Ladies and gentlemen, welcome to the FY 2023 Financial Results Conference Call and Live Webcast. I am Sagar, the Chorus Call operator. I would like to remind you that all participants will be in the listen-only mode, and the conference is being recorded. The presentation will be followed by a Q&A session. You can register for the questions at any time by pressing star and 1 on your telephone. For operator assistance, you may press star and zero. The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Marcus Wolfinger, CEO. Please go ahead, sir. Thank you, Sagar, and good afternoon in Europe and good morning in the United States. Welcome to the STRATEC Financial Results Fiscal Year 2023 presentation. Before we start, please allow me to get you some housekeeping statements. First, I think I don't need to walk you through Safe Harbor Statement and so on. You can download that presentation either from the webcast or from our website. As always, we are intending to split this presentation, the actual presentation, into three major segments, which is getting to Fiscal Year 2023 in a glance and then a financial overview, and then followed by the outlook probably after 2023. And particularly as we have a couple of nice developments ongoing, I think it's more important to talk about 2023, sorry, 2024, rather than about 2023. Then we should have the chance to bring up some questions, and hopefully I can answer them accordingly. Then certainly the presentation has some supplementary information. 2023 at a glance. Our sales data and margin was in line with the expectations and the targeted corridors. Sales down on a constant exchange rate to about EUR 262 million, representing 3.8% in margin. EBIT margin and adjusted level of 10.3%, like I said, both in line with targeted corridors. We have launched a number of new products. We just picked out two, which are from a technological perspective very interesting. So an extended version of a sample preparation system for complex sample prep, where the actual readout is only a minor proportion of the actual process and the sample prep, particularly coming from tissue, being super complex. And then secondly, certainly a number of products in the field of complex consumables. We have executed a number of new corporations, and again, we just picked out randomly one. It's a development corporation for a modular analyzer system to include complex consumables in the field of high complex and sensitivity immunoassays, particularly for two of those applications for blood banks and in the field of clinical diagnostics. We have a material product portfolio expansion and our first real manufacturing site in the United States after the acquisition of Natech Plastics. We discussed it a couple of times. First of all, this is definitely expanding our product offering in the field of complex microfluidic consumables. It helps us to offer more products going into this third dimension, often called cartridges, rather as supplementing our consumables business, which is two-dimensional, so often one layer covered with a foil with microfluidic structures. It certainly offers capabilities to have our first instrument. I shouldn't say manufacturing. Therefore, it's definitely the ramp-up process would be too complex. Let me say the resources available there, but certainly for field activities, repairs, reconditioning in high volumes, that certainly allows us to do instrumentation work from one place in the United States as well and grow from there. Certainly, it's worth mentioning our dividend proposal, which will be provided to the AGM of EUR 0.55. We're trying to cover dividend yield payout ratio as compared to the result of the company. As mentioned, we were trying to keep payouts ratio on that level and still leaving some gas in the tank for potential acquisitions we have there and a lineup as well. Allow me to discuss that a little bit more detail later on. Now, getting to the financial review. As mentioned before, fiscal year sales 2023 with about EUR 262 million. I think the positive thing we want to get across that, first of all, it is in corridor with expectations. Secondly, I think Q4 clearly shows a couple of things and proves a couple of things. First of all, there is this demand. At this point, we have high volatilities, but we have no doubts that particularly Q4 and probably from Q2 2024 on, we will get into a level of revenues where scalabilities are coming in again. I think the EBIT margin and EBITDA margin generated in Q4 shows that there is a certain threshold of revenues where we are really getting in scalability. We still have to see that we are a development-heavy company. We are investing a tremendous amount of money in development, not only to keep our products young, but to allow us to grow, get back on that growth traction. That kind of investment means that we are spending some money, which is not capitalized, but expense, which are, I would say, socket costs for the development and research activities in order to get new products to the market. Considering that there is a certain threshold of revenues that if we achieve that scalability comes back and we are able to achieve this 14%-15% EBIT margin, and I think this is certainly the long-term goal to get back to that. But again, I'll dive into details as well. I mentioned the very good sales trajectory in Q4 with a growth on constant currency basis of almost 13% in the Q4. On a full-year basis, the expected decline of about 4% coming from EUR 275 now down to 262 million. Adjusted EBIT margin and EBITDA and EBITDA margin all on that expected level with some of basic EPS coming from EUR 2.41 to EUR 1.07, down 55%. In Q4, actually way better with a nice growth rate on the EPS north of 20%. I think, as I mentioned before, this is in line with expectation. It's certainly not satisfying. However, please