Ladies and gentlemen, and welcome to the Rheinmetall AG Q3 2023 Conference Call. At this time, all participants have been placed on a listen-only mode. The floor will be open for questions following the presentation. Let me now turn the floor over to your host, Armin Papperger. Thank you very much for your kind introduction. Welcome everyone to Rheinmetall's Q3 2023 Conference Call. Like in the last call, I will, together with my colleague, Dagmar Steinert, to update on the latest market development. Dagmar then will share further details on the quarterly financials, and finally, I will present our years and outlook with you. Please be reminded of our legal disclaimer on the following page two. Now, let's flip to page three. In page three, in quarter three 2023, it was a really good quarter for the Rheinmetall Group. We had a sales of EUR 1.758 billion. It's a +24, about 24%. The very positive thing is that the operating result of EUR 191 million is a plus of nearly 60%, so we have a really good leverage in our business. And the operating margin is with +2.3 is growing up to 10.8%. The operational free cash flow is still with - EUR 102 million, not in the range where we want to be, but and that is very positive, we will have a very, very strong Q4 that we can see because most of the customers now will pay the bills there, and our expectation is a very, very high free cash flow in Q4. Positive also for the quarter is that we have an outstanding Rheinmetall Nomination, and the backlog is growing up to EUR 36.5 billion. Very positive also is that the Expal integration is very successful. We had the first integration workshops, we had the welcome days, and we see now after checking the factories and having 100% detailed information about that, that we have a strong potential, growth potential. So our expectation is that we can grow up to more than EUR 650 million next year, and the total potential, we see EUR 1 billion sales with very high profitability on Expal. Another point which is very positive is that the tank factory in Zalaegerszeg in Hungary is now working. End of this year, the first Lynx will be ready. So since month, since the grand opening, we are producing on that vehicles. End of this year, first vehicle, and then next year, the serial production of the vehicles of Lynx will start, and we are on the way also to implement some other technologies. I will tell you later. So the R&D contract about the Panther main battle tank will be there, and also the integration of turret production in Zalaegerszeg. So very successful. We had a groundbreaking ceremony, and the machines are running at the moment, so we are on the way to build up the plant in Weeze. It will be the most modern Rheinmetall plant worldwide, full digitized, full climatized for the F-35 in Germany. We see a potential over the next years for us, because we are able to produce the fuselage for Lockheed to have a potential between EUR 4 billion and EUR 5 billion over the next years for the F-35. Let's flip to page four. If we go to page four, we had two big events, trade fairs. Some of you visited us in London. In London, we have a heavy focus on unmanned systems and also air defense solutions. We got very positive feedback from European customers about that, and we had a presentation of our vision for the digitalized battlefield, where later on the German side especially, we will tell you that there are now opportunities to book very, very soon good contracts. The second show is, was the AUSA in Washington. On the AUSA, as you know, there are two main programs at the moment. This is the Infantry Fighting Vehicle on one side and on the other side, the CTT program, the tac truck program. But we are looking at the moment also for other programs, and this is the new artillery system. And here, we could show the 155 millimeter, how it's a technology that we have, especially on the barrel side, barrel and ammunition, the Skyranger and the HX3. And I think it's also good to have the autonomous unmanned systems. I believe that the U.S. Marine Corps, we will have a good chance to get orders about that. So let's flip, now go to page number five. In page number five, you have now an overview about Q3. And sorry, we had a typo inside for the figures, but these are now the real figures. We speak about gross figures. This is exactly what the reporting from the German government is. In Q3, we had, without Ukraine, because the Ukrainian business is also paid from the German side. I'll give you the figure later. Only for Germany, EUR 7.5 billion booked. And the it was especially Caracal, then tank ammunition, artillery ammunition, and also LUNA NG. There are some smaller contracts, and we are looking also for Q4. This is an expectation of about EUR 1.5 billion. And this EUR 1.5 billion is at the moment Skyranger and NNbS heavy weapon carrier, so Schwerer Waffenträger. We are in negotiations. Maybe we are able also to book it. This will be a EUR 2.6 billion contract. But it could be also possible that we switch to Q1, which is for us not really important, but as a pre-information from your side. So what we told you last time from the German side is that we have a potential of about 13 billion. This is still in place. And in between, we booked another EUR 2.1 billion from Germany for the Ukrainian forces. So contract is coming from Ukraine, but the bill will be paid from the German government, and we see this year a potential of EUR 2.5 billion for