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Edited Transcript of GMM.DE earnings conference call or presentation 13-Aug-19 1:00pm GMT

Half Year 2019 Grammer AG Earnings Call

Amberg Aug 21, 2019 (Thomson StreetEvents) -- Edited Transcript of Grammer AG earnings conference call or presentation Tuesday, August 13, 2019 at 1:00:00pm GMT

TEXT version of Transcript

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Corporate Participants

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* Boris Mutius

Grammer AG - Director of IR

* Jurate Keblyte

Grammer AG - CFO & Member of Executive Board

* Thorsten Seehars

Grammer AG - CEO & Member of Executive Board

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Conference Call Participants

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* Christian Ludwig

Bankhaus Lampe KG, Research Division - Head of Research & Analyst

* Harald Eggeling

ODDO BHF Corporate & Markets, Research Division - Analyst

* Michael Punzet

DZ Bank AG, Research Division - Analyst

* Peter Rothenaicher

Baader-Helvea Equity Research - Analyst

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Presentation

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Operator [1]

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Good afternoon, ladies and gentlemen, and welcome to the Grammer AG conference call regarding Q2 figures. (Operator Instructions) Let me now turn the floor over to your host, Mr. Boris Mutius.

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Boris Mutius, Grammer AG - Director of IR [2]

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Yes. Welcome here from Amberg for the Grammer AG Q2 results call. With me today are Mr. Thorsten Seehars, CEO of Grammer AG; and Mrs. Jurate Keblyte, CFO of Grammer AG; and of course, Mr. Manfred Pretscher.

 

So please, Mr. Seehars, start with the presentation.

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Thorsten Seehars, Grammer AG - CEO & Member of Executive Board [3]

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Well, good day, everyone, ladies and gentlemen, to our first half year earnings call. So this is the first time that Jurate as new CFO and myself are presenting the results of the company. As you know, we have recently taken up our positions, and she also looking forward to meeting you sometime in the future on a personal level. I'm also happy that Manfred Pretscher is here today with us in this conference call. As you know, he is a Board member of Grammer AG until his retirement at the end of this month.

 

Now let me start with a brief summary of our business in the first 6 months of 2019. Actually, Grammer showed a quite good and strong performance in the first half of this year. Our group revenues were significantly higher. That's mainly due to our acquisition of TMD in 2018. We delivered an ongoing solid performance of our operational EBIT with an EBIT margin of 4.8% in the first half of 2019, which, again, is above the previous year.

 

Looking at the business volume in what I'd call the classic Automotive division. This was lower in the first 6 months of 2019 caused by the decline in certain automotive markets, and especially in Europe where the Automotive segment was and still is facing quite a lot of challenges.

 

On the other hand, looking at commercial vehicle markets, they were performing very solidly and supporting both top and bottom line growth of the company. Obviously, we will continue to monitor those market developments very closely as various critical political and economic events could have significant impact on our business, but we are prepared and continue to prepare ourselves to counter them.

 

Looking at Page 2 on our major markets in more detail. I'd say it's a little bit of a big mixed picture here. In the Passenger Cars segment, new car registrations here in Germany were up 1% mainly driven by SUV. However, Western Europe as a whole is showing a decline of minus 4% in the first half of 2019.

 

The North American market, we saw a receding minus 3%. And China, which, obviously, a very large market, as you well know from the media, there was a significant drop of around 14% in the first half of the year. In our Commercial Vehicles segment at the mid- and heavy-duty trucks, Europe market, especially with Germany as the largest market, is still showing a positive growth. Similar for the U.S. market where we're also seeing positive growth in momentum of plus 14%, especially in the heavy-duty class 8 truck segment. Brazilian market continues on its recovery path. And so year-over-year, it was about 46% higher registrations in that market. China, largest truck market of the world, with a decline of roughly minus 6%.

 

Looking at the other segments of Grammer and the commercial vehicle market such as agricultural, construction equipment and material handling, all of them continued with positive growth rates in the previous quarters.

 

So how did we perform as a group in the first half of 2019? Turning to Page 3, group revenue we reached record high level of more than EUR 1.05 billion in the first half of the year, and thus increased revenues by more than 13% over previous year's numbers. Although we saw good development in the commercial vehicle sector and grew significantly in our automotive division. Mentioned before that's mainly coming from the TMD acquisition, where top line and weight on bottom line growth is reflecting positively and as planned. ForEx effects account roughly for EUR 12 million to our sales in the first half of the year.

