Good day, and welcome to Kendrion's third quarter results 2021 analyst call with CEO Joep van Beurden and CFO Jeroen Hemmen. At this time, all participants are in a listen-only mode. Today's conference is being recorded. Joep van Beurden, Kendrion CEO, will start today's call with a short statement, after which there will be time for questions. At this time, I would like to turn the conference over to Joep van Beurden. Please go ahead, sir. Thank you, and good morning, everybody. Welcome to Kendrion's Q3 2021 results teleconference. My name is Joep van Beurden, Kendrion CEO, and with me on the call is Jeroen Hemmen, our CFO. I will start the meeting with some remarks regarding our Q3 results after we will have time for Q&A. We will post a recording of this call and of the Q&A on Kendrion's website as soon as is practicable. I would like to draw your attention to the fact that certain statements contained in my remarks and in the answers to your questions constitute forward-looking statements. These forward-looking statements rely on several assumptions concerning future events and are subject to uncertainties and other factors, many of which are outside the company's control, that could cause actual results to differ materially from such statements. Before reviewing our Q3 2021 results, I would like to reflect a little on the current economic and market environment that we are operating in. As COVID-19 is slowly receding across the world, the economic implications become clearer. What all of us now experience is that the adverse effects on pretty much all businesses are far more substantial than expected. In 2020, when COVID caused most of the world to be locked down, we were dealing with a demand crisis. Economic activity was low and revenue dropped. The drop in demand was somewhat predictable, allowing governments across the globe to take mitigating measures and allowing companies to plan and focus on cash preservation, cost, and cash flow. Today, economic activity is back and demand is back. However, this time we are facing a supply crisis. Not just the much-talked-about shortage in the supply of semiconductors. The supply crisis is much broader. Steel, plastics, building materials, shipping containers, oil, natural gas, even the availability of labor. We are facing shortages everywhere, affecting, in essence, the entire economy. Demand or supply shortage, what's the difference? Well, the difference is that the supply shortage is far less predictable and more volatile. The supply crisis causes upward price pressure on raw materials, compressing gross margins, and it affects working capital as customers across the supply chain demand delivery as soon as it's possible, forcing everyone to keep stock of raw materials that are not supply-constrained. In our view, the current market environment is more difficult than a year ago in the midst of the COVID-induced demand crisis. I'm therefore proud of our Q3 performance. In a tough environment, we have continued to substantially grow revenue and profitability. Top-line growth was healthy in all our businesses, Industrial Brakes, Industrial Actuators & Control, and Automotive. In my view, we are navigating this supply crisis well. We have been resilient, as we were last year, and more than that, we have continued our growth. Why are we so resilient? Many of our stakeholders view Kendrion as an Automotive Tier 2 company with a bit of Industrial side business. That may have been the case in the past, but today the reality is different. Kendrion is an actuator company focused on products that help enable the global push towards electrification and clean energy. Whether it's brakes for wind power, robotics, automated warehouses, sound actuators for electric vehicles, or induction technology helping industrial processes move from oil and gas to electrical solutions, in all our business groups and in China, the broad push towards electrification determines our product development decisions. It has determined these decisions for a couple of years now and has been amplified by the INTORQ acquisition in 2019, and most recently by the addition of 3T to our group. It has resulted in a balanced, diverse portfolio exposed to the global and accelerating trend towards electrification and clean energy, and not overly dependent on any specific vertical or market segment. Amidst all the shortages, we have continued to deliver significant growth in revenue across all our business groups in Q3 and during the first nine months of 2021. I'm proud of our global team who have managed the impact well. Let me talk in a bit more detail about the Q3 dynamics and some of its highlights. Our Industrial businesses continued their strong performance of the first half into Q3. With organic revenues exceeding Q3 2019 levels in both Industrial Actuators and Controls and Industrial Brakes. Higher raw material prices reduced the industrial value-added margin somewhat, but we expect this effect to be temporary as our own price increases kick in. Short-term demand looks healthy, and in the longer term, we expect our Industrial businesses to continue to benefit from the global energy transition towards electrification. In the Automotive segment, demand is volatile due to the severe and ongoing semiconductor shortage. The shortage reduces the production in the sector significantly, putting pressure on our Automotive revenue. Longer term, we remain well-positioned as the transition towards autonomous connected electric and shared mobility accelerate. On September the twenty-first, we announced the acquisition of the Dutch electronics and embedded systems developer 3T. The acquisition offers significant growth potential for our Industrial business in combination with the control technology activities of our business group Industrial Actuators and Controls. 