Good morning, ladies and gentlemen, and welcome to the SAF-Holland SE Conference Call regarding the H1 2021 Results. 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, Michael Schickling. Yes, good morning and welcome to the H1 2021 Analyst and Investor Conference Call of SAF-Holland. This morning, we have published our full set of numbers as well as the presentation slides used in this call. Your hosts today will be our CEO, Alexander Geis, and Inka Koljonen, our CFO. We will start with a presentation followed by a Q&A session. This call is scheduled to one hour. We will try to cover as many questions as possible. I now would like to hand over the microphone to our CEO, Alexander Geis. Good morning, everyone, and a very warm welcome to our today's H1 2021 Call. This is Alexander Geis speaking, and together with our CFO, Inka Koljonen, we will be presenting our H1 and Q2 figures today. Your SAF-Holland performed well, and we, the executive team, continued our profitable and sustainable growth path. Our today's presentation consists of the highlights of half year one 2021, our financial performance, and the outlook for the remainder of the year. Let's get started on the next page with the highlights. Our group sales in half year one 2021 reached EUR 608 million versus only EUR 476 million the year before. This sales increase was driven by all our three regions. Due to an increase of sales, a favorable customer and product mix, our cost discipline, and despite massive raw material increases, we increased our adjusted EBIT from 5% in H1 2020 to 7.7% in the first six months of this year. Our CapEx ratio equaled 1.4% of sales. Safeguarding material availability, and longer logistics ways were the main drivers for a net working capital ratio of 14.8%. Last but not least, our operating free cash flow came in with a positive EUR 7 million. More details and the quarterly distribution we can see on the next page. Starting with the upper left, you can see that our sales increased by 27%, adjusted by FX by 32%. Especially Q2 2021 came in with a strong EUR 323 million, driven by all regions. Speaking of adjusted EBIT, we reached a solid 7.7% for the first six months, with even a slight increase to 7.8% in Q2 of this year. Strong performance despite heavy cost increases on the material side. Absolutely worthwhile to mention that our restructuring costs are significantly down from 9.4 million in H1 2020 to now only EUR 1.1 million in the first six months of this year. Inka will come back to this later on. On the next page, I will start with our region, EMEA. Sales in EMEA reached EUR 361 million, which is a plus of 34% or 36% FX adjusted. Strong increase in all product groups, trailer, truck, and aftermarket. Beginning of April, we already ramped one of two axle plants up to a three-shift operation. Beginning of May, then the second plant, too. Our two axle plants in Germany, our Turkish axle plant, as well as our fifth wheel plant in Germany, are fully booked and we are increasing our capacity further. Special thanks to our sourcing and supply chain teams who manage material excellently. Due to a favorable customer and product mix and a strong aftermarket, our adjusted EBIT came in with 9.8% versus 8.0% the year before. Speaking in quarters, Q1 with 9.6% and Q2 2021 with 9.9% adjusted EBIT. Next page for Americas, please. Here, sales came in with EUR 195 million, which is an 11% increase or 22% FX adjusted. Especially in the second quarter and with EUR 105 million, we had a solid quarter again. Our truck business, which consists mainly of fifth wheels and truck suspensions, is running well with actions underway to further increase capacity, too. Trailer business is strong, which means for us all product groups there, axles, suspensions, landing legs, and kingpins. Also our aftermarket business is running excellently with increased sales. Speaking of adjusted EBIT, we can report a solid 5.5% in H1 2021 compared to 2.6% the year before. Looking at the quarters, you can see a 6.0% in Q1 versus a 5.1% in Q2 of this year. Main reasons are the extraordinary increase of raw material and logistics costs, as well as production ramp-up costs in Q2 in the U.S. A big portion of our OE business is with the truck OEs, where we have a three to six months delay of steel price recovery. That means that our Q2 steel price increases we got, we will get back from our customers in the second half of 2021. APAC on the next page, please. Here in APAC, sales increased from EUR 34 million in H1 2020 to now EUR 52 million, which is an increase of 53% or 55% FX adjusted. Despite another COVID outbreak in India in Q2, the team managed to keep our high market share there and continued producing to overall achieve EUR 25 million of sales in our APAC region in Q2. The good news is that our adjusted EBIT reached 1.7% in H1 2021, versus a negative 6.9% the year before. Q1 this year, with 1.4% adjusted EBIT, and the second quarter came in with 2.0% adjusted EBIT. Now I would like to pause for a while and hand over to Inka, please. Thank you, Alex. Good morning also from my side, and we would continue directly with