 

Looking at the EBIT numbers, group earnings before interest and taxes increased by EUR 8.3 million to EUR 50.2 million in the first half. This translates into an EBIT margin of 4.8%, which, again, was higher than the same level of the previous year. This operating margin of 4.8% is also reflecting the improvement of the operating performance for the group.

 

Now let me hand over to Jurate, who will provide and continue more information on the Grammer development in the first 2 quarters of 2019.

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Jurate Keblyte, Grammer AG - CFO & Member of Executive Board [4]

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Ladies and gentlemen, welcome also from my side. I will continue with the numbers for the Grammer Group on the Page 4.

 

Net profit and earnings per share. With more than EUR 27 million and an increase of 9.5%, group net profit in the first half year 2019 strongly rose above the high level of the previous year based on our positive EBIT development. As you can see, earnings per share correspondingly increased to EUR 2.25 in the first 6 months, also a growth of 9.2% over the previous year's level.

 

Balance sheet development on the Page 5. The equity ratio was slightly up with 23% as of June 30, and it remains at the same level despite the first time application of IFRS 16 lease regulation. Net debt decreased largely to EUR 252.6 million despite the same effect. As you know, our balance sheet is influenced by the financing of the TMD acquisition and this 76%, the gearing ratio remains on a solid level.

 

On the Page 6, continue with the investments. The Grammer Group capital spending amounted to EUR 56 million in the first 6 months and was significantly higher than the previous year. This has been driven primarily by the capital expenditure in Automotive division and TMD, new product ramp-ups as well as for the new Grammer technology center and group headquarter in Ursensollen near Amberg. The capital spending in our business divisions is used for efficiency improvement measures, especially automation projects, in-sourcing initiatives; for example, where in-house production offers price advantages versus purchasing materials; and for expansion of the growth of this portfolio at existing Grammer sites.

 

In addition, new noncurrent leases were recognized as assets from January 1 under the new accounting guidance provided by IFRS 16 leases. The effect in the first 6 months in connection with this amount that is EUR 9.4 million. The 5.3% CapEx to sales ratio is, therefore, higher compared to previous year.

 

Employee, on the Page 7. As of June -- as of end of June, the Grammer Group had a total workforce of nearly 15,000 employees. This growth is primarily attributable to the acquisition of the TMD Group. Compared with December 31, the number of employees rose by 289%. The ratio of high-cost countries has been stable for a long time, but now increased to 36% due to the consolidation of the TMD group in the U.S.

 

Now I would like to come to the performance of the divisions on the Page 8, Automotive. Revenue in the Automotive division rose substantially by EUR 98 million from EUR 646.7 million to EUR 745 million in the first half year of 2019. The increase resulted mainly from the acquisition of the TMD Group. Correspondingly, revenue more than doubled in Americas and climbed from EUR 103.1 million to EUR 265.1 million. EMEA remained by far the division's largest region in terms of business volumes despite a decline in revenues in this region from EUR 432 million to EUR 373 million. This was due to the weak passenger car market conditions in Europe mentioned by Thorsten already. As widely reported and for a number of reasons, the first half year of 2019 was influenced by still challenging conditions in the automotive industry and the related general slowdown in sales by passenger vehicle OEMs in Europe, in particular.

 

EBIT in the division came to EUR 28.4 million in the first 6 months of this year, thus exceeding the previous year of EUR 22.4 million. Accordingly, the division's EBIT margin came to 3.8%, surpassing the same quarter of the previous year despite the customary post-acquisition depreciation. Operating EBIT increased to EUR 27.1 million compared to previous year EUR 21.3 million. We will obviously continue to closely monitor the market and the economic developments. Comprehensive action plans are in place to boost productivity and efficiency in the Automotive division during the year.

 

Commercial Vehicles division posted an increase with 7.8% in revenue in the first 6 months of 2019. This positive development was driven by rising sales volume in the agricultural and construction machinery and material handling sector as well as the ongoing recovery in Brazil. Overall, all major core market segments showed a strong development in the first half year. In absolute figures, revenue in the division came to EUR 332.2 million, which is EUR 23.9 million up on the same period in the previous year.

 

Commercial Vehicles business in China continued to expand with revenue in APAC achieving the highest percentage increase of 16.5%. This is followed by Americas. Their revenue rose by 7.3%; and our already large home market, EMEA, with a 6.4% increase in revenue. Driven by higher volumes, EBIT improved to EUR 32.5 million, and the EBIT margin again remained high with 9.8%.

