Good afternoon, ladies and gentlemen, and a warm welcome to the RENK Group AG Q1 2025 results 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 within the conference call. Let me now turn the floor over to your host, Christian Weiß, Investor Relations. Thank you, Operator. A very warm welcome from our side. Our Q1 2025 investor and analyst call is hosted by our CEO, Dr. Alexander Sagel, and our CFO, Anja Mänz-Siebje. Now I would like to hand over to our CEO, Dr. Alexander Sagel. Alexander, please go ahead. Yeah, Christian, thank you very much. Ladies and gentlemen, hello to everyone from my side, and I want to again thank you very, very much for joining today's call. Today's presentation has two parts. Firstly, a quick review of the Q1 2025 highlights and figures. Secondly, more forward-looking, we will talk briefly about the 2025 guidance and our midterm targets, followed by an overview of some of our 2025 key order intake targets and key tasks. Finally, for the first time, we will provide a brief outlook beyond 2028, which reflects the current estimates and discussions from our management level. To sum it up, and before going into details, we are fully on track. Now I would like to move into the presentation on the next page, and let me start with a brief overview of the highlights of the first quarter 2025. Starting with the very first highlight, our strong order intake, which increased year- over- year by 164% to EUR 549 million. This is a record order intake for a first quarter. Consequently, the book-to-bill ratio increased to a strong 2.0 compared to 0.9 in the quarter of last year. You can see some of the main drivers for the strong order intake on the right-hand side of the slide, and we discussed some of these programs during the last weeks. I mean, as you see, those three orders stand out here with almost EUR 140 million. We were also able to win major orders, for example, with an international customer in regards to transmission, and for Turkey, where we are supplying engines out of our U.S. operations. We also touched upon the point in the past on seeing increasing demand for Leopard spare parts across various European nations. Also, this is part of our order intake in the first quarter. In this list, last but not least, our navy business with new contracts for various international customers in the range of EUR 70 million. Our defense business was clearly the main driver for the group in the first quarter. Defense-related order intake increased by + 196% in the first quarter, and revenue increased by + 29% year- over- year. We also expanded our network of strategic partnerships by teaming up with NXP, Patria, and Quantum Systems, all leading companies in the field of hardware and chips, eDrive, eGenerators, and UAVs. These partnerships follow the strategic rationale to secure RENK's position in future technologies and to provide operational synergies. At the end of March, Patria presented their new famous APC vehicle concept during their Arctic event in Finland and in front of more than 12 potential user nations. RENK is a key partner for Patria and has developed a completely new and downsized high-performing transmission for the famous APC almost in record time. This is not only a further proof of our unique engineering competence, but also a significant future business potential. As a final point, it should be mentioned once again, and for the last time, that since March 24, 2025, RENK is listed on the German MDAX. Now, some comments on the overall group performance on page number two. Anja will go into further details later on in the financial section. As mentioned at the beginning, we had with EUR 549 million a very strong order intake, which is almost at Q4 2024 level. Our revenue growth in Q1 with + 15% is exactly in line with our CAGR expectation and came in at EUR 273 million. The adjusted EBIT, on the other hand, grew by 38% and therefore clearly outperforming the revenues growth to EUR 38 million. This overproportionate increase had led to a significant improvement in margins. All three segments were able to increase their margins in Q1 compared to last year's Q1, leading to an adjusted group EBIT margin improvement by 2.4 percentage points to 14.1%. On the right-hand side of the slide, you can see our split between defense and civil business, as well as the share of new business with aftermarket. Regarding the sectors, there's almost no change compared to the end of last year and is now at 73% defense and 27% civil business. The split between new build and aftermarket is with 61% to 39%, also quite similar compared to December 2024. On slide three, you can see the development of our pure defense business in terms of order intake and revenues. As said before, the defense business is with an order intake increase by a strong 196% and revenues following with + 29%, the clear driver and backbone of our business development, which mostly comes as no surprise. Now, a few quick words about the individual segments. As said before, more financial details will be provided by Anja later. Starting with the VMS segment on slide four. As already emphasized several times, we see a very strong order intake, which amounts to EUR 397 million, an increase of more than 400% year- over- year, while the revenues increased by + 28% to EUR 172 million. Our two main plants in Augsburg, VTA, and Maschinen RAM are performing on track and as planned, and nothing more to say. Also, and as mentioned before, we observed an increase in aftermarket activities by various European Leopard users, which could signal early signs of a change in behavior among European armed forces, which are now preparing to increase their mission readiness of the existing platforms. To sum it up, our LED segment VMS continues to be the main driver for the overall group performance. Going now quickly to the M&I segment on page number five. As already mentioned in our pre-close call, we had shifts