Good afternoon, everybody, here in the Novotel and on the webcast. Welcome to Kendrion's Capital Markets Day 2022. My name is Joep van Beurden, Kendrion's CEO. With me here are Jeroen Hemmen, our CFO. Richard Mijnheer, responsible for the Global Commercial Organization of the Automotive Group. Ralf Wieland, the Chief Operating Officer of our Automotive Group. Andreas Laschet, who heads our Industrial Brake unit, and Robert Lewin, leading our Industrial Actuators and Controls group. Not present physically, but virtually, we have Telly Kuo, President of Kendrion Asia and responsible for our Operations in China. Not presenting, but available for questions are Pascale Cornut, our CIO, and Yvonne Wiersma, who is our GC and who spearheads Kendrion's sustainability efforts. Almost exactly two years ago, September 8, 2020, amid the COVID pandemic, we have launched our strategy and related financial targets for 2025. At the time, we felt that we had positioned our company for sustained and profitable growth from several sources, auto, brakes, and China. Now two years later, I'm proud of the achievements of the Kendrion global team, represented here by its most senior leaders. Today, we will share with you our strategic and financial achievements since September 2020, but of course, we will spend most of our time looking forward, as the potential for further organic profitable growth has, in our view, only gotten bigger over the past years. As you may have read in our press release, we are making a clear strategic, operational, and organizational distinction between Automotive Core and Automotive E. The split of the Automotive Group into Core and E allows us to create even more focus on innovation and on products such as AVAS sound systems, active suspension, and sensor cleaning, while at the same time improving the efficiency and cash generation of the business that we have with products related to the combustion engine. In summary, we are here to make sure our stakeholders understand the significant secular growth opportunities that we have identified, which cyclicality and volatility notwithstanding, we expect to lead Kendrion to continue to grow substantially over the next five years. It's an exciting story, and we are keen to tell it. The agenda. We have structured the presentation following our strategic house. This is the Kendrion strategic house we've built over the years, and it's a metaphor for the opportunity, that we have created. Hold on, guys. Sorry. For the opportunity we have created. We expect this opportunity to inform our actions over the next five years and beyond. I will start with an introduction of our strategy, and we then move to the foundation of our strategic house. It represents what Kendrion is built on, our people, supporting systems and IT, our social responsibility initiatives, the way we think about M&A, and importantly, our culture. We then move to the business pillars. First, Richard Mijnheer, who will lead Automotive E from January 2023, will talk about the opportunities in E. Ralf Wieland, who will be the head of Automotive Core, will talk about our actions and activities there. Next, Andreas Laschet will present the substantial opportunities we have in Industrial Brakes, where Kendrion is the clear market leader with a full range of brakes aimed at growth segments such as robots and wind power. It's Robert's turn to discuss Industrial Actuators and Controls, after which we move to China with Telly joining online. Telly will highlight our plans for further strong growth we expect over the coming five years. Finally, we get to the top of our strategic house with Jeroen rolling up our plans, giving further insight in our progress towards our targets. We end with Q&A with Richard, Ralf, Andreas, Robert, Telly, Jeroen, Pascal, Yvonne, and me available to answer your questions. We'll wrap things up by 4:00 P.M., after which you are invited for drinks right here in the room. Before we get started, I would like to draw your attention to the following. Certain statements contained in this presentation constitute forward-looking statements, and 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. I'd now like to start with the strategic overview. The coming five years at Kendrion will be about growth, just as the past two have been. As you all know, we have made substantial changes to our company over the past years. We simplified our organization and focused our R&D efforts in automotive, in industrial, and in China. We've acquired INTORQ, which strengthened us in brakes and in China. We've acquired 3T, strengthening our actuators and controls business and providing us with much-needed expertise when it comes to software and electronics. These two acquisitions have also improved the balance between our automotive and industrial activities as a natural hedge against cyclicality. I said it before, our strategy is all about organic, sustainable, profitable growth. When I mentioned this at our previous Capital Markets Day two years ago, I said that you will be forgiven if you are critical about our ability to grow, as we had various organic growth targets before that we couldn't meet. It led to a nice article in the Bartjens column of the FD headline, Forgiveness at Kendrion, that I personally felt reflected our Capital Markets Day message well. Today, two years later, we are certainly not here to declare victory. Comparing the first half of 2020 with the first half of 2022, we have grown our revenue with close to 30% and our profitability with some 40%. We were, and we are confident in our plan, and we believe our overall position in the markets of our choice has substantially improved. In auto, where we have been investing in a range of exciting new products like suspension, sound, and sensor cleaning for hybrid and electrified cars. In China, where our two factories in Shanghai and Suzhou are almost full, and we are completing our new manufacturing facility. In brakes, which has seen an acceleration in organic growth on the back of the broad electrification trend and helped by the INTORQ acquisition. In IAC, where new products for selected niches in healthcare, automation, and smart security systems are also driving organic growth at healthy margins. Around us here in the room, we are displaying some examples of the products of our various business groups, so please take a look at them after the presentation. In our view, we are well-positioned in the markets of our choice and ready to continue Kendrion's journey. As you can probably tell, I'm very much looking forward to it. Let me say a little bit more about the foundation of our company, starting with IT. About two years ago, we have fully centralized the IT team by removing the so-called local IT organization and morphed it into one centralized global IT organization led from our offices in Amsterdam by Pascale. The team is organized to select and implement global IT systems while maintaining a local connection to the various plants. The team consists of 45 people in seven countries and at 13 sites. We have invested in security, in project management capabilities, and we've implemented Power BI, a best-in-class analytics platform to improve decision-making and visibility of operations. A big focus for the IT team is to rejuvenate key platforms like our ERP and project management system, which will enable increased efficiency and automation possibilities and facilitate cross-business group learning. We're also investing in data science and digitalization using artificial intelligence, and that allows us, for instance, to deploy predictive models to forecast sales and inventory levels more accurately. Let's look at a snapshot of where we will be working on over the coming years. First focus is on strengthening the platforms like our ERP system, IFS, our product lifecycle management through Aras, and our HR system with SAP to keep driving efficiency. As a second pillar, we are investing in data platforms. Business intelligence has started to make a difference in our analytical capability and in the way we run our business. The third pillar is around innovation and digitalization. The IT team monitors and tests newer technologies to investigate early on where it can add value to the business. Examples are automated guided vehicles for our warehouses and intelligent inventory forecasting with remote technical assistance using head-mounted devices. Going forward, we intend to continue to invest into IT as a key foundation for the organization. Next, another important part of what we're built on, sustainability in all aspects of doing business. As you know, sustainability is an integral part of the way we do business at Kendrion. This slide indicates the progress we have made as part of the 2019-2023 sustainability targets on two important metrics, relative reduction of energy consumption and relative reduction of CO₂ emission. As you can see on this slide, we are in good shape when it comes to CO₂ emission reduction, and we still have some work to do on relative energy reduction. The last metric is especially topical given the vastly increased energy prices. I'd like to add that we're currently in our second five-year sustainability plan. Since we started in 2015, a relative reduction of carbon emissions, of course, mostly from energy by production plants, is reduced by no less than 58%. Good progress over the past years. What are we planning for our next sustainability plan that will run from 2023 - 2028? On this slide, you can see the themes for the coming years. Continued focus on CO₂ emissions and energy consumption. We also look at our supply chain, at gender and other measures of diversity, and at health and well-being of our people. We feel we've accomplished a lot over the past 10 years and will continue to push forward. In short, sustainability is integral to the way we run our business in all its facets. Let me give you one more example related to our recent debt refinancing. To achieve our sustainability-linked credit facility, we have requested a sustainability rating from EcoVadis. EcoVadis is a renowned provider of sustainability ratings, and their assessment considers criteria in four categories, environment, human rights, ethics, and sustainable procurement. The rating achieved gives us a silver medal and puts us in the top 22% of rated manufacturing companies. That is a positive external validation of our sustainability agenda and further stimulus to increase our ambition towards a gold medal, which would put us in the top 5% of rated manufacturing companies. I'd like to talk about another part of our strategic foundation, which is M&A. We've done two M&A deals over the past three years. We acquired INTORQ in January 2020 and 3T in September 2021. In our view, these transactions have strengthened Kendrion and have accelerated our journey towards our strategic goal. M&A continues to be an important tool for us. We have clear acquisition criteria and combine that with a disciplined approach to potential transactions. First and foremost, when offered an opportunity, we look at a strategic fit. The transaction must be in direct support of our strategic objectives. Second, we look for tangible, identifiable synergies that need to be available on a reasonable timescale to justify the acquisition premium. We assess management, and importantly, we look for a good cultural fit with Kendrion and with the Kendrion Way. We will continue to use M&A using these criteria in a straightforward and a disciplined manner. I mentioned the need for a strong cultural fit and the Kendrion Way, which brings me to possibly the most important part of our foundation. Management guru Peter Drucker famously said, "Culture eats strategy for breakfast." In other words, a strong and positive culture supporting the strategic goals of the company is critical for its success. In my view, of all the changes we have made over the past six years, the most important is the change in the way we get things done at Kendrion, our culture. We've gone from a collection of operating companies, each optimizing its own