 

Now I hand it back to Thorsten, who will continue with the presentation.

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Thorsten Seehars, Grammer AG - CEO & Member of Executive Board [5]

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All right. Thank you, Jurate. So what is the market outlook for 2019? Forecast for the worldwide car market predict a decline of minus 3%. Europe, the analysts see minus 2% a decline including all of those segments, larger vehicles and SUVs, which obviously continue to benefit from those low petrol prices, especially the North American market.

 

Looking at the mid- and heavy-duty truck segment. Even though we do have those lower-sales expectations for the largest growth truck market in China that's affecting the market itself, Grammer will continue the recent growth story in that market as we've started to gain market shares in that region. So we are not seeing that as a bad news, but rather seeing further growth opportunities here for Grammer.

 

The Brazilian market and the recovery should continue into 2019. Overall expectation is plus 9% growth. Obviously, for those of you who follow that market for many years, it's still away from that high level that the market had in the earlier years of 2000. Looking at the truck markets in both Europe and U.S., we still expect them to grow by 1%, respectively, 7% in 2019. Also, I think as we all know, they're already on a very high level, so we have to monitor those markets as well.

 

On the Agricultural machinery sector and comparing that to previous years. Listening to our customers, they continue to send positive signals to us, so we are having stable expectations for both Europe and South America. And looking at the U.S. and the Canada market, we've seen somewhere a flat to up to 5% growth opportunities in that largest market for Agricultural equipment.

 

In the other segments such as construction equipment and material handling, we are mostly expecting to continue to grow in 2019, but on a more modest level.

 

So with that on Page 11, I'll turn to our company's outlook for the full year. Grammer expects the market environment to remain challenging and volatile, especially in the Automotive market. We are also expecting that the global economy may be losing some further momentum and that the challenges facing the car manufacturers and hence, our customers and hence, ourselves as a supplier will continue to increase. Accordingly, the company will take targeted countermeasures to continue to strengthen our competitive position in that market.

 

For 2019, we forecast a modest increase in revenue in our core business areas and expect revenue growth for the group, so including TMD, in the area of EUR 2.1 billion. We expect the earnings before interest and tax to rise clearly above the figure for the fiscal year of 2018. That's going to be mainly driven by the lower exceptional expenses; obviously, the integration of TMD and its contribution to the P&L; as well as the better cost base and performance of the entire group.

 

We also forecast operating EBIT to exceed the level of fiscal year 2018. In fact, a further increase in our operating EBIT margin. ROCE should also increase above 2018 levels.

 

In order to give you a larger picture, please allow me to add that it's quite difficult given the current situation to give an impact on our forecast with all the, let's say, international trade politics and discussions that's going on politically, even such in the U.K, which may all have an impact on the overall automotive market. However, I think as a Board, we are confident that especially with our global manufacturing footprint and our dedicated 15,000 employees worldwide, we are strong and we'll be able to manage those challenges.

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Boris Mutius, Grammer AG - Director of IR [6]

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Thank you. Now the floor should please be opened for the Q&A session.

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Questions and Answers

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Operator [1]

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(Operator Instructions) And the first question came from Christian Ludwig.

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Christian Ludwig, Bankhaus Lampe KG, Research Division - Head of Research & Analyst [2]

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I've got a couple for you. I am aware that especially, for the 2 new members of the management board, it may be a little bit difficult, but I want to ask anyway. First of all, the simple one, could you give us the exact effect of the TMD acquisition on sales and EBIT in H1? Second question would be on the outlook for 2019, after 6 months now, could you become a little bit more concrete on your EBIT guidance? I mean significantly more than last year. You already surpassed last year's numbers with the half year figures. What exactly is the range that we should be looking for at the end of the year? And then for the new management board, what are your most important challenges that you currently are dealing with, what should we expect? And will you have a strategy, new target update for us at some point during the course of the year?

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Jurate Keblyte, Grammer AG - CFO & Member of Executive Board [3]

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Okay. Thank you for your questions, Mr. Ludwig. I will start with your first question, the TMD effect on revenue and EBIT. It has, obviously, positively influenced both revenue and EBIT for the division Automotive and -- in the first half year in both quarters. And as a general rule, we do not break down the divisional revenues into the individual group companies, and I can only say that TMD delivered the expected revenue and EBIT. And however, we see some declines coming from the U.S. market. And as for the guidance of -- for a more precise EBIT guidance, we indeed expect the volatile conditions in the world market, together with complex political developments to continue, and we remain guardedly positive about the outlook of the Grammer Group, however. As you specifically asked for the EBIT, I would like to answer by saying that we anticipate a good, absolute EBIT, which will be clearly high above the previous year, EUR 48.7 million. And I should say that we currently assume that there will be no fundamental positive or negative change in the difficult conditions for the Grammer Automotive division in the second half year.

