Ladies and gentlemen, thank you for standing by. I'm Stuart, your Chorus Call operator. Welcome, and thank you for joining the STRATEC conference call regarding today's announcement for the Q1 2022 financial results conference call. Throughout today's recorded presentation, all participants will be in a listen-only mode. Now I'd like to turn the conference over to Marcus Wolfinger, CEO of STRATEC. Please go ahead. Yeah. Thanks, Stuart. Good morning in the United States, and good afternoon in Europe. Before we start, allow me to just mention some housekeeping things. First of all, I think there is no need to read you through the, I would say, safe harbor statement, and you can actually download the presentation, either from this presentation tool or from our website. It's already on. As always, I would like to split this presentation into three major segments. First of all, I would like to get you an overview of our Q1 in 2022, then followed by some financial data, and then certainly I would like to get you an outlook and the area as a focus and so on. After that, certainly we'll have the opportunity to ask question. In this presentation, if you download it, you will find some supplementary data. Q1 was actually an uneventful quarter in the positive sense. Except the almost daily hits of supply chain, nothing super special has happened. We have executed a couple of nice things and brought other things on the development pipeline. Let me walk you through that actually. Group sales was up by about 4%, representing about 1.8% in constant currency. The adjusted EBIT is in the area of EUR 15 million, which is slightly below the super strong prior year, which, let me say is, like an unfair comp. I would say actually Q1 2022 is more in line with our overall long-term expectation, rather than as compared to the super strong Q1 of 2021. Still it's slightly ahead of budget. We made really significant progress within our development pipeline. Again, we are typically differentiating between deal pipeline and development pipeline. New things are on what we call deal pipeline, and development pipeline means projects which are already contracted, and on both ends we actually have a couple of things ongoing. One thing to be mentioned is actually a new customer which came on board for risk assessment project, you know, for our Smart Consumables division. Actually the company is Cytovale. A lot of noise about that company. It has really like the potential to become a kind of game changer over time if really things are happening as planned. On the other side, we have a super high number of incoming customer requests regarding new projects, on the one-hand side for instruments certainly, but on the other side for our consumables and other activities as well. Really, we definitely see a super healthy recovery effect. We already saw that over the past year after, particularly at the beginning of the pandemic, where things like cooled down slightly. We really, for the last year and especially over the past six months and in the beginning of this year, we see super healthy and nice recovery effect, not only technically interesting projects but projects with volume as well. We have several products in the ramp-up phase by means of products which are already launched, which will contribute in the next 24 months to the growth of the company, and more launches to come over the next 12 months, which includes a molecular program family for one of the market leaders, which is scheduled for mid this year, where STRATEC doesn't only provide instrumentation, but certainly complex consumables for these companies, again, being one of the market leaders, for this company's next generation molecular program with super high sensitivities and digital readout. Let me get you to the financial review now. I think it's worth mentioning that all our earnings KPIs are actually in line or slightly above expectations. EBITDA is 2% lower after this super strong first quarter of 2022. Same thing applies for adjusted EBIT linearly down, break, and certainly the income, EPS slightly above expectation, which is mainly related to the overall tax situation of the group. Top line development, as already mentioned, 4.7% year-over-year leading to revenues in the first quarter of EUR 75.4 million, which represents 1.8% in constant currency. Positive contributors certainly slightly higher development and service sales. Again, this is not super high from our today's perspective as compared to some quarters we had in the past. It's just higher as in Q1 of 2021 with super low comps. On the other side, we see strong service parts and consumables. That's actually something we expected to happen with this almost exploding installed base during the pandemic over the past two years. We expected that our customers will bring those instruments into a regular service and maintenance scheme, and therefore we really see some nice tailwinds, top line, but particularly bottom line, coming from our mainly service parts and consumables. Like, very positive development on the instrumentation side, certainly on the one hand with immunoassay, mainly chemiluminescence immunoassay. Something which actually went like flat during the pandemic was our immunohematology business, representing