Good afternoon, ladies and gentlemen, and welcome to the Q3 2024 results analyst call of RENK Group AG. 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. Please go ahead. Yeah, thank you, Operator, and thanks everyone for joining our call today. You will have seen that we published our Q3 numbers this morning. Our documents are available on our Investor Relations website, and we're now hosting our Q3 results call with our CEO, Susanne Wiegand, and our CFO, Anja Mänz-Siebje. We also have our Chief Operating Officer, Alexander Sagel, with us today, and he will be available to answer your questions as well. But firstly, I'll hand it over to Susanne to take you through our Q3 numbers. Thank you, Ingo. Welcome from my side, from our side, on behalf of my colleagues on the board as well. Thanks for joining. We would start with slide four. I hope you can all see that. So on this slide, you can see a concise summary of a few key financial metrics and revenue splits. We have disclosed many of these metrics consistently in the past, so I would like to use the opportunity to tell you what has changed. Our total order backlog has reached EUR 4.8 billion, which is EUR 200 million higher than at the end of last year. Our last 12 months' revenues are well above a billion already and on track to reach around EUR 1.1 billion for the full year 2024. Our revenue growth, sorry, our revenue growth rate, has accelerated to almost 20%, a strong improvement compared to the 10% growth rate which we have seen last year. In the revenue splits, you can see that our aftermarket share in Q3 has further increased by 3 percentage points to 39%, which is a great development on that end, which has been a very gradual and sustainable improvement during the last nine months. Furthermore, our share of revenues generated with defense-related business, so predominantly VMS and the Navy business and M&I, exceeded 75% from the well-known 70% revenue split which we had last year, thanks to strong growth in the VMS segment as well as in the Navy business. On the qualitative aspects, we can fully confirm that we had claimed in the previous quarters. We are the number one player in our market with a market presence of 75% of the installed base of platforms, and our book-to-bill was above one in the first nine months of this year again. On slide six, I would like to begin with you with a summary of key highlights for Q3 2024. Overall, we are very pleased with our third quarter and reiterate our full-year guidance. The key highlight for us is the strong revenue growth in the VMS segment, which accelerated to 48% in quarter three this year. We are executing on record-high order backlog. So supply chain challenges, and we have discussed this in the last 12 months that we had during last year and also in the course of this year, were resolved successfully, and our product efficiency and output in Augsburg has improved considerably thanks to clear operational efficiency measures that we have implemented and also explained to you in much more detail during our Capital Markets Day. Following the role model of our success in Augsburg, we have initiated earlier this year in Q2 improvement measures at our plant in Muskegon as well, and these are bearing fruit in our operating KPIs already. In the Marine and Industry segment, revenues remained at a high level with a slight sequential reduction compared to Q2, but in line with normal seasonal patterns. As we had already communicated, the second half is more difficult than in the first, but for the full year, we are on track to achieving considerable growth in the M&I segment. Thanks to the operational improvement that we had achieved, and despite higher investment in technology and R&D, we had narrowed our full-year guidance, as you remember, to the upper end with our Q2 results, which we presented in August, and confirm this view again. Revenues should be around EUR 1.1 billion, and the adjusted EBIT guidance now narrowed to the upper end is between EUR 175 million-EUR 190 million. In the midterm, we strive for an even higher profit level of EUR 300 million in absolute terms at an organic growth rate of about 15% as market growth is intact and our ability to execute is improving day by day. I'm flipping now to slide seven to go with you through our total order backlog development. Compared to the second quarter of 2024, we see a slight increase of EUR 31 million in the soft order backlog, which leads to an increase of the total order backlog from EUR 4.7 billion to now EUR 4.8 billion, thanks to strong order intake again at the VMS segment. In addition, the order pipeline remains very encouraging. You remember that we presented also during the Capital Markets Day our market view on the pipeline, which is beyond and in excess of our total order backlog, and which shows in total a figure of EUR 12 billion, including the soft order backlog. And if you take the soft order backlog out, it's still above EUR 9 billion on bottom-up developed and identified projects on which we are working until the early 30s. Fixed order backlog increased compared to the end of last year, which is also positive development. Backlog visibility is the highest in our VMS segment. This is in the nature of that business, of the fixed backlog, about EUR 1.3 billion, which translates to about 70% of group fixed backlog is attributable to the VMS segment. So from the EUR 1.8 billion, about EUR 1.3 billion is attributable to VMS. That said, backlog in M&I has also grown as well and stands at more than EUR 400 million, which is predominantly, to a very large extent, Navy business, and this roughly is a quarter of the group fixed order backlog. This is up 2% points compared to Q3 last year, and this gives the Navy business a healthy two-year visibility. Slide Bearings is a more short cyclic segment, but even there we had 30% fixed backlog growth over the last 12 months and currently have more than seven months of backlog visibility, which is in the nature of that business, a very comfortable situation going forward. The vast majority of our soft order backlog is relating to the VMS segment. We have a good long-term pipeline in the other segments as well, but due to the competitive landscape, VMS projects are more likely to meet the strict soft order backlog criteria. We see a large volume of profitable business opportunities in the coming years beyond the projects that we have included in our soft order backlog and in the total order backlog. I would like to now hand over to Anja for a more detailed look at our Q3 financials starting on slide eight. Over to you, Anja. Thank you, Susanne. Let us now have a look at the group performance for the third quarter of 2024 with a focus on our top line. We had a good flow of base orders during the quarter. Similar to Q1, we have shown that we are able to reach a book-to-bill not far away from around 1.0x, even without large orders in VMS. For Q4, we see a good order pipeline. Fixed order backlog has increased by EUR 100 million compared to the end of last year. Revenue growth reached a good level thanks to strong growth at our VMS plants in Augsburg and Muskegon. Let me continue with a look at our profitability and our key metrics on slide nine. Our