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Thank you kindly, operator. Dear ladies and gentlemen, also from our end and on behalf of the entire management board, a very warm welcome to the first quarter 2019 results conference call.Beginning on Page 2, I'd like to lead you through some of the details of our Q1 results. Starting with revenue and sales is up by 1.1% to EUR 275.6 million versus EUR 272.6 million in quarter 1 last year. Adjusted EBITA at EUR 39.6 million, a minus 13.3% decrease year-over-year, versus the EUR 45.7 million which we reported in Q1 2018. This leads to an adjusted EBITA margin of 14.4% relative to the 16.8% year-over-year quarter 1 2018. And while net operating cash flow has improved to minus EUR 0.3 million versus minus EUR 13.8 million a year ago, we report an equity ratio improvement to 41.2% on the balance sheet coming from 40.9% on December 31 last year.Net debt increased by 13.8% to EUR 455 million, up from EUR 400 million on December 31 which is mainly driven and mainly attributable to the first time application of IFRS 16 in this quarter 1 2019.On the dividend side, the proposal of EUR 1.10 per share is up EUR 0.05 per share and is to be confirmed by the annual general meeting on May 21, 2019.And finally on this Page 2, we are confirming our guidance with a moderate organic growth of around 1% to 3%, plus around EUR 13 million revenue up from acquisitions. Adjusted EBITA margin ranging between 15% and 17%, whereas as we substantiated our guidance on April 25, more likely the lower end of the range will be reached.Continuing on Page 3 and deep diving into our sales development, we report a negative organic growth in Q1, which is offset by acquisitions and currency effects. Total gross, if we refer to the top chart on this page versus 2018 of EUR 3 million, splits into minus 4.2% organic growth or minus EUR 12 million plus 2.3% or plus EUR 6 million from acquisitions and 3.1% plus or plus EUR 8 million from currency effects. The organic growth is primarily driven by the fairly strong growth in the U.S. water and strong DS business but a very weak EJT business in all the 3 regions and of course, comparatively high comps. And we reported the 13.6% organic growth in Q1 2018.If you refer to the bottom left chart on Page 3. There's only minor changes in the regional split, with APAC now coming in at 13% of total group sales, up from 12% last year. Americas at 40% and EMEA drops to 47% of total revenue.Drilling further into the regions on Page 4. If you refer to the top left chart, please. It becomes evident that while Americas and APAC are growing in absolute euro values, EMEA is actually slightly declining in total euro values. But into the organic growth, all the 3 regions have negative organic growth, again, driven mainly by the soft EJT markets which are actually down in all the 3 regions.While DS is strong and helping us to recover some of the EJT downturn, we expect now according to our research and forecast provider, which is LMC, the former J.D. Power, that Q2 remains in a relatively volatile position. This forecast was adjusted down in the past couple of weeks by our provider to reflect a more volatile market climate in the global EJT or automotive environment. And as a consequence, we were specifying our guidance on the 25th of April.If you flip to Page 5 and analyze our margin development, of course, the missing momentum from primarily the EJT market also leaves its marks in our margin development. While we expect to see some tailwind now only starting in late Q2 or even in H2, the possibility to flex, particularly personnel cost, is now in our focus despite of the momentum might being in the right direction picking up in other words. While we count the material inflation and report a stable gross margin, which shows also our ability to pass on material inflation and our pricing power, we now see the personnel cost up as a result of -- well, combination of strong growth last year where we, of course, had to add resources and now a relatively fast declining market environment and which is, in that particular respect again, lasting longer than originally forecasted by our providers. So we now do expect to slow down which is a -- slightly longer than originally thought. And we with that -- with that, we will also further reduce and optimize our cost position. And all of this combination leads to a Q1 margin of 14.4% EBITA which is at the lower end of -- also our own expectations.And with that, I would like to hand over to our CFO, Michael Schneider.
