Earnings Transcript for GBF.DE - Q3 Fiscal Year 2024

Martina Borger: Good afternoon, ladies and gentlemen, and welcome to Bilfinger's Third Quarter 2024 Results Call. My name is Martina Borger and I'm heading the Investor Relations team since beginning of October. Today I'm joined by Thomas Schulz, our Group CEO, and Matti Jakel, our Group CFO. We will start with a presentation on the quarterly highlights and financials and then open up the call to your questions. You can ask your questions via phone by pressing star and one on your keypad or via chat in the webcast. During the presentation, all participants are in a listen-only mode. The conference call is being recorded. With that, I hand over to Thomas Schulz.

Thomas Schulz: Thank you very much. Hello, everybody. We would like to guide you through our third quarter 2024 for our Bilfinger Group. And what we can say is quite a successful quarter and another step in the direction for fulfillment of our midterm targets, which is a growth of 4% to 5% per annum, as well as 6% to 7% EBITA. In the quarter, we received more than 30% orders, 18% organic growth, quite significant in that market where we operate in. Revenue is up 15%, organically 2%. And our EBITA margin made quite a jump from 5.1% to 6%. Our free cash flow was in the quarter 55 million, coming down from 61 million last year. But it was the fifth quarter in a row positive. And actually, the year-to-date figure is significantly higher than it was last year. We confirm our outlook for 2024 and we keep the guidance on 4.8 to 5.2 and the EBITA to 4.8% to 5.2%. And as we communicated before, in both, our midpoint is really the target area where we go for. The markets are stable to positive in all target markets and industries. Our earnings per share moved up from €0.98 to €1.49. And the acquisition, the stock business, what we acquired from 1st of April this year, is well on track. Before we go into the markets and into the financial figures, safety. Occupational safety is a very high priority for us. And we are quite market leading in that area for our clients who have very, very large interests, the same as we. If you look on the right upper page, it's the total record of an incident frequency. And it came down from 125 to 0.88. Really a good move in the right direction. If it comes to the lost time injury frequency rate, that is actually up from 0.12 to 0.29. But when we look over several quarters or several years back, we see that we are moving step-by-step and a little bit too slow into the direction of zero. But we have a lot of activities on board to speed that up more. With that, I would like to give an information, as we did in an open letter on the Internet regarding the incident in U.S., which happened in October, means in the fourth quarter. Our U.S. subsidiary, Centennial, completed the works as the contracting company for that order in 2021, means three years in operation. The cause of the incident is still unknown. We and Centennial is supporting the authorities and, of course, is available if necessary to assist. Now into the markets and industries. And as you know, we operate in four main industries, energy, chemical, petrochem, biopharma, pharma and oil and gas. Let us start with energy, which makes roughly 20% of our top line. The market outlook is stable to positive over all geographies and customer ranges. We have an increasing demand in the energy sector for that, what we as Bilfinger cover. Especially nuclear has a significant revival in all countries besides Germany. The outsourcing potential, that means the business, what we get offered and what we can capture from our clients is good and stable in that area. Important to mention here from all the areas is the new U.S. administration, because the verbalization towards conventional energy resources is rocket high. And we expect quite a shift more into conventional energy resources. If we then look into the chemicals and petrochem business, which is roughly 25% of our top line. As you see on the graph on the left side, we are roughly on the pre-COVID year 2019 level in the markets where we operate. For us, the market is stable. We see that the global petrochemical demand is growing, especially in the midterm but we have significant regional differences. The outsourcing potential in that area is increasing to good. And here a special highlight is the U.S. market