Good day and thank you for standing by. Welcome to the Kendrion Second Quarter and Half Year 2025 Results Analyst Call. Good morning, everybody here in the Holiday Inn Arena Towers and on the webcast. Apologize for the delay. We had a fire alarm here in the Holiday Inn. Luckily, it turned out to be false, so we can proceed safely. Today, we will discuss two announcements that we made earlier this morning: our Q2 and first half 2025 financial results, and the divestment of our Suzhou-based business, including the implications for Kendrion's strategic repositioning as a pure-play industrial company. My name is Joep van Beurden, Kendrion's CEO, and with me here is Jeroen Hemmen, our CFO. This morning's agenda: I will start with reviewing the divestment of our China franchise to local management to complete our strategic repositioning as a pure-play industrial company. Jeroen will then discuss the financial impact of that transaction and review our Q2 and first half 2025 results, after which I will give you an update of the progress that we've made operationally over the past half year. Next, I will discuss the outlook for the remainder of the year and will go to Q&A. Before we start, 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. First, I would like to present the divestment of our China business, a sale that completes our strategic repositioning as a pure-play industrial company. A company that will focus exclusively on high-potential niches within our industrial brakes and industrial actuators and controls business group. A company that is a global niche leader in selected industrial market segments and that will sustainably grow its revenues through the economic cycle with the goal of achieving a profitability of at least 15% EBITDA. First, the key terms of the transaction: the enterprise value is set at EUR 70 million on a cash and debt-free basis. The transaction will be completed once condition precedents are fulfilled and Kendrion receives payment in full, which is anticipated within three months. We envisage to reduce our central service cost and other related overheads by approximately EUR 3.5 million, which should fully compensate for the dissynergies. These cost savings are expected to be fully effective from January 1st 2026. The related one-time restructuring expense and deal-related expenses will be approximately EUR 1.5 million, and these one-time costs will largely fall in Q4 2025. Before going into a bit more detail on the specifics of the China divestment, let's look at Kendrion's strategic intent, first announced post the sale of the majority of our automotive factories to Solero roughly one year ago. We are a global niche leader in selected industrial market segments, and we aspire to a profitability of at least 15% EBITDA with strict criteria for the market segments that we invest in. First and most importantly, it needs to be a product opportunity with a clear so-called unique selling point, or USP, a clear differentiator. The USP is based on our deep expertise in valves, actuators, brakes, or control technology. Second and related, the product-market combination offers superior profitability with at least 15% EBITDA. Finally, we're looking for healthy growth potential, typically 5% and preferably more. In other words, no USP, we will not engage; not enough profitability, we will not engage; and no visibility to at least 5% average revenue growth per year, we will also not engage. I want to emphasize the importance of the USP, the differentiator. The uniqueness of our industrial products allows us to protect our added value margin and our profitability. In fact, as we will discuss later, in the first half, we have managed to improve the added value margin. That is a big driver of profitability and only possible with a differentiated product. We are looking for opportunities in the sweet spot in the middle of this diagram. At our Capital Markets Day a year ago, we presented many concrete examples of these opportunities, and later in the operational update, I will present a few more. Each opportunity is different; each has its own dynamic, its own competitors, its own leading customers, its own USP, and in some cases, also its own roadmap. Each opportunity shares the characteristics just mentioned. Some may be relatively small, but added together, they represent a substantial and tangible opportunity for growth of at least 5% through the cycle at an EBITDA of 15% or more. This brings me to the strategic rationale of the China divestment. Over the past years, we have seen significant and relatively fast changes in the automotive market. These have led to strategic changes at Kendrion, such as putting more emphasis on industrial through the acquisitions of INTORQ and 3T. The automotive industry is in a major transition, and to make full use of the opportunity that creates requires substantial and ever more investments in R&D and in production equipment. Looking at China, the growth we realize there and the future opportunity is primarily driven by the automotive segment, which does not correspond to our strategic priorities. The transaction