Good morning, ladies and gentlemen, and welcome to the Analysts in the Investors web conference regarding the Stabilus results in the second quarter of fiscal 2025. At this time, all participants have been placed on listen-only mode. The floor will be open for questions following the presentation. Let me now turn the floor over to your host, Dr. Michael Büchsner. Yes, good morning and welcome, hello everybody, to our quarter two call today. You have for sure our interim CFO, Mr. von Wietersheim, in the call, then also Andreas Schröder in Investor Relations, and as stated before, myself, Michael Büchsner, being the CEO of the Stabilus Group. We're happy to lead you through a presentation at the beginning, and then we'll open the floor for a Q&A session as always. We're happy to announce that in very rough water, we are delivering constant results, and with a revenue increase of 7.8% year over year, we delivered a very solid performance. For sure, as you all know, the economical environment is somewhat challenging, and overall, the market is in decline versus last year, so we are also affected by that. Overall, we see an organic decline of the market and our business of about 5%. That's something we'll talk about later also. Region by region, our initiatives are on to further improve our profitability in the second half of the year. They are mainly centered around efficiency increases, but also in terms of negotiations with our suppliers and customers. We're making good progress in difficult times, also with tariffs in place and whatnot. However, for the second quarter this year, we achieved an EBIT margin of 11.2% and first half of the year, 11.4%. That's for sure a very profound and good result for the time being, considering the bumpy road we are all on in these economically difficult times. The market environment continues to be somewhat challenging for the rest of the year. That's our expectation, but we are fighting all these effects. You can be sure about that. For sure, we confirm our guidance again this time around. You all know on December 9th of last year, 2024, we published our guidance, and our guidance for the year remains $1.3 billion to $1.45 billion in terms of sales, and then adjusted EBIT margin of 11% to 13% with a free cash flow of $90 million to $140 million. On the next page, we jump directly into one of our highlights of today's presentation. We are now having our DESTACO Group with us for a full 12 months. In these full 12 months, we see a very nice sales of €187 million, which is round about $200 million in terms of dollar, with a nice EBIT margin of, as we said at the beginning, it would be in the range of 20%, so 19.6% in very difficult times. You know that the automotive automation and industrialization market went down by about 6%, 5% to 6%. With these solid numbers, we are actually outperforming the market in the industrial automation sector by about 6% with our business on hand. For sure, the free cash flow generation of DESTACO business is very solid at 19%. That means the free cash flow generation of the past 12 months was $36 million. Also for sure, you see this constant performance in all the different quarters if you look back since the first day of integration. Some more details on the next page. Actually, as I said, for the last 12 months, we've been consolidating DESTACO numbers, and it was really a success from the beginning. Our customers enjoyed this whole journey. Just to give an example, our colleagues from China were particularly happy, as well as the other regions, and they approached the customers. Actually, we were happy in the same way as our customers. Some of the sales teams even said, "Hey, come on." Our peers of the other customers on the Stabilus side versus the stakeholder, they asked us from the early days, "Now it's great to have DESTACO guys on board. We can buy all kinds of products via the sales channels of the Stabilus Group and vice versa." This is also why we highlight always our cross-sales activities, because indeed our sales teams of Stabilus are basically walking out to the customer and sell DESTACO parts. On the other hand, the parts of the DESTACO Group are sold by Stabilus and vice versa. This is something which is particularly important to us. Yeah, it was a big success, as I said, and this leads to solid numbers over the course of the second quarter. As you can see on this chart, we've been increasing our sales by 7.8% in rough waters. Yes, particularly if you look at the base business we have on hand, we all know it's impacted by the economic downturn or softness we see currently in the market. That means the organic growth was basically negative with 5% over the course of comparing quarter two to quarter two last year. However, sales after all increased from $313 million to $338 million over the course of the quarters, quarter two 2024 to quarter two 2025. The adjusted EBIT margin is a similar thing that remains constant within the range of $37 million to $38 million. The M&A effect for sure is a big one. It's $8.8 million on the EBIT margin contribution. The business of DESTACO is very healthy, and we also see only a small portion of integration cost. The incurred integration costs in there are $0.6 million over the course of the second half of the year. As stated on the previous slides, our performance is very solid. The integration is concluded, and we see a solid performance of DESTACO group going forward, and the integration is done. The last portion of integration was indeed the integration on the IT side, which we performed. The integration on the IT side was extremely important because we need to harmonize our system landscape. Some of the systems which we found that DESTACO were basically outdated, which actually is beneficial for us because we could switch them right away to our systems, which are at the end of the day modernized systems. If, for example, it goes into the customer relationship management, we've been hooking our colleagues from DESTACO on to the latest and greatest technology we have at the Stabilus Group to make also the cross-selling activities a big success. In terms of profitability, we ended up with $11.2 million, which is less than in the prior quarter. This is kind of a switch driven by tax payments between the quarters. Overall, over the course of the years, you will see a different number even in the first half of the year, which you will see on the next slide. You see a very more constant number. Adjusted free cash flow. Here, we are fighting the current market circumstances, as you all know, with softer sales. Also, the cash flow generation is somewhat impacted. However, with managing our net working capital in a good way, we are on good track here also to achieve our free cash flow guidance, which we, as I said, confirm. On the next page, you actually see the first half of the year. I mentioned already the profit being somewhat on similar levels, but start with the revenue. Let's start with the revenues. It's basically a similar picture than you see in quarter two. That means over the course of the past two quarters, we are actually moving sidewards. We are delivering a constant performance. Our sales are pretty much impacted by DESTACO acquisition, as I said. That's a very positive sign that DESTACO acquisition lifts and improves our sales line. Independent aftermarket is a very good driver. We'll talk about that later because