in customer projects due to delays on the customer timelines into the second and third quarters, which accounted for a high single-digit EUR value in terms of revenues. These shifts can occur and are not really untypical for a project-based business like the M&I business. Similar to the VMS segment, we also see with EUR 122 million a good order intake for M&I and increase by + 25% year- over- year. Last but not least, no surprises on the slide bearing segment as shown on page number five. Solid performance, continuous growth with approximately 7% on the revenue side and with EUR 37 million order intake, good on track but slightly below last year's level. Nothing more to add for the time being, just keep them running. Finally, before I hand over to Anja, a few comments on the total order backlog. As you can see on page seven, we were able to increase once again our total order backlog by + 10% to a record level of now EUR 5.5 billion. This is equal to 4.7x last 12 months' revenues and signals an unchanged high visibility for future growth. Compared to full year 2024, we could again uplift the fixed order backlog by plus EUR 252 million, driven by the strong order intake level mentioned before and overcompensating our increased output levels from our operations. Our highly visible soft order backlog ended up at EUR 2.5 billion compared to EUR 2.2 billion at fiscal year end. It is important to mention that this figure does not include yet any impact from the expected increasing NATO-Europe defense budgets so far. Having said this, I would like now to hand over to Anja in order to have a deeper look into our Q1 2025 figures. Anja, over to you. Thank you, Alexander, and hello everyone. I'm glad to have the opportunity to guide you through our Q1 financials. As a starting point, I want to focus on our group's growth metrics before I provide you with a deep dive into our segments. Our first quarter contributed on an excellent order intake of EUR 548.6 million compared to EUR 208.2 million in the same period last year. The primary drivers behind this increase were the VMS segment, as already mentioned by Alexander. With a special thanks to our VMS segment, we lifted revenues up to EUR 273 million, representing a 14.7% increase year- on- year. Outputs for VMS came in on plan and confirmed our year-end performance of fiscal year 2024. As already mentioned by Alexander, we added EUR 252 million to our fixed order backlog, confirming our growth path. Let me continue with a look at our profitability and net debt ratio. Our adjusted gross profit substantially benefited from our revenue growth and its underlying increase of volume, strengthened by our operational efficiency gains at our plants in Augsburg and Maschinen. VMS as the primary contributor with M&I and slide bearings adding solid assistance to profitability increases. The underlying margin mix is another positive factor driven by attractive new business and high margin aftermarket. I point at Alexander's chart to our current distribution of new business and aftermarket. Q1 provided us with a solid foundation for our anticipated full year performance. We increased our adjusted EBIT by 38.1% compared to prior year quarter. With a look at our profit or loss statement, we kept cost levels within a reasonable range, especially when considering our growth trajectory. Therefore, our adjusted EBIT of EUR 38.4 million is mainly a direct translation of gross profit increase into profitability, resulting in a satisfying adjusted EBIT margin of 14.1% compared to 11.7% in the prior year period. After a sharp decline of our leverage ratio in Q4 fiscal year 2024 to 1.7x of LTM adjusted EBITDA, we see an increase to 1.8 at the end of the current quarter. However, this is mainly due to a decrease in our cash position. We consider this to be reasonable and in line with a normal business that is subject to cut-off effects. Now, let's have a more detailed look into our segments. Let's start with VMS. VMS had an outstanding quarter across all metrics. When looking at order intake, the prior year comparison is a little bit unfair. Throughout fiscal year 2024, we saw more and more momentum related to military spending, now reaching new heights in Q1 2025. Nevertheless, our teams deserve our thanks for handling this agglomeration contracting processes, resulting in a segment's book-to-bill ratio of 2.3x compared to 0.6 in the prior year quarter. You heard it already, VMS also played a decisive part in our group's revenue increase. Augsburg and Maschinen volumes came in according to plan, proving the success of our efficiency initiatives and convincing operational execution in continuation of our year-end performance. Not surprisingly, adjusted EBIT and adjusted EBIT margins benefited from volume increase while holding costs at a short leash, resulting in operational leverage lifted adjusted EBIT up to EUR 28.6 million compared to EUR 19.5 million in the prior year quarter. Adjusted EBIT margin came in at 16.6%. We are pleased to see this positive development when comparing first quarters. Next in row is M&I. M&I order intake made a solid contribution to the group's figures, with marine solutions being the main driver. Book-to-bill ratio is greater than one and stood at 1.7x after 1.2x in the comparison period. M&I revenue shows a moderate dip of -6.9% to EUR 73.1 million. What we see is a decline in industry-related applications, whereas the output of marine business goes up. From an overall perspective, we still see an intact M&I trajectory. The shift towards marine business and its margin led to a sharp increase of adjusted EBIT when compared with Q1 fiscal year 2024. The adjusted EBIT margin of 10.2% declassifies the Q1 fiscal year 2024 profitability, but even more important, is not far away from Q4 fiscal year 2024 with its 11.9%. Let's now turn our attention to our third segment, slide bearings. The demand for E and marine bearings still