Ladies and gentlemen, thank you for standing by. I'm Natalie, your conference call operator. Welcome, and thank you for joining the group Q3 and nine months 2022 earnings conference call of Schaeffler AG. Due to technical issues, you need to accept the security warning first before you can register for the telephone conference. Throughout today's recorded presentation, all participants will be in a listen-only mode. The presentation will be followed by a question and answer session. If you would like to ask a question, you may press star followed by one on your touchtone telephone. Please press the star key followed by zero for operator assistance. I would now like to turn the conference over to Renata Casaro, Head of IR. Please go ahead. Thank you very much, Natalie. Dear investors, dear analysts, good morning. Today, for the third quarter release of the Schaeffler Group, here in Herzogenaurach are present Mr. Klaus Rosenfeld, the CEO of Schaeffler Group, and Mr. Claus Bauer, the CFO of Schaeffler Group, and together with us from the IR team. Without further ado, let's start the call. Klaus, the floor is yours. Renata, thank you very much. Ladies and gentlemen, welcome to our Q3 call. I'm happy to report a good Q3 2022, as you saw in the documents that were distributed to you. Following your advice that we should be crisper, I will try to be very short at the beginning here and do not repeat what you could already read, but give you some flavor around it, and Klaus is going to take over to leave enough room for your questions. On page four, you have the key parameters that all point in the right direction. 20% growth across all divisions and regions, really positive. Gross margin, more or less on the same level like Q3 2021. Clearly room for further improvement. That's also one of the reasons why we put in the structural measures in automotive. EBIT margin, really strong in industrial. We are very happy about that result. It's clearly benefiting from all the measures that we have put in place in the last years. Clearly also with a positive outlook for the rest of the year and also automotive aftermarket showing strength in Automotive Technologies. There is more work to be done, and that's why we decided to start this additional program of structural measures with 1,300 jobs to be reduced, overcapacity being reduced in particular where we have still combustion engine activities, and also fixed cost to be brought down. Free cash flow is strongly positive as expected. EUR 240 million is more or less what you probably expected, and I'm very certain that the above EUR 250 million guidance for the year 2023 too will be met. On guidance, outlook for all metrics confirmed. I think I can say we are pointing to the upper end of the range for the rest of the year. The highlights and lowlights on page five, very briefly. Positive in Automotive Technologies, double-digit growth across the regions and across the business divisions. Strong order intake in e-mobility continued, EUR 4.7 billion speaks for itself, significantly above our EUR 2 billion-EUR 3 billion. Automotive Aftermarket is benefiting from the environment, because in this environment, also for the year to come, people will rather repair cars than buy new cars. All regions growing, and what I just said points to the anti-cyclical nature and resilience of our aftermarket business. We're expecting also here good forward-looking developments. In Industrial, again, the champion in the portfolio, double-digit growth plus improved earnings quality. Also relative to peers, that's exactly the right direction. Stefan does a tremendous job here. It also justifies why we are acquiring and building a pipeline of external growth opportunities. This all together, that's the fourth bullet point, tells you that we are driving our transformation forward. Despite the headwinds that we have, the balanced portfolio pays off, and we will continue to harness the mega growth trends of the future. On the negative side, where am I unhappy? As I said before, Automotive Technologies has to do more work, in particular on gross margin. That's the health indicator of the business. In Industrial and Automotive Aftermarket, that's pointing in the right direction, and we are here in Automotive Technologies sequentially improving. The second bigger concern is cost inflation. I think we can demonstrate in this quarter that we have achieved what we promised in terms of sales recovery. Input costs continued to be increasing, high in certain areas, stabilizing, in other areas, increasing. We still need to wait what the labor side is going to look like. Therefore saving, reducing, substitution, efficiency measures are absolutely necessary going forward. Here we need to do more. Last point, what also is the main theme of this presentation, in this environment with the macroeconomic and geopolitical headwinds, it's all about efficiency, preparedness for a continuously volatile environment, and also strict execution. Next page, six, just tells you the breakdown of the 20%. It just proves that every part of our portfolio, both divisionally and regionally, contributed to the strong growth in Q3. That's positive. On the next pages, you have the different divisions. I'm not going to read that to you. I already mentioned the most important parts. EUR 4.7 billion order intake, let me repeat it. Also in terms of margin, the positive highlight is the 4.8% in Q3. That then leads to a 3% margin for the nine months, 2022, clearly above our guidance of 2.5% and above. You see the breakdown of the order intake on page nine. I leave that to you. Aftermarket on the next page 10. Sales growth still rather moderate. You see the gross profit margin more or less capped and an EBIT margin of 13.1%. More to come here. Some of this margin is clearly a function of the higher selling expenses and logistics and freight costs. Let's see how that develops. Where we are very happy is the way how the aftermarket develops also for the new world. This example here, and some of you saw that when we invited you to Automechanika, on page 11, is the first E-Axle repair solution. That is the new world. With our pilot application for our e-Golf of VW, that seems to be a unique selling point here. Certainly, a unique solution in the aftermarket shows our readiness also for e-mobility solutions in that area. 12, industrial. I think it speaks for itself. 