Yes. Thanks, Bernd. Also -- well, a warm welcome from my side to all participants.Looking on Page 6, a deeper view on the adjusted EBITA development, and Bernd already mentioned a couple of issues that characterized our development for the first quarter. These are all the material costs going slightly up from 42.6% of sales to 42.9%. This also includes some inventory building in the first quarter based on the rightsizing projects and Brexit preparations. And also, as mentioned earlier, the water management business that we expect to be on a very high level in April.We saw a good or better development in gross profit versus last year. Last year, we had 58.2% of sales in gross profit. We improved the gross profit margin by 30 bps. We saw a couple of positive impacts in that area coming from the raw material side. Nickel and chromium prices, let's say, normalized and came down a little bit in the beginning of 2019. Steel prices as well while thermoplastic materials, polyamides were still on a very high level. Overall, a positive impact in the first quarter coming from these materials.What Bernd pointed out, the adjusted personnel expenses went up 170 basis points. A reason for that is that we have, based on that sales development, a personnel cost ratio on the same level as if you would have higher sales not being able to flex as quickly as it would have been necessary based on that V-shape in sales development. We have to see that other operating income expenses bends down versus last year, 30 bps. And this also includes that is impacted by the IFRS 16 leasing treatment in our accounting systems which had a positive impact on the OpEx in the first quarter. The referring impact we see and the depreciation coming from these IFRS developments. Overall, our adjusted EBITA went down to 14.4% driven by these personnel cost increases in percentage of sales in the first quarter 2019.If you look on the operational adjustments going on to Page 7 of that presentation, we see that we had operational adjustments on EBITDA level, especially based on the rightsizing program. So that in EBITDA, we had EUR 1.7 million costs normalized adjusted based on this rightsizing project and EUR 0.9 million integration costs. On EBITA level, we have additional depreciation coming from PPA of EUR 1 million and also amortization PPA of EUR 5.5 million below EBITA in the EBIT growth, that overall, post tax, we have EUR 6 million of adjustments in the net profit, or in terms of earnings per share, EUR 0.19 per share in adjustments.Going forward, on Page 8, looking on the earnings per share development. Based on that development of the first quarter, where we are all are not happy about, we see that earnings per share adjusted went down by 13.9% to EUR 0.79. Based on the net income development in the first quarter and even the reported earnings per share, they went down, as showed earlier, to EUR 0.60 per share which means a decline of 23%.Looking into net debt and net debt ratios on Page 9. We can see that we have mainly based on that -- that we have an impact also from IFRS 6 leasing accounting. We have a leverage increased to 2.3. If we would not have had IFRS 16, we would have been at 2.1. So this also includes the capitalized lease liabilities overall. So that based on that net debt increase by 13.8% to EUR 455 million, they're all EUR 41 million coming from the new lease treatment in IFRS 16. Equity ratio improved to 41.2%. We also have an impact of IFRS 16. Without that, it would have been 42.4%. But in the future, we will have that lease accounting gearing at 0.7 so that's one of the net debt equity ratio situations.Looking on the cash flow development on Page 10. We saw that starting with the EBITDA, we had great working capital outflow which was less than in Q1 2018. And that due to this low outflow of working capital, we have net operating cash flow before investments of EUR 11.6 million which is a good increase versus Q1 '18. After deducting EUR 11.8 million of investments of CapEx from operating business, we have net operating cash flow of EUR 0.3 million minus versus 13.8% last year. We also have to see that IFRS 16 is also impacting that relation by EUR 2.6 million.We newly introduced with the year-end report in 2018 the reporting on NORMA Value Added and even return on capital employed. We also will show NORMA Value Added on a quarterly basis so that we see the, let's say, running value creation, value at -- of NORMA Group and NORMA Value Added for the first quarter 2019, lost EUR 10.9 million, so value increase of EUR 10.9 million versus EUR 17.1 million that we had in Q1 2018.With that value creation chart, I would hand over to Bernd again.
Well, thanks, Michael. Ladies and gentlemen, leading you through the rightsizing program and explaining it a bit further. In order to, well, first of all support our tactical costs improvement measures and in order to strengthen the organization for our future growth expectations, we decided last year to launch a so-called rightsizing program, which has, as a main target, to optimize the production landscape which has rapidly grown as a result of in total 14 acquisitions since the IPO, to optimize our organizational structure and to further harmonize the processes and systems in the NORMA Group. The optimization measures are to extend across all divisions and regions, so it's not only a one single region or one single area where we intend to optimize the production landscape as well as our processes and systems. And the goal of the program is to further develop the business model and to meet the requirements of our future strategic growth areas primarily in the e-mobility and water management sector.The program as such is expected to result in positive earnings contributing to adjusted EBITA of around EUR 10 million to EUR 15 million annually, full swing 2021. And the total cost volume is around EUR 10 million to EUR 15 million, of which EUR 2.2 million were already activated in 2018 and EUR 1.7 million in the first quarter 2019.And that brings us to the summary of today's conference call. On Page 13, ladies and gentlemen, we would like to leave you through our 2019 guidance. And as we expect, already indicated, an organic sales growth of a moderate 1% to 3% and additionally, around EUR 13 million from the acquisitions of Kimplas and Statek.Our adjusted EBITA margin is expected in between 15% and 17%, whereas more likely the lower end of the range will be reached as per our specification a couple of weeks back.Adjusted earnings per share will show a flat development versus previous year, last year. And the NORMA Value Added is expected to range between EUR 50 million and EUR 60 million.With a net operating cash flow of around EUR 100 million and a dividend in line with our policy of approximately 30% to 35% of adjusted net profit for the period, we complete our company outlook into 2019.And with that, we would like to thank you very much for your attention, ladies and gentlemen, and open the conference now up for your questions. Thank you very much.