drives slide bearings order intake of EUR 36.7 million, representing a moderate decline compared to prior year quarter, but beyond what we have seen in Q4 fiscal year 2024. The segment's book-to-bill ratio decreased from 1.4x in Q1 fiscal year 2024 to 1.2x at the current quarter end, above one, and as Alexander said, running. Inversely to order intake and so also driving slide bearings lower book-to-bill, we see a moderate increase in revenue to EUR 30.6 million compared to quarter one fiscal year 2024, primarily attributable to a higher output of marine, turbo, and vertical bearings, as well as growth in aftermarket business. If you put this into perspective, slide bearings revenue trend over the quarters steadily establishes higher levels. Profitability remains high and above group level, so small but mighty. Key factors for the 9.3% increase in adjusted EBIT to EUR 5.3 million were high margin new business and a high share of aftermarket activities. After this close look at our segments, I want to continue with our adjustments. Operating profit came in at EUR 24.4 million after EUR 11.9 million. This is we were then doubled our profit thanks to our volume and revenue growth I already mentioned earlier. When adjusted for PPA effects, we land at EUR 35.4 million compared to EUR 22.9 million in Q1 fiscal year 2024. This is below our year-end performance in Q4 fiscal year 2024, but represents a very good first quarter. After we digested our IPO and efficiency-related costs, adjustments mainly relate to global system improvements, M&A-related activities, and other minor components, mostly due to consultancy fees. The overall level of adjusted non-PPA items is significantly lower compared to prior year levels. Let me continue with a detailed look at our net working capital development. Our net working capital at the end of first quarter stood at EUR 334 million compared to EUR 284 million at the end of December 2024. When offsetting the cut-off date-related effects in accounts receivable, payable, and prepayments, the remaining impact is essentially due to higher inventory levels. This is a result of the advanced production undertaken to fulfill delivery commitments in the following quarters in order to meet our 2025 revenue targets. This led to an increase of net working capital as a percentage of sales by 350 basis points. We are still committed to our midterm target of a net working capital ratio of around 20%. However, we currently have to take account of our growth trajectory and customer behavior in terms of desired delivery capabilities. The rise in net working capital has a direct impact on our free cash flow. Let's have a look into that. When taking a look at this bridge, only a few major effects are left over that are noteworthy. We are already familiar with our satisfactory adjusted EBITDA development and the reasoning behind the net working capital increase. The latter essentially takes a big bite into cash due to the tied-up capital. As I said, we talk about inventories and products that we expect to convert into cash in the following quarters. Our capital expenditure of about EUR 5 million into PP&E amounts to 1.8% and is below our orientation mark of around 3%. Interest paid in Q1 fiscal year 2025 reflects a normalized level based on our current financing. If you do the math and add things together, free cash flow is negative at EUR -24.9 million, and we saw that already in our net debt development. At this point, let me thank you for your attention. It was a pleasure for me. I will now hand back over to Alexander. Thank you, Anja. Ladies and gentlemen, now a few words to our outlook. If you can just switch to the chart. Thank you. We do confirm our 2025 guidance, which means revenues of more than EUR 1.3 billion and an adjusted EBIT between EUR 210 million and EUR 235 million. We do confirm our midterm targets. As you also know, revenues grow with an average of 15% CAGR, leading to EUR 2 billion revenues in 2028 and EUR 300 million adjusted EBIT for 2027. To be crystal clear, our midterm targets do not consider yet further business potentials from the expected increasing NATO-Europe defense budgets. During the upcoming months, where the NATO summit in June will play a key role, we will carefully follow the defense budget allocation decisions and will also continue to work on a further quantification and refinement of potential business opportunities for RENK. Because of this process, we will review if and how we would need to adjust our medium-term targets. From a production capacity point of view, and as already mentioned in the full year 2024 call, we can confirm that we are prepared to cope with incremental volumes on top of our 15% CAGR growth line towards 2028 by leveraging, for example, shift models in Augsburg and our European production footprint. As you know, we have the plants in Rheine and in Paris, in combination with a clearly defined so-called modular capacity investment strategy. We also discussed this. Finally, a robust supply chain in combination with our deep vertical integration, where we already started right now to carefully procure important subsystems with very long lead times, for example, up to two years or even more, or even to make conscious decisions and insource such critical components and systems. Maybe also for this chart, one remark on the topic of U.S. tariffs. As already mentioned several times, we are constantly monitoring the situation and expect to have a manageable impact in the high single-digit million EUR range for 2025. Fortunately, due to our high level of U.S. localization, we do not see a major effect here. We now do a sneak preview in 2025, and looking on 2025 on this current slide, we have some key order intake targets for the current financial year. What you see here is a kind of assorted collection. Of course, if you talk about the total lifetime volume and business quality, the SO4 framework agreement certainly