14% margin in a Q3 should not be extrapolated that easy. We are positive that the positive trend as such is going to continue. This clearly shows what I would like to see, 15% growth in terms of sale and also margin improvement. That's definitely the right direction, and it comes across the board. All the efforts from the last years start to pay off, and it justifies, as I said, also external growth opportunities. As you see on the next page 13, Ewellix is well underway. It's the right acquisition. You also saw that we put in place the financing that is necessary here. Klaus and his team have done an excellent job here in this environment to pull off a EUR 2.5 billion refinancing. Not an easy task, but very well executed and exactly right on time. We are also happy here about the financial flexibility. Let me reiterate here for all of you that look at Schaeffler as an automotive supplier. If you just look at the sales, you see 25% share of industrial. If you look at the EBIT, you see that 50% is coming from that area, and that tells you that Schaeffler is more than just an automotive supplier. We are an automotive and industrial supplier, and we will continue on that path because exactly that diversification gives us the resilience that is needed for the next years. Capital allocation, nothing important to report here. Page 14, reinvestment rate at 0.8. EUR 550 CapEx for the first nine months. We are careful with our investments and follow the strict capital allocation logic. I think what we said around EUR 750 for the rest of the year seems to be a very good indicator. Now let's go to 15 and spend a minute here before I hand over to Klaus. This is the summary of our structural measures that we put under the motto, we drive our transformation, in particular in Automotive Technologies. What's happening here is we are seeing and perceiving a acceleration in terms of the portfolio adjustments, mature business, in particular also outside Europe, going down faster than expected. At the same time, new business growing and accelerating. That's why we decided that we also need to further adjust in our overhead cost and also in terms of the footprint. What's happening here is we're releasing 1,300 jobs, 1,000 in Germany, 300 outside Germany. In Germany, it's basically three main locations, Homburg, Bühl, and Herzogenaurach, plus two smaller locations where we will start a dialogue with our workers council about the future of these smaller locations. In green on the page, an important third element of the program is Gunzenhausen. Gunzenhausen is a smaller plant that today already manufactures parts for the automotive aftermarket. We all believe that the aftermarket and the combustion engine components in the aftermarket will live longer than the OEM business, and therefore it's important that we have there the right production concept. You can imagine that a serious production of a million parts for a car maker, for OEM, is something different than lower lot sizes for aftermarket, and therefore, readjusting the production concept in a plant like Gunzenhausen is of the essence, and that's what we're doing here. It's to some extent the first automotive aftermarket plan will come in effect 2024. Clearly point tells you about the way how we think about this transformation in the most efficient way. Numbers are clear. Potential savings, EUR 100 million, you saw that. We need 1.3 times or EUR 130 million one-off transformation cost. That's all well in line with what we did in the past, and we think we can achieve more or less 100% of the savings by end of 2026. That's the program. It is, from my point of view, a necessary step. We are starting negotiations with workers council now. We have a long experience with them. It was very friendly when we prepared for this, and we hope that we get this done in a very efficient manner. With that, I hand over to Klaus, and for the financial results. Thank you very much. Thank you, Klaus. Let me now give you a little bit more flavor on the numbers. Q3 was, in many aspects, the robust quarter that we anticipated, when we also last talked to you. Versus the first half of 2022, we definitely benefited from stronger volumes, continuing price recovery. Also, retroactive lump sum price recoveries in automotive, and as I said, stronger sales volumes, also supported by our tactical inventory increases that we explained in the past. All divisions you have seen are achieving all-time high quarterly sales. You see on the bottom right here, also all regions contributed, as Klaus already said. As it relates to gross profit on the next slide, I already mentioned there was a retroactive price increase for automotive that we anticipated and also explained to you also for the half year results. You see on the bottom right that the nine months margin development for automotive aftermarket and industrial are in line. What might raise some questions is the -4 percentage points change in the Automotive Technologies margin versus the nine months of prior year. Remember, the first half of 2021 was still under the recovery of the COVID lockdowns. Price and volume, and especially overhead cost ratios were still distorted by the savings and special programs at that time. That's about half of this split. Then you have, as we explained in the past, production inefficiencies, sickness rates are higher, absenteeism due to COVID, and the call of volatility that really makes it more difficult to be at the absolute efficient lot sizes, especially for automotive. That's around half a percentage point that explains that deviation, and the rest of that is the net price impact that we bear so far ourselves. When we talk about that and