Good day, ladies and gentlemen, and welcome to the Volkswagen AG Live Audio Webcast and Conference Call on the Third Quarter Financial Results 2019. For your information, today's conference is being recorded. At this time, I would like to turn the conference over to Mrs. Helen Beckermann, Interim Head of Group Investor Relations for Volkswagen AG. Please go ahead, Madam.

Ladies and gentlemen, welcome to Volkswagen's conference call for investors and analysts on the results for the period January to September 2019 based on the interim report we published early this morning. For today's conference call, I'm delighted to be joined by Frank Witter, Member of the Board of Management, Volkswagen AG responsible for Finance and IT; and Director of Group Sales, Christian Dahlheim. Most of you will have followed the webcast from this morning's press conference. Our focus now is to add a little more color relating to your specific needs as investors and analysts. Following the presentations we look forward to taking your questions. So, now let me hand over to Frank.

Yes. Thank you, Helen, and warm welcome to all participants on this call. So, Volkswagen Group has performed quite well in the nine-month period in a very challenging global environment and a very tough sector. At €14.8 billion the underlying operating result before special items came in strong at 11% above the prior year, leading to an operating margin of 7.9%. Whilst we much appreciate the improvement it is important to understand some of the drivers that may not be so obvious. Firstly, we need to consider the negative base effect from WLTP, which hit last year's earnings in Q3 hard when comparing year-on-year. A further significant drive was a positive swing of €0.5 billion, a loan from the fair value accounting of derivatives under IFRS 9. Unfortunately, it was necessary to book further special items of minus €300 million in Q3 relating to legal risks. This brings the amount of special items year-to-date to minus €1.3 billion. After special items the operating results came in at €13.5 billion. Deliveries for the nine months at 8 million vehicles were slightly below the prior year. In Western Europe and South America we've seen higher demand compared to the prior year. On the other hand it is no secret that the Chinese market continues to be under real pressure. Overall, despite the known challenges we continue to grow market share in the declining overall worldwide market. Christian, will give more color in a few moments. Sales revenue rose 6.9% to around €187 billion, reflecting mainly the strong model mix. At €1.1 billion the financial result is down about a third versus last year. The decline was mainly related to higher interest cost and the negative impact caused by interest rate changes relevant for long-term provisions. However, the equity income mainly driven by our Chinese joint ventures came in at 6% above the prior year at €2.6 billion. For the nine months period, profit before tax came in at €14.6 billion was profit after tax at €11.2 billion. Automotive net cash flow before diesel outflows and M&A came in at €8.6 billion reflecting the strong operating performance. We ended the quarter with a robust €19.8 billion of automotive net liquidity. We will dive deeper into the drivers in a few moments. Let me now hand over you to Christian.

Thank you, Frank. Ladies and gentlemen, I would also like to extend a warm welcome to this conference and present the sales results. In the third quarter of 2019 the Volkswagen Group delivered a total of 2.6 million vehicles to customers worldwide. While the total car market decreased by 3.1%, Volkswagen Group achieved an increase of 1.1% in the third quarter. The increase was mainly driven by strong performance in Europe, and dampened by declining volumes in the Asian Pacific region. Shrinking markets have already affected the first two quarters with the total market decrease of 6.5% respectively 5.3%. This environment the Volkswagen Group has performed each time better than the markets and consequently increase market share to 12.9% globally. Let us now take a look at the performance of our deliveries to customers on a year-to-date basis. Since the beginning of the year, the folks were delivered a total of over 8.0 million vehicles to customers worldwide. After the last year's strong first three quarters for many of our brands this represents a solid result, being only 1.5% below 2018 [ph] on a year-to-date basis. Brand Volkswagen delivered from June until September over 4.5 million cars, minus of 2.3% compared to last year. Volkswagen wins market shares in a shrinking overall global market especially Brazil and China remained the driver for growth with a slight market share increase. ŠKODA delivered 914,000 vehicles to customers from January until September, 2.7% down versus last year. The reason for this is a continued decline in the Chinese car market where ŠKODA deliveries in its largest single market declined by 22%. However, the carmaker could nearly compensate this development with the strong growth in Europe and Russia. Again, SEAT achieved a new record with delivery of 455,000 vehicles in the first three quarters. This result is the highest figure ever in history of SEAT whereby four SEAT nine main markets posted the highest sales volumes ever in the history. Volkswagen commercial vehicles delivered 370,000 vehicles to customers nearly the same level as previous year which was at minus 0.5%. Pushed by Crafter sales, deliveries rose in the key region Western Europe and its home market. In contrast to this, volume loses has to be recorded, especially in Turkey, due to inflation and exchange rate issues. Since January, Audi delivered around 1.4 million premium automobiles to customers using the cumulative declined to 3.6% versus last year. While restrictions in the portfolio due to the WLTP test cycle have had a negative effect of deliveries in Europe at the second -- at the end of last year, this year nearly all variants have been homologated for WLTP Second Act and are available in the configurator. Year to-date Porsche achieves an increase of nearly 3% for the prior year. Especially Cayenne and Macan saw the strongest growth with the plus of 25% for Cayenne and 9% for Macan. Furthermore, growth was driven by the Eastern European region across all model lines. Bentley delivered seven point thousand vehicles, an increase of 0.8%. The new Continental GT has been successfully launched in all relevant markets. Since beginning of the truck and bus division showed a positive development. Scania increased deliveries by 8.9% and MAN by 6.8%, resulting in 179,000 vehicles delivered to customers. Let us now take a look at the performance of our deliveries to customers versus the car market development on a regional basis. The demand in North American market shrink in the first three quarters by 1.9% due to the still generally weaker economic situation in Canada and Mexico. Deliveries of the Volkswagen Group dropped by 1.4% compared to the same period last year. So we succeeded in maintaining our market share. In spite of the generally weaker market deliveries in Western Europe were encountered to the trend by delivering a plus of 0.7% to our customers. Therefore the market share has been slightly increased. Germany, France and Italy have been the strongest driver for growth in the region, while the U.K. car market continues to be characterized by general consumer restraint and market uncertainty mainly driven by ongoing Brexit discussions. Volkswagen Group could not participate in the positive development in Central and Eastern Europe. While the total market increased by 1.3%, deliveries for Volkswagen Group decreased by 1.1%. This development was influenced by our high market share 50.4% than a shrinking market in the Czech Republic. On the other hand, the Volkswagen Group could increase market share in Bulgaria, Russia and Sylvania. The upward trend of the Volkswagen Group in the South American market continued. Our total market decreased by 5.2%, Volkswagen Group has increased deliveries by 0.5% and achieved a corresponding market share increase. Brazil remains the strongest driver for growth in this region. The car market in the Asia-Pacific region declined significantly by 6.4%. This was mainly caused by lower customer demand in the Chinese Passenger Car market, among others due to the trade conflict with the USA. Despite this market environment Volkswagen Group increase its market share especially in China. In light of the macroeconomic conditions, we expect deliveries to customers for the full year 2019 on the level of 2018 despite a downward market trend especially in the Chinese market. Of course, we continue to roll our further excellent products as you can see in the next chart. With the Q3 Sportback, Audi is introducing the first compact crossover of the brand. Beneath its expressive design the customer will find a variable interior with additional operating concept and connectivity features from the full-size automotive class. With the new e-Lavida Volkswagen by SAIC-Volkswagen automotive officially launched its first all electric model in China. After the world premier in three continents simultaneously in September the Porsche Taycan 4S along with the Taycan Turbo S and the Taycan Turbo can be ordered since October 14 and will arrive in European dealerships in January 2020. Last but not least, Volkswagen commercial vehicles is introducing the facelift of T6.1 Multivan in the last quarter. Now, I would like to hand you back over to Frank.