Q3 adjusted EBIT came in moderately above the prior year level. After the first nine months, our adjusted EBIT stands at EUR 112 million. As we anticipate a higher earnings run rate in Q4 2024, we reiterate our full-year guidance of EUR 175 million-EUR 190 million. If we turn to the next page, we have a look at our VMS segment. Revenue growth in VMS continues to be a key highlight for us. From an already strong growth level in half-year one 2024, growth accelerated further. Both of our key plants in which we produce transmissions for military vehicles, Augsburg and Muskegon, contributed very nicely to revenue growth. Like in previous quarters, our aftermarket business grew at a higher rate than the new equipment business. The installed base is growing, and we are enjoying growing aftermarket business on the back of this. When you assess the adjusted EBIT development in this segment, we had already said on the Q2 call that the EBIT improvement should shine through with a time lag in Muskegon, and we are confident in further margin improvement in VMS in the coming quarter. To be clear, the numbers of RENK Augsburg were very good in the third quarter, and I would like to thank the team for great effort. There is work to be done in the U.S., but we are confident that we can make it there too. Let me now turn to our Marine and Industry segment. For the M&I segment, order intake and revenues remained at a high level, consistent with our target to generate considerable growth in the full year. In Q3 specifically, order intake and revenues decreased compared to the prior year's level due to the high comparable base in that quarter. The Q3 adjusted EBIT margin is at a very good level, close to 10%, and only marginally below the first half-year margin, despite Q3 being a seasonally weaker quarter. For the full year, we still aim for a double-digit margin in that segment, an improvement compared to the year 2023. We continue to take a disciplined approach on the margin quality of our civil business, and this pricing discipline is paying off as well in terms of higher margins and higher backlog quality. Lastly, the Slide Bearing segment continues to experience strong profitability with solid revenue growth. Revenue growth reached a double-digit level again and exceeds typical growth rates in the capital goods sector. The segment management team has achieved capital-efficient growth in the right areas. Electrification is a key trend driving demand for E-bearings, for example, in generators. Beyond this, demand for maritime bearings increased too, and aftermarket clearly outgrew new equipment business in this segment as well. Margins also remained at a very pleasing level during the third quarter and even improved slightly compared to an already strong Q3 2023. Now, our adjustments. Our adjustments mainly relate to the adjustments of PPA effect that are very customary across the industrial sector. In Q2, we had adjusted certain expenses related to our ramp-up performance improvement program. We have continued to incur expenses for this program during Q3, but slightly lower than in Q2. Capital market readiness costs decreased to zero after completion of the listing in Frankfurt in the first quarter. Let me continue with a detailed look at our net working capital development. In Q3, net working capital as a percentage of revenues increased by nearly 2%. This was driven by higher inventories and receivables reflecting business growth. For year-end, it is still fair to model around 25% net working capital. In particular, we should receive advance payments, and we are also working hard on reducing inventory levels structurally. In the midterm, net working capital should decrease to 20% at group level, and it is clearly one of my priorities as CFO to keep the team focused, motivated, and able to reduce net working capital and improve capital efficiency. Moving on to our cash flow statement. Overall, many aspects of our cash conversion were good during Q3. Underlying CapEx was low, excluding QinetiQ, and cash outflows for interest, taxes, and other items close to normal levels. The increased net working capital has been a drag, but overall, we were still able to generate a slightly positive cash flow in Q3. This is despite the fact that we have digested a cash outflow for a payment to our technology partner, QinetiQ, in Q3, which is included in our CapEx number. For Q4, we expect a reduction of the net working capital ratio to around 25%, for example, thanks to some prepayments that we anticipate to receive. Let me now hand back to Susanne, who will take you through our outlook for the rest of the fiscal year and give you an update on our strategic priorities for 2024. Thank you, Anja. I will continue on, what is that slide? Let me see, 17. Based on our solid progress in Q3, we reiterate our full-year guidance, which we had narrowed to the upper end with the Q2 results. I said that already. We came originally from EUR 160 million to EUR 190 million and narrowed to the upper end of the EUR 175 million to EUR 190 million. On the top line, we expect around EUR 1.1 billion in revenues. Growth in the first nine months was higher than the midpoint of the initial full-year guidance had suggested, so we don't expect this growth to abate in light of strong demand growth as well as operational progress. You recall that the revenue and the top- line growth for us is predominantly dependent on our ability to deliver, so to execute orders, and it's not a reflection of the market growth, which we see more in the pipeline and the order intake side of things. Gross prospects remain good across all of our three segments and also in all regions which we address, and please also keep in mind that we can generate higher revenues as our ability to execute, as just said, is much better than in the last 12-18 months. Supply chain challenges have been overcome. I'm really happy and glad that I'm able to say that here. Operational improvements have been achieved significantly in the Augsburg plant, specifically on the VMS side, and with good progress also in Muskegon, which is, at the end of the day, crucial for our profitability performance. We also reiterate our full-year EBIT guidance for the EUR 175 million-EUR 190 million adjusted EBIT. Regarding our midterm revenue growth and respective EBIT targets, growth in the defense sector will last for longer. We discussed it several times, and we don't see any change on the market side. Again, our ability to also execute those orders has significantly improved in the last month. Hence, we have hiked our midterm targets and now expect 15% annual organic growth on the top line and an adjusted EBIT of about EUR 300 million in the midterm. Flipping the page to slide 18, I would like to conclude with some thoughts on the upcoming months of 2024. Our first priority this year was, as you know, the output increase at our main production plant in Augsburg in Germany during the third quarter, as well as the month of October. We were very pleased with the progress there. We were also very pleased with the product mix we have seen in Augsburg on the VMS side with the increased growth of our aftermarket share specifically there, which gives a good contributor