3T also strengthens our software and electronics development capabilities benefiting our Automotive Group, specifically the development of our sensor cleaning and sound actuation platforms. Integration has started, and 3T has already positively impacted our profitability. Now let me review our financials in a bit more detail. Third quarter revenue came in at EUR 113.2 million, which is 15% higher than in the third quarter of 2020. Before exchange rate effects and the consolidation of 3T per September 21st, revenue rose by 14%. Following the strong first half, economic activity remains on a high level with both Industrial Groups' quarterly revenue now exceeding the pre-pandemic revenue of Q3 2019. That is, in our view, a strong indicator of the underlying growth potential in our Industrial segment. Organic revenue growth in IB of 21% year-over-year and in IAC of 25% speaks for itself. In Automotive, revenue is affected by the semiconductor shortages that have led to a sharp reduction in global car production. The commercial vehicle-related revenue, especially in agriculture and trucks in the U.S., have been performing well, while the coach segment remains weak. Despite the supply issues, Automotive revenue increased with 6% compared with Q3 2020. Revenue over the first nine months of 2021 totaled EUR 347.8 million for the group, which is an organic increase of 19% compared to the EUR 293.3 million of the first three quarters of 2020. Automotive realized 21% organic revenue growth, with revenue ending up at EUR 179.1 million. IB revenue increased 17% to EUR 93.1 million, and IAC increased 18% to EUR 75.6 million. Our profitability developed well. EBITDA, the normalized operating result before depreciation and amortization, increased by 9% to EUR 12.4 million compared with EUR 11.4 million last year. Operating leverage in Q3 was affected by the lack of predictability in the supply chain. This restricts our ability to temporarily and dynamically reduce our costs. Also related to the supply constraints are an increase in material prices that somewhat affected the added value margin. That margin was 48% in line with Q2, and 0.4% below previous year. Industrial Brakes has been most affected by the material price increases and has taken pricing action to improve added value margins. Revenue growth and the reduction of capital expenditure in the previous year has decreased the depreciation charges as a percentage of revenue to 5.3%. In Q3 2020, this was 6.4%. EBITA increased by 33% to EUR 6.5 million, with the EBITA margin increasing to 5.7% from 5.1% a year ago. Normalized EBITDA for the group in the first nine months of 2021 increased significantly to EUR 44.3 million, 34% higher than in the first nine months of 2020. Normalized net finance cost in the first nine months of 2021 amounted to EUR 2.8 million compared with EUR 2.5 million over the first nine months of 2020. This increase is due to the higher applicable interest rate markups. Income tax expenses for the first nine months of 2021 amounted to EUR 6.0 million, which is a normalized effective tax rate of 29.5%. Our financial position is strong. The total net debt increased to EUR 141.2 million at the end of Q3 2021, up from EUR 112.7 million in Q2 2021. Net debt at the end of Q3 2021 includes EUR 23.3 million cash out and EUR 1.9 million IFRS 16 lease liabilities from the acquisition of 3T. Free cash flow in Q3 was negatively affected by a EUR 6 million organic increase in inventory levels. The build up of buffer stock for the anticipated closure of our Austrian Automotive plant and late order reductions from passenger car customers contributed to the increased inventory. We have taken measures to reduce the inventory going forward. Our capital expenditure is in line with our planning, with year-to-date investments now at EUR 20.2 million compared to EUR 11.2 million over the first nine months of 2020. Of this, EUR 5.6 million relates to the construction of our new factory in China, which is progressing according to plan. The leverage ratio at the end of Q3, including the consolidation of 3T, stood at 2.4, down from 2.9 at the end of Q3 2020, and well below the financial covenant of 3.25. Kendrion solvency ratio remains strong at 44.4% at the end of September 2021, compared to 45.7% a year earlier. Our outlook is