when we talk about the nine months, I explained to you the first half of the year, we still had some negotiations ongoing with customers. You also remember we started these negotiations at the end of last year. These were very tedious, sometimes on a part number level, discussions and negotiations. If you now look at the nine months in total, you see actually a pretty realistic underlying picture also for Automotive Technologies. And as Klaus already alluded to, it's definitely one of the areas that we have to continue our very disciplined work to improve profitability. Next slide talks about overhead expenses. Won't spend a lot of time here. You see from an absolute level, absolutely unsuspecting. You see the ratio of 14.8% markdown at the left chart. This is not new, as you see, due to the absolute spending, but rather the high sales volume in the third quarter. Selling expenses might stand out as sequentially higher, as you see here. I think I explained it already the last time. There's obviously also a price impact in the selling expenses for increased logistics cost. Also, as you can imagine, there's a lot of outgoing freight and logistics, especially from our Industrial and Automotive Aftermarket divisions that have significant volume growth here. Last but not least, also our efforts in regard to marketing activities have normalized and now are at the pre-COVID level, if you will. Also here, EBIT is just following what I already explained in gross margin and especially overhead. You see with 8.4%, definitely a highlight. Maybe also interesting if you now compare that to the second half of 2021. As I said, the first half of the year, especially the first quarter of 2021, was still impacted by distorted cost ratios due to COVID savings. If you compare it to Q2 of last year, then we are at the same range, as we have achieved last year. Obviously then dealing very well with the increased inflationary cost pressure that we have addressed since then and updated you on a regular basis. Let me say, the 8.4% has, if I now calculate the one-time lump sum impact from the retroactive price adjustment in Automotive Technologies, if I normalize for that, then I had to shift around 60 basis points from Q3 into the first half of the year, just to give you an idea how much that is on a group level. The math we walked through last time when we talked about Q2 and our anticipation of this lump sum payment then in Q3. Next page, now talking a little bit more about Automotive Technologies. I think Klaus already mentioned in his overview, the most important points, maybe new on this slide and also definitely interesting, is the outperformance calculation on the bottom left. You see here the picture for Europe, with an outperformance of 10 percentage points. That is as we anticipated, actually, we told you that we think outperformance, especially in Europe, will be above also our target range. That also is testimony, obviously, of our successful price recovery actions, again. If you look at the 9 months, that might be also pulled up the 9 months view here, not the quarterly view. The distortion of the one-time lump sum payment in Q3 is normalized, that is a fair comparison. On the other side, you see a significant underperformance in China, that has really two reasons. First, in a volatile environment, we definitely had that in China with the COVID lockdowns in Q3, then strong recovery in Q2, then strong recovery in Q3. The correlation between car production volumes and our sales is also distorted, at least on a quarterly basis, very difficult to draw conclusions. Maybe even more importantly, because it's more systemic, is the fact, and you are all aware of that, the e-mobility segment in China, especially with the domestic OEMs, increased over proportionally, which means the traditional mature business obviously then decreased or increased under proportionally, but in relative terms decreased. As you're aware, we are not really proportionally represented in the first-generation domestic e-mobility players in China. That will, over time, correct itself, because we now are much stronger, and I would also say proportionally represented, in the next generation. That will take some time until that is washed out. You see, coming to the right side, I'm only talking about the EBIT margin 4.8%. I already told you around 60 basis points is the impact for the total group. You can do the math, around 100 basis points is the one-time impact of the retroactive lump sum adjustment that really concerned half-year one. On a 9-month basis, we are now pretty balanced and have every price negotiated and in place. On the next page, we talk about automotive aftermarket. I think Klaus already alluded to pretty straightforward and very solid quarter. Not the most dynamic from a sales growth, but also from an EBIT contribution, very stable. You see, nevertheless, that we have a quarter-by-quarter, year-over-year reduction of the EBIT margin from 14.3% to 13.1%. You see clearly the reason in the selling expenses here on the bridge on the right side. Included in there is obviously some volume impact, higher volume also increases logistics cost. There's a significant price impact, as I already explained. Also here we have normalized marketing activities that are now higher than prior year, shouldn't increase really from that point on going forward. On the next slide, we go to industrial. Industrial, I think Klaus again said the main parameters here already. On the bottom left, you see some more detail in regard where sales growth really took place. You see that we really have strong growth in all regions and especially in all market sectors. If you remember prior calls, we always had in renewables, maybe a little bit, strangely, not that strong a growth number. I also explained that the reason for that was mainly the subsidy timing in China. Subsidies ran out about a year ago, then some of the demand was pulled ahead, then we fell in a hole. That is normalized now, you see we are completely now in the normalized growth