Yes. Moving to look at the group operating results performance for the nine months in detail. The block volume mix prices in the Passenger Cars segment reported plus of €2.7 billion. Strong product mix reflecting the continuing growth in our higher margin SUV portfolio and strong pricing were the key drivers. The block exchange rate and derivatives in total had a neutral impact on the operating results. Within this, the isolated currency translation effect was minus €0.5 billion mainly driven by the devaluation of the Brazilian real and the Argentinean peso against U.S. dollar. In contrast as mentioned earlier, the impact from the f fair value valuation of derivatives for commodity hedges was plus €0.5 billion. As you're aware, this position is highly volatile, demonstrated by the swings we have seen in the last few quarters. This shows again that it doesn't make much sense to speculate on where this position might end up at year end. Product cost savings continue to improve with the plus of €0.5 billion year to-date. Fixed costs have risen by €2.3 billion over the nine months period. Higher depreciation on CapEx direct on fixed costs by €0.9 billion. Furthermore, R&D costs with the P&L impact were about €0.8 billion higher. It is no secret that Q4 is typically the quarter with the heaviest load of Capex and R&D. We need to continue with the necessary high investments for further electrification of our product range getting up to speed on our digital transformation and the expansion and overhaul of certain factories. To compensate for this, we haven't led up on the push for efficiencies to secure the respective margin targets. I will comment in a few moments on both our commercial vehicles and our financial services results when I take you through old brands in detail. Turning now on to our brands, it should be noted that three of our brands contributed over €3 billion to our operating result in the nine months period. At around €3.2 billion Volkswagen Passenger Cars operating result before special items increase significantly compared to €2.3 billion in the prior year. This year the WLTP homologation issues are better under control. However, let me remind you of the WLTP base effect from the prior year that boosted the improvement. The return on sales of 4.8% compared to 3.7% last year. Product mix and pricing compensated negative exchange rates. Audi reported an operating profit of €3.2 billion compared to €3.7 billion in the prior year. WLTP related lower volume, higher ramp up and run out costs, investments in new products and technologies and higher personnel expenses dampen the result. On the other, mix improvements and product cost improvements contributed positively. ŠKODA came in with operating earnings of around €1.2 billion, slightly above the prior year. Negative FX effects and investments in new products could be more than compensated by volume, mix and pricing improvements. At around €0.2 billion earnings at SEAT improved slightly on account of volume increases, mix and price improvements. However some cost increases impacted negatively. Bentley's operating results stayed in the black zone at €65 million. Volume, mix, cost improvements and currency contributed positively. Porsche Automotive delivered an operating profit before special items of €3.2 billion. Volume and better mix compensated for negative currency impacts and cost increases. The Volkswagen commercial vehicles operating profit declined substantially to around €0.5 billion. I have fixed costs and development costs for new products, as well as a declining mix burdened our result. This was only partially compensated by higher volume and lower product costs. The lack of availability of certain models due to change over of to WLTP since the 1st of September was also a challenge. Through increased volumes, better mix and a positive FX impacts, Scania was able to generate of €1.2 billion significantly stronger than the prior year. MAN commercial vehicles improved results to €0.3 billion. Volumes contributed positively. However, mix a more difficult market environment for used vehicles and higher investments in the new truck and bus generation had a negative impact. Power Engineering saw operating results declined to €91 million due to continuously challenging market environment. Volkswagen financial services grew the business and improved operating earnings to slightly more than €2 billion with positive exchange rates also contributing. The full financial services division also increased earnings to €2.2 billion. The other line on the other line came in at around minus €0.4 billion. As you know, this position consists of the elimination of intercompany profits, as well as the earnings from non-brand companies such as Porsche, Salzburg and PPA cost allocation. Please be aware that, the swing related to commodity hedging is also reflected in this line. There's no change in the principle. Volatility in this line and will be very difficult to forecast and to reflect the global nature of our business as well as across supply of components and vehicles between our brands. Let's now take a closer look at the underlying automotive net cash flow. Net cash after the nine months including diesel payments and M&A activities came in at €8.6 billion showing our strong operational performance. Cash outflows for diesel amounted to €0.3 billion in the third quarter bringing the year to-date diesel related cash outflow to €1.2 billion. The cash paid out for M&A activities of €0.6 billion relates mainly to our stake in WirelessCar that he already acquired in Q1, as well as the announced acquisition of shares in Northvolt as part of our long-term battery cell strategy. Focusing on the underlying net cash generation, this came to €10.4 billion around €3.4 billion ahead of where we were this time last year. This is a decent achievement and above our target of at least €9 billion of underlying automotive net cash flow for the full year. However, please be reminded again that due to seasonality there's a lot of CapEx and R&D coming in Q4. Furthermore, since the extent of the decline in some markets is still open, more pressure has been added to keeping inventories on track. In relation to working capital management and particularly inventories we've moved the needle in the right direction compared to Q2. However the core messages here is that our inventories are still too high relative to ideal stock levels. By that, I refer to those stock held in our factories and our fully consolidated national sales companies. Yes, we have adjusted production downwards to the relevant extent with various measures. Nonetheless, we did not anticipate the full extent and pace of the downward trending markets. Therefore, we are somewhat fighting an uphill battle. At the same time you can favor the trade. You know fairly well the trade relations and tariff uncertainties do warrant in certain cases relevant precautionary measures in stock management. However, rest assured that in each CFO call I make it crystal clear that ideal stock KPIs for yearend remained a top priority for everybody. Moving on to CapEx and R&D. CapEx at €8.2 billion corresponds to a CapEx ratio of 5.2%. Despite inevitable CapEx increase in Q4 we are still striving to stay within our 6.5% to 7% full year guidance. Total research and development costs or cash spent came in above prior year at €10.7 billion versus €9.9 billion in the prior year. But not a surprise as we work hard to realize our e-mobility strategy. Capitalized development costs came in at €3.7 billion versus €3.5 billion last year. Capitalization rate at the end of Q3 was around 34%, approximately 1% lower than in the prior year. As we have consistently commented, strict discipline in our investment and development processes is vital. We are not yet there and 2019 is a crucial year to bring improvement -- improved engines and new bets to market in order to meet our CO2 goals. Automotive net liquidity ended at close to €20 billion, roughly €4 billion higher than at the end of H1 this year. We have received Chinese dividends of €1.4 billion so far this year and as mentioned the outstanding amount is expected in Q4. As you are already aware, the change in accounting for leasing with an effect of €5.3 billion negatively impacted our net liquidity in the automotive division. In relation to MAN minorities, the end of the domination agreement let to further payments of close to €1.1 billion shown already in the first quarter. Dividends of €2.4 billion were paid out to our shareholders in Q2. The key driver in Q3 in addition to our strong underlying cash generation was the proceeds received from the TRATON IPO in the magnitude of €1.4 billion. Now getting to our final chart; while we are still growing in market share, it can't be denied that markets are contracting at a faster pace than assumed. Therefore as we approach year end we see it as a necessary to adjust our guidance slightly downward for deliveries. However, we would stick to original guidance for both revenue and the operating return on sales margins before special items for the full year. We are currently in the final throws of tough discussions around the five-year planning growth. The ramp up for e-mobility and digitalization combined with the challenge of CO2 compliance already kicking in 2020 are the industry pinpoints that also we have to face up to. Furthermore, the unsettling global economic framework conditions have certainly not gone away. Global markets are cooling down. Brexit uncertainty seems never-ending, risk of U.S. tariffs was China and Europe are still threatening. On top of that, the increased geopolitical tensions in the Middle East is also concerning. To wrap-up for today, we are still confident for our holistic strategy 2025 plus continues to give us a strong backbone to keep on track and our commitment to create value will remain unchanged. On the 18th of November we would hold our planning around conference call with both Herbert Diess and I in the hot seats and as always you're welcome to participate.