again with a growth potential of 3% to 4% for the next two years. And not to forget, the Middle East has quite a significant production growth. If we then go to the next page with pharma and biopharma, around 10% of our top line. You see in the graph that we are in 2024 expected 36% up in the production index versus that what we had in 2019. Definitely the most growing area of the industries what we have in the Bilfinger Group. The market outlook stays quite positive. Global investments remain quite strong. We have a good and increasing outsourcing potential. The demand over all kinds of societies for pharma and especially biopharma products is still going up. The growth is based on more localization of production, reduced time to market for innovation. That means new products are getting faster into production and then to their end clients. And that drives quite a lot of business opportunities for us. In the oil and gas, which makes roughly 20%, market outlook is stable. We have a good and increasing outsourcing potential. And we see, especially with the new U.S. administration, a lot of movement into growth out of North America. Out of that, some special view on that what we see as our demand, as the Bilfinger demand. You know that we for quite a while now show you what we call the opportunity pipeline. It's that how we index the market based on July 2022, how much business potential we have in front of us. And when you look into it, you see that we had two years ago between 95 and 100. 100 was the index for the July. Last year was between 94 and 104 and this year between 102 and 110. The reason why I bring that so specific, it clearly shows that we have a higher single digit growth of opportunities in all industries and areas where we operate in. The orders received actually moved up 31% from last year to €1.344 billion. It's an 18% organic growth. You see the acquisition with more than 100 million in it. And you see project business with a quite high figure. That comes out of individual orders, especially with technologies, what we see in the future as standardized products. It is green technology, especially in that part. The order backlog is on a very healthy level, moved from €3.378 billion up to €4.109 billion. When we then go further, we have some selected orders to show you on which kind of orders we work here. On the left side, it's from Zeeland Refinery in the oil and gas in the Netherlands. It's a six years contract for what we call all in one maintenance for the refinery out of a Bilfinger single source. This is what we were able to offer and being successful in getting the order based on the new acquisition to add that on. So the package, what we offer to clients is really a full package and makes us very competitive in any market. In the mid part of the picture, we have energy with the MAN Energy Solution in beautiful Denmark. It's about heat pump supply. It's about engineering and mechanical integration for the city of Aalborg so that they get climate neutral district heating system. On the right side from Germany, from our client RWE, again in the energy sector out of the segment technology. It's about 100-megawatt electrolysis plant for hydrogen production and with all what we do supply capacities. All the three orders shows that our vision to be the number one in efficiency and sustainability really is on a very good track. Out of that into innovation, you only can expect that you are the number one with your clients. If you renew the way how you do efficiency, the way how you do sustainability. This time we show you the Bilfinger corrosion detection. This is a special system with x-ray control on work where you have insulation around pipes or tanks or other material. And as you can imagine, the risk for the clients is that you get corrosion under that insulation. In the old version, you have to build a complete scaffolding and then dismantle a lot of that insulation to check where you have this corrosion, which could lead to leakage. With this system, it's no need to take away insulation at all until you find the spot where you have corrosion. That makes the whole work not only more safe for the people doing it, it actually makes it significantly cheaper in the cost and it makes it significantly faster. That kind of efficiency improvement we bring to our clients. Out of that, I would like to give to Matti Jakel, our CFO.