range as all other market clusters as well in renewables. Let me also make one more comment. On the right side, you see the strong EBIT margin with 14.1%. You see a similar impact in SG&A expenses as you would expect, as I just explained for automotive aftermarket. Same reasons, higher volume, price impacts, and increased marketing activity. With the positive volume dynamics and therefore fixed cost absorption also in our production facilities, industrial was able to overcompensate for that impact. Net income follows completely the EBIT, so I would save some time for Q&As and just leave that slide to your own studies. On the next slide, free cash flow. That was a slide, as you remember, that we spent some time in our last call. You see clearly based on the quarterly distribution why we were still negative year to date in the first half of the year. We already anticipated and told you, and explained also, why we definitely are confident to meet our full year guidance and why Q3 will be the inflection point. You see that clearly with our positive free cash flow before M&A of EUR 240 million. Clearly, the strong profitability was one contributor, and the other one, and I already explained that last time to you, was that we tactically increased our inventory in the first six months continuously. I think we also showed the benefit of this inventory, especially in automotive aftermarket and industrial with very strong sales development. I also already anticipated and said there will be no further inventory increase in the second half of the year, that is obviously the second leg of the swing in our free cash flow. Last but not least, in regard to our financial situation and liquidity position, you see with the strong cash flow generation in Q3, but also the EBITDA improvement, we could reduce our leverage ratio now down to 1.1. Again, also pretty much within the range that we anticipated and explained. You also know that the Ewellix transaction has not closed yet. Will close early in the first quarter of 2023. That has a 0.3 to 0.4 times impact on this leverage ratio for some time, and then we gradually bring that down again. You read that last week we secured financing for that deal with a EUR 500 million, five-year term loan. In connection with it, we then also refinanced our revolving credit facility, increased it from EUR 1.8 billion to EUR 2 billion with a term of five years plus one plus one. Maturity then earliest in November 2027. That leads to a secured liquidity position that at this point stands at 17% of the last 12 months net sales. With that, Klaus, back to you. Thank you, Klaus. I will finish with the outlook, that traditionally starts with our market assumptions. What has changed since August is clearly the global LVP numbers. They are more stabilizing. We are expecting now 81.8 million from the market light vehicle production. We are still conservative and saying let's be on the safe side and discounting 1.5. 80 million cars is a good proxy. That would be something in the range of 6% growth. I think the key question is not so much what's going to happen in the fourth quarter, that's more or less over, but how is that going to unfold in the next year. After market, more or less unchanged. Industrial production as well. Clearly, we need to say that in that market, we think are well advised to expect a certain slowdown because the overall expectation for a recession, at least in Europe, is probably something that you would share guidance. As Klaus already said, we confirmed all the metrics that we have. 6%-8% growth, 5%-7% EBIT margin, and above EUR 250 million. I think it's fair to say that we are confident, in particular on the margin side, that we will be able to reach the upper end of the group ranges on the divisions. Nothing changed. There's clearly an element of cautiousness in Industrial. Given the environment, we decided not to increase the guidance at this moment. For all the rest, I think I can confirm what you see here, and the probability is I think high in confidence as well that we will get there. Now to the conclusion page 30. I just repeat the key messages. Strong Q3 performance. Strong quality of earnings in Industrial. Good work in automotive. More work to be done in Automotive Technologies. You all know we're managing through this challenging environment and I'm proud to say that the team here is very focused on getting the portfolio right. This means, in particular for Automotive Technologies, that growing the new and harvesting the mature business is elemental. You saw the little structural measure program that we announced that will help to push forward in Automotive Technologies. At the same time, in Industrial, we are balancing in terms of organic growth and external growth. Ewellix is a super addition to the business. Gets a lot of positive attention from customers. We'll integrate this properly and that opens also new opportunities on the external growth side. Cost management is important, not only in the short term but also in the longer term. The structural measures speak for themselves, and clearly we will continue to work on saving energy cost, gas in particular, but also electricity. You all know that our key selling point has always been the strong cash generation power. The balance sheet is robust with a leverage ratio of around 1, before the acquisition of Ewellix. The fact that we have now adequate financial flexibility is a key to weather the complex environment. Guidance, everything said. The current trading points, as I said, to the upper end. Good start into the October months. Let's now see how we finish the year and then provide you with more color for 2023. You will understand that we're not giving guidance today for 2023, so we can maybe answer your questions there. Let's get the year properly done. We are in the planning season at the moment, and the key is clearly efficiency, preparedness, and driving our execution. Thank you very much. With that, back to you, Renata, for questions and answers. Ladies and gentlemen, at