reflects this at an attractive valuation. After completion of the transaction, Kendrion will return around EUR 25 million to its shareholders through a special dividend of EUR 1 per share and by a share buyback program of up to EUR 10 million. The remainder of the proceeds will be used to strengthen the balance sheet and to reinvest in the industrial business. You may ask why not carve out the China-based automotive business and keep the rest. The reason is straightforward. Our Suzhou facility tightly integrates both automotive and the industrial operations at a single site, which favors a unified transaction. In other words, selling the entire business reflects the local operational reality. In summary, this transaction completes Kendrion's transformation into a pure-play industrial company with deep expertise in valves, actuators, brakes, and control technology, and a focus on selected high-potential profitable niches. Before I hand over to Jeroen for the financial implications of the divestment, let's look at the impact of the transaction on our business and geographic mix based on 2024 actual revenues. As you can see, Kendrion post-transaction will have around 84% of its business in Europe, 7% in Asia, and 8% in the U.S. In terms of our business mix, the further focus on IB and IAC is clear. All remaining mobility products are produced in CBU with some engineering support based in Malenta. This CBU-based business will be the only exposure to mobility we have left. We will continue to run this for cash, and we expect that over the coming years, revenues here will slowly decline. The CBU mobility business is integrated into IAC and is managed separately. We will also continue to report the numbers of this mobility segment separately, as we did before. Next, Jeroen will review the financial impact of the China divestment and will then proceed to review Q2 and the first half of 2025. Thank you, Joep. Today, I will present the financial impact of the announced divestment of Kendrion China, followed by our financial results for the second quarter and the first half year. Based on our 2024 results, the pro forma and indicative KPIs after the transaction would have looked like this. Our pro forma revenue would have been around EUR 252 million compared to EUR 301.5 million realized in 2024. Normalized EBITDA would have ended up at EUR 33.1 million against EUR 37 million for the group, including China. Therefore, the divestment would have been accretive to EBITDA margins in 2024 by 0.9%. Also, when looking at the half-year results, taking out the China results would have been margin accretive. The 14.9% normalized EBITDA margin that we disclosed today would have been 15.4% on a pro forma basis. Return on investments would have been 400 basis points higher, excluding China in 2024, and our leverage ratio would have decreased significantly from the reported 2.7x to 1.0x. This, however, excludes any distribution to shareholders. Based on the planned distribution of EUR 25.8 million, to which I will come back later, our leverage ratio would have been 1.7x. An important part of our rationale for divesting China is, of course, the attractive value that this transaction allows us to realize. Based on the 2024 results, we realize an EBITDA multiple of close to 18x, and given China’s solid last 12 months' performance, the transaction reflects an EBITDA multiple of 9.5x. The proceeds of the transaction will be used to strengthen the balance sheet and reinvest in the industrial business. In addition, we intend to return part of the proceeds to the shareholder after completion of the transaction. The intended capital return includes a one-off dividend of EUR 1 per share, which is a total amount of EUR 15.8 million. In addition, we intend to launch a share buyback program of EUR 10 million. This program will be initiated after the divestment of Kendrion China has been completed and the proceeds have been received. Once initiated, the program is expected to run for roughly nine months, although the actual pace will depend on market conditions and trading volumes. To the financial review, our revenue increased 3% in Q2 at constant rates of exchange. Growth was driven by a 15% revenue increase in mobility. This increase was on the back of the ramping projects in China, as announced earlier. Industrial revenues were stable. Profitability increased significantly and is progressing in line with our goal of achieving 15% EBITDA by the end of the year. Normalized EBITDA increased 20% in the second quarter and with 14% in the first half year. In Q2, the EBITDA margin improvement to 15.9% and to 14.9% in the first six months was fully driven by a higher added value margin. Product margins improved significantly in both industrial groups and mobility, primarily as a result of positive pricing initiatives. Operating expenses increased 4% in Q2 and 5% over the first six months. However, this increase was almost entirely offset by higher other operating income, as we charged on certain operating expenses as rent and IT income to our former automotive activities. A bit more detail on the