the full year, for the Ukrainian business. Our expectation is that we are very stable in Germany also next year. So an order potential for 2024 is always, is also again, EUR 13 billion-EUR 15 billion, where we see EUR 10 billion-EUR 12 billion for Germany and the rest is for Ukraine. And this is especially for ammunition, tactical, logistical, vehicle, and also digitization. Later, I will give you the information that the Ukrainian joint venture is running and the first sales are coming in. It is possible that there are some approvals may be delayed because of a lot of work at the moment in BAAINBw. In Germany, there are heavy weapon carriers, there are Skyranger systems, and there are the Gladius system. Their digitization is a program, TaWAN, which has a potential of EUR 1 billion, IdZ EUR 1 billion, up to EUR 1.5 billion, vehicle like Kodiak of EUR 600 million, 6x6, et cetera, et cetera. So now that our expectation is that the potential is on the same level of order intake that we had this year. So that end of the year, we will see a backlog, total backlog, Rheinmetall nomination of nearly EUR 40 billion. Let's go to page number six. Here we see that the business with Ukraine is already materialized. Sorry, we have here an order intake from EUR 1.9 billion, but three days ago we have had another EUR 200 million, so it is now EUR 2.1 billion, which is the newest figure, and we want to give you for sure the newest figure. The expectation next year in 2024 is that we can book EUR 2.5 billion-3 billion. This is discussed at the moment with the German government about the budget for Ukraine. The sales of this year will be at the moment about EUR 400 million, but we will have a significant stronger impact in 2024. So from, if you count up 2023 and 2024, it will be more than EUR 5 billion for Ukraine, and most of them will be delivered 2024 and 2025. So, which is very positive for the next years, but this year will be also a very good year. So, we have further contracts prepared also for this year, and there is an expectation of another EUR 200 million-EUR 300 million that we can book with Ukraine this year. We approved RUDI. RUDI is Rheinmetall Ukrainian Defense Industry. It's a cooperation between Rheinmetall and UDI. UDI is Ukrainian Defense Industry. They, Ukroboronprom, gave them a new name because this was very difficult for most of the Europeans to remember how the name is. We launched the first Ukrainian joint venture. As you see on the right side, the Chancellor Scholz and the Prime Minister had the first Rheinmetall company. The Prime Minister gave the license to the Chancellor. This joint venture is working now, and on the first phase now, we do maintenance and repair in vehicle. The point is that our expectation is that we can start next year with the production of Fox, the 6x6 vehicle, from Rheinmetall, that we bring Fox in a box to Ukraine, and we assemble that on the Ukrainian side, and that we can implement the first infantry fighting vehicles, Lynx. This is discussed with the German government. I think it will be positive, and we will get a permission about that things, and our expectation is that we can get contracts up to EUR 250 million for these vehicles, for that company. This joint venture is able to grow up very fast, and there is an expectation that after a wrap-up phase, that we are able to make about EUR 200 million sales per year. Let's go to page number seven. In page number seven, we see now the negotiations between Germany and Australia. As you know, the letter of cooperation is signed in Q3. The negotiations with both governments are in the final stage, and it will be a contract for Rheinmetall Australia, with a back contract also to Rheinmetall Land Systems here in Germany. More than 100 vehicles, and it will be about EUR 2.5 billion. At the moment, as I said, if we are very lucky and because there is only one possibility from the parliament, yes, to give the permission, we can get it end of the year, but otherwise it will be in the first meeting, the parliament next year. So that it will be in December or January, February next year. This is a Boxer-based solution with some manned turret. And this is also very important for the medium heavy forces in the German army, because the expectation is that Germany need hundreds of that vehicles, and we are also in the pre-discussions with the German government about that possibilities. Let's flip to page eight. In page number eight, what happened in Q3 is that we are in the final stage, and the government of Hungary told us they want to sign it now. End of November, the development contract for serial production of the Panther. And it will be between EUR 250 million and EUR 300 million contract from the Hungarian government to Rheinmetall Hungary. And the point of that the Panther will be then also the first, Hungary will be the first customer for the Panther. Panther is a very positive thing. You see the Prime Minister, he said, "We are producing a Lynx, we are buying a Leopard, and we have joined in the development of the Panther." So, in a private meeting, he saw me, so now I have a new small suit. And, I think it's very positive that the first customer has really made that decision. Let's go to page 9. On page 9, you see that the Rheinmetall group structure will change. On the reporting side, next year, we will bring Sensors and Actuators and Materials and Trade together. We create a new division. In two weeks time, we