cautiously optimistic. On the one hand, we see that the economy has expanded rapidly and that the activity levels and consumer demand are high. On the other hand, demand is volatile and supply chains worldwide are impacted. We expect the current economic environment to persist in Q4 2021 and well into 2022, but trust we can navigate these challenges well with our balanced product portfolio, global exposure and strong strategic position. We remain positive about the growth trajectory of our three business groups and in China, our strategy and product pipeline, and are confident we are well positioned to benefit from the accelerating transition towards clean energy. We expect added value margins to come back to pre-pandemic levels and remain positive about our business fundamentals and our main objective, deliverable, sustainable, profitable growth. I now open the line for your questions. Thank you, sir. If you would like to ask a question at this time, please press the star or asterisk key followed by the digit one on your telephone. Please ensure that the mute function on your telephone is switched off to allow your signal to reach our equipment. If you find that your question has already been answered, you may remove yourself from the queue by pressing star two. Again, please press star one to ask a question, and we'll pause for a moment to allow everyone an opportunity to signal. Our first question today comes from Frank Claassen from Degroof Petercam. Please go ahead. Your line is open. Yes, good morning, Joep and Jeroen. Frank Claassen. Two questions, please. First of all, on the raw materials position and the price increases, do you think you have seen most of the raw material price impact now, or could we expect more? Could you also maybe quantify the price increases and elaborate on how easy it is for you to pass on the raw material prices? That's the first subject. Then secondly, on China, could you elaborate what you saw in Q3? Is it in line with the group or did you see signs of slowdown? What is happening on the ground in China at the moment? Thank you. Okay, thank you. Thank you, Frank. A few words on raw materials, then China, and then maybe I'll hand back to Jeroen for some more color on that. The generic remark on the raw materials is that the impact going forward, of course, for us is hard to gauge. There is upward pressure on things like steel and also on semiconductors for obvious reasons. The visibility in our view in how much more there is to come is unclear. We are in a position and we are in some cases contractually, in other cases, not contractually, but this is of course the pricing action we take to pass this on. Maybe Jeroen can talk a bit more on that later on. On China, it's actually very much comparable to what we see in Europe and also in the U.S.. Supplies are constrained quite broadly. That leads to some volatility in demand. On the Automotive side, the chip shortage also causes their production to be lower than what could have been sold based on the demand that you see also elsewhere. At the same time, we're managing all this volatility quite well and our revenues there are developing in line with our planning. Which of course means that we are seeing good growth certainly through the cycle. The other thing to say about China is that we have started the construction, having received all the approvals of our factory, and expect by the end of the summer 2022 to move in that large, much larger facility to also accommodate for the growth that we're going to expect over the next couple of years in that part of the world. You maybe a bit more color on the raw materials? Yeah. Let's say of the current price increases that you see for example for steel and copper, which has luckily been flattening somewhat in the last months. I would say the majority is currently in the prices, although there are also some contracts that expire in the coming months. That is throughout the year you are confronted with some upward pressure for renegotiated prices. I feel confident, as you've mentioned, that our price increases will keep up with the price increases that we are confronted with. There are some delays, especially in IB, but yeah, like I said, I feel confident that we will be able to pass on the great majority of the price increases, as we are currently doing. We are not disclosing the exact impact, but just to give you a bit of an idea, that yeah, it's somewhere between 1.5% and 2% of revenue. Okay. That's helpful. Thank you very much. You're welcome. As a reminder, please press star one to ask a question. Our next question today comes from Tijs Hollestelle from ING Bank. Please go ahead. Your line is open. Yeah, thank you operator. Morning, Joep and Jeroen. Yeah, my first question is about the Automotive business. Was it loss-making in the third quarter because of the higher expenses dealing with the demand volatility? We're not disclosing quarterly numbers per business group. But what I can say is that the Industrial units performed equally as in the first half year. Obviously on Automotive, the