allow me to remind you on a couple of facts. There were a lot of companies which had some nice tailwinds during COVID-19. Everybody was super proud of the revenue growth rates generated during that time. People didn't differentiate that much of growth which were coming through the exposure to COVID-19 tests and instrumentation. We actually clearly said that our instruments are not only for COVID-19 testing. Our consumables are not only for COVID-19 testing. So typically, a classical molecular instrument of STRATEC runs between five screening tests and probably 25 other tests. On the immunoassay side, the menus are typically a little bit bigger. However, COVID-19, independent of this, was a PCR test or an antigen test. This was one of several infectious diseases tests. That's why we couldn't clearly differentiate what kind of instruments were exclusively related to the exposure to COVID-19 and which instruments were going into a setup where they were testing STDs or infectious diseases on a broader scale. That's why we clearly said we had some nice tailwinds during COVID-19, but certainly, particularly in our molecular franchise, this led to a certain saturation in the market. So we generated some growth which was covering some future capacities needed, which means it led to a certain saturation, and the market is still working down that saturation. We clearly see that there is a nice effect coming from the market back where testing volume is going up, where additional demands and additional testing volume is still covered with instruments which are sitting in the warehouses of our customers. But we clearly see that it starts getting to see the traction that new demands are now not only covered with capacities sitting in the lab, with capacities which are sitting in the inventories of our customers, but where we clearly see that the volume is going up. I'll discuss our consumables business later on, but particularly with consumable sales, which was very satisfying in Q4, we clearly see that the capacities built during COVID-19 are now getting back into a mode where they are getting more utilized. Like I said, we see that in our consumable sales, and that makes us very positive, particularly about the tail end of 2024. I think this slide nicely shows what I was talking about. If we take the compound annual growth rate between 2018 and 2023, this amounts to about 7% compound annual growth rate, certainly peaking out in our most successful COVID-19 year 2021. Like I said, building capacities in annual growth rates in the area of high single digit, I think nothing changed from that perspective at all. In 2023, and I mentioned that already a couple of times, with top line being almost flat, we still have that pandemic-related overcapacities, particularly in the MDX markets. All other markets are either going flat-ish, like our immunoassay business, or is showing nice growth rates, particularly in immuno hematology and serology, particularly in our hematological business, very much driven by our veterinary business. We took a hit in 2023, but are positive that from 2024 and particularly 2025, this will also participate to our growth rate. I mentioned the launch delays of our next-gen veterinary diagnostic system, which takes us into 2024. There is good communication with the customer ongoing, and we are actually about to sort out the issues even in manufacturing. That's why we believe towards the end of the year, we will get into run rates which will allow the partner to go on a wider scale with the market launch ongoing. Then certainly, and I mentioned that already, we are showing strong growth with our service parts and consumable business as well as with development and services, which is actually pointing in the right direction. Service and maintenance parts going up shows higher utilization. Higher utilization means either higher wear and tear leading to new instrument sales or leading to the utilization of the capacities in the lab, which typically means with a certain deferred consideration that the increasing demands are swapping through into STRATEC manufacturing and therefore into sales. And then certainly, we mentioned some new product launches. All in all, if we are diving into the details, and you probably saw that our two biggest clients saw some decline. And even during COVID-19, we mentioned that the tailwinds we saw in our molecular franchise and with some of our biggest customers will lead to a certain decline in 2022, 2023, and 2024 with the bigger customers. However, we were extremely positive that the products which were at the time recently launched or have been launched between 2020 and now, that the run rates of those products have the means to offset the decline of the major products. Unfortunately, we clearly see that the hope everyone has during COVID-19 that those standards built with the regulators, with the cadence new tests are coming on the market, didn't work out at all. We clearly see that the regulators and the industry didn't only switch back into a pre-COVID-19 mode, but that they actually switched back into a mode which made the situation even worse. So, timelines from development activities from scratch into prototyping, evaluation, integration of the assay menu on the instrument, bringing the instrument in front of the regulators, achieving regulatory approval after the performance of clinical trials, and then that a staggered launch in certain territories, often enough, launches with a less than comprehensive menu on the assay menu side. That back in the days pre-COVID took us together with our partners often four to five years. We clearly see that those timelines are pushed out and pushed out even further, which definitely adds complexity. I'll dive into details later on how we are intending to mitigate that. I think just making sure