to the overall EBIT performance for this year. The monthly run rate of production has been above 60 transmissions in September, as well as in October. The adjusted EBIT contribution of the transmission unit in Augsburg was notably higher than in quarter three last year. We have increased the performance level in Augsburg and anticipate further growth from there. Our second priority is the operational excellence in RENK America in Muskegon. We discussed it many times. Naturally, we will see the effects of the program, which we are conducting there with a certain time lag, also to what we have seen in Augsburg. The challenges in Muskegon are simpler. We discussed it already that Muskegon is structurally much more easy than Augsburg, so we have a two-product site with basically three customers and five contracts. Augsburg is much more complex with respect to the variety of different products and customers and also timelines. So we have a strong team on the ground in the U.S., also with the latest changes of our management team, which we have executed, that we make good progress in Muskegon, and also the expert team out of Germany is spending much more time in the U.S. to accompany and to support the improvements and measures going forward. We are confident that we will be able to replicate the success we had in Augsburg, also in Muskegon, and the improvement so far is already visible for us in certain performance metrics, for example, the daily output rate of transmissions out of the factory, and we could see that also in the recent months on the revenue levels generated by RENK America. We have added in that slide growth in the sense of future technological applications, not just general growth, but really with focus on innovation, on new technologies, for example, hybridization solutions, digital solutions, and this is one of our key priorities. Our colleague Alexander Sagel has presented on our progress during the Capital Markets Day, and this includes clearly that we advance in our technological leadership in our segment. We are consequently and disciplined investing in hybridization of our products. We have added intellectual property in the area of advanced mobility technologies. Our fourth priority is net working capital optimization. Anja has just presented the figures. We had a good start in Q1 this year. However, we are back to a level of almost 29%, which we regard as much too high. So we are not happy with the development of the net working capital figure. However, we are rather confident, as Anja said, that the year-end ratio will be lower again in the area of 25%, thanks to a rather structured approach now on managing and looking at inventories as well as our good performance on advanced payments that we are also expecting in Q4 this year. Based on that, we see a further better development in the right direction by the end of the year. Our fifth priority is order intake. We are really pleased with the performance during the first nine months and believe in a strong finish in Q4 this year. The defense super-cycle, as you know, is in full swing and will last for longer. The result of the election in the U.S. is putting much more pressure on Europe to speed up here. For our business development, definitely a positive factor. This is clearly visible also in our order intake in our pipeline. As discussed already, I said that before that at our Capital Markets Day in September, we have given you more color on the order pipeline with the EUR 12 billion, including the soft order backlog and the more than EUR 9 billion, which is beyond and excess of our already strong total order backlog in the next years to come. The sales teams are standing ready to secure those orders for RENK. I would like, with that, to hand over back to Ingo for our, let's say, financial calendar and then starting Q&A session. Thank you very much. Thank you so much, Susanne. Thank you, Anja. On the next slide, you will see a quick summary of our upcoming financial calendar. Also, at year-end, we will be on the road and also at a few key conferences. So hopefully, we'll see many of you there. But to also answer your question on this call, I would like to hand it back to the Operator to take some questions. Thank you very much. Ladies and gentlemen, if you would like to ask a question, please press nine and the star key on your telephone keypad. In case you wish to cancel your question, press niine and the star key again. Please press nine and the star key now to state your question. And the first question goes to George McWhirter from Berenberg. Please go ahead. Good afternoon. Thank you for the question. Just on RENK America, you mentioned we should expect an improvement in EBIT in Muskegon in the coming quarters, but with a time lag. So what is the incremental EBIT that you expect from Muskegon in Q4 and also over the long run? Thank you. Hi, George. Thanks for your question. I would start to take that question. Please accept that we are not giving any guidance on EBIT on that level of legal entities or specific sites. But RENK America generally is able to perform EBIT levels well in the two digits, and we see that company coming back to that level in the next three to four quarters. So to give you an idea, they are typically performing on the level of the VMS segment. So they are neither materially diluting or increasing the levels of the VMS performance. Thank you, and the next question goes to David Perry of JPMorgan. Please go ahead. Hi, Susanne and Anja. A couple of questions. One of them is, we talked about double-digit margin for the year for Maritime and Industry, and I think slide bearings is fairly stable, it looks like, over the year. So by implication, if I take the midpoint of your EBIT guidance, you probably need to do a 30% margin in VMS, if my math is correct, in Q4. Can you just talk about how you achieve that, what your confidence is in that? Because I don't think you've had a margin that high in the short history that we have of RENK. The second one is just whether you've got any update for us on the SAP investment you're going to make, I think about EUR 50 million over several years, how you will account for that. And then can we just check the RENK Italia? Is that to be a supplier to the Leonardo Rheinmetall JV that we're expecting? And are you the guaranteed supplier there on any tanks that they may build? Thank you. Hi, David. Susanne speaking. Thanks for your question. I would take question number one and number three, and Anja will elaborate on your beloved SAP IT question. Your math is correct with respect to the required, let me put it that way, EBIT performance VMS has to bring in the fourth quarter of this year. Why are we so confident that we reach the, let's say, guided EBIT results? We have quite a good predictable situation on the other segments indeed that they contribute to what they have to contribute to reach there on the VMS side. Augsburg is, let's say, performing much better than we originally planned at the beginning of this year, is able to compensate quite a little bit. And we have also obviously seen in the last weeks the improvements in the U.S. That's why this is one point. The other point, obviously, is that we were able to