the, let me say, the fourth pillar of STRATEC's product portfolio. We saw a really nice catch-up effect here as well. We had those product launches, and I was already referring products like the LIAISON XS or products for Becton Dickinson, products which have been newly launched. Our CLIA is starting to ramp up nicely, so we have nice tailwinds from that, offsetting the slightly lower sales in certain areas, particularly it's mentioned here as molecular instruments, but I would actually say overall, mainly the complex systems are slightly lower, which is actually an expected effect, which is actually mainly related to those super high run rates we had during the pandemic. Bottom line, we have an adjusted EBIT which is down by 6.3%, which is actually a little bit less than expected, year-over-year, ending up with EUR 15 million in EBIT. Q1 2022 adjusted EBIT margin was just a little bit south of 20%, compared to 22.3% in the previous year, like Q1 of 2021. Negative contributors, headwinds are coming from a normalized product mix within. We have an overall change in product mix if we see those three revenue pillars of instruments, consumables, and service parts and maintenance parts, as well as development revenues. Certainly higher development revenues on a percentage of sale basis, lower instrument sales. Even within the instrument, we see a normalization of the product portfolio. Those instruments which have been put on the background during Corona are now pulled more towards the front, more focused products for our customers. I mentioned that at the beginning, super intense supply chain and input cost inflation, which is really a challenge. Typically, whenever we sort out one angle, we definitely see the next day a new contributor to delays. It's really a stressful time for our supply chain people. However, that's why they managed to sort out things fairly well. So far we haven't had any super long delays on the other side. We literally have delays throughout our entire supply chain. I only came back from the United States yesterday. I think that, particularly, the supply chain in the United States works a little bit better than in Europe. Mainly related to that effort over the past two years of the U.S. government to achieve higher independence, particularly from Asian supply chains. I think in Europe we are slightly behind that repatriation of manufacturing to be brought back in the United States. I think it's already showing some effects, whereas I have the impression that in Europe it's still getting worse. On the positive side, I already mentioned that when we discussed top line, is the increased share of our high margins, mainly service parts, but to a certain degree, consumables and spares as well. We have that, which is actually a little bit uncommon, higher than usual contribution margin from development activities. Typically our development revenues are coming along with slightly lower margin than actual instrument sales. Again, it's not extraordinary high. I think we had a milestone in the area of EUR 2 million to EUR 3 million with almost 15% EBIT margin. I think even here we are progressing fairly well. Now discussing cash flow, which has actually not been super satisfying, which is mainly related to increased activities or increased position of accounts receivable, seems to be a little bit a thing that our customers are trying to not pay us towards the end of the quarter. I think we can always report or this is actually like a reporting date effect. We already show significant improvements at the beginning of the second quarter, so this is actually only a snapshot towards the end of Q1. Overall, I think we are progressing here as well. Investment ratio came down to 5.2% of sales. Incorporated in our guidance, we actually see higher investments on a full year basis. Net debt to last twelve months EBITDA actually progressed to 0.8, which is actually like a development in line with fairly good cash flows we saw over the past 24 months, and we are actually expecting that this continues over the next years. I think we have brought those huge investment cycles behind us, real estate activities over the past two years and the two years before, huge investments into development activities and development tooling and so on. Even here, I think we made good progress. Let me get you to the outlook. We in the press release which came out this morning, we actually confirmed the guidance for 2022. It gives us some margin. However, we still see a high unpredictability. From our perspective, actually transparency and predictability for 2022 is actually lower than what we see for 2023, particularly related to the upcoming launches, and particularly the fact that, our expectations regarding those instruments of STRATEC which have COVID-19 exposure are still declining for on a full year basis. What we actually expect that additional tailwinds from COVID are over. Some of our customers are actually expecting that we might see a ramp-up in testing volume in autumn or early winter this year. However, they are expecting shorter durations and steeper ramp-up during the pandemic is sufficient to cover that additional testing volume. We actually see more normalized business and from that perspective, a