that everyone understands this is not dangerous per se for us because if new products see delayed launches, it typically means that we are selling our predecessor products for a longer period of time. However, it means that we are facing issues like with product lifecycle management, particularly obsolescence management. It adds a number of complexity because particularly at the very beginning of a product lifecycle and at the very end of a product lifecycle, it adds unforeseen costs and unforeseen volatilities where we have to find a burn-in process together with our customers to cover that change in scenarios well. I think, again, it's worth mentioning that besides that, what I've just mentioned, that we will have to establish means which are allowing us to actually address those needs and to achieve a bigger footprint in areas of the life sciences industry where higher cadences and faster product cycles are achieved. And there are actually means, and we have the technology, and we are already in that market. However, it means a slight change of focus what and where we are actually putting our activities to. Allow me to get you some supplementary data in terms of product mix. Starting with the percentage of sales, I think I already mentioned that, and you probably see that, I think from an absolute amount of service parts and consumables in the year 2023 and from Development and Services, you see that the percentage grew, but actually the overall amount grew as well and that instrument sales was down during the same time. Assuming that the market recovers, which is expected to happen on a full-year basis, certainly only in 2025, but particularly Q3 and Q4, and in our particular case, even Q2 is expected to already drive that growth. We would expect that as soon as instrument sales get more healthy again, that actually we see nice margin traction. Compared to 2022 data, you see that the contribution of instrument sales was only 44%, so less than half. I think if we are using historical data, already 2022 was weak. Typically, we are coming from more 55%. I think considering that we still have high degrees of utilization in the instruments, certainly the service parts and their parts and maintenance parts proportion should continue on a relatively and absolute high level. Same thing applies for development activities with better charging abilities we see now, and with the recovery of instrument sales, actually the overall situation should improve as well. Breaking that down in the sales of systems and development activities, you can clearly see the same observation. Now getting back to the margin profile, certainly after the adjusted EBIT and EBIT margin, you can clearly see that we peaked out in 2021. Certainly, the margin we showed after COVID-19 with a then less optimal product portfolio on the one hand side and certainly with a supply crisis on the other hand side where we had to pay premium on the input side but couldn't put forward our price increases directly to our customer, I think we did very well in 2023. So price increases, earnings improvement program, and the recovery of the market and a very healthy product portfolio makes me believe that the year 2024 and ongoing from there, 2024, certainly not on a full-year basis, but certainly the second half and 2025 will show that not only the business model is intact, but that we did our homework in the meantime. Diving into the details, certainly 2023 with the capacities built during COVID-19, negative economies of scale at the very forefront, negative product mix, so very immunoassay-heavy, very maintenance parts and consumables light. It got better in Q4. I already mentioned that, but we are discussing full-year basis here. And then certainly the rise of input costs, sheer nightmare. I'll dive into details what that means inventory-wise, but allow me to postpone that until we get there. And then certainly our earnings improvement program, which was very effective and we will certainly continue in 2024, which gives us some headroom regarding the budget. Now discussing cash flows. Operating cash flow was okay, up by 90%. Then certainly investment activities. Here, you clearly see the acquisition of Natech. Financing activities was definitely the bridge financing and inventory levels. Inventory levels, probably from an outside perspective and not only from an outside perspective, really disappointing what happened in 2023. As mentioned, I'll discuss this in further details in the course of that presentation. Cash at the end of the period, certainly up, but equity ratio and net debt up, as equity ratio 50%, which is certainly driven by the Natech acquisition, but net debt up as well. And certainly on a level, I would actually say really kind of satisfying if we wouldn't have that inventory level I'll discuss. So improvement on the operating cash flow due to year-over-year lower increase of net working capital, certainly contracted inflow set to increase inventory level again in Q4 2024. I will mention that later on. Thereafter, certainly significant level of reduction then in 2025. Cash flow from investment activities contains the cash outflow for the acquisition of Natech. Then certainly a net debt to EBITDA ratio of 2.9, a little bit north of our expectation. We will work that down in 2024, but mainly in 2025. Now allow me to get you some details regarding inventory. Although we are certainly expecting a good progress regarding our inventory development in the first nine months of this year, we are again expecting significant increase in the last quarter of 2024, which is due to contracted inflows where we only have limited options for amendments. Please allow me to remind you, this is the outcome of commitments we had to take in the supply crisis and certainly based upon the run rates, which were forecasted by our customers