Matti Jakel: Yes, thanks, Thomas. Good afternoon, everyone. Let me give you some flavor on the numbers. First of all, group numbers. And then after that, we'll talk about the segments and then finish up with the group view again. Revenue increased by 15% in total, absolute numbers, to €1.28 billion. This includes roughly €140 million for the acquired business, meaning that the organic growth achieved 2% top line. On the bottom line, EBITA grew to 6.0% -- 6.0% EBITA margin from 5.1% one year ago. The €76 million EBITA includes 8 million for the acquired business. If you deduct this number and divide by the revenue for the last year's quarter, you come as well to 6.0%. So the EBITDA margin improvement comes out of our business. The improvement stems from an increase in our gross profit margin, which grew from 11.0% to 12.3% on the back of our strategy, meaning positioning, operational excellence, and efficiency are at full speed and are working. At the same time, our SG&A quota went down to 6.1%, the cost in total grew, but this is due to the acquisition. So if you compare the organic numbers, EBITA increased by 2%, and revenue increased by 2%, and EBITA in absolute terms increased by 20%, from 57 million to 68 million excluding the acquisition. So a significant improvement [Technical Difficulty] 12 months later. This also turns into a significant increase on net profit and earnings per share. You see the EBITA of 76 million, the financial result, which shows a slight improvement over last year, giving us another uptick on the EBITA taxes, obviously, when you make more money, they are higher for 56 million than in the earnings after tax for our continued business. And with the discontinued business and minorities, this comes to €55 million for the quarter in net profit, giving us an earnings per share of €1.45 after €0.98 in Q3 2023. That's an increase of 49% or 48% on the earnings per share. Cash flow and working capital in absolute numbers, the third quarter 2024 is just a bit lower than last year, 2023, 61 to 55. However, this comes on the back of a very good first and second quarter in 2024. And as we have planned and explained various times that we will moderate our intra year cash flows from very negative in the first half to very positive in the second half to a more even profile. And this is working in 2024. Year-to-date, last year we were at minus 12 million and this year we are at plus 105, which is also a reason why we are adjusting our outlook on the free cash flow for the group. Net liquidity follows the free cash flow. What is interesting here is, we are showing the liquidity effects of the acquired business in each quarter. So 29 million cash out in the first quarter, 21 million inflow in the second quarter and 6 million outflow in the third quarter. If you add those numbers together, then the net cash out for the acquisition was just €14 million. With our very good earnings and margin. There's no issues on the gearing ratios, on the financing targets. So 108% on FFO to net debt and 0.73% on the net debt to EBITDA. So there's a lot of headroom, as we have explained various times before, and that remains in place. Now, a little bit more flavor on the segments. Segment Europe, orders received very strong 8% in organic growth, including the acquired business. It's 27%. On the right-hand side, you see orders received 126 million for the acquired business revenue, 140 million and EBITDA 8 million, which is a margin of 5.8%. So that business is doing quite a bit better than what we had anticipated when we talked about this transaction earlier this year. Orders received for Europe with significant organic growth. This is due to increased maintenance activities across all industries and all geographies. So we are very well underway to achieve our midterm targets, which is 45% growth. On the revenue side, we see a flat quarter, but we do know that we have these seasonal ups and downs from time-to-time. And what we see here, that's a bit of a mixed picture. In the third quarter, we see increases in Belgium and Holland, in U.K. and in Eastern Europe. And we see a flat development in the German speaking areas and also in the Nordic countries. If we look at this from an industry point of view, the increases come of oil and gas and petrochemical, while the flat and slow or slight declines are in the chemical industries. Profitability increased quite nicely from 5.8% to 6.3%. Again, this is due to a good product mix, operational excellence and the effects of the efficiency program. Over to international and there we have a little bit more to explain. Orders received, they normalized versus prior year quarter, but continuing our overall positive development that we have seen over the last few quarters. Book-to-bill 1.03, which is an indication that the company and the business is growing. Revenue quite stable at plus 2%, especially in the Middle East and there, especially in the engineering sector. We have seen some very nice order intake, so we're seeing some strong growth. Growth in engineering always means that then the larger work, construction and maintenance will follow anytime soon. So it's a good and early indicator for what is ahead of us here. Now to the EBITA in the segment, it shows a negative 9 million, minus 9 million. This 9 million includes about 15 million of one-time effects. We had for a long time a legal proceeding in the United States on a contract that was taken in 2018 and completed in 2020. And while in execution, a dispute arose with the client and it has now taken four years to complete the arbitration. The arbitration was completed in our favor. The overall impact on the group bottom line is pretty much zero, which means that the risk provisions that were taken were sufficient and well estimated. However, the risk provisions were taken in two places. One is in segment international and the other one is on group level. So while we are seeing a negative effect in the segment here, the offsetting impact is on group level, which you will see in a moment when we talk about the reconciliation of the Group. The other effect is that we have taken another risk provision on the discontinuation of our project business, which we have talked about many times in the last few quarters, that we are getting out of that piece of the business. And as always, we do find a few things here and there. And so we felt it was appropriate to do some risk provisioning here. If I remove that, those two one-off items, then the EBITA margin on the underlying U.S. business is 2.5% profit. Technologies, significant growth, about 50% over the last year's quarter, particularly in pharma and biopharma, as well as in energy. So book-to-bill at 1.4 is an indicator for strong growth. Also growth on the revenue side, plus 9%, which is a natural consequence of the good order intake we have seen now for a few quarters. Profitability following the revenue, 6.9% after 5.8% last year. So from €10 million to €13 million for the quarter. Again, product mix, operational excellence and efficiency program showing their positive effects, as we had expected when we announced our strategy. So on the basis of these results, we have made adjustments to the outlook on segment level. In an international, we have taken down to 0% to 1% EBITA margin after 2.5% to 4% previously. Revenue is unchanged. Technologies, we have taken higher from 5% to 5.5%, now to 5.7% to 6.2%. Revenue outlook unchanged. And due to very favorable business in South Africa, we have increased the revenue under reconciliation group from 50 million to 75 million to 90 million to 115 million. And also the EBITA, which is an absolute number because a number of effects play a role here. It was minus 25 to minus 15, has improved by 20 million to minus 5 million to plus 5 million as a consequence of the release of the risk provision in the U.S. and an improved business in South Africa. With that, I hand it back to Thomas.