performance, to a global team of specialists that cooperate to optimize the performance of the Kendrion Group. In 2019, just before COVID, a team of young Kendrion employees has run workshops in all our locations to try and capture that in a single sentence. Every word in this sentence carries meaning and has been the result of this global bottom-up effort, and we call this the Kendrion Way. Next week, Jeroen and I will host our annual top 50 management meeting, and the Kendrion Way is an important topic, as it also always is. I am convinced that at Kendrion, our culture and our strategic direction move closely together. Which leads to the final part of my presentation before I hand over to Richard. Here we look at the expected development of the passenger car market by IHS Markit, as also presented at our Q2 and first half 2022 results in August. This slide indicates the number of internal combustion engine powered vehicles and the number of battery electric and plug-in hybrid vehicles between 2018 and 2027. The current forecast for the total number of vehicles is flat. Within that, the growth of both classes of electrified vehicles has been and is projected to remain strong. In fact, the number of electrified vehicles is forecasted to grow from 1 million in 2018 to 30 million by 2027, an average annual growth of more than 40%. As a proportion of total vehicle production, the share of electrification is expected to rise from less than 2% in 2018 to over 30% in 2027. Compared to a few years ago, the forecasted and actual penetration of electric vehicles continues to accelerate, and it's therefore not surprising that all major OEM, Tier 1s and Kendrion too are investing in this. In fact, the faster penetration of electrification is causing investment in the combustion engine to dry up. In summary, the success factors and the way to manage our traditional, more mechanical combustion engine related business is now vastly different from what is needed to succeed in the world of electrified and autonomous cars. We have therefore decided we need to organize for this at group level and today announce we will split our automotive group in two parts, Automotive Core and Automotive E. The main goal of the split of Core and E in this new organizational model is to create even more focus on innovation in products like sound suspension and sensor cleaning, while at the same time improving the efficiency and effectiveness of the business we have with products for vehicles with a combustion engine. Both automotive groups will have full P&L responsibility with separate and distinct KPIs. Automotive Core will focus on operations excellence, lean production, cost efficiency, profitability and cash flow. Automotive E on innovation, close customer liaison, program management and profitable growth. The new organizational structure is expected to result in annual cost savings of around EUR 4 million, and one-off costs are expected to be around EUR 6 million. We will report Core and E revenue separately, and over the last 12 months, Automotive Core generated around EUR 167 million or 72% of the automotive revenues, while revenue in Automotive E was around EUR 65 million. With this new structure, we will disclose our revenue makeup in a new way. This slide shows the actual revenue breakdown over the first half of 2022. Brakes constituted 29% of revenue, actuators and controls 24%, Automotive E 14%, and Automotive Core the remaining 33%. This means that 66% of Kendrion's current revenue is exposed to markets that are growing fast. IB has grown with 36% over the past two years in a market that supports strong growth to continue. IAC has grown with 26% and is also positioned to continue to grow rapidly. E has shown 32% growth in the market for electrified vehicles, and the market itself is forecasted to grow, as I talked earlier about, with around 40% per year over the next five years. In Core, we expect to see a slow, managed, and profitable decline in revenue. Management there is tasked with optimizing profitability and cash flow. Jeroen will come back to this when he rolls up the financials at the end of the presentation. I now hand over to my colleagues and starting with Richard, who will cover Automotive E. Welcome. I will elaborate a little bit about Automotive E. My name is Richard Mijnheer, and I'm the former CEO of 3T, the company that was acquired by Kendrion last year. For Automotive E, we have defined a strategy which basically consists of three pillars. The first one is that we would like to expand our customer base and product portfolio in our existing customer base, and we would like to focus, that's the second one, on three focus segments at this time, where we then bring our products that we have in these market segments to the market and gain market share. Of course, we also would like to have additional focus segments added to it. One important thing as well for Automotive E is finding new talent. We make a shift from mechanical products to more electronics and software, which means that we are fighting, like most OEMs and other parties in the world about electronics guys and software guys. These are the three important pillars of our strategy. Then I always use the approach that structure should follow strategy. Making sure that your organization is focusing on the things that are important in your strategy. Therefore we will rearrange a bit of the automotive group that will become the E part accordingly. One of the important things that we will do is that we will create a business development group in our sales team. At the moment, we have key account management going to our customers, but we lack a separate group that really goes out to new customers, but also understanding, okay, what are the new niches where Kendrion could play an important role. We will also focus our sales, and especially our account management team, more on understanding better where is our customer going, understanding our roadmaps. Ideally, that's the ideal situation I would like to have, is that by talking to the customers, better understanding them, knowing what know-how we have and technology that we have available, we will be influencing their roadmap technologies. That's another change that we'll do. One important thing, and that's around the segments, is that we will create dedicated segment teams consisting of project managers, product managers, and technical experts, so that they become best in class in their segment. Last but not least, and that's on the war for talent, we will recruit a, what we call a talent recruitment manager, making sure that we have a dedicated person making connections to, let's say, all the technology institutes like universities, high schools, where we can find talents, and try to recruit them. We also will look outside the current R&D centers, so that's mainly focused right now in Germany. For example, at this moment, already five engineers from the 3T organization are working dedicated in the Automotive Group. If you look at the organization chart, I can briefly say that one of the changes that we will do is that we lift the segment teams out of R&D to give them also attention. They will report directly to me, and by doing so, they become quite important in this organization. If you look at E in total, we will be focusing on the plug-in hybrid and battery full battery cars. That's basically the markets that we are targeting. As Joep already indicated before, that's a growing market. As you can see from this IHS report, it has grown from 2018 until 2027. It will grow by 40% year- over- year. That's quite a challenging and growing market. What I will now do is briefly go through the three focus segments. Again, at this moment, there are three focus segments, but we would like to have more. Starting with, the first one is vehicle sound identity. Vehicle sound identity is really all about giving a car a unique identity. If you buy a Ferrari, you would like to have it sound like a Ferrari and not like a Volkswagen Polo. That's basically also the same for electric cars. The problem is electric cars by nature do not generate sound. You would like to give them an identity, and that is really where this segment is all about, giving a car an identity. It's not only giving them identity, there are also legal requirements that we have to fulfill. The so-called Acoustic Vehicle Alerting System requirements, basically to alert pedestrians of the presence of a car. If you're deaf or blind, and if blind, you can't see the car, you are relying on the acoustics of your surroundings. If you don't hear it, accidents could happen. Every electric car or plug-in hybrid will need such a system. We will also go a step further. That's around interior sound. Also inside a car, you would like to have an identity. If it's really silent, you would pick up all the noises that is generated by the chassis. You could do noise cancellation, but you could also give it a certain ID, and that's one of the important things also in this segment. What we changed over the last two years is that we went from RFQ-based customer-specific solutions to a more platform approach. With an RFQ-based approach, you always make one-offs, which is quite intensive from the resource point of view. You have to develop everything all over again. We move to platform approach. Also in sound, we have done that. We have a number of elements consisting of actuators and speakers, ECUs, software applications that you can combine and make a unique customer specific solution. We have a software based on AUTOSAR, which also makes it future proof, where you can port it to, let's say, new car architecture as well. Another unique selling point is our sound designer application. That's a PC or an app-based solution, where you can create sounds for your car. That can be used by car manufacturers, but we envision also in the future that we could integrate this in an app, where you can create your own sound for specific items in the car, like opening a door or putting a charging plug into your car. That's all in the future. I would say, later on, go see the demo car. My colleagues from the sound segment, Philipp Lüdtke, Head of Sound, and our Product Manager, Uwe Dettmann, will demonstrate to you and tell you much more about the technical details than I can. Moving to the second segment, which is active suspension. Active suspension is quite key in electric cars. By improving the ride dynamics of a car, you can also improve the efficiency of the car, if there is less resistance, because you can keep the car as stable as possible on the road, which means that you use less energy, and therefore have to charge less often. Kendrion has been quite active already for years in this area. Also with the current combustion engine cars, we have been providing solutions in this segment, but it's becoming more important also in the electric car segments. In the active suspension area, we focus on two segments or sub-segments, you could say, with so-called active damper valves and air suspension. That's a growing market. If you look at the semi-active dampers, we see three parts that we deliver there. That's our eCDV platform, External Continuous Damping Valve, where we already have nominations and we will go for SOP, start of production in 2023. Our iCDV, that's the same type of valve, but then internal in the damper, which has more constraints and more technology challenges because of space constraints. There we are now looking into different concepts, how to bring that to market. We still have a large portion of customer-specific solutions, especially for the bigger damper manufacturers. Air suspension is a growing market that fits Kendrion quite well. A key in an air suspension system is the distribution of air, which we have from our valve knowledge from the last years. It also requires that you control so-called air compressor system, which is basically a pump. For that, you need electronics and software that fits quite well to, let's say, the electronics and software components that we also have in the sound segment. At this moment, we