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Thorsten Seehars, Grammer AG - CEO & Member of Executive Board [4]

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All right. So let me take on the other 2 questions you had, Christian. So one, obviously, as we started just a few days ago, the most important task of getting to know Grammer, getting to know the people, getting to know the business, getting to know the business units, the product and the locations. And I can tell you that within that learning journey, we have already had one visit to our major plant here in Germany and will continue exclusively in Europe as well as in the most important regions of our business in China, North America because of the September month. So that would say the education part of the story. At the same time, obviously, the world continues to turn, so we are in very close interactions with our divisions and the function leaders, seeing the market challenges, looking, obviously, all that. If it means that Brexit and what our inventory levels are for that to understand what the -- what's going on and how we are preparing ourselves. So that's what I would consider a learning journey, getting to know the people and learning about the business here at Grammer in Amberg. Talking about strategy, I think that's way too early. However, I think it's a fair statement to say that with the next Q call -- Q3 reporting that's due on November 12, I will obviously update everyone on the call on the sales and earnings outlook for 2019. And I'd say, from my experience, after some holidays, especially talking in Germany or in Europe in September, those figures should get more reliable from OEM call off in all of those segments.

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Christian Ludwig, Bankhaus Lampe KG, Research Division - Head of Research & Analyst [5]

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Just as a quick follow-up. Excuse my French, you're right but you didn't answer my questions at all, I have to say. But I need to phrase it in a little different way. What was your organic growth rate in Automotive in the first half year? Just to get a feeling how big or how strong the headwinds are that you are currently facing there.

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Thorsten Seehars, Grammer AG - CEO & Member of Executive Board [6]

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The organic growth rate...

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Jurate Keblyte, Grammer AG - CFO & Member of Executive Board [7]

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So the organic growth, you are talking about the Automotive group without TMD, if we say it straightforward, there was no growth. It's -- the organic revenue came in lower by a single-digit percentage, I would summarize it that way. As I said, if we would now give numbers, we would then start to argue about different subsidiaries and single businesses, so I would keep it at that level. So headwinds, yes, we feel them and see, but it's at a lower single...

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Thorsten Seehars, Grammer AG - CEO & Member of Executive Board [8]

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I think as I said before, it's a mixed picture. I mean if you look at the European market, mentioned that before that -- from the market side, we see a downturn. However, in the Grammer segment, there may be some automotive that we supply that our customers were not selling as good as they expected. On the positive side, however, in the NAFTA region, we have seen especially our German plant, customers been very successful and results ramping up in those markets with new models that's also somewhat offsetting this stronger than market decline here in Europe. So that leads to the overall number that you have to just set off the single-digit decline in the Automotive segment in our classic Grammer Automotive segment.

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Christian Ludwig, Bankhaus Lampe KG, Research Division - Head of Research & Analyst [9]

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To understand it correctly that you expect this kind of rate to continue in the second half. You don't see an improvement, you don't see it worsening?

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Thorsten Seehars, Grammer AG - CEO & Member of Executive Board [10]

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Yes.

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Jurate Keblyte, Grammer AG - CFO & Member of Executive Board [11]

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We do not see it worsening. Definitely not.

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Operator [12]

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Then the next question comes from Mr. Harald Eggeling.

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Harald Eggeling, ODDO BHF Corporate & Markets, Research Division - Analyst [13]

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Three questions, please. First one would be if you could give us an indication of the FX impact on top line per segment in Q2. Second one would be if you could please explain the quarter-over-quarter swing in operating EBIT in Automotive. I think it was pretty pronounced at EUR 6 million from Q1 to Q2. And third question, could you please give us an indication of what you see with regard to ramp-ups or product launches in H2 for Automotive to get an understanding of your potential organic growth rate?

