Good afternoon, ladies and gentlemen, and welcome to the RENK Group AG Q2 2024 Investor and Analyst Call. At this time, all participants have been placed on a listen-only mode. The floor will be open for questions following the presentation. Let me now turn the floor over to your host, Ingo Schachel. Yeah, thank you very much, operator, and thank you everyone for joining our today's results call despite the holiday period. As usual, speakers on today's call will be our CEO, Susanne Wiegand, and our CFO, Christian Schulz. We're also joined in the room by the entire management board of RENK, including our Chief Operating Officer, Alexander Sagel. We also have our designated CFO, Anja Mänz-Siebje, in the room. Her ability to join our meetings is quicker than my ability to update slides apparently, so she's not there on the slide, but she's in the room, and Susanne and Christian will be our speakers for today. Over to you, Susanne. Thank you, Ingo. Welcome from my side, from our side. Thank you for joining and taking the time during this holiday period. I would start on slide four, which you know, just to recall, last year's figures. So you see here on that slide, a concise summary of a few key financial metrics and revenue splits. Last year in 2023, 70% of our revenues were generated with defense-related applications, and our aftermarket share has increased to 36%, which is very favorable. The aftermarket share has continued to increase in Q1 as well as again in Q2 of this year. The defense-related part of our business activities has continued to be a key source of growth in the second quarter, with a market presence of about 75%. We are present in the majority of all tracked military vehicles powering in the Western world. With respect to the overall market and geopolitical situation, I think we are all well aware that tensions have more increased than decreased. Unfortunately, Ukraine war is ongoing with a counteroffensive at the moment. In the Middle East, we see with some concern increasing escalation and the situation in the Indo-Pacific has also not improved to the better for our industry. Obviously, this provides the basis of continuous tailwind of needs of the armed forces to be reequipped and to increase defense spending respectively. Jumping to slide number 6, let me begin with a summary of key highlights for quarter 2, 2024. Overall, we are very, very pleased with the strong second quarter, on the back of which we have been able to upgrade our short and midterm outlook. The key highlight for us is the strong revenue growth in the quarter and the half year. We have a very sizable order backlog and have made it our mission to execute it profitably. With great pleasure, we can conclude that we delivered on this ambition and promise. Supply chain challenges that we had during the year 2023 were resolved successfully, and our production efficiency and output, specifically here in the Augsburg site, has improved considerably, thanks to clear operational efficiency measures that we have implemented. Despite the strong revenue growth, our order backlog is growing further. As we had already indicated in our Q1 call, order intake in the VMS segment increased very strongly in quarter two and allowed us to report a very good order intake for the quarter, as well as for the half year overall. For the coming quarters, the order pipeline remains very strong. The defense super cycle is in full swing and visible in our order intake, both for new equipment as well as for aftermarket. In marine and industry segment, revenue growth accelerated further as we convert our increased navy backlog. We reported on that in the last two quarters already. As the navy business tends to be more profitable than the industrial newbuild business in the M&I segment, this has also allowed us to improve margins substantially. Thanks to the operational improvement that we have achieved, and despite higher investments in technology and R&D, and we have presented our latest ATREX hybrid main battle tank transmission on the Eurosatory exhibition in June in Paris. The performance in the first half of 2024 has put us into a position to increase the revenue guidance to around about EUR 1.1 billion, which is clearly the upper end of what we had so far guided, and the adjusted EBIT guidance to EUR 175 million-EUR 200 million in profits. So here again, narrowing of the guidance to the upper end. As market growth and our own operational improvements will continue to improve, we're confident in our midterm prospects and have raised our midterm targets accordingly. If we jump to the next slide, very briefly, we see our total order backlog compared to the first quarter of this year, 2024. We see a slight increase of EUR 100 million in the fixed order backlog. If you compare the fixed order backlog per end of June with end of June 2023, we could even increase by EUR 200 million. Also the total order backlog even grew by a half billion, by EUR 500 million, I think, from EUR 4.2 billion to EUR 4.7 billion. So a billion, sorry. So a substantial increase in the total order backlog. Thanks to, in Q2, specifically, strong order intake on the VMS side, based on a large order we got from the U.S. Armed Forces. In addition to the order pipeline, remains generally very encouraging, we see a good, market growth in all three segments. Total order backlog remains on a very high level, as reported already, with the EUR 4.7 billion, which is about 4.6 times, revenue coverage as of, June 2024. We see also large volume of profitable business opportunities in the coming years beyond the prospects that we have included in our soft and total order backlog. I would like to hand over now to Christian for a more detailed look at the Q2 financials. Thank you. Thank you, Susanne, and also a warm welcome