at the tail end of COVID-19, which and I think the progress of our adjustments to our expectations, which happened in 2023, clearly showed that we are coming back from a way elevated level to now more realistic expectations and certainly to more realistic inflow. However, after the restructuring of our supply chain activities, we have to live with the fact that the setup we found now in supply chain has to work down the commitments being made at the end of 2022 and at the beginning of 2023 based upon way higher expectations, and we are working that down, which means all structural amendments we are doing in supply chain in order to bring our gross margin back to a level which is acceptable and which is on the level we saw pre-COVID is suffering the fact that we are sitting on inventory levels and have to still buy things where actually the structural setup is predefined and is less than optimal. Any structural changes and improvements made on that to increase our gross margin and to work down our inventory levels will only become effective towards the very tail end of 2024 and to a majority only in 2025. So as a result, the inventory levels are set to again rise in 2024 by about EUR 10 million. We are working on that. This is the, let me say, the worst-case scenario based upon the contracted level. As an outcome of a comprehensive assessment, we are working on that to bring that down. I'm 100% convinced that this will not be on that level I've just mentioned. However, I need to bring that up that in the worst-case scenario, our inventory levels will go up towards the end of the year 2024 again and that we can only work that down, but then certainly materially in 2025 when we went through that. Again, we are working on that. Gut feeling would say we will not be there. However, I need to bring that up at this point. Contracted inflows is certainly based upon decisions made before the in the meantime implemented reorganization in our procurement organization. However, those decisions have long-lasting effects or longer-lasting effects than initially expected. Allow me to discuss our earnings improvement program, personal measures, fully established already, the goals achieved for both years 2023 and 2024, so we can actually check that box. Then certainly focus on price adjustment strategies so they are aware some price adjustments already happening in 2023. There are already agreed upon and therefore budgeted price increases in 2024. There will be some on-top price increases in 2024 which are not budgeted yet, which gives us some headroom on the margin side. Today's margin doesn't – today's margin guidance doesn't actually cover that. Then we will definitely have some personnel and cost reductions on track for 2024, and that leaves us that on an annualized basis, it's actually in 2023 already overachieved. Certainly that part which was left over in 2023 for 2024 because allow me to remind you that our earnings improvement program covered both years, 2023 and 2024. Certainly that leftover for 2024 was already covered in our 2024 budget and is therefore at least partly foreseen in today's guidance. However, we are about to set up a new earnings improvement program which at this point already gives us another headroom of about EUR 3 million already at this point considering the run rate with the instruments as planned. So I mentioned that there are certain volatilities in this market. I would say there is still a good chance that the recovery of the market happens earlier or clearer than expected, which then wouldn't allow us to utilize all those EUR 3 million. However, I would like to say that we will continue with our cost discipline on the one hand side and certainly with other earnings improvement measures which are giving us already at this point EUR 3 million headrooms compared to today's budget and therefore compared to today's forecast. So actually, which shows that we put out a very realistic guidance for 2024. We will get you some additional details regarding our new earnings improvement program in the course of our Q1 2024 announcement in April 2024. Now, please allow me to get you some outlook data. As mentioned, we have given financial guidance for fiscal year 2024 that is expected to remain stable or to grow slightly compared to 2023 on a constant currency basis. As mentioned, this is a bottom-up planning based upon data we have collected from customers, offset it with some risk assessment. We believe that the data provided by some of our customers still has to be seen in the light of the current relatively depressive overall mood of the industry. We believe that more optimism will come back, and I think it's the common understanding that today the diagnostics industry and adjacent markets like some areas in the life science industry we are working in, like translational research, areas where instrumentation in combination with Smart Consumables are playing a major role and instruments and setups where already scalability comes back are actually starting to show more optimism. So therefore, mainly driven by product mix, but mainly considering if we grow only slightly or if we can manage to show higher growth rates, the adjusted EBIT margin will be in the area of 10%-12%. And I mentioned those two headrooms, which is higher degree of utilization, certainly on the one hand side and on the other side, strict cost discipline in our earnings improvement program. And again, certainly we have to see that there is correlation between utilization of manufacturing capacities here at STRATEC and in our side and cost discipline on the HR side, whereas achieving higher growth rates certainly mean that we have to give up on certain goals as far as our earnings improvement program is concerned. We are expecting a very weak start in the year, but there is a highly subdued level of