you know, in difficult times when people wait to buy new cars, they typically maintain the current car fleet. That's something which you see in the area of independent aftermarket. That's something which at the end of the day drives not only our revenues, but also the EBIT performance. So EBIT performance half year versus half year, it's at 11.4%. If you compare that half year one result of '25 to the half year one '24, it's at similar levels. Actually, in absolute terms, we did for sure increase the EBIT margin driven by our stake integration, which contributed in the first half $17 million to this healthy EBIT margin. As I said, overall, over the past 12 months, the EBIT percentage was in the range of 20% of DESTACO, which is extremely helpful. It's exactly what we've been planning on in terms of DESTACO. So the integration costs were $1.5 million for the complete half of the year, which underlines that the integration costs somewhat fading out because you know, for the first half year, it's $1.5 million. For the second quarter, it was only $600,000. So that means we had $900,000 the first quarter, $600,000 in the second quarter. This is just fading out now. So the integration, as I stated at the beginning of the presentation, is somewhat fading out and coming to an end. It is a great success. In terms of profit, as I said before, we are actually on the level of similar level than last year, 3.8% versus 4.9%. So in absolute terms, $30 million versus now $25 million. There's some shifts in terms of financing costs, some fixed impacts along the line. At the end of the day, a healthy and stable performance here as well. You see the free cash flow is basically impacted by one effect. I'll talk about that later on. There is a higher CapEx, which you will see only in the first half of the year. Why is that? Because we all expect that we see the effect of our operational improvements over the course of the year. So for all these automation investments, we actually had to put these investments, have done these investments in the first half of the year to gain from these benefits in the second half of the year as our year is back-end loaded in terms of performance. You know, I said at the beginning that customer and supplier negotiations and also the important factor of operational improvement is rather kicking in in the second half of the year. So we need to pave the road for that. That's why we took a big chunk of our investments into the first half of the year, which you see in the CapEx numbers. But this actually will normalize towards the end of the year because this is just a pull ahead effect. Our overall target of 6% CapEx, 5% to 6% CapEx for the whole year is still on, as I said. Throughout the year, we took the decision to pull it ahead in the first quarter to have all these nice automation effects on our performance of operative performance in the second half of the year. That leads us to the next page. I'll talk to you a bit about the different regions. One effect for sure sticks out. There is America's pretty much up because of DESTACO consolidation. It's 16.8% year over year. You know that Stake is home turf is North America. That's where Stake is coming from. Second largest area is EMEA. Here it's also driving 4.8%. You see an effect in Asia Pacific, which is flat and neutral almost year over year. This is something which is pretty much driven by the automotive industry there. As you all know, there is the Western world customers who are actually suffering the local production of EVs. We are withstanding that forces. That's why we are at the end of the day in solid and stable performance year over year. We also contribute a lot via Stake, which has double-digit growth in Asia Pacific. However, in a nutshell, bottom line, you see this effect of the automotive industry suffering to a certain extent also in the Asia Pacific region for us. Bottom line is a mixed picture between the regions for sure. Actually, America's leading the crowd and then EMEA and Asia Pacific. You, at the end of the day, see a somewhat similar picture in terms of the EBIT margin. You know, all the businesses we have on hand is a business which is pretty much driven by volumes, right? And growth. That's why you see that also hitting into the bottom line. Our EBIT margin is 11.5% in Americas, also here impacted by this take. In EMEA, it's on 10.3% and 12.2% in Asia Pacific. As I said, there we see currently the market being somewhat soft on particularly the upper segment, Western world car manufacturers. This is something which you see on this chart. Talking a bit more in detail about these different regions, you see here the North American region or Americas in total, nice growth year over year, $109 to $127 million. We see some impacts here for sure on the automotive industry. The automotive industry's impact you see in all different regions. However, here organic growth in particularly independent aftermarket areas and for sure automation sector for our business. The absolute EBIT number is 11.6% in last year, and now this even increased to 14.7% EBIT margin, which leaves us with 11.5% EBIT margin, which is above and beyond last year's performance. As I said, to the vast majority also driven by this take. After all, Americas is delivering a very solid performance these days. We all know how bumpy the road eventually could be going forward with this uncertainty of additional tariffs kicking in. But we'll see how things are coming. I'll talk about the tariff situation in a later stage on one page, which at the end of the day also indicates as we do the right measures with our business to make sure that we are not suffering from these tariff increases. For sure, it's a bumpy road due to the fact that also driven by the tariffs, not only the first level or direct impact could or could hit everybody, but also the secondary impact, as you all know, of a decline of the general economics in America could eventually cause some bumpy road in the future. I'll talk about that in a bit. Before we go there, we also spend some time on the EMEA section. In EMEA, you see that we increased our revenue from $137 million to $144 million. We see some lower revenues also here in the automotive sector. Also, some of the areas like independent aftermarket is rather strong and for sure industrialization is going upwards. After all, you see here an impact of our business of the automotive side. We know that particularly when it comes to EMEA, the automotive business impacts the whole business equation for everybody these days. We are nevertheless having a solid performance. We have a 10.3% EBIT margin, a little softer than last year to a vast majority also driven by these lower sales of POWERISE driven by the automotive environment in EMEA. Last but not least, let's spend a bit of time on the Asia Pacific region. Asia Pacific in terms of sales, stable, driven by this take because you see here that with the performance of this take, we achieved to be somewhat flat year over year. However, the organic growth is minus 9%. This is pretty much driven by automotive. You know that BYD is very strong. BYD is producing the POWERISE systems in-house. That's one effect. But also in after all, Tesla is feeling some pressure there. We trust that over the course of the years with different priorities in the Tesla leadership, also, this number will go up again that Tesla is getting back to the