the CapEx investments. Here we see the CapEx development on a quarterly basis for last year's quarters and this year's quarters year-to-date. We see that the CapEx ratio as of sales went down from 1.9% in Q1 to 0.9% in Q2. That represents 1.4% CapEx from sales for the first half year. We see that we are below or lagging behind our full year guidance of 2.5%. Main reason for this is timing issues. You know that CapEx spending is not a linear topic, but we have here also bigger topics which are punctual then. The reason is also higher growth than expected. This means that the percentage ratio is going down, obviously. Nevertheless, we expect a catch-up for the second half year. Overall, content-wise, we are talking about investing in further automation. Of course, efficiency increase, but in this environment, it means also capacity increase punctually where it's needed. Regionally, we are talking then also about the high growth regions. We are investing, especially in the EMEA region, but also Americas. Less in APAC, which we have been highlighting that here we have a state-of-the-art factory. On the next page, we have the net working capital development. Net working capital clearly driven by growth. You see here inventories going up, receivables going up, driven by growth, obviously. At the same time, the sales of the last 12 months have been increasing steadily and strongly. Therefore, overall, the ratio of net working capital as of sales is a little bit deteriorating, but more or less stable at the high level of 14.4% in Q1 and now 14.8% in Q2. Reason for this is really, and you know this all, we've been discussing this in separate meetings, throughout the year. We really do have a special cycle with extreme tightness in supply chain. In this special growth situation and supply chain situation, we want to do everything to secure availability of products to our customers and to be able to deliver in this high-demand environment. Therefore, we have been really consciously building up net working capital in the first half year, but I really do expect that the situation will ease up to some extent in the second half year. On the next page, we see the same topic from another perspective. We're talking about the cash conversion rate. How do we define the cash conversion rate? We say we come from the EBITDA of EUR 34 million in Q2, EUR 23 million, so these are rounded numbers now that I'm referring to, is then invested in net working capital built up, and that leaves us with an operating cash flow of EUR 12 million in Q2. That represents about 35% of cash conversion. This means that 35% of the EBITDA we have been able to convert to cash, which is then available to invest to CapEx and free cash flow. Again, what you can see here from last year's quarterly development, that in the second half year, the situation and the net working capital trending turns around. This is what we also expect for this year, as mentioned before. On the next page, we see our balance sheet structure and the debt situation. I think here, very positive news. The structure is further improving significantly. The leverage is down to 1.75 x EBITDA. We are already quite significantly better than the defined target range of 2x-3 x. What is the main driver here? It's clearly the strongly improved EBITDA. For this ratio, we use the unadjusted EBITDA of the last 12 months. Here, a clearly positive development. Further improvement is expected as the EBITDA recovers in the future. What does this mean for us as a company? Definitely it increases our flexibility regarding any investments into the future, and here our strategy regarding balance sheet and M&A remains unchanged. Yes, with these remarks, I would like to hand over back to Alex for the market data and for the outlook. Thank you, Inka. On the next page, I would like to summarize how we see the markets for whole 2021. Here starting on the left side with Europe. You can see our new numbers for the truck business, is expected to grow somewhere between +25% to +30%. Trailer also very bullish with a +20% to +25%. Speaking of North America, truck, +45%, still very bullish. Trailer also with a +45%. South America, truck +45%, trailer +20%. Here's a reminder that we have a suspension specialist, KLL, in Brazil, which produces a lot of truck suspensions, and we are quite happy with that. China, truck, somewhere neutral with zero to a -5%, so slight decrease. Trailer with a -5% to a -10% decrease. India, very strong with truck + 115%, and trailer with a + 100%. Here, a reminder that we acquired 2018 company York, which is an excellent suspension specialist. We are located in Pune, India, and we have about 60% market share in the trailer business, which we can really see now in the market developments. What does that mean for us as a summary? That means for us a significant rebound in North America and India. Higher volumes in Europe and South America. China, lower volumes. Next page, please. Dear all, your SAF-Holland delivered a solid half year one. Despite all difficult circumstances like COVID development, logistics issues, and raw material challenges, and given