will give it officially into the market with the new name of the division. The importance is that we want to do it first of all to have synergy effects because we have to find synergies also to bring up the profitability on one side. The next point is that we can focus management attention if we have one division. Very important is also, but also for the capital market, that both together are now in a size where, for example, Electronic Solutions is, and because over the next year's Weapons and Ammunition, Electronic Solutions and Vehicle Systems will grow much stronger. So Vehicle Systems will grow much stronger than the rest also, and that is the reason that Vehicle Systems, and that is already in place. We have two subdivisions. There is a main division, Vehicle Systems, where we are re porting, and then there are two subdivisions. One is Vehicle Systems Europe, and the other is Vehicle Systems International. The reason for that is because over the next two-three years, this division will grow up to EUR 5 billion, and this is an MDAX company. So we said, "Okay, we split it, and we can focus more to our customers." And so one subdivision is really focusing on Germany, which is now our, absolutely our main customer with a very strong order intakes. And U.S. and U.K. over the next years has the ability to grow very strong. Especially, USA will be so strong that it, at the end of the day, maybe in some years, it's an own division, if we are able to win some of these contracts. So far, the organization and now I take over to the financials to Dagmar. Thank you, Armin. Before I start to present the key financial data, I would like to point out that we have adjusted our financial KPIs after the closing of the Expal acquisition. The present operating result is now reported excluding PPA effects. Historically, PPA effects amounted to just below EUR 10 million per annum. The preliminary monthly PPA effect from Expal is currently estimated to account for around EUR 7 million. You find the reconciliation in the appendix on page 22. Let's move on to page 11, the key financial data. Weapon and Ammunition, as well as Vehicle Systems, were the driving forces behind the sales growth of nearly 25%, and the jump in the operating result to EUR 191 million. We also see a first positive sales contribution of EUR 41 million from Rheinmetall Expal Systems. The relative strength of these two divisions contributed heavily to the 2.3 percentage point group margin improvement. The strong improvement on the operating result lifted earnings per share for the continued operations to EUR 2.31, despite an increase in the interest expenses. Let's move on to page 12 for the divisional breakdown of our key financials. In our divisional reporting, we see that the sales increase was predominantly driven by the strong performance in our divisions, Weapon and Ammunition, and Vehicle Systems. In the division, Weapon and Ammunition, call-offs from existing framework contracts and a better product mix, pushed the positive sales development as well as operating results margin. Products for tactical and logistic vehicles explain the favorable development in our Vehicle Systems division. Strong sales, but stable operating result in our Electronic Solutions division, resulted in a lower margin development, which can be explained by an adverse product mix. The performance in our civil divisions is slowly recovering from the cyberattack in the beginning of the year. The operating result in our Sensors and Actuators division is, however, still burdened with price pass-through issues for certain raw materials, e.g., plastic, semiconductors, and so on. The Materials and Trade division had a strong operational improvement, including the recovery of the Chinese casting joint ventures, but also profited from one-off effects for material price adjustments, which included prior periods as well. The effect in our non-divisional consolidation line results mainly from higher IT costs and a negative at-equity contribution from our joint venture for 4iG in Hungary. Please turn to page 13 for a look at Rheinmetall's operating free cash flow and working capital development. Our operating free cash flow improved by EUR 251 million year to date, mainly driven by a strong first quarter, which was characterized by slip over effects from the fourth quarter last year. Inventory levels have increased to around EUR 1.3 billion, while received prepayments help to mitigate the further working capital buildup. Our divisions, Vehicle Systems and Electronic Solutions, account for most of the buildup in anticipation of the upcoming customers' orders. Let's move on to page 14. Our net financial position is now fully respecting the purchase price payment for Expal. As a consequence, the equity ratio came down to close to 30%, but this is still a very comfortable level. With undrawn credit lines of EUR 900 million and a strong cash position of around EUR 400 million, our balance sheet remains very strong. Moving on to the next page. To provide a better understanding of the backlog development, we created the following overview. We start with the order backlog at the beginning of the year, then we add the three components of the Rheinmetall Nomination for the nine months period, and then we subtract the cumulative sales in 2023. So the result, the last column, presents the order backlog per end of September. Whereas the first half year saw a modest increase in Rheinmetall