has the largest order volume between $800 million-$1 billion in a time span between three and maybe optional additional two years more. We also talked before about ABDS engines for international customers. We do expect the first batch for the series production for Patria, for the famous APC. We always talked about the K2 Poland additional volumes. We do target various IFV programs for Latvia, for Italy, for Romania, various frigate programs. Of course, we continuously strike and fight for future key order intake projects, such as, for example, the M1E3 Abrams, or if you talk about Indian programs, for example. Now let's have a quick look on our priorities for 2025 on the next page, on page number 20, as already shown in the full year 2024 call. As you can see, no change compared to our full year 2024 call, except point five, where we added the development and conclusions of the increasing European defense budgets, which will play a key role in the second half of 2025. Operational excellence, including a disciplined financial framework regarding net working capital targets and CapEx spending, securing and expanding the top line by order intake, as shown on the page before, regarding some of the key order intake programs for 2025, and making progress in key R&D projects such as hybridization and digitalization. These are clearly the operational top priorities for 2025. Last but not least, M&A, where we are currently in the PMI phase of Rami. You know this formerly since NATO Gearing Systems, and where we are constantly and very focused monitoring and tracking the market for value-accretive acquisitions according to well-defined M&A criteria. I would like to close our today's call with a first outlook beyond 2028, based on various scenarios we are discussing and evaluating on management level at RENK, where we highlight main drivers to realize what we call ambitions 2030. Starting base is on one side our current total order backlog of EUR 5.5 billion and our current project pipeline, which is currently at a level between EUR 12 billion-EUR 13 billion, including a very rough and preliminary estimate on so-called upside potentials from the expected increase in defense spending across NATO-Europe. Of course, as mentioned before, these upside potential estimates will be updated and refined in detail. More we are getting, a higher visibility of the future defense budget allocation in NATO-Europe. Please, important side notes regarding the project pipeline. First, we are looking here on a time frame between today and 2031. This update is based on our bubble chart, which we have shown on our capital market day back in September 2024. A second important point, our project pipeline is only considering defense business, and here only new business, so no aftermarket business, which would be on top. As we know, we have quite a decent share in the aftermarket business. The EUR 2 billion mark in revenues in 2028 is well known as a consequence of our 15% CAGR midterm revenue target, and basically the result of converting our total order backlog into revenues. Operational excellence and execution is the key. Our ambitions for 2030 are between EUR 2.5 billion-EUR 3 billion of revenues. We as a management, we are of course more targeting towards the EUR 3 billion range, to say it clearly. It is important to note that value-accretive M&A is a key factor here. Same holds obviously true for the upside potentials from increased spendings of the NATO-Europe, plus additional revenues from our normal project pipeline. Already starting in 2027, 2028, we do see first revenues from the increase in NATO-Europe defense budget in the mid double-digit EUR range, increasing further towards 2030. We do also consider that the biggest upside for the time being would certainly come from Germany. Ladies and gentlemen, I would like to repeat and summarize what I said in my introduction. RENK is fully on track in the execution of our strategy and prepared for growth towards EUR 3 billion and beyond. I almost forgot an important chart. Sorry for this. Next slide, of course, if you look on our financial calendar, as you can see, first, it's getting more and more crowded, which is good, I think. I would like to highlight our second capital market day, which is dated for November 20, 2025, where you are all welcome to join. It would be a great pleasure, and it will take place here in Augsburg. Further information will follow in due course, of course, over the summer months. For the time being, thank you very much for your attention, and we are now looking forward to your questions. Thank you. Thank you very much. Dear ladies and gentlemen, if you wish to state a question, please press nine and then the star key on your telephone keypad. It is only possible to state questions verbally within the conference call, so please dial in. The combination to state a question is nine and then the star key. We have a few questions incoming already. The first question is from Sebastian Growe of BNP Paribas. One moment, please. Over to you, Mr. Growe. I hope you can hear me well. Good afternoon, everybody. Hi, Anja. Hi, Alexander. Sebastian, could you speak a little bit louder? Sorry to interrupt you in the beginning, but a little bit louder would be fantastic. I'll try very hard. It's a little better now. The first question is around demand, and particularly with regard to your initial estimate for the long-term potential. The slide number 21. We've heard now during the quarter one reporting season, suppliers rather pointing to a GDP defense spending quota of 2.5%, whereas the largest system house in Germany in defense is following the latest 3.5% claim of Mark Rutte. Do I understand correctly that your 2030 estimate is based on the 3% quota? If I may ask a bit more detail around the EUR 2.5 billion-EUR 3 billion range, what trades have you assumed in Germany compared to the rest of Europe? Start there, please. Sebastian, it