market. However, you know that Tesla is one of our biggest customers. You see something happening there. We defend our sales line. That's very good news. However, we see also here on the adjusted EBIT side, some impacts in conjunction with kind of a price pressure we see currently in China. We talked about that several times that over the course of the years, particularly in China, in a market which is under pressure, we feel some pricing pressure. This is also why our business here is loaded towards the end of the year. Because as I said at the beginning, all these improvements we are doing in terms of negotiating with the suppliers, technical changes, but also efficiency increases, we do over the course of the year investing a bit more in the first half of the year to gain from these efficiencies in the second half of the year. This is something you will see down the line also on the EBIT side. Aside from the revenues, you will see on the EBIT side an improvement driven by that. We switch gears here and talk a bit about the business development by market segment. One thing which is very clear, this is what we wanted to achieve. We multiple times told everybody we want to move towards 50% automotive and 50% industry. Now with the full consolidation of this take, you see that here in a very nice way because the automotive portion is at the end of the day at 54%. Moving to the 50%. There is this big growth area of industrial business, which we are really proud of, right? Because that's our strategy. That's a strategy in motion. That's strategy, the strategic portion we wanted to work on, we wanted to materialize upon. This is actually happening. You see that here on this pie chart that the automotive portion versus the industrial portion is almost equal. There is, however, also some things we'd like to highlight here because on the industrial machinery and automation, for sure, it's four times more sales now than in the past quarters and past year at all, driven by DESTACO integration. But also very important, it's exactly the right strategy to put the money onto industrial automation because even, and I tell you, even without this takeover, this segment is growing for us 5% year over year. That means the automation sector and the industrialization sector is a sector you want to be in. I just give you a reminder whenever we talked about this takeover and this takeover integration and the business rationale in the first place, it's the mega trend the Stabilus Group is following. The mega trends are labor shortage out there, labor cost increases, and reshoring activities when it comes to industrial production. That means the kind of governments or government-supported economical reshoring activities lead to the point that you put production from a low-cost country back to a high-cost country, right? Everybody would wait and say, "Oh, how is this working out?" You definitely need automation to do so because without this automation, you're just lost because you can never deal with the efficiencies you need. You can never deal with the cost point you need, and you don't even have the people who should do the work wherever you put then and reshore the activities of operations. There you definitely need automation equipment. We see that in our shop floor, and I said before that we've been pushing our investments into the first half of the year because we want to gain from these efficiencies in the second half of the year. Everybody's doing that. This is also why this sector of automation is particularly strong, not only for us, but overall in the world. This is even independent from this take because, as I said at the beginning, even without this take growth, we saw that our automation sector was growing 5% in the second quarter of this year. The strategy which we developed is spot on with what we want to achieve. The industrial machinery sector and automation sector thereby is four times bigger than last year for sure. Also very important is distribution, independent aftermarket and e-commerce. Not only that, e-commerce is growing by double digits percentage these days because people tend to buy more, as you all know, web-based. We are following the trend and sell more and more in electronic way. We have even tailoring programs where you can design your own Gas Springs and POWERISE systems and order them, which is highly profitable for us. On top of that, you also get to the point that independent aftermarket, we sell many, many different components also now on the POWERISE side to all OEMs and not only to the OEMs, but also to the different sales channels to gain from this opportunity that people maintain their car rather than buy new cars along the line. Something which is for us an area where we do not want to grow too much, and that's why we've been pulling out was basically the furniture area. You see a decline here, 14%, because there the market prices are not to our expectation. The profit expectation from our business is higher than the average you could gain in furniture. That's why we rather concentrate on the industrial machine and automation sector. Energy is somewhat a mixed bag because this pretty much depends on how the governmental regulations in North America rule out. We're in good position here concentrating also on South America. We'll see some upsides here for the rest of the year. Aerospace was impacted by the Boeing strike, but also here we see for the second half of the year good improvement in our top line. On the next page, we talk about a leverage ratio. You know that our target is to stay below three for the year. For sure, with lower sales, we've been seeing that going up a bit, but we are confident that we still stay below three. You know that with the banks, we've agreed for our covenant of 3.5. That means we have enough headroom here. We are on the safe side. Nevertheless, in conjunction with working capital, this is a very high focus for us for the rest of the year. We manage our working capital and all levels we have to stay below three. On a midterm, we want to stay below two. And then out there in three years, we want to be below one again. And we will for sure. That's what I'm convinced about achieved this number for the time being. We will, or we are staying below the 3%. That's what was important to us. One particular driver is the working capital. If you remember back when we talked over the course of the last quarters, I always said that 20% working capital ratio is important to us. Working capital to revenue ratio, 20% is something which is in our ballpark. This is something which we, at the end of the day, see our targets on a midterm for the complete financial year will be somewhere in between 17% to 20% working capital ratio. It's very healthy that we are driving our inventories these days because with all this volatility in the market and soft markets, that's something which is definitely important to look upon. We are actually driving these points. Yeah, leads us to the next section, which is investments in focus on our CapEx rates. As I said at the beginning, we've been pulling ahead the CapEx to the first half of the year because important this year is to gain again from economies of scale in terms of efficiency increases in the plants. We've been investing a lot in robot systems, cobot systems. Also in the first half year, we still invested in Direct Actuation, some programming stuff, some