Nomination, the start of the second half year benefited from accelerating German orders, as Armin already told you. This lifts our Rheinmetall backlog to a record high of more than EUR 36 billion. With that, and of course, the upcoming orders in the fourth quarter, our growth story is secured for tomorrow. With that, I would like to hand over back again to Armin. Thanks, Dagmar. So, let's flip to page number 17, and here you see the outlook. We had sales now after nine months of EUR 4.6 billion. The expected sales from the backlog is EUR 2.6 billion, so and there is another for the last three months is the way to go, and these are about EUR 400 million. This is service business, which is an ongoing business. Then civilian chemicals, which we monthly book, and especially three months on the Materials and Trade, and especially on the trade side, where you that you do not have on the backlog. So, we have only about EUR 400 million to go to meet the fiscal year sales. So that our expectation is that, first of all, we are safe on our sales guidance. Let's go to the next page, to the guidance in total. So we spoke about sales between EUR 7.4 billion-7.6 billion. We have the operating margin, where we said this is about 12%. We have an impact, but not a very big impact also from the Expal side, but the impact is there. So that my expectation is that we are better than 12% on the operating free cash flow, we stay also on the level between 4%-6%. What we can oversee at the moment is that the Q4 is very positive, so that my expectation is that we are more on the upper than on the lower level of the operational free cash flow. So, as we told before, Rheinmetall Expal Munitions is now fully consolidated for the period from August to December. And, the expectation is that we make more than EUR 190 million, even on more than EUR 200 million and with an operating margin of more than 25%, which is a very positive result. So thank you, thank you very much for your attention, and now we are ready for Q&A. So ladies and gentlemen, if you want to ask a question, please press nine and the star key on your telephone keypad. And if you would like to cancel your question, please press nine and the star key again. So please press nine and star if you want to ask a question. And the first question comes from Sven Weier from UBS. The stage is yours. Yeah, good afternoon, and thanks for taking my questions. The first thing I was hoping that you could help me to reconcile the contribution of Expal in the third quarter. Because when I look at the quarterly report, you said there was a EUR 41 million impact on revenues, but EUR 28 million were internal revenues, so that the net impact was EUR 14 million on the top line and EUR 17 million on EBIT. So could you just help me to reconcile those numbers? That's the first one. Thank you. Yeah, I will take that question. And yes, we have EUR 41 million revenue or sales from Expal, and out of that EUR 41 million, EUR 28 million was intercompany sales, which was taken over from Rheinmetall WM. And there we used in a case, Expal as a supplier and RWM just had the external sales. And therefore, the earnings number, the operating earnings of EUR 17 million for Expal is the right number. But just to remind you, that's before PPA effect. Mr. Weier, maybe I can add to Dagmar that this is a point which is very important. The sales force that we have in Rheinmetall for sure is much bigger than the sales force than we have in Expal. And we brought over the last month or to Expal EUR 400 million, about EUR 400 million, from ammunition business, from Rheinmetall Weapon and Ammunition, Germany, to Rheinmetall Expal in Spain. And that is the reason that we can fill Expal a lot, and that is the reason that, as Dagmar said, that there are difference in the figures. This will be also in the future, because a lot of contracts will come into the headquarters of Weapon and Ammunition. Yeah, thanks for the color, because I was also wondering, because of course, the margin is above 40%, both when we look at those two months, right? But also when we look at year to date, Expal, it's above 40%. So, and your guide is above 25%. Yeah. Quite, quite a bit of a difference. Yeah, the reason is also very simple, because at the moment we are charging from the headquarters, not as much as they usually had. If they would, I can tell you if Expal would make the business a standalone without the group, this is a positive figure. It's always between 25% and 30%. But if you calculate smaller sales with high profits, and if the headquarters is not charging as much as they earn, it could be also in some calculations that it is more than 30%. The other question I had was just on the bridge you've given for the full year, the EUR 2.6 billion additional from the backlog and the EUR 0.4 billion from the in-for-out. Yep. Because when I look at last year, right, you had EUR 2.5 billion for, I think it was, sorry, it was EUR 1.5 billion from the backlog, and you had EUR 2.3 billion of sales then eventually Q4, so it was EUR 800 million in-for-out. Yes. Is that the right way to look at it? Am I comparing apples to pears here, or what would be the like-for-like comparison? Yeah, I think you are right, and what we want to show you is that it never ever life is riskless, but we have a smaller risk than last year because of this EUR 400 million. As you see, the service business and the trade business especially is coming year by year. And