Thomas Schulz: Thank you, Matti. So when we then look into the group outlook, you see on that slide in the first column what we had full year in 2023. Let us look into the revenue. We have a guidance for this year of 4.8 to 5.2. When you see what we have year-to-date with 3.676 versus the 3.29 in 2023, we are well on the way to hit exactly the middle spot of the guidance. Same is in the EBITA margin. There we had year-to-date in 2023, 3.7, and we are now operating on a 5.0. And that, of course, is quite a step up and gives us the confidence to say that the 5% target for the EBITA margin would be promised in 2016 will be hit this year in 2024. More important for us is, beside the figures here year-to-date and in the quarter as well as for the full year, is that we are very much on a very good way to fulfill our midterm targets with a growth of 4% to 5%, what we said at the beginning of 2023, and a 6% to 7% EBITA margin in the midterm, which is then around the year 2026. As Matti showed and explained, we lifted up the free cash flow guidance from 100 to 140 to 125 to 165 based on, let us call it, technical reasons. When we look into the year-to-date, it's a significant improvement versus year-to-date last year, 23 with minus 12, to 105 year to date this year. More important is it was the fifth quarter in a row being positive in the free cash flow. To summarize that, it was quite a successful quarter in the orders. It was as expected in the revenue. EBITA margin made quite a jump up to 6% and the free cash flow performed very well. The outlook we keep as promised and as said before, all our markets are stable to positive. Our earnings per share went up quite a lot from €0.98 to €1.45 and the acquisition, the former stock business, what we got 1st of April, is well on track. And with that, I give back to Martina.