momentum in the business performance in the first quarter. However, and allow me to get you some data here, we are expecting a solid recovery already in Q2. So this is not as backend-loaded as 2023 was. So today, if we are looking into manufacturing planning of STRATEC and into the forecast of our customer, we are expecting to end up somewhere in the area top line of EUR 125 - 130 million already in H1, which shows that we are already going through previous year's data after the first six months. So again, I think mentioning that this is not as backend-loaded as 2023 was. Certainly then we will most likely be able to get into scalability levels that we can already show some nice margin trajectory after the very weak scalability we will show in the first quarter. Obviously, on that low level of revenues with high investments into manufacturing, we'll see poor scalability as far as earnings are concerned in the first quarter of the year. However, like I said, I want to reiterate that today's planning for H1 is to end up top line somehow in the area of EUR 125 - 130 million in revenues with good scalability on the margin. Now discussing the focus for 2024 and beyond, the implementation of our additional earnings improvement program to increase company-wide efficiency onto pre-pandemic levels, this certainly won't allow us to get back into EBITDA or EBIT margin levels we showed prior to the pandemic. This will only happen after 2025. However, I think we have undertaken the structural measures in the organization, particularly in supply chain, but in development as well, in marketing as well, in our product portfolio to get back into a cadence level where measures undertaken are showing effectiveness at a higher pace. And certainly with the recovery of the market getting back into top line levels and product mix levels where we can achieve this higher gross margin and therefore the higher margin profile bottom line. We want to address the product design and manufacturing issues in the veterinary business. We did that. We are continuing to do that. It shows traction. We believe we have good communication with the customer. We are not yet in the manufacturing yield we want to be. We are not able to ship the quantities for the customer needed. This will improve in the course of that year. There is an established project plan. There is a level of communication where the customer has that transparency, and it's upon us to meet the targets and the goals set with the customer. Then we want to manage and process a well-filled M&A pipeline. We have a couple of opportunities. So I think this is getting back into a market where, let me say, pricing expectations are becoming more and more realistic. I think that COVID blues, which hit us so much, is hitting some of our peers as well and certainly some of our targets as well, which means sorry, this is the moment in time to look into better-priced M&A opportunities as compared to 18 and 12 months ago. Then we want to execute our deal pipeline regarding development and manufacturing agreements. We have a very nice lineup here. Again, I mentioned that at the very beginning of that presentation, that decision-making processes in that kind of depressive mode the market is in is not easy for our customers. That's why we clearly see that our customers are expecting higher degrees of flexibility on our end, that we are starting earlier, that typically we are not able to execute those 20-year deals anymore, that we are moving from one milestone to the other. However, we have the factual reality that if products are approved using STRATEC background technology or using STRATEC manufacturing environment, that those products are literally not able to be moved later on. As mentioned, we are changing our contractual setup. That's why we want to get back into a mode where we see higher cadence and the higher degree of execution as far as deal pipeline and development pipeline and manufacturing pipeline is concerned. Certainly, the integration of Natech Plastics and the utilization of synergy potential together with our consumables business, I'm typically calling that going into the third dimension, that offers definitely huge potential that our consumables business will certainly continue to be the most margin-accretive part of the business and secondly, certainly being the part of the growth driver of the entire group and then certainly grow our footprint in the life science segment. We are already fairly active there, but certainly grow our footprint there as well, particularly in areas where shorter time to market could be achieved. This gets me to the end of the presentation, and I would like to hand back to Sagar, who will explain us how to commence the Q&A session. Thank you very much. We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on their touch-tone phone. You will hear a tone to confirm that you have joined the queue. If you wish to remove yourself from the question queue, you may press star and two. Questioners on the phone are requested to use only handsets and eventually turn off the volume from the webcast. Anyone who has a question may press star and one at this time. The first question comes from the line of Jan Koch from Deutsche Bank. Please go ahead. Great. Thanks. Hi, Marcus. Thanks for taking my questions. I have three. The first one is you mentioned a weak start to the year. Is it fair to assume a double-digit top line decline and a slight decline in the margin, or what should we assume here? Then secondly, on the digital PCR system you have developed for one of the market leaders, how is the ramp-up progressing? How happy are you with the project so far, and can you do anything to accelerate the ramp-up? And then finally, on destocking, I'm trying to get a better feeling about the potential tailwinds you could have here in 2025. So