usually we are nearly fully booked, so this should be the information that we give to you. So the risk is not very high. This is number one. If not something extraordinary happens, for example, that a lot acceptance will not run or whatever, which always can happen, but at the moment we are in a good way. Maybe to add from my side, we started to report in the year 2023 Rheinmetall backlog and Rheinmetall Nomination, and in 2022 it was a different way to present it. Okay. Yeah, that makes sense. Finally, if I may just, was curious, in your opinion about the D-LBO, right? We had those reports about the radios not fitting into the vehicles, and was just wondering how you think about that, impacting the timing of the D-LBO contract overall. I think that the D-LBO contract will come next year. There is also a budget about that. And by the way, they have to do it because otherwise, the heavy fighting brigades are not able to fight because they need the digitization. So I believe the first pack of contracts are coming there, and it's very clear at the moment also that Rheinmetall will get a good package out of that. And the second point is, what maybe is helpful also in that discussion about the radios, that I think now the government thinks about to have one company or one consortium, let me say, one consortium who is taking care about all that things to coordinate and to manage that. Very clear. Thank you very much. See you at the CMD. Thank you, Mr. Weier, thanks. The next question comes from Sebastian Growe, from BNP Paribas. The floor is yours. Yeah. Hi, good afternoon, everybody. Hi, Ms. Steinert. Hi, Mr. Papperger. The first set of questions is on Vehicle Systems and goes to you, Mr. Papperger. You obviously had a fantastic margin on the quarter three, that was almost 13%. So I would be interested if you could walk us through the key levers that led you to that great margin. So how much is related to operating leverage with growth of more than 40% in the quarter? But how much might also be then related to mix effects, e.g., ring swap agreements? And let's start there. It's a mixture. Mr. Growe, it's a mixture, very clear. On one side, it's for sure that and if you see what happened, a growth in of 40% on the Vehicle System side, for sure there is a leverage effect inside. And on the other side, is it because, as you said, as we, as you know, that we depreciated the vehicles that we had inside, that we also have good margins on this, on these areas, because we paid the bill over the last 10 years when we had the vehicles here inside, and now we are here in a harvesting phase. So it's a mixture, and this is exactly over the next time what we want to continue. Can you remind us of how much is still sitting on the order backlog when it comes to those contracts that you referred to as you are on the harvesting mode now? Let me say, most of the growth is still there. Nice way to phrase it. Yeah, it's we are in Q4, and in the next year we have higher packages than we have now here inside. Okay, that sounds good. The other question is related to your comment that you made on the ecosystems revenues going forward. To grow into a EUR 5 billion territory, what's the rough time spent to get there? And can you also help us better understand how quickly that massive order backlog might convert into revenue? Yeah. So, the expectation is on the defense side, first of all, let me say from the whole defense side, that we have a good growth rate this year. We will have a better growth rate next year, and the expectation is that in next year, the growth rate is between 25% and 30% on the defense business. A strong growth rate on Vehicle Systems and Weapon and Ammunition, what we told you before. Weapon and Ammunition will up to, and we have very soon a capital markets day, so we give you detailed figures about that. Weapon and Ammunition, and Vehicle Systems will be the main drivers, but also electronic solutions will grow up over the next years, very strong. So next year and the year after next year, so 2024 and 2025, we'll have a very, very strong growth rate on the defense side. So that we are still at the beginning of the performance. Okay. Then moving on to the order pipeline. You made reference to also expectations for the next year, at the EUR 13 billion-EUR 15 billion level for Germany. Obviously, we have been going through, what can I say? Rocky ride, that was not always kind of coming through when it was expected to come through. What's sort of the, kind of, safety net in a way? Or would you really think that the EUR 13 billion-EUR 15 billion, especially the lower bound, is this in a way, bulletproof when it comes to 2024 orders from Germany? Yeah. So I must say that most of them, what we told you, also what is coming in, is coming. As you said, we booked a lot. Yeah, and if you see the Q3 and also the Q4, which will be also the Q3, never ever seen before inside the Rheinmetall history. That we have an order intake from the German side, which is on the level of EUR 7.5 billion. And as we said, also there is coming on the Ukrainian side, in total EUR 2.1 billion, which is also Q3, was very strong. So, my expectation is that we fulfill the potential that we told you before. And if you count up, the what happened this year, we are still on a level of EUR 10 billion and with Ukraine of EUR 12.1 billion, and we told you it will be between EUR 13 billion and EUR 15 billion, and next year it will be the same. So