Thank you, Frank. Thank you, Christian. We will now take questions from investors and analysts. Operator, over to you.

Thank you. [Operator Instructions] We'll take our first question comes from Patrick Hummel from UBS. Please go ahead sir. Your line is open.

Thank you. Good afternoon everybody. My first question on free cash flow with a more near-term focus, you did highlight of course that the lion share of CapEx and R&D is coming in the fourth quarter. But is there any reason why Q4 free cash flow would not be in positive territory bearing in mind that the China dividend and you're going to get the lion share of the China dividend this year in Q4. And I would assume also some inventory reduction helping on the working capital side. And in that context, how should we think about the dividend, because it seems you're comfortably exceed the €9 billion free cash flow target for the year. Will we possibly see already a 30% payout this year? And second question. How are you thinking about the medium term guidance, the 2020 target you gave us at the CMD in 2017 are just around the corner? The market would certainly appreciate a medium term update over and beyond the few KPIs that are out there for 2025. And more specifically also on the CO2 topic; is there going to be like a CMD with the full year numbers or how are you thinking about updating the market on that? Thank you.

Yes. Hi, Patrick, bunch of questions. Let me start with the free cash flow. Yes, I mean, first of all, we certainly appreciate very much what we achieved so far. But you might remember how disappointed we were with the cash flow performance in Q4 last year for various reasons which we've intensively discussed. But I think you mentioned some of the relevant bits and pieces, CapEx and R&D will be pretty high in the fourth quarter, you know the seasonality. Inventories, I explained about the focus we are having more than ever on inventories. But on the other hand to be honest, it's harder than it was in the last two years to predict even the near-term future because markets seem to contract and therefore inventory management is even more difficult. So with the experience from last year we are certainly most cautious on that number and you know how strongly we feel our commitment on cash flow. And with the guidance, minimum €9 billion greater or equal to €9 billion, our guidance gives the opportunity to exceed, but the elements I was describing and relating to our real, some of you follow also heavy-duty trucks. This is also an area where incoming orders are significantly slowing down for everybody and basically all regions in the world particularly relevant for TRATON is obviously Europe, it's also is certainly an area impacting us.

20202 target, you mentioned some of that obviously related -- relates to what I said and the level of uncertainties, part of the call on the 18th will certainly related to the outlook. Final numbers for 2020 will be posted with Q1. But we certainly we'll give you a better favorable of where we see 2020 to end. So I hope that this addressing the four of your questions.

Yes. Just one little follow-up, I was more referring to the medium-term planning because back in 2017 you gave us a very detailed plan for 2020 and I think the initial plan was also strategy update in summer this year, which I think hasn't happened. So are you planning like a bigger CMD type of event to give us a more detailed framework for the years after 2020?

I think, obviously we had the Capital Markets Day and at the end you have press conference, that is also an occasion. I think for the time being we laid out the plan. I think it was appreciate when we explain the five pillars of the 2025 strategy and the focus and also ERR is certainly to be mentioned. So that's the way I would currently leave it. For us it's tightening the forecasting and obviously with the planning round call we will look at the guidance we gave when we posted PR 67. Some of the framework conditions have worsen, but you also know how serious we take commitments, but obviously our guidance has and will be realistic based on what we think can be accomplished, but we will strive for the next.

Okay. Thanks very much.

We'll now take our next question from Tim Rokossa from Deutsche Bank. Please go ahead. Your line is open.