are looking into a roadmap for that. It's a segment that will come to us in the coming years. Just to give you an example of such a valve, also there we use a platform approach where in the past we made customer-specific valves, which meant that every development was unique and costly. We now go for a more platform approach where we have fixed components which will exist in every valve, but we can make it unique with variable parts in that system, so that you eventually get, again, a customer-specific solution for the customer. Cost-efficient because we can reuse quite a lot of the components for different customers, therefore more volume, therefore cheaper single parts. We can reduce the R&D efforts, and we can be quicker to market. This approach, we also will do for the internal valve. Last but not least, we have a segment called sensor cleaning, and that's really in the startup phase. Sensor cleaning is all about autonomous driving vehicles and then the higher levels, so the level four and above. In such a car, there will be a lot of sensors to make the car aware of its surroundings, to see where are other cars, where are pedestrians, what is the traffic light saying. There are a lot of sensors like cameras, LiDARs, radars in such a car equipped. The predictions are that more than 20 of such sensors are in such a car. When you're driving, these become dirty and therefore could be unreliable. That basically means that you have to clean them, simple as that. You do that with water and air. You spray water on it, and you blow it dry with air. This is not so simple as it looks like because you need quite a lot of water and air. What you don't want is that you have to tank water more often than fuel or recharge your car. You have to do this smart and intelligent. You have to have algorithms. You have to do it preventive, so making sure not it's completely dirty. There are a lot of algorithms behind to do this efficient and smart, and there our system comes in. That's the platform that we will provide. We do that not alone. We have a leading customer or a joint development partner is called Kautex. They have complete washing systems already, tanks, pumps, and so on. We bring the intelligence in in their system by means of an air distribution block, which is our valve technology combined with an ECU. Also there you see that the knowhow of software and electronics is becoming quite important. The first application for these systems will be in people carrier shuttles, so small buses for airports, closed circuits where you can drive, let's say, without many obstacles. That's around 2025, but the volume will come later, and that's 2028, where the predictions are that then the first autonomous driving cars, level four and higher, will come, let's say, to passenger cars. That means that we will, we are busy with prototypes at the moment. We have engineering samples available, but we will take it slow when it comes to the investments. This is, in a summary where, Core or, not Core, E is all about. Now I want to hand over to my colleague, Ralf Wieland, which will tell you all about Core. Yeah. Good afternoon, ladies and gentlemen here in the room as well as watching from external. My name is Ralf Wieland. I'm since 18 years within Kendrion in several positions in automotive as well as industrial, and currently I'm the CEO Automotive. That means, I'm dealing with all in direction of operations, quality, industrial engineering, so all which is about the real life. My home base is in Villingen-Schwenningen in southern Germany. It's a pleasure for me to give you a little bit insight about what is Automotive Core. For what is Automotive Core standing? Very simple spoken, Automotive Core stands for the strict management of all what we are producing today. Let's have a little bit some insights. The focus, of course, is to increase the profitability of our existing products, and if you are speaking about the existing automotive products, these are mainly products currently for the combustion engine. These products, they require a straightforward management of our suppliers, our operations, but also our customers. Two main KPIs are leading Automotive Core. It's the profitability, and it's the cash flow and nothing else. Very simple, very straightforward, and very clear tasks. For managing this, we will set up a very lean and flexible and simple organization. Again, all in direction of focus of profitability and cash, and we will avoid any kind of inflated or bureaucratic organization. The challenge is to shift our production facilities from today's mainly mechanical component producer to a mechatronic system producer. Mechatronic systems here in the meaning of software-managed electronics systems with, for sure, mechanical parts. It's a clear shift of our production portfolio. Therefore, we have to streamline our plants. We have to deal with this shift and, also for sure we have to adjust our production capacities where needed. A short view on the organization which we're behind, and you see that's very classical. It's simple, and it's lean. Core will have a own dedicated sales force. The sales force is not for acquiring new customers. The sales force is for focusing on the pricing of our products and increase it as much as possible. We will have our own R&D. The R&D is not for developing new products. We will develop no new products for combustion engines, but there's a product maintenance necessary. If a customer is coming in and requires a product which we have the basic product and we have the basic production system, for sure we can develop. For example, if there's a valve necessary or needed with a changed plug or something simple, we can do, but we will develop no new products for combustion engine. Very clear message. As you see in this org chart also, the plants will be subordinated to operations. That means also a strong signal in direction. The plants have to focus on their operational performance. With this and with this focus, there's simply only one thing behind this. Core has to earn as much as possible money so that E can work on the future and that we can spend it on E. For sure, that E can work undisturbed. In operational areas, always we have disturbances, and it's very important that we can work undisturbed and with full support for the future of automotive. A view about our current manufacturing footprint. We have currently in automotive seven plants, so we are located in the U.S. in Shelby, North Carolina, and in Suzhou in China, where everything is about growth. We have already heard and will hear that there are big plans with the new plant, and we will launch also some automotive products there in the future. In Europe, we have currently our five plants in Germany, in Malente in northern parts, in Villingen in the south as well as in Markdorf, near the Lake of Constance. We have in the Czech Republic, in Prostějov, our plant and low labor country in Romania, in Sibiu, we are producing mechanical components as well as we are producing their electronic components in our electronic plant. This set up, we have to maintain further. In the last year, two years, we have closed our Eibiswald operations and transfers the products to other locations. There will be further streamlining of the setup necessary. That means, not every plant has to produce everything. We have to streamline this, we have to optimize this to be ready for the change product portfolio which is coming out of E. Now I like to repeat again, and if you catch this, then everything for me is fine. The focus of Core is on profitability and cash. Again, nothing else. With this, we want to be a reliable and competitive production partner for our customer as well as for E. If we are competitive, E will join us. We have to streamline our existing product portfolio and be ready for the new set up, for the new products which have a changed set up like we have today. We have to streamline our production capacities and adjust them onto the future needs which are upcoming. We have to do a more proactive change management that means we have to convince or approach our customers and also internally that we need further changes of our products to be more profitable and more competitive. Sometimes we have to convince our customers that a change is a good thing and we have to do it. Let's have a last look on the market of Core. As already mentioned by Joop, the market is more or less flat. You see here the combustion engine as well as the plug-in hybrids. Both of them have a combustion engine. It's more or less flat. You see up till 2027. I'm fully convinced that this will last longer. To be not misunderstood, the strategy of automotive is not to rely on the combustion engine. The strategy of automotive is to rely on what Richard has presented with Automotive E about sensor cleaning, about sound, about suspension. But it is wise to cash in as much as possible our existing portfolio in the combustion engine, and that is the clear task of Core. With this, very simple, very fast, I'd like to hand over now to my industrial colleague, to Andreas. We are the experts for electromagnetic brakes. These products are used in a variety of applications to stop, hold, or position electrically driven loads. Ladies and gentlemen, before I continue with my journey into the industrial brakes, I like to introduce myself. My name is Andreas Laschet. I'm with the acquisition of INTORQ starting in 2020, part of Kendrion with a lot of joy on the first day and even today continue. Together with my team, we have created the business group Industrial Brakes. Based on the results which we have achieved and on the challenge we have actually successfully overcome, I'm actually very happy and proud to stand here almost two years later in front of you and give you a little bit overview what we have reached and what we have done. In response to some of your questions two years ago, we also have worked to get a more detailed assessment of some of your questions especially on size and growth of our market. I've picked one example, which is actually wind turbines, where we are providing our brakes and serving actually encapsulated brakes for the pitch adjustment. These brakes withstanding temperatures from -40 degrees to +120 degrees. As the towers are getting bigger and taller, the brakes also need more torque and are therefore getting bigger, as well as our brakes. Besides the for the pitch control, we are also delivering the controls for the azimuth brakes, actually between four to 10 to control and hold the cabin towards the wind direction. To better understand the market, the growth and the trends and the size, we have now looked at numbers of global installed capacity in 2021, as well as in the future. Here we see with the installed wind turbines of 21,000 last year, and that's growing, a growing market, it will be on a yearly basis, even 28,000 wind turbines installed. We do know with the numbers of our brakes what is our size into this market. It's actually quite strong. We do expect here a growth, a conservative growth of 7%, even 12% and more in only this market. Similar to the calculation what we have done for wind, we have actually used these calculation scheme also for the other existing markets, and I would like to share this with you for some of them. You see the classical areas of industrial robotics and trucks where we are actually expecting moderate growth between 2%-4%. We have the wind portion, which I already explained, going up to even 12%. My personal expectation is even more. We have a very big one on electrical motors, where we have also the total market size, the biggest one. We are expecting a growth of 2%-3%. It's an undefined application or market for us, as we are producing, delivering brakes into these products and serving motor producers, not exactly knowing which application they finally go in. This is the reason why this is the biggest current market. With the other markets, we see around about 1.2-1.5 billion market size of a growth of 6%, which we are actually not only following for our existing market, but which