A - Martina Borger: Thank you. Ladies and gentlemen, we will now start a Q&A session. [Instructions]. We have the first question from Michael Kuhn from Deutsche Bank. Michael, your line is open.

Michael Kuhn: Starting with the Q3 EBITDA and also the outlook, given that you again took provisions for the legacy project business, would you say it's fair to say that maybe the underlying margin quality was actually a bit better than what you had shown? And actually with that, was this the final step or is there, let's say, a remaining risk for the project business that you ended in the U.S. resulting in more provisions?

Matti Jakel: Michael, this is Matti. Good afternoon. Good to have you here. The underlying U.S. business turns about 2.5% EBITDA. If you add then the very good performance of our Middle East business, then the average for the segment international, so both Middle East and the U.S. together, is roughly 4%. Does that answer your question on this one?

Michael Kuhn: It does. Thank you.

Matti Jakel: Okay. Now, I have a lot of experience with legacy projects. So, we do provide for as and when we see certain risks. There is one project out of this, call it [Era] [ph], that is still under execution and will be completed next year. It's very closely monitored and we believe as for now that the risks have been provided for adequately. But it is still under execution, and we will do as always if and when we see that things are not moving as planned, we take every precaution that is required.

Michael Kuhn: Thank you. And also in the connection with the guidance and the increased outlook for the reconciliation group, could you split up those effects? So, what was, let's say, the better underlying development of the South African business and what is the one-time effect from the provision release?

Matti Jakel: The one-time effect of the provision release is about €10 million and the improvement in the South African business is about 3 million quarter-over-quarter.

Michael Kuhn: Thank you. And then one on the order intake, obviously a very good outcome in this quarter. Technology contributing, which is per se always a little more project driven. For the other two segments, was there a mixed shift? So, was there a higher project share or is it really all maintenance contracts?

Thomas Schulz: Yes. We have actually quite a healthy level of maintenance orders in. But we got at the same time in the EM segments project business in what we see will be more often ordered in exactly the same way, which then will be in the future not a project business. We are very conservative when we look into that, how we take orders and how we classify it. If we give an example, if we build something for, let's say, life science and we get only one order exactly for that, then it's actually dealt like a project. But if we sell it 10, 15, 20 times exactly the same through our de-risking and standardization approach, actually it's not a project any longer. It's like a product what you can buy from the shelf. So, it's a mixed picture and we are actually quite proud of that because we showed with the acquisition, with our vision, with our strategy, that we can add a lot of efficiency improvement for new things for clients too. You will not find a lot of companies who can calculate the green footprint of a plant which is only in the mindset of the customer. We as Bilfinger can do that.

Michael Kuhn: Thanks. And then, one more on the guidance. At the upper end, you got 3.6 billion sales in E&M Europe, which implies hardly any growth in the final quarter, if I'm correct, from an organic standpoint. Is there an implied growth slowdown here?

Thomas Schulz: No. We don't see that. Of course, the figures show what the figures show, but please don't forget that we reduced some of, let's say, former businesses what we had over the time. That is out, that is off the shelf. We took actually companies or former customers out where we were not satisfied. So, we actually reduced what we call the base pool in one side. On the other side, we have regional differences. We see, if we take, for example, Germany, where we think the business what we have is actually quite good, but customers are very clear. When they give us an order, let's say, for 100, then they stay on the 100. In expansion mode, what we have in some other parts in Europe, there, if you get something for 100, they actually, over the lifetime of that order, you actually go to 105 and 110. Where is that coming from? Especially Germany, which is here the exception in the, let's say, slow business environment, what we have in the country, in all economy, not only in our industries, puts our clients into the position to look for cost reduction, efficiency improvement. And as we said before, we have to offer there a lot, but it doesn't add a lot on top of that automatically.

Operator: We can now go to the next question, which is on the line from Gregor Kuglitsch from UBS. Gregor, please go ahead.

Gregor Kuglitsch: So, maybe two questions then. So, firstly, I mean, in your prepared remarks, you said you're still sort of happy with the margin guidance. By 26, you're going to be in that 6%, 7% landing zone. I guess my question to you is, what's your initial sense of how, what the kind of pace is in '25? I don't know if there's any sort of early thoughts that you can share. Do you think you can do 50 bps or more or perhaps a bit early? I'm guessing you're expecting growth, but I just want to understand sort of the pace. And then maybe a second question coming back to the sort of rather unfortunate events in the U.S. Can you give any sort of further details? I appreciate it's quite early. I think in the past, you sort of had insurance cover for these sort of accidents. So, can you just give us some kind of comfort what the financial risk is to the Group, please? Thank you.