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Jurate Keblyte, Grammer AG - CFO & Member of Executive Board [14]

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Okay. Thank you for the questions. I will start with the FX effect. Even though the overall number is EUR 12.2 million -- EUR 12.5 million, it is roundabout 1% of the overall revenue, but we do not have the split of it over the segments because there's no significant difference between the divisions. So the effect -- what I want to say the effect is similar between the divisions. There is no big difference. The swing, EBIT swing in the Automotive between the 2 quarters, actually this is mainly driven by the project business and some one-off effects that we have in the first quarter or between the 2 quarters mainly in administrative and selling expenses as well as higher other operating income in -- especially in U.S. These effects, yes, have accounted for around about EUR 4 million IFRS EBIT in the second quarter in 2019.

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Thorsten Seehars, Grammer AG - CEO & Member of Executive Board [15]

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Looking at the question you had on the market side and our customer launches if I compare those launches that took place at the later part of 2018, early 2019 that obviously are now starting to benefit our top line. We see majorly these 3 large type German OEMs with their very prestige SUVs being on a very nice upside path, but at the same time, also with 1 -- with 2 of the 7 German premium car manufacturers in their midrange segment, where Grammer was also participating in the launch. And all of that says roughly EUR 100 million year-over-year improvement on top line related to those model launches.

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Harald Eggeling, ODDO BHF Corporate & Markets, Research Division - Analyst [16]

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Okay. One follow-up to the EUR 4 million one-off from various sources. So you expect this, as you mentioned, one-off, as it, so to say, over with Q2, and we have a clean basis in Q3 being EUR 4 million lower. Is that correct?

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Jurate Keblyte, Grammer AG - CFO & Member of Executive Board [17]

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Yes. This is correct.

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Operator [18]

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And the next question comes from Mr. Peter Rothenaicher.

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Peter Rothenaicher, Baader-Helvea Equity Research - Analyst [19]

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Peter Rothenaicher from Baader Bank. I'd like to do the questions one by one, starting with Commercial Vehicles division. So we had an excellent first half of the year. Now we have some negative indications, particularly from the industrial truck market. Do you already see here some weakening in your business in the course of the second half of the year, particularly here in the fourth quarter? And have you already taken here some measures perhaps to reduce capacities or is it not necessary now?

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Boris Mutius, Grammer AG - Director of IR [20]

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Should we answer it straightaway, okay? Yes. Please, Mr. Thorsten.

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Thorsten Seehars, Grammer AG - CEO & Member of Executive Board [21]

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All right. So to your question, I think to overall Commercial Vehicle segment, as I said before on the truck market, especially Europe and North America still on a high level, so no signs of a downturn for 2019 yet in our colors. On the material handling side that you were referring to, the news from the market. On the one side, yes, customer may be seeing less in terms of sales volume. However, from our revenue side, we are not impacted here as actually the customer is ordering more high-value add products from ourselves compared to previous colors. So no impact on the top line at Grammer right now.

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Peter Rothenaicher, Baader-Helvea Equity Research - Analyst [22]

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Okay. So you're still confident regarding the Commercial Vehicle's performance in the second half of the year?

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Thorsten Seehars, Grammer AG - CEO & Member of Executive Board [23]

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Yes. Yes, I am. And in addition to those 2 markets that I referred to, in Europe and North America, I mentioned earlier that the Chinese market, which is the largest truck market of the world, despite the decline, Grammer it's growing in that region as we are ramping up with the largest Chinese Commercial Vehicles manufacturer based in Chongqing with some new applications.

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Peter Rothenaicher, Baader-Helvea Equity Research - Analyst [24]

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Okay. Then regarding -- having a look into 2020 with regard to perhaps some upcoming weakness in the heavy truck market. How strong is your exposure in the U.S. truck market and do you think you will be impacted here considerably negative next year?

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Thorsten Seehars, Grammer AG - CEO & Member of Executive Board [25]

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Okay. I want to get to that. I think overall, the truck market out south in the U.S. is roughly 3% of the total Grammer revenues. Looking at the market, no signs right now in -- well, in some of the shows there have been discussion and also from my -- I know that colleagues have been looking at 2021 with some skepticism. I would say it's too early right now to comment on that.

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Peter Rothenaicher, Baader-Helvea Equity Research - Analyst [26]

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Okay. Then regarding your remark on TMD that there is some decline in business coming up. Have you already felt this in like-for-like comparison at TMD in the first half of the year? And how strong might this negative effect be then?

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Thorsten Seehars, Grammer AG - CEO & Member of Executive Board [27]

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I know about one model that TMD is selling to the -- I think the Jeep Cherokee that's not selling as our customer and also we would expect -- so that's hitting the top line of TMD. Well, I wouldn't have a precise number here but, yes, that's one of the projects I referred to early on.