we are actually ahead of this. I would like to also explain you why and what is the reason behind. If Joep, you were also talking about this, about energy transition, optimization. If you're opening today newspapers, you see it in various articles, the changing markets. Actually a very attractive thing is, we are able to serve all these, strong changing markets with, existing application. One, for example, is wind, which I already explained. Others, next to the wind, for example, e-mobility, where we are stepping in on railway, for example, which is also, a highly potential market. On electrification, even bigger ones with all the electrical motors, but we are seeing application, and we have already gained application in agriculture. Another one is the medical area, medical domain where we are already in. Here, one of our entry points in order to step in is expertise, which we do have in the neighboring areas domain like the industrial robotics, combined with a wide range of product which we do have, both from Kendrion and the acquired INTORQ side. I will get back to an example on medical side in a few minutes. Another headline is the optimization of manufacturing processes. Here it is the same. We are able to open a new application in the growing e-commerce and logistics with new development markets because we are already well-positioned in, for example, the industrial trucks. That's the reason why we are growing much stronger than the market and not only the existing market, but also with the new ones. This is also the reason why we, despite the corona and COVID-19 restrictions we have experienced during the last two years, we were actually growing. We have already heard this by 36%, which makes me proud. Not only revenue-wise, also profit-wise, we have some quite attractive numbers. The markets where we are in, the focus markets, and actually I've shown this picture two years ago, that's still the same, but we are going into new ones, new markets. We are confronted with all the challenges, and we do have actually solutions for all these markets. Let me share at least an extract of our products and our product portfolio, which we do have. This is mainly matching the needs of the customer, which we do have today, for example, on robotics, wins and industrial trucks, but also with this expertise also going to the future. We are investing a lot in new market segments. Actually, we are also quite successful with hit rates, which are doubled than two years ago. For this, we are able to grow, and we have been able to materialize this growth, which I was just mentioning, and we are planning to continue in the same way. Let me give a few examples for this application. One is robotics. We were already in the market since actually many, many years, but the combination of industrial robots and medical is something completely different. In this new application, we are confronted with new requirements, which we had not in the past. Here, for example, requirement of no backlash. Another requirement of 100% positioning and precise positioning. I think everybody who had or is going to have a surgery also perfectly understands that positioning for this is essential. It's just mandatory. In very close communication and cooperation with our customers, we have been able to position actually a quite good solution for this required application, and we are using the highest performing brakes with the highest actually power density, which we do have in our product portfolio. Additionally, we have upgrades, also our internal process, we are able to comply, on the test laboratories and on our production processes, fully with the high quality standard which are coming from the, medical environment, based on documentation and traceability. You are going to see an example actually of, a company or robot, actually, it's a collaborative robot, from, Rethink Robotics. Rethink Robotics is a supplier of, industrial collaborative, robots. You see it, I think Jonas probably have already demonstrated, it's serving actually chocolates. Based on the result, we could serve, champagne, but, we were not able to install it as quick. Jonas had been trained yesterday actually within two or three hours in Bochum at the company with Rethink Robotics, and was able to install this robot here, self-teaching, in a short period of time. Another example is our AGVs, automated guided vehicles, in the logistics area. I think Robert also will talk about it. It's a strongly growing market. All these products are normally battery driven, and space and weight is highly restricted. Therefore, our customer needs a very compact motor solution with high-performing brakes on one side, and on the other side also lightweight solution. Additionally, we need to ensure a wider range of temperature, for example, in a cooled down warehouse, which our brakes also needs to operate. We also need to comply with additional requirements. For example, there's certain load scenarios that different brake behavior needs to be followed. Here, we actually do have a patent solution, which was coming into place, and we are able to provide a nice solution. Without going too much in detail, actually, we have been able to by eliminating manufacturing tolerances, we have been able to design a brake which has a 40% higher performance than the conventional one. This serves right now these AGVs, and actually it's a quite nice success story. These are two examples. In summary, I would like to say we are right set up for quite successful journey. I am actually proud that we have been able to successfully integrate INTORQ into our industrial brake unit. Not only because we were able to gain synergies and able to harmonize our processes, which actually is still ongoing, but I think more important that we have learned from each other, sharing best practice, and using a common future, having a common future in mind. We have grown together and become a team, which I think is most important in striving being number one for industrial brakes worldwide. We do have also an extensive product platform and portfolio, which I have shared with you, either for today's customer and also for future markets. This is off-the-shelf or customer-specific projects. I also think, and this is seen as growth, which we have actually experienced during the last 2.5 years, that we are able to serve existing customers even with our logistics constraints, which we have seen, and material shortage. This had been tested by our big customer, but also smaller one that we have done a great job there. We are able to serve these customers, and we are doing this from Europe. There are two locations in Germany. We have one location in the U.S., one in India, and a bigger one, growing. Telly Kuo will talk about this in China. Currently, we still have two there. I'm actually very proud having a strong team with sound and proven expertise in all these areas, great ideas with high dedication and strong motivation, actually moving us for number one. That's great. With all these success pillars, I'm convinced that we are able to support our customer and be Industrial Brakes as a reliable and innovative partner and able to grow with our customer in future. Thank you for your attention. I pass now to Robert. Yes. Yeah. Good afternoon, ladies and gentlemen. My name is Robert Lewin, and I have the pleasure to manage Industrial Actuators and Controls Business Group, in short, IAC. IAC is a multi-market, multi-product Kendrion Business Group, active in selected industrial automation niche markets where we can achieve above average profits. Facing our customers' challenges, we utilize our profound know-how in electromagnetics, control technology, and fluid technology to create innovative solutions. IAC's revenues of EUR 120 million per year are created by 50% in Germany, but Germany is not the only one. We create business in China, in the U.S., and also in the Netherlands at a higher rate than average IAC. Currently, we are well ahead of pre-COVID times in terms of revenue and profit. Our EBIT, EBITDA target is 15% to be achieved in 2025, and we are already quite close to that target, and we will achieve that earlier. Some explanation of the growth rates and of the trends we are following might be given. These are not necessarily so-called mega trends, but in current geopolitical environment, these are accelerating trends to more health focus, more internet retail, more energy efficiency, and more security. The trends we are following should have, of course, a higher growth rate than the average target of 5%. Some words about our healthcare innovations. Our main product for the healthcare sector are miniature valves and valve modules. In 2019, we insourced our valve production from an Italian supplier into our Sibiu plant in order to reduce production costs and increase our flexibility in our supply chain. Now our regained power unfolds step by step. Our main markets in the health sector are dialysis machines, dental chairs, and anesthesia devices. One example I've brought along is from the company NxStage. This is a relatively new company founded in 1998. Founded in the U.S., operation in Tijuana, Mexico, and it's now owned by Fresenius. They invented the so-called home hemodialysis. As a patient with chronic kidney disease in the latest stage, you have three possibilities, a new kidney, peritoneal dialysis, or hemodialysis. The peritoneal dialysis only lasts for one year because the filter function of the peritoneum ceases after one year. Then you have to see the dialysis station 3 x a week, four hours each. That's, of course, very inconvenient and the home hemodialysis will enable the patient to do it in self-service, and during the night, so that is a little bit longer and therefore much more convenient. Why has Kendrion chosen to support that product? We have a long-term experience in clamping units for dialysis machines. Every dialysis machine needs such a tube clamp because in emergency case you need to clamp the tube. If there is an air bubble, for example, in, you might die. We operate here with PVC tubes. They are relatively hard, and that's why you need a high force clamp to operate in that. Even from the distance during COVID-19, we came along with the new customer. We sold it via video. We deliver products to all major dialysis players, to Fresenius, Gambro, Baxter, Nipro, and hopefully soon to NxStage, and also to Weigao in China. The next trend we are following is energy saving. We do that via the method of induction heating. Induction heating is a very efficient and precise method to heat. The system consists of a controller, generators, and inductors, where the inductor is the heating element. In industry, that kind of heating already exists, especially in the forging industry, and also in the synthetic fiber production. It had difficulties to spread further because of high initial and system costs. Now, as energy costs are ramping up dramatically, the situation changed. Also here I have an example for you brought along. That's the Bühler business. Bühler is a CHF 3 billion company. It's a worldwide leader in mechanical and thermal food processing plants. Here, the task is for the automatic wafer baking ovens, where Bühler owns about 60% of the world market, to change it from gas heating to inductive heating. Kendrion has been chosen because we are a technology supplier and with profound know-how in that area. We have technology leadership in the industrial inductive heating, in the power range between 3 kW and 20 kW. The next example is Matthews Saueressig. This is a global leader for rotating precision cylinders used for embossing and foil production. Here the current heating is oil-based, and of course, it might be dirty. It's a lot of maintenance needed. Here, of course, our inductive heating solution provides much better efficiency. It's cleaner, it's more precise. The first application is for plastic foils for car batteries used in Tesla's electrical cars. Again, why Kendrion? We are in that range, definitely technology leader, and we have the whole system under control. Yeah, we