assuming that the underlying demand for molecular systems remains low next year, but that the destocking is completely over, how much of a group boost could that be? Yeah. First of all, good afternoon, Jan, and thanks for bringing up those questions. Really much appreciated. I hope you're okay. Weak start in Q1 2024. It's definitely too early to talk about that. I know the quarter is over, and then you'll say, "Why is that so difficult?" The thing is that certainly we achieved some material milestones in development, let's say, in March. So we made to meet some performance criteria set in milestone agreements. However, we are lacking the confirmation of some of the customers at this moment in time, which means it's still a matter of will this swap on the side of Q1, or is it going to be Q2? So I cannot answer that question straightforward. However, let me say you should actually expect top line decline Q1 2023 as compared to Q1 2024 of about high single-digit-low double-digit. On the lower scale, certainly with a hit to the margin. Again, I think we and please don't get me wrong when saying it. We shouldn't focus too much on Q1. Mainly, those effects we see in Q1 will entirely swap over in a positive development in Q2. And that's why we assessed actually already at this point top line and bottom line development in Q2 2024. And as mentioned before, we will go through previous year, most likely already in H1 with EUR 125 - 130 million top line with healthy margin progression. Ramp-up on DPCR, you mentioned, how happy am I? I think I shouldn't discuss how happy I am. However, we and our customers have and had huge expectations, which actually materialized only partly. This doesn't lead to an overall dissatisfaction. However, there is always a bandwidth of number of placements of consumables and of instruments. And certainly, particularly with the momentum in this particular market, we still see that we are slightly behind our expectations. However, if we see the activities made by or undertaken by our customer, how this customer is positioning the instrument, how menu is built, the quality and technical performance of the instrument and of the consumable, the attractive pricing in the field, and so on, I think all this data is showing in the right direction. So for me, this is not a question of if. This is exclusively a question of when. And we are showing positive traction, are getting positive momentum. So I think particularly towards the end of 2024 and the beginning of 2025, this will be a material contributor to STRATEC growth. So the fact that, let me say, the hockey stick is coming later doesn't mean that it is a disappointment. It just means that things are taking time, that the market is not in a condition where it used to be two years ago or pre-COVID-19 or where everybody expected it to be at this point. There is certainly an ongoing uncertainty, ongoing unpredictability. I think it's common sense that this is happening in the entire industry. If you are looking into the top 10 companies, often they don't call it. They don't call it margin improvement or earnings improvement or reorganization, but literally all top 20 players are looking into their product portfolio, are looking into their activities, are looking into their costs in order to improve the situation. This is the time where those companies which had nice tailwinds during COVID-19 are forced to do their homework. We as a company providing the CapEx side of things see more difficulties. We are not alone. We have been at this place. I hope we will not be soon at this place again, but I'm 100% convinced that we and the entire industry will come out of that stronger. Discussing the effects, destocking being slow in 2024. So definitely, there are two sides of the entire equation which will both provide us nice tailwinds in 2025. It's too early to actually tackle that because we are trying to work down our contractual obligations which are hitting us towards the end of the year. I mentioned about an inventory gain of about EUR 10 million compared to the inventory level of December 2023. However, the two contributors are, first of all, certainly that we will be able to show input costs on a more attractive level because we see some areas where pricing is getting more attractive. Today, we are actually partly sitting on elevated prices. That's one thing, which is a difficult thing in our industry because doing changes in order to take advantage of structurally lower prices in some areas requires change, often requires re-verification. However, we have the lever to discuss with our customers either price increases, and if they don't allow us for, then certainly structural improvements to the products, which might or might not require re-verification, re-validation by them. That's one part of the equation. So showing more attractive prices, but then certainly structural improvements we are showing in supply chain and lower inventory levels are overall giving us a better lever in the year 2025. So my perspective on that at this point means that we will have the two nice tailwinds in 2025 on a full-year basis coming from those two sources. Again, still too early to determine the effects, but I'm fairly positive on that. Okay. Great. Very helpful. Thanks. Thank you, Jan. Thank you. The next question is from the line of Michael Heider from Warburg Research. Please go ahead. Hi, Marcus, and good afternoon. Thanks for taking my questions. I have three left. First of all, when I look at your guidance, full year guidance for 2024, and look at your earnings improvement program where you said that you are very well on track and that it's aiming for EUR 10-15 million EBIT improvement on a full year basis. Then if I take the lower end of your guidance, which would be flat sales, then I think your guidance is quite conservative, or