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Peter Rothenaicher, Baader-Helvea Equity Research - Analyst [28]

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Then a technical question. So in the second quarter, you had much better financial results than in the first quarter. Was there some special impact in or was -- financial result in the first quarter impacted perhaps by some refinancing issue. How do you see it and then what can we expect in terms of financial results for the full year?

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Jurate Keblyte, Grammer AG - CFO & Member of Executive Board [29]

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So the second quarter was much better in the financial results mainly due to the FX effect. Actually, yes, our acquisition -- the TMD acquisition is financed by U.S. dollar and the change of the currency rates had a negative effect in Q1 and a positive effect in Q2. And assuming stable FX rates, we do not currently expect substantial changes for the second half year compared to the first one.

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Peter Rothenaicher, Baader-Helvea Equity Research - Analyst [30]

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So on average, so if you take the first and the second quarter on average, this is a good guidance for the full year, you mean?

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Jurate Keblyte, Grammer AG - CFO & Member of Executive Board [31]

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Exactly.

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Thorsten Seehars, Grammer AG - CEO & Member of Executive Board [32]

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Yes.

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Peter Rothenaicher, Baader-Helvea Equity Research - Analyst [33]

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Okay. And lastly, on cash flows, it was a really good performance in the first half of the year. What was the reason and what do you expect here going forward?

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Jurate Keblyte, Grammer AG - CFO & Member of Executive Board [34]

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Okay. I'll take this one also. So the good cash performance has been driven mainly by our operative business and optimized working capital. It has been invested a lot into optimization of receivables, but also payment terms with our suppliers and also inventories. We have some programs ongoing to optimize inventory. And we, obviously, are continuing with those programs and expect a good cash performance going forward also.

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Peter Rothenaicher, Baader-Helvea Equity Research - Analyst [35]

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So you can confirm that you will have a considerably positive free cash flow by the end of the year?

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Jurate Keblyte, Grammer AG - CFO & Member of Executive Board [36]

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We will also have a lot of capital expenditures, so I would not dare to give a precise number yet for the end of the year.

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Operator [37]

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And the next question comes from Mr. Michael Punzet.

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Michael Punzet, DZ Bank AG, Research Division - Analyst [38]

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Yes. Michael Punzet, DZ Bank, Frankfurt. I have two questions left. First one once again on TMD. Could you provide us with some figures for the PPA in Q2 or in H1? And second on the order intake. Can you give us an update, how it developed in Q2? And if you still stick to the guidance of EUR 1.7 billion in new orders for automotive in 2019?

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Jurate Keblyte, Grammer AG - CFO & Member of Executive Board [39]

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Okay. For the purposes of purchase price allocations, we -- on the basis of the preliminary fair value of the assets acquired, we have a goodwill of EUR 72.8 million and PPA depreciation in Q4 was EUR 2.5 million and in the first half year 2019, EUR 5.2 million. And we do not see any...

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Thorsten Seehars, Grammer AG - CEO & Member of Executive Board [40]

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And this will continue for several years.

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Jurate Keblyte, Grammer AG - CFO & Member of Executive Board [41]

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This will continue for several years, the -- or let's say, we do not see at least for the near future any changes here.

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Thorsten Seehars, Grammer AG - CEO & Member of Executive Board [42]

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Okay. Looking at the order intake, obviously, that's the -- one of the callers and -- one of your colleagues asked it earlier on what's -- what is on -- hot on our list for the start here. Obviously, that's order intake. That's going to be revenue of a -- from the business in future, we continue to focus at that mainly in the regions outside of Europe, so North America and China. That's part of our growth strategy with -- not only the Chinese plant but also the local OEMs and that should be supported by the, amongst others, TMD acquisition and our partner in China. We are, I'd say, on track. OEMs continue to push some of their positions to the, I would say, post-summer period, but overall on track to meet that target that you mentioned earlier on for 2019.

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Operator [43]

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There are no more questions for today.

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Boris Mutius, Grammer AG - Director of IR [44]

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Thank you very much, ladies and gentlemen, for questions also. And if anything remains open or if you would like to ask anything else, you can always find me here in the -- on the office. I'm looking forward to your call. Thank you very much, and see you soon.

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Jurate Keblyte, Grammer AG - CFO & Member of Executive Board [45]

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Thank you.