have to do, and we have opportunities. That is a positive message for Porsche. In total for the global European industry, I think each company has to think how to act in the U.S. Our path for the Volkswagen Group is clear. Where Porsche at the end maybe could benefit is when we come to a separate deal in terms of investment in the country. I agree completely with what you have said, that the level, what we got with the deal, is not a positive outcome. Okay, thank you very much. Next in the row then will be Patrick of UBS, and he will be followed by Stephen of Bernstein. Thank you, Björn. Good morning, Olli and Jochen. I have two questions, please. The first one is on that second realignment package that's currently under negotiation. If I take a step back and I look at your top line, your volumes, I think it's fair that the new Porsche has to be built for about 20% less volume than maybe expected a couple of years ago. The first package is about a 5% headcount reduction. I get it that more top end, more exclusivity, more Sonderwunsch also requires some resources. But is it fair to say that the second package actually needs to be larger than the first one in order to restore profitability where it needs to be for a luxury brand like Porsche? If you can just share a bit of color on the nature of the measures you have in mind, is it just a continuation of voluntary measures or what else is going to be in there? My second question, and I'm not sure if I agree with what has been said before about the underlying margin, if I look at your guide for the second half, basically you're guiding to say 6%-7% margin in the second half. Yes, a bit of realignment cost in there, but the tariff is here to stay. I wonder with the view of 2026, can we be confident that you bring this business back to more than 10% margin already next year? What would you say are the key levers to get there? More pricing, more restructuring benefits, or anything else? Thank you. Yeah, Patrick, let me start with the structural package that we announced that we will negotiate in the second half of the year. Let me put that into context of what we've agreed so far and what we also achieved so far. As I said before, we agreed that 2,000 fixed-term contracts will expire and that we will use roundabout 2,000, exact number 1,900 indirect positions over the course of the next few years until 2029. These numbers need to be put into a relation with our core business at our headquarter company. When you take the total workforce for the whole Porsche Group, including, for example, such companies as MHP, our IT service and consulting company, they alone have around 4,500 employees. That's a completely different business. We are not targeting these businesses there. In terms of percentages, we're not talking 5%. We're talking rather 15% in reduction. That is well in line with what you've also mentioned, that our volumes that we will achieve while following our value of a volume strategy are lower than we initially planned one and a half, two or three years ago. Now, when it comes to the second structural package, it's a bit too early, unfortunately, to talk about details because we haven't started negotiations yet. We have announced that we will start the negotiations straight away after the summer break. That is discussed with the works councils, but we have not exchanged details yet. Negotiations have not started, and we will do that internally with the colleagues from the work council. Once we have agreements, we will, of course, incorporate these and bake them into our numbers and also communicate them to the public. What we've said is that the structural package two needs to be a big one, a decisive one for the company. As of now, it's not possible to compare it to what we've already achieved so far. The second point you were raising was about 2026, about two-digit return on sales numbers in 2026. As you know, we are not guiding the next year in detail. We will do that with the annual report in the beginning of 2025. What we can say is that giving all the special expenses we already had in H1 and the additional special expenses we expect also in H2, and also giving the first positive momentum from product strategy and strategic realignment, 2025 will be the trough. 2026 will be a better year. That's what we are fighting for. That's how we put the position that we put the company into. No precise number as of now. Got it. So it's too early to say whether double-digit or not next year, basically. Yeah. Too early to say. Maybe as an addition, we were talking return on sales. Now, also when it comes to cash flow, we will see the same shape. Also in terms of cash flow, cash flow margin, we expect 2025 to be the trough because not all, but a bigger part of the special expenses we have in 2025 are also cash relevant. Understood. Thank you very much, Jochen. Next in the row will be Stephen of Bernstein. Thereafter, we're going to have Michael of HSBC. Thank you very much. I have two questions. First of all, a clarification. Oliver, you mentioned that the replacement or the vehicle that will be in the segment of the Macan ICE will come at the end of the decade. That is not a change from sort of previous communication, which was suggesting it was coming around 2028. So it is not coming later than 2028. That is my first question. Secondly, looking at the U.S. market, with some of the changes in structure, first of all, with the ending of the lease credit, the $7,500 that your dealers were allowed to claim from the U.S. government, which helped them suspend leases, which obviously has been very effective in selling the Macan BEV, how do you see things developing after that for your BEV sales in the United States? Secondly, given also the changes to sort of environmental regulations that the U.S. administration is pushing through, do you think there is an opportunity to increase actually some more of your ICE vehicle sales? Thank you. Steve, may I start with product strategy? You are right. We will not be later than 2028 with a BSUV, ICE, and hybrid version. That is what we said by the end of the decade. We are rolling out in all the markets. We are speeding up the process there with very short development times and making a very, very typical Porsche for this segment and also differentiated from the BEV Macan. We think, especially for the SUVs now, we have a complete flexible product