Yes. Thank you very much. Tim Rokossa of Deutsche Bank. Frank, I'd like to follow-up on the free cash flow question from Patrick. And I know you took it very personal last year to not have met the €9 billion, so, completely understandable that you want to be conservative. Let's leave the CapEx element and spending aside. When you push for working capital you as a CFO, what do you consider to be the optimal working capital ratio for VW? And where do you think specifically on the inventory side since you mentioned that you still see room for improvements. And also when I look at your working capital movement in Q3 I noticed that quite a bit came from payables. Can we see this as a sign when you're stretching the payment terms for your supplier substantially more similar to all your French counterparties, for example, do it? And is this a sustainable way or was that a coincidence? And the second element of my question, Frank, maybe for you or maybe for you Christian, the 900,000 you took out of your production forecast and you split that up by region and is there material difference by any of the brands? Thank you.

Let me start Tim. Yes, working capital, I mean, we just yesterday in the board discussed that even though we significantly reduce the production plan for this calendar year that even in light of the 900,000 which I related earlier which is the number for the whole group including China that we probably need to cut even further productions for the remainder of the year. So we are obviously take the sales forecast very serious and want to be realistic in terms of the relevant impact on our inventory. In terms of payment terms, no, we are not touching that. There is no stretching of payment terms. And if you look into what drove working capital? Obviously, significant impact from lower increase of inventories versus to a very difficult prior year, discounts for roundabout €1.8 billion, to be ahead higher liabilities and higher provisions. And the on the negative side, we also had – I think roundabout 800 million change in receivables. We have an outstanding dividend receivable from China. So if you add that up, that is pretty much explaining this €3.8 billion improvement year-over-year.

Yes, Tim, let me take your question on production. I mean, I think it’s relatively simple, I mean, obviously if you look at the core region, China which is pretty much local production, we adjust the production according to the market trend which you know. Second, same holds true for Brazil which is also mainly driven by local production and then obviously given the cash impact. There's always a particular focus on the European production, as you know the Chinese liquidity doesn't come directly into our liquidity so of course we took down European production pretty much across brands as you see sales numbers, obviously, so if you SEAT, as you can see due to the phenomenal sales results less reduction and let's say for brand Audi. But again let me reiterate also from the sales side the clear focus is to manage the liquidity position at the end of the year given our current stock level, so I think we need to continuously adjust.

Great. Thank you. Let me maybe follow-up to the first question that we have both of you a call. When you two discuss about the idea of working capital ratio, Frank, you don't just say to Christian surely, you have to improve the number. You may have -- must have some sort of benchmark number in mind that you consider to be ideal because otherwise Christian will probably always say we need little bit more stock that less stock. What is that number? Are you happy to share that? Or do you really just say it needs to be improved?

I mean, in absolute numbers we're not going – we're not in the position to share. When we talk about ideal stock level, it is about the forecast for the period thereafter. It's basically if you take year end, it's about what business we do expect to be written in the first quarter and that determines the level of ideal stock we should be holding on December 31st to stick with this example. So it's not a number which is carved in stone. It is always to be updated based on the expected sales going forward. So we are obviously very closely exchanging the perspective and sometimes not to disclose it, sometime sales and finance tend to come from different angles, but at the end of the day we are able to come to a conclusion and particularly relating to yesterday's discussion in the Board, coming that late in the year with additional production requests are a tough cookie, tough for every brand concerned, but there's no good reason not to face up to reality.

Great. Thank you.

Just few additions, Tim, if that helps your guidance. So one is of course in the decline sales trend and your ideal stock levels or the ideal stock factors automatically go down because you see declining sales going forward. So by definition, the way we manage ideal stock, all markets initial sales companies are driven to then drive down stock. And second, we typically manage ideal stock levels in a bandwidth of plus/minus 15% which in a more problematic market environment or a more on certain market environment like today we more look at a plus 5% instead of plus 15%, so maybe that helps you a bit in terms of guidance without disclosing the absolute figure.

Thank you. That helps. Thank you very much.

We'll now take our next question from Arndt Ellinghorst from Evercore. Please go ahead. Your line is open.

Good afternoon everyone. Arndt Ellinghorst from Evercore. Thanks for taking my question. Frank, you're doing really well on CapEx and you're running well ahead of your 6% or below your 6% CapEx ratio target. But on R&D it's actually not so great. The R&D ratio has going up in 2018, will likely increase again this year over last year quite a way above your 6%. As you're heading into planning around 68, and your topline assumptions have to be so much lower, what can you do to come from this elevated level down towards the 6%? That's the first question. And then again I'm sorry, on inventory levels, with 100 days of supply you are still really way, way ahead of your normal levels. And I think we all understood during diesel and during WLTP you need it more inventory and it's not just about inventories about sales and being able to print revenues and everything, so we all understand that. But I would say your normalized level historically has been around 60 days -- 70 days give or take of inventory. If we assume that market flat line for you in the coming two to three years, what measures would be necessary to move from 100 to about 70 days? How much production would you need to take out?

Okay. Arndt let me stat. I think we guided very early and I think pretty precisely that in 2019 on Capex and R&D a lot needs to be accomplished predominantly for the electrification of our fleet and digitization of our company, so the 6.5% to 7% we clearly positioned as tough to accomplish, but clearly a commitment on our side internally as well as within the brands and from today's perspective we have strong reasons to assume that the stay within this corridor even though it would be at the higher end. You rightly hint to what we think strategically is the right level for the Volkswagen group, this is 6% on Capex and R&D. We make that our topline KPI and one of the numbers which we posted very early and from where we sit here today this is still what we're striving for in 2020 being the first year. We have to peak year 2019 with a lot of investments in electrification in all relevant brands and we knew that, we guided that way, but we are going also to normalize going forward. It is also a significant reduction of complexity within our ICE lineup. We could talk about examples and we did that at numerous occasions, so I don't want to repeat all of that. So more disciplines, more topline guidance from the group and more involvement in sharing and more synergetic approach is what's driving it, Arndt, at the end of the day. A clear-cut target and discipline in execution and the Board is fully committed. We know that this is a huge task, but the 6% is what is in the books and where we want to go to. In terms of inventories, obviously, we expect a significant improvement in November and particular December that leaves the guys like Christian and myself who were supposed to forecast properly obviously in a difficult spot, because if you're depending on such a short period to bring things in a better position. You have also a couple anomalies just to have it mentioned, you have a very early Chinese New Year and our folks over there together with the market forecast expect some business being pulled forward due to this very early Chinese New Year. But this is just one of those. But generally speaking the most relevant measure is adjusting production to revised forecasts and this is exactly what the company is willing to do if needed. On the other hand, from the overall sales performance, we have opportunities, we are gaining market share in almost all regions. So we need to optimized inventories, but we also don't want to cut it too thin. But at the end of the day we have more cutting to be done. I don't know, Christian, if there is anything to be added.