more normalized product portfolio in sales. Adjusted EBIT margin has been forecasted by STRATEC to be in the area of 16.5%-18.5% after 18.9% in 2021. I think already the progress made in Q1 gives us some level of tolerance for the remainder of the year. I wouldn't say it's aggressive or conservative. I think we are not yet in the position to determine the overall development on a full year basis. However, and I think that's mentioned in that sentence at the bottom of that page, that this guidance includes a higher than normal number of assumptions and risk adjustments. Again, the good progress we made in Q1 gives us some tolerance level for the remainder of the year. Let me discuss the things we do have in the pipeline. The focus for, let me say, the next 12-15 months is to execute on the current development pipeline and launch pipeline. We are expecting, among others, actually, we are expecting that two molecular platforms will be launched in the next 12 months, and we got another molecular platform on board, multiplexing in molecular for decentralized testing, which will get to the market before 2024 ends. Again, on that slide, we are only mentioning some molecular programs. Certainly, we have other programs in the pipeline as well, just because particular PCR and other molecular methods have been so much of interest over the past 24 months that we thought it's mentioning that really a lot of things are ongoing here. We actually believe on the one hand side that some of the smaller companies, like after IVDR and after the strong tailwinds we saw during Corona, will have a difficult time, particularly those one-trick ponies. On the other side, we believe that particularly in the United States, decentralized molecular testing will play a role in the future. In Europe, we think particularly because of the structure of the market, decentralized testing will not play such a material role as compared to the United States. Second element is that we wanna execute on our deal pipeline regarding new development and manufacturing agreements. We have a nice lineup of new things. We brought things back from the United States, and actually, and then I mentioned that already at the beginning of this presentation that over the past 12 months we see a lot of interest. We have started a number of feasibility agreements and are in contract negotiations, which makes us believe that the actual pace regarding new projects will continue to increase. We certainly and that seems to be the challenge of the year. If you would ask me if we see any top-line development constraints, where are those coming from? I would actually say it's most likely less the demand side this year than the actual supply chain issues. We definitely are about and have not only in this quarter, not even in previous quarters, we have started measures to address the supply chain issues we have and the rising input costs. However, this is not an easy approach, particularly as there is no structure in those supply chain issues. I think I already mentioned that in the course of the presentation, that like this week it's that, then the next week it's something else. Even such stupid things like you probably know that we are shipping some of our instruments in wooden crates, that you just don't get the crates because the wood is no longer available. Then you have to switch to other woods, and then you have to bring in wood-free declarations, because in certain countries you are only allowed to ship with those bug-free certificates if you ship wood. And that's like it's just painful what we see here. Another element is definitely that M&A remains part of the company's growth and diversification strategy. I think we've mentioned that before, although the last transaction we did happened in 2016, we are continuously working on that. Even here we have a nice lineup of attractive activities. Like, besides the two angles we have within our universe of transactions, like, the acquisition we made with Diatron, giving us access to certain diagnostics market segments we haven't actively played a role in before. The diversity, the strategy in M&A here is making acquisition to increase our universe in certain areas, like in the Diatron case, diversification into vet hematology. The other angle was the acquisition we managed through the acquisition of the Sony DADC BioSciences business back in 2016. A technological approach, I think that's something we really have to discuss internally and where we are focusing more is our activities in the United States. I think, with all those activities ongoing in the United States, and based upon the fact that nine out of ten decision-makers are actually sitting in the States, it may make sense to try to get a bigger footprint in the United States in terms of manufacturing and development in parallel. Certainly one of the key challenges is to restore the pre-pandemic efficiency throughout the entire company. This is not just related to making people come back in and away from home office. It's actually, like, this degree of cooperation and fast turnover times we saw pre-pandemically, where we still have to work on in order to restore those levels. Certainly, we have to manage additional headcount growth, particularly in line with