Ladies and gentlemen, thank you for standing by. Welcome and thank you for participating in the Joint Media Analyst and Investor Call regarding Porsche AG's Q1 2026 Results. This call will be hosted by Dr. Jochen Breckner, Member of the Executive Board for Finance and IT. During the intro statements at the beginning of our call, all participants will be in a listen-only mode. After the intro, we will jump to the question and answer session. Anyone who wishes to ask a question may press star and one. At this time, it's my pleasure to hand over to Florian Laudan. Please go ahead, sir. Good evening, dear colleagues. Welcome to our Joint Media Analyst and Investor Call on the Porsche AG Quarter One 2026 Results. My name is Florian Laudan. I'm the new Vice President in Communication, Sustainability, and Politics. Just started beginning of this month, and it's a great pleasure for me to host this call today together with Björn Scheib, our Head of Investor Relations. Joining us is our CFO, Dr. Jochen Breckner, and before Jochen will give you a brief overview of our business performance in the first quarter, I hand it over to Björn. Thank you, Florian. Hello, everybody, also from my side. After the intro statement of Jochen, we will start with questions from the analysts. We will switch to the Q&A with the media representatives. You can find further detailed information online in the Porsche newsrooms, as well as on the investor relations website. Before we begin, I would like to remind you that all forward-looking statements are subject to the risks and uncertainties mentioned in the safe harbor statements in the online materials. With that, I hand over to Jochen. Björn and Florian, thank you very much, and also everyone on this call, very warm welcome to you for joining our Q1 2026 Results Call. As it was announced, let me just quickly start with a few introductory comments to give you some more color and meat around our Q1 financial numbers. As you know, Porsche starts from a position of strength as one of the world's strongest exclusive brands, with iconic products and a highly loyal customer base. The environment has fundamentally changed. Heightened competition, geopolitical uncertainty, a slower-than-expected BEV ramp-up, and shifting market dynamics require decisive structural action. Since the beginning of the year, our new CEO, Michael Leiters, together with the Porsche leadership team, has conducted a thorough, systematic, and fact-based review of the company. We have taken an open and honest look at what is working well and where decisive action is required. On this basis, we have already initiated targeted measures. These include, first, value over volume remains non-negotiable, particularly in China. Despite lower volumes, Porsche continues to prioritize pricing discipline, control dealer inventories, and production, balancing demand to protect brand exclusivity and long-term pricing power. Second, a quality-driven and carefully phased ramp-up of the all-electric Cayenne. Third, comprehensive efficiency initiatives, such as our Push-to-Pass program, with focus on lowering our break-even point. Fourth, a sharper Focus on the Core business. Our ambition is clear. Return Porsche to its full strength. The realignment of Porsche AG is progressing at high speed. The measures weigh on our financials in the short term, but first tangible signs of progress are becoming visible. As part of the strategic focus on Porsche's core business, the supervisory boards of Porsche and Volkswagen approved the planned disposals of the equity interests held by Porsche AG and its subsidiaries in Rimac Group, Bugatti Rimac, and Bugatti International Holding, as well as other assets related to these investments in March. In April, the relevant sale and purchase agreement was signed. Based on current expectations, the transaction is anticipated to close within the next 12 months. Upon completion, Porsche expects a significant cash inflow. The transaction is expected to be predominantly reflected in financial income. Let's start with our sales and top-line development in the first quarter of 2026. Keeping in mind the current gaps in our product portfolio and market conditions in China, our unit sales are resonating relatively well. As you know, Porsche delivered around 61,000 sports cars in the first quarter to customers. This decline of 15% year-over-year, which was anticipated and reflected in our guidance. Wholesales were around 58,600 units in the first three months of this year. This corresponded to a 9.5% decline in sales compared to the prior year. Let me briefly walk you through the wholesale development by model line and region in the first quarter. The Cayenne once again proved to be our strongest-selling model line, with sales of around 18,700 units, supported by a solid and well-balanced global demand profile. The 911 also performed very well. It recorded a significant increase in sales and continued strong customer interest. At the same time, Macan sales declined to around 18,200 units, which was largely expected. This was driven by the strong ramp-up of the fully electric Macan in the prior year period, as well as the expiry of tax incentives for electric and hybrid vehicles in the United States end of last year. Panamera volumes were lower, mainly due to temporary supply gap in China, ahead of the launch of a China-specific edition starting in April. Wholesales of the 718 Boxster and Cayman were also down. This reflects the discontinued availability since the end of production in October last year. From a regional perspective, growth in North America was offset by declines in China and parts of Europe. In China, in particular, we remain firmly focused on a value-driven sales approach. This means we deliberately balance supply and demand to protect brand exclusivity and long-term pricing power. Looking ahead, our clear focus in the coming month is the market launch of the fully electric Cayenne. First customer deliveries will start this summer. With regard to the Middle East, unit sales in the region accounted for around 2% of Porsche's global wholesales in 2025. A negative volume impact in the region in March was offset by other markets globally as Porsche continues to benefit from its well-balanced global sales structure. Given the ongoing disruption to vehicle logistics into the region and currently subdued dealer traffic due to the conflict, we have to expect a further temporary volume impact. We are closely monitoring developments. Overall, Porsche's global sales remain well-balanced across key