We'll now take our next question from Stephen Reitman from Societe Generale. Please go ahead. Your line is open.

Yes. Good afternoon. Stephen Reitman from Societe Generale. Just question again about production and inventory and just get understanding about this 900,000 cut from where you are budgeting. And try to understand how much of it still has to go in the final quarter. If I look at the production numbers in your interim report, in the nine-month figures you are down about 200,000 units or so from last year. Your unit sales obviously are also down about – delivers to customers are down about 130 and you're down also roughly same thing in terms of the deliveries to dealers. So I'm just wondering really given the guidance of the beginning of the year was for a slight increase in sales taking almost a billion units out of your production during the course of this year is quite a big cut. So, I'm still trying to square all these different factors really, because – or this is a just a very substantial reduction in the final quarter?

I would seen there couple of elements coming together. Obviously there's a point when you basically fixed the budget, you obviously have developments in the previous calendar year and basically the actual stock level you are ending with that has an impact. And yes, we had higher retail sales in our previous plans in the original budgets which were quite a bit higher than last year's number. So it's a carryover from 18 [ph]. That is the starting point in the budget and the expectations you have for the full year that is pretty much explaining the swing we have been relating to without getting lost in details by brand or region. But this is pretty much the way we look at those number. The one element which probably hasn't been mentioned before is obviously if you have a negative carryover from 2018 then you also have to catch up with it.

Just maybe to add, Stephen on the Q4 outlook because you mentioned our per year to-date performance, I mean, we can – yes, guess we have decreased our outlook, but we continue to believe that we can gain market share and catch up the – let's say the losses versus last year in the last quarter. I don't remember last year the first three quarters were particularly strong in the last quarter last year was particularly weak due to WLTP. In that sense, some production adjustment, I think you can safely assume by the end of this year we will have adjusted production accordingly in line with sales figures.

And so just to follow up on that. Would this guidance be a surprise you think to suppliers? Or would this already been incorporated into the forward planning based upon information that Volkswagen has been providing to the key suppliers over the last few months?

No. I can't imagine that they are fully surprised. And I think if I look left and right in the industry compared to some other folks we have been a pretty decent and stable factor for them.

Understood. Thank you very much.

We will now take our next question from Michael Blank from Egerton Capital. Please go ahead. Your line is open.

Yes. Hello. Thanks for taking my questions. Just two or three if I may. Can I ask question on inventory levels in a different way. So, if I benchmark back the inventory days to five or six years ago then there currently seems to be about a 10 billion excess inventory level. Should you not commit as part of the next planning round to normalizing that excess inventory over say the next five or six years and therefore boost annual cash flows by 2 billion? That's one. And then secondly, you mentioned the headwinds to the business going into 2020. And we can all try to estimate and try to quantify those. But I have a hard time quantifying what the offsets are or what they could be. And you mentioned in Frankfurt that VW has the unique opportunity to offset a lot of those headwinds. Could you just say how significant for example the complexity reduction could be when you talk about reducing engine gearbox variance and options by 20% or 30%, what is that in EBIT terms? And is it significant enough to offset the headwinds in 2020? And then maybe for Dahlheim, a question on EVs. Now looking at your launch schedule on EVs over the next few years say in Europe and takings IHS numbers as a benchmark, which are a bit conservative to your own assumptions, then it seems that you will have a much higher market share in EVs compared to your existing business in Europe. Do you agree with that? And do you think you can gain significant market share over a number of years with the EV rollout?

Michael, yes, I'll start with the third question if that's okay, because it's relatively easy to answer. Yes, absolutely you're right. We expect a higher market share for EVs in Europe compared to our average market share. And second part of your question, yes, we're absolutely confident to gain, achieved that market share. Why are we so confident? Because we're confident on first of all the range of models and the superiority of models we're bringing to the market given the usability and the range. So, clear confirmation of your calculations and high degree of confidence that we can achieve this.

Thanks.

We'll now take new questions.

No. I think I still own Michael a couple of answers before we move on. I think in the second part you talked about complexity reduction engine gearbox combination. Measures of that nature are certainly core elements of the profit improvement programs like the future pact we have in place at all brands. But obviously other than that, we are we are rolling out. We are still in the final rollout face of MQB, basically using that very competitive platform. And it is certainly behind some of these successes which you can see in the individual brands results. So I think that is certainly one of the key elements in order to be successful in this tremendous transformation in our industry with the cost for ICE is increasing and obviously an increased share of battery electric vehicles with a level of profitability which is not yet where ICEs are today. So this balancing act is more than anything else depending on our ability on the profit improvement programs using the synergies to the full extent. And when we started to basically educate our medium and long-term plan, one of the big advantages we have -- we have a lot of areas where we did not perform at benchmark level. So basically using that potential is also supporting our current position. And I think it's probably undisputed that we're improving, but we are also fully aware that we have room left to improve further and this is what we are building on. You mentioned 10 billion excess inventory number also related to the past. I think whether 10 is right or wrong, I don't want to assess too closely, but at the end of the day we need to bring inventories down. But when you look at comparing today in the past, the footprint of the company also from a regional perspective has changed from the mix perspective and it also always depends -- a snapshot number depends on the outlook you have for the next months in terms of sales to come. So it's a mixed bag but it is undisputed that we have until December 31st quite a bit to do, but we have internally the organization geared up. And if the market somewhat will end up in the range where we are expecting then we should come in with at a decent inventory level. Not at perfect level but at least at decent.

Thanks.

We'll now take your next question from George Galliers from Goldman Sachs. Please go ahead. Your line is open.

Thank you. And thank you for taking my question. Firstly, just a quick housekeeping question. I think at the H1 point you guided for diesel payments in the second half of around the €1 billion. In Q3 obviously you said it was €300 million. Are you still expecting the total for the second half to be a billion or is that now expected to be a bit lower?

I think for the full year we expect the number little short of 2 billion. In the first nine months we paid out €1.2 billion year to-date. So €600, €700 million is probably what you should think of.

Okay, great. Thank you. Then second question I had was on the battery electric vehicles. So for next year you have presented charts where you are targeting around 500,000 units in 2020. Can you just give us some idea of the split between Europe and China? And given the negative development we've seen in battery electric vehicles in China over the course of the last three months, do you think that that target may need some downward revision?