business groups. We witnessed stable market circumstances in industrial. The 2% lower revenue in IAC in Q2 mainly related to specific customer segments, in particular the textile machinery segment. Revenue in mobility increased 15% as the projects in China continued to ramp up. Despite the stable revenues, we were able to improve profitability in industrial. As I mentioned, profitability improved thanks to a stronger added value margin, a clear sign of the strength of our market position in our selected segments. Profitability in mobility more than doubled on a like-for-like basis, with the EBITDA margin improving from 7.9% to 14.2%. The improvement reflects on the one hand growth in China, but mainly the substantial margin improvement at our electronics plant in Sibiu, Romania. To cash flow. Cash flow was strong in the first six months, leading to a EUR 6.1 million reduction in net debt. Together with the higher EBITDA, this contributed to the improved leverage ratio of 2.4%. Reported free cash was EUR 9.5 million and includes the final EUR 8.6 million payment related to the sale of automotive and EUR 4.8 million paid restructuring charges related to the EUR 9 million cost savings announced last year. Our normalized free cash flow, therefore, was EUR 5.7 million. Free cash flow was supported by comparably low capital investments at EUR 4.2 million, well below the depreciation level of EUR 8.1 million. We do expect CapEx to pick up in the second half year, also driven by our ERP implementation project and the realization of some delayed investments, but still ends up well below depreciation around EUR 10 million. With that, I hand over to you. Thank you, Jeroen. I will now proceed with an update of the operational progress that we've made so far in 2025. As of January 1st of this year, we've been dedicated to selected high-margin, high-growth industrial markets. As you just heard from Jeroen, it has resulted in a strong Q2 and first half of 2025, despite the continuing uncertain global economic circumstances. We have realized a significant improvement in our profitability through our drive to improve the added value and through our cost discipline. As is clear from our improving profitability, we benefit from our intellectual property and our differentiated products, as this gives us the pricing power to protect and increase our margins. Let's start with IAC. Starting with the markets, our first half revenue was 6% lower than the first half of 2024, with difficult comparables. Towards the end of the second quarter, European machine building, robotics, and automation sectors saw a bit of improvement, but the textile industry remains weak. The U.S. beverage flow control valves business, where we have strong traction on the back of our innovation in this technology, further increased with record revenues throughout the first half. The IAC revenues in China were stable. How about the developments for the longer term? We have a whole range of product and business development opportunities going on, all with specific USPs, IP protection, and good margin and growth potential. On the actuator side, we are making progress developing the first biocompatible regulator for oxygen gases, and biocompatible means bacteria-free. We successfully launched our new magnetic gripper aimed at the market for automation equipment at the Automatica Expo in Munich, and our kidney dialysis clamp valve development is accelerated with two significant projects running concurrently. Our industrial locks show further revenue growth in target markets such as industrial washing machines and parcel lockers. In inductive heating, we are experiencing a high level of inquiries and are working hard on further standardization and higher flexibility by modularization. We also started the development of a low-power induction generator with a whole range of new applications. On the control side, we started the development of a FIO S afety Controls for robots in partnership with a major international robot producer. For those of you who wonder what FIO S afety is, that refers to a product range by Kendrion that provides functional safety, essentially ensuring that control systems will enter into a safe state in case of a fault. In other words, no runaway robots with Kendrion safety control. Next, let us look at IB. In the first half, the IB market stabilized with revenue up 4% compared to last year, and our initiative to improve added value margin paid off. Over the first half, it increased by 190 basis points. In terms of our supply chain, the rare earth bottleneck has been resolved. All critical rare earth shipments from China are delivered, securing our production without interruption. Strategic stock now covers six to nine months of demand, and regular sea freight has resumed, ensuring a stable and resilient supply chain that supports long-term security. Like IAC, we are also working to improve our long-term prospects. We are working hard to create a platform for future growth in the market for medical robots. For this, we are modifying existing brakes that we adjust to be fit for work in the medical