Thomas Schulz: Yes. Let us start directly with the second part, the event in the U.S. You are completely right. It's a very sad thing. And accidents, incidents happen. That's part of life. It's not good, but it happens. And here, it's something what we got as an order, what our Centennial colleagues got as an order in 2020 and finalized it in 2021. So, the whole installation was in operation for three years. The cause of the incident is still unknown. There are no facts and figures on the table. We support Centennial. Our daughter company in the U.S. supports the authorities. That's to that case. All other information, what people think about and shoot figures left and right and so on, this has no base. That has absolutely no base. But when we look into the general setup of a company as we are, we are the same as you have other European companies covered with insurance. That's a standard thing what we have. We are the same as other companies established in that way. That's what I can say. More is really back on the U.S. case or Sapelo case, more we can't share because nothing is there more.

Gregor Kuglitsch: Thank you.

Thomas Schulz: Then, of course, to the margin guidance, we are not guiding now for 2025. And I know that you know that very well. But of course, but you always try it, which I think is great. You can imagine that. And I hope that that always comes through out of the last two years. We have a clear picture for that, what we call the midterm targets. This is all what motivates us. And we believe strongly that we will achieve it so that we are not having then a side movement in 2025. And then out of the nothing, we go to 6% to 7% in 2026 is logical. But please wait up to the quarter four announcement when we come with the guidance for the year 2025. When you look into, I can give a little bit of comfort in. Matti said it several times. We have what made the 6% in the quarter, which is, we think, actually quite a good result when you look more than 10, 12, 14 years back in the Bilfinger Group. It is, of course, the operational excellence part of the strategy. It's the new positioning part of the strategy. It's the efficiency program. And in the quarter as a special item, the product mix, which was quite favorable. And that can always move from one quarter to another.

Operator: We have another question on the line, which is from Craig Abbott from Kepler Cheuvreux. Craig, your line should open up.

Craig Abbott: Yes, first of all, I just want to come back to E&M International, please. I mean, my first question was already answered earlier in terms of what may be risk in your approaches to winding down, you might have. I appreciate that. But I just want to get an understanding again. If I understand it correctly, the Centennial business, by nature, is also basically a project business. The average project size, I understand, is very small. But as we see with the unfortunate incident there, a very small project can, of course, can go wrong or whatever can cause problems. So I just want to know, in general, when you say you're winding down the project business, where your definition line lies there? I mean, it's just really large-scale projects. And what your thinking is with continuing the type of operation that Centennial conducts going forward? Thank you.

Matti Jakel: Craig, this is Matti. Maybe I respond to Centennial as sort of a particular case. The way Centennial operates is they also operate like many of our European operations under long-term frame contracts. They're called job order contracts where the clients issue small call-offs, hundreds and hundreds of those during any given year. So from a risk exposure, it's a very, very low-risk business that we are operating there. This incident here happened three years after completion of the project. I know the Bilfinger history, and in the past, large, risky projects, they turned out financial losses. But I guess during operation, because, I don't know, bad estimates, bad execution, whatever you can imagine was bad. But here, this thing had been in operation for three years, and now something happens. Nobody knows why, and nobody knows how. So we have to deal with it. But this does not put into question, our entire business, it does not put into question any of what Centennial is doing. The job was properly executed, as far as we can tell. So it's tragic, but it's an incident, and we're dealing with it professionally and very transparently.

Craig Abbott: Okay, thank you. And I just have one on E&M Europe. A very good margin progression, as you clearly pointed out. And you gave your order book indication chart again, and just the flavor you've been giving us. It sounded rather upbeat, also. But nevertheless, if we look at the book-to-bill was a bit below 1, around 0.96. And the organic growth there was flat, Q3. And I just wondered if you could maybe provide us some color on the outlook you're seeing for ordering activity in Q4. And heading into Q1, in that business specifically. Thank you.

Thomas Schulz: Yes. Hey, Craig. Here Thomas. Hi. Nice to have you here. Craig, I don't want to be picky, but we had the quarters before was 1.11. The quarter before was 1.1. So quite a good book-to-bill ratio. And last year, it was 0.89. And this time, it's 0.96. So we have always some variances in it. That is normal in that business because it's based on the milestones. It's based on how customers act. There's nothing to concern about. We actually think that, and that is what we see in the profitability too, that we were able in the last one to two years to focus on that customer group and on that business where you have an underlying good margin, low risk. And a lot of that, what we call not only in EM Europe and the other segments too, project business, will be in the future product business because it's repetitive work to the client. So from that point of view, the 0.96 for that quarter doesn't concern us at all. It's a typical, let's say, variances over the quarter.