Though the guidance as we already confirmed in Frankfurt on the roughly 500,000, is that the majority of these BEVs will be sold in Europe, majority meaning obviously a range share of above 50%. Yes, it might be that we'll have to adjust slightly to a bit more European level. Although keep in mind that most models are country specific. And if you look at our performance in China admittedly mainly on ICE cars we continue to gain market share. So we believe that while some of the smaller brands are currently struggling in China based on our strong brand image we're very confident that we can achieve our best shares in China.

Okay. And if I may.

[Indiscernible] market environment. Sorry, go ahead.

Thank you. And if I may just sneak in a final one. Lots of OEMs have discussed sort of hypothetical timelines of when they see cost parity between battery electric vehicles and internal combustion engines. But I wanted to ask you a slightly different question given the scale of your investments in electrification. Can you give any insight into when Volkswagen will be spending more on electric based power trains than internal combustion engine based power trains from a CapEx and R&D perspective? Is this a tipping point that you will pass in the coming years? Are you there already? Or is it something that's much further out?

I mean we are definitely not yet there. That is that is obvious. I think in terms to give you at least the snapshot idea. In terms of R&D we are probably not higher than 20%. And on CapEx it's still a rather smaller percentage number. So from the top of my head I don't have that number with me. I think on the 18th we can certainly shed more light on it and we have some updated planning around numbers. But from today's perspective certainly on R&D significant increase over the last two years, but the majority of the R&D and CapEx is still for the good old ICE world we are living of.

Great. Thank you very much.

We'll now take your next question from Kai Mueller, Bank of America. Please go ahead. Your line is open.

Thank you very much for taking my question. The first one is coming back to the question asked earlier in terms of your savings that you're looking at to offset your regulatory costs going into next year. Can you also may be split argued you'd obviously talked about the measures internally how much is it external also possibly getting better pricing from your suppliers versus your internal measures? And can you give us a little sense on when those price negotiations would actually occur with regards to 2020 and maybe beyond? And then the second question would be you've obviously benefited significantly from a strong mix impact on the SUV across your group. So far this year it's over the 30% mark now. How do you see that progressing into next year? And can you give us a bit of color how much of your margin improvement was driven from SUV and how that sort of fades or you know progresses into 2020 and maybe 2021?

So Kai, maybe I'll start with the SUVs here. So you're right we have a continuously increasing trend and we actually see that continue into 2020 across all global regions. So talking about North America, Europe and China, I would say in about the same pace it is increasing today. And as you know of course this is partly driven by market, partly driven by our model mix and as you see we of course launched and continue to launch significant shares of SUV both in Europe and in China and in the U.S. So I would say general guidance would probably develop according to market trend. Margin improvement of course is mainly driven by SUV, but that's probably a comment I leave to Frank.

Yes. I mean, I think I indicated in the speech that from the portion volume mix price, the type mix contribution is by far the strongest. So I think this is a pretty safe bet for the rest of the year. And the way I look at our current continued rollout of expected SUVs, I'm quite comfortable to assume that at least in 2020 type mix will be an important part of any improvement year-over-year. So in that respect we are improving in terms of our mix but we are still not at the perfect state where we think we should be so continued rollout is the explanation. And related to savings, obviously, we have pricing negotiation are part of the business and ongoing, though there's not a specific date or initiative, it's something which you continuously do working with your suppliers, for example, in order to improve their cost situation and ideally share the benefits and the outcome of it. So there's nothing earth-shattering, I would call it the normal negotiations and improvements we are striving for. And yes, I think we need and we'll continue to push harder to improve on the cost side because obviously the competitiveness of the core markets is not to be expected to ease on us and obviously volume pressure is also there. So it's on us to make up for the gap.

Thanks. And maybe just a very quick follow up on the inventory that was mentioned earlier. Can you give us a little sense of how much you currently have increase in inventories for this possible U.K. Brexit as well as U.S. trade tariffs, and maybe in terms of units or a billion number?

Obviously for I think good reasons we are not in the position to share numbers, but they are not unreasonably high. And also given the fact that some of those issues if you -- I think are related to Brexit who knows what happens when. And therefore we also started to normalize things a bit. And obviously when you relate to the tariff discussion between the United States and Europe, it is a threat, it is a risk, but we also continue to assume and hope that an equitable and fair solution can be found. And at least to give you a flavor, when we talk about the U.K. we might talk about 20,000 vehicles. So it's not an earth-shattering number in the greater scheme off to make sure that nobody misreads my statement.

Okay. Thank you very much.

Yes. Friends, we still have quite a number of participants still waiting in the line. We would request you to stick to two questions max. Thank you.

We'll now take our next question, Jose Asumendi from JP Morgan. Please go ahead. Your line is open.

Thanks very much. Jose Asumendi, JP Morgan. Frank, just a couple of questions please. Christian, can you comment a little bit on the product cycle across Porsche and Audi and please also the upcoming SUV product launches in North America and Brazil which are definitely going to help earnings momentum in the next 15 months across those two items please. And the second question for Frank. There used to be a time when the group was running a bit more balanced fixed cost savings. I'm aware of the changes in terms of CapEx, R&D and the transition to electrification, which are all fair points. Do you see in the coming two years maybe a more balanced equilibrium between the incremental cost savings and incremental fixed costs which I think will also help the earnings momentum of the company? Thank you so much.

Yes. Let me start, Jose, [Indiscernible] talking all the great products. Yes. On fixed cost, I mean, you're rightly hitting the point. Obviously, we want to bring down CapEx to the desired level which we talked about earlier. What we also shouldn't forget, this company is under monitorship and it is without doubt that we have to significantly improve our integrity and compliance program, together for integrity that we have to improve processes which also means bringing on people but focusing on all those relevant areas to make sure that Volkswagen is going to be a better company going forward and the things like diesel are never ever going to happen again. That requires a lot of internal and external resources during this three-year monitor process. And some of the incremental expenses in order to improve our position will probably not to be incurred going forward, but also obviously when you relate rightly to headcount personnel costs but also depreciation. So rest assured fixed cost development is an area we all together on the board of management have a clear target for.