was hard to understand, but anyway, I will try my very best. First of all, we do assume in the time range of 2030, indeed, a kind of average of 3%. Personally speaking, I do assume that in Germany, it would be slightly higher, more in the range of 3.5%. I did not get, to be honest, the second question. Could you repeat it again? Because the line was breaking. The question was what hit rate you would have assumed in Germany. To be very clear on the 3.5% that you now said, the 3.5% is Germany. For the rest of Europe, you would assume a lower GDP defense spending quota? Or how should I think about this? I think the average will go in the range between 3.5%, 2.5%, and 3%. I think this will be different developments. I mean, what you see, for example, Italy just announced to strike on the short term for 2%. I mean, you also see from the news that also in the U.K., there is a kind of reconsideration on the land business. You're talking about increasing ATEX volumes. I do not expect that all the countries are immediately all going in the same speed to 3%. I think an average in the year 2030, if you talk about the main European nations, to be in the range between 2.5% and 3% is our current guess. If I look on Germany, it's a little bit, I would see the 3.5%, 2029 and 2030. If you talk about a hit rate, I mean, if you talk about a hit rate in Germany, it's more or less 100% because we are supplying all the main battle tanks, the Leopards. We are supplying the Pumas. We are supplying the Panzerhaubitze. We are supplying the British ETC. I think overall, as you see our market share, I would assume that our hit rate also for the rest of Europe is in the relevant programs. Of course, it depends always if the programs are at the end sourced to European primes or maybe to international primes. I think we also do expect to have a higher hit rate. Maybe an explanation here at this point, again, the green part or this green segment is what we discussed on the management level. Of course, we have at least today, even that we do not know the final outcome of the NATO requirements. Based on talks, on various talks with high-ranked militaries and with politics, we do see that in Germany, and as you know, I am always bringing this example, if you talk about two parameters which are easily to translate into revenues or top line, the number of heavy brigades is key. The second key parameter is to what percentage the circular reserve will increase. As I said here, we have different scenarios. Maybe what has changed a little bit is the understanding that the NATO requirements need to be in place, so mean to be operational in the mid of the 2030s. This means that finally, order intakes for these kinds of volumes, however and how high these platforms are, have to take place latest until 2029 and 2030 in order to be produced. Just take the heavy brigades. It depends if Germany is required and targeting to get additional three, additional five, additional 10, or additional 50. Within this range, we talk about between EUR 400 million-EUR 1.5 billion as a potential. To be also fair, to have at this moment a deeper quantification for additional European business is for us at least hard to estimate. We are constantly working on this. I am sure in the next week, I mean, June is coming very, very fast, we will have a better update on this. For this reason, we estimated in our discussions, and this is depicted here in this pie chart, to be somewhere on the current level between EUR 1.5 billion and EUR 2 billion. Are there additional potentials? Yes, there are, because we do not talk, we do not consider, for example, I mean, also for Germany, no spare part, aftermarket, overhaul service. This is not integrated currently. We need to get figures from the real number of brigades in order to understand this. Of course, I think what we get, and I said it before, more clarification on how the other European NATO countries will increase their spending and according to what kind of domain and platforms. Yep, that all makes sense and sounds indeed reasonable. I appreciate that it's still very early days, but nonetheless, I would like to ask the question if you could also comment around profitability and how you might see that evolve by 2030. You provided a yardstick of around 20% as a target before. Any update on that? Sebastian, we have, as our, I mean, as we said, 2028, our ambitions, I mean, our ambitions are, as I'm always saying, to make 20% with EUR 2 billion. I think if you have seen our significant improvement in profitability year over year, if you just take the Q1, which is, I think, quite impressive. It looks like, and in fact, it's true that our strong performance focus on operations, step by step, also kicking in the first potentials also during this year from our cost savings, from procurement. I think the strong focus on operational excellence as a key level of our strategy is paying back. I do not change my internal ambitions to be on the 20% level. To what extent this could be further improved towards a higher revenue, to be seen. All right, understood. The very last one for me, if I may, just quickly around working capital. I appreciate that quarter one is special, it is seasonal, etc. We are apparently also seeing other companies in the value chain that are massively benefiting from down payments. I guess my question is how we should think of working capital management at your end from a more structural standpoint, and to what extent you might also benefit from improved payment terms by key customers. This is a perfect question for Anja, Sebastian, but allow me just to make a comment. During Q1, for example, we have in our networking capital, I do not know, 35 engines-40 engines we produced, and they will be shipped as batch in Q2. These engines, and these are not cheap engines, are one example for our increase in the inventory. With this comment, I would like to hand over to you, Anja. Thank