regions. This underlines the strength of our brand, the appeal of our product portfolio, and the resilience of our diversified market presence. Despite the challenging market environment, incoming orders remain robust. This is supported by strong brand desirability, a favorable product mix, and consistently high demand for individualization options. Group revenues of EUR 8.4 billion declined at materially lower rates than wholesales, with revenues down 5.2% compared to a 9.5% decrease in wholesales. Automotive revenue per wholesale increased to EUR 126,000, up by EUR 5,000 year-on-year. This again reflects our disciplined pricing, strong product mix, and our Value over Volume strategy. Turning to expenses. In the first three months of the year, we continued to face inflationary pressure, particularly in material costs, including compensation payments to BEV suppliers. These payments were driven by lower than anticipated volumes. Our further investments in product quality and customer satisfaction contributed to ongoing cost headwinds. We launched numerous new products in recent periods, we again accounted for slightly higher depreciation and amortization of EUR 750 million compared to last year. Moreover, temporary gaps in our product portfolio weighed on fixed cost absorption. Foreign exchange effects developed unfavorably compared to Q1 2025. In addition, the first quarter we recorded around EUR 100 million of charges related to our strategic realignment, as well as approximately EUR 200 million of increased expenses from the U.S. import tariffs. On the positive side, our cost base benefited from the continued execution of our Push-to-Pass program once more. This has a clear focus on improving operational performance and cost efficiency. In Q1 2026, we earned a group operating profit of EUR 595 million at operating margin of 7.1%. Turning to cash flow. By the end of the first quarter, automotive net cash flow increased to EUR 514 million compared to EUR 198 million in the prior year period, despite lower earnings. The net automotive cash flow margin improved significantly to 7%, up from 2.5% a year earlier. This improvement was primarily driven by higher cash inflows from operating activities, disciplined working capital management, and lower cash outflows from investing activities in the ongoing business. It is important to note that the automotive net cash flow in the first quarter already reflects extraordinary cash outs of around EUR 400 million. This is primarily related to the first tranche of the Audi license payment and strategic realignment measures. In addition, we incurred tariff payments of around EUR 200 million in the first quarter. Despite these meaningful cash outflows, the strong net cash flow performance underlines the resilience of our operating cash generation and our disciplined approach to cash and working capital management. With that, let me turn to the outlook. Despite changed geopolitical and economic conditions, we confirm the guidance for the 2026 financial year as published in our annual and sustainability report. As also mentioned, temporary portfolio effects, notably the run out of the 718 and the phase out of the ICE Macan production in mid-2026, are fully reflected in our planning. As a result, retail and wholesale volumes in 2026 are expected to be below 2025 levels, while the share of BEVs will increase, also based on the launch of the electric Cayenne. We will continue to manage demand and supply strictly in line with our Value over Volume strategy. For the current year, we expect a group return on sales of 5.5%-7.5% and an automotive net cash flow margin of 3%-5%. The group return on sales guidance includes EUR 800 million-EUR 900 million of extraordinary expenses and an estimated EUR 700 million from U.S. import tariffs, broadly in line with last year. Automotive net cash flow is expected to reflect extraordinary cash outs of EUR 1.4 billion-EUR 1.5 billion, mainly related to strategic realignment, including the Audi license payment of around EUR 1 billion as well as tariff payments of around EUR 700 million. Given the current uncertainty, a reliable assessment of any potential lasting impact of the Middle East conflict on our business is not possible at this time and has therefore not been factored into the current forecast. Our increased Focus on the Core business may also result in further selective adjustments to our portfolio of shareholdings. Potential M&A activities relating to the divestment of non-core shareholdings are not included in the outlook due to their uncertain nature. If successfully executed, such transactions could result in one-off effects. Before concluding, let me briefly address our capital allocation strategy. The proposed dividend of EUR 1.01 per preferred share, payable after our annual general meeting in June, strikes a clear balance between financial flexibility and shareholder reliability. It underscores our confidence in Porsche's long-term earnings power, even as we navigate the transformation. Our strong financial foundation provides resilience and flexibility. A healthy balance sheet, solid liquidity and disciplined capital allocation underpin Porsche's ability to navigate the transformation and to restore compelling margins and cash flows. Before we come to the Q&A session, let me give you a brief update on our Strategy 2035. Porsche has a solid track record of navigating complex environments. Today, we are managing another phase of macroeconomic and industry-wide challenges, operational discipline. Transformation requires time and execution. Porsche has all prerequisites firmly in place. A powerful brand, iconic products, and strong financial foundations to sustainably restore profitability and long-term value creation. Strategy 2035 will sharpen Porsche structurally and strategically. With our new strategy, we will combine cost optimization and operational excellence with targeted investments in product offering, customer experience, and brand. With this, we will lower our break-even point, increase our resilience, and further strengthen Porsche's positioning as a leading sports car manufacturer. We aim to bring back Porsche to its former strength in a financially and strategically sustainable way. China and electrification realities are being addressed with realism and discipline. We are recalibrating portfolios, footprints, and investments without compromising brand positioning or our value over volume philosophy. Strategy 2035 is approaching its next key milestone. We are working at full speed on a more compelling and more