lineup between Macan and Cayenne in all drivetrain versions. I hand over to Jochen. Yeah, thanks, Steven. On the lease credit or the expiration of the expiry of the lease credits in the U.S., that's for sure an impact that we will see. It's a $7,500 credit that you are eligible to when it comes to lease contracts on BEV vehicles. Of course, our products, both the Taycan and the Macan, also benefited from that support. Once these budgets are cut from the official side, we will see increasing lease installments and pricing offers from our side. We have not decided yet how we will treat these. What we can say is we will stick to the value of a volume strategy. There is no way that we can swallow that amount against our margin and keep prices stable when it comes to the financial services products. There might be a strategy of smoothening the transition from the, say, former pricing to the new pricing over the time. In general, if official supports are abandoned in either country or in any country, that is something that customers will experience. The last point you were mentioning was the legislation when it comes to environmental rules that you need to comply with, greenhouse gas and all the other. As of now, when it comes to our H1 financial statements, we have put the numbers in a way of the legislation as it stood on June 13th. We were not expecting any easing situation there. If these effects come into place, that would help both the provisions that we have in our balance sheet, where we might be in a position to release some of them. When it comes to product strategy, when it comes to product mix in the markets, it will become more profitable to sell the ICE and plug-in hybrid vehicles as opposed to the electric vehicles. That is something that we will optimize in our production and sales steering once we have clarity on how an updated administration and regulation might look like. Thank you very much. Thank you. The next now is Michael of HSBC. Thereafter, we're going to have Horst of Bank of America. Björn, thank you very much. Morning, gentlemen. Just a couple of questions, if I can. Can we talk a little bit about China? Because the dealer body there, if I'm not wrong, I'm trying to remember what the exact number was, but you were cutting by, was it 25% or 30%? Sales are down over 50% from their peak. I just wonder if there's more work that needs to be done on the dealer network in China. Secondly, the changes to the thresholds on the luxury tax side. Can you talk a bit about that? What's the impact of that for you? How much of your model range sits in that new threshold? How will you deal with that? Does that mean just another headwind on China sales? Thanks. Yeah, Mike, about the concrete figures of the so-called luxury segment. Over CNY 800,000 there shrank in the last year by 34%, in the first half of this year by 50%. More than half of our volume is playing there, and this describes the situation. We think now we have a more stable order intake situation since the last three months in China. We are calculating around 40,000-50,000 units in China, but we do not expect that we will come back to 100,000 or over 100,000, what we expected some years ago. We think this will be able by adapting our dealer network, as we said, 30% less, and also checking where it is positive for us to invest in city showrooms and so on and to change a bit the customer touchpoints. About the product initiatives I already talked about, the luxury tax, we are getting there. We think, especially in this segment, it has not got such a huge impact. A customer who wants to buy a luxury product at the end does not care about 10%. It has a small influence, but in our segment, we think that we have the pricing power. Our focus is more now realigning, rescaling our organization in China, the dealer network, and what Jochen before explained, also that the capacities in Germany for our 100% export business to China. I think we will be able to come back to a profitable or positive profitability in China with a lower volume in the region of 40,000 units. Got it. Thank you. Very good. With this, we move on to Horst. After Horst, we have Anthony from Udo. Yes, thank you for taking my questions as well. Sorry, I need to come back again on this tariff stuff. Question for Ollie, since you have been that specific about this potential CapEx credit, and you mentioned it also during this call all the time, by when could we see that implemented? When could there be a potential agreement? Is there any timeline you maybe can provide? To Jochen, you said that I think in your speech, you said that you expect the tariff impact of mid-triple digit to high triple- digit. What does it depend on if it's mid-triple digit or high triple digit? Maybe you can clarify that. The last one, again on tariffs. I mean, Audi and Volkswagen, they largely invest in the U.S. I understand why they should get a CapEx credit. Is there maybe a risk that Porsche needs to compensate the Volkswagen Group for getting an indirect tariff benefit by getting part of this CapEx credit deal? Thank you. Awesome. I would like to start with your two tariff questions. Before the tariff deal between the U.S. and the EU, we were negotiating and fighting for a specific automotive deal. We think now with the closed deal, there will not be a specific automotive deal overall. I am still confident that with our investment offers we do for the U.S., what I mentioned for Volkswagen, Audi, for Scout International, and what we are doing in Rivian, there could be an opportunity that we will get a special bonus, I would call it, not connected to the tariffs, but which can support and compensate a part of the tariffs. We will continue now with the talks. We agreed not to do nothing in the finish line of the negotiations in between the EU and the U.S. Now we are catching up the point already in August with the Secretary of Commerce and checking what will be possible. The package is attractive for the U.S., but at the end, we have to come to a special mode, how to calculate it and benefiting this. Investments. In terms of compensation payments for Porsche, we did not talk. We will integrate Porsche, but also Lamborghini, Bentley, or Ducati, who all do not invest in capacities in the U.S., into this deal. On the one hand side, an investment should be feasible for the investor. At the end, a second effect could be to connect the