you, Alexander. This is exactly right. These engines go to Taiwan. Obviously, our client wanted to have the engines shipped in bigger batches. In order to get this number done, we need to produce and start producing these engines in Q1. We will also be producing that second batch in Q2 and then ship it. The ship is scheduled by the end of June this year. We will get a decrease in inventory there. The other thing about networking capital is our prepayments. At year-end, we were really very, very lucky because we had the high order incomes and intakes. We also managed to get, I would say, about 80% of the related prepayments before the end of December 2024. In Q1, we were not quite that lucky. We got a lot of huge order intakes, but we missed out on the time-wise because all the related payments to these order intakes, they will basically come in now. This is really why our net working capital increased. It is basically the inventory upward in order to meet our delivery commitments for our customers later on this year. Obviously, the cut-off topics related to prepayments in relation to order intakes. Okay. Looking through these sort of specialities, if I may put it this way, around the seasonality elements, be it the year-end in 2024, be it the Taiwan shipments in quarter one, quarter two, is there any sort of direction of travel where you would think there is scope for you to improve more structurally so that there is more of a sharing of the better payment behavior and moral of some specific customers? Yeah. I mean, what we do is we set up a networking capital project, obviously. We have a supply day coming up mid-end of May. We will definitely then discuss with our suppliers on delivery schedules to us, which will also then affect our inventory levels. What we also will be discussing is confinement stocks. Yeah. Okay. Understood. So I got a big sneak peek. Thank you. Thank you. Thanks, Sebastian. Thank you very much also from my side. Moving on to the next questions. The next question is from Sven Sauer of Kepler Cheuvreux. Over to you. Yes, hello everyone. Thank you for taking my questions. The first one would be on the upcoming NATO summit. I was just wondering, I'm not sure if we discussed this before in a call, but do you think the MCR requirements that this will be public information? Sven, hi. Good to talk to you. Honestly, I don't know. I mean, what is the typical process? Is Is that the German Bundeswehr, if you take, for example, the Bundeswehr, but I'm sure this is taking place exactly in the same moment and in the same process in all the other European NATO stations. The German Bundeswehr is collecting, if you want to call it, their current demand, what they see as a target based on the current and future threat scenarios. So they are piling up their demands and their request list. You could also say it's a kind of wish list, but it's really profound. This is a current process. I am sure this will be part of the discussion on the NATO summit. To what extent we will immediately see this, I don't know. I mean, of course, we can imagine I would like to see if, in a perfect world, Germany needs 15 heavy brigades, yeah, because then we could do the math in 30 seconds. When we do see this and how this then transfers into the governmental approval process and everything what is behind, we will see. Okay, thanks. The second question is regarding the news in the last couple of days about the shareholder package. I think it's clear that you can't really comment on the topic. My question would rather be if KNDS would not be able to obtain the package. Do you believe that this could lead to a negative impact on the planned cooperation and the joint programs that you had in mind with KNDS? No. I mean, you are perfectly right. I cannot and I will not comment on this discussion between RENK, between Triton and KNDS. I think everything is published and it is also my level of information. I do not see that there is any impact on our future operational business, not at all. Okay. The final question is, I understood that by 2028, the upside that you expect from NATO and from the heightened defense spending is only a mid-double-digit revenue amount. We are talking about like EUR 50 million. I mean, this is in 3 1/2 years. Is that not a bit conservative? Sven, you are right on one side. Usually, I'm not a very conservative guy. I mean, in this typical time frame, what is coming now, I do expect, but it's my expectation that in the second half of this year, there hopefully will be bigger frame contracts according to the requirements from the Bundeswehr in alignment with the NATO requirements. This should be the time, hopefully during this year, in the second half year, where the brands in Germany like KNDS and Rheinmetall will get the big frame contract. We do expect that we as an important sub-supplier will get under contract somewhere in the beginning, in the first half, in the first quarter of 2026. It depends. We are ready, I mean, on a very short timeline to deliver. As you know, it depends not only on our delivery capability. We will always deliver, but it also depends on the ramp-up capacity of the brands. That is the reason why we are saying to our understanding, I think we will see already in 2027 the first revenues. If it is now EUR 40 million or EUR 80 million, to be seen. What is, according to our current discussion, the kind of run rate if we consider what I discussed before, I mean, to have a total upside potential for order intake, especially driven by Germany, between EUR 400 million-EUR 1.5 billion. We could see that starting in 2029 or 2030, there would be a three-digit million figure of revenue on the low to mid-level, most likely kicking in. It does not depend, unfortunately, on our delivery capability. We will deliver. We can deliver. Understood. Thanks a lot for the insights. Thank you, Sven. Thank you very much. The next question is from Ben Brown of Jefferies. Please