this time, we will begin the question and answer session. Due to technical issues, you need to accept the security warning first before you can register for the telephone conference. Anyone who wishes to ask a question may press star followed by one on your touchtone 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 the handset before making your selections. Anyone who has a question may press star and one at this time. One moment for the first question, please. There are no questions at the moment, and I hand back to Renata Casaro. Thanks, Natalie. We understand that many of the sell side, and probably also buy side as well, may be in overlapping events in other corporates. It could be that there are less questions. For sure, we wait a second. In the meantime, I would just say that tomorrow we start our roadshow. Next week we are also in conferences in Europe. Yes, in case there should be questions, you can always write to us at IR, but I see that there is one in the pipeline. Over to Natalie to let the question in. Thank you. We have one question from Alexander Wahl from Stifel. Please go ahead. Yes, good morning. Thank you very much for taking my question. My first one would actually be on the pricing component. I'm not sure if I understood you correctly, but I understood that the pricing impact for the auto business in the third quarter was only 100 basis points, and that you have now basically received all lump sum payments. Could you just confirm that for the fourth quarter, you do not expect any further retroactive price adjustments for the Automotive Technologies business? My second question, you have a pretty solid performance over the first nine months in your industrial segment, and you just confirmed the margin guidance. You said you want to be conservative, maybe you can elaborate a little bit on where you see the biggest headwinds that made you conservative or so conservative in mid-November this year. Thank you very much. Okay. I'll start out with the first question. What I try to explain is that also connected to our call of the second quarter. There we said our margin in automotive is impacted, because obviously we are already facing the inflation on the cost side, we are still in negotiation on the sales price recovery side with our customers. We, therefore, also already indicated that there will, in the second half of the year, be retroactive lump sum adjustment for the pricing in the first half of the year. That is obviously an impact that we now enjoyed significantly in the third quarter. That one-time adjustment as a lump sum that really concerned the first half of the year, is therefore in Q3, an extraordinary one-time impact. That is an impact for the automotive division of 100 basis points around. Of course, that lump sum payment comes also with the implementation of the prices. Now the new prices on a part number level going forward, it's not a lump sum payment in the sense that now we got one payment and it's good. It's just the lump sum payment to make up for the price adjustment for the first half of the year. From now on, it's normal pricing that's in the systems and will be invoiced with every shipment. I hope that clarified that point. To your second question regarding industrial. It is indeed, as you said, that we have discussed that also you might have seen if I didn't expressly talk about the one bubble on the industrial slide, we also always give you the portion of distribution sales in industrial. As you know, distribution sales are, from a margin standpoint, higher than OEM sales. Therefore, in industrial quarter by quarter, there's always a not insignificant mix impact in regard to how much distribution sales are in that quarter. Now you can say, normally you would assume distribution business pretty stable developing with normal business activities in all the sectors, that's not the case. There are so-called stocking orders of the distribution customers. These stocking orders are dependent not just on the general economic environment, also the stocking levels in their own distribution centers. Mainly also then, also with the cash flow, managing needs of our customers. Therefore, these stocking orders, a very significant part of the distribution business, can be volatile. We have seen strong distribution orders in the second quarter and third quarter of this year. We are a little bit from a mix standpoint, a little bit less, and I shouldn't say optimistic. It has nothing to do with our business. It really is a mix that we think that some of the distribution business for this year has already been done in Q2 and Q3 as it relates to these general stock levels. Now we are a little bit more conservative about this sales mix in the fourth quarter. Okay. Thank you very much. The next question is from the line of Marc-René Tonn from Warburg Research. Please go ahead. Yes, good morning. Thank you for taking my questions. First one would be on the free cash flow, and, sorry if I've missed that, but what I see for the third quarter in particular, you had quite a ramp up or let's say an increase in trade receivables. I wonder whether that's, let's say, purely driven by the increase in revenues in that quarter, or whether you see any change in, let's say, your customers' behavior in paying receivables, let's say, with the change of the general interest environment probably, let's say, leaving its mark there. That would be the first question. Secondly, on the footprint and overhead measures you are doing at Automotive Technologies, is it something you have pulled forward from something which you would have had to do anyway sometime in the future, or is it something which is now really tackling the current situation in specific? Thirdly, I think industrial, the business is holding up very strongly. Let's say given the clouds we see on the horizon regarding the overall economy. I think the three-month order intake is coming down a bit. Perhaps you could give us some indication what you would expect there. In terms of how resilient this business