am I getting something wrong here? That would be my first question. Then second one, you mentioned also that your acquisition pipeline is quite filled. Could you maybe give us some more hints here like what kind of sizes you are looking at? I mean, could it be? Really, are you just looking at add-on acquisitions, or could there be something transformational going on here? Then, last question, just technical. You had slightly higher taxes than expected. Is this something sustainable, given your new setup with the U.S., or is this just a one-off? Thanks. No, Michael, thanks very much for the question, and good to hear your voice again. I hope you're doing well. The reason is, almost exclusively our molecular franchise, is manufactured in Switzerland with a structural lower tax rate, which means weaker sales and therefore weaker earnings contribution to the group's earnings, and group's margin is leading to a structurally higher tax rate coming from the other countries with structurally higher tax rate as compared to Switzerland. So this is not sustainable, assuming a pickup of the molecular business towards the end of the year. However, I would remain on the so in case we are erring on the safe side, acquisition. So obviously, I cannot discuss deep details. Actually, we have two, two and a half super interesting things in the pipeline. As mentioned, I think the interesting thing is that actually both are not transformative in the typical understanding of transformative, although they might contribute nicely. Certainly, we cannot execute both, but which are contributing nicely to that the business model is supplemented in the right corner where, let me say, cooperation with customers in other areas is certainly facilitated and enabled in areas where, although we have the technologies already in-house, we are not perceived as a specialist in this area. So it would be actually nice. Even from a margin profile, it could help us. Both not super large, but kind of okay size. And Michael, please forgive me. I cannot discuss whether the guidance is conservative and if we are twisting this KPI in the right direction and another one in the KPI direction, that this might cause a fundamental change to the overall profile. We were trying to find some common middle ground, assuming that not all contributors to today's pressure on the margin will recover fully in 2024, that although we see some very nice trends, but we would have to assume that not all will materialize fully, that we will have to take some hits in areas where we are not expecting to take hits this year. So that's why I think we are fairly happy with what we did and what, as mentioned, particularly when I'm looking into our forecasts from our customer and in the way how we are utilizing some of our manufacturing lines make me think very positive. And I hope we can. We don't want to set. We don't want to move the bar already. At this point, I hope we can come up with positive surprises in the course of that year. I would like to leave it with that. Thanks very much so far. Great. Thanks a lot. Thank you. We have the next question from the line of Alexander Galitsa from HAIB. Please go ahead. Yes. Thank you very much for taking the question. The first one, briefly on the guidance, whether you're baking any absolute SG&A savings into your guidance. The second one, just a clarification regarding the earnings improvement program from last year. If you can once again clarify, so from the range EUR 5 - 8 million improvement, how much is the annualized effect you've been able to achieve and what was realized in 2023? Thank you. Yeah, Alex, I think that's our only two questions, right? Yes. Okay. Thanks, Alex. Thanks for coming, and thanks for your question. I hope you're doing well. So I was hoping to get around that earnings improvement question because this is super complex, particularly finding the offset point. Sorry for kidding around with that. So let me try to explain the complexity here. First of all, certainly, we budgeted in late autumn 2022. We budgeted 2023 and 2024. When we returned from J.P. Morgan conference at the beginning of 2023, the world was still in order. And we saw some material hits when we discussed sales projections of our customers from February/March on. At the time, we introduced an earnings improvement program where we said we see some potential of savings compared to budget, compared to budget 2023, and compared to budget 2024. And again, budgets which were actually set in autumn 2022. Now, certainly, we achieved some of those earnings earlier than expected, but not in all cases, we achieved all the earnings which were set for two years already in the first year. Now, on the personnel side, we can clearly confirm that the planned earnings impact were already achieved in 2023. Focused price increasing certainly cannot be covered all because we only achieved the price increases in the second half of the year. So on an annualized basis, we achieved what we were intending to achieve. On the, let me say, OpEx side and non-personnel costs, we set our goals, again, being on track, which led to the fact that from the EUR 10-15 million we set for 2023, and actually, at the time, we didn't say how much is going to be accounted to 2023 or 2024. From that level, we achieved, let's say, and it's tough to assess it from an overall basis, about EUR 9 - 10 million already in 2023, which means that there is a leftover of about EUR 5 million. But now, we were setting a new budget for 2024. So we can no longer compare to the budget we set for 2024, which was the basis of the earnings improvement proportion of 2024 as compared to the budget we set in autumn 2022. So that's why we said we canceled that earnings improvement program. The leftover is already factored into our budget, which means it's already factored into