from my side. Let us now have a look at the group performance for the second quarter, with a focus on our top line. Order intake growth was very pleasing. If you strip out the large order wins, Turkey and US last year and US this year, growth has been very strong. Well, if you include these large orders, order intake has been stable, meaning that we have been able to almost fully compensate the Taiwan contract, the largest contract in our recent history, which we had booked in Q1 2023. The high book-to-bill indicates further revenue growth. Besides demand, we also have to improve our operational excellence to achieve high growth, and we have also succeeded in this regard, especially when it comes to our plant in Augsburg, as we will later on discuss. Fixed order backlog has increased in line with the higher order intake. If we flip page to number 9, you see our gross profit increased in second quarter by a pleasing 14%. To put it into perspective, keep in mind that the prior year number included the release of a warranty provision. If you strip this effect out, our gross profit would have increased by 33%. Regarding our adjusted EBIT, our old full year guidance implied at the midpoint a 19% increase of adjusted EBIT. If you strip out the release of a warranty provision in Q2 2023, our adjusted EBIT in the second quarter increased by 21%, after 46% in Q1. To put the number into perspective, please also keep in mind that in our second quarter, as Susanne has alluded to, our R&D expenses increased by EUR 2.5 million. These are fully P&L effective expenses. We do not capitalize R&D. If R&D expenses had remained at the level of second quarter 2023, EBIT growth would have been 6 percentage points higher, or the margin would have been 110 basis points higher. The R&D projects that we are investing are backed by strong commercial business cases. We also successfully digested an increase of SG&A expenses. This includes new items like our annual general meeting, as you know, which we hosted in June. Let's now come to the segments. If you go to page 10, a key highlight for us was the very strong order intake of the VMS segment. From our point of view, this is not a one-time coincidence, but order intake should remain strong in the coming quarters. Some of this growth potential is visible in our soft order backlog, but we also have many sizable business opportunities that are not yet included in our soft order backlog. Revenue growth continued on the strong path of Q1 and was primarily driven by successful operational improvement in Augsburg. Augsburg is the role model for similar measures that we are now rolling out in Muskegon as well. The success in Augsburg makes us very confident that our improvements of the operating model in Muskegon can allow the asset to reach a new level of performance as well. When you assess the adjusted EBIT development in this segment, keep in mind, as mentioned, that the previously mentioned effects of the warranty provision and the higher expenses occurred in this segment. If you look at adjusted EBIT, excluding these effects, earnings were higher than in the second quarter last year. Once operational improvement measures are rolled out in the U.S. as well under the ramp up program that we will discuss later, profitability should improve further, as we have already demonstrated in Augsburg in the first half of this year. To be clear, the numbers for RENK Augsburg were exceptionally good in the second quarter, and I would like to thank the entire team for this great effort. There's work to be done in the U.S., but we are confident that we can make it there, too, and we are already seeing first progress. Once Augsburg and Muskegon perform well, this will take the performance of the VMS segment to an even higher level. Let's talk about the business in M&I then. For the M&I segment, order intake is up slightly year-over-year. Compared to the first quarter, it is lower in line with the comments we had already made on the Q1 call, indicating that order intake in both segments can be lumpy. Revenue growth accelerated further. Keep in mind that comps will be higher in the second half, but despite this, we should see a good activity level and solid growth, especially in the more profitable Navy part of the business. The strong second quarter Adjusted EBIT margin makes us confident that we are well on track for a good full year margin in the segment. Like in Q1, a higher share of Navy business has helped us. Beyond this, we have also taken a very disciplined approach on the margin quality of our civil business, and this price discipline is paying off as well in terms of higher margins and higher backlog quality. Lastly, the Slide Bearings segment continues to experience a strong profitability with solid revenue growth. While revenue growth is not as spectacular as in the defense-related area, it nevertheless exceeds typical growth rates in the capital goods sector. The segment management team has achieved capital efficient growth in the right areas. In German, I like to refer to Slide Bearings, as you all know, as a "[Foreign language]" which means a very nice business in the pearl of our portfolio. There is no proper English translation for that, but it's a big compliment for the management team at, around Mr. Rusch. EBIT margin in that segment has generated in the second quarter a truly strong achievement under the leadership of the new CEO. Page number 13. As we had promised in our Q1 call, adjustments relating to capital market readiness decreased. In fact, they even turned negative in second quarter. Also, several of the adjustments of last year, such as inflation adjustments and severance packages for management, did not reappear, like we also have had indicated previously. During the second quarter, we have booked a