software stuff, which we actually have been paving the road to success. You for sure read the news in the press that we won another big contract with Mi Auto in China. This is extremely important for us because we are not only winning with our new technologies, we are winning with our new technologies even in Asia Pacific, in China, where you see this competition being so strong. All this is possible with our latest developments of technologies where we invest some money still in, but also in terms of equipment. We've been pulling ahead some of the equipment in the first half of the year. That means our full year guidance also in terms of CapEx in the range of 6% is still on. However, we've been pulling this ahead in the first half year. It was quite some work to install all this automation equipment in all the different areas of our business to make sure that we harvest the fruits of this in the second half of the year. This is also why you see that our business is somewhat back end loaded because many of these effects will kick in in the second half of the year. This leaves us with the guidance page, only two more slides to come before we go into our Q&A session this time around. You know that our last year's benchmark was the $1.3 billion, 12% EBIT margin, $132 million in terms of free cash flow. We are on a solid track towards that. Our guidance for the year is confirmed with $1.3 billion up to $1.45 billion, 11% to 13% EBIT margin, and $90 million to $140 million in terms of free cash flow. The market environment continues with this guidance, somewhat volatile for sure. Nobody really knows at this point in time what the next 12 or 6 months even will bring us in terms of market environment, which is pretty much driven by the US tariffs. Andreas already was jumping onto that desperately because this is for sure something which, and you know that all from all the media reports and press reports, could move the needle significantly in the second half of the year. For the time being, we are very solid. Why is that? We actually have tailored our business always to the point of in the region for the region, as you know. Whenever we've been talking, we talked a lot about that our suppliers are following us, that we deliver or produce in the region for the region to have as small or as possible impact onto our business with these tariffs. This is something which helps us now particularly. We see for sure a low visibility of the customer demand because there is this secondary impact on the tariffs because you never know how the overall economy for sure, and you all know that, is developing in the second half of the year based on these tariff impacts or tariff discussions out there. Sometimes things change over the weekend. But for the time being, with the current tariffs in place, we see an overall all in effect of $5 million to $10 million. So what means all in impact, and we're having these discussions now several times in all of the investor meetings we're having currently, and many of you also call Andreas once in a while to talk about that. That means with the current scheme in place, we are exposed to tariffs for steel and aluminum from Europe, but also to a certain share for imports from China to the US and China to the different regions, which underlie also tariffs. The overall effect is $5 to $10 million. This is not the net impact. The net impact is about one third of that currently, which we have in our forecast, it's only $2.5 million roundabout. Why is that? Because for sure, these tariffs get passed on from us to our customers. Like with all other price increases, this basically goes along with some nasty discussions you're having. We walk into the door of our OEMs, we walk into the door of our industrial customers, and then we talk to them about the tariffs. They are open for a discussion because they know that's nothing we can influence. They're open for a discussion because they know eventually they get a tax deduction whenever they do their company taxes. This is why we typically invoice the tariffs in a separate line item. We overall, basically for the year see $5 to $10 million impact. Everything else but $2.5 million is passed on this year to our customers, driven by this delay in terms of negotiation because at the end of the day, we placed all these increases at the customer, but we see a negotiation delay of three to six months. That means whatever you see now on your bottom line in terms of tariffs, you walk into the doors of the customers, then you start this negotiation, which typically takes you three to six months. The net impact for this year, because we cannot cover and basically close everything with the customer and get everything paid, the net effect we see for the year is $2.5 million roundabout, which is now our P&L as we speak for the forecast. Despite that, we're still within the guidance, but we see some uncertainty out there because nobody knows which tariffs kick in along the line in the months and quarters to come. But for the here and now, as I said, the important thing is we're overall exposed with $5 to $10 million. We expect that two thirds of that to three fourths of that get passed on to the customer. That means we get impacted only by $2.5 million. Also very important to know is the USMCA, we are still compliant with it. We fall under the USMCA regulation. That means the products we have on hand do not underlie the tariffs from Mexico to the US. There are no tariffs for the time being for our Mexican productions to the US. This is something where we fall under the USMCA. This is our assumption also for the rest of the year. This is when we talk about the guidance and also the next steps. We see that there is some volatility in there. You don't know how this develops, right? There was a 90-day exemption with sooner end. Then for sure, the question is how these tariffs continue to be shaped by the US government. In parallel, we basically have as mitigation actions the negotiations with the customers for sure, and also sourcing optimizations. Because as you know, this in the region for the region is rolled out to a vast majority, but there's still a couple of suppliers out there who can be further localized in the US side or even in the all over America side. This is in the meanwhile what we are working on. Overall, the risk for the time being is limited for us. However, also in terms of precaution, nobody knows how the next six months go with the direct effect, which tariffs to kick in, and the indirect effect, what this does to the overall economy. As we all know, the overall economy could also be impacted by that. With that, we switch gears again and talk about the summary. We are in a challenging market environment. You all know that. We are basically fighting our way through that. We have several things we do currently besides localization stuff to avoid tariffs and taxes. We work on our networking capital to keep our CapEx under control. All these nice measures you would do whenever sales line is flat in conjunction and above and beyond that we invest still in automation to bring our labor rates down. This is something which we particularly do in our high cost areas. So we continue to do that in the plant in Koblenz, but also even in the plant in Mexico and China. We're driving now automation equipment. We are doing cobot system, robot systems, and whatnot in order to further optimize our