the solid order intake in all our major regions, we as an executive team feel very confident by raising our guidance as follows. Starting with the sales. Sales to be up from a range of EUR 1.05 billion - EUR 1.15 billion before, to now sales of between EUR 1.1 billion- EUR 1.2 billion. Adjusted EBIT up from before around 7% to now around 7.5% in adjusted EBIT. CapEx is unchanged with around 2.5% of sales. Dear all, we are benefiting from the upswing in Europe, North America, Brazil, and India, based on leading market positions. Our structural cost discipline safeguards strong operating performance. We do have a disciplined approach to manage accelerating customer demand and working capital investments in recovery cycle. As Inka said, a further de-leveraging is expected. Material price impacts are included in our revised full-year guidance as well. Our company is in good hands, and more is to be expected. Thank you for your trust in us, and I think we are now open for any questions you might have. Thank you. Yes. Ladies and gentlemen, if you'd like to ask a question, please press nine star on your telephone keypad. Please press nine star if you'd like to ask a question. The first question comes from Mr. Philippe Lorrain. Your line is open. Yeah. Good morning, everybody. A couple of questions from my side. Perhaps first, on the raw materials inflation impact on margins. It looks like EMEA was not really feeling anything, and that the situation there is just really good. Surely there's a product mix effect that in the region since you deal mostly with trailer products with lower steel content and more processed parts. Besides that, is there anything particular that you would like to highlight as well that is really bringing up these margins? Perhaps as well, would you share with us where you see these margins heading to, in terms of midterm potential? Good morning, Philippe. This is Alex speaking. Well, I would like to take that question in regards of EMEA. Of course, we are not guiding any margins in steel prices, or in the future we cannot do that, of course. What we can share is that I think there is no company not having any troubles with raw material increases. I have never seen that like this year. The scrap prices are just skyrocketing. Steel prices are at an all-time high. Well, the secret is basically, and I have to just to come back to what you said about the steel content in trailer products, this is not really quite like you said. Of course, our excellent suspensions, they have also a very high steel content because they are made of steel and all the parts are made of steel. I think first of all, we have a team which is excellently dealing with steel price increases. We of course get them in. We balance that with, also on the sales side, with increases because we have to pass that on. It is possible to do that quicker than on the truck side, which is a delay somewhere around three to six months, by contracts. Basically, we already did some price increases towards our customers on the trailer side, but also on the aftermarket side. What also helps to counterbalance the steel price increases is economics of scale. We have a much higher output. As I said before, in Europe, we ramped up in April, the one plant, the biggest one, already to three shifts. In May, another one to three shifts. All our plants are running with high capacity. Output is really good. Economics of scale are counterbalancing that. Of course, we have to watch that very carefully for the remainder of the year. As I said with my last statement, material price impacts for the remainder of the year are also included in our revised full-year guidance now. Hope that helps. Yeah. That's true. No, I get that on the steel content. I was just thinking like relatively speaking versus a fifth wheel, for instance. It's more like, let's say, via the purchase of processed parts, which means you're not probably just like 100% or directly hit by the increase in the raw materials. That's what I was meaning with the comment. Perhaps like a second question related to the topic as well, since you mentioned that you take into account the raw material situation in your guidance. By how much do you reckon that your prices go up in this environment due to the passing through of this input cost inflation to your customers? I guess probably there's a difference between aftermarket and the OE business. Okay. Maybe I can comment on that. Just on the first part, at least. We don't make our own price assumptions. We are not raw material price forecasting experts, so we really use here official data of the market experts. The second part, Alex, maybe you want to answer on that. Yeah. Well, on the aftermarket side, it's a little bit easier to increase prices, because most of our, let's say, customers in the aftermarket sector are dependent on us. It's a little bit easier to increase prices. Of course, you have to also stick to, let's say, the timing, to do such increases. On the OE customer side, we are not speaking about any data or perecentages because this is internal data, so we are not willing to share that with the outside