our expectation is that that the government will fulfill their plan, and I'm absolutely fine with that. So what does it mean? It does mean that end of this year, our Rheinmetall Nomination, so the total backlog of the group, is on a level of EUR 40 billion. But my expectation is that next year we will go up to EUR 50 billion. Okay, sound good. And the last one, more housekeeping, one for you, Ms. Steinert. You pointed to the Expal-related PPA charges of around EUR 7 million per month, so taking it to EUR 80 million or so for the full year. Can you give us a better sense of how these PPAs should move over time? I mean, what, what's the rough annual levels for the period 2024-2026? Well, first of all, it's really preliminary PPA, so there might be changes. As of today, with these EUR 7 million PPA effect per month, we expect for the full year 2023, an amount of EUR 35 million. For the year 2024, it will be something around EUR 80 million and then it comes down because, of course, we have effects on order backlog, on inventories and so on. Therefore, the number changes in the years to come. And the best indication you could provide, so like stepping down by EUR 20 million per annum or so, just that we cover it correctly in our models. I would say, stepping down roughly EUR 30 million per annum, until you reach a level of around EUR 20 million. Okay. But as I said, it's preliminary and we might see something in the full year figures. Okay, fully understand. If you update it. Yep. Great, appreciate it. Thanks, and see you both then at the Capital Market Day. See you. Thanks. Next question comes from Christoph Laskawi, from Deutsche Bank. The floor is yours. Good afternoon. Thank you for taking my questions. Those will be on the ammunition business. Could you comment on the current utilization that you have in Expal and the Rheinmetall Expal business, for the major product groups? It seems like you're ramping up quickly also in Expal. Is there still far more room to grow? Because when we look at what Germany plans to spend on ammunition and others are needing in 2024, there seems to be, and you commented on that significant growth ahead. So is there a need to increase capacity in the short term, or are you well covered with the current setup? Thank you. Thank you, Mr. Laskawi. So, in 2024, our expectation is that we can make more than EUR 650 million sales in Expal, totally covered for 2024. In 2025, we will grow. We are investing small numbers, not big numbers, because the factories are in good shape. And in 2025, we will make more than EUR 650 million, maybe up to EUR 750 million, and in total we want to grow up. And this is the total capacity with a small investment. At the moment, this is a small double-digit million investment that we have to do, to grow up to EUR 1 billion. So this is the ammunition that we have at the moment. Then another information, which is, I think also new. We gave an offer now also to the Spanish government about the long-range artillery system. And this is another opportunity to enlarge the product portfolio, to produce the rocket motors and to produce also the missiles and with a very small investment, because we also have mixers and all the other things for rocket motors, inside Expal. There is an opportunity for some hundred million also, only for the Spanish market, for long-range artillery systems. So that, with that together, maybe there is also a possibility to make more than EUR 1 billion. So but, the good thing is we are nearly fully booked 2024, 2025, and also nearly 2026. Thank you, and following up, excluding or putting Expal aside, the production footprint that you have in Germany and other regions, the utilization there is also pretty high and you're fully booked, or if you could comment on that. We are not fully booked in that area. So I would say we are on a level, on the tank ammunition side, we are on a level at the moment of 70%-75%. On the medium caliber side, we are at the moment on a level of up to 80%, I think, worldwide now. Yeah, what is going on. On the artillery side, we are very strong booked. I will say that over the next three years, we have a booking level of more than 90%. As I said, Expal full. South Africa, then we are waiting for a contract, but then we are also nearly fully booked for the next three years from Australia, which is going on, so we are here in a good shape. But what we are doing is, we make investment programs. So what are the investment programs now? There is an investment in our powder technology to produce propellants for artillery. This is an investment program that we do in Germany. There is an investment program that we do in South Africa. These are the two main producers of modular charges for the artillery side. And with smaller investments, we are able to bring plus, let me say, 30%-40% more capacity, also inside that factories. So this is done. We are on the way, we made this, we gave that investment three. This is part of our investment program next year, that we will present you also now on the Capital Markets Day. But it's in a very simple range because it's not a lot of money, and, as you know, the profitability of this product are fine, so we are in very good shape. The next point is, as you know, to enlarge our capacities is that the RDX production in Hungary and the ammunition production, that is in our books also. So we booked the order intake for we produce on one side, the factory, on the other side, we