field. We have good traction working with two important medical companies on a pilot, and our campaign in India is gaining momentum with initial sample orders received. In the market for intralogistics, we are finding ways to repurpose brakes from our existing product portfolio for new applications in fully automated warehouses. Pilot production of the new brake series is complete, which is a key step towards series launch. Field testing and certification are underway. The projects open up significant growth potential and lay the foundation for expansion in automated guided vehicles and forklift trucks. In the large market segment for brakes for servo motors, we are working with a large customer on their servo for future product project, where an order for series production tools has been received. The order intake is ramping up, and our pipeline is above our expectations. Good momentum for the medium to long term at IB as well, with significant opportunities to work in close cooperation with our customers on new brake applications and solutions. This brings me to the outlook. Trading conditions in the second half of 2025 are expected to mirror those in the first half, with some weakness in Europe, steady demand in the U.S., and varied trends in Asia. U.S. trade tariffs remain a source of uncertainty. As a pure-play industrial company focused on selected high-margin and high-growth industrial markets, we are well positioned to capitalize on an economic rebound when it occurs, and even if the challenging economic environment persists for a while longer, we remain confident in meeting our medium-term financial targets, which are: achieving an EBITDA margin of 15% to 18% from 2025 onwards, a return on invested capital of 23% to 27% by 2027, and delivering annual dividend payments of at least 50% of normalized net profits. With that, I would like to go to Q&A. Thank you, dear participants. As a reminder, if you wish to ask a question, please press star one one on your telephone keypad and wait for a name to be announced. Alternatively, you can submit your questions via the webcast. I didn't get that. Can we take the questions here in the room? Yeah, can you please go to one of the microphones so the webcast participants can also hear the question? I'll go first, as usual, with the conference call as well. This is Frank Glassman of the Growth PDCAM. Question on your growth. How much, could you indicate how much was driven by price and how much was driven by volume? The 3% organic growth in Q2, could you give an idea how much was driven by price? Maybe going to your revenue target, your medium-term revenue target, 5% to 8%. Of course, this was also driven by, let's say, accelerating growth in China. Now that that will be out, how do you look at your revenue growth target? How should we look at it? Yeah, so first thing to say, it's not a target. The revenue is an expectation because profitability leads growth. That has been announced, I think, for the first time last year when we sold to Solero. We want to grow, but only when we get to the 50% or more EBITDA. We select margins, we select niches that actually support this kind of growth. That's point number one. Point two, we set 5% - 8% as an expectation. I think it's fair to say that part of that was related to China, although I don't want to put too fine a point on that because through the cycle, if at some point the economy is going to be a little bit more cooperative than it has been over the past five years, you could easily see a couple of quarters when we go to the top range of that. If you say through the cycle with China gone, I would say put this expectation on average at around 5%. Yeah, that's helpful. Finally, you indicated the SG&A will go down to compensate for the dissynergies. What are those dissynergies? What should we think of? You mean the cost types? Yeah, yeah. Basically headquarter cost. There's still a small, we do some R&D services still from Europe to China that will be discontinued. IT charges, those. In general, about the cost savings, these will be added. Yeah. What do we still have from last year's savings? That's all in the numbers. Yeah, what we did last year is all in the numbers, and this will then come on top, but that will offset the dissynergies. Okay, yeah, thank you. Yeah. Okay, Martin. Okay, Martin. Yeah, good morning. Martin Andrea Freyman here. My first question is on the pricing and procurement initiatives or program. How far are you now in the execution of that program? Can you elaborate a little bit to give us a sense of what more might come in terms of the value-add improvement that you've already shown? I'll take them one by one. Yeah. Yeah. The majority is done. We will not, at least not this year, include it with another 2%. There is still more to come. We started this initiative toward the end of last year. Of course, you have many customers that still buy at the old price, and the orders are already there. It's gradually growing in. A bit more to come, but the great majority is already done. Yeah. You now specifically mentioned the delayed effect of price increases. Does