lower revenue compared to the second quarter had an impact also on the profitability. We're not disclosing specific numbers per unit. Yeah. Okay. The bulk basically came from the weakness in the industrial, and that that's also my second question because your remark in the press release about the inability to dynamically control the cost base, I do understand, let's say that the comment itself. When we were discussing the second quarter or the first half results back in August, the Industrial business was already growing, yeah, quite firmly above the 2019 levels. I think that operating margins were also quite healthy. I think that most analysts would also share all those investors gave you a lot of compliments for that. Did you at that time not already were planning these additional investments to deal with the growth? Yeah, a bit more heads up on that would be helpful. Because I believe you only mentioned back then the more global issues that could hamper, let's say, the results. This seems like a massive investment program, and also if I translate it to the number of FTEs, that is still growing quite rapidly. A bit more color on that would be helpful. Let me, because I'm not sure you're making the right interpretation of that remark. We are facing there's more demand than we and everybody else in this current economy can supply, right? That is the supply constraint environment we're currently in. What you see is that in automotive, the delta between supply and demand is specifically the largest. The reason we mentioned that there is not a total inability, but it's more difficult to dynamically control the cost has to do with Kurzarbeit. If you know before the quarter starts that your revenue is going to be roughly at a certain level, you can take action. If that demand pattern from the customers is highly volatile, you're contractually obliged to deliver what is basically in the order books. If you then at the last minute get a cancellation, and in some cases specifically on the Automotive side that happens, then you basically have your inventory. That's also the pressure on the working capital, and you have your people ready to produce. That is basically why this unpredictability impacts both the working capital but also a little bit the ability to control the direct labor cost, if you like. Now, on the Industrial side, I think the performance on the Industrial side has been extremely strong. I mean, really, really good. That is to do with the fact that the gap between supply and demand is somewhat smaller. We have managed, I think, very well in a difficult environment to source as much raw materials as we could possibly get. This is why you see growth numbers in IB year-over-year of 21% and in IAC even of 25%. There is certainly not a shortage of investment or a capacity crunch or anything that would hamper that other than the supply constraint that we talked about. Maybe, Tijs, if I may add, if you bridge the result of the second quarter to the third quarter, as you said, in the second quarter, we got a lot of compliments on how we managed it. Let's say the profit shortfall compared to the second quarter, 90% of that or 80%, 90% of that is caused by lower volumes. This is partially seasonal at the third quarter with the holiday season in it, and also in automotive as we explained, where we had lower volumes than in the second quarter and in addition. That is not the bulk of it. Indeed, compared to the second quarter also, we lost some direct efficiency because this volatility did not improve in the third. Yeah, it got a bit worse. 80% of the shortfall has to do with the lower volumes compared to the second quarter. Okay, yeah. I mean, I liked your comments on the outlook that the global situation on this is unlikely to improve in the next quarters or maybe a little bit, but it will go gradually. Do you think it could also get worse before it gets better? It's, I mean, difficult to gauge. We don't expect it. We also, of course, Q4 is on the way. We don't see that. On balance, as we say, we use the word cautiously optimistic. I feel we are managing through the volatility with all its different elements quite well. If you look at the order books, specifically, on the Industrial side, where, as I mentioned, the gap between supply and demand is a little bit more modest than on the automotive side, that looks very strong. The fundamental driver there, and that's why I think it's also very relevant to not forget that currently revenues on the Industrial side are ahead of 2019. The underlying growth trends are, if anything, accelerating, boding well. This is not just a Q4 statement. This is, you know, 2022, 2023 statement. Our ability to manage through this volatility plus the position that we have, which is also true a little bit longer term for automotive around electrification, makes us, as well, we say, cautiously optimistic going forward. Okay. Yeah. Then, one final question, if I may. I have asked it before, not because it's my favorite subject, but probably because I'm not fully understanding it. Year