should be in, let's say, a tougher economic environment, going into next year and probably beyond. Thank you. Okay. Let me tackle the last two questions, I start with industrial. You are absolutely right. We should not extrapolate the 14% margin into the next quarters. The environment becomes a little bit softer, but on the other hand, we are very well diversified across different sectors, industrial. The homework is done. We are benefiting from all the cost initiatives of the past. I'm optimistic that Stefan is able to continue the positive development, even in an environment that is a little bit less buy-in and less supportive. Don't forget, we are not managing for quarters, we are managing for the long run. There, the industrial business is definitely on the right track and supports our diversification. I think the second question was on the restructuring measures. Let me say, we always said in the last years, this is a dynamic transformation process in automotive. It is dynamic not only because of the overall environment, but also because of the market situation we have, about the competitive situation that we have, and clearly about the technological challenges. It would be wrong to assume that you can handle such an environment with one big restructuring and that's it. That's not possible, not on the portfolio side, and also not on the capacity side. That's why we now adjusted. We said this is the right moment. There are strong indications that the e-mobility business is accelerating across the globe, therefore it's right now to put in place these measures. These measures are not going to pay off in the first half 2023. These are measures that need still adequate negotiation with workers' council. We think that we can harvest the EUR 100 million, 2026. You see, it's always important to look at the end of such an investment. EUR 130 million restructuring costs also need to be earned. I think, I feel good that we are now out with this, the most important thing is not the announcement, but that this is executed properly. We have ample experience with these kinds of programs, it was absolutely right to put this in place now. Okay, I take over for the first question regarding cash flow and, let's say, timing pattern of the cash flow. It is for sure the revenue growth, and especially the price recovery component of that, then falls also to the bottom line and increases our cash inflow, was one part of it. The other part that I was referring to, which I explained in last quarter's call, was we increased inventory in the first half of the year in the range, and that now includes FX and valuation topics, of course, by EUR 500 million. We already said in that call that we will not increase in the second half year by another EUR 500 million. That is already really indicating a swing of that size, if you compare the cash flow generation of the second half year versus the first half year. I hope that explains the second leg that I indicated. To your question about payment behavior, also in regard to the interest rate environment, we are not seeing a change in payment behavior at large scale. In regard to your other question, are we going into a recessionary environment or not? I would assume that cash will get a little tighter along the entire supply chain and that we have to really manage our receivables very carefully. To answer your question, that is not yet the case. Cash flow seems to be neither in limitation or limited right now along the supply chain, nor is there any red flag or alert yet about change in payment behavior one way or the other. Okay. Thank you. Operator, we have received a set of questions from Christoph Laskawi from Deutsche Bank. The team here said I should quickly read them because they came in by email due to a technical issue. The first question is, "Should we expect further retrospective price adjustments for Q4 or everything done already? Are you in discussions with OEM on wages and energy? Any indication on energy cost into 2023, how much hedge and what do current contracts imply?" That is the first set of questions. Klaus, you are going to split that. The second one is for industrial. 14% is clearly a strong result. How sustainable is this in a lower volume environment? Could you comment on pricing currently now that the short-term order book has fallen below sales? I think, Christoph, we already explained to some extent the industrial question. As I said, don't extrapolate 14%. You know the guidance, 12-14. That's our midterm target, and that's probably a good range going forward. Yes, we said we were benefiting in the first nine months also from the strong market development. Let's see how that develops in a recession or more recessionary-like scenario. However, what we get from our business guys is that they are, due to the broad sector coverage, they think there is the ability to outgrow the market in industrial. Clearly, don't forget, all the measures that we put in place from Space are not fully in the P&L. There is also some support from that angle. And I can definitely confirm our midterm target of 12-14 for the next year's pricing power in industrial is tentatively higher than in automotive. You can imagine, Klaus also talked about the distribution business, very important part of that. Again, we are confident on the midterm for our industrial business. In terms of price adjustment, let me quickly talk here about energy, then I hand over to Klaus. The energy in particular, gas, electricity side is very interesting. Lots of dynamic changes. You saw what was decided in Germany with the gas price and electricity price break logic that has really started to pay off in terms of calming down the market. Gas prices, spot prices, are significantly reduced compared to the peak that we had in the summer. Same holds true for electricity prices. However, ladies and gentlemen, we will not go back to what we were used to in 2018 and 2019. The key answer to this is, let's save as much as you can. On gas, I think, Klaus, we can say we will achieve the 