manage also to come to agreements with the customer in the U.S. to, let's say, increase our pricing a little bit or, to put it the other way around, to not punish with a full burden of discount, but with a less discount than the customer would be entitled to get. So we get some improvements here. We have still discussions with our auditors how to bring that into the figures. So this is the remaining uncertainty where we exactly end by the end of this year, but we can assume that some of this, let's say, negotiation success will be visible also in quarter four. And this brings us to the strong and firm belief that the segment will deliver what you have calculated and what we are expecting. You are right, it's rather back and loaded. It's not a nice walk along the Seine, but it's hard work every day. And there is, let's say, some remaining risk of how much and what do we get into the figures in Q4 and what is accountable for in 2025. So the agreements with the customer are in place. This is the very good news. And how this hits our figures, when exactly in which quarters, is something to find out. But our confidence is high that we get the performance in VMS ready, specifically thanks to the very solid performance of Horstman, very solid performance, and more than solid of Augsburg. And this together with the improvements in RAM will bring that result. With respect to Italy, I think for us good news, the Italian Army is insisting on RENK, but also Leonardo, who has in the joint venture agreement with Rheinmetall the responsibility for the power pack, so the responsibility for the power pack is with Leonardo, and Leonardo is also confirming and insisting on RENK solutions in the vehicles, not just in the main battle tanks, but also in the infantry fighting vehicle, which will then replace the Dardo platform in Italy, and this was also the reason why we decided not the only one, but also one of the good reasons why we decided to establish RENK Italia in La Spezia, not just close to the Navy, but on the site and premises of Leonardo in the OTO Melara facilities. Respective agreements are in place with Leonardo, which gives us all the, let's say, comfort that we are set in those platforms going forward. I would hand it over to Anja. Hi, David. It's Anja speaking. Thanks for your question. So at the moment, we're basically in the planning and evaluation phase. So we're looking at timeline, costs, and then also on what actually do we need to get. And there are certain options. So in these days, you can either buy Software as a Service or you have an on-premise solution. And obviously, if you look at both of them, you have a different accounting way to treat them. And if we look at our security standards and security necessity of data and data security topics, we're most likely to come up with an on-premise solution and not a Software as a Service. So therefore, we will have bits and pieces which we will need to capitalize, but we also will have OpEx topics because there are certain costs which you can capitalize in accordance with IFRS. And if you look at that, so it's going to be a mixed accounting most probably, but all this really depends on how the contracts will be drafted and signed. So therefore, it's very tough to give you a very clear picture at the moment. But what we can say at the moment, it's going to be OpEx and CapEx. So it's both. Okay. Do you mind if I ask just one follow-up on question one on this discount deal with the customer? Is that just the benefit? Will it just be the benefit for Q4 that's booked in Q4, or is it like a multi-year benefit that's taken in Q4? No, this is a very tricky thing, which we could debate now for weeks and months with red wine or without or gin tonic. This is what we do with our auditors at the moment as well. So there are lots of versions how to see that, whether this discount is just something for the future or whether this needs to be distributed over a longer period of time in reflection of the contract structure. So there is no clear answer, and if we had the answer, we would tell you we don't know today. That's why in Q3 figures, there is nothing in because it's still under debate. I think this is worth to mention that Q3 is zero impact of that agreement in. So my assessment, Anja's assessment, and the high likelihood is that we have distribution of that funds over the quarters. So it will hit some of that in Q4 and probably the majority next year. But how the distribution of that exactly will be, we don't know yet. Okay. I will wait. Thank you. Yeah, we need to wait. Exactly. Same on our side. But I think worth to note is nothing in Q3. So Q3 is not somehow positively influenced or impacted by that agreement. The agreement is signed. The agreement is still contingent to another contract modification which we need to sign. So that's why it's anyhow something we have to consider in Q4 where we will sign the other modification which is linked to that. So it's a little bit more complicated, but the good thing is the Army is supportive. The Army is giving us some money and some funds, which is, let's say, improving the overall situation, which is basically a great one that we have this record high call-offs of this frame contract, more than 1,000 transmissions. So the backlog is full, full, full in the U.S. And the execution guys can really concentrate on efficiency and processes and make the best out of it. And the customer is even supportive with money. So there is basically nothing to complain. We just need to finalize the paperwork and come with the auditors to an aligned view on how to read that and how to put that into the accounting. This is where we are. Okay. Thank you. You're welcome. The next question goes to Christophe Menard of Deutsche Bank. Please go ahead. Yes. Good afternoon. I had three questions. The first one is on the free cash flow in Q4. You highlighted the working cap as a percentage of sales at 25% being the target for the full year. In this, you have the prepayment. Do you expect one large prepayment or a series of prepayments? Why are you so sure that you will achieve that target of 25%? Because it's quite essential, I think, to you attaining your free cash flow targets for the full year. Second question is more technical. It just looks like tax rate has been on the P&L really high in Q3. Can you just tell us whether it's pure timing and what it relates to? And the last question is on QinetiQ. You mentioned the CapEx payment in Q3. How should we be looking on our side on the benefit of that venture in terms of extra revenues in the future? Obviously, you cashed out some money. So when are you cashing in some benefits on this one? Thank you. Christophe, hi. Susanne is speaking. I'll give it a start. Anja and Alexander can probably take over. So indeed, we are expecting some down payments, some prepayments in Q4. How can we be so sure that we bring the net working capital down to 25%? This is at the moment our best knowledge of where the projects are and where the agreements are. Is it 100%? No, nothing in life is 100%. But our confidence is high. It's not just one big down payment. It's, let's say, three to four, which are in the RENK world and for us sizable. However, there are two which