operations. As I said at the beginning, the year will be somewhat back-end loaded because we invested in this automation in the first half of the year, and we'll see the benefits throughout the rest of the year kicking in. So we confirm our guidance and for sure our long-term strategy. Not only that, we confirm our long-term strategy. As you saw with the tech stake acquisition, it was spot on. The tech acquisition allows us, unlike the majority of all other companies, we still grow. We are holding the line. We are holding our profitability, and we're actually on a growth path with our strategy in the industrial automation sector, even without this takeover. So this segment is growing, and we are spot on with our technologies to feed into the market. With that, I would like to draw your attention to the capital markets day we're planning to do. This is basically my last slide for the presentation today. On the 4th of June, we'll be gathering in Koblenz. We have an exciting program for you. There will be a lot of things about theoretical stuff at the beginning in the welcome section. We'll have then right away a start of factory tour. Then we see some presentations, and the presentations will be interesting because we'll talk about the year 2030, how we continue to deliver upon our strategic goals. You know that our strategic goals are $2 billion in terms of revenue, and 15% EBIT margin. We'll show some details how we think about that and how we confirm that and which actions we're taking to pave the road for this success. It'll happen in Koblenz on the 4th of June. We'll lead you through the complete day. We'll start at 9 o'clock and probably end at 4 o'clock in the afternoon based on the questions you all have. I just can reiterate that please register if you haven't done so at this point in time. There is this registration link, which you see on this page, and you find it also on our homepage. We'd be happy to see you all there. It's a lot of effort we did. There will be not only a theoretical tour through our numbers, but also we'll talk about the concrete product developments we do. We have an experience walk in the plant prepared for you. You will see the latest and greatest technologies, the technologies not only on our motor side, but predominantly on the industrial side, the technologies, the products, the applications. It'll be a nice event to understand our detailed strategic path, walking to this $2 billion sales, 15% EBIT margin, the underlying products like Direct Actuation for the automotive, but also industrial POWERISE and a lot of DESTACO information you'll get along the line to be sure that you're geared up with all the necessary information you need in order to not only know what the established group is about, but also to feed your models for the years to come with the necessary information to forecast our business. We will be disclosing somewhat more information about our business along the line, and we are happy to do so on the 4th of June. Please, if you haven't done so far, make sure that you hook up, get into our online portal to register. With that, I would open the floor for questions. Thank you. Ladies and gentlemen, if you would like to ask a question, please press nine and star on your telephone keypad. In case you wish to withdraw your question, press three and star on your telephone keypad. The first question comes from Akshat Kacker JPMorgan. Please go ahead with your question. Good morning, Michael. Thank you so much for the presentation this morning. I have three questions, please. If I may, can I just take them one by one? The first one is on tariffs. In terms of trade flows, can you just give us more details on the main components, parts, or materials that drive this cross tariff impact of $5 to $10 million, which I believe is on a 6 to 7-month basis in this fiscal year? Importantly, how much of this cross impact can you offset by your own procurement actions in terms of looking for alternative sources of supply, please? That's the first question. You have for sure plenty of questions. The three, as you stated, they're quite complex. Let's kick in with the first answer. In terms of, I mentioned the 5 to 10 million, they're at this point in time split between steel and aluminum from European sources to the US and to Mexico. At the end of the day, it's also driven by electric motors. There are two main components. I'm just focusing on the two main components, I think, to illustrate currently what the things are we're basically working on. The first thing is if you talk about steel from Europe to US, for example, there are steel tubes for Gas Springs. The Gas Springs go into the automotive sector and they go into the industrial sector. They underlie tariffs of 25% up to 25%. Currently, they are 10%. It depends on which kind of regulation you fall under. For the time being, they are 10%. This is basically tariffs on steel for steel tubes from Europe to the US. You can localize them in the US. There are some suppliers in the US, and we have them approved as well. Unfortunately, these suppliers are more than 20% more expensive than the European source. Just to give you an example of what we're working on, because we always see that under the best economic position for us. The tariffs are 10%, but the price difference to the US suppliers is 20% plus. That means it's still less expensive for us, bottom line, to bring parts from Europe, to bring these raw tubes from Europe to the US, then sourcing them locally in the United States with the current suppliers. We have a backup for that because for sure, if the tariffs go up, nobody knows how that goes over the course of the next months, then eventually it'll get less expensive to really locally produce these tubes. This is basically nothing new. We are used to that. That was also under the administration of Joe Biden, the same thing where with this Inflation Reduction Act, the U.S. steel and tube producers got promoted. However, the capacity of these U.S. producers is limited. This is why they drive their price high. That means 20% is the impact of local sourcing and only 10% of steel importing. This is something and a perfect example of what we constantly are watching. We always check how much the tariff is versus what the latest offer of the local produced parts is to make sourcing decisions what's better for us. We are, at the end of the day, having a full backup in place in that concrete example, but it's too early to pull this full backup because still importing tubes from the European region to the US is the better deal for us. By the way, this has also a lot of things to do with other impacting factors like the transportation in between, the ecological factors of that. Now, for the time being, we are importing also some stuff from the US. We have kind of from the US to Europe. That means it's a milk run from one to the other regions. Then there is also the implication of local sourcing in Mexico. I think this example of tube sourcing illustrates this very well. That means for the time being, tubes in the US are 20% more expensive than the 10% additional tariffs out of Europe. This is why we took a decision to still source from Europe. That's one example from Europe to North America or to the US. The other example to mention would be for the POWERISE systems, the electrical motor. Because as you all know, over the course of the last decades, the whole world was