have this nearly EUR 900 million contract from Hungary for the ammunition contract. And now we are on the way into other countries, one Baltic country, where we want to build up a production line for artillery rounds, with a maximum capacity of 100,000 extra rounds per year. Which is a very fair model between this Baltic country and Rheinmetall. And on the other side, an Eastern European country, which want to build up a factory for propulsion systems, where we are able to produce another 1,500 tons of triple-based and double-based powder. So, and all that together, yes, stabilize us or gives us a situation. We are very, very fine with up to 2026, but we want to grow. The sales expectation is that in 2026, the Weapon and Ammunition sales will be now more than EUR 4 billion. Thank you very much. A pleasure. The next question comes from Virginia Montorsi, from Bank of America. The floor is yours. Good afternoon to you, and thank you for taking my questions. Just a quick one, because I think, all my questions on Expal have been answered already. Can you give us any update on supply chain, specifically, if you plan on ramping up production this much? Is there anything that worries you, or is there anything that has improved significantly over the last couple of months? Anything we should be aware of? Thank you. Yeah. So on the supply chain, on the ammunition side, the beauty is that the vertical integration inside Rheinmetall is really done. So we produce the propulsion systems, we produce the primers, we produce the fuses, everything is internally, and we only have to buy in raw materials. The most critical raw material, as always said, is linters, to produce nitrocellulose about that. But this is one thing what we did. We now have in between a three years stock, three years stock for linters for our productions. So 2024, 2025 and 2026 is absolutely safe, and we order more. And the, and we have no problems at the moment from our sources to get it. But this is the biggest thing because we have it not under control. On the vehicle side, we have this five-year contract with our chip producers. So the microchips are, I would say, 99% under control. Not always, you cannot have 100%, but most of them are absolutely under control. Another bottleneck is armored steel, but on the armored steel, we also made a good job. I think that our purchasing guys made a great job, that we have minimum for two years armored steel also in-house. So, it is always possible that one—and if one piece, especially on the vehicle side, if one piece is missing, that we buy in, we will have a problem. But at the moment, I think that we would have it very, very good under control. Thank you very much. Very clear. A pleasure. The next question comes from Sash Tusa, from Agency Partners. The floor is yours. Thank you very much indeed. I hope you can hear me. I just had one last question actually, about Sensors and Actuators, and whether you think in, with the current structure, it's possible for that to get back to the historic 7%-8% margins, or, does that need such a fundamental reorganization as part of the new division? Yeah. So Sensors and Actuators at the moment is suffering with two things. The one thing is that we have a pre-financing of the material costs, where the OEMs at the moment has a strong delay, and some of them are -- we are still in negotiations with the OEMs, that the material price is, that we get the, let me say, the real, the real pricing. So this is one thing where we are suffering. The second point is that we have higher capacities in our factories than at the moment the Nomination letters are coming from the OEM side. The reason for that is that the European car industry is not working as we expected. Point number three is that we booked a lot of electromobility, but the most of them are starting in 2024, but are really in the ramp-up curve is done in the year 2025. So a mixture of all that three things at the moment is bringing us in the situation that you see in Q3. I think that in Q4, we will get some of the material pricing, as I told you, where we are in discussion with the OEMs, is coming back. And the other thing is on the sensors and actuator side, that and that is, that are the synergies that we are looking at. that we have to find the synergies to find another 1%-2% in this area, and that is the reason that we bring the two divisions together. Thank you very much. A pleasure. There's one more question at the moment. A short reminder from my side, if you want to ask a question, please press nine and the star key. The next question comes from David Perry, from JP Morgan. The floor is yours. Hello, Armin. Hello, Dagmar. I've got some quite boring questions. I think they're for Dagmar. I hope you don't mind. Can I just make sure I understand slide 22, just on the PPA? And I'm sorry if I've got this wrong, but just to be clear, is this a new definition of EBITA now, or Rheinmetall that we haven't had before? I guess that's the first question. Yes, there is a new definition of operating earnings. We report our operating earnings before amortization of PPA. Okay. The historic numbers we adjusted as well, but that are for the full year 2023, yeah, just below, close to EUR 10 million. Okay, thank you. Therefore, we corrected, of course, the year 2022 as well, to have to compare apples with apples. Okay. Sorry, there, there's three parts to this question. The second part is, staying on slide 22, if I look at