Jose, your first question probably could take the next 30 minutes of this call, so I try to maybe hit the highlights. So generally speaking I think look 2020 of course is special because we will launch the first full launch of our new MAB platform. So of course you know about the launch of the ID, with the launch an ID SUV both in the U.S. and in Europe. And we will continue to work on the each one in different variants. So that's across all major levels. And then of course, we continue to launch SUVs. Let me take two examples. We have a Macan facelift in the U.S. we have the Cayenne coming up and of course on the electric side not to forget the Taycan. And then last but two more mentioning; one is of course the Golf that you know just have the world premier. Despite a huge SUV trend, the Golf continues to be a phenomenal car that is well received in the market and that we believe will continue to build the basis of Volkswagen. And last but not least, if you look at the model lineup in Brazil, we now have successfully ease your lineup and we will continue to drive, that was in A0 CUV so more SUV oriented version of the A0 which especially in this region is a very growing market. So I think great mix of SUVs also in the smaller segments, particular focus of course on electric vehicles and at the same time for your numbers high margin SUVs that we continue to launch.

And Jose, I'm not sure that I mentioned it obviously earlier in the presentation. When we talk about fixed cost year to-date alone we have round about 800 million higher research and development costs going through the P&L. And when you relate to the 6% target going forward you obviously can probably rightly assume that the absolute amount of R&D in 2020 is going to below the 2019 number, so this is obviously also an element other than depreciation and personnel costs, I shouldn't forget. So there is some light at the end of the tunnel.

Thank you.

We'll now take our next question from Adam Hull from MainFirst. Please go ahead. Your line is open.

Hi. Good afternoon. Thanks for taking my question. Two questions; one, on your Chinese JV bringing about 3.5 billion of annual free cash flow in the dividend. Could you talk a little bit about your situation with regard to SUV mix now pricing and how orders are coming in China and how you see looking into next year? Clearly, you're doing a very big beat versus the market and even more so I presume in revenues versus units. And then secondly on Audi clearly you've suffered in a big way from WLTP. Could you tell us a little bit about how incoming orders are coming in? Are you now fully able to meet the fleet demand and therefore we should be seeing clear year-on-year rise into 2020 from the weak position you had last year in the first half? Thanks.

Adam, I'll take your second question first. For Audi, yes, we still have some impact on WLTP restricted availability first quarter of this year, but by now we're fully able to deliver virtually all requirements. We can fully satisfy our fleet demands in all fairness, unlike last year where of course we had a big impact. So, Audi is fully on track with way about 90% of their variants available. And if you look from a fleet customers perspective that corresponds to a 100% of their needs. Your question on China, we have launched excessive SUVs across all brands last year and as you know we have in a declining market gained almost 1% of market share. So as much as we regret the declining market, we also look, take that as an opportunity to maybe drive out some of the weaker competitors and actually gain, continue to gain market share going forward.

And just on that on the SUVs, I mean in terms of the impact in your China JV you're gaining share one thing. But is it significant higher margin and to what degree are you able to get good pricing in what seems to be quite a tough market, but hopefully I mean is it getting a better market in terms of pricing?

Yes. I think that's a fair assumption. Even though it's not -- sometimes really we tend to go a little bit on overbought because if margins on SUVs are better they tend to be weaker at the same point of time on sedan. So since we are selling in large numbers both there's -- there are two sides to the coin. But at the very end of the day being in the right segments where the margins are better with more products is certainly substantial. It is essential to maintain the margins. Nevertheless quite a quite a high degree of competition out there and particularly FAW-VW was quite late. We just this year started to have a fair share of SUV. So – and you could clearly see the impact positively in their performance. So overall SUVs are helping but on the other hand the sedan segments are under pressure. So that combination is once you're pleased to take also with you.

And just final on Audi, I mean just those incoming orders. Are they clearly up year-on-year outside China, say? Yes. So you asked one auto banks and I think specifically for Audi so Audi or the bank both auto bank and order increase. If you look at October I was up significantly versus.

Yes. So you asked about order banks, anything specifically for Audi. So Audi order bank, both order bank and order entries, if you look at October, are up significantly versus last year. Overall order bank is about at the same level of last year if you look at across all brands. Now forget last year we had particularly strong order bank compared to prior years.

Thanks so much.

We will now take our next question from Angus Tweedie from Citi. Please go ahead. Your line is open.

Thanks. The first question is on capitalization of R&D. I believe you had an accounting change in the third quarter on those. Can you talk us through what's changed? And do you think you could give us a run rate on an annual basis for the level of capitalization we should expect. And then the second one is just on the simplification process. I know you've talked about it a lot today. But would it be possible to get an OpEx saving Euro amount that you've managed to ring through the simplification so far? Thank you.

With respect to September year to-date, there's absolutely no accounting change. I think the question of what is to be considered as cash generating unit is a subject matter which we are discussing and validating. And I assume that on the 18th of September -- November we are going to be more concrete, but no decisions at this very point of time have been taken, but it is certainly an important proof point and it's no secret that everybody in the industry is thinking about it, so, for us important to mentioned year to-date September no change at all. I think even if I would have one which I don't. I think there is no simple euro dollar number I could give you because those effects -- it's a convoluted package in terms of -- yes obviously, just to give you a couple examples, if you think engine gearbox combinations Golf 8versus Golf 7 roughly 50% reduced light number of color options roundabout a third with certainly positive impacts in production, in procurement at the end of the day, also in sales. But on the other hand we go through WLTP very frequent homologation issues. So it is a mixed bag with plus and minuses and in today's environment and given the competitiveness and also the emissions related changes, EU 7 it's just around the corner. EVAP and all those issues Second Act WLTP, it is an absolute necessity to optimize the complexity and your lineup and offering in order to reach the level of profitability which we are achieving today and forecasting for the years to come. But a simple hardcoded euro number, I think there isn't actually one which could hold up and be entirely true. These are important steps, but you shoot goals and you have headwinds you fight against. So it's all of the above. Not just the benefits which you can calculate, but they will never be visible entirely in your P&L.

Okay. In the interest of time, time is ticking and we still have quite a few participants left in the line. So please focus on one question only. Thank you.

We'll now take our next question from Demian Flowers from Commerzbank. Please go ahead. Your line is open.

Hi. Thanks. It's Demian from Commerzbank. My one question is this. So Frank, we hear from the press that you've created a seven point plan which is all about boosting the Group's market value. And there's one item on there optimize the business portfolio which clearly points to the idea of structural changes in the Group moving up the agenda. So you've denied that Lamborghini is up for IPO. And you said in the press call today that there's no great rush with MAN power engineering. So what then is left for this agenda point? In other words what are your priorities for tackling this concept of optimizing the business portfolio? Thanks.