mid-single digit cost relating to the ramp up program, the program to enhance the operating model of RENK America. Apart from that, the adjustments mainly relate, as you know, to the adjustments of PPA effects that are very customary across our industry sector. Next page, please. Net working capital reduction remains and is a key priority of our organization for this year. At the end of second quarter, our net working capital as a percentage of sales was back on the level of the year 2023. This does include project-specific, temporary ramp-up of inventories in the context of our strong growth. Furthermore, it's not unusual for companies in our industry to build net working capital at the beginning of the year. We strive to reduce the net working capital ratio in the midterm and also think we should be able to make progress towards the end of this year. As we've indicated, a level of around 25% seems to be a realistic achievement based on the legal entity specific program we have launched. Moving to our cash flow statement. Overall, many aspects of our cash conversion were good during second quarter. CapEx was low, and cash outflows for interest, taxes, and other items close to normal levels. As we had to digest, the net working capital increased, discussed before, cash flow turned slightly negative, which is not an unusual pattern, and for the half year includes one-time payments for the refinancing of the high-yield bonds, in the due course of the listing. Let me hereby hand back to Susanne, who will take you for the outlook of the year. Yeah. Thank you, Christian. Based on our solid progress in Q2, we increase our guidance for this year. We now expect around EUR 1.1 billion revenues, as growth in the first half was higher than the midpoint of the previous fiscal year guidance had suggested. We don't expect this growth to abate in light of strong demand growth as well as operational progress. Growth prospects remain good across all of our three segments and all regions. So in total, we are very pleased with the development of the first six months and feel very confident on setting this new guidance on the top line. Also, keep in mind that we can generate higher revenues as our ability to execute is much better than last year, as supply chain challenges have been overcome and operational improvements have been achieved. So one of the key successes was to point out and mention for, for this year, for the first six months, specifically, implemented, realized, and materialized here on the Augsburg side, for the VMS business, very strong output level, very strong operational performance. Our earnings guidance has narrowed to the upper half, reflecting the strong performance. You recall the old guidance was EUR 160 million-EUR 190 million, and we narrowed it down and, two hundred seventy-five to EUR 190 million, and that a little bit closer range. Regarding our midterm revenue growth and EBIT targets, growth in the defense sector will last for longer, we alluded on that, and our ability to execute has significantly improved. The role model, as Christian has explained already from Augsburg, and the operational model will be transferred first to Muskegon and then to the rest of the production sites in our global production setup in RENK. Hence, we have hiked our midterm targets and now expect—instead of the 10% CAGR annually top line, we now expect 15% annual organic growth and an EBIT of about EUR 300 million midterm. If we flip the page, let me conclude with some thoughts on the upcoming months of this year on slide 18. Our first priority is, and remains, and was the output increase at our main plant in Augsburg, and, we will need to stabilize this further and, not just stabilize, but we, but improve and accelerate the output level, to, in Augsburg to the next, let's say, level of performance. During the second quarter, as well as the month of July, we were very pleased with the progress we have made here. The monthly run rate of production has been around 60 transmissions in every month, except for the month of May, which was a month with several public holidays, which has impacted a little bit. The adjusted EBIT contribution of the transmission unit in Augsburg was notably higher than in Q2 2023. Our second priority is operational excellence in the U.S., in the Muskegon plant, specifically. Naturally, we will see the effects of our program there with a certain time lag to Augsburg. The challenges in Muskegon are almost similar to the challenges we had in Augsburg last year. We now have a very strong team on the ground and are spending more time in the U.S., also with people deployed and supporting here from the German side in Muskegon. We are very confident that we will be able to replicate the success we had in Augsburg, in Muskegon, in the next two to three quarters to come. I would like to emphasize the following: In Q2, we were able to meet market expectations for Group-adjusted EBIT, despite RENK America performance not yet delivering on its full potential. Once the performance of RENK America reaches a higher level, the better profitability of Augsburg should shine through more visibly. Our third priority is clearly net working capital optimization. After a very successful Q1 in this regard, net working capital increased back to the level it had at year-end 2023, as a percentage of sale. We strive to reduce net working capital further in the midterm and also expect it to be rather lower at the end of this year. On our fourth priority, order intake, we were very pleased with the performance in Q2 and do not expect the strong demand environment to abate in the coming quarter. The defense super cycle is now in full swing and lasts longer. We alluded and elaborated on that. This is clearly visible in our order intake and strong order