go ahead. Hi, guys. Just a couple of questions from me. I mean, if I'm wrong, but it looks like based on the 2030 ambition slide that you've raised your 2025 pipeline-2031 pipeline by around 20%-30% since the CMD last year. But the organic drop-through on the right-hand side looks much lower. Are there any specific ramp-up constraints that are stopping you from ramping up further by 2030? The second question would just be, have you seen any impact of the German government transition on your order intake so far in Q2? Thanks very much. Thanks for the questions. I would like to start with the second question. No, we do not have seen at all any impact from the German government transition, independent of the fact that it takes time on our business because simply we are fully under contract as long as what is potentially on the market from the German customer today. We do not see a contract. We just move forward and shipping to our clients. Regarding 2030 and the key order project pipeline, your math was absolutely correct. Of course, this basic normal or gray colored in this diagram, pipeline volume is huge, is big for us. We only talk about the new business. No aftermath is included. What we simply did in our estimate, we were more focusing on to get an understanding on the M&A, even if it's not really something what you can plan, and to get, according to our current own estimates, I'm always saying estimates about upside potentials, some more clearer picture, as I said before. What we assumed was that simply by reaching 2018, we will continue a little bit below the 15% CAGR, but this is not driven by our operations because, as you know, we are in a lucky position to have with two additional existing plants in Europe, in northern parts of Germany and in France, sufficient place. We have our modular investment strategy, supply chain insourcing, etc., etc. I do not see currently any further ramp-up issue. We were maybe a little bit cautious in saying 15% is good, but maybe it's only 14% or 13%. This is more, you could rate it as the conservative Alexander Sagel maybe. I think what is important is, and this is what I mentioned during the call, I mean, we gave a span of EUR 2.5 billion-EUR 3 billion. We are striking for EUR 3 billion. Full stop. Perfect. Thank you very much. Very clear. Thank you. Moving on to the next question. The next question is from Carlos Iranzo Peris, Bank of America. The floor is yours. Hey, guys. Good afternoon. Thanks for taking my questions. I have two if I may. Yeah, the first one is you're probably going to grow way more than what you anticipated 12 months ago. How should we think about CapEx as a percentage of sales? I mean, do you think you will be in a position to reach your 2030 sales ambition having CapEx around 3% of sales? Hi, Carlos. Thanks for your question. The 3%, the till the 3% is what we always communicated to support and to manage our growth line towards the 2028 midterm targets. Of course, then later on, we need to invest if there is additional business. If we go to the 2030 figures and we see this additional business, I mean, I think I explained last time that we developed in this modular investment strategy. We have a price tag per additional incremental capacity between 100 additional transmissions -200 additional transmissions per year. It depends on the transmission type, on the complexity. In order to add this capacity, we have a tag of between EUR 18 million-EUR 21 million, EUR 22 million per increment. You can imagine if we're going to what I said before in the lower mid three-digit range, if you take, for example, 150, it's a nice number now, additional EUR 150 million, we would need to add some of these modules. I mean, in the same time, we are growing by absolute figures on the revenue side. I'm quite convinced that we will always try to stay in this till the 3%. The absolute turnover is growing. Therefore, the absolute 3% CapEx figure is growing. We have, I think, a smart approach how to cope with this incremental business. I hope this answers your question, Carlos. I understood super clear. When you the strategic M&A, what will be the priorities when it comes to strategic M&A? Could you potentially consider disposals to finance M&A? Let me answer in this way. We have a very structured approach. We have a clear understanding and clear strategic criteria of what could be good candidates. We are clustering them or allocating them into certain categories. Do we close a market gap? Do we close a product gap? Or do we close a technology gap? We have more or less in all of these three categories, we have a couple of companies we are observing. With some companies, we are maybe doing a little bit more than just observing. These companies are ranging from a revenue size between EUR 10 million if you talk about startups, for example, EUR 10 million, EUR 50 million, EUR 80 million. They could also go to a high three-digit million euro figure. What is important, we have a clear managed for profitable growth approach in our core business on the defense side. This also implies that all kinds of M&A will be only and exclusively be allocated in our defense segment. If you ask further if I could give some examples, for sure, the U.S. market was, is, and will be also in the future a very relevant market for us. We do consider us as a US company. We have, in the meantime, with the acquisition of Cincinnati Gearing System today, RENK America Marine & Industry. We have a new company acquired in order to position us for the future upcoming Navy business. I do believe and we see also some further attractive options here. Second, if you talk about M&A technology, it is relevant. I mean, for example, digitalization or software-defined defense mobility. Also everywhere where and how we can strengthen our aftermarket and service business. Super clear. Thank you. Thank you, Carlos. Thank you also from my side. Moving on. The next question