brands of Volkswagen Group which are not investing. That is also one part of my double role, where I can put everything under one umbrella. This one is very, very helpful to speak for all brands who are connected with Volkswagen Group. First on the tariff impact. We had, as communicated, EUR 400 million in Q2. That was the quarter where we had to pay the full 27.5%. As you know, we had not implemented any pricing because we agreed on a strategy to price protect our customers in such a volatile and uncertain situation. Now, when it comes to the full year, what you should not do is take the EUR 400 million for Q3 and Q4 for two reasons. First, as of August 1, we expect the tariffs to come down to 15%. Second, we have already implemented pricing measures in early June with 2.3%-3.6% of additional price increases due to the inflationary impacts. When we talked about mid to high three-digit numbers there, a mid number would be 500, a high number would be 999. Mid to high is well in between these numbers. That is our estimation of the net effect for the full year, given the assumptions I have just mentioned, especially that we will see the 15% as of August 1st. Impact. Very good. Jochen, thank you very much. As we have 10 minutes left only, we will now take the last three in the row. Gentlemen, please keep it short to give all of you the chance to ask your question. First in the row will be Anthony of Udo. Second will be Michael of Die Z-Bank. Last on this call will be Adrian of Redburn. Anthony, the line is open. Yes, good morning. Thanks for taking my question. Just the final one on China. It's regarding the tightening of the financial conditions and the financing conditions in the country. On the Mercedes-Benz call, they mentioned that should have positive impact on pricing, but they were seeing negative impact on volumes. I was just keen to have your opinion on what you were seeing from these tighter financial conditions and how you would expect that to impact your volumes and pricing and profitability maybe in the coming quarters. Thank you. Yeah, thanks for the question. Looking at the China situation, I mean, as discussed back and forth, the market evolved completely differently as opposed to what we've seen in our record years 2022, 2023, and also what we were expecting how the market situation would be. We are volume-wise down at a level of probably a bit more than 40,000 units this year. That's a level that we also see for the years to come. We see first stabilization elements. Having said that, that's a result of our value over volume strategy. We deliberately cut production and reduced volumes to protect our brand, to protect our price premiums. Having said that, of course, price competition is fierce in China, and it's still fierce. We do not see easing elements there yet, although there were discussions also from the government side that they will scrutinize the situation and see that there are no, say, too small prices from the local players devastating the markets. Looking at our segments, there's still fierce price competition, and dealers do what they have to do. From our side, we protect prices. What we've done is that we've launched a few special models with the Cayenne, also with the Macan, where we launched products with a better proposition to the customers, additional options in the car, a bit of a lower price, but still very well positioned above everything that you see in the competition. That's how we run the pricing and also volume strategy in the market. Of course, that's less than we had achieved. Therefore, we do the restructuring work both locally in China with the dealer body, with our own organization, but also here in our headquarters. Thank you. Okay, I see on the list that Michael dropped off. So last in the row then would be Adrian of Redburn. Morning, everyone. Thanks for taking my question. Maybe a last one for me, just related to the automotive net cash flow. So around EUR 400 million in H1. The guidance at the midpoint suggesting around EUR 1 billion in the back half of the year. Just in terms of thinking that through, is there any working capital tailwinds that you'd like to highlight that we should consider and maybe even consider phasing it between Q3 and Q4? Also thinking through the tariff costs, if there's any kind of disjoint between the P&L costs that you had in the quarter and then thinking about that in the second half of the year. Really just thinking about the phasing of free cash flow, please. When it comes to free cash flow, the second half will be better than the first half. That is clear. As you said, you can see that in our guidance. We will see tailwinds from working capital. That is correct. We will see first positive effects also already in Q3 and then for the year-end, optimizing our supply chain and the stock levels that we have in the markets. We have already decreased dealer stock, which is also important when it comes to pricing pressure so that we have an alignment of demand and supply in the markets. When it comes to the stock levels on our books, we will definitely have a reduced stock level in the second half of the year. That is also due to the fact that we held back some of the volumes, especially in the U.S., given the tariff situation and also the open pricing decisions we had not taken yet. We deliberately held back stock on our books so that we can release that stock at updated prices that we have agreed on. Ollie, Jochen. Gentlemen, thank you very much for your questions. We hope that we could serve you with your interest in our business, financials, and strategic outlook. For the ones of you that we are going to see tomorrow in London, we are going to look forward to see you there. For the ones who are going to meet us in Frankfurt virtually and New York at the end of the week, stay tuned. For the ones we are going to see next week in Canada, prepare your questions. For all of you who are going to go on holidays now, we fully understand this was a quite busy reporting day for all of you. Thank you very much for your patience. Thank you very much for your interest. Have a good rest, stay healthy, and we look forward to see you after the summer break. Bye-bye. Thanks for joining. Thanks, everyone. Bye-bye. Talk soon. Ladies and gentlemen, the conference is now concluded, and you may disconnect. Thank you for joining, and have a pleasant day. Goodbye. Goodbye.