pipeline, which is beyond and in excess of our Soft Order Backlog, which we are reporting to you. Also, our investor dialogue continued. Our key highlight is our Capital Markets Day on the ninth and the tenth of September. As you recall, we start in the evening of the ninth in Munich with a dinner and have a daily program, a day program on the tenth of September in Munich, at which we hope to see many of you. Before I'm now handing back to Ingo, and we start to answer your questions in the Q&A session, I would like to hand back very briefly to Christian. Thank you, Susanne, and thank you for giving me the opportunity to share some personal words with you here in this discussion today. As you have seen yesterday, I've asked the supervisory board of RENK Group AG to release me early out of my contract for personal reasons. I would really like to make clear that this is really a personal decision. RENK is a, is a great company and in a very, very good shape. As you can also see, numbers point in a, in the right direction. Everything's going the right way. The management team here, if I look around with with Susanne, with Ingo, with Alexander, with Anja, is great. So there is also no story behind the curtains or no story to be made up like some did already in the press. It's a private decision because it has been a tough time for me. I take some time out and time off, so you will not see me, despite nobody believes me, that at the first of October, as the CFO of the company whatsoever. So I will finish my term here and hand over with Anja in the next six weeks to come. I will meet many of you in the next two to three weeks on the road, and also I will be around the Capital Markets Day. Not everybody of you might understand it, but I ask you to respect my decision, and please also understand, I will answer any other question on the business, but not on my decision of yesterday. And with that, I would thank back to Ingo, and would basically also just remind yourself, I'm a shareholder. I will keep my shares, and I will be a friend of this company after the thirtieth of September. Thank you. Thank you very much, Christian, for your very open words and for remaining committed to the RENK share. Hopefully, we can take your question on one of the future earnings calls then. But before we do that, let's head back to the operator, open the line for questions. Operator, if there are questions on the line, we're happy to take them. Otherwise, I've already received a few questions by email, in case certain participants can't sort of communicate verbally because they are on holidays or something. Feel free to send me questions by email if you like. ... Okay, so ladies and gentlemen, if you would like to ask a question via the telephone conference, please just press nine, followed by the star key on your telephone keypad. If you wish to cancel that question later on, please press nine, followed by the star key a second time. And there are some questions coming in via the telephone conference. The first question comes from Charles Armitage, Citi. Please go ahead. Yes, good morning, good afternoon, even. Thank you for taking my question. Christian, thank you for all your help. It's been fun working with you, so thank you for that. My question is, is RENK America, it clearly disappointed, as you, Susanne said, it's been made up elsewhere. But could you elaborate, both on the problems and, but more importantly, why you're confident, that you can improve them? And maybe give some sort of order of magnitude, of what the improvement might be, please. I tried, Susanne speaking, I would start with giving an answer, and will be probably amended or corrected by Alexander and Christian, as it is needed and required. We have faced in the beginning of this year in Muskegon, significant supply chain challenges. What does it mean? Shortages of material not sufficiently delivered by subcontractors to cope with the production planning and the amount of transmission specifically, but also engines, which we had in the production planning. So we basically had a similar effect, which we have faced and experienced in Augsburg, that we start to work on something in assembly, then we stopped, and we were hunting and chasing parts. So an overall very inefficient and not satisfactorily at all process. We have established a task force team supporting our management team in Muskegon for specific initiatives on supply chain, but also on improving production planning around the situation in the supply chain. So a flexible system of adapting and tackling assembly things. We have started to give you a feeling, beginning of the year, with the delivery of less than one transmission per day in the U.S., and we are now already at three transmissions per day. So improvement is significantly over the course of the last months. We have today, let me say, theoretical coverage of all required material until the end of the year. Therefore, that's why, because it's not physically all on the site in Muskegon, but as long as subcontractors stick to the latest commitments and contractual obligations of their delivery schedules, we are fully covered by material for transmissions and engines until the end of the year. And with the expediting processes on the subcontractors, we feel very confident that deliveries will now, with the new dates and new commitments, come on time. And so far, we have in the last weeks already constantly delivered on a daily basis three transmissions. What we now improve as the next step is, in the very moment, assembly is performing and delivering, you obviously get pressure on other areas. So we are at the moment optimizing material flow and test bench processes in an overall efficient setup. We have also adapted the management and organizational structure to support