10% target saving that we demanded from our plants and our businesses in this year. We'll continue to save in the next years. The target is 30% until 2025, compared to 2021. That also has to do with a fuel switch. One of the key logics here is to electrify parts of our production, and that means more electricity need. The answer there is a similar saving program. We're still working on this, but also an investment into more own energy production. I think I can say here the target is for the next years until 2030, that 25% globally of our energy needs will be produced by ourselves. That's an investment, but in the long run, with what we're expecting, it will definitely pay off. How that translates into prices, ladies and gentlemen, is a second question. We have done well this year. Klaus explained that. Achieved more or less all our targets in all the three divisions. In particular, the guys in automotive have done a superb job. That was new territory, and they really did it well, not destroying customer relationships and, on the other hand, achieving the targets. You can't do this every quarter. In automotive, we will continue to look at this and then see what we're going to do in 2023. It's too early to give you, Christoph, more information at the moment how the sales recovery action will look like for 2023. What I can say, there will definitely be sales recovery action. Maybe let me add to that. That I would call it wave 2. I think the gap in answering your questions was still related to wave 1. You asked, is there still any retroactive adjustment as a one-time impact anticipated in Q4 of this year? There will be smaller adjustments, but it will not be at the size and volume that we have seen here in Q3. I would say, and I think I said it, if you look at the 9 months now, we are pretty much at that level, that the pricing actions are as if the pricing actions wave 1 would be fully executed. There's a little bit of a catch-up effect still to come in Q4, but not significant, as I said. Okay. Yeah. There was 1 more question. There's 1 more question that Renata just handed over from J.P. Morgan, Akshat Kacker. Hopefully, I spelled this correctly. The question is: Keen to hear what rating agencies are saying if you're targeting on getting back to investment grade. Maybe I do this quickly. We've just been out with the numbers. The numbers will be shared with rating agencies as usual. So far, they confirmed ratings that we had. Let's see what that means now. We are not expecting any bigger changes at the moment. Is there a target to get back to investment grade? We have always benefited from the position we are in. At the moment, I think the differential between investment grade and where we sit at the moment is not that big. The superb delivery of Klaus and his team on the refinancing shows that. We don't see that as a strategic thing. If it goes in that direction, fine. For us, the most important thing is that we get the rating drivers right, and that's clearly margin, cash flow. As you know, we are fully focused on this. Let's see what the risk rating agency assessment will look like. We feel confident with where we are playing at the moment. We have another question from Edoardo Spina from HSBC. Please go ahead. Good morning. Thank you for taking my questions. I have three quick questions. The first on financial cost, if you can remind us how much of your debt is on variable rates, and if you expect the financial cost to increase in 2023. If you can give us a guidance on that, would be great. The second question is on steel and raw materials. I believe the price has passed the peak, so can we expect to see flat raw material prices for you, raw material bills in 2023 or even a decline in raw material costs, excluding the energy and logistics? The final question is on energy costs. If you can give us some visibility on the new prices you're paying, but particularly if you can highlight the difference by region, if we should expect the regional profitability will be affected by the energy cost difference. Okay. I start out with the financing cost. Our terms and conditions with the new financing are almost unchanged. The margin is a little bit higher. With having said that, obviously, it's on a flexible base rate, and it's now our task to also make that as economically sound and predictable as possible with instruments around it. In regard, I start with steel and energy. Klaus, you might want to add. The energy cost, it's clearly, as you indicated, it's extreme regional differences. We are, in this discussion, very Europe-focused and centric. The problem is in Europe. There's no issue in volatility or significantly increased prices, any of the other regions. Even within Europe, we have a significant variety of topics and issues between Western and Central Europe, then Eastern Europe, in regard also to the capability of really entering into longer term price fixed contracts. I think as we stand here with the gas and energy prices having developed as they developed in the last two to three weeks, it doesn't seem to be as critical anymore as it was two, three months ago. It's definitely on our risk management agenda. We are talking about this almost every day and as a complete executive board really every other week. I think we have a sound strategy how to secure supply. That's the first one. I think we can report that we have secured supply for 2023, 100% in every single location. Then secure that supply then also at a reasonable price. The discussion here in Germany about gas price frames and so on, is also impacting the tactics in that regard. You can be rest assured that that is a top priority on our agenda here to assess the environment and draw the economically best solutions out of it. In regard to steel, indeed, steel prices relaxed. It's always different to look at steel prices at the spot price or when you talk about forward prices for longer term. It's no question for wave 2 right now, it seems, for wave 2 of our price recovery topics that we talked before. The cost drivers