world. Also here, of course, if you get high material price increases in the company, you also have to pass them on the customer side. You were mentioning as well that you pass on these raw materials price increases basically to your trailer customers a bit quicker than in trucks. Yeah. Why is it so? Is it because the customer base is a bit more fragmented and the customers that you address now tend to become a little smaller versus the past when you had the top three guys in Europe? Well, I wouldn't say that it's easier to pass on price increases to trailer customers than to truck customers. Every company, of course, is first of all, denying any price increases, of course. It's a matter of negotiations and, of course, our customers also see on their purchasing side because everybody is buying steel, of course, for their structures. For the trailers, for instance, they know what's going on. It's, of course, due to negotiations and I think the teams did very well on both on the sourcing side, but also on the sales side. Okay. I understand correctly that you pass through the price increases quicker in trailers than in trucks? Not to all trailer customers. No. Okay. Okay, perfect. The last question is more for Inka. It's about the M&A targets and strategy. Could you remind us a little bit of your typical targets and strategy? I think you were mentioning in the site interview, that you want to be quite conservative now, and you mentioned as well that the strategy is relatively unchanged. Any refresh here would be helpful. Thanks. Yeah, absolutely. The remarks and the strategy has always been kind of also related to the balance sheet structure. I've been saying, and this is always valid, that the priority is to have a solid balance sheet structure. Last year when I started, we were really on, I would say, on the edge or where we want to be. Now, meanwhile, we have managed to improve the leverage ratio, and I would say we are really in a very good situation. I mean, overall, what is the strategy? The strategy is how we deal with this topic, is that we, on a regular basis in the management board meetings, have a look at potential targets, analyze strategic fit, valuations, and so on, and then discuss if we see a potential for us. This is really basically unchanged. Focus and priority is to have good balance sheet structure and, a part of that, on a regular basis, we are reviewing targets. Okay, perfect. I guess now with the situation that you've got, you probably monitor a little more like what's happening in the selling market rather than like a year ago. It's true, and what I also said in the interview, and Alex and myself are aligned on this, and the whole management board, is that we would rather do something which makes really a strategic difference for us. Rather than adding maybe a small topic. That's my view on this. Okay, perfect. I'm back in the queue then. Thanks. The next question comes from Nicolai Kempf. The line is open. Hi, it's Nicolai Kempf here from Deutsche Bank. Thanks for taking my question. I appreciate that APAC is stabilizing right now. Do you think that the slowdown in China posing emission laws could slow this recovery? My second question would be a bit on the guidance. I mean, post H1, you had 7.7%. You guide for 7.5% for the full year. We understand that, from the raw material side, you expect that to ease that a bit because you pass on to your customers. What are the other headwinds for the second half of the year? Good morning, Mr. Kempf. Let's start with APAC. Well, actually basic, our APAC region consists of India, where we have a big production facility. Consists of China, where we also have a very big production facility. Australia, New Zealand, and Singapore for Southeast Asia. This is basically where we have our subsidiaries and also all our manufacturing, all our assembly plants. First of all, I have to admit, I'm very happy that we went from a negative now. We turned the wheel here of coming from a negative last year to a slightly positive 2.0% now, in the second quarter. I'm not happy with the 2%. Our margin in APAC should be not dilutive to the group as a target to us, and we are working on that. We turn now India. We are happy with the development also for Pacific, we are quite happy. Also Southeast Asia. We are still working on getting more market share in China and filling our production there. Once this is happening, and we are targeting only the premium segment, which is air suspension and disc brake, plus export of landing legs into specifically North America. Once we have achieved this, also we then can see that the margins are going up further. As I said, our internal target is that no region should be margin dilutive. Does that help for APAC? That's clear. Thanks. Okay. Maybe Inka you want to answer or come back to the 7.5 in our guidance? Yes, absolutely. Regarding headwinds in the second half year, I think it's general insecurity and question marks about raw material price, but also not only raw material price, but in general, the price inflation. I would say it's a mix of those two. Then, of course, our own mix and product mix