differentiated product offering in the most relevant segments. Let me also briefly address the discussions around our future package. Management and the workers council are currently engaged in a constructive dialogue to jointly shape this initiative. Our shared objective is clear: to enhance Porsche's resilience, flexibility, productivity, and agility, and thereby reinforce our long-term competitiveness in an increasingly dynamic market environment. All these efforts are fully aligned with our long-term ambition: sustained high margin growth and resilient profitability. A comprehensive update will be provided at our Capital Markets Day in autumn. With that, let's now turn to your questions after a short break. Thank you very much. Ladies and gentlemen, we will now have a short break. Afterwards, the Q&A session for the analysts and investors will start. Ladies and gentlemen, we will now begin the question and answer session for the analysts and investors. Anyone who wishes to ask a question may press star and one on their touchtone 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 mu-muted to avoid interference. In the interest of time, please limit yourself to one or two questions. As mentioned, anyone who has a question may press star and one at this time. With that, I hand over again to Björn Scheib, Head of Investor Relations. Please go ahead, sir. Thank you very much. Taking a look at the time, I would highly appreciate your discipline when asking your question. It would be very nice if you could limit yourself to one or two quite short questions. With this, we start with Tim of Deutsche, who will be followed by José of JPMorgan. Tim, the line is open. Thank you very much, Björn. Thank you, Jochen. First of all, thank you for agreeing with Mercedes that you would report post-close today, and that made our lives definitely easier today. Two questions, very quick. Firstly, very stable delivery this quarter, pretty much exactly what we all expected of you. We've often spoken of the fact that a premium multiple requires premium execution. Was this an exception, Jochen? Or have you changed something when it comes to the planning and processes and controls that now means you're gonna deliver more stability going forward, even in this very uncertain world and times? Secondly, how should we think about seasonality from here? Q2 is traditionally a stronger quarter, at least on an underlying basis. Is anything with respect to the mix derailing that this year? Anything else that you see? Thank you. Yeah, Tim, thank you very much. everyone, also, thanks again for joining this call. As Björn said, we try to focus your question, I try to answer also as crisp and short as I can to give the details so that we can cover as many questions as possible. Tim, on your first one, Q1 came in not only for you as expected, only for us. We were steering and managing the company in that direction. We see a significant better performance than we had in the last year, at least on reported numbers. With a 7.1% return on sales, we see a solid result, as I said, as expected. Yes, that also comes down to execution, which works out very well and which is not a matter of luck or of coincidence. This is really, I would say a result of very hard work over the last quarters and month, and first effects are coming into place. We will continue to focus on execution both operationally, but also on our strategic realignment and on the restructuring of the whole company to stabilize further the situation. Now, you were asking about Q2. As you know, we're not really give guidance on several quarters, but let me maybe comment again on the full year. For the full year, as I've said in my introductory comments, we confirm the guidance that we have given, 5.5%-7.5%. The first quarter sits very well within that guidance corridor, rather at the upper end. Gives us a bit of a cushion. For the remainder of the year, we expect a bit more of the extraordinary expenses, up to EUR 900 million in the full year. We just had EUR 100 million in the first quarter. From a seasonality perspective, there's a bit more to come. Looking at mix, we had a very favorable mix in the first quarter, especially from our 911, with the 911 Turbo S kicking in, also in our books for the remainder of the year. We see that ongoing on the 911, but with the full electric Cayenne, and with more BEVs also in the BEV share that we expect for the full year. Of course, there's also some pressure on margins. Thank you. Next in the row will be Jos é, and Jos é will be followed then by Patrick. Hello, Björn. Thank you. Jochen, just a couple of questions, please. One, can you talk a little bit about the costs you're taking to reduce the break-even point and any additional actions you're taking in the second half of the year? Anything you could point out there. Second, from the Beijing Auto Show and the presentation of the vehicles you've done, can you share any anecdotes with regards to demand, customer reaction and, yeah, product reactions from customers in the region? Thank you. Yeah. José, thank you very much. On the first one, cost work, we are really focusing on our Push-to-Pass program. That Push-to-Pass program, as you probably all know, is focusing on really each and every cost item. Lowering our break-even point is a key measure within our Strategy 2035. Achieving that, two elements are important. First, reducing expenditures and fixed costs so that the level of costs that we have that need to be digested by our contribution margins is lower than what we had. Secondly, maybe even more importantly, we wanna improve margins on a per unit level based on the material and production costs, because if you have better margins, you need less cars to cover the fixed costs that you have. We are focusing on both initiatives heavily. We are targeting each and every cost item that we have. What we not do is that we will compromise our products. Especially when it comes to the bill of material, we need to do that wisely, that we have the savings there, where the customers do not recognize it and where we need to invest into the car to make the cars real Porsche cars, differentiated cars, covering for a price premium. We will invest into that one. On your second question, reactions on the electric Cayenne, especially in China after the launch of the car in the Chinese market in the Beijing Auto Show. I can say that overall the Cayenne electric is again a fantastic real Porsche electric car with the genes that you would expect from a Cayenne. You know that a Cayenne Turbo in the