the graph on the right-hand side, what's the difference between the EUR 16 million and the EUR 5 million, please? Is the EUR 5 million just Expal, and EUR 16 million is all previous PPA effects? So EUR 16 million is PPA effects from Expal and historic effect for Q3. And the EUR 5 million, that's just some other one-offs, which we normally adjust in our operating earnings. Okay. And so I think you said Expal is EUR 7 million a month. So in the EUR 16 million, is it EUR 9 million of other and EUR 7 million of Expal? Is that how we think about that? We have two months for Expal, so it's EUR 14 million for Expal and EUR 2 million for others. And these EUR 2 million, if you multiply by EUR 4 million for the full year, you have EUR 8 million-EUR 9 million. That's what I said. It's just below EUR 10 million per annum, the historic PPA. All right. So that's all good, I think. I was a bit concerned that maybe the 12% margin guidance wasn't on the same definition as it was at the start of the year, but it sounds like it is. There's no accounting benefit in this year's margin guidance, which is kind of what I just wanted- Well, our guidance is on our existing business before Expal. And therefore, of course, yes, you are right, we didn't adjust for historic PPA effects, but that really doesn't have any, yeah, influence. It's EUR 10 million, basically, I think you just said. Yeah, it's EUR 10 million or less than EUR 10 million. When we report our full year figures, we will give you the full transparency, how we met our original guidance and that you are able to see our real performance and to measure what we said and what we promised. Got it. Okay, and then my final one is more, which is on this PPA. It's a request/question. Is your policy to adjust EBIT for PPA, but not to adjust net income and EPS? That's how it reads when I look at the appendices section. Well, in our external communication, we adjust all these figures because that makes, yeah, that makes sense for us. In the report, of course, you find as well the numbers as reported after PPA effects. Yeah, well, this is a request more than a question. I mean, across the sector, some companies will leave PPA out of net income, some don't. Most do, the vast majority do. I can only think of Leonardo that doesn't. But I mean, because you're going to penalize yourself. You just gave us that EUR 80 million number for 2024, pre-tax obviously. You're going to just take that down. That will be in your reported EPS number. You've got no plans to adjust for that, like have a Rheinmetall adjusted EPS number? Well, we will have for Capital Market, on our Capital Market, we'll give you more insights, but we will have an adjusted number for our external communication. But of course, you find the real number after all these accounting and bookkeeping, always in our reports, quarterly reports, full year reports, and to make up your own mind. Sure. Well, I'm not here to give a speech, but I think most people on this audience will say the real number is pre-PPA. So but I'll let you decide, but that's what your peers are doing for the most part on EPS. Yeah. Thank you for indulging me on all of that. There's one more question, please, on a different topic. On the free cash flow. My sense throughout much of this year was you were trending to the lower end of the EUR 4 billion-EUR 6 billion, working capital for the ramp up, CapEx ahead of the ramp up. So I'm just curious, why Armin, you said you now think you'll be at the upper end of the range. That seems to be a different message. Thank you. Yeah. The reason for that is that, at the moment, some of our customers gave a signal that they want to give in Q4 also the huge numbers of down payments. That is the reason that we are no longer on the lower, but it is possible to go to the upper range. That is the reason. In addition, we might have some slip overs of CapEx into the next year. Okay, and just as a thought, the customers are now saying they'll pay more. Would that include Germany? Is this a structural change in the market, or is this just a one-off with an export customer? It's also Germany. It's Germany. Is this a- Especially for the contracts also that we have from Ukraine. And you should know, and this is also very important, that 50% of our ammunition sales, 50% will be in quarter four. And this is, there is a lot of cash which is coming in. So it is a double effect that the very profitable business, the most profitable business, will make 50% of the sales. And our expectation is at the moment that the customers are also paying that things, and the second thing is the down payment. Do you think this is the new normal from Germany, or is this something that's just for this year? You know, it's going to get sort of more favorable? The Germans, the Germans, changed their strategy because it is a clear decision from the government, especially also from the Office of the Chancellor, that we said we have to give more cash to the industry, otherwise, the industry is not able, to grow as much as we want that they grow, and they need all the stuff. And, and the point is, as you see, they, they bring now all the orders, also of the EUR 100 billion, into, to the, to the industry. So I, I think, it's a long-term trend. Okay, that's good to hear. Thank you. Thank you for your patience. Thank you. So there are no further questions. Okay. Thank you very much. Have a nice day. Thank you. The conference is no longer being recorded.