those well-filled project pipeline. This means getting developers in order to allow to offer our customers the same service and the same speed and quality in development they are used to from us. This actually gets me to the end of the presentation, and I would like to hand back to our host, Stuart, who will explain to us how to ask questions. Thank you, Marcus. Ladies and gentlemen, at this time we begin the question-and-answer session. Anyone who wishes to ask a question may press star followed by one on their touch tone telephone. If you wish to remove yourself from the question queue, you may press star followed by two. If you're using speaker equipment today, please lift a handset before making your selections. Anyone who has a question may press star followed by one at this time. One moment for the first question, please. First question is from the line of Oliver Metzger from ODDO BHF. Please go ahead. Oh, good afternoon. Thanks a lot for taking my questions. The first one is, it's more a strategic question because, there were plenty of, rumors over last weeks or months about, also your ownership structure. I know you cannot comment on detail on the existing ownership, or and their intentions, but, it would be pretty interesting to hear from you what your customers think and what's your assessment, how they would react if there's any change of ownership, whether it's from, let's say, from a private equity background or whether it's from another industry player background, whether this would have, meaningful impact on your business. That's number one. Number two is, you mentioned, a new customer for Smart Consumables, which you described as a game-changing characteristic. To clarify, is this we have already over last quarters or basically if not? If you talk about game changing, it would be great to get a little bit more details about expected timeline and also for potential size relatively to the existing Smart Consumables business. The last one very quick, it's on your service parts and consumables rise. Was there also some pent-up demand from customers which did not make or basically, or to a lower extent, make services during the pandemic, which supported you in the first quarter? Thank you very much. Yeah. Oliver, thanks very much for your questions. Come on. We always had those rumors, particularly as we have this stake of the founder family, the founder Hermann Leistner and his family owns those 40%. We always had those rumors. We never commented, and we continue to not comment on those. I think our customers bring up the same questions and here we are actually giving the same answer. I think it's not really contributing to the overall situation to comment on rumors and making them even more important. As mentioned, we haven't ever commented on those rumors and are not planning to do so. Cytovale, I mentioned this smart consumable for sepsis. Again, it's not upon us to assess if something is game changing and even comment that. I think it's an ongoing discussion about the diagnostics of sepsis. Here, early diagnostics is a sensitive and important topic. Cytovale is actually one of those players with a lot of expectations in the market. Our Smart Consumables business got that in. We are allowed to mention the customer's name. I think at this point a lot of discussion about Cytovale is actually taking place in the market. Again, it's here I think again it is important to mention that this is early in the pipeline, but it's one of those programs with high expectations in the market. Your third question, service parts, and the demand related to that. I think that particularly the focus of some of our customers and we have to see what happened here during the pandemic is that the majority of our customers were trying to address the needs of their bigger customers. It was always easier to put a five or six or seven instrument into a laboratory where our customers already had a certain installed base, mainly leading to the fact that no qualification or user training or additional service activities had to happen. That's why our customers focused a lot on those customers of them, which already at the time have been existing customers. I think in the meantime, the majority of our molecular customers are trying to address the needs of smaller customers trying to build up capacities, or already had built up capacities in the last one third of the pandemic. Here we definitely see other pattern in terms of service and maintenance parts. On the one hand side, we see initial ramp ups in certain areas and on customer side and definitely shorter maintenance cycles. Certainly the majority of our customers were trying to drive service cycles to the edge, even including short-term maintenance to be pushed to the edge. Here we definitely see that they are returning to those patterns where they focus more on service and maintenance than it was the case during the pandemic, which is leading to, like, on a like-for-like comparison to the install base, higher service parts, particularly maintenance parts sales per install base. That's actually something, so if you have been in earlier calls over the last quarters, that's something we actually expected to—we expected to happen a little bit earlier, but particularly