drive forward our product standardization to act quicker and with less initial costs. The main effort is with the machine or with the plant manufacturer who needs to completely change its heating process. Normally they are very careful and resistant or conservative to do such a major change in the heating process, but governmental and geopolitical pressure for energy efficiency has brought more movement into that industry. We will definitely participate in future and should double our induction heating revenues in the next five years. The next one is about our automation initiatives. As Andreas already explained, automation lines are equipped with robots and with more operator safety features because of collaboration between the operators and the robots. IAC's products like our CODESYS-based safety PLC, the motion control modules, and the solenoid actuators are well positioned in this growing market. COVID-19 gave also a push to the internet-based retail market. A lot of warehouses are being built, including the automated guided vehicles. We are supplying and discussing projects with major material handling players like MHS Global, Honeywell Intelligrated, WITRON, and SSI SCHAEFER. MHS VanRiet an international company, but with European headquarters in the Netherlands. The headquarters is in Den Bosch, and the VanRiet operation is in Houten. This is near Utrecht. It is the leading provider of automated material handling solutions for parcels for e-commerce and for retail industries. What kind of product we are delivering? It is so-called shoe sorter. The shoe sorter is sliding the parcel from one roller band to the other and doing the switching mode, so to say. For that, you need a bistable rotary solenoid. Also here, long-term experience, fast switching time and all these kind of requirements are necessary to fulfill. We cooperate with major electrical automation brands like Parker, Lenze, 3S, Beckhoff, Murrelektronik, ifm, Kontron. Sometimes they act as resellers for Kendrion, and sometimes they provide us with their products. The last trend are smart and remote security systems. Here, operator safety is one major driver, but also the remote operation and the remote control of access to certain devices is important. We are currently becoming a well-known supplier with contacts from Turkey to the U.S. For industrial washing machine locks, we are the European market leader and supply to Electrolux, Miele, Alliance Laundry, Gorenje, Girbau, and soon also to Dexter Apache in the U.S. Yeah. Finally, what ISC stands for. To sum it up, it is a solid business with innovation, intellectual property, price power, and top customers. We are dealing well with the current inflationary environment. We are better able to pass along cost increases than many other companies. ISC has promising innovation projects running and the R&D power to build new products with our own intellectual property. We are usually the leader within the approach niches. Our highly efficient active sales and our sophisticated in-house market intelligence approach is needed to find the right product market mix in a fragmented market environment. The last item is we usually have long-term customer relationship. It lasts 20 years and more. It is also, on the other side, a very stable business, and it is a lot of fun to managing this business group as in Kendrion. Thank you for your attention. I will hand over to Telly Kuo, President of Kendrion China. Good afternoon, all the guests, ladies and gentlemen. My name is Telly Kuo, head of Kendrion China since 2016, six years before. I'm physically in Suzhou right now, nearby Shanghai in China, and I'm happy to share all our progress in China to all of us. Yeah. Do you have it? Yes. We actually, since the six years before, we already identified China will be our most important country or market for growth. Therefore, in the past six years, we do our best try to scale up in China. We are calling this as a scale in China. So far, we have been on our schedule. Right now, two years before in this meeting, we already announced we are going to plan for our big manufacture plan for coming ten years from now on. Two years before, we announced we are going to get a piece of new land to build our own manufacture factory in China. We are happy later on in coming page, we can share what we have complete. Two years before, we are just planning, but today we are happy to share that really our factory is almost complete. Yeah. And next page. The background of why we are so aggressive in China, because actually the bigger market is here. If we look at the current Kendrion focus to major market, industrial and automotive, actually, China, the market size is actually much bigger than what we have in Europe. In the left-hand side, we can see for industrial market size, actually, China even own 5x bigger than what we have in Germany. For automotive, either combustion engine car or traditional car or further new electric car, China also own the biggest market size in the world. Therefore, we do believe as we are performing very good in Germany and in Europe, we should be also can be good or even stronger in China. Eventually, we believe our business and revenue scale in China will be in line with the market size as we showing here. This is background, we are so aggressive in China. Next page. Because opportunity is here. The business strategy for entire Kendrion China, we want to deliver one Kendrion to China. We got different BU, and each BU we got our strengths in Europe, but in China, we want to integrate all our BU together to deliver one Kendrion power to China, to market. The strategy will be we integrate all BU and BG resources to get a more professional economic scale on the following, which is including local talent, because we can provide it much bigger economic scale to attract more talent people to join Kendrion. We got a more efficient supply chain to serve all our BU requirement and business growth. We can get a more efficient operation infrastructure, and even we got a better government subsidies or PR program. Like there's the piece of land we got from Suzhou government. Naturally, this is quite local government is providing a quite attractive offer to Kendrion as a whole group. Actually we are happy we are deliver the much stronger resources here. The strong belief behind is we believe we can integrate all BU together. That means, it's like, one fist. We believe the fist is much more powerful than the single finger. This is what our belief. Here, in this page. Actually, we already deliver more than 25% annual growth in the past six years, every year, averagely. In the coming five years, we are quite confident we can also deliver higher than 20% for each year. I think that, then we can share what the. As we mentioned in the beginning, what is, we actually, right now, we have two manufacturing sites, one in Shanghai and the other in Suzhou. Both are almost full. We are happy to share a video, a show video about our new building factory progress. Actually this new build, this new factory, two years before, is just planning and just paper working, we talk about here. Today, two years later, we are happy to share all progress to everyone here. Yeah. Can we show the video? Yeah. The idea is only phase one. We divide the entire factory building into two phases. Phase one can support our growth up to five years from now. After that, we will also. We are also preparing to get phase two. Actually, the nice idea from Joep's support is before we build in the phase two land, we are thinking about to have a temporary Dutch garden before we got the phase two. We hope we can combine the German technology and Germany building, technology building and Dutch garden, and located in China and get the China growth. Thank you for the attention. Yeah. This is our update and sharing in China. All right. Good afternoon, everyone. In the last 1.5 hour or so, you've heard from Joep, Richard, Ralf, Robert, Andreas of course, and Telly, quite passionately about our various growth opportunities in industrial brakes, actuators and controls, and in Automotive E. I will now present how this all translates into the realization of our financial targets, first announced in September 2020. Of course, what we have achieved now two years, almost two years, into our five-year ambition. First, let's revisit our midterm financial targets. Firstly, we aspire to grow our organic revenue with an average of 5% per year, taking 2019 as the base year. Second, to realize an EBITDA of at least 15% by 2025. Third, to realize a return on capital of at least 25% by 2025, and our target defines return on invested capital as EBITDA divided by invested capital, excluding intangibles arising from acquisitions. Finally, to distribute between 35% and 50% of our normalized net profit as annual dividend. Although economic circumstances have profoundly changed since we first announced our targets, we believe that we have progressed towards realizing each of the financial targets. Let's start with the development of our revenue and growth. Group revenue increased 13% per year from the first six months of 2020, and now exceeds the pre-pandemic level of 2019 by 2%, in both cases on an organic basis. The revenue development between the business groups, however, deviates quite substantially. Industrial brakes realized 17% average of organic growth, with revenue now exceeding the pre-pandemic level by 26%. Actuators and controls grew organically by 12% per year, with revenue now exceeding 2019 by 9%. Also, revenue allocated to Automotive E as well has shown a positive development despite the industry-wide semiconductor shortages. Revenue in E exceeds the 2019 level by 15% as we successfully ramped new suspension and sound projects in recent years. Total automotive revenue has grown on average 12% per year since the first half year of 2020, but of course, the first six months of 2020 were significantly impacted by the COVID-19 shutdowns. Total automotive revenue is still 11% below the level of 2019 when global car production was 14% higher, and European car production even 31% higher than it is today. Besides growing our overall business in the last two years, we believe that we have also made a significant positive change to the growth profile of the group. As indicated by the chart on this slide, in 2019, Automotive Core still represented around 50% of group revenue. Now, 2.5 years later, we can state that around 2/3 of our business is exposed to growing end markets, and in most cases, driven by the mega-trend to cleaner forms of energy and electrification. We believe that the exposure to the growing end markets will contribute to realizing the targeted minimum EUR 635 million revenue by 2025. In IB, as Andreas explained, we will expect to grow with our existing end markets in, for example, industrial robots, industrial trucks, wind power, and electric motors, but we will also tap into emerging markets such as AGVs and lightweight robots, as stated earlier by Andreas. In some of these markets, we already have realized sizable new revenue in the last 12 months. Also, in IAC, we see selective niche markets where we are able to achieve above-average growth. Examples shown are induction heating, smart security systems, and nuclear power plants. In Automotive E, we will launch several new sounds and suspension products over the coming years and expect to further add to our pipeline in the coming years. The dependency on the overall car market has significantly reduced in the last years. However, of course, a recovery of the global car production to 90 million+ cars per year, as the semi shortages are expected to gradually subside, will of course further support automotive and group revenue. Switching to the development of our profitability. Consolidated normalized EBITDA, the consolidated normalized EBITDA margin has increased with 1.6% between the financial year 2019 and the first six months of 2022. Profitability in the industrial segments developed positively. The EBITDA margin here was 17.9% in the first half year, well