to date, over the first nine months, you have a positive impact of EUR 5.2 million from the P&L line item change in inventory of finished goods and work in progress. If I understand your remarks on that line item in previous sessions, that measured over a few quarters, it more or less, the positive and negative should balance each other out. It could very well be there is, let's say, a EUR 5 million negative impact on the to be reported EBITDA number in the fourth quarter. If I take the cost base, let's say, all things equal, there's basically zero EBIT if this line item adjust itself. Can you shed some color on that, please? Because, yeah, making these estimates are quite difficult because everybody's also, yeah, looking at your long or medium-term targets. Yeah, the starting point in this case is very hard to make, I must say. That it's a bit technical, but the EUR 5 million is indeed now the accumulated increase in finished inventory. Basically, we produced more than we sold. This is typically the case every year, right? In the first half year, we produce more than we sell, and in the second half year, that reverses. Then we sell more than we produce. That also has to do with holiday days. This year also due to the volatility, especially in automotive with some order cancellations, that means that you have more inventory on the shelves that we would want to have, partially delivered, partially not delivered because of order cancellations. I do not expect that the full EUR 5 million will reverse in the fourth quarter. That is simply not in the works. On the long run, that number is zero because on the long run, you sell as much as you produce. The EUR 5 million is not 100% profit or loss because there are also products that you produce. You also have raw material cost, you have direct labor. As a rule of thumb, I always calculate with an EBIT impact rounded out 20% of that EUR 5 million. You could say that in the first nine months, we had a tailwind from producing on stock of approximately 20% of that EUR 5 million, and that is EUR 1 million, which at one point indeed will reverse over the coming quarters. Does that answer it? Yeah. No, that helps indeed, because I'm trying also to see, let's say, the quarterly connection between the cost of goods sold, because I understand you take those costs, but it is very difficult to deduct that from the historical data. Indeed, if you then, as you sell or recognize revenue on these already produced, then your cost base for the rest should be lightened more or less. Okay. It helps me. A bit of understanding of the drop from there. Okay. Yeah. Thank you very much. Important to note is, so there's not something. It is not that the current balance sheet or the current P&L foresees that in the coming quarters we will have a EUR 5 million negative impact on EBIT because of this. That is not the case. Roughly 20% of that is. Then you talk about EUR 1 million spread out over the coming quarters. Yeah. Okay. Yeah. Thank you. Thank you. Our next question comes from Maarten Verbeek from The IDEA!. Thank you. Good morning. It's Maarten Verbeek of The IDEA!. A couple of questions from my side, please. Firstly, when we look at the Automotive Group, which reported an organic growth of 6%, and when I compare that to the European car sales or car registration growth of -25%, could you explain why this gap is so huge? There's a couple of things to note. Of course, there's also, you know, sell-through numbers and car registration. Of course, there's also a little bit inaccurate, if you like, and there's always a timeline. I mean, the difference between +6% and -25% is highly significant. First of all, as we noted, as you well know also, there's about one third of the revenue is related to commercial vehicles. Cars and on the commercial vehicle side, although buses are not that strong, farm equipment and trucks, heavy trucks, specifically in the United States, are actually doing reasonably well. That helps a bit. The other, I think, more important reason is, as you know, over the past three years, we have won a significant amount of nominations, more than the current size of our business. Now, given the fact that compared to a couple of years ago, there were 25% less cars being sold, those nominations are under pressure by the same 25%. As you can well imagine, the market is smaller than, of course, that will be smaller too. At the same time, we do have quite a number of new products ramping. Compared to our original expectation because of the state of the market, maybe not ramping quite as large as we would have expected two, three years ago, but still they're ramping. That is the other reason why we have still a small plus while the whole market is currently under more pressure than what we experience. You're not afraid that your clients have built up some inventory? No. I mean, the visibility that we have in that is high. It's very limited, as you know. No, we don't see that. We certainly see I mean, the volatility is real. The pressure on the total revenue is there. I mean, if you look