in Q1 and taking the demand for Q2 and Q3 into consideration, we are expecting now way more, and, like I said, our customers to return to more those normal pattern in terms of the ratio of service parts sales compared to install base. I hope this answers your question, and happy to take the next. Yes, thank you very much. Apart from first one, but that's okay. Next question is from the line of Oliver Reinberg from Kepler Cheuvreux. Please go ahead. Well, thanks for taking my question. First is on understanding the top line a bit better in Q1. Marcus, can you just give us any kind of color to what extent has Q1 sales benefited from the deferral of sales from Q4 into Q1? And can you just talk to what extent the COVID related business lines have really developed year-on-year? And probably add to that some kind of commentary to what how strong was the kind of COVID related demand in Q1. That would be question number one. Secondly, on the new contract that gets live middle of this year, is there anything we should consider in terms of quarterly phasing? In the past, I recall that when a product comes to the market that is involved with significant stockings. I know this is not an immediate global rollout, but is there anything to consider on that side? Then last question please, is more technical nature. One on currencies, obviously quite some moving things here. Can you just update us what is the percentage of sales in US dollar? I guess around 45%, is that a recent assumption? And also what is roughly your cost share in US dollar? And then the last technical question on the stock appreciation rights. I think the STRATEC stock is meaningfully down end of Q1 versus end of Q4. Just wondered whether there was not a significant contribution from stock appreciation rights in Q1. Thank you. Yeah. Thanks, Oliver. Thanks for your question. Actually, contribution like as deferred revenues where we had orders, but due to supply chain constraints, couldn't ship the product in Q4 and now ship them in Q1 is not super high. Particularly on the instrumentation side, it was like in line. Actually we continue to have that issue that we are not yet able to fulfill all the demands. Let me say, back order as compared to the actual order income is almost comparable after Q1 in 2022 as compared to Q4. Sorry. After Q1 in 2022 as compared to Q4 in 2021. On the service part sales, and I think I've already mentioned that in the course of my presentation, we saw some nice developments here. Today I would say roughly EUR 1.5 million additional sales coming from spare parts. It's tough to say if this is really like additional demand we couldn't fulfill in Q2 or if the actual demand is still going up. Today we, if we are looking into those areas where we have forecasts or where our customers have ordered their long lead times items, I would actually say that the additional demand goes up rather than we are reducing the overall back order. As that part of back order situation which where planned supplies haven't been materialized in a particular quarter, but only in the quarter thereafter. Yes, Oliver, and again, thanks for the question. Typically, when we launch new products, at the beginning of the supply phase, we, particularly because of lower volumes and being early in the learning curve, are realizing lower gross margin on certain products if they are only young in the product pipeline. I think in this particular case, driven by the fact that we have already shipped some instruments and driven by the fact that particularly because of the supply chain issues, we are actually trying to put those parts and sub-assemblies and components we need for them, supply of those products are at least partly already in inventory. We would expect the effects coming from that particular angle, as we believe that the effects here are lower than compared. However, we have already factored in certain pressure on the gross margin coming from that angle, particularly on a full-year basis. Again, you're right that on the currency side, we are realizing about 42%-45% of our revenues in U.S. dollars. Same amount, slightly higher in euros, and then certainly other currencies like Swiss francs and so on. I think it makes sense to say that certainly, if you see and compare the reported data from local currency, you see that we had some headwinds currency-wise. Don't ask me for my full-year expectation because I'm always wrong here. If we see the most recent development, particularly with U.S. interest, we should expect that this development continues for the full year 2022. I wouldn't be surprised if we stay on that difference between revenues reported as compared to revenues in local currencies. The stock appreciation rights, we had a positive effect of about a quarter of a million euros in Q1 coming from the lower share price on an average basis for Q1 of 2022 compared to, and again, on an average basis, Q4 2021. I hope this answers the question. Happy to take any- Yeah. Can I just understand, so it's not the share price at the end of the quarter, it's the average share price in the quarter that is impacting the stock appreciation rights? It is the actual share price for the SARs at the end of the quarter, so the last trading day of the quarter. Yeah. We