process thinking focused on the output of processes rather than silo thinking. So it's a rather comprehensive approach there to improve operational excellence in the frame of the ramp up program. This will definitely continue until the end of the year, and we have, at the moment, no reason to believe that things will deteriorate again or not work again. We have the hands on the ground and on the parts on a daily basis with sufficient capacity, and that's why we have the full confidence. On that basis of the overall performance, we decided not just to narrow the guidance for this year to the upper end, but also to communicate today the midterm outlook, and to, let's say, raise the targets here. Excellent. Thank you. So improving through the rest of the year, hitting sort of what you should be as a run rate by the end of the year, but not in the second half. Is that the way to read that? I think it's Susanne has said a gradual improvement with a stronger second half, in particular Q4, but we will take two, three quarters until we are where we want to be, pretty much like Charles we had in Augsburg. And the impact here was quite impactful, and the same team is now helping the US. So we have a high probability that this will come through in the first half of next year at the latest. Excellent. Thank you very much. You're welcome. The next question comes from David Perry, J.P. Morgan. Please go ahead. Yes, good afternoon, everyone. RENK and Christian, I'll add my good wishes for the future as well. Thank you. So I've got a few questions. I'm a little bit confused on a few things. I'll start with the guidance. Could you just maybe help us a bit more why, why you've raised the guidance now, specific drivers of that? And maybe help us a little bit on the divisions, which can be volatile, so just so that we can map it out. Sorry, this is a long list of questions. There's a lot in that already. Can you also just be clear, please, what you define as the medium term? Because it isn't totally clear to me. Secondly, this is a little bit more in the detail. There's a big swing in eliminations, actually EUR 8 million against you in EBIT, EUR 4 million positive last year, EUR 4 million negative this year. Can you just explain what causes that? Then lastly, maybe I've got sunstroke because I'm on holiday, but doesn't the new guidance imply a margin of 18.5%? And I thought the margin guidance was 19%-20%. So if you could just clarify that, that would be helpful. Thank you. Real pleasure, David. So first of all, I think, guidance, let's separate into areas. One is for the remainder of 2024 and for the midterm. For the remainder of 2024, we decided in the Board to go to EUR 175-219, which is, as you know, the upper part of the guidance. This is supported by the very good achievements for the half year in Augsburg that give us confidence that we might finish the year on the upper half of the guidance. If, if we go to the medium term, we see medium back from the year 2023, from the initial start of the IPO, is a 3-5 year horizon. That means 2024, 2025, 2026 is year 1, 2, 3, as 2027 and 2028 is 4 and 5. That we've increased, and that's to Susanne's point in her presentation, the revenue guidance to 15 is because you might understand, last year in the IPO process, we've given out the 10. Basically, we see that our ability to realize output has significantly increased in Augsburg and continues to improve in the US. Hence, we saw now 24.4% already for the first half of the year. So we think that a number of around 15 seems to be the right one. And, as with the growth prospects, especially, also on the recovery side with RENK America and the strong VMS in the backlog, we also assume that a profit level of around EUR 300 million might be feasible also with the achievements on the material cost side. I would suggest the way you think is on M&I, a double-digit margin. Slide bearings continue to be a profitable, enjoyable business, and VMS returning to strength that you have seen in 2022, with a fully effective ramp-up in due course of next year. Why is it 18.5? I mean, should I just assume, usually when you say three to five years, most analysts would take year four as the base case. So should we assume it's 327? Yeah. So, what's the question? Yes, it's the right direction. So look, for us, is we have 19-20, we've said in the IPO process. If you see the growth we currently have, we switch now to absolute EBIT, also because of the significant growth we have in certain segments. You basically will also see that, going forward, with the strong recovery of VMS, it might be possible. And at the Capital Markets Day, without giving too much preview here, Anya will give an outlook on the new steering model of the group, which will be enhanced by value drivers, which will complement an absolute EBIT level. So it's not that we say goodbye to the margin, but we basically focus on the absolute value creation for investors. With this, we also take business, that is in the segment, for example, of slide bearings of 16%-17% margin. But overall, we do not collect the 19%-20%. It's just we need to see how the VMS or the backlog needs to develop also in due course of the coming quarters. Okay, so thanks. There's a lot of your comments were on margin, but the higher sales, should we put most of that in VMS, or is it spread across all the- The majority, the majority of the EUR 4.7 is on the VMS land side. There's an increasingly higher portion on the Navy side, but the majority comes from VMS and a very strong focus also on European business, which is good margin. Okay. And just on that elimination swing? Look, I don't know out of my head which swing you mean. Well, the- I think it's on the corporate cost. You know, we've had certain swings in there, but we will get back to you, via