our 2024 guidance. Now, we will continue and set up a new earnings improvement program. As I mentioned before, this will give us a headroom of probably, at this point, about EUR 3 million, which are not yet factored in neither in the budget and therefore nor in the guidance. I hope that makes sense. This is only one of the contributors. I think we discussed earlier that we see some abilities for good scalability and still see some abilities as far as inventory levels could be reduced, contracts with suppliers renegotiated, which makes me believe that the structural changes established at the end of last year, particularly in the first quarter this year and as an ongoing process, will show effectiveness already towards the end of the year. I know this was complex, but I hope it makes sense. Understood. And then two more briefly regarding the inventory purchasing commitments you entered, whether pricing on those are much different from what you would normally pay had there been no such commitments in place, and also whether you can provide any color, whether we should expect those commitments to extend beyond 2024. Yeah. No, the clear answer for your latter question is a definite no. And the first question today is so it's not material. But let me say, certainly, we had to nail down prices in order to be able to supply, certainly on a level of higher expectations and of uncertainties in supply chain, which are now minimizing or which are now only effective on a lower level. Certainly, and allow me to open a side discussion, as far as microcontrollers are concerned, certainly, this is a different discussion because certainly, some of the manufacturers discontinued microcontroller lines where we had to do some last-time buys. So certainly, we will continue to run an elevated level of parts, which can only exclusively be sourced in Taiwan. We have some cases where we have three years inventory levels of certain PCs in our warehouse, which are actually required to satisfy the needs because we have to freeze PCs because they are frozen on certain Windows versions, which have to be frozen in order to avoid revalidation for some of our customers where products will be discontinued, and you don't want to validate a new version of software, which is only needed for a new version for an operating system, which is only needed because you need a new PC. So there are some economical decisions which are forcing us to go into warehousing. However, this is a side discussion. So there are some meaningful inventory levels which have been taken not by chance, but purposely, right? So we will continue to live with that. But that's not that side, which is actually harming us. That's the course of business. I'm talking about those elements where structural improvements are leading to procurement on a better pricing point, which are helping us to show higher gross margin. It's not material, but it may bring us from, let's say, a 13%-14% EBIT margin into a 14%-15% EBIT margin downstream from 2025 on. And that's why we are undertaking those measures. Just want to follow up on that and then another question. Given that these inventories are obviously dedicated to specific systems that are meant for specific customers, you would exclude the risk of write-offs here. Is that fair? 100% true. These are products which will be sold for the next 10 years. So definitely no write-offs needed. We had that discussion intensively already. Thank you. The very last question for me is, with the way things are unfolding currently in the industry, baking into your expectation of a revival in the H2, do you expect H1 of 2025 to outgrow sorry, the first half of 2025 to outgrow second half of 2024 in terms of revenue? No, that's actually an excellent question. I'm not brave enough to answer that right away. You know that CEOs of way bigger companies with a way wider spread product portfolio than us are trying to maneuver around that very question. I would actually say that looking into the data we have, and we have tools to actually visualize utilization of equipment, visualize product portfolio of our customer running on those instruments, visualize geographical distribution of where our testing volumes are already going up and where we are still suffering. When I'm comparing that to historical data, I'm actually about to answer that question positively. However, and I have to put that caveat on that, is that I'm working for 25 years in this industry, and I saw some ups and downs. This is not only linked to diagnostics or adjacent areas. I'm talking life sciences in its entirety. I have never seen a period for such a long time where even those ones setting the cadence are unable to predict the next 12 months. So we still see high volatilities and a high degree of uncertainty and unpredictability. We have to put that. We see that the peaks in volatility are declining. But simply, just bear with me. If I'm comparing my expectations about the following quarters, comparing Q4 2023, where I was extremely positive, to Q1 2023, where, again, things were pushed out into the second quarter, clearly shows that high volatility is not a good signal, and we are still in a phase where volatilities are high. Thank you. Very welcome. Thank you. Ladies and gentlemen, that was the last question. I would now like to turn the conference back over to Marcus Wolfinger for any closing remarks. Yeah, thanks very much. Ladies and gentlemen, this concludes today's presentation. As mentioned, this presentation can be downloaded. If you have any further questions, please do not hesitate to call us. Thanks very much, and happy holidays for the next couple of days. Thank you. Ladies and gentlemen, the conference is now over. Thank you for choosing Chorus Call, and thank you for participating in the conference. You may now disconnect your lines. Goodbye.