above the 15% group target. For reference, in 2019, the industrial EBITDA margin was still 12.2%. This margin improvement comes largely from operational leverage, but we also successfully realized around EUR 4 million cost synergies from the integration of INTORQ and Industrial Actuators and Controls. Our return on invested capital increased from 11.7% in 2019 to 15.5% at the end of 2021, and 14.5% at the end of the first half-year. A good step towards the 25% target, mainly driven by the increased EBITDA. Profitability in Automotive is affected by the continuing low volumes as a result of the semiconductor shortages and high order volatility, and increased costs for engineering for new project wins in the last year. The Automotive Group's 5% EBITDA in the first six months does, of course, not contribute positively to the 15% group target. However, we expect that our new organizational setup, cost optimizations in Automotive Core, and a good project pipeline in Automotive E will contribute to a significant profitability increase of our automotive franchise. To make that more concrete, planned cost optimizations in Automotive Core are expected to reduce costs with around EUR 8 million per year, which corresponds to 1.25% EBITDA margin for the group. This cost optimization includes the closure of the Eibiswald Austrian plant, as explained by Ralf, where we expect savings of around EUR 4 million per year starting in Q4 of this year. Other measures are expected to generate another EUR 4 million in cost reductions, the great majority of which we expect to be fully effective in the next four to six months. In order to effectuate these annual cost savings, around EUR 6 million in one-off costs are expected. Another 180 basis points-200 basis points margin improvement is expected to come from leveraging revenue growth. Automotive is expected to be the largest contributor to the margin increase. Here, higher revenues will lead to a better absorption of fixed cost. That includes costs for engineering. Finally, to our dividend policy, where it's our target to distribute between 35% and 50% of normalized net profit. In 2020, dividend was passed as a protective measure, as we were in the middle of the first COVID-19 wave, with significant pressure on revenue and profitability. In 2021 and 2022, we returned to our policy as we were able to successfully protect our financial position and profitability during the first Corona wave, and have further improved profitability since. Both in 2021 and 2022, we distributed 50% of normalized net profit. Thanks. Which is at the high end of our target range. That concludes my presentation. With that, I open the line for questions and hand back to our master of ceremony, Joep. Thank you, Jeroen. Yeah, this brings us indeed to the end of the presentations. I hope that we've given you a comprehensive overview of our achievements over the past year, two years, but more importantly, of our plans for the future. Now, one remark on the Q&A. We created the opportunity to ask questions, of course, here in the Novotel, but also for those attending the presentation virtually. This requires you to actively move the cursor on the screen of your computer and ask your question. Pop-up will appear on the bottom right-hand side. You can click on this block, submit the question, and when submitting the question, please state your name and the company you're representing. Then Cleo will read it out here, and we can answer it. With that, we're all available here to answer your questions. Who will kick us off? Frank? Yes. Frank Claassen, the Degroof Petercam. Question on your targeted EUR 4 million savings. Could you elaborate? What are the sources for these savings from the split up? And also, the EUR 6 million of one-off costs. What is roughly the timing? When do you expect these one-off costs to kick in? Let me take the first one and then, for the timing, move to Jeroen. If you look at that split between Core and E, the fundamental reason we're doing it is because the markets for the traditional combustion engine and the brave new world of new mobility have, over the past two years, become so different that it is almost impossible for one management team to cater to both. You say it's classic organizational design. It's now so different, we need to separate this out. Related to that is, for instance, in automotive, you can well imagine we now have one R&D organization. We have one organization looking after quality. We have one organization looking after sampling, et cetera. By splitting that up and giving these groups their own P&L, certainly on the indirect side, so not so much on the production side, but on the indirect side, you're effectively forced to look at the makeup of these teams and say, "Okay, how many do we need for Core and how many we need for E?" It becomes much more transparent. Generically, without, you know, getting into too much detail on exactly where and how and what, but the fundamental point is that if you look at Core and E, we found doing this analysis in quite some detail, that in these various blocks, specifically, I think in R&D is one area, we have too many skills related to the world as it was, and not enough skills needed for the world that we're moving into. That is the source of most of the savings there, and our estimation is that will yield us around EUR 4 million annualized. Timing of the one-off costs, Jeroen? Yeah. Which is at this stage an estimate, and we will, of course, inform you over the quarters on the progress. P&L-wise, the majority will be this year. Cash flow-wise, the majority will be in the first half year of 2023. Okay. Related to that, also on the split up between Core and E, how does that work in a plant, in an automotive plant? For instance, you have a line for sensor cleaning, sound systems and a line for core automotive. Yeah. How does that split up? How is that split up on the ground? For instance, if one person is working on the same two lines, could you elaborate on that? Yeah, sure. Production is 100% of our production the responsibility of Core. Now, some of the E products, for example suspension, is going to be produced in those same factories because we're not going to physically split up lines or production facilities. What we will do on an annual basis is we're going to basically say, "Look, here are the standardized costs for this budget year with a specific yield, with a specific raw material cost, with a specific scrap rate and all these other things. And this is the cost that you basically should be able to make it at." That's the transfer cost to E. Of course, not physically, but in our management systems. If the Core people do better, they make money. If they do worse, of course, the P&L gets down. It's basically an internal system that we will use to make sure that on the one hand, the Core guys can actually earn money on that, and on the other hand, that E gets their input costs at a predictable level. At a certain stage, there could be, let's say, plants dedicated to E if it's big enough. Well, yeah, maybe. Ralf, you want to say something about that? Yeah, basically, of course producing everything. The old parts, the combustion engine related parts, we are fully responsible. The e parts, we are a kind of, I would say contract manufacturer for E. If we are competitive, it will choose us. It's up to us to produce as profitable as we can. In the end, it will happen over the time that the classical products will disappear more and more. That's by nature given. On the other side, we are relying that Richard's team bring in new products which we can produce if we are competitive. To be honest, I mean, if you looked at the chart now, of course, you know, this is an IHS Markit prediction. We will see what happens. We do expect, Ralf also mentioned that, you know, for at least five years, probably 10 years, there's going to be quite a bit of volume still in the combustion engine available. Before you get into the world where you say, "Actually, now most of this production is related to E," will probably still be a while. This is one of the things that we're going to look at very carefully on an annual basis, optimizing the manufacturing footprint, and that is squarely in the responsibility of Ralf and his team in Automotive Core. Okay, thank you. Any more questions? Sorry. Tijs. Yeah. Good afternoon, Tijs Hollestelle, ING. I appreciate the more detailed overview of the product categories, because I can learn from that, remember, the last time at the Capital Markets Day, there were a lot of questions about. A bit more detail on the offshore wind market. Is it that it is structured in a similar way as in automotive so that you, for instance, have a co-development phase with Vestas and you're spec'd in for the 8-MW turbine, and then you will be the preferred contractor for the next couple of five to seven years on that turbine? And is it then possible for other turbine makers also to choose your products? What is it more or less your market share? What is the opportunity? Andreas, you wanna talk to that? Yes. Actually, on the wind turbine, it's our strongest market and our strongest application where we are in. I don't know if I can state it, but we have actually a quite strong market share with more than 50% here. I think with this, it's not that we are set, but of course, we have the expertise both onshore and offshore. Offshore is the stronger market, and we are moving or everybody's moving further on the offshore side. We do have products both on pitch and azimuth application, which where we are able to serve these very strict market requirements. We are also discussing and in discussion with suppliers, additional even smarter solution in future, with less maintenance, how can we have brakes which are serving these kind of requirements. If you remember the slide I've presented, actually, also the brakes are a very small portion out of a total wind turbine. One is probably between EUR 6 million-EUR 10 million installation cost. If we are installing maximum 13 brakes, it's a price of EUR 1,000, so probably a little bit more. Mm-hmm. Yeah. These brakes needs to run because if the brake doesn't work, it actually costs much, much more. I think we are well positioned. We are in contact with almost every producers, both on motor, electrical motor producer, as well as also with wind turbine producer by itself. I'm expecting to keep and maintain this high level of market share. Maybe one more thing to clarify. You're talking about the turbines. The brakes are part of an electric motor. A wind turbine is actually a tower full with electric motors to basically move the tower into the wind. We call it azimuth, but also the pitch of the blades, depending on how fast the wind is blowing. These are electric motors that basically turn them, and that's where the brakes are in. As Andreas said, up to 13 of these brakes need to be highly reliable, and that's the market. It is also, it's the same as with lots of the products in IB, it's all related to the sale of a specific electric motor. Once you have, of course, the brand and the customer relations and the product, then you know, combined with a strong market share, that's a very good position to be in. It's also deliberately chosen to seek these customers which you can grow on the back of, because that's more easy if you are indeed backed by huge customers that are growing. Yes. My feeling is that there is still a lot to come. If I look at slide 51, 52, there are more examples, and a lot of that is in R&D phase or just prototyping. Yeah. I do also see that the revenue opportunity is not that big, but altogether, adding up all those millions, that could be quite something. Is that a correct way of analyzing that? That's definitely, that's also, I mean, the slides you're referring to are in IAC? Yeah, because I look. Yeah, exactly. I look at it more broadly, yeah, because there's so much detail, but indeed, yeah. Now in IAC, because there is roughly 30 different segments. Indeed, we just give a few examples. It's impossible to be exhaustive there. Yeah. One