We've received the first question. It is from Omid Vaziri of Jefferies.
I'd be interested to understand your underlying assumptions for regional auto production developments in the second half this year to meet your sales growth guide. Q2 looks like it could be another quarter of production decline, so weakness globally as a number of OEMs were caught out with excess inventory at Q1, namely Volkswagen, GM and Daimler. Destocking expected in the U.S. in the second quarter. China's still very much destocking, and Europe auto production looks like it could see another quarter of decline. So I'd be interested to understand your underlying assumptions for how the rest of the year would look like from the auto production perspective globally, regionally.
Right. Well, thank you very much for your question. Again, we're using LMC data. And as per the data here, we see that particularly China, also in light of the recently introduced incentive scheme, is going to bounce back as of Q2, while they're still shrinking slightly, but this is nothing compared to the minus 12% which we saw in the first quarter. So in other words, we see the momentum picking up in Asia, which is, in our case, pretty much the Chinese market which is going to pick up. The same thing equates for NAFTA and here in particular, the Detroit Three. While the NAFTA market, according to our market intelligence, was down 5% in Q1, it's now going to be flattish. In Q2, whereas the biggest momentum is coming from the Detroit Three where we enjoyed the highest content per unit as such. And in Western Europe, we see still a relatively slow market. But there's a couple of ramp-ups of businesses where we do see relatively large content per unit, so it's the share of wallet which also supports this thought process, not only the market bounced back.Again, interestingly, Q1 versus Q1 last year, quarter 1, following a Q4 2017 of 16.8% organic growth, we still grew 13.6% in Q1 2018 which is largely outperforming the total market. Now we're comparing ourselves against, of course, this relatively high comps in Q1. And therefore, also from that perspective, we do see the comps going down during the course of the year 2019, slightly supported by a still slow market. Yes, there's no doubt about that, but supported by some of the, well, new launches -- new product launches as well as more quite as a severe drop as in Q1.For the full year, we do expect a relatively flattish market in Europe. Also, China or Asia Pacific's supposed to pick up slightly versus -- particularly versus the minus 12% in Q1, and we see Q4 at this moment, relatively nice gross expectations as per our market intelligence. And the same thing is going to happen in Q3 in NAFTA after a flattish Q2, following a minus 5% total and minus 11%, minus 12% for the D3, Detroit Three. That's the assumption which we take at this very moment.
Oh, that's very clear. My second question is on raw material developments -- of raw material cost developments so far into the year. We've heard from a number of auto OEMs that road map headwinds built into original guidance as it turned out to be less strong so far. Are you finding the same on your raw material exposure, and could that perhaps provide a bit of support in the wake of margin pressures that you are experiencing?
We can second that for the markets in EMEA and APAC, that expectation and that development. However, the steel market in America, given the Section 232 trade tariffs, have seen a relatively significant increase in raw material in the first quarter. However, again, our ability to pass on prices to the market is also seen in a slightly improved 30 bps, improved gross margin quarter-over-quarter. So with some time lag, we are able to pass on also the raw material increases into the market, and that strategy, of course, is going to continue. Answering the question, yes, we see a probably less challenging development on the raw material markets in both Europe and EMEA and Asia Pacific, while there's still some pressure on steel prices in the Americas as a result of the protectionism on steel mills in the United States.
Great. And finally in the EJT business, can I just get a confirmation that you mostly produced locally? But does -- do some stocks often get stuck in transit? This is in relation to the destocking dynamics.
Yes. We confirm that we do produce locally in some regions like in APAC. We haven't yet the full swing of our localization scheme implemented. We're still further ramping up localization potential. But we see a decreasing export level, particularly in the EJT world, depending on whether it makes sense on the business plan or not to localize, of course, that is also one of the things to consider. But yes, confirmed. Localization is part of the key strategic focus of the NORMA Group in order to, well, be in the market and produce in the market for the market as well as natural hedging.