relying on electric motors from China. That means you'll not be able to find anywhere in any region outside of Asia motor suppliers for electrical motors being competitive. This is something which is currently also from our perspective still worthwhile sourcing from China because also here the impact of the tariffs onto China exports to Europe or North America is still less than a fully blown localization, for example, in a plant in Mexico. This is the point which I said at the beginning for the here and now, that's the overall impact we see. This is something which we closely monitor to be sure that we are tracking that continuously. This is here to a vast majority that gets basically managed internally. Coming back to your question, how much do we do internally versus externally? That's something we do manage internally. However, the effect of these 10% add-on costs for the imported components, we pass on to our customers. That's what we're at the end of the day talking about. I hope that answers your first question. Thank you for that. Yes, it does. The second question is on North America. Just broadly, could you please talk about the call-offs in the market that you've seen in the month of April and May, and if they are coming in very different from your previous expectations as you think about your third quarter? And also what I'm interested in is what we've heard from US OEMs this reporting season that in the medium term, they will be eventually asking suppliers to move to higher local production. Can you elaborate your discussions that you're having with your customers and if moving power train production to the US is one of the many scenarios that you're working with? Absolutely. If I talk about the North American call-offs for April and May, we did not close the books for April finally, but we see them being on similar levels than the second quarter. What we currently see is kind of a sideways movement in North America particularly. That means we don't see big ups and downs. For sure, there is this volatility in the market nobody can give a prognosis on because we see from one to the other week for sure fluctuations on number coming in, going out, coming in, going out, which we typically did not see to that extent in the quarters before. I would say comparing to the last quarter, it's moving sideways, but with a certain volatility that people are kind of checking for what's coming next in terms of tariffs, right? Depending on whether we see good news or bad news out of the tariff corner, this could give an upswing or a downswing. Nobody really knows. It's really volatile from one week to the other at this point in time. If it comes to the US OEMs, nobody did talk to us about local production in terms of car producers. Why is that? You know everybody knows out there that if USMCA is not counting anymore in the long run, that the whole industry is under big pressure. The whole automotive industry is under big pressure. Why is that? Because the majority of components of the OEMs' production in the US comes from Mexico. In the US, there is simply no opportunity for the vast majority of suppliers to localize back the production from Mexico. In our case, we would have the opportunity. We would have the opportunity to relocate parts to the US because we still have, as you know, six plants in the US and one big automotive plant, which helps a lot in terms of our production there. So we nevertheless don't do that. Why? Because in case we need to transfer it, it's easy and it'll take probably three to six months. However, you need to take this decision in a very careful way because you, first of all, need to have contracts with all OEMs in place to, at the end of the day, fund the transfer of the lines and also to guarantee you that they stick with you and the orders they give to you for at least 12 months because otherwise you've done the exercise for all kinds of risks exposed, transfer ramp-up offline, ramp-down offline, and you don't gain anything. That means customers, if they come along, they'll be confronted with a contract saying, "This is what it costs to move a line. This is a binding contract for the next 12 months." Then it's up to the customer to decide if he really wants to execute that. Our competition, I can tell you, they are sitting in the same boat, even though they are in a somewhat more unfavorable position because some of our competitors, they even source the vast majority of their components from China and bring them directly to Mexico and the US, which in case of a different tariff scheme actually hits them even more than it hits us. At this point in time, we are in a wait-and-see and a very careful position of reacting very fast. This is for the automotive sector. On the industrial sector, it's somewhat different. There was particularly already in the Biden administration, a couple of customers on the industrial side to ask us, "Hey, can you be more local in the US?" At that time, it was a tax refund they got for renewable energy for, in concrete cases, the solar field dampening systems. With this contract I was just mentioning, they paid the transfer costs and they paid an on-price to make up for the labor difference of producing in the US. They gave us a contract for 12 months. In that case, we've been switching a line even to the US because we can do so. As I said, we have the right suppliers on board and also have the capabilities to move the lines. However, for the automotive side, we don't see signs at this point in time in that term. Thank you, Michael. Can I ask my third question? Can you still hear me? Absolutely. Yeah, go ahead. We hear you well. Perfect. Yeah, the third question is on China, please. How has the market evolved since your full year outlook back in December? Could you give us an update on the pricing pressure from the OEM? Has it been in line with your expectations, or has it been higher than what your previous assumptions were? And now, given that we have done the first half of the year, are you leaning towards a certain end of the 15.5% to 17.5% margin range that you had given for the region, please? Thank you. Thank you very much for this question. For sure, this is a question which is somewhat challenging, right? Because for the time being, it's spot on with what we've been planning. We've been planning for the year about a 5% price pressure on the majority of our POWERISE systems. It's only about POWERISE systems for sure, which is a big part of our business. So the customers come along and they approach you, "Hey guys, reduce your prices by 5% to be eligible to have a new business in place or to get a follow-up business," or they actively desource you within the year. We, on the other hand, have a good opportunity and a lot of activities to counterbalance this price deterioration with our technical changes, the VAVE changes, the technical changes in our product. So this is always coming with a time delay. This is why you see now the 12.5% EBIT margin and not the 14% to 15%, which we saw last year, for example, where it was kind of 14% to 15%. So that means to a vast majority, we've been able to offset the pricing, and we will continue to fight for offsetting this price decrease for the rest of the year. We see these price fights going on for the next 12 months. For next year, we're planning less of a price fight because there are only the two players now, the big players in the