are clearly both in the two-digit figures. So not just something which is below EUR 10 million, but above that. And that's why this would be, let's say, probability, I think, is very low that nothing of all of this is coming. If one of the big ones is not coming, obviously, we can't compensate this with small ones, but our confidence level is high because all has been agreed. I think in one project, there is a certain rest risk that the customer is paying by the very end of this year, and the bank is booking the money on our bank account only on the 2nd of January or 3rd, so that we just miss, so to say, the 31st of December. That's why can we promise something at the end of the day? No, but we are sharing with you very transparently and honestly that there are four bigger ones clearly in the planning and more than, let's say, following up every day and pushing the customers to execute, and hopefully then the money is booked on our bank account still in a timely manner this year. It's then the rest risk which we have. But there is no risk concentration on just one big one. And I think this is the good news here. And we expect down payments in a considerable amount beyond EUR 40 million-EUR 50 million. And this would really then bring the net working capital and not just 1 percentage point down from this much too high 29%, which we had by the end of quarter three. So this is the background and the reasoning behind that. The QinetiQ question, tax rate, I leave it to Anja, honestly. But QinetiQ, maybe generally, what strategy do we have? So the developments QinetiQ has done is not just interesting, but we think it's a crucial technology which has been developed with funding support of the U.S. Government, of BAE, and QinetiQ. So these guys have spent all together in the last years rather high two-digit figure of millions. We were able to, let's say, get those patents and technologies at, as we think, a well-negotiated price out of QinetiQ. Why have they done that? All these guys have not the ability to manufacture industrially those transmissions. I think they were maybe before the times of the market with the development. The market was not ready to take that up for us with the own development on the ATREX on one side, which follows specific, let's say, design principles. Together with those technologies which we have now taken over from QinetiQ, we are covering a rather broad range of serial, parallel, and different approaches of hybridization of the transmission. The market is getting rather narrow and tight for other players since we have secured technology with our approved registered patents. So the downside is that not all of the patents have a long remaining, let's say, rest period to go. There are some which run only a few years, some longer. However, I think we were able also to considerably close the market for other players with our patent rights. This was also part of the strategy. And taking over those patents was a package deal in a broader relationship, in a broader technology development partnership with QinetiQ to develop things also in the market of UGVs, for example, where our Horstman colleagues on the suspension side were already part of and we're extending the scope in those applications within our, let's say, abilities of the portfolio. And taking all of this together, we think it was a good move, and we are convinced it was a good move. Yes, we still have to find that, let's say, customer base who is buying that technology. But we are rather confident that together with QinetiQ, together with BAE, together with the U.S. Government, who have all contributed to the financing and development of the technology, there are some use cases going forward. Can we promise an exact date? When do we see money back? No, this wouldn't be prudent, honestly. But my best assumption is that in the next 24 months, we should see concrete projects on the table which are ready to take up those technological steps and solutions. I don't know, Alexander, whether you want to add on that. Otherwise, Anja would take over the tech question. I think there's not so much to ask, Susanne. Thank you very much for this short introduction, but just to underline it, QinetiQ is a perfect fit to our overall hybridization strategy, as just mentioned by Susanne, and I think we explained it already during the Capital Market Day. There are two legs. One is the hybridization technology, as just perfectly explained, and the second one is really to consider synergies on future markets, for example, such as the UGV, where we're really going by joint efforts in autonomy capabilities, remote control capabilities, and as I tried to explain on the Capital Market Day, especially on the UGV market, below 20 ton and going down low up to 5 ton, we see a considerable market developing beyond 2030. Anja. Anja, tax. Okay, taxes. Taxes. Taxes is basically driven by local regulation. Let me just give you two examples to add a little bit of flavor. In the U.S., we had last year calculated a research development tax credit. However, in this year, it turned out the project went a little bit different. So when we then prepared the last year's tax return and looked into that with our tax advisors, it turned out that the tax credit wasn't as high as anticipated. So that's one topic, for example. And I can give you another example that's also U.S. tax-driven. We have a loan in the U.S. in one of our companies. And the interest, there is a cap of the interest which you can deduct in your taxable income. In the U.S., we have a similar topic in Germany. It's called Zinsschranke. Sorry, I can't really translate that into English, but it really means you can only deduct a certain amount of interest for that loan. And this is also driving basically these interests because we are now above that cap, basically, and therefore we cannot anymore tax deduct it. We are already looking into that topic, and we hopefully come to a solution. I hope that adds a little bit of flavor to our tax situation. Yeah. Thank you very much for the very detailed answers. You're welcome. And the next question goes to Carlos Iranzo Peris of Bank of America. Please go ahead. Hey, good afternoon, and thanks for taking my questions. I actually have two, if I may. The first one, in the presentation, you mentioned that you expect large orders to pick up in Q4. So could you elaborate a little bit more on this? And then the second one, based on what you mentioned in the call about the joint venture of RENK Italia and Leonardo, just wondering if the potential opportunities arising from this joint venture are already included in your midterm guidance? Thank you. Absolutely, Carlos and thank you. Just on the first question, order pipeline for the fourth quarter, we've not yet specified any particular customer names, but we do have a pipeline which also includes, I would say, two to three larger orders, which would really make a difference. As you know, a large order for us would be high double digit, low triple digit. And I think if you see the base order level we generated in Q4, which was more than EUR 200 million without large orders, if you imagine at least one or two larger orders on top, that gives us confidence that the Q4 