overboost mode has more than 1,100 horsepowers. Insane number, and you can feel that in the car, and you can also safely and conveniently drive it just from one place to the other. Based on that, it's a great car. In China, it was also well-received by the media and customer reactions. Having said that, you need to keep in mind that that car is facing and hitting a market where we see fierce price competition, segments under pressure, and that will be also seen in the sales number once the car hits the market. Thank you. Thank you, Jochen. Next in the row will be then Patrick, and after Patrick, we have then Christian. Hi, Björn. Can you hear me? Sure, we can hear you. Perfect, thanks. Hi, Jochen. Thanks for taking my question. My first one, we're now two months into the Middle East crisis, and I wonder how things have evolved over the last few weeks and whether you can share your latest thoughts how the situation will affect your business in the remainder of the year. Is there a demand issue you see in the region? Do you think it can be offset as in Q1 with some reallocation of product to other regions? Is your bigger concern the input cost side? You said in the full year disclosure that you have a very high degree of hedging. We heard earlier today from Mercedes that there is a second half headwind to be expected on commodity front. I'd just be keen to get an update on those two items. If I may, on the on the focus on the non-core business, one asset you had talked about in the past was MHP, I suggest. I suppose that's on the list, potentially. This is a fully consolidated business. Should we read your comment about the guidance not including any M&A items that this is potentially a charge that might be arising from such a transaction? Or am I misinterpreting you here? Yeah. Patrick, thanks for raising these various topics. Let me start also in the order that you raised the topics and the questions. On Middle East, of course, and that's stating the obvious, we are monitoring the situation. We are concerned about the situation, and we hope that a solution is found rather sooner than later for the people in the region, but also for the worldwide economy. On the specific effects, we've seen a slowdown in the demand in the region because we do not have the traffic in the showrooms as high as we used to have it, and also deliveries from us on the logistics side into the regions are not possible in the way that we used to ship the cars to the market. Therefore, there's a pressure there. We need to see how long that will last. Having said that, important to understand is that in that specific region, we have around 2% of our worldwide sales volume, and we have the possibility to reallocate volumes also to other markets, depending, of course, on the magnitude and the timing of the conflict as long as it will last. On the material cost side, first and foremost, and I think that's really the most important part of it is, before we talk about cost, the supply in general. Our supply chain is secure. We do not have a lot of specific supplier in that region. Actually, it's just one, and the products we get from that supplier are also secured in the supply chain. We have no complications in the production yet based on the Middle East situation that we have. On the cost side, again, we are hedged in most of the materials as good as we can. Also, we have long-term supplier contracts, so short-term, we do not have excessive effects there. Again, we monitor the situation, and if it lasts for a longer period, if oil prices stay high, et cetera, of course, there might be effects that we need to take into consideration. On M&A, first on the technical effect, yes, MHP is a fully consolidated company. We are a 100% shareholder of that company, and if we would sell such a shareholding, that would have different effects than the ones that I've just commented on Bugatti Rimac, which was a minority shareholding. That's correct. Assuming that a potential sale of MHP could result in a charge is something that I do not see. If that would be the case, we would not sell it. Therefore, if we have an updated structure for the MHP shareholders, that would again come with a positive one-time effect. Understood. Thank you. Thank you very much. Thank you, Jochen. Next in the row would be then Christian from Goldman, and thereafter, we're gonna have Horst from Bank of America. Yeah. Hi, Jochen and Björn. Thanks for taking my question. I'll keep it really short. The first question is just an update on any key conclusions Dr. Leiters has made post his 100-day review, ahead of the Capital Markets Day in autumn. For example, should investors expect any further major decisions ahead of the Capital Markets Day event? My second question is, really, you know, yes, looking and thinking about the mix over the next one or two years, clearly, the 911 Turbo S mix is helping a lot. Of course, offset by the phase-out of the Macan and the increased BEV share that was mentioned. Thinking about your Rimac exit and, I'm just wondering, should we... Would it be reasonable to expect more specials or what other levers do you have that could improve mix going forward, if any? Thank you. Yeah. Christian, thank you very much. Yeah, first 100 days are over for Michael, unfortunately, nothing to communicate yet. Why is that? We are, yeah, diligently working on the update of the strategy and the structure, we will communicate the updates in more detail in the Capital Markets Day in autumn. That's still a few months to go, it's not that long time, I really unfortunately have to ask for your patience on that one. Of course, what are we targeting there? The most important thing that also Michael is looking at is the product strategy. We have some issues that we want to address there. We've talked about that one also in the full-year disclosure, that we want to target segments, rather in the higher end of the portfolio, and we wanna sharpen the portfolio and become even more distinct in terms of our brand positioning. Talking about mix, yeah, I think I've commented on that one. The 911 Turbo S helps already in our books. Then we have communicated the, for the first time, convertible version of the GT3, the S/C car. Very, very, very well received in the markets. That's a car that's also, again, as a product is really fun, but also, talking here as a CFO of the company, that's also something that I'm really looking forward for that will help us. As said, the increasing BEV share put some pressure on our mix in the second half of the year and also, ongoing then in what we