has been helping us also in the first half year. This is also quite a situative topic. I would say no specific big headwinds expected for the second half year, rather a general conservative approach. Okay. Makes sense. Thank you. Nicolai. Yeah. As the last, let's say, saying from my side, I think you listened what I said before, when I said we feel very confident by raising our guidance as follows. We want to stay cautious, as Inka said. We don't know what's happening in the second half year with parts being available. I really wonder how our teams manage that we really fill every single shift at the moment. They do an excellent job, and I hope we also can achieve this for the second half year of this year, and then it should be really good. Sounds very good. Thank you. There are no more questions. Ladies and gentlemen, if you'd like to ask a question, please press nine star on your telephone keypad. Please press nine star if you'd like to ask a question. The next question comes from Johannes Ries. Your line is open. Yes. Good morning. You can hear me? Loud and clear. Okay, thanks. Maybe some short follow-ons to the questions before. Maybe first with the price increases compared to the higher cost for materials. Only give us a feeling, do you think with the time lags, you nearly can fully pass the material price increases to your end customers? Because it's at the moment, you're seeing the strength of the market, more sellers than a buyer market. Is it possible, or is it too optimistic, like other companies telling us only 70% or 80% are possible? Well, basically, and to be honest, we do not want to tell you a percentage here, but I have never seen that a company was able to recover 100% of the price increases. This is a very delicate situation where you are in. First of all, you have customers. You don't want to lose the customers. Of course, you also have to fill your productions. I spoke about economics of scale before. This is really important for us as well. Basically, it will be a very high percentage we are targeting to get back from our customers. I've never seen that a company was able to recover 100%. Okay. In the other way, if the prices come down, so you not to have to give everything back to the customer. Well- If you need to buy- Big wish, you don't know our customers. They're really good in negotiations, of course. Once steel prices are going down, for sure there will be talks. Okay, clear. That's clear. The question is only if you have to keep them, it's the same way in both directions. Maybe on the development, the margin development you asked on APAC. How fast or what's the reason that there's still this difference in U.S. to Europe? How fast then we can close the gap? What is to do there? Maybe what makes a difference that you are close to 10% in Europe and around the 6%, 5%, 6% in U.S., despite the booming markets on both sides of the Atlantic? Here, I have to go back a little bit in time. You know that we did a plant consolidation in 2017. Yeah Which totally went south. That means we didn't do a good job at that time. We had big issues then to recover in 2018, 2019. The team was very hardworking in 2020, 2021, by consolidating our productions, increasing the fill rates, but also reducing the complexity of all our products. Give you an example. Basically what we did now in the product group of fifth wheels, we had more than 2,000 different fifth wheel configurations. You have to manage that. Okay? About 95% of those were for 80%, 85% of the sales. Basically we narrowed that down now to less than 500, so only 25% of what we had before. Of course, you lose 1% or 2% of sales, but your cost comes down. We are further working on that. We are not done yet. There is more to come. I'm very happy with the recent developments, not only on the truck side with the fifth wheels and with the truck suspensions, but also on the trailer side. Target is clear that we are not selling any products anymore with negative margins. We're not here to exchange money or to lose money. We're here to increase the value of the company for our shareholders, and this is what we are doing, and we said that in the past as well. We were in the ballpark of the EMEA regions before in Americas, and this is our target. I'm not saying when and how we are going to do that, but this is clearly the target also for Americas and the potential is there. Like I said, no region should be dilutive. Only a side remark, I hear that in the U.S., in the invested space, it's partly harder to find people. Have you any problems with attrition and hiring people in the U.S. f ab? Well, we also face the same issues with that. We have a couple of plants where the availability of workers or workforce is very limited. I have to say what the U.S. administration did with the stimulus package, in my point of view, is not really helping because they pay the money to stay home, and basically they get more money by staying home than getting money while they are working. This is not really helping. This is also what we faced a little bit in Q2 in the U.S. when I was saying ramp-up costs or production ramp-up costs, we had