are different ones than they were in 2022. Klaus, I don't know. Maybe I can just add to give you one figure. The debate about steel prices by regions, Edoardo, is a longer debate, but I just give you one indicator for some color around what Klaus said. If you look at the price for hot-rolled coil in Europe, the peak for that was sometime at the end of Q1, beginning of Q2, around EUR 1,400 per ton. That is down to somewhere in the EUR 600 to EUR 700 range, and that's now a level that we were dealing with at the beginning of the year 2021. This significant peaks and volatility is gone. However, this is not clearly reflecting to some extent the recessionary trends. Don't forget, this is still a volatile environment. In particular the steelmakers will need to digest the high energy prices. There's no reason to believe that everything will be fine in 2023. We will still need to deal with a volatile environment here, and it's something that we know well. We are sourcing from dozens of different steelmakers. I can say, as Klaus said, that's not the predominant issue for the next weeks and months to come. Let's watch out carefully how this material price develops. There are also other raw materials that are critical. For us, I think we feel good about how we handle this and hedge this going forward. Maybe this gives- Thank you. Yeah, you're welcome. Next question is from the line of Himanshu Agarwal from Jefferies. Please go ahead. Hi. Himanshu from Jefferies. Thanks for taking my questions. The first one is on the restructuring measures. If you could just talk about the timing of these measures. Are these going to be front-end loaded or back-end loaded? Secondly, I just wanted to come back on the energy and wage inflation. Based on your negotiations so far, how confident are you in terms of passing through increases in energy and wage inflation to your customers? Also, if you can talk about the potential increase in 2023 on those two. Thank you. Let me start with your last one. I'm sorry to say, we are not guiding for 2023. We have agreed this before the call and said let's see how the rest of the year develops. We will give you proper guidance. That is also why I cannot really say something about sales recovery action. The only thing that I can say is that we will continue with that based on the learnings from the year 2022, but it would be premature to give you anything more than that. Help me again, what was the first question on the restructuring measures? Again, you have seen from us several of these programs. This will have a similar structure in terms of profile, in terms of when do we achieve what. You can basically assume this runs according to the experience from the larger program Space. That means 2026, let's say more than 90% of what we want to achieve should be in. It depends on the negotiations. For me, let me also stress this here, it is very important that this is done in a socially responsible manner with our workers' council. While some of the capital markets always think that that is the soft version, that is not the case for us. It is important to get the things properly executed, and we have always done well when this is handled carefully and consistently. Therefore, the profile of this, just copy our last bigger program from 2020. Understood. Thank you. Just a quick clarification question. In terms of the price increases that you have realized in this quarter, including the retroactive pricing, can you just talk about the cash flow impact of these price increases? Are you receiving the cash in as you are realizing these in the P&L, or are these still sitting in your accounts receivable and you will get the cash in next quarter in Q4? Thanks. As you can imagine, a lump sum payment for the first half of the year, we already waited a long time due to the negotiations. Cash inflow and EBIT effect is not simultaneous but very close. For modeling, you can assume that it is pretty much also cash flow impact full immediately. It's basically synchronized. It's not that we book the revenues and cash is coming in later. It was not a last-minute exercise in September. It is well synchronized over the months. Thank you. You're welcome. We have a follow-up question from Edoardo Spina from HSBC. Please go ahead. Edoardo. Hi. Sorry, very quick follow-up. Hi. On the regional differences, I was curious about one thing. If you're facing different cost inflation in Europe compared to China, for instance, does it mean that you are pursuing a different pricing strategy in Europe compared to China with stronger price increase in Europe, for example? Thank you. Well, the pricing strategy, and again, it's different by divisions, for sure. Pricing power is a function of the business model and where you sit in terms of your competitive edge. It's also different in regions. In certain parts of the world, you cannot execute things that we executed in Europe simply because of what customers are willing to accept. I would leave it here. The cost drivers are also different. Still, it's at the end of the day what the customer is willing to accept and how competitive the market is. Okay. Thank you very much. You're welcome. Okay, I think we are finished. Thanks a lot. After it started slow with questions, we had a lot of questions now, what is good. Thanks for the interest. I can only repeat one more time. These are interesting times, and I think these are times where there is a potential for strong companies to get even stronger. We want to be on that side and not on the other side. I feel very confident with the execution power we have with what we have shown in the past, that even if there is a recession 2023, a diversified supplier with a balanced portfolio will make it. We're looking forward to the next call and to road shows that are upcoming also at the beginning of the year. Thanks for listening, and thanks for your support throughout the year. Bye-bye. Ladies and gentlemen, the conference is now concluded and you may disconnect. Thank you for joining, and have a pleasant day. Goodbye.