Ingo, with a concrete answer on the EUR 4 million. David, to give you a concrete answer, I think it's fair to summarize it as corporate costs. And just I gave a random example of the annual general meeting. And then, so, so I think, I mean, it's lower numbers. I think it's low, low, low single-digit numbers. So, so we can take it as... Those are, yeah, corporate costs and things like the annual general meeting. So, is that temporary? Does it just normalize at 2-3 a year, or is it... What's the normal level there? We're not giving guidance on the specific line item, and I think it's also a matter of how we allocate it. But I mean, yeah, it is a bit higher than maybe the 0 that you've seen in the past, but it's not that substantial that we need to give you a line item guidance on this one. I think we have a very clear guidance on the group numbers now, which is what it is, and I think you've seen the right drivers. And yes, the elimination then is slightly higher than you had it in the past, but yeah, difficult to forecast on a quarterly basis because it's low numbers, and that's really more volatile. And we're not going to host another AGM this quarter. Welcome, David. The next question comes from Christophe Menard, Deutsche Bank. Please go ahead. Yes, good afternoon, and thank you for taking my questions. Best of luck, Christian, as well. I had three questions. The first one, just data point. I think you previously mentioned that you had a target of 650 transmissions in Germany in 2024, 425 in the US. You may have mentioned it on the call, but I didn't hear it. Is it still valid, or should we expect a lower number of transmissions in the US as per your statement on the recovery? That was the first question. The second question is on the full year guidance. I mean, I'm still thinking in terms of margin, sorry on that. But your, your... The guidance you crafted or the new elements are leading us to a margin between 16% and 17.3%. Last year, you were at 16.2%. My question is related to the aftermarket slash oil mix. I mean, clearly, H1 is better. We have a better mix on aftermarket. I would have expected probably a better margin in the full year, or is the mix of aftermarkets going to decline in H2? So that was the second question. And last question is in, it's a broader statement that Germany apparently is considering taking stakes in defense firms. I mean, at this point in time, this is not your case. Have you heard anything? Could there be an interest of Germany taking a stake in, uh, RENK? Thank you. So, maybe I start, and maybe the last question on the German state investment into RENK, Susanne might take. When it comes to the 650 you're mentioning, this has not changed, so Augsburg will produce and also sell more than 650. This is what Susanne has alluded to with the very strong performance that we already saw in the first half. As for the US, the absolute number, we will probably make, it's around 400-450. But as we've seen last year in Augsburg, if you sort out the supply chain, then you get in a second range a little bit of inefficiency in your assembly, and this is why we will not see a reduced number there. But efficiency needs to improve in the second, in the third and fourth quarter. For the overall year, if RAM would have performed like it performed in the past, when parts were there and positive leverage were there, the company most probably would have had it towards EUR 200 million+ already in this year. But it is what it is. The guidance is EUR 175 million-EUR 190 million on the back of very strong VMS here in Augsburg, improving situation in the US and solid double-digit segment numbers in M&I and also on the slide bearing side. To your questions on aftermarket, it's not declining, it's, it's stable growing, like we accept in the same relation like in the past, so, in line with the overall. To the third question, if the German state is supposed to take a stake in RENK, maybe, Susanne, you can elaborate a little bit. Yeah, happy to do so. Hi, Christophe. It has never been a discussion, and it, as far as I know, and I think, and I deem relevant and sensible, not a discussion going forward. The German government has generally changed their position with respect to a potential step in of a minority shareholding for national security relevant assets. They have done that, as you know, for an interim period in Airbus many years back, they have done it in HENSOLDT. They will probably do that whenever TKMS, so the shipbuilding activity of thyssenkrupp, will be on the table. Other than that, I do not expect, neither for other defense companies nor for RENK, specifically, a German government involvement with respect to a potential shareholding, and I also think it's neither necessary nor good. So we want to have a liquid share and not a shareholder blocking 25% of our share capital, not trading. And it wouldn't give us any advantage if the German government would be invested in RENK. And that's why, not an issue for us, but going forward, it might become an issue for companies being up for sale and looking for a sensible new ownership structure. I think TKMS is today the most prominent case, in that context, there is a discussion. Other discussions I'm not aware of, and I don't think also the German government is not intending proactively to engage if they are not forced to or feel forced to do so. Thank you. Thank you very much for the, the color on this. Welcome. Welcome. Thanks, operator. Maybe ask for another round of questions. Yes. Ladies and gentlemen, if you would still like to raise a question at this point, please press nine, followed by the star key. There's one question coming in from Sven Weier, Kepler Cheuvreux. Your line is open. Yes, hello. Thank you for taking my question. I have a question on Q2 order intake. You