that also apply to procurement? Because not all suppliers can go to the new plan that you probably devised. For both elements, there's still a bit more to come just because of time progressing. Exactly, whereby the majority is on sales. Okay. It's a similar story. I do want to emphasize that, of course, you cannot continue to increase your added value margin forever. At some point, you're at the pain threshold of your customers. We do expect that we can protect that margin quite well. Clear. Second question is, what do you expect to be the net proceeds? Because it's cash and debt free. There are some mortgages still. What are the expected net cash proceeds of the transaction? Related to that, is the repayment of the short shine an option given the strength of the balance sheet? The net proceeds are basically EUR 70 million, minus some transaction costs there. If you will, we can take the EUR 1.5 million, one of that we expect deducted. Those are the net proceeds that exist of EUR 10 million net debt in China. That debt will be taken over by the buyer. We get rid of that debt and EUR 60 million roughly in cash that will arrive in Europe. Got it. Third question is on, you have a section in the press release which shows normalized personnel and OpEx expenses. That actually has gone up from EUR 57.1 million to EUR 59.8 million. Why are these cost buckets up? The operating expenses, they are, so they are up for the first half year on a normalized basis by 5%. To have a like-for-like comparison, you need to deduct, or you can deduct the other operating income. After the sale of Solero, after automotive to Solero, we had some, we still deliver some services, mainly rent. They rent two buildings from us. Those costs, for example, also energy, they are in our operating expenses, and we charge them out to the buyer of, to our former automotive colleagues. We look at them netted. If you look netted, then the costs are fairly stable. That's a combination of the announced cost savings offset by, yeah, wage inflation. Okay, because FTEs are also down significantly year on year. You would expect then, even though you mentioned already that all the savings are in, because of that effect, you would expect the combination of the two to still go down. Your FTEs don't drop immediately on T is zero. You gradually reduce that. The effect comes later. No, actually, we basically were ready in Q4 with our measures. The first two quarters are clean on the cost side. All right. My fourth question, you did well on working capital, on inventories, good overall performance, but the trade payables are down significantly. What's the reason for that? Was there some sort of balloon payments? No, no. Basically in Germany, the early payment discount is still quite common, and we simply make more use of it now that our leverage ratio is allowing that. We will continue to do that. That is also included in the value add, the positive effect of that. Yeah, yeah. In that sense, it's a relatively minor topic, but it's in our calculations worthwhile to do that. Got it. On the retained automotive in CBU, would you be willing to share what type of EBITDA margin that activity has today? It's higher than the average in the mobility. Higher than the average of mobility. Yeah. It's still below automotive. In that specific case, which is now the part that we retain, it's a true sunset business. That means within the contractual limits, we increase the prices as far as we can. We are not susceptible to any typical tactics that you see in automotive, like you will never get any more business from us in the future if you do this because we don't want any more business. That helps. It's still despite that. We view that, and that's also why we're going to break that out. You will see that going forward. It's a pure cash cow. We like to have that cash, and we will run it for as long as we can. It's not part of the strategic part of Kendrion. The uplift in CBU, that's on a clean basis. What we see now will be reported; that will be it. It will go down after. I mean, this EBITDA margin. Yeah. You mentioned in the press release, or you just mentioned it in the analyst call that it was due to the integration in CBU. What I'm trying to ask is, the level that you have today, is that the maximum and it will go down as volumes decline over time, or are there still some actions that you can take to offset that? No, there's still, as you've mentioned, it's 100% cash cow. On the revenue, there is actually still something ramping. We think this will last quite some time. The volumes, we expect them to be fairly stable in the coming years. On the added value margin, this is the main contributor to the improvement in mobility, also more than the contribution from China, for example. We think we can continue that. Clear. Thank you. Thank you. Thijs? [Foreign language] I had a few detail questions about, oh sorry, in English, yes, the depreciation impact of the Chinese disposal, because it's a new factory, a lot of new equipment. Can you give us an indication how much depreciation you will lose by the disposal, roughly? EUR 4 million