call the BEV tap 2027, 2028 before new products kick in and we can increase our performance even further. Thank you. Thank you very much. Next in the row, Horst of Bank of America, and then Stephen of Bernstein. Thank you. I hope you can hear me. We do. I have got two questions. First of all, before I ask my questions, we know now what [ultimately] means when we look at your net cash flows. That's great. On the first question on Rimac, maybe you can give some more details. The book value, and the potential closing, does that happen in 2026 or more in 2027? If you can, maybe an indication on the impact on financial income. The other question that I have is more phasing of wholesales versus retails sales in connection with the Macan phase out. We see that wholesales were again below retail in Q1. I would expect that to change basically in Q2 and Q3 and Q4 to be the opposite. Where do we end up in the full year regarding wholesales versus retail sales? It's gonna be a year with de-stocking or with restocking that's accelerating because of the Macan phase out at year-end. Thank you. Yeah. Horst, first on Rimac, Bugatti Rimac and say, the whole Rimac Group and our investments that we had there. Let me first comment a bit in more general on that one. We've decided to sell our investment in that group because we wanna focus on our core business, take care of the Porsche brand and our products. When it comes to parts of the activities of the broader Rimac Group, from our first VC investment perspective, we achieved what we wanted to achieve with our investments, therefore, the exit was something that is very well in line with our strategy, of course. Otherwise, we would have not done it. On the financials, the book value of the combined assets, the various shareholdings, and also some tangible assets like real estate and historic cars, are EUR 441 million in our books. That's a number that you can also see in our balance sheet. Sorry, EUR 411 million that you can see in our books as assets held for sale. As commented on the MHP, that's something that we expect that will not be the special effect that you will see once the closing comes into place. Talking about closing, that will take some time. There are also some legal issues, antitrust things that need to be checked, normal procedures will take a couple of months. That is not in our control. Therefore, yeah, we communicate again on that topic when the closing has taken place. On the full year, we expect the wholesale numbers being below the retail numbers, as you've seen it in the Q1, mainly coming down to the portfolio effects and the supply structure that we have, as you've already commented on it. With that, taking also the time into consideration, and as you know, not commenting too much into details on each and every model line and quarters, I think that gives a good orientation how we wanna steer the full year. Sorry, a follow-up. That means Q3 is this boost when the Macan phase out and you produce whatever you can because then the production stops and Q4 is already de-stocking, because production phased out, right? We produce the ICE Macan until mid 2026, and we stock as much as we can based on also the supplier parts that we have, and then we sell these cars. Yeah ... the months to come. We will even see some sales in some regions in 2027. Of course, a declining trend will then kick in. Yeah Once the supply stops. That's great. Thank you. Horst, thank you very much for your [Non-English content]. Now we move over to Stephen, and after Stephen, we have Henning. Yes, good afternoon. Thank you, Jochen and Björn. My question actually also builds on from your answer about the Macan. As you said, as you've already communicated, you're stopping production of the ICE Macan in the summer. What opportunity have you had to at least increase production or to actually maximize production up to that date? Obviously, demand for the ICE Macan has proven to be very resilient, particularly in the U.S. market, particularly versus demand for the BEV. Particularly, I think there's very good demand for the vehicles like the GTS version. Are you able to? Have you been able to, you know, maximize at least the ending of this vehicle? Thank you. Yeah, Stephen, as already discussed in the last question from Horst, we are optimizing the run out of the ICE Macan. The production will be stopped in summer 2026, and during the last month that we have, we produce as much as we can. Of course, our capacity is one factor there, but that's not limited. Supplier parts are the other issue. Based on what we have sold so far and the remaining stock that we have, ICE Macan will be sold in the months to come. As also already said in the last question, we will see sales even into 2027 in some regions, but there's a declining trend. In the United States, the ICE Macan really has great demand. We are also supplying that region with the cars that we produce. That's even more important based on the fact that the tax incentives on the electric vehicles have been stopped by the U.S. government. Those were $7,500 per car, which is a substantial issue. Therefore, there's some pressure on the electric Macan in the United States. Therefore, we provide as many ICE Macans in the United States as we can. Thank you. Last in the first section of the analyst Q&A will be now from Barclays, Henning, and then we move over to the media. Should we have some spare time after the Q&A with the media, then we will see if there are other questions from analyst investors. Henning, the line is open. Hi. Thank you, Björn. Thanks for squeezing me in. Perhaps one question on the guidance. The wording is a little bit different than what we've seen from everybody else with this excluding Middle East. I must say I'm a bit confused, and there's a few client questions as well. If we can just clarify that. I think, Jochen, you said you do expect a further temporary weakness, yet it's excluded from the guidance. I just want to make sure you're not intending for this to be some sort of soft management of the top end of the guidance range or something like that. If you could just sort of clarify what you really mean with this wording around the Middle East effect being excluded. That's the first question. The second question perhaps on supplier compensation. You mentioned it briefly in your prepared remarks. Can you just remind us if we're already in a period where the supplier compensations are declining, can you maybe remind us of the magnitude? Or are the compensation payments sort of stable or increasing because the original