pipeline is high. And that's basically what we are trying to say with this statement. I'm taking over the question number two, Carlos. Business out of Italy and then the JV, Rheinmetall Leonardo, is not part and considered of the guidance. However, there is proportionally a part covered in our soft order backlog. Understood. Very clear. Thank you. You're welcome. The next question goes to Victor Allard of Goldman Sachs. Please go ahead. Good afternoon, everyone. Thank you for taking my questions. First one is regarding EBIT. If we look at the past couple of years, the adjustments have been somewhat significant and kept on increasing in recent quarters. Looking at RENK specifically, I was hoping if you could share a bit more color on what was the nature of the costs associated with the efficiency plan and the drivers to recognize them as one-off. The second question is if you could share also some color on how much of revenue recognized so far this year were accounting under the POC methods, and what is your expectation for the full year? I think in the past couple of years, you had disclosed revenue recognized over time at accounting for around 25%, if I remember well. So I was wondering whether there was a relationship here with DSOs, which have been increasing somewhat versus last year as well? Thank you. I'm happy. Thanks, Victor, for your questions. Susanne is speaking. Happy to take over your first question. Anja then will complement and take over the POC question, I think. Cost of the efficiency program in the U.S. is, let's say, a high one-digit figure in million euro in total expected. We don't have final figures yet, but this is what we expect. So you see parts and proportions of that in the adjustments. You can expect that we will see another piece of that in the Q4 adjustments, and then we are also done with the program, and the external, let's say, consultants and persons who have supported our program will then be phased out, and you will not see anything in 2025 of that, but I think size-wise, volume-wise, this is the color we can give you on that. Let me add to the POC question. POC, we do that based on an accounting assessment, what we do on each new contract, what we get, and then we determine whether it's POC or whether it's not POC. Therefore, it's very hard to really say what is our future percentage going to be of POC and non-POC revenue. The current percentage of POC revenue, that really depends on the percentage of completion what we have on each POC contract by quarter to quarter and by year-end. It really depends on how well we get on with our contracts. Just by a gut feeling, I would say there is no indication that we would be very off. I think the prior year's percentage should be in a similar ballpark. It's very hard to give you very detailed figures on that. But what we can say is that typically you can expect that the Navy orders, which are by nature and type typically POC orders, will continue to be one. We changed the model, if you recall, in Q3 last year. This is also visible, let's say, in the comparable figures in M&I, where we had this one-off effect of correcting our POC accounting measures in front of the IPO when we learned that RENK is doing things wrong. So we can expect that the Navy business will continue on that level, as we have seen that in the last quarters since Q3 last year when we changed it. So they are by nature typically POC. Our test bench business is by nature typically POC, but it's not visible in the figures since the volume is minor in total and not material. And in VMS, it is what Anja said. We look project by project. Typically, the German ones, there is no POC logic visible inside, and I think the only one which is different is the large contract with the U.S. customer. All others are typically by nature not POC, so assume what Anja said, that we don't expect any change in the structure and in the profile of that business with respect to POC accounting. This has also helped you a bit with precise numbers on that. I think for the full year, as you know, we disclose it in the annual report. For the year 2023, you will have seen it was slightly lower than in the year 2022, trending down. And I think for the 2024 numbers, of course, to get a precise number, please wait for the annual report to be published early next year. But for the first nine months, I think it's fair to say it was slightly lower than in the first nine months of last year, also slightly lower than the quarter that you sort of have to do it too. Okay, got it. Thank you for the color. The next question goes to Joe Orchard of Redburn Atlantic. Please go ahead. Yes, good afternoon, and thank you for taking my questions. I've got three, if I may. Please could you comment on how you see the aftermarket versus new build dynamic evolving in Q4? I mean, is the level of aftermarket revenue sustainable on an absolute basis in Q4, even if it decreases in relative terms versus new builds? Second question is on free cash flow, please. I think that was quite a big year-on-year swing, EUR 25 million, I think, in the other line on slide 15, which helped move free cash flow positive in the quarter. Please could you talk us through some of the moving parts here? And then third question, finally, on the current German political situation, do you have any comments to add here, and do you anticipate any impact on the business from potential, well, from the elections next year? Thank you very much. Joe, thanks for your questions. I give it a start again. Anja will take over. With respect to aftermarket, where this new build share, we had a super strong aftermarket performance in Q3. Basically, we expect the business to stay strong. So we don't have an extraordinary or, let's say, specific effect in Q3. We have seen quite some spare parts orders coming from Israel specifically. We can expect that this continues for the next months to come. Whether Q4 is as strong and such strong as Q3 is, for me, not predictable at the moment, but you can assume that aftermarket performance will continue to be on a high level in the next months to come. So we had no extra effect in Q3. With respect to the situation in Germany politically, let me comment as follows. Maybe first of all, you have seen that our coalition is broken. We have new elections by the end of February next year. Is it good news? We think so. Why is it good news? Because we had a government in the coalition which was not able to agree on many points, which basically led to vacuum of non-decision-making and starting election campaigns much too early in reflection of the normal schedule of elections, which would only have taken place normally as planned in September next year. So we had not much fruitful, let's say, output out of this government anymore. So it's good that they took the consequences. It's good that we come rather soon to new elections. What does it mean for RENK and for the business? Since this government was not able to agree on the budget for 2025, the German government will be run on a preliminary budget. Preliminary budget means they pay whatever they are obliged to pay according to contract. Everything which is OpEx is obviously no problem. Everything which is maintenance and spare