have seen a big, I think it's actually a delta of EUR 20, so I'm just surprised that it's such a small impact. Okay. Can I just follow up on the US dollar? Can you just give us a rough idea what is the cost share in US dollar? Is it 30% or less? Oliver, I'm just looking up the share price difference, which was. It's actually Xetra closing on the last day of the quarter. The rumors came. Yeah. After the close. Yeah. Actually, those rumors came after closing, which made the difference. Just Jan, I think the EUR 20 is not entirely right. Okay. Help me out. Your second question again. Can you just, any idea of the cost share in U.S. dollar? I mean, roughly something along 30% or so. Actually, at this point we are trying to increase our natural hedging in US dollars, but so far we are actually realizing the majority of the revenues and have like a system where we are selling US dollars on a rolling basis, on a rolling 12-month basis. Independent from hedging, just from your operations, any idea what share of costs are in U.S. dollar? I would say at this point, less than 25%. 'Cause if at some stage hedges run out, that would give you a meaningful margin support, I guess. True. As mentioned, we are trying to cover that even in Europe, but we have to see that the majority of our supply chain is still sitting in Europe and Eastern Europe and not in the United States. Like with our approach to increase our independence from Asia, I think for the time being, we have to expect lower inputs to be paid in US dollars. However, on a long-term basis, it's definitely our goal to increase natural hedging. Perfect. The last question, just is there any idea, if you look at your COVID-related book of business in terms of instruments, how has this changed year-on-year in Q1? Yeah, I think, you know, we discussed that already. It's super difficult for us to say whether an instrument has been placed by our customer just because of COVID-19 or whether it has initially been placed because of COVID-19 and is now used based upon another breakdown of the menu. It is important to understand that our instruments are not exclusively running within a certain application. Which means the majority of our molecular instruments are running certain panels. If this is a respiratory panel, this might include COVID-19, but, like, if this is another infectious diseases panel or even sexually transmitted diseases panel, then the instrument can certainly run COVID-19 tests but doesn't necessarily have to run COVID-19 tests. If we see today, we are looking into the breakdown and are talking to our customers, certainly some of the instruments are still placed on the basis of certain expectations of higher testing volume in COVID-19 in autumn and in winter of 2020. The majority of the molecular instruments today placed are either actually for replacement or are actually placed for the remainder of the panel of our customer, which means non-COVID. I think from those instruments, and again, minor is the leftover and back order, we supplied instruments in Q1, which couldn't have been supplied in Q4 2021. We saw, like, less than 10% back order situation of instruments which were exclusively COVID-19 related, and actually, are perceived as sufficient from our customers' perspective to cover potentially higher testing volumes towards the end of the year. Super. Thanks so much, Marcus. Very welcome. Next question is from the line of Jan Koch from Deutsche Bank. Please go ahead. Hi, Marcus. Thanks for taking my questions. I also have three, please. Firstly, yeah, I would like to start by coming back to your back order situation. It would be interesting to know if the backlog spreads across all modalities and applications or if certain modalities are more affected by this. A high-level breakdown of your back order across your segments would be helpful as well. A breakdown of your growth in Q1. It is great to see that you were able to report a positive organic growth again in the first quarter. It would be helpful if you could break down your organic growth a little bit more into price and volumes, just to get an indication on how successful you were on the price increases. Then, the third question is on your guidance in the remaining quarters. Following a good start to the year, should we assume that Q2 will be the twelfth quarter with the highest earnings decline? I'm sorry if you already answered some of the questions in your introduction. I couldn't join the call on time. Yes, thanks, actually, thanks for bringing that up. Hasn't been answered so far. Elaborating a little bit on our backorder and backlog situation. Let me put it that way, except our plastic segment, I think we were hit throughout the entire product portfolio. Particularly, instruments and I think, trying to describe this on a technological basis or on an applications basis doesn't make too much sense. What we could say that particularly those customers providing us with a quantity forecast as early as possible, which is actually part of the agreement we have with our customers, actually turned out that those additional or those demands could be easily satisfied. The biggest issue were actually caused by lumpiness and additional demands in particular. Back in the days when we were