budget for the BEVs was still going up. Despite the fact that the, you know, in timing they're rolling off, but in size they were growing as it were. Where are we in this dynamic around the supplier compensations? Thank you. Henning, thanks for raising the first question. We need to have clarity there. Let me start with the first quarter again. With the war and the conflict in the Middle East region kicking in, we've seen first negative effects in March, based on lower demand that we've seen because people are a bit more reluctant in going to a Porsche dealership and ordering a car. Also the supply of the cars is not possible in the way that it used to be by the ships. Now, with 2% of our sales volumes in that region, in March, we were able to reallocate the volumes and compensate by sales in other regions across the world. If the conflict would be not a temporary one, but would be rather a constant one and long-lasting, we would see huge effects also as effects that are not only sales in the specific regions, which we can partly compensate, but also if you would see spillover effects on a worldwide economy situation, that would be something that we would need to see how that would affect our Porsche business model. As of now, as of now, based on the situation that we see, we confirm our guidance 5.5%-7.5%, there's no reason to manage that downwards. Second question was on supplier compensation. We've covered most of it from a negotiation perspective with the suppliers we had, because we've updated our expectations on the electric cars to the level that we see in the market with the cars that are already there, namely the Taycan and also the Macan. Based on that, and also from the customer feedback we have, we have quite a good visibility on what we can expect on the Cayenne electric that we will see this year, also ongoing on the 718 Boxster Cayman, which will be the first real electric sports cars in the market with the right crest on the hood that you would expect for such a car. That's a rather stable situation. However, what you need to keep in mind that, settling supplier compensation does not mean that these numbers are not also included in the guidance for the current year and also in our midterm planning, because these settlements result in higher material prices, to some extent, that are then covered by the sale of the car within our contribution margin. Thank you, Jochen. They're already on the way down or they're stable or they're going up? Yeah, I mean, that's. That would take a bit more time to explain that in detail. We've covered for the effects that we see. Negotiations are going on very well, so we see also positive effects from what our colleagues in the purchase department are achieving there. From a P&L perspective, these have been partly one of the effects that you have seen in 2025, especially with the stop of the SSP 61 platform and the heads and cars that we wanted to build on that platform. For the other cars, it's really a mixture of things that are already covered and that will be within our margins of the car. Thank you very much. Very good. With this, I would now love to hand over to Florian. Okay. Perfect. Thanks, Björn. Coming to the second set of questions here, Benjamin Wagner, Frankfurter Allgemeine Zeitung, you're first with your question. Can you hear me? Yes. Good to hear you. Thank you for taking my questions. Can you provide some more insight into the Chinese market? Mercedes announced again today that it was lowering prices in order to remain competitive at all. What is the situation like for you? Which cars will you still be able to sell there and then, and at what prices? Does the new electric Cayenne even have a chance there? Another question about the cost-cutting programs. Profits in 2025 have dropped due to the costs of these programs and the new strategy. Now, Michael Leiters has announced further cost-cutting measures for this year. What will these programs cost, and will you be able to meet your return targets on the spaces? Benjamin, thanks for the two questions. Let me start with the Chinese market in general. Let me also give some brief comments on the electric Cayenne. The Chinese market is a market where we see a fierce price competition and a general fierce competition in all segments, also in the luxury segments, for especially imported cars. Based on that, we see declining volumes from peak volumes that we had few years ago of above 90,000 units down to 42,000 units in 2025. We've also said that based on our portfolio and market trends, we expect an even significantly lower volume in 2026, just above 30,000 units. Why is that? Because we follow our Value over Volume strategy. We focus on pricing. We focus on our brand equity for long-term success in each and every market, and also particularly in China. We will always, if the demand is not on a level where it might have been or where it should be, we reduce production. We have the flexibility. We do not have local production with a lot of investments, no joint ventures and these things. Therefore, we are flexible to that is end, and we control the market in that direction, which is important. On the Cayenne electric, that car is, as I've said in the first part of the call, this is a real Porsche. This is insane, a driving machine, also for a Porsche car and rather competitively priced in China at EUR 1.1 million. Therefore, it's specifically positioned, especially for the Chinese market. With that price point in that segment, you cannot expect really high numbers. This is rather positioning car, which will have some success. From a media and customer perspective, it was very well received and commented on. Second question was on cost effects. Of course, we're working on the Push-to-Pass program, full flat out, day by day, scrutinizing each and every cost item that we have, optimizing everything that we have, questioning everything that we have. We do that because we need to make the company more resilient and flexible and to reduce our break-even point. I've commented on that one also. That means fixed cost structures, but also variable costs, material costs that need to be optimized. We've even increased speed on these initiatives with Michael joining the company on January 1st, because also for him, this is something that he really is looking at. As I've said, doing the analysis on where we as a company are standing, improving the cost structures is really key. These programs, as we look at them today, do not come with additional costs as far as we have defined them so far. If there