parts isn't an issue, but they are not able to bring underway big acquisition programs and CapEx projects going forward. This is also true for defense and for any other business, except they find individually for things majorities, which is not super likely. So the RENK impact is hence limited because first, our dependency on Bundeswehr business is about 10% of the revenue. So we anyhow don't live too much on German budget. Secondly, all big orders which are relevant for RENK are in place and signed and sealed. So this is specifically on the Navy side, the two additional frigates for the class F126. This is on the VMS side specifically, the large volume of Leopards when the German government and the Bundeswehr draw on the entire frame contract of 123 Leopards going forward. We have sealed in time our, let's say, stake in the Puma program and also on the Howitzer side, as communicated also publicly. We look much more on the 2026 budget, and this will be a challenge for the new government since they have to agree not just on the 2025 budgets in summer next year, but in parallel together straight also 2026 budgets. So this will be an interesting process. In 2026, we foresee some larger relevant programs for RENK, which is the frigate program F127, which is the next piece of the second batch of Pumas. So there is, and there's also, let's say, a larger quantity still outstanding of recovery vehicles for the Army. Those are all relevant programs for that RENK, which are, let's say, scheduled to be, let's say, on the table for 2026. So this is more our focus than 2025, or all our things are settled, sealed, under way and not impacted by the preliminary budget process. The, let's say, only negative is maybe too negative, but the only other aspect which I see is that the government, now being in transition and change, will not be speedy in taking export approvals. So we might see even longer processes than before of this government granting export approvals. And even if we have then a new government, which realistically takes a few weeks after elections until coalition is coming together and the coalition contract has been finally negotiated, then there will be probably new people in responsibility and in action, and they will take their time to understand their business. So we can expect probably some longer processes until or in the course of next year, until mid-end next year with respect to export approvals. This is then relevant for us not so much on the order intake line, but if we have certain things in production which are not covered by approvals which are then required. Honestly, also here, a rather reduced risk. We have some Israel business which has not full approvals as per today. So this is something where we could, let's say, sail into next year. However, Israel is anyhow in Germany a special case, and I think we'll be on the agenda and not be subject to, I don't know, election campaigns and tactics of parties. It shouldn't be like this. But this is the only bigger, let's say, impact we can see at the moment in reflection of our budget planning for 2025 and business impact. But all those companies who are much more dependent on Bundeswehr business and who have still this famous 25 million applications out there, they have to assume that there is a delay and a negative impact on their business development for the next years to come. Yeah, thanks, and Joe, on your question on cash flow, as you rightly pointed out, we had a positive other line item in our free cash flow bridge. If you look at our quarterly results release, you will see that of this EUR 13.6 million other swing, a large part is attributed to a change in other provisions, which has been positive to the tune of almost EUR 10 million in the third quarter. Yeah, so in general, of course, nice to have, let's say, higher cash earnings and a little bit of conservative provisioning. Primarily, this relates to personnel-related provisions, but again, not a single big item, but rather, let's say, an overall higher level and hence good earnings quality for the quarter. When you look at the cash flow overall, of course, keep in mind we had digested for the first nine months a number of one-offs, like the EUR 8 million prepayment penalties, like the QinetiQ-related cash offer in Q3. If you strip that out, I think the underlying cash flow was fine, always conscious that Q4 tends to be the seasonally strongest quarter. Fantastic. Thank you very much. You are welcome, Joe. More questions? Yes, we have two more questions. The next one is from Sven Sauer of Kepler Cheuvreux. Please go ahead. Thank you. Just two follow-up questions. The first on net working capital and the second on the order situation. You mentioned that you were expecting some prepayments or down payments in Q4. I was wondering, were some of those previously anticipated for Q3, or was there some kind of quarter-over-quarter threshold expecting them at the end of the quarter, but then realizing in the next quarter? And the second question would be, in Q3, did you already see any order intake for the Leopard 2? Hi, Sven. Thanks for your question. Susanne is speaking. There's no shifting of planned prepayments from quarter to quarter. So nothing of those were planned in Q3 and somehow shifted there originally and were originally planned for Q4. Some increased in size, which is good news for us, but nothing which is subject to delay and shifting. Order situation, Leopard 2, we are at the moment, let's say, finalizing with KNDS our contractual arrangements with respect to a bigger package of Leopard 2. Bigger package means beyond an excess of 300, large figure. So this goes well beyond the need and the requirements of the German programs, but is including and covering several export customers as well. So that's why we decided with the KNDS together to make a package deal and to sign and seal that with a planning period of the next few years where we are then, let's say, required to deliver those Leopard tank transmissions going forward. And the agreement with KNDS is that we will still sign this year the contract, the respective contract, and as I said, also get the down payment on that, which is customary in the market size-wise. And then we hope that they are not just paying this year, but that the money and the funds hit our bank accounts also still this year. But this is one of the bigger portions which I have mentioned, which are well then in the two-digit figure of down payments. Leopard transmissions in excess of 300 pieces is obviously also a contract which qualifies in our definition of a large one. Great. Thank you. You're welcome. The next question goes to Marie-Thér`ese Grübner of HAIB. Please go ahead. Yes, good afternoon. I had one more question regarding how you see the impact of the Trump presidency on your American business, and yeah, especially in light of the fact that you were considering maybe building a Navy-related footprint in the U.S., maybe via M&A. But generally, your view on how that could impact your American business and also, of course, on the Vietnam side as well. Thank you. Marie-Thér`ese, it's great to hear your voice, although it was hard to understand you. So what I got and please forgive me if I got