The next question we've received is from Philippe Lorrain of Berenberg.
It's Philippe Lorrain from Berenberg. I just have one question on the organic decline of 4.2% that you had in Q1. And I appreciate that you actually managed to pass through the fluctuation of raw material prices to your clients. But if we look at this 4.2% year-on-year decline in organic terms, could you speak what exactly was the volume effect versus what you got as a tailwind from actually increasing your prices as a result of this pass-through mechanism? Because last year, during the year, you mentioned that we are rising prices, and I'm just surprised to see that the organic decline is still so pronounced, especially if we bear in mind the fact that your product prices may have somewhat increased.
Right. Thank you very much for this question, Philippe. Of course, looking at the Q1 comps being very high, we now see relative to the market that kind of caterpillar effect of also destocking in that particular respect in Q1.In the EJT markets, again, DS in particular, within DS, water management is nicely growing. So while we were largely outperforming the market last year relative to market growth, this year, thanks to the destocking initiatives, we seem to be falling below the total market volumes. However, this said again, we don't have a homogenous content per unit on the total volumes. And some of our major clients, particularly the D3, Detroit Three, were suffering more significantly than the general market which, of course, has also an impact on our total development.Again, comparing with relatively high comps and the effect of destocking, remember, we are Tier 1. But at the same time, we are Tier 2 and Tier 3 supplier, too. So we are not just a direct Tier 1 supplier to the industry, but we, also in certain areas, Tier 2 and Tier 3 which explains that as well.Coming back to the pricing effect, we still have also pricing effect in the positive side as well as in the negative side. So the total pricing as such is around flattish, if we take all of the markets into the equation because we are also enjoying long-term contracts where the price levels are going to trend downwards. So it's not necessarily the price which is going to help us here from that perspective. But with new product launches, price increases versus price decreases, we are able to stabilize the gross margin and also increase the gross margin, given the amount of new product launches into the market.So it's a combination of various factors. There's not a monocausal, let's say, correlation between market, volumes, and our changes, again, equates for both. Last year, we largely overperformed at this very moment in Q1, and also because of destocking, we are slightly slower than the market. But we expect that momentum to turn into a better performance in the remainder of the year, however, largely volatile. So the visibility at this stage into Q2, Q3 and Q4 is not necessarily high, and that is also reflected by the constant changes of forecast by our forecast provider and forecast resources.
Just as a quick follow-up. So when you mentioned that the total pricing is around flattish if you take all markets into the equation, do I understand that it's still, I mean this comment on being flattish, is actually a bit better than what you actually usually face? Because in the EJT business, I assume that you've got like the normal kind of price deflation, conditions that are characteristic to the automotive industry, at least to understand that is related to the automotive industry. While in DS, typically, you've got like price increases at the beginning of a [ Reano ].
Correct. So both combined in line with our previous statements, Philippe, is normally on a minus 1% level, the price impact of DS and EJT combined, whereas we are in a flattish area this year. So it shows that we have certainly also passed on some of the price pressure from the raw materials. Again -- and this seem in the respective gross margin development.
Okay. And the final one is just -- I see on your P&L that you seem to have done a little bit of restocking as well during the Q1, i.e., production probably for the future quarters. If I remember correctly at the end of last year, you still had like a relatively high balance when it comes to the increase in inventories of finished goods. So I'm just wondering what we should expect in the quarters ahead if you're going to digest all of that inventory and perhaps a little bit of what you've piled up towards the end of last year. And I bounce back on Omid's question, if this is all also in the context of the fact that you still deliver some regions out of the plants in Europe.
Yes. Philippe, thanks for the question. If you look into the inventory development, we have to see that the cost of our rightsizing projects after a couple of activities where we in the first step also needs some, let's say, pre-inventory for realizing these projects. We also have to see that Brexit still impacts the development, and you also expect or we also had a very good development in the water management business where we also had some inventories during March. So these 3 reasons are mainly responsible for that development. But a clear message of cost and the cost of realizing all these projects and to take these steps, we will get, step by step, better.
The next question is from Christian Ludwig of Bankhaus Lampe.