is from Marie-Thérèse Grübner of HAIB. Please go ahead. Yes, good afternoon. Thank you for taking my question. First of all, congrats on this amazing order intake. My question's twofold. First of all, the free cash flow, which is quite explained in great detail on one of the slides, but it's still a strong negative swing. I was wondering if you could at least give us a range of where we could see free cash flow for the full year if indeed these working capital reversals happen in Q2 and Q3. That would be the first question. The second question, you mentioned acquisitions in the triple-digit million range. I was wondering if you could, yeah, would you be able to finance those with your existing debt capacity, or would you need fresh capital for that? Value target is high. I will answer one and a half of your two questions. For the free cash flow, I would like to hand over later to Anja because she is the absolute expert on this. For the free cash flow, I mean, we already and several times discussed it. We have a clear cash conversion rate target beyond 60%-80%. This is exactly where we are aiming also for this year. I will not comment further on this. This will be the job of Anja. For the M&A side, most likely, we cannot finance it from our own capital. We are in discussion with financial institutes to put it in this way to understand what the firepower could be. This depends always on the target. Do we talk about a $7 million target? Do we talk about a $100 million target? Do we talk about a different target? We would need to, if this is really a strategic big bang for us and really stepping forward and bringing us strategically forward, we would need to discuss alternative finance options. We must see. Of course, we still would have the option maybe to see if we could capitalize on existing business, what is maybe not considered as core. Thank you, Alexander. Okay, so free cash flow. By fiscal year end 2024, we were around EUR 85 million-EUR 90 million free cash flow. If you consider our growth trajectory and also our policy about when we get order intakes to really emphasize and make sure that we get prepayments in the contract settled and also looking at our inventory being relieved by all these pre-production machines we have sitting in there, we expect to be the free cash flow higher than last year, definitely, and in line with our growth rate. Oh, okay. Thank you. So higher than the whatever it was in the EUR 90 million range despite this negative. Okay. Keep in mind, it's also cut-off related. This is the target what we have. Yeah. All right. Thank you. Thank you very much. Dear ladies and gentlemen, the combination to state a question is nine and the star key. For now, we are moving on to the last question. The last question is from George McWhirter of Berenberg. Over to you. Good afternoon. Thank you very much for the questions. I've got two, please. Maybe we can start with the first one. Thank you for your updated comments on the German additional order potential of about EUR 400 million-EUR 1.5 billion. I'm not sure if you gave a similar figure for the rest of Europe earlier in the Q&A, and I apologize if I missed it. If you could give any commentary on that, that would be helpful. Thank you. Hi, George. Thank you for the question. You did not miss it because I tried to describe it in a very gloomy way that we still need to do our homework. We have some more concrete estimates. I always repeat estimates on the German market. We do not have yet the full picture or the clue what could come up from the additional European market, such as Spain, for example, Italy, if you talk about the Nordics, if you talk about the U.K. This is currently where the team is working and doing a lot of scenarios. This is an additional potential which we cannot grasp really seriously today. That's helpful. Thank you. The second one was just on the U.S. opportunity with the M1E3 Abrams tank. It looks like the development plan has been accelerated for that program. What is your expectation in terms of timing and order potential size from that and where you think you're placed for that opportunity? Thank you. That's another good question. I mean, right after this call, the entire management will sit together for two hours because we are currently in the moment to prepare a huge offer, I mean, as part of the competition for the EMD phase. The EMD phase, as you know, is the development qualification phase at the customer, at GD. After this, there is the LRIP and the series production. We are right in the full competition. We believe that this acceleration of the program timeline is in our favor because we are coming more or less with a solution which has a very high technical maturity. Of course, there are several aspects. I mean, in this ranking matrix, it's all about, I mean, it's beside the so-called technical readiness level. It's about weight. It's about meeting performance criteria. It's about the budget what we would need to make a three-year EMD phase and to build a certain amount of prototypes. You are asking this question right in the hottest moment during this entire year so far in regards to the M1E3. We are on the full steam. That sounds exciting. Thank you very much. Thank you, George. Thanks a lot. At the moment, there are no more questions in the queue. As there are also no more incoming, I would like to close the Q&A session with that and hand back to the host. Ladies and gentlemen, my closing word is thanks for your attention. I hope this was informative. Again, as I said before, we feel and we are fully on track and committed to meet our 2028 targets. Today, you have our ambitions and where we are working forward towards 2030. I hope to see you soon during the next conferences and latest on the capital market day. Thank you very much and have a good day. Bye-bye. The recording has been stopped. Your conference call has come to an end. Thank you for attending. Goodbye.