per year. Quite a lot. Let's say the trade working capital characteristics of China, is that above, below, or at par with Kendrion as a group? Slightly above. I calculated it will go down with some tenths of a percent if the rest stays stable. Okay, that's also clear. The CapEx let's say the running recurring CapEx for the Chinese business? That is quite lumpy because the CapEx question always comes. In the presentation, I mentioned indicative EUR 10 million for the year. Currently, we're at EUR 4 million. For the full year, at this moment, I think it will be around EUR 10 million CapEx for the whole year. Lower next year? No, I think that is really on the low end. Our depreciation is EUR 16 million, you take out the EUR 4 million of China. You have roughly EUR 12 million. I think we will be, we believe we can be consistently below depreciation for the coming years, but lower than EUR 10 million for next year, especially also considering the ERP program. That's not feasible. One remark to make, Thijs, you saw quite a few programs that we are running in IB and IAC. There may be some CapEx involved in that as well for organic growth, and we'll obviously do that. Okay. The cash outflow relating to provisions, you mentioned already that was for previous cost-saving programs in the first half. You will add the EUR 1.5 million restructuring charge in the fourth quarter. Yeah. Is there also another expected cash outflow from the older ones in the second half? No, we are done. This will come on top, and as mentioned in the presentation, we'll be cash out most likely in the second half year. Okay, the cash outflow also already takes place in the majority. Yeah, fourth quarter, okay. Yeah. Which P&L cost components will the researching charge be added to? Is it mostly employee costs or other operating? Yeah, employee costs. Okay. I have asked the question before, but these kind of comments on slow end markets like textile, that is not something that springs to mind when I'm thinking about Kendrion. The overall client concentration risk or end market risk is not there. You are very diversified in industrial brakes and IAC overall. Is that a fair assumption? That's a fair assumption. This specific one, we used to be exposed quite significantly to this. Now I'm talking about five, six years ago. Yeah, and that market seems to be sustainably much lower than it used to be. That's why we singled it out. Of course, at some point, it goes out of the comparables and then it doesn't show up anymore. If you look at IAC with all these ramping projects, all this stuff also in medical takes time. The pump is primed. There's a lot of projects in various stages, but there are quite a few that are ramping. I believe we're sort of at the end of that. We're talking now about revenue exposure, but there's also no huge significant difference in profitability in these end markets or clients. There are some differences. I will say the new projects typically are very, I mean, they were selected for being highly profitable, and they have new and fresh differentiators. That profitability is going to help us. Okay. A question on the third quarter. We have seen relatively harsh declines in recent quarters, but some of the business is already getting easier, like for like comps, like industrial brakes. What can we expect in terms of seasonality in the third quarter? There is some seasonality, I would say. Can you give a bit of a highlight per division what we should expect? No, per division, I think typically, the first half of Kendrion is stronger than the second half. That is mostly related to Q4. For obvious reasons, we have Christmas, so it's a short quarter. That's also why we're not declaring victory on the 15% yet, although we made a very good step forward, as you will have seen in the numbers. Q3 is usually a touch below Q2, but still quite healthy. I think Q3 is still looking okay. As I mentioned, it's stabilizing, if anything, at the risk of us reading into things that we want to read. We've seen a bit of uptick. I would say typical seasonality, Q2 is usually the best quarter, then Q3 touch below it, and Q4 is weaker simply because of the Christmas season that costs us two weeks. Okay, that's quite helpful. I also had a question. Oh yeah, the exposure to defense. Yeah. Is that already there, or are you in conversations with clients? There is some exposure today. It is a huge opportunity for obvious reasons. We need to be quite deliberate as to what you want to engage on and what not. We have certainly discussions, mostly in IAC, on specific actuators for defense companies. Is that mostly German SME companies? Not just SME, also the larger ones. Yeah, also the large German and French contractors? Absolutely, yes. It is typical IAC business or industrial in general. This is not going to show up into our top line anytime soon, but it is definitely an opportunity, and we're looking at it. If I may add, the indirect effect, and I think that effect, especially in the coming years, will be more sizable because before all this money can be spent on weapons, we need to collectively increase the