First one is more general. You have this great slide where you showed us your margin development over several years, and then it is certainly broken down in 2 quarters for the last 3 business years. And clearly, since 2016, we see the trend that your adjusted EBITA margin is slowly coming down, and this year through another year. Well, margin will be below last year. And those are -- basically my question is, yes, you have started this restructuring program to bring the margin back up by maybe 1 percentage point, but even that will not be enough to get you back to above 17%. So what needs to happen for NORMA to get back to the 17% level? Or do we have a structural change in the market that means that it's not going to come back to this kind of margin as we've seen in the past? That will be number one. And number two, very quickly, on your restructuring program, and you've now booked, I think, close to EUR 4 million. Is this run rate of 1.7 we've seen in Q1 something we should assume for each quarter? Or will it be more back-end loaded? What are the expectations here?
Thank you, Christian, for your question. On the margin development in addressing question number one, of course, the mid-term plan for us, and that is also reflected in our rightsizing program which is more strategic than tactical, is to come back to the previous very stable EBITA margins. And driven by our new markets and future markets, e-mobility and water management, we are pretty certain that we are going to see that margin trend into the right direction and heading toward our well-known above 17% in mid-term. This is supported by 2 tactical and strategic cost measures from our side.From the market perspective, of course, a little bit less volatility, be it from the raw material side, be it from -- and Michael was mentioning that V-shape before. Again, we're talking about plus 17%, plus 14%, plus 8%, plus 7% in Q3 last year, organic growth only to jump now into minus 4%. You see that this relatively high V-shape type of amplitudes, which we see, is certainly not helpful for the steady development of the business. So certainly, apart from the measures which we take, a bit more of a steady development in the market would not necessarily hurt. Raw material, same thing. We saw a relatively harsh development during the course of 2017, second half year and full year 2018 toward a high level of base prices as well as alloy surcharges. Now with the exception of Americas at this moment, we see that calming down somewhat. Again, I think we mentioned it, EMEA and APAC were certainly stable on the raw material side.So apart from our own initiatives, a relative, let's say, more or less volatile market, more stable market, would certainly be beneficial going forward. We are still shaping the business, however, to deal with volatile markets because there might well be this kind of volatility rather the norm than the exception. But steering a company into this certain level of flexibility, it takes some extra effort and time.
Christian, coming to your second question, the rightsizing cost. You saw in the first quarter EUR 1.7 million of adjusted rightsizing cost. For the full year, we expect EUR 8 million to EUR 10 million overall. So there might be some little more cost per quarter in the future, but not significantly overall EUR 8 million to EUR 10 million for the whole year.
Okay. Just one quick follow-up. Again, on your changes in inventory line, I get that there may be some at least in the year the need for a buildup of inventory, but for the full year, should we expect a negative number for the changes in inventory for 2019? Or could that carry on well into 2020?
That's a good question. We stressed a couple of times now the volatile market. And so far, this volatility also, of course, rise inventory levels. If we look on the overall cash flow guidance of EUR 100 million and the information that you will get that's step by step, we will see an improvement. At the end of the day, what the concrete value will be, I think it's far too early to talk about the final value for the whole year.
The next question is from Christoph Laskawi of Deutsche Bank.
I would have one on the personnel expenses and that in relation to the volatile market environment. You touched a lot on the forecasting agencies and essentially, they have cut estimates month by month. And also, growth for the second half is now expected to be much lower than when we started into the year. So the question will be, if you start to see that the growth is not coming in as currently expected, especially in China and potentially Europe, the utilization, if you keep your personnel basically unchanged, if unlikely to be good, at what point would you start to adjust your capacity in that sense? And how quick can you do that? Because in Q1, I think it was a fairly big headwind on margins and in order to maintain the margin target or get there more comfortably, I think at some point you might need to touch it. Could you elaborate on that, please?
Thanks for the question, Christoph. Absolutely right, I mean now that we see that it's not a V shape as originally predicted, but we see a little bit of a bottom down in the value of the V, we're now starting to flex also our personnel cost, which otherwise would have been a bit more difficult given the V shape, you go out of the volume and then immediately into the volume again, which was expected to actually kick in only until a few weeks ago. Now that we see that this is going to slow down, that will have an impact on our cost development. And apart from the strategic, the rightsizing programs, we have also started now to reduce our cost position in both personnel cost and OpEx as a result of that relative slowdown, and that should yield also some positive result in quarters to come. Step by step, we also are intending to get better on both OpEx side as well as personnel cost as a percentage of total sales.
We got a couple of comments from other suppliers that the Q2 production probably will be roughly unchanged to slightly better than Q1. So given that you already started to work on that, should we expect less of a headwind already in Q2 or less of a negative impact to this?