of the things, as Robert mentioned, is that the art there is to zoom in on certain niches where you see this growth opportunity at a high profitability level and invest in that, while others are interesting from a profitability perspective, but not so much growing, and you don't invest in that. Robert, maybe I don't know if you have any additional color. Yeah. Yeah, for sure. Of course, these have been four examples of niches where we are in. It gives you some insight about how we are acting. Of course, you are right in summing it up, there's quite some potential in. On the other hand, also within IAC, there is, let's say, 25% business scope where we see also reducing revenues. All in all, we are targeting for 5% being rather conservative and looking for profit growth. Yeah, okay. That is indeed the reason behind my question. Is it now more than average, the prototype and R&D phase, or I understand that you show the PowerPoints with, of the businesses that are growing, but there are also declining businesses. If you look at IB and you look at IAC, looking back over the past three years, we've mentioned the growth numbers over the past two years. You see that both have substantially outgrown what was usual. Now, part of that, of course, has to do with COVID, because when we announced these targets, I mean, the whole revenue, I think Q2 2020, the group revenue was EUR 85 million. That is clearly depressed by COVID, not just on automotive, but in other areas. Part of it's that. You also see that I'd say the overall growth profile, not just in IB, but also in IAC, has improved. Now, it's very difficult even from where we sit, because you need to look at the cyclicality, to pinpoint exactly if that is going to be 5% or more. I'm personally quite optimistic about it. I also believe that the growth profile of IB is going to be a little bit stronger than of IAC. At the same time, when I look at the order book and I look at all the innovation that we've had, some of the products here, that I invite you to take a look at, after this, when we serve the drinks here, are examples of that. You add up all those millions, as you mentioned on the slides, there's some very good potential in both industrial franchises. Yeah. Okay. Yeah. Then a final question for now. In the automotive space, let's say five years ago, and also reading your annual reports, you basically have almost the complete automotive market as your customer. To me, it always looked quite stable, and you're spec'd in for a couple of years producing. I visited the plant in southern Germany, could see that. My view is that it changed a lot with the e-vehicles. It's much more volatile, probably, because it's in development also with your customers. But I also remember you have a lot of these, yeah, German-based, family-owned competitors. Mm-hmm. Which have, yeah, less revenue compared to the Core business. Yeah, in my view, an R&D disadvantage. Have these competitors also made the change to the e-vehicle development because of their tight customer relationship? Or are some of them basically, yeah, not able to catch up? It's hard to judge that. We've talked before about the fact that we're the only one in this market that is public, so we're sharing much more information- Yeah. By definition than family-owned businesses in Germany that are, as you rightfully point out, our competition. On the suspension side, which is a mostly mechanical product, we do see the same names that we compete with. When it comes to sensor cleaning and sound, we don't. So it's hard for me to say whether they're also investing as much in E as we do, because they don't have to disclose it, and they don't. But my impression is that in this transition, we were certainly early in starting to invest in products like sound, sensor cleaning and also suspension, specifically the platforms that Richard showed you for e-vehicles. But I have to be a bit careful because, you know, there's no disclosure that we can really look at. Okay. Yeah. Maybe on the sensor cleaning, it's not contributing any revenue to Core today. What is your, let's say, conservative expectation for that? Richard, you want to talk a bit about that? At the moment, we have samples out. If you look at revenue, it's just on a sample basis. No substantial revenues. There is growth potential, but as I also outlined, it's the market is not there yet. It will take years before that will take off. Predictions are good, but at this moment, there is no substantial revenue. If you, let's say, I don't pinpoint you on an exact date, but if the market comes up, what kinds of millions perhaps are we talking about? That's quite hard to say because, let's say the passenger cars market will take off in 2028. That are the predictions. You could say, that could be millions or hundreds of millions for those kind of systems. In 2025, it will be mainly people carrier, and that's maybe 1,000 vehicles per manufacturer per year as of 2025. That's quite a limited revenue. I don't expect that will be tens of millions in the beginning. Yeah. Maybe to drill down a little bit on that. One of the things that Richard said when he presented, he says, "Structure follows the strategy." One of the important things that we've announced in the way that we've organized E is the segment managers. Why is that so important? Because it's very easy. This is an innovative group. It's very easy to get ahead of yourself and say, "Oh, sensor cleaning is gonna be wonderful." It's also a lot of investment dollars. The segment manager's responsibility to really gauge and keep the pulse of this development, where, when, and if it's going to take off, and then it's going to be very transparent how many R&D dollars we invest in that. We make sure, and that's the responsibility of the segment manager, of course, reporting to Richard, that we do not invest ahead of the curve. That is really something, and sensor cleaning is a great example. I must say, two years ago, we were more optimistic about when it was going to be introduced. At the time, we said, "maybe 2025," in line with the view of the market on autonomous driving. That is shifting backwards a bit, and that also means, Richard mentioned that in his remarks, we will pace the investment in this particular product accordingly. That's another benefit of this new split, where you say, "Look, this is the team that is thinking about the innovative, the profitable growth, and therefore also about how much R&D do we spend when. Okay. Thank you. Martijn. Martijn den Drijver. Firstly, because I've seen some numbers of annual growth. When I do my calculations and I don't have the information about INTORQ in 2020 acquired it. I arrived at year to date, you have achieved an organic growth of 0.7% on average. Am I close to that number? From when? Organic growth start 2020 till mid 2022. No. The growth since- Organic growth. Organic growth was 13% per year. Since the first half year of 2020? Starting of 2020. Yeah. You've included INTORQ. I don't have that information then. More or less INTORQ acquisition was not available yet. INTORQ has been consolidated in the group from January on. Basically, the full year 2020 includes INTORQ. Okay. The organic growth since the start of your program, you said, "We start a program with a basis of 2019. Yeah. Oh, yeah. That was also in the presentation. The current revenue level, if you look at the last 12 months, exceeds organically 2019 with 2%. Of course, when we stood here in September 2020, we were much lower. That 2% could well be 0.7% per annum on average. Yeah. That implies that going forward, you need slightly more than 8% to achieve your 5% on average target. Yeah. Okay. What kind of gross margin do you expect to achieve in future? Is that stable or is it growing or? No, we expect that it's stable. In the models, we keep it stable. You've seen over the last periods that due to industrial, for example, also the addition of 3T, the added value margin has improved positively. As the mix is expected to be equal going forward, so will be the gross margin. That's the expectation. On the basis of your guidance, you expect quite a strong conversion ratio to get from that gross margin to reach your targeted EBITDA. That more or less implies that you need to convert 50% of your gross growth into EBITDA growth. That is achievable? You did a lot of math. No, the target, so as from the current, like I said, so from the level where we are now, 12% EBITDA, 1.25%, from 12% -1 3%, so 3% more EBITDA, 1.25% will come from cost savings. 4% is already realized. The other 4% we expect in the coming months. Then you have another, let's say, 2% coming from growth. Well, if you look where automotive is right now, I think that is quite plausible for 2025. If automotive, the automotive franchise grows as we believe it can with the focus on E, then definitely that 5% will increase significantly. Another discussion we had two years ago was a fierce discussion about your return on invested capital- Yeah. whereby you have excluded the acquisition related to goodwill. Mm-hmm. If I now make all these calculations to 2025, and we know you have made the INTORQ acquisition, the 3T acquisition, and then assuming you will achieve the 25% return, and then I'm also assuming that your invested capital will grow now from EUR 215 million at this moment to EUR 250 million, and then you will arrive at an EBITDA of EUR 62.5 million. If I correlate that one to, according to me, the true invested capital, which includes the goodwill also, you also made for INTORQ and for 3T, then you won't achieve the 15% level even. Before in 2020, at the CMD, you raised your return on invested capital target from 20% to 25%, again, excluding that goodwill. Looking back, you have not made that much progress in that respect. Actually, you have gone down on your return on invested capital target when I look at it on a like-for-like basis. That's also why we have excluded, so that is not to make the number nicer because when we announced it, so we did also a comparison, like for like. We excluded it deliberately, because if as you've mentioned, M&A is part of the strategy of the growth strategy, and you have a target, an ROI target, then your target actually prohibits you of doing any M&A. Because you will never, ever find an M&A deal that on day one will deliver 25% of ROI because then basically the seller needs to give it to you. That's why the 25% is based on internal hurdle rate, that's it, what we invest in in our operating business operations. Also, the EBITDA is what we earn on the operations. There is where we plan to exceed 25%. Currently we do around 15%, that was 10-point-something. It went up. Maybe I agree with you that you can't do any acquisition then, but therefore I don't think you should measure it like that. The way you do it is not fair either. For example, looking at INTORQ, whereby you have invested capital of only EUR 23 million-EUR 25 million, and that already delivers you currently a return on capital employed from close to 30%-35%. To make it even more, when you look at 3T, all the acquisition money you pay over there is virtually all goodwill. Mm-hmm. There you have a return on investment of over 100%. What is your point or your question? That, this target is a bit, should be adjusted maybe to a short one, but definitely doesn't add that much value to us as analysts and to an investor. Okay. Thank you. There's not much to say to that. Yeah. Yes. Hi. Axel from Berenberg. I had three questions, and the first one is to have maybe a better idea on the Automotive E and Core business. How much do you think the Automotive E business will represent in terms of the Automotive Group sales in 2025? Because I can imagine that even though ICE is set to decline, given that ICE projects are longer, as mentioned two weeks ago, three weeks ago, Core will still represent a significant portion of 2025 Automotive business, right? Yeah. I mean, it's extremely difficult to answer, and of course, we don't want to be guiding that. Current expectation is if you accept the markets going down with around 