Craig Abbott: Okay. Fair enough. That's a very good explanation. Thank you.

Martina Borger: Thank you. Ladies and gentlemen, be reminded that you can ask your questions via telephone, by pressing star one on your keypad, and via chat. We now do have a question from the chat from Nikolas Demeter from Bankhaus Metzler, which I will read. Regarding the EBITA margin improvement in E&M Europe, could you provide more insight into how profitability has improved? Are there specific examples to illustrate this? For instance, has better pricing been achieved due to enhanced market positioning or the unique services that Bilfinger offers? Additionally, could you highlight any efficiency improvements that were implemented during this period? What is already different to one year ago, specifically in this segment?

Thomas Schulz: Nikolas, that's quite a package what you ask. I make it like that. We said that for all the segments, product mix, operation excellence, efficiency program, new positioning are actually the reasons. And our efficiency program, what we announced in November 2022, actually pays off fully. That is what we see. And it's a good behavior of all the colleagues we have. Which makes us really proud how cost sensitive our organization is. And how we look for getting things faster and simpler done, despite all the pressure on bureaucracy, especially here in Germany. Then we have on the other side, the new positioning. New positioning includes two, de-risking, standardization, and especially to sell into the areas where you are good at it. And taking that out where you have one-time wonders with higher risk and so on. That all adds up into it. Then we had with the onboarding acquisition and having a bigger portfolio to the same clients, where we can offer more, where we can show more efficiency improvement that makes us towards the client more attractive. With that, we can increase prices. That is what we see too. But please don't ask me to separate it in millions and a percentage, because then it gets very, very tricky. I hope that explains that what you were after.

Martina Borger: Thank you very much, Thomas. I think that should answer the question for now. We have a further question on the chat from Chaima Ferrandon from ODDO BHF, which I will now read. The event in the U.S. raised questions about your exposure to construction projects. Could you give us some color of what represents construction in terms of revenues and order book? How strategic is it to keep a construction exposure that you could end up with potential losses and being negative in terms of sentiment for investors?

Thomas Schulz: So, we have less than 5% what you can in a large scale call construction business. As we said before, if we get the majority of that is our U.S. daughter Centennial. And Matti already explained what it is. It is light commercial building business. We do that for the public sector. What is it? We go into an existing hospital. And in the hospital, they would like to replace in one hallway the air condition and the wallpaper. And then they go with us through that hall. We have a frame agreement. We have a kind of a product list. And then they say, I need this and that and that and that. And that is what we take and give to local, qualified and specialized companies. Because that's the request from the client that local companies get that because it's small work. That is what we do. We are talking here not construction business as the former Bilfinger Berger was known for. We are not making tunnels. We are not building bridges. We are not pouring million cubic meters of concrete. That's not what we do. It is, as Matti said once, we are the biggest provider of renovation of toilets in the public sector in North America. And it's the truth. I'm not joking around. It's really the truth. That's the kind of business. So what are we doing to de-risk that? We standardize. And it is already to the by far largest extent standardized by the business model from all time before. We standardize further. We don't want to have big project business. We don't want to have construction project business. We phase that out. We de-risk the company with that. I know that based on history that people immediately make the step into former Bilfinger Berger. It isn't. We are not Bilfinger Berger. We are not a construction company. We are actually an industrial service company helping customers doing more efficiency and sustainability. We are not building motorways or any other things. I hope that gives more light on it.

Martina Borger: Thank you very much, Thomas. As there are no further questions, we will conclude the Q&A session. Thank you very much for your participation. Of course, the IR team is available for any further questions you may have. Thank you very much and goodbye.