mentioned, of course, the big order that came in. I was wondering if you could share some, some other orders by type that came in, in the VMS segment. And also you mentioned that there are some opportunities in the future which are not included in the soft order backlog in VMS. I was wondering if you could, yeah, provide some, some color on what, what you're thinking. Thanks. So, so I think the general remark, why it's not in the order intake and the Soft Order Backlog, the Soft Order Backlog ends in 2028, as per our definition, and is every year, just one year rolling forward. There is programs, so then that will come beyond 2028, which we already know. So this is why we have more potential here. We'll give at the Capital Markets Day, a further flavor, on that end. I think generally, I would like to add and recall the definition of soft order backlog. So what is in and what qualifies for the soft order backlog is a very tight definition of projects which for which we are the sole source of supply. And this is either the case when the prime contractor for a given platform like on Leopard or Lynx or other platforms where we are, or K2, where we are the sole source, has already signed a contract, and we are negotiating the flow down contract to us, which is not yet signed. And we put it in the soft order backlog or, we discuss and negotiate with customers further batches, of projects where we have already delivered and executed or taken under contract, previous batches. So, and this definition of soft order backlog is rather tight. So there is many programs out there. And I could mention now, main battle tanks for Italy. I could mention infantry fighting vehicles for Italy. I could mention infantry fighting vehicles for Poland. I could mention, repowering programs, for Abrams, for Challenger 3. I could mention, the midlife modernization of the Ariete main battle tanks. I could mention, programs in Romania, for infantry fighting vehicles. They are all sizable, large programs, which are not yet so concrete that they qualify for our definition of soft order backlog, and the pipeline and the potential is huge. So this is not 10 or 20 projects, but probably 40-50 in all sizes, just in VMS. Plus definitely a list of 15-20 programs I have now spontaneously in my head for Navy. And if you take all of this together, this is a huge, huge pipeline, a quantity which we will, on the Capital Markets Day, I think give more color and more insight for you of what are the, what are the programs and the projects we are working on, and what is in the pipeline, to give you a better feeling of the potential of the market. And I think, with that, we have given you hopefully enough information and color of what we can give you in the very moment. Generally, there is like in Q1 as well, except the big large order from the US, many smaller and mid-sized orders, which we are not communicating or reporting specifically. But for us, it's relevant if we get EUR 20 million here, EUR 40 million, EUR 50 million there, and that's a sizable number of mid-size orders across various countries and customers. Obviously, orders also from the Middle East and MENA area. But also from smaller European customers also out of Germany. And also, new equipment, which we book on the Aftermarket, because it goes into existing platforms, into the reserves. And, and this is also reflected by, by, I think, a revenue growth, specifically in the Aftermarket, which was in Q2, 30%. So it pays into the overall, let's say, market situation. That's why it makes no sense to list more single projects. It's really a comprehensive, longer list of things, of smaller and mid-size orders and projects which are out there, which gives us a good resilience because it's not concentration risk on one big thing, which you either win or lose, but it's really a broad base. Great. That was very clear and very helpful. Thank you for that, and all the best, Christian. Thank you very much. There's one question also coming from Yan Derocles, ODDO BHF. Please go ahead. Yeah, good afternoon, Olena, Christian. I join my colleagues in wishing you all the best for the future. Thank you. Maybe three questions. Two modeling, one on R&D for the full year, because H1 was strongly up compared to last year. So what should we expect in H2? And the other modeling is on refinancing, because you've mentioned that you have in fact fixed for two or three years the new term loan. So could you tell us what at what rate you've swapped this new loan? And maybe the last question to come back on VMS in Q2, the profitability at VMS in Q2. Because even if we adjust for the provision release and the additional R&D, the drop through is relatively low in Q2, even lower than in Q1. How do you explain this rather low, I would say, low drop through compared to Q1? Thank you. So, maybe let's start with R&D. For the second half of the year, depending on the progress of, let's say, project with the customers, assumption of a number between EUR 5 million and EUR 10 million could be a suitable assumption, I would say, Yan, when it- Which is the own self-funded- Yes, that's what I heard. Portion of the R&D capitalized, not what we additionally do under customer contract and under, let's say, R&D fund subsidies on the European level, U.S. government, German government, French government. Yeah. And, the swap for the interest for the half year is around EUR 1.5 million. The overall cost for the financing in total is around, let's say, 6.5-7%, based on the current development. So as you know, it's basically the same financing that we've disclosed upon the IPO, so there's no news in there. There is a certain possibility as we narrow down our net debt position, that we get some more favorable rates on that one, so we continue to work on this. You might have seen