at analyst reports, they estimate that another, about 10 million cars could have been produced and sold if the demand, because the demand is there, if it wasn't for the supply constraints. Now, that means 10 million cars means a lot of actuators for us. You can imagine that these numbers would have looked completely different if the supply situation was normal. The difference between demand crisis of last year and the supply crisis of this year that I highlighted is real, and presents us with a unique set of challenges. As I said in my earlier remarks, I feel we managed those well, and that includes this, a small growth number for Automotive in a market that really doesn't support that. Talking about the inventories, at your end, it rose by EUR 6 million. More or less, could you break that down into what you have currently as an increase in finished products and more or less the inventory increase you have taken on your balance sheet to secure your manufacturing process? Round about EUR 1.5 million is finished products. The remainder is raw materials. On the one hand, to indeed secure your production process. But it's also driven by the volatility that we mentioned before. When you are faced with order cancellations and increases varying week by week, makes it more difficult to manage your inventory. In the third quarter, it's actually a bit higher than where I would want it to be. We are now taking measures to bring that down more to a level as what it was in the second quarter, which I think is fine in the current market circumstances. In the presentation, you also mentioned that 3T had a positive impact on the margins you have achieved in this third quarter. Could you more or less inform us about the revenue and the EBITDA contribution of 3T in these only 10 days? Yeah, it's tiny, of course, but it has been. I mean, we said when we announced the acquisition is gonna be accretive immediately, and that is, that has happened. I mean, since September 21st, of course, and as you say, it's 10 days, not even. It's a very small impact, but it was there. Of course, in Q4 that we get the full benefit of the full quarter. Now, it's a small addition. It's quite important though. It is accretive, it's highly profitable. It's another EUR 12 million of Industrial revenue in an area of IAC that's actually showing excellent growth. I mean, there is enormous demand for software and embedded systems and for control technology. This is what they do. On top of that, which is a bit longer term, we get the benefit of these capabilities for automotive as well. It's a small acquisition. It's immediately accretive. It's justified on the basis of strengthening our Industrial Control Technology Group, plus some additional automotive benefits. We feel very good about this. This quarter, you made quite some investments, more or less similar to the one you have achieved in the first half. For the fourth quarter, we should expect a similar CapEx level as we have seen in this third quarter? Roughly, yes. I expect a bit less than in the third quarter also because normally business is almost closed in the last weeks of December. It's typically a bit lumpy. Maybe EUR 2 million less than in the third quarter, but that's what you should be looking at. Of course, I mean, quite a bit of that also, of course, is for the China building that continues because we started the construction. The investment level also on the Industrial side is indeed quite substantial because of all the growth we see coming. I just want to ask that for China, more or less similar amount in Q4 will be a little bit less. It was EUR 5.6 million. Yeah, a little bit less than so far year to date, it's close to EUR 6 million. I think it will be a little bit less in the fourth quarter, but a substantial part of the fourth quarter as investments. Also in itself, that is quite lumpy because it also depends on the building progress. If something falls in December or in January, it obviously impacts right away your investments for the year. Yeah, let's say EUR 3 million, EUR 4 million in the fourth quarter related to the building. Normally you also mention on a quarterly basis what your free cash flow was this year. This quarter you only mentioned has been affected by, among others, by the inventory level. Also, would you also mention the absolute level of your free cash flow this quarter? Yeah, you can derive it. Then I can also state it. It's -EUR 3 million for the third quarter, driven by the higher inventories, but in particular also, as anticipated, the higher CapEx level. Lastly, could you remind us about the leverage capital ratio development for the next coming quarters? Sorry. Leverage capital ratio. What do you mean? What do you mean with leverage capital ratio? For the current quarter, it was 3.25. According to me, that will come down. Oh, the covenant. Yeah. Yeah. Oh, that is flat. Sorry, I didn't understand. That is flat at 3.25. To year end. To year end, and also next year it's yeah, 3.25. Okay, thank you very much. You're welcome. Thank you, Mark. As a reminder, if