I mean first of all this program, I think from my perspective the proof point that the Board of Management is not only talking about a stronger focus on the capital markets or on the share price development and we cascaded the remuneration scheme of the board into the senior management. And we want the entire management to think about improving the market value of the company and some of the levers that they will expressively addressed there. Obviously there is nothing to be discussed today. The point we made is actually extremely consistent with the Group initiatives and our strategy that we continuously have to and will review our asset portfolio. And the announcement we made on power engineering and nothing else on top of is to be announced today. But part of getting to the optima market value for the company is obviously to put to put the money where it counts the most and allocate capital where a decent return is to be expected. And these are some of the key drivers. But the focus is not on asset disposals. It's an element, but it's not the most relevant driver. And we have a lot of levers and we have a lot of opportunity. Improving profitability is one of them. But also getting of doing what we can do in order to get to multiples who are more in line with the industry was used to trade it.

We'll now take our next question from Daniel Schwarz from Credit Suisse. Please go ahead. Your line is open.

Yes. Thank you for taking my question. I have one question on CO2 emissions. When I look at data from the KBA, I see that Volkswagen Group emissions are consistently rising through 2019 pretty much in line with SUV share and for most other OEMs we see emissions actually declining. Is that of any concern for you or is that fully in line with your planning regarding CO2 emissions?

I think it's -- there are a couple of developments. First of all, we all know what significant improvement needs to be accomplished going forward targets to 2020. And I think we are all -- we have been made abundantly clear that only a relevant share growing over the years to come are fully electrified vehicles will get us there. Obviously, improving the CO2 performance of ICEs is another pillar. So to answer your question, no, it didn't surprise us. But on the other hand obviously if you have a higher share of SUVs and the lower share of diesel than you were used to, that is certainly not making the job easier, but it's also basically the explanation why we did spend in 2019 a tremendous amount of money to develop the technical features and capabilities to be CO2 in 2020 and thereafter. But it is not a walk in the park. It will be a huge improvement year-over-year because we obviously coming from fleet averages in the north of 420 grand and therefore a proper launch of full electric vehicles is one of the essentials. And this is why obviously we put a lot of emphasis, money and resources on the successful launch of the ID family in the SAIC factory. But it's a huge improvement, rightly, if you're referring to it. But we are still working under the assumption and mandate that we will be compliant. But by no means walk in the park.

Thank you.

We will now take our next question from Henning Cosman from HSBC. Please go ahead. Your line is open.

Yes. Hi. Good afternoon. It's Henning from HSBC. I just wanted to ask a question about the mid-term guidance please. And without going into the actual numbers for 2025 just to understand a little bit better conceptually seeing that we're at a much lower base now than where we thought we would be at this point in the global market and seeing that some of these offsets for some of the challenges are falling more into the volume category I would imagine like the platform benefits. You're also illustrating your profitability for the volume brands with and without the benefits of this CO2 for the BEVs, where the, yes, the negative share of that rather tends to fall into the volume segments and the benefit is maybe a little bit more felt in the Audi and Porsche brands where you can then sell more variance with bigger engines. Is it fair to say that VW brand and the target of equal to or above 6% is maybe the most vulnerable then of the 2025 targets if you could just discuss that conceptually a little bit please?

I mean by no means, nobody has the intention to walk away from the 2025 targets. The 6% margin target for brands Volkswagen Passenger Car was assumed to be achieved in 2022 [ph]. This is obviously a significant improvement because obviously it goes back to the – to 1.8% starting point, in 2016. The mid-term guidance we will obviously update in our call related to planning around 68 on the 18th of November. But on that agenda will not be to revise the targets for 2025. We have ample time left. In the short-term obviously things are worsening and it is our management responsibility and the entire management to tighten the belt and to push even harder on efficiency and improvements. What gives us comfort is the fact that in such a difficult market environment we are gaining quite inefficiently market share. I mean just in China alone round about a percentage point. But this is not limited to China. And that speaks for the quality products that we are addressing in the segments and that we are obviously where we have to recover from diesel slowly but surely. But it's a marathon. But generally speaking 2020 to 2025 targets is not in focus. We are focusing on execution in the next two or three years which will be tough, but obviously doable.

So may I just clarify very quickly how you might be updating on the mid-term plan without possibly changing any of the numbers for the 2025? What do you mean with that?

I mean the focus for the planning round will be for the period 2022 till 2024. This is the five-year period which will be addressed. The targets for 2025 were posted after the Capital Markets Day in March 17. And from today's perspective and from what I understand today what PR68 will look like. There's no need, no good reason to revise those targets for 2025, But more to come obviously on the 18.

Very helpful. Thank you.

We'll now take our next question from Charles Coldicott from Redburn. Please go ahead. Your line is open.

Hi. Thank you for taking my question. I just wanted to ask on CO2. Can you give us an idea of when in 2020 you expect to first be compliant with the European emissions levels? And is it fair to assume that that might be in the second half of the year given that the ID doesn't start deliveries until the summer?

I think your assumption is correct. So we will be compliant and we will be obviously be compliant as of the second half because then the ID volume will reach relevant levels.

Thanks.

We'll take our final question comes from Mike Dean from Bloomberg Intelligence. Please go ahead. Your line is open.

Good afternoon. It's Mike Dean from Bloomberg Intelligence. I just had a follow up question on corporate restructuring. I was just wondering when should we expect an update of the strategy here. And following the TRATON IPO in June has that experience change your thinking on how best to extract shareholder value from within the group versus the view you held back in March when you presented it to us at the Capital Markets Day?

I think the TRATON IPO was a step which I think generally speaking was considered to be right. Obviously, market conditions were difficult, but the line to be drawn after a number of years and obviously going through the cycle in the industry we announced and I refer to it earlier that we are looking into alternatives for power engineering and this is announced. And if there are more decisions being communicated we will do so. But at this very point, this is what we communicated and – but certainly we're visiting the asset portfolio is an ongoing management task. But generally speaking IPO was in the cart and we execute it accordingly. So, other options can be sort of but no decisions being made. And therefore I don't want to spur up any speculation in that respect. But I think we are committed to do so to increase shareholder value and this is what the management is focusing on and that's what the internal communication regarding the company's market value relates to.

Okay. Thanks.

Okay. I think to wrap up from my side, thank you to all our participants, to my colleagues in the IR team and especially to all my internal colleagues who support us always for the event and the preparations. And yes, we've already said a lot about the 18th of November, so we're hoping for good participation there as well. If you have any questions, you can contact myself directly or any of my colleagues in the IR team. So have a good afternoon. Thank you.

This concludes today's call. Thank you for your participation. And you may now disconnect.