3%, average in core, without a lot of investment in new products. By the OEMs, I mean. Which means that current products will probably last a bit longer, run a bit longer, which of course is what Ralf and his team are going to heavily push for. Yes, you know, the hope would be that indeed this is quite stable. At the same time, we're going to grow as a group. That growth will come from IB, from IAC, but also from E. Without being drawn into predicting what then. Because you're asking then after the proportion E versus Industrial, that is very difficult to predict from where we are now. Okay. Thanks. The second question was actually a bit more about profitability again in Automotive E and Core. Because according to the press release today, we basically saw that Sensorclean in the E business is more focused on a project-per-project basis with customers. Does that basically mean that the churn rate is higher? What impact does it have on profitability in the Core and in the E business? Not sure if I follow exactly. In the press release today- Yeah. you mentioned that in the Automotive E- Yeah. You are more focused on a project basis. Has this an impact on the profitability? Is it lower or higher than, for example, longer project that you have in the Automotive ICE? No. As it's more innovative, so typically that means the starting margins are actually higher. Of course, currently, Automotive E. If you look at the profitability, which we are not disclosing, but with all innovation going on there, the majority of the R&D within Automotive will be working on E. That has its impact. If you look on the product margins, then at the start it will be higher, and then of course it will go down and then- Yeah. the cycle starts again. Does that? Yes. Yeah. Maybe one more addition to that. Richard Mijnheer presented in all these different new products that we are going for a platform approach, and that is very important. Because the traditional automotive model is that you say, "Look, I'm winning a certain actuator. Then I have a dedicated line built for that specific actuator that will run for six years, seven years, eight years, with a fixed margin and an agreed price and volume agreement with your OEM." The minute you win the next actuator, you need a new line. We're trying to move away from that. We're trying to move away from a model that, you know, every product customer combination has its own production line. We want to build more modular products, and that, of course, helps your scaling. Okay. Do you plan in the future to, I don't know, provide some profitability guidance or, I would say, estimates in the Automotive E and Core as the more you have information about those two businesses or? For now, no. One of the reasons is that ultimately I think, you know, given the size of the company, there's almost only so much you disclose, but the more important argument is that competition is looking as well. So it's very tricky for us to be that transparent because ultimately customers, competition will see the same thing. But I mean, over time, you know, as this develops, who knows, it may change. Okay, thanks. Last question on my side in terms of M&A. Are you currently working on something? Can you please, I don't know, provide us information about something you're working on? Or, is it something in, like, in IAC, for example, in Automotive E? No, I mean, let me say what happens. We purposely put a slide up on it, so the process that we follow on M&A, I think is quite clear and straightforward. We are looking at teasers weekly, and then the first question is: Okay, does this help us strategically? In 99% of the cases, the answer is no, and 10 minutes later we send an email to the investment bank saying, "Sorry, we're not interested." So it's not possible to predict whenever the teaser comes in that says, "Hey, this is interesting." It could be in Automotive, it could be in IB, it could be in IAC, it could even be in China. It's less likely, but who knows? Okay, thank you. Johan? Johan van den Hoeven, Edison Group. A few questions about your financial targets. You've kept them the same, but the question is more or less on the organic growth and EBITDA margin. Are the building blocks, the supporting building blocks per segment, have they changed or are they the same? The growth projections for the different segments? Yeah. No, I would say compared to two years ago, if you were then, you know, of course, we don't split it out, but our internal assumptions there have changed a bit. Industrial, I mean, you look at the numbers, has done better than what we would then expected. Automotive, for you know, you've seen the market, and you know what's going on with semiconductors, a little bit worse. It's shifted a bit. Ultimately, I would say for the Group, you know, we project out to say we were 2020, you know, where we were. We've grown very handsomely over the past two years. We look at the position we have, we look at the product pipelines that we have in Automotive, in IB, in IAC, in China, and that gives us the confidence that we say: Look, we are in a position to get to that EUR 630 million, and then, the operational leverage and the other targets related metrics will follow from that. Same question for the EBITDA margin. I heard during the presentation, IAC is close to 15%, so IB is far above. What about EBITDA? It was EBITA without the D. Ah. Yeah. Even a little bit more. Underlying question is: Where can Automotive, or are you assuming Automotive hitting the 15%, or is it a positive mix effect of Industrial bringing you to the 15% overall? Yeah. At least. Industrial was 717.9 in the first half year. For Automotive, they will come up from the current level. Yeah, we model more towards, let's say 12%-12.5%, depending on where we are in the cycle. Okay, thank you. Last question for now. If you're looking at IB, the existing markets are growing by 6.6% per annum, but also you're adding new markets, and you want to grow faster than the market. Are you aiming for close to 10% per annum? In IB? Yep. Andreas? The 6% on the existing market, definitely, yes, we will follow them, and I'm expecting that we are even stronger there. But I'm giving you a few examples of the new markets where we are not in yet, where we are stepping in, where we are actually adding much stronger than with the growth on the existing market. The number you have mentioned is very likely that we are overachieving them. Towards the double digits. I'm not stating if we will, but that's certainly where the ambition is and also where the opportunity is. Existing six, and then all these new applications that we see coming. Good. Anything online, Cleo? There's a question from Harry Hesseling. His question is about the split of Automotive. He's asking: Is the intention of this split to sell part of Automotive? To sell it off? To sell part of the company. It's. Let me come back to the M&A question. We get a lot of teasers on a weekly basis, you and I, that we look at. Actually, the majority of the teasers are for combustion engine-related automotive companies or parts thereof. The reason is that there are lots of people see the way the wind's blowing and then try to dispose of it. As with all other M&A, if there would be an opportunity that is interesting enough, of course we'd consider it. We're very dispassionate about it. It is unlikely. Besides, if you've listened closely to Ralf and his presentation and the way we think about Core, it could be a fantastic or we expect it to be a fantastic cash-generating machine for quite a few years to come at a reasonably stable revenue level. It's unlikely. You can never rule it out, but it is unlikely. Okay. Any more online? No, no more questions. Good. I would like to thank all of you for your attention and for your questions. I would like to thank my colleagues for their presentation. Oh, Maarten, one more. Maybe two. Maarten Verbeek here. Just to verify, you will break down Automotive. They will have full P&Ls, but what will you be disclosing? Will that be the same as what you have been doing with your Industrial group? Yes. Revenue. Okay. Yeah. Within your Automotive Core, how much is really directly related to the combustion engine? Because within the car, there are dozens of actuators, not all linked to the combustion system. No, that's true. Also, by the way, we didn't even talk about it, but there's also, of course, a chunk of that EUR 167 million is actually commercial vehicles. Commercial vehicles is a lot more stable. Electrification is also there a theme, but much further away for obvious reasons. The pressure on diesel in commercial vehicles is nonexistent. That is still very much part of Core and very much part of a stable, nice, and profitable business. Now to get, you know, because everybody always wants more disclosure and breakout, I understand that, but then to break out what is actually the engine itself, what is in the drivetrain, what is in other parts of the car that we don't intend to disclose that. Also because you mentioned that within Automotive Core you won't be developing new products, but for example, if there will be a new actuator needed to automatically closing doors or hoods or whatever. Whatever. What will you do with that? Will you simply ignore that or? Ralf, what's your answer? Yeah. In Core, I can answer very precisely for Core, it's simple. If there's a product where we have a product base and an existing production base, then we will consider. If it's out of this, we will not do. Yeah. By the way, we also will not have the engineering capabilities and capacity to do it. That's the setup. It's a very conscious decision that we say, "Look, we maintain what we have for as long as we can." It's all about lean production. It's all about operational efficiency. Of course, we want in Core to be a very lean producer for the products that we sell in E for obvious reasons, and that's it. Okay. Understood. Then all the focus is on E. What you also put in the presentation is that you have three focus areas at this moment within E. You also mentioned, and I think that's fair, that should be a new segment. You also have a target that you want to have a new future growth area, that you say within three or four years, I want to have allocated a new focus area within Automotive. Richard? Quite simply, yes. Yes. Did you hear that? Yes. Yeah. Is it every two years or every three years? Or maybe hard to pinpoint. It's hard to pinpoint because in the past, we were really reactive to our customers. We basically got an RFQ, looked at it, is it interesting? We did it or did not do it. I would like to turn it around. We would need more intel, let's say, in the roadmaps of our customers to understand better what is coming and looking at commonalities between different customers and then define a roadmap. If we say, "Hey, this is, could be a new segment," then we'll start it up and develop a roadmap and platforms accordingly. That's basically the approach. I strongly believe that 3 is too less. We already saw two years ago, we thought, hey, sensor cleaning is quite interesting, will come quite soon. Well, we find out it does not. We need some more of these niches or segments to be in place. That's definitely one of the targets that our business development team, together with account managers and existing customers, have to bring in. Let's say the technology person from R&D can look at it and say, "Hey, this is something where Kendrion can play a role in," and then we'll start a new segment. Yes. Since you have blocked new systems in one of the slides, are you on the eve of announcing such a new area? No. No. No. Unfortunately. Good. Let me try one more time to wrap it up. I would thank all of you for your questions. I thank my colleagues for their presentations, and kindly invite all of you to stay around here for some drinks. Andreas, it's not going to be champagne, but we'll have beer, we'll have some wine. Of course, take the opportunity and look at the products that are underpinning some of these growth plans that we've presented here. Thank you very much.