market, which drive the latest business wins, which is the local Chinese supplier Anjun versus the Stabilus Group. The latest businesses were only shared between the two of us because we are considered as the one and only Western world supplier still being competitive in the region with our very profound and good market position with our product and a good pricing power. We saw a price deterioration over the course of the year, about 5%. Half of it we've been able to counterbalance. This is why you see versus last year's 15% EBIT margin, now 12.5% EBIT margin. Our expectation is that this pricing erosion fades out next year because we're somewhat reaching a bottom in terms of prices. That's what we see with the latest quotes. Thank you so much for the details. Absolutely. Thank you, Ashok. Further questions? Yes, the next question comes from Yasmin Steilen at Berenberg. Please go ahead with your question. Yeah, many thanks for taking my questions. I have actually three left, so I would also take them one by one. Just a clarification on your guidance. Could you walk us please through your end market and regional assumptions in H2? As you already mentioned, that US call-offs are rather flat and also that you see further deterioration of price erosion, at least in the current year. So what's reflected there around the, yeah, 3.5% top line growth, which is basically implied by the midpoint of the guidance? And how should we expect a sequential EBIT margin improvement in the setup? That is my first question, please. That's a very heavy-loaded question for sure. Yasmin, thank you for that. At the end of the day, if I talk about the different regions, we see the North American market at the end of the day somewhat flat in the second half of the year versus the first half of the year. We see some positive developments actually in Asia-Pacific, particularly in China, because here, not only that the automotive market, we see some positive signs for the second half of the year, but also the disteco volumes and thereby the complete industrial portions kicking in a bit more. In North America and in the European market, somewhat flat in terms of automotive, but a little better also on the industrial side, which gives us a first glimpse of that eventually the industrial business on a global scale could be stable for the next six months and eventually also improve a bit. After all, if you now factor into the numbers of the sales, then currently we are, as I said at the beginning, half year through the financial numbers. In terms of sales for the rest of the year, we see basically that we will be kind of flat. If you take the current sales, the current sales for the first half of the year was $663.9 million. If you take it as an assumption that this is something flat, somewhat flat for the rest of the year, then you end up at $1.34 billion, which is within our guidance. If you put some wins in there, tailwinds in there, then we would basically come up in the second half of the year slightly better than the first half of the year, considering that in the first half of the year, you have two effects, right? You have the winter season and the Chinese New Year. Yes, in the second half of the year, you still have the summer season in place, but we also see somewhat solid numbers for the second half of the year. That means if you take the current sales numbers and multiply them by two, if it's a flat development of sales and put some tailwind in there for the rest of the year, then we are basically on safe terms to kind of confirm the guidance. But you know this for sure, coming back to what I stated during the presentation, pretty much also depends on how the tariff situation goes and how stable thereby the economy is for the second half of the year. This is something which we at this point in time for sure see as the uncertainty in our business. Hope that helps for the first question. Yeah, perfect. Thanks for the detailed answer. Then just on the cost synergies, so you said you have the finalization of the integration and should not expect any further integration costs. Could you please update on the expected cost synergies and also the timeline? Yeah, there are two buckets, as you know, in terms of divestco synergies. One is the sales synergy. The other one is the cost synergy. When it comes to the cost synergies, we're currently at the range of €0.67 million. The target for the year is €1 million, which was driven by combining insurances, by joint sourcing activities on services, and it also was pretty much driven by purchasing savings along the line. This is something which we're tracking on a quarterly and monthly basis to make it a success of achieving this €1 million. And then on the other side, our complete year's guidance for sales synergies is in the range of €10 million. And currently, we are at €6.4 million for the first half of the year. Also here, we are good on track, which is Stabilus guys selling Desteco stuff and vice versa around the globe. This works out pretty well for the time being. Perfect. And then with regard to your covenants, I mean, you're already close to three times. Are you in discussion with your financing banks about the covenants to get more leeway to your EBITDA covenants level? Yeah, the discussion about covenants is kind of not a solid discussion, right? The first thing is for sure we have a lot of touch points to the banks these days because also, as you know, there will be a refinancing coming up for next year. The banks which we've been talking to are syndicated banks, and all of them basically are very open for discussions in a general term. Most of them see the Stabilus Group as a very stable performing business because if you compare us with our peers, we have basically three times more EBIT margin. We have a very healthy cash flow. We are paying back debts. We've been paying back debts for even the last 12 months. We're paying back almost $70 to $80 million in terms of debts. So we're considered as a very solid performing company. This is why the banks are open to discuss refinancing activities, but also the covenant is not necessarily a topic to them. They have been approaching us to increase the covenant. So we are having these discussions for the time being. It's not needed, but that wouldn't be a topic necessarily. But you know if you increase the covenant with the banks, then this costs you a certain share in terms of interest rate, which for the time being, we don't see a need. The banks, they approach us, and we see that rather as a complete financing package, which we are working on currently. There is this $83 million refinancing coming up next year. We are currently looking to this option combined with some other financing options in conjunction with also discussing covenant-related points. Our plan is over the course of the next three to six months to close these discussions because we think that's still early enough, right? Because this leads us into the next year when the $83 million become evident. For the time being, it's rather a discussion on syndicated loan versus revolving credit facility, plus also this covenant-related point. But it's too early to state. We're in the midst of this discussion. In the next three to six months, we will have that finalized. For sure, now the first half year, which is for us more cash intensive, is over, right? Because you see now that we've only generated a $30 