capacity. I think at this moment, that is the major challenge to get all the equipment to make sure we actually can produce this. That, of course, will definitely help us in IB and in IAC. For the machine building industry, yeah, it's going to be, of course, where we are designed in for many, many years. If it helps the overall German economy and economic activity, it will definitely help us. Yeah, okay. That's clear. Thank you. Martin. Yeah, dear. Firstly, you have sold your business for EUR 70 million. In the presentation, you mentioned that we present an EBITDA of 9.5. I believe that is on a historical basis. Is it on 2024, or is it the last 12 months mid this year? No, if it's 24, it's 18, I think. The last 12 months, it's the 9.5. The last 12 months were strong. Yeah, because then it's more or less EBITDA. With the upcoming orders getting into China, EBITDA should be expected to grow further on in this year for this business. I don't think the outlook for this year will be stronger than the last 12 months. The last 12 months were a good reflection. Okay. When I look at your business, what you sell, some EUR 50 million of sales, is it correct that only less than half is automotive and still the majority is a combination of IB and IAC? At this moment, automotive reflects already half. The main trigger here is that we talked about in the past also when we announced the building, the EUR 100 million revenue target in China. If that EUR 100 million is realized, that would be EUR 70 million. At least the expectation is that that would be close to EUR 70 million automotive, and that is the main driver here. Okay. In the press release, you mentioned that you will seek for IP royalty revenues for your industrial businesses in China. Shouldn't you keep control of your business there yourself because now you outsource it to? Yeah. Let me clarify that. That's just for the permanent magnet brake business. It's not for the Chinese-based IAC business, and it's not for the Chinese-based spring applied. The former Intol business, which is, by the way, the bulk of the brake business in China. For the specific permanent magnet brake business that we have, which has very specific IP that we'd like to protect, we have agreed a royalty arrangement with very strict commercial boundaries. Now, you're going to ask me, of course, what are these commercial boundaries? I'm not at liberty to share that. There's very strict commercial boundaries where we would have to, if they want to take this technology somewhere else, we would have to approve it. Could you indicate how much money you will receive on an annual basis, how many millions of IP you will get from this? Yeah, it depends, of course, on the revenue that they will realize in that new entity, but several hundred thousand euros per year, we can look forward to. Getting back to the transaction of EUR 70 million, I presume it's being sold to local management and investors. That Telly Kuo is part of local management, which is buying this business. Who? Telly. Telly, yeah. Telly is leading it. He was also the driving force behind their team, of course, helped by local bankers and lawyers. His current management team will drive the, they will run the business. Have you considered, or Telly, or I don't know, that he will swap his interest in Kendrion as part of the purchase price? No, I haven't. That's obviously up to him. I have no idea what his plans are. Do you consider calling Telly Kuo for the share buyback, that he will swap his 0.5 million shares in cash for you, that you can easily arrange your share buyback? No. Okay. With respect to this, because I don't know how it, because you discussed that the EUR 70 million or EUR 10 million of debt, does it also include the mortgage you have on the Suzhou operations? Yeah, that's the EUR 10. Or let's say net of cash, that's the EUR 10. Okay, yeah, that's it more or less from my side. Thank you. Thank you, Martin. Are there any questions online, or are there still questions here? Melanie? Thank you. There's a question on behalf of Willem Burgers from Oasis Capital. Can you elaborate on developments at 3T? Am I right? A new office has been opened in Eindhoven. Can I elaborate at the? On developments at 3T. At 3T, sure. Yes. Thank you for the question, Willem. You're right. We have an office in Eindhoven that actually has been opened a couple of years ago. The most recent addition in terms of an office for 3T has been in Drachten. That is now a year ago, I believe. I'm looking at Jeroen. Yeah, about a year ago, we opened an office in Drachten, simply because we need engineers, and it's very hard to find them. In Drachten, we still managed to get initially a handful. We're now up to about 10 engineers. Okay. Online, no more. Anything? Final questions, thoughts here in the Holiday Inn? I'd like to thank you very much. Again, apologies for the fire alarm. We now have time for a more informal session. If you have follow-on questions, you know where to find us. Thank you very much. This concludes today's conference call. Thank you for participating. You may now all disconnect. Have a nice day.