able to satisfy additional demands from our customers within a four to six- month period of time, it gets more and more difficult. If we are asking our suppliers to pull in supply chain, we see them facing the same difficulties as we do. Today, we clearly see that if our customers are reporting additional demands, it takes us more like nine months as compared to the 6 months previously to ramp up manufacturing in certain areas. Long story short, if we had, like, high quality forecast in terms of demand, those demands have been easier to be satisfied as compared to volatilities, particularly growing demands. It was difficult, and again, this mainly reflects the products where we have complex supply chains, particularly in components and plastics. It was a little bit easier because here we actually control the supply chain in a better way. I'm trying to compare or to break down the organic growth in price versus volume. Only in a very few instances we have been able to really get the price activities done in Q1, which means actually the growth in Q1 is mainly driven by volume and not by price. My teams are actually working very hard on finding agreements with the customers to cover the price increases. I think the majority, and if this flips from volume to pricing, will be only in Q2 and Q3. Looking into Q2, and you brought that up, when do we expect the hit? If I'm seeing demands for Q2, particularly for our main product lines in chemiluminescence immunoassay, and molecular, and on top with the spare parts, I wouldn't expect a big hit in Q2. However, we want to be careful how the actual demands are developing in the remainder of the quarter, and if our customers are trying to push out supply from Q2 in Q3. However, the real concrete answer is that I'm at this point not expecting a big hit in Q2. I hope this answers your questions and happy to take the next. Great. Thank you. Welcome. As a reminder, if you'd like to ask a question, please press star followed by one on your touch tone telephone. Next question is from the line of Michael Heider from Warburg Research. Please go ahead. Yes. Good afternoon, and thanks for taking my questions. I have actually two left. First one is on shortening replacement cycles. We had the discussion last year that the instruments in the market are really being utilized on a very high rate, and that you expect to see some shorter replacement cycles. Do you have any view on this, how the situation is now? I mean, is there anything like this coming through? Do you see any new orders that are replacing instruments that are only been in the market for one or two years? I mean, is there any? Can you give any color on this? The second question has been partly answered now, just with the last comments you made, but still, any. Yeah, I would be interested in how you proceed in price increases with your customers. I mean, you mentioned that you expect that in Q2, Q3, but maybe you can give a little bit more insight here, how that works. I mean, how the discussions are going and, yeah, when do you expect this to happen? Thanks. Yeah. Thanks, Michael. Excellent question. Thanks for bringing it up again. Actually, I think it's worth mentioning that our long-term planning actually is based upon the expectation that we see higher price increases on the input side as we could actually get through on the sales side. As mentioned, my team is working on price increases, but I think it's obvious that it's not only our customers, it's even us understanding that there is an equation of volume and pricing and that we as a company, STRATEC as a supplier to the diagnostics market and adjacent markets. That we are only, quote-unquote, "only" supplying the vehicle to make our customers successful. We are the enabler, but we don't provide the content. I think it's obvious that everybody is expecting that we see a more normalized level in terms of pricing. No longer governmentally guaranteed prices for COVID testing, then we will switch back into a scenario where particularly those of our customers not only having emergency approval to sell COVID tests, but regular approvals, that those ones will become a bigger share of that overall smaller pie. Long story short, we want to keep our price increases minimal because we believe that we will be in a better spot if we are selling more instrument as compared to a lower volume of instruments for higher prices. I hope this makes sense. Like I said, our planning assumptions at this point, particularly midterm and long-term planning foresees input prices growing faster than actual output prices. At this point, we are trying to find or to reach consensus with our customers and in order to find that sweet spot and balance between price increases but still keeping the volumes up to the extent possible, which then certainly contributes positively to our overall overhead. I hope this makes sense. Now discussing replacement cycles. I think the majority of our customers are now getting back into more those, let me say, normal patterns in terms of how long instruments are used during COVID-19, particularly in the United States, but to a certain extent in Europe as well. We saw instruments which have been directly or indirectly paid by the government, and our