million free cash flow over the first half year. The real two cash flow generating quarters are yet to come. That means also this KPI towards the end of the year will further improve in terms of net leverage. Okay, perfect. Very clear. Just to follow up, is there any update on the CFO search you're able to share at this point in time? Yeah, absolutely. You see here in the call with me, Mr. von Wittesheim. Mr. von Wittesheim is our interim CFO for the function. We've been actually having had some intense discussions with plenty of candidates. We narrowed that down to two possible candidates. And within the next four to eight months, the supervisory board actually will conclude this discussion. So the expectation of the supervisory board is that towards the end of the year, we will have another permanent CFO in the Stabilus Group. So December latest for the time being. Okay, perfect. Thanks very much. Thank you. Thanks for the questions, Yasmin. We have at the moment one more question coming from Marie Therese Grubner, Hauck Aufhäuser Investment Banking. Yes, good morning and thanks for taking my question. I have one or two left. I think most were answered. I was wondering if you could give us some perspective regarding the, first of all, the stack of synergies. I was reading the updates that were written when the business was bought, and the mention was there of €50 million in revenue synergies by 2026 and I think €10 million on the cost side. So are those goals now still in place, or do you have new targets for the medium term? Let's put it this way: on the synergies you can generate? That would be my first question. The synergies we will generate are still on the same level that we've been communicating along the line. If you remember back, the integration at that time was underlying the approval of certain regulations of governments, particularly in the U.S., because as a German company, it was not too easy to acquire a U.S. company. But it was absolutely the right step, as we prove now, because not only do we invest in automation technology, but we are also exactly in the country where the localization of components and operational equipment is right up front in the discussion. So these approvals, however, at that time almost took 12 months longer. The $12 million in terms of synergy, we always said will be within three years. So that means three years out there. So it will be now towards the year 2027, 2028 when the $50 million kick in. The plan is $10 million this year, $25 million next year, and then the full $50 million kick in in the year 2027 to 2028. The similar thing is with savings synergies where we did great steps for the time being. However, it did start for sure late because of these late approvals of getting this deal done of acquiring the company Disteco. That means from now on, the targets are still on. They are just delayed by this time it took to integrate or to get these approvals for integration by the US governments predominantly. Okay, well, thank you very much for that. My second question relates to your market share in PowerRise. I think in Q1, you were mentioning that with the current tenders, you are more in the region of 35%, 36%. I somehow did not see an update in the latest release. Could you give us maybe a flavor of where it is right now? Absolutely. In terms of business acquisition, you're absolutely right. I forgot to mention that every time during the presentation, we have also very positive news because as we published lately that we won this big contract with a Chinese company, which is Mi Auto, we actually did outpass our current win rates even because we've been above 40% in the past quarter of acquiring business for the PowerRise side. We're doing very well in difficult times with business acquisition on the PowerRise side and also on Gas Spring side. We won around about 80% of the business out there with our customers. We have a very profound basis of continuing that path of success. As I mentioned throughout the presentation, we are a side of Anjun, probably the only two suppliers at this point in time in China winning new business, which also underlines the competitiveness of our products. We are doing well in terms of business wins. These market shares, 35%, 36% in terms of if you include the tenders won, it's still on track, right? Absolutely. It's still on track. I said in the current quarter, in quarter two, we won even 45% of the businesses out there. So even more. Okay, got it. Yeah. All right. My last question has to do with, again, going back to the margin and the adjusted EBIT margin in APAC, we saw basically a bit of a deterioration in terms of the year-on-year decline compared to Q1. You rightly mentioned the 5% price decline. So my question is, looking at H2, how much of that price decline will you be able to claw back? Is it 2% or is it more? Actually, I think that for the time being, out of the 5%, we're actually closing 2% to 2.5%. We will be able to close this gap this year driven with the investments we did in automation. That's why we invested a lot in this automation equipment. That's why the CapEx rate already was pulled ahead for the first half of the year. We have a very stringent set of measures in terms of technical changes on the products to take costs out and also in terms of supplier negotiations. These three effects will lead to the point that within this year, we can close 2.5% out of the 5%. Many of these questions also will have its effect next year. So half of this effect will be closed this year. I'm sorry. I have one more question regarding your PowerRise business Gas Spring businesses, Asia. Could you specify how much of the business is exposed to Western OEMs and how much is exposed to local OEMs? It's about 50/50. It's 50/50. We are very strong with the local OEMs. That's extremely important to us. So it's Mi Auto, it's Geely, it's Great Wall, and Li Auto. So the local Chinese and Asian OEMs is about 50% of our wallet. All right. Thank you very much. Those were my questions. Thank you very much,Marie-Thérèse. At the moment, there are no further questions. If you would like to ask a question, please press nine and star now. Yeah, we are anyway already 12 minutes above and beyond our schedule. I think if there is one further question, we can for sure take it. But also important to know is, as I said at the beginning, Andreas is actually also always there, investor relations, Andreas Schröder. So you can contact him at any time for a one-on-one, even with Mr. von Wittesheim or myself. We would then for sure join if needed. On the other hand, also the 4th of June is an important date, as I said before, for our Capital Markets Day. Are there further questions or any last question? There are no further questions from the audience. Perfect. Then important to know is, again, we had a very strong performance, solid. There is uncertainty out there. This is something which affects everybody. The next six months will be not an easy journey for sure because we don't know how things develop, particularly when it comes to tariffs. But as a Stabilus Group, particularly when it comes to the strategic points of our business, we are spot on with the acquisition of this takeaway. It was the right investment at the right time. We are fighting our way through difficult times with good success. Thank you very much to everybody. With that, we would close the call. Have a good week.