you'd like to ask a question, please press star one. Our next question comes from Johan van den Hooven from Edison Group. Please go ahead. Good morning, gentlemen. It's Johan van den Hooven from Edison Group. I was disconnected early in the call, so hopefully I'm not asking the same question. The first one is about growth margin. The growth margin effect of 30 basis points so far. You also announced some price actions within Industrial Brakes. Is it then fair to assume that you are sort of aiming for a flat growth margin in Q4? Second question is about 3T. We know it's EUR 12 million, and it's a bit more focusing on our model, but I guess it's the revenues will first fall largely in Industrial with potential revenues in the Automotive sector in future. You already mentioned you're highly profitable, but is that 20+ or is that the wrong region to look at? The third and last question for now, about the planning for the plant closure in Austria. Can you provide us, please, a sort of timetable and the possible non-recurring costs related to the closure? Thank you. Well, first maybe on gross margin, so added value margin, as we call it. It was 48%. For the group, the first remark to make is that, despite the upward pressure and of course some of the delays that you get because first your raw materials go up and typically pricing action takes usually a while, we have managed reasonably well. Compared to last year, indeed, I think 40 basis points lower, as you mentioned, Johan. However, last year, of course, we also had a different mix, because then also in 2020 Automotive was more affected than Industrial on the revenue side. It's, I think managed well. I think today so far the biggest impact was actually in IB, and there we have taken pricing action that it's already happening, but then in Q4 and in Q1 that will help us a little bit. Overall, I think gross margins will and have always been around that 48% level value-added margin. We expect that we can manage the pressures reasonably well and keep it roughly at that level. On 3T, all of the revenue is indeed industrial. This is an industrial acquisition, so it strengthens IAC in one of the segments, as you know, we call this our cash engine, but there are a few, quite a few segments also related to energy transition, by the way, that are growing nicely. This is one of them. It will help also the profile and the growth opportunities in our cash engine quite a bit. Over time, initially, the capabilities that are now part of the Kendrion Group, and also the ability for us in our new locations in Amsterdam and Eindhoven to attract more software and hardware engineers will de-risk the developments we have on the Automotive side, and then specifically sensor cleaning and sound actuation. That will indeed at some point. It's hard to de-risk it, to say, how does it translate into revenue? It is clearly a strategic benefit, a very important strategic benefit, given the fact that we're focused entirely on electrification in automotive and autonomous driving, as you know. Yes. Um, and then the- Austria. Yeah. Maybe we could talk a bit about. Well, perhaps just a sub question for 3T about the profitability bit, of course. Oh, yeah. An indication of how high high is. Okay. They're quite profitable, even compared to our Industrial units. Roughly 20% EBITDA margin we should be looking at. Yeah. Okay. Thank you. Yeah. That's a good one for you. Yeah. On Austria, I think was your final question. Some production lines have already been moved to Sibiu. We are continuing to work on that, and that was also mentioned as one of the reasons that the inventory is a bit higher. Not the only reason, but we are currently building buffer stock to enable us to also transfer the larger lines to Romania and to Germany. As it looks now, it remains a bit fluid. We will close the Eibiswald plant in the second half of 2022. I thought you perhaps last year mentioned some expected non-recurring costs. Was it sort of EUR 1 million-EUR 2 million maybe? Is it still the same? That is still the same. Yeah. The negotiations with the unions on that are not finalized. Also that remains fluid. That is still the best number that we have. Yeah. Okay. To date, this year, there's, I think, hardly any restructuring costs, so also not related to Austria. That's still the common belief for most of it in next year. Yeah. Far, we have a couple of hundred thousand in mainly retention bonus to make sure that we keep personnel on board until the closure. Yeah. Severance costs related to the employees, which is the majority of the expected one-off costs, most likely will fall into 2022. Yeah. Okay. Thank you very much. At this moment, there are no further questions. I would like to hand over to Joep van Beurden for any closing remarks. Please go ahead, sir. Well, I would like to thank everybody for your attention and for your questions. If you have any follow-on, you know where to find us. Thank you very much. Ladies and gentlemen, that concludes today's call. Thank you very much for your participation. You may now disconnect.