to hire temps at a higher price than before. Yeah, we have to pay the money for this, but we are also now working and already working, or did work before, on a risk mitigation for the future on this. We also have a big plant in Canada. We have a big plant now in Mexico for two years now, and we are further ramping up. Okay. How is the utilization difference between Europe and U.S. in your hubs? Well, if you give me 25% more capacity in the U.S. on the truck side, I would be very happy. We can sell that easily. Okay. We are fully booked, really six days, 24 hours, around the clock, as we do here in Europe with five days, 24 hours. On the trailer side, we are booked not at 100% in the U.S., but we are working on that. As I said before, our focus of our team is to grow profitable. We are not selling anything at a negative margin, and the team is working on that. We now again, lucky us, see a shift back in the U.S., to air suspension. Air disc brake. That was a little bit paused in 2019 and 2020, specifically during the COVID time. We see now a recovery, and we are selling much more air disc brakes now in the U.S. We hope that that continues in the future as well. They have a structural driver. Yes, that's clear. Yes. On APAC, still the most lacking part of your business or despite the improvements you have seen there, is the way so much longer than in the U.S.? China is, I think, the highest problem. India is much more profitable than the average, I think, in APAC. Is that right? Well, we are not guiding any specific production facility or country in any region. You asked before, what is the difference between Europe and the other regions? In Europe, we are the market leader. We have much more than 40% market share. We are the clear dominant player in air disc brake, and Europe is air disc brake and air suspension only. There is no mechanical anymore, less than 1% or 2%. Also the drum brake is less than 20%. If you carve out the U.K., it's less than 10% on for Continental Europe. One, China is even more pushing, and we saw the legislation turning in 2019 and 2020 also, more towards air suspension combined with air disc brake. This is where we are good in. This is what we are focusing on. Also here, we get higher economics of scale. Once in China, we get higher market share in the premium segment, then I have good faith that also APAC we could be happy in the future then with APAC as well. Okay. As I see, underutilization is the highest in APAC now. Clear. If there are any, yes. Not in all plants. Yeah, clear. If the utilization would be as good as in Europe or in the U.S., then we would be very happy. Totally clear. Okay, there was one question, but it's a little bit out of my mind. Was more general. Okay, thanks a lot. Welcome. The next question comes from Hans-Joachim Heimbürger. Your line is open. Yeah, good morning. Two questions from my side, if I may. First of all, after this stronger than expected recovery of the markets in 2021, can you give us a little bit of feeling what is the sentiment and the mood of your customers going into the next year? The second one would be, can you give us a guidance for the full year on the adjustments to the EBIT line you are likely to see? Thank you very much. Okay. May I recommend that I take the first question and the second one leave to Inka then? Speaking of the bullish markets recovery, yes, there is a recovery, but please keep in mind that 2020 was a disaster. Basically in all the regions, trailer and truck build rates went down drastically. Basically, everybody has to eat, and you have logistics, which is increasing heavily due to the fact that during the COVID crisis, the people tended, and they are still doing that. They are ordering online. Everything is being transported in small boxes. Okay. I typically use the example before, if somebody got 200 pairs of shoes, that was in one pallet being transported in a trailer. Now everybody's ordering online and not going to the cities and buying the shoes in the shops. Basically, there are 200 pairs of shoes now sitting on five pallets, maybe. What I would like to say is that the transportation volume increased heavily. There's a shortage of trucks and specifically trailers, in both in EMEA and also in North America. This is why all the fleets are keen on getting more trucks and trailers because the business is there. Also, with the interest rate policy on both sides of the ocean, that also is really helping because money is cheap and the people are investing. We are fully booked in all our plants in Europe. We are fully booked in the plants in the U.S. until end of the year. We even shift or confirm orders into the first quarter already of next year here in Europe, and that's a good sign. We really watch that carefully, but there are no signs that the orders are not continue to come in, which is a good thing. Thank you. Welcome. On the adjustments, we have two adjustment lines, right? This is unchanged. One is for the depreciation and amortization of the PPA. Here, the number is unchanged. We're talking about, for the first half year, of EUR 4.6 million. For the full year, you can