customers didn't focus too much on those activities to keep this installed base young. Already, in the second half of last year, we saw that new instruments hitting the market were not only in order to satisfy the demands and needs of additional customers, our customers, but replacing instruments which were fairly young in the market. Like a typical product life cycle in a laboratory, depending on the actual application and the contract between our customers and the end customers, between three, in some cases up to seven years. We saw that the actual lifespan of a product in a laboratory came down to 18 months, two years. We see this ongoing, particularly for those instruments, which have been used for COVID-19 testing. In a regular setup, about 15%-20% of a fleet, particularly if a product achieves the phase of being a mature product in the product life cycle, about 15%-20% is actually replacing instruments of its own family just being aged or life cycled or worn down. During COVID, this went up to a third, in some cases even 40%, and step-by-step we see this normalizing. Still we are replacing instruments which saw extraordinary high variance here through utilization during COVID. We believe by the end of this year or mid-next year, we will come back to that normalized level of replacement that an instrument typically runs for three years on high utilization rates and, in the clinical lab, more like five to seven years. I hope this makes sense, and happy to take the next question. Next question is a follow-up question from the line of Oliver Reinberg from Kepler Cheuvreux. Please go ahead. Oh, yeah. Thanks for taking my follow-up. Marcus, just wanted to clarify, when you said at this point you do not see a big hit in Q2, is that referring to a year-on-year comparison or sequential comparison versus first quarter 2022? That's question number one. Secondly, just on supply chain. I mean, it sounds it's still all very tight, but still manageable. Is it fair to say that over the last five weeks, this has not significantly gotten worse? Is that a fair assessment? Answering your second question first, Oliver, I think it's still getting worse. That's at least the perception. I know that my team is heavily complaining and that we have more meetings with suppliers and that we are trying to find alternative sources and that we are trying to help our suppliers, you know, particularly thinking about the supply chain for microcontrollers coming from certain countries and then being sent to those companies manufacturing the PCBAs for us and then being forwarded to companies manufacturing the sub-assemblies like a reader or a washer using that PCBA, using that microcontroller. Already here we see, like, that we are only number four or number five in that supply chain, and we are trying to help our suppliers, particularly tier two and tier three from our side, to get their materials in, and we still see that the uncertainties and the interruption in the supply chain are getting worse rather than better. I know that particularly the automotive industry in our area are trying to make us believe that they are about to sort this out. I think additional demands on the consumer side and additional demand in certain areas, and the fact that during COVID, a lot of investments simply didn't happen in this area, and that it takes time to build the factories and the manufacturing line, makes me believe that it will continue to get worse before it gets better. Answering your first question regarding the hit. I think it's actually a fair mixture of both. If we are looking into the forecast, I think it is still too early to determine how big and if we will see a hit, then if this is actually like, you know, defining what big means. I actually wanna keep that open. It's definitely too early. If I'm looking into the forecast and talking to my manufacturing teams and my teams talking to the customers, it's not really devastating what we get back. Our customers, to a certain extent, are actually surprised themselves how big the end customers' demands are and, like, the pace of their leads. That's why I can only reiterate myself, which is a derivative of a lot of soft factors we are collecting at this point, that I wouldn't expect any meaningful negative surprises for Q2. Okay. When you talk about it, that means versus Q2 2021, correct? I would actually say that if we compare the actual developments, our expectations are obviously compared to Q2 of 2021. Again, Oliver. Yeah. It's definitely too early. Yeah. To discuss it, if this is, or to discuss percentages. It's like, I think we would be in a better position if we would discuss that, like, in three to four weeks from now. No, absolutely. Further questions at this time. I would like to hand back to Marcus Wolfinger for closing comments. Please go ahead. Thanks, Stuart, and thanks, everyone. Thanks for your interest in STRATEC. If you have any follow-up questions, please do not hesitate to call our investor relations department. Again, thank you very much for following STRATEC. I would like to wish you a good day and thank you very much. Ladies and gentlemen, the conference is now concluded, and you may disconnect your telephone. Thank you for joining, and have a pleasant day. Goodbye.