are additional programs that would change that situation, that might be something that we communicate on a Capital Markets Day. For the time being, this is really things that we do internally, based on processes and structures that we have. Okay. Thank you, Jochen. Next in line is Sebastian Ash from Financial Times. Hi, Sebastian. Hi there, and thanks for taking my questions. Just looking at the BEV share in the first quarter, it seems to be slightly lower than what the average was over the past year. You said you were still confident about that increasing overall. I mean maybe you can break down why it's gone down in the first quarter and also say how it might recover over the next three. And then in relation to that, you say you're working on your new 2035 Strategy. The direction seems to be very much away from electric mobility and battery vehicles and back towards more emphasis on petrol cars and hybrids, of course. We've seen renewed interest, if anything, in EVs in, well, in the European market at least. Do you think that that direction is still the right one given the developments we've seen and perhaps also rising prices for fossil fuels? Yeah. Sebastian, quick answer, on the BEV share, which is lower in Q1 than, we had the numbers in 2025 and is, which is also lower than, the BEV share that we are guiding for. The main and mere reason for that one is that, we have some decreases in demand, especially in the United States, on electric cars based on the general trend that we see in the States and also based on the, abolishment of the $7,500 subsidies that were paid for BEV cars, until late in 2025. That's giving some pressures on the BEV share, but it will increase in this year once the electric Cayenne hits the market, which is an addition to our product portfolio, and that will add to the electric sales that we have. On the second question, more on the strategy side, I mean, we are coming from a strategy where we were targeting 80% of full electric cars by 2030 based on the trends in the market segments that we had seen three, four, five years ago. Based on that one, we've built our product portfolio. Now, given the effect that, and the fact that, the trend into electric mobility is much more differentiated across the regions, just said in the United States, it is really muted these days and not expected to pick up substantially over the next years. Also, the special situation in China, we need to adjust our product portfolio to target the demand that our customers in our segments are looking for. Therefore, what we've already done to some extent, and which we are also further focusing on and pushing forward to, is that we have a balanced portfolio where we can offer all three drivetrains, full electric cars, but also the plug-in hybrid versions and the combustion cars in the various segments to address the customer demand in the various regions, as the customers wants to have our cars. Okay, thank you. Next in line is Rachel. Rachel Moore from Thomson Reuters. Rachel, your question, please. Hi, good evening. Thanks for taking my questions. The first one is if you could give some detail on the EUR 900 million in extraordinary costs that you're expecting this year. I also wanted to ask about the impacts of the Middle East conflict on costs for Porsche. Are you seeing a rise in cost for raw materials, and are there any raw materials in particular where you're seeing this trend? Thank you. Rachel, the up to EUR 900 million of special and extraordinary expenses that we expect for the full year, we also explained in our full year disclosure a few weeks ago. They tie back to the clusters that we are addressing since a couple of months, since we are realigning the strategy and the structures, namely our battery activities, the product measures that we have, realigning our product portfolio, and also the structural measures we are taking to becoming more lean and cost-effective when it comes to workforce and also management structures. These are the effects that we have in our books. On top of that, we decided to have a launch that is really focusing on quality for the full electric Cayenne, so that car will hit the market on the quality level that you would expect from a Porsche car. Therefore, we had to postpone the launch of the car for a few weeks. It's a few weeks. It's not months or years with other cars in the past. It's few weeks. Again, that comes back to the execution issue that was raised by Tim in the other call. But it gives us a smaller headwind in 2026, and we also have a charge included in our guidance for the focusing on the core activities that we are following in our portfolio. On the Middle East situation, I think we had already quite some comments on that one. We are tracking the dynamics in the region. It's difficult to predict what will happen. For the time being, we do not have issues in the supply chain. We can run the production as we are planning to run it to fulfill the demand in the various regions that we have. Cost pressures that we see are mitigated through our hedging strategy and our supplier contracts that are rather long-term contracts. For the time being, no excessive cost pressure there. If the conflict would remain and the whole economy worldwide would change, then of course, things might also change. For the time being, we look at it as I just commented. Mm-hmm. Okay. Thank you. Next up is Monica Raymunt from Bloomberg News. Good to see you on the call, Monica. Nice to be here. Thanks so much. Can you hear me all right? Yes. Wonderful. Please go ahead. Thanks so much. I have two questions for Mr. Breckner. The first, you've mentioned on the call with analysts, some discussions about M&A activities and how that might impact Porsche in the form of one-off charges for the rest of the year. I was wondering, could you comment on whether or not you're actually holding discussions on the sale of MHP or are planning to sell MHP? My second question, Mr. Breckner, you said that Porsche is scrutinizing each and every cost item that you have. You're optimizing everything that you have in front of you from the operations side, from your production side, et cetera. As part of those efforts to become leaner, where do you see potential to leverage synergies within the Volkswagen Group? Would you say that there's room to work more closely with Audi, for example? Yeah. Monica, thanks for the two questions. On your first one, about our shareholdings, let me just again underline that we, as part of our strategy and our updates in the strategy, are running an initiative that we