expect double of that. This is not going to change so much midterm, because the amortization period is very long. The second line is the restructuring cost line. Alex mentioned this quickly. Restructuring costs are significantly down from somewhere around EUR 9 million in first half 2020 to about EUR 1 million in the first half year this year. For the remaining part of the year, we do expect some restructuring, and I guess there will be need for restructuring also on a regular basis on a smaller level, but we are not talking about similar order of magnitude like in previous times. Really low single-digit number is what we expect here for the full year for restructuring. Thank you. Helpful. The next question comes from [Werner Siegmann]. Your line is open. Good morning, ladies and gentlemen. Two questions from my side. First is the guidance. Are you happy about the momentum of gaining new customers in China? Maybe you could comment on the progress you make on this. The second one is on the aftermarket business, which had a very strong comeback in Q2. I would not guess that these volumes could be seen in the next quarters also, but maybe you could comment whether the H1 sales volume of aftermarket could be a guidance for the total year also. First, speaking of China, I will be then satisfied if a production facility or a country or a region is double-digit margin. This is what we are working on. Okay? That would be really good. In China, we have state-of-the-art facility. It's not utilized fully yet. We're working on that. Also once we have created the population on the OE side with our disc brakes and air suspension, we also can earn money in the aftermarket side. Teams are working on that. It's a way to go. Of course, you cannot change a market within one or two years. As I said, we have a good team. We have a state-of-the-art facility. We have now a good product for that market, and we are working on achieving better results there. On the second question on the aftermarket. Aftermarket is basically very stable for us in normal years, also in peak years. Of course, if you have a shortage of trailers, more trailers will be refurbished, and then you need aftermarket parts. Also in the recent years, our aftermarket, specifically in the EMEA region, also on the Americas region, North America, is very stable. We are surely increasing and slowly increasing the overall sales by keeping our profits there. Also, please don't forget that we pumped in the last couple of years, huge populations of axles, air suspensions in Europe, also axles, air suspension, and fifth wheels, specifically in North America. Those parts need repairs, and for those repairs, you need our aftermarket spare parts. I'm very happy with the development there. Okay, thanks a lot. You're welcome. The next question comes from Sebastian [Demounier]. Your line is open. Yeah. Hi, good morning. Congratulations for your results once again, all the work you've been doing on the margin. Just a quick question, as the order are really booming, in fact. I guess historically the visibility as well has been as strong as it is now. How do you monitor, nevertheless, the risk of any inflated order? We're seeing this in some industries where the clients wants to be sure they get delivered. There is clearly some behavior of inflated order. Is it something that you monitor? How you deal with this? Is it a topic or not? Thanks. Good morning, Sebastian. This is a really good question you are raising. Indeed, we are monitoring them on a weekly basis. We are in very close contact, not only by telephone, but also face-to-face with our customers. We meet with them. What we basically do, we see their production rates. We know our share of their markets. Also then we see if they try to place some orders which we cannot understand, we come back to them. Basically most of our orders are fixed placed orders for deliveries in upcoming weeks. We only have a limited numbers of customers having frozen zones. That means they can shift orders within three to four weeks maximum. This is, I'd say, a percentage. We are not risking any orders that we then could see to be canceled. Indeed, we are monitoring that together with our customers by using their build rates, our market share, and our production capabilities in axles, but also fifth wheels, and we don't see that yet. Thank you. The next question comes from Philippe Lorrain. Your line is open. Yeah, thanks for taking my follow-up. A couple of things. I just wanted to make sure I understand the comment you made a little bit earlier. You said you would be satisfied only if your region is double-digit margin. Do you mean like EBIT margin? Well, you can see the numbers we achieved in Europe. That was hard work. Okay Over the last couple of years. With 9.9% now in the last quarter, we are very close to that. If we have a really good strong OE business. Also strong aftermarket business, yes, this is achievable. This is basically what you asked, or the question was asked, what do I want? What do I see? I said my wish is that a region should be double-digit and earning money and not being dilutive to the