The current models, including our launches of new products, which we have specified in new models, show that we should see less of a headwind in Q2. Together with lesser than Q1 headwind on the volume side, we again expect a slight improvement in Q2.
The next question is from Sebastian Ubert of SocGen.
Also one question from my side with regards to the, yes, remainder of the year, assuming flattish development maybe in Q2, Q3 and the sum that still needs about 10% growth organically in the fourth quarter to make it into the lower end of the guidance. Do you really have this confidence that you can make it to that level since we have seen, as previously mentioned, lots of cuts to production volumes and also many other suppliers have just flagged that OEMs tend to call off significantly lower volumes than they were ordering? Do you also see this pattern?
Well, first of all, we have -- thanks, Sebastian, for your question. We have lower comps. It's certainly something which we cannot wipe off the table here, number one; number two, very strong water management business and DS business, which is supporting also the organic growth. In fact, in the DS world, we were growing in Q1 organically, right? And then of course, we see in Q2 a lower than Q1 reduction relative to the last year, a couple of new product launches happening in Q2 and Q3, which also support again share of wallet. It's not only volume driven but it's also a share of wallet where some of the programs, like, for instance, Ford Explorer in the U.S. have been deferred into Q3 for the sake of the argument, that including together with the volume bounce back -- or not necessarily bounce back as in we expect volumes to come strongly back but they are not as weak as Q1, leads us to the conclusion that our 1% to 3% guidance is in reach.
Okay. Then one housekeeping item is also on the net interest result for this year since you are now also guiding for flat adjusted EPS. But if I assume higher depreciation also from IFRS 16 at about the same level of adjusted EBITA, I come down to a lower pretax profit that would hardly support flattish EPS. Can you help me on that item?
Well, if we take the extra tax rate of around 20% to 25%, I think that also will probably help a little bit. And I don't know exactly which lower end of the guidance you take, if you take 15.0% or whatever. So overall, we expect a flattish development of EPS, taking at least 25% of tax rate and the operating margin.
At the moment, there are no further questions. [Operator Instructions] We've received a question of [ Andreas Guillan ] of [ Gartner Capital ].
I have also a question regarding to the personnel expense. It has been the talk of your rightsizing program for a couple of quarters now and I cannot see any effect yet of this program. In fact, personnel expenses have increased, and I see no reaction to the volume decrease that was in the card since last September. So question -- my first question is, did this rightsizing program that seems quite comprehensive and strategic to me, did this program hinder your managers from taking swift actions to the lower volumes? And the second question would be, given that the volume development looks rather flat for the rest of the year, do you expect any positive effect from that program already? Yes, these are my 2 questions, please.
Thanks for the question. I think what we have to take into account is that we started this rightsizing projects or that program quite recently end of 2018, and we will have the full sequence and the full project work in the close of 2019 so that we expect the first positive impacts coming in broadly at the end of 2019 and seeing the full amount of EUR 10 million to EUR 15 million in 2021. So that's the background of this program. So it probably would be far too early to see currently any positive impact coming from that because we started a couple of weeks ago and we have that project work in 2019.
Okay. May I ask maybe another question? Your volume in Q1 was around EUR 10 million higher than in Q3 and Q4, but margin was significantly lower. So why is the margin going up for the rest of the year?
Well, there's 2 reasons for that. Well, first of all, we don't see the same kind of organic shrinking and we are taking action on the cost side to the tune of -- now that we understand where the market is heading toward and not coming back to the full swing to the tune of the margin improvement, which we see in our also full year's guidance. So now that we have a little bit more security on the planning side, we can start taking action, tactically taking action. Again, I think we mentioned it before that we are looking into a twofold way of improving our cost structure. Well, first of all, it's structural and the second one is the operational part of it. The operational part, difficult to achieve when you're forecasting services, predicting much higher volume than it actually kicks in because you can't release your people and 2 weeks later, you try to get them back into the factory when the volume comes up. And so we take the right mix of early indicators together with our order book program. And mind you that our order book as such is still increasing, all right? And then we take operational and structural cost measures, which are going to see an improvement on the cost -- on development for the remainder of the year together with a top line development, which is going into the right direction and a stabilized gross margin.
Thank you. As there are no further questions, I would hand back to you.
Well, then last but not least, thank you very much, ladies and gentlemen for your attention and your interest, and thanks a lot for your very valuable questions.
Thanks a lot.