that we also got an upgrade on the rating side from Standard & Poor's. This is in the clear mind of the company, and with this, also slight improvements on the financing costs are subject to appear. The third one I forgot, sorry. I think- R&D, yeah. It was a question on the release of the provision of EUR 9 million and the R&D effect on the. Yeah ... EBIT of VMS, right? Yeah, because even if you strip out the release and the increase in R&D, the profitability, the drop through at VMS is not that great in Q2. So I know that you've got these issues that are in the US at Muskegon, but I was wondering if something else- I think a fair comment. I think a fair... No, it's not something else. I think the fair comment is- Okay ...... Christian, under your control, is we are pleased with aftermarket performance. We are specifically pleased with the Augsburg performance, which is, let's say, compensating a lot. We are not pleased with the outcome in Q2 of RENK America. That's why full focus, that's why full transparency also to you with respect to output of the factory and the program and what we are doing there specifically. We expect Q3 and Q4 much better figures from RENK America, but we also need, what Christian said, another two, three quarters to fully unlock the potential we have in the factory on this improved level. But clearly what we see in Q2 is an effect of a bad performing US business in VMS, is a super well-performing business in Augsburg, which is compensating a lot, a lot, a lot, and which is a pleasing performance on the aftermarket side. And there is no other effect in. And which makes us confident to add on what Susanne said, what worked out here, will also work out in the US, because it's, it's the same topics, it's the same procedure, it's even the same people helping. And it shows us, as Susanne has alluded to, if the run rate from below one is now up at three, that we're on the right path. So, this is why we are confident about the recovery of the US business model in the next two to three quarters. Very clear. Thank you. Welcome. As there are no further questions at the moment, I'd like to hand it back to the speakers. Absolutely. We still do have a few questions in writing. If there's no follow-up question from Christophe, which still seems to be in the queue, but that's not a real question. We'll go to the questions we received in writing. I think the first step was from Marie-Thérèse at Hauck Aufhäuser Lampe. The top line and margin development in Marine is impressive. Can we assume profitability hovering at those levels for the rest of the year? I would say the top line should be pretty sustainable at the current level, so there's a clear yes. Margins should be sustainable at the high level for the first half, as well as they should be double digit for the full year. I would always say 10% and above would be the right assumption. Thank you. On the Aftermarket business, the question is: What is the share of the Aftermarket business in the VMS order intake in Q2, and do you expect this to accelerate in the remaining quarters? The quote, the share of aftermarket business isn't very meaningful on a quarterly basis. Usually, aftermarket order intake is less lumpy than new equipment, so that in the quarter of a very strong order intake, the excess order intake is more likely driven by new equipment. This also has been the case in the second quarter, so that the aftermarket share was less than 30% of the order intake. A more meaningful metric, in our view, is aftermarket order intake as a percentage of revenue, and this metric was around 40% in the quarter and should remain at that level, indicating substantial further aftermarket growth. Thank you. Then probably a quick question: Can you give a guidance on order intake for the full year? No. Good. Then we would move on to the questions from Carlos at Bank of America. I think the most questions have been answered, except for the last magic question on free cash flow, where he comes up with the question: I know you guys don't guide on free cash flow, but how should we think about cash for the second half of the year? Is high double-digit free cash flow for full year 2024 something achievable? ... So yes, we don't guide on cash flow, but if you take into account that we had to digest bonus payments, especially relating to the refinancing, and, as Susanne has alluded to, the temporary net working capital increase in the first half, our cash flow in the first half was good compared to normal seasonal patterns. So yes, high double digit is still realistic. Thank you. I think the other questions have already been answered. If not, please follow up by email. With that, I would like to hand it back to Susanne for our closing remarks. Yeah, thank you for attending and participating despite holidays and sunshine and beach weather. I would like to take the opportunity, however, to thank Christian. I know you are still here for another 6 weeks. It goes without saying that I'm obviously sad and that I also regret your decision, but have no other chance than to respect that. It makes it easy to digest because of Anja. Anja is a great colleague, and I'm really very much looking forward to continue the success story with Alexander and you together here to drive RENK into the future and the next level of performance. Other than that, thank you, Christian, and welcome in the team, Anja, in that new role as of 1st of October. If nobody has something to say and to add, we say collectively here in, from Augsburg, thank you very much to all of you. Enjoy the rest of the summer. Looking forward to see you in Munich for the Capital Markets Day, and when we are on the road in the next days, and speak to you soon then for the Q3 report. Thank you very much. Bye-bye. Thank you. Take care. Goodbye.