group. This is what the whole teams worldwide and globally are working on, and the executive team is working on that. First of all, now we have to turn Americas now. You saw our numbers, 6.0, 5.1. We are trending in the right directions. As a reminder, in 2019, we were break-even or even loss-making. Last year, APAC was loss-making. Now we are slightly positive. We are trending in the right direction, of course, we cannot be happy with APAC with 2%. Of course not. No, the underlying question I got was that you typically have different mixes in the different regions, be it OE versus aftermarket, the product mix itself, trucks versus trailers, and so on and so forth. I was just wondering what you mean with all the regions should be more or less on par in terms of margin, that there is no such big mix effect on the margin anymore going forward, so that the share of aftermarket normalizes across the whole group towards a certain level and these kind of things. Is it the way to see the situation, or is it more related, let's say, to only purely the factory utilization? Well, Philippe, first of all, our midterm target we published last year is 8% by 2023. We stick to that midterm target. We also said profitable growth at that time. I have to repeat myself, a region with 2% or 4% or 5%, we cannot be happy and laid back. We are working hard on getting better in all the regions. Basically, you have regions, you have areas where you are not so much dependent on the aftermarket profits. You also can make money selling OE components. We have niche markets. We are a specialist, for instance. This is also why we bought 2018 York, but only because of the leading market position in axles and suspensions in India. We are also one of the only ones, or of the few ones worldwide, selling axles, for instance, up to 20 tons. Okay? Very specialty products. Of course, if you have a niche market and you are the market leader in this, you have to earn money. This is what we are increasing in different areas. mining sector is booming at the moment in most of the areas, Australia, in Indonesia, Papua New Guinea. This is where our products are running, and we are selling, and we are running under steam. We see good profits also on the OE side. You're not all the times dependent on the aftermarket profits. Okay. I understand that correctly, that it's not at all, let's say this margin trajectory is not going to be driven by normalization, let's say, of the aftermarket levels across the group, but more basically the different profitability levels among the different product groups that can offset this kind of mix. Well, basically, it's easy. Don't lose any money in the OE business. If you are a niche player, also earn money in OE business. If you can get the aftermarket, also increase your overall profitability. Okay. Okay, perfect. Thanks. Welcome. The last question comes from Johannes Ries. Your line is open. Yes, hello. There was a follow-on question I forgot. Only a clarification because you just answered a little bit before with another question from a colleague. Did I get it right? You don't said exactly anything about your order backlog or so, but you said, is it really covering, especially in Europe and U.S., in most parts, without maybe trailer in U.S., yeah, the revenue for the rest of the year, therefore, you have a much better or very good visibility than you would normally have? Mr. Geis, the question before was, if I'm not mistaken, what is the utilization? I said, at the moment, we are running under full steam. I also said before when I was guiding you guys through our presentation, that we are working heavily on capacity increases. For instance, give you a little bit more insight what we did in Europe. As I mentioned before, we have two big plants in Germany, for axles and suspensions. We also have, since 2016, a axle and suspension facility in Turkey. We further ramped that up. For instance, in July, the team was able to ramp up another friction welding machine in Turkey, which is a big, big machine, like 75 tons, which welds the stub ends onto the axle tube. We didn't have that before in Turkey. That was a little bit of a bottleneck because the German plants need to manufacture that axle beam component, and then we send it over to Turkey. By being able now to also manufacture that in Turkey itself, we have a slight release here in the production facilities in Germany, which increases the capacity further. Also in Turkey, we have now increased. We are working on that. Also on the North American side, we also initiated, beginning of the year, some capacity increases and initiatives to do so. We are able now in the next couple of weeks, months, to further increase our capacity. Mm-hmm. Please? Your order book is very good, and you have a good visibility for the second half. Oh, yes. In most of the regions. Yes. That was the question. Okay. Yeah. Mm-hmm. Thanks a lot. There are no more questions. Okay. If there are no more questions, we as the executive team would like to thank everybody listening to us, and especially thanks for your trust, and stay healthy. We talk to you soon. Thank you