call Focus on the Core. We want to reduce complexity, and we want to become even more efficient in our capital allocation, investing into what the Porsche brand stands for, and that's our model portfolio that we have with the two- and four-door sports cars. With that, we are constantly evaluating the full portfolio, and we've commented on the MHP situation last summer, and that's unchanged. We think that an updated shareholder structure from MHP might be beneficial for that incredible company for software and digitalization consulting services. We are doing cars, so therefore, changes there might be something that we want to look at. For the time being, no decisions, nothing to communicate on that one. On your second question, on leaner structures and especially on synergies within the Volkswagen Group, that's a very important issue for us. We are part of the Volkswagen Group, and we are in, say, a very positive situation that we can benefit from technologies, from platforms, also from combining purchasing power within the Volkswagen Group, and we do that with various cars. We share platforms, especially with Audi, especially on the SUVs. Also, we are offering our technology to other sister brands in the group. For example, the platform that we have developed and that is under control for the Panamera is a platform that is also used by Bentley for their two-door and four-door cars, other than the SUV. There is a lot of synergies that can be exploited. We do that heavily. That helps us improving our cost structures. What's really important to add is we always do that to an extent that we can still do a Porsche sports car. When we take over a platform from Audi, we never use it one-to-one without any changes. We leave as much unchanged as possible to have the synergies. If there are items that we need to change to make a Porsche a Porsche, we do that and invest on top into the platforms because this is really the most important strategic position that we follow. A car with the crest of Porsche is a Porsche, and it's differentiated from the cars we have from the sister brands. All right. Looking at the time, let's go to the last question. It's another familiar name, Ilona Wissenbach, Thomson Reuters, it's yours. Yes. Thank you. I was wondering, recently Oliver Blume said in an interview with Manager Magazin that he wants to reduce the production capacity, as I understood it, by one million in the whole Volkswagen Group, and I wonder what this means for Porsche as the sales are going further down. I wonder if you can give us any indication where production capacity stands currently, and how far you got in adjusting the cost basis to 250,000 volume per year. Yeah. First, the statements from Oliver is something that we do not comment on. I mean, that's for the broader Volkswagen Group, so just let us leave that aside. Talking about Porsche, we've already reduced production capacity based on the flexible model that we have in two dimensions. Looking at the past, just a few years ago, we were using four plants, two own plants, one in Stuttgart-Zuffenhausen and the other one in Leipzig. On top of that, we were running our cars in Bratislava and in Osnabrück. These two plants belong to Volkswagen. Given the output that we need, we have already canceled our contract in Osnabrück, so we are not producing cars there anymore. That was also a reduction in production capacity. On top of that, we've also adjusted capacity in our own plants. We communicated that last year that we reduced the workforce, not only in the indirect functions, but also direct workforce personnel, especially temporary workers, that we didn't need anymore based on the demand that we have. Therefore, we have a quite flexible setup that we optimize, of course, year -by -year. These are the major effects that we already had and have put into place. On top of that, talking about capacity, also a very important part of our strategy these days, but also going forward in terms of expansion, is that we see a huge demand in the markets for what we call the Sonderwunsch program, individualization of the cars. We use scarce, no, excess capacity that we have in some areas to increase the supply that we have for this part of our business model. The capacity right now stands at how many units? I mean, we have a flexible production network. We can produce the number of cars that we need to have. You've seen in the past that we've sold 320,000 cars that were able to be processed through the factories that we have. Also in this year, where we are down to around 250,000 units, more or less, is something that the capacity can take care of. As I said, we do the optimization for these years where we have less output than in the past. Thanks. Thank you very much, Jochen and Florian. Now, as we have Michael Punzet of DZ Bank tenaciously waiting all the time by the end of this call, and we still have one minute left, Michael, this commitment needs to be incentivized. As such, the last question goes to you. Okay. Thank you for that. I have only one question with regard to China. I see some reports that China is intend to implement an emission regulation in 2028. Will this have any impact on your product offering in China from today's point of view? Let me answer that in general. We are monitoring emission legislation in all the regions and all the markets that we have. Of course, there are some dynamics. You are aware about the discussions in the European Union about averaging effects, about targets in 2030, 2035. Also in the United States, under the Trump administration, some things have changed. Also in China, we react to the regulation that we have. We analyze that, as of now, we do not see significant impacts. Sometimes things change rather fast also in China. You might remember the situation on the luxury tax that was increased, or maybe to put it more precisely, the threshold for the luxury tax was decreased more or less overnight within 48 hours. These are situations where you then need to adjust yourselves and the business model as good as we can. As of now, yeah, we are analyzing regulations and react and develop our portfolio in that direction. Okay. Thank you, Jochen. 19 on the dial, 19:01. Slightly over time. Thank you, Jochen, for answering all the questions. Thank you, Björn, for being with me. This was our Q1 disclosure call. Thanks everyone for joining in. Thanks for the participation, and have a nice evening. Thanks, everyone. Have a nice evening. Ladies and gentlemen, the call is now over. Thank you for joining, and have a pleasant day. Goodbye.