your question maybe wrong. You asked about Trump and U.S. and the impact and the like. So I think there's two impacts. One is with Donald Trump, we have to expect that he is serious and honestly also justified that Europe has to do more. So Europe has to accelerate its, let's say, activities on equipping the forces back. So there is positive pressure, so to say, on the industry to develop for the governments and the countries and the politicians is maybe hard stuff. However, he will mean it serious. Second effect is that we cannot expect that the U.S. aid and support for the Ukraine will stay on that high level as we have seen in the last years. Trump is also to be taken seriously on that point. So Europe, in its very own interest, has to increase support for Ukraine and has to do more. So this is challenging for the industry, but I think at the end of the day, positive impulses on our super- cycle with respect to the U.S. business, very clear, America first, very clear localization is required. So great that we are with our land business and VMS already there. We are considered American. We have U.S. technologies, U.S. jobs, U.S. IPs, and U.S. work. So no issue here, but this also triggers, let's say, our intensified activities on how to localize in the best way possible our Navy business in the U.S. Navy is in the midterm expected to be a very attractive market in the U.S. with attractive big programs. And as you know, we have delivered so far in the last 20, 30 years being a partner to the U.S. Navy and the U.S. Coast Guard, our products out of Germany. This is for sure not the model going forward in the next years to come. So localization is one of the priorities. We are working on that. We are assessing at the moment two versions, acquisition versus, let's say, a green or brownfield approach, maybe even supported and subsidized with government funding if we invest something organically. However, our tendency at the moment is if we find a good target for acquisition, meaning we don't pay silly multiples on that, and the company size-wise must fit to our abilities and our ability also to integrate operationally and digest such an acquisition, we would tend to go the M&A way rather than the, let's say, organic way, which is long, which is risky, which is expensive. You don't have a brand, you don't have a track record, you don't have a supply chain established. So even if there is a target which maybe requires some management attention, which is anyhow the normal way of things, if you have a post-merger integration program to do, this is the preferred way for us to get things, let's say, up and running in a much faster and much more reliable way. This is where we are active at the moment, but we are not in a position to, let's say, inform or disclose something which is really materially progressed. So please give us another few weeks and months to do our homework, and hopefully we are able to present something in the course of next year. Is it covering your question, Marie-Thér`ese, or was it complete bullshit? No, it does cover. And in fact, I mean, you perfectly answered my question. I hope you hear me better now. Do you hear me better? No, I think the order is still pretty bad. And I think conscious of time, Marie-Thér`ese, if you have a pressing follow-up question, let us know. Otherwise, we probably move on to the last question from Beltran. That's fine. Thank you. Thanks, Thér`ese. Okay, and the last question goes to Beltran Palazuelo of DLTV. Please go ahead. Hello, good afternoon. Thank you for taking my question. I have two. First one, the cost of debt. If you could elaborate, apart from the document you put in February 2024 of the EUR 525 million that it's partly hedged, if you could give us more color on exactly what is the cost in the next few years and if there's a possibility of prepayment if you generate cash, and then if you could elaborate more, maybe there are many opportunities, what type of firepower does RENK have in order to execute it? Thank you very much. Anja is taking over. The cost of debt. Exactly. So in February, when we did the IPO, we also did a refinancing, so we basically paid off the bond, and we took on a Term Loan B. And obviously, what you see in our financials on a quarterly basis is that the Term L oan B had a fixed interest rate and was paid twice a year, so in July and in January. This is why our interest payment and expenses are a little bit off because now we are paying on a quarterly or even monthly basis. The cost of the debt really depends on EURIBOR. The basis is EURIBOR plus some surcharge. And as the EURIBOR is increasing during the year, it's higher. However, we did a swap on top of that, and we are kind of, we fixed that, and we did a hedge accounting on top of it. So some of the, but it's not covering the whole portion. So it's from a year and a coverage of the full debt. It's not fully covered. So we do see some of the inefficiencies seen in the P&L, but the other effects which are efficiently hedged, they're going into the OCI. I think it's on the level more or less of the high-yield bond, which we had in the last years, to give you an orientation, which, let's say, number you can put into your model. Around 6%. Yeah. So what was the 6%? The next question? The next question, I think the one question was whether we could reduce it. I mean, it's a term loan. So yes, of course, over time, there could be possibilities. We're not in a rush, but. Cash flow and cash conversion is allowing that. What's the question? What do we have to for? Firepower. And I think, Ingo, we can reiterate here as well that our midterm aim is obviously to end up in investment-grade rating at 1.5% leverage. So if we talk about reducing debt, we see that obviously realistic given our cash flow performance going forward. With respect to firepower, this is a good question. So we differentiate basically two segments. One is smaller acquisitions or engagements as we have done that with the patents, for example, with QinetiQ or the general QinetiQ acquisition, which we have done last year in 2023. So everything which is in the area up to EUR 30 million, EUR 40 million, EUR 50 million is basically something which we would pay straight out of cash and out of our existing facilities. If a bigger acquisition in M&A comes our way in the area of, let's say, the size of the CPS business, which we have bought back in 2021, which was in the area of EUR 400 million, for example, we obviously would need financing. We have respective discussions conducted with our key banks on that. They confirmed that such acquisitions in that size and even a little bit bigger are financeable and possible for us. So I will not give you a precise number on firepower, but you can assume that, let's say, any acquisition in the size of 50%-60% of the RENK revenue level is financeable by the consortium of our banks. Thank you very much. You're welcome. Perfect. I hope that answered your question. With that, thanks for giving us a few minutes more than we have scheduled. It was a very good discussion. Thanks, everyone, for dialing in, and hope to speak soon. Thank you very much to all. Thank you. you. Bye-bye. Bye. Bye. The conference is no longer being recorded.