Good day, ladies and gentlemen, and welcome to the Volkswagen AG Live Audio Webcast and Conference Call on the Financial Results 2019. For your information, today's conference is being recorded. At this time, I'd like to turn the conference over to Ms. Helen Beckermann. Please go ahead.

Ladies and gentlemen, welcome to Volkswagen's Conference Call for Investors and Analysts on the Full Year Results 2019 based on the Annual Report, which we published early this morning. For today's conference call, I'm delighted to be joined by Herbert Diess, our CEO; Frank Witter, our CFO; and Christian Dahlheim, our Director of Group Sales of the Volkswagen AG, who also look forward to taking your questions. We are also very pleased to welcome Frank Blome from Volkswagen Group Components, he is the Head of Business Unit Battery Cell there; and Sebastian Fischer [ph], who's Head of Group and Brand Battery Procurement. Frank Blome will give an insight into our battery technology. And following that, both Frank and Sebastian will be available for Q&A. Most of you will have followed the webcast from this morning's annual press conference. Our focus now is to cover your specific needs as investors and analysts. So let me now hand you over to Frank, who will open today's session with a brief overview.

Yeah. Thank you, Helen, and a warm welcome to all participants in this call. Without a doubt, we have proven our robustness with our 2019 figures, that gives us a springboard in 2020. However, the scale of the coronavirus has thrown a real curveball and is having an impact all over the globe. For example, pulling the stock market severely down with it. This presents an unprecedented challenge. Certainly, we cannot exclude Volkswagen from these developments. We announced our outlook at the end of February. We assumed the situation would normalize within a reasonable period of time. Whether this assumption is still viable is now to be seen over the next couple of weeks and months. Let's be clear. Nobody knows at this point the severity and duration of corona. Nobody can reliably quantify the knock-on effects. This makes it near to impossible to provide reliable forecasts today. However, we are not giving up the fight yet. We are in full task force mode, and we utilize any countermeasures we have to take care of our people and stabilize our business. We are still very early in the year and some normalization and catch up can still occur. We will, of course, be constantly reviewing the situation depending on the further developments. As you are well aware, we also have the pressure of CO2 compliance, achieving the timely launch of the ID and securing better results supply. Nevertheless, over the last couple of years, especially in 2019, we have proven our resilience and flexibility. Our group has highly flexible production networks with flexible tools within our so called breathing factories. We have options to change shift patterns or use employee time accounts. Our purchasing areas are working intensively with various suppliers around the globe. We will continue to focus on high-margin cars and will phase out certain low-margin cars with a poor CO2 footprint. We will continue to stringently reduce costs. We will also push further on the existing brand efficiency programs. Through even stricter steering of the brands and continued discipline with our platform rollout, we will strive for further synergies. From the product side, we are bundling more vehicles in model families, Peugeot, Passat and Superb, and further reducing complexity and variances. Let’s now take a closer look at some of our strategic KPIs. To be abundantly clear, for CapEx and R&D, we continue to strive for a 6% ratio each. Certainly, it will be challenging since turnover is working against us this year. We still target automotive cash flow of at least €10 billion ex-diesel outflows and M&A. Of course, robust underlying performance is a prerequisite for also this. In relation to M&A activities, you all are well aware that the automotive industry is transforming at a very rapid pace, for example, within the areas of mobility services and digitalization. Therefore, we are continuously looking into options to strengthen our core business. You know about the collaboration with Ford and Argo, our invest in Northvolt, as well as a possible further cooperation in China related to e-mobility and battery cell technology. Buying Navistar is strategically a good idea, as the U.S. truck maker well fit into TRATON's Global Champion strategy. However, we are determined not to pursue that project at our cost. Please take note that the net liquidity outlook, as also laid out in our annual report 2019, does not take into account a potential takeover of Navistar since we are not far enough in the process. To wrap up my opening, I think you well us - you know us well by now. We are not writing off the year yet, and we will push ourselves to the limit. For now, back to Helen.

Thank you, Frank. We will now start with the first Q&A session. So feel free to direct your questions to Herbert, Frank and Christian. As mentioned, following that, we will switch for the remaining 30 minutes to the battery topic with Frank Blome and Sebastian Fischer. Operator, over to you.

Thank you. [Operator Instructions] We will now take our first question from Tim Rokossa from Deutsche Bank. Please go ahead.

Yes. Good afternoon, everyone. It's Tim Rokossa from Deutsche Bank. I would have two questions, please. I would have not asked because I figured that you didn't want to say anything else, and I agree that it's impossible to quantify. But Frank, you did give us an indication for Q1 EBIT this morning. You must run your operations on some sort of scenario for the full year as well. Are you somehow happy to help us on that side as well as maybe assuming that Q2 halving and then some sort of stable year-on-year scenario, maybe the most likely right now? And also when we look at the annual results data, you seem to have ample cash and credit lines on hand. Has anything changed to those numbers as we speak today? And then secondly, that's probably for you, Herbert. I think China tells us that we can eventually move on from this coronavirus, hopefully as difficult as it is to deal with this and the strategy - any sort of strategies are in the process? And I suspect the majority of investor interested when we move to the ID.3 again. You confirmed the launch again for the summer. In the press, there's a lot of talk about this, but basically, everyone is just copying 1 single article. Can we talk about what exactly the problem is with the ID.3 and also when it comes to cell availability for the e-tron, for example? Thank you.

Yeah. Hi, Tim. Let me start with the easy questions, and Herbert takes the rest. Yeah, operating profit, I think we made it abundantly clear that it is extremely difficult to quantify any numbers at this point of time. I said earlier this morning, for the operating profit Q1, you might remember that we had a very strong first quarter last year with an operating margin of 8.1%, basically ending up at a bit over €4.8 billion. Best guess from what I know today is that probably half of that number is probably the most realistic outlook for Q1. And there's no way that I can go beyond that since we are currently talking about close down of factories. We don't know what other measures from the politics will come. So customer reaction, the lengths and duration of the coronavirus situation is difficult to predict. I think you might picked up this morning from Herbert’s speech that we take some hope from the developments in China and the way the market reacting. Basically pretty strong January with around about 1.8 million cars, basically followed by a non-existing February with just 250,000 cars. And now from March, the numbers are between 800,000 and 1 million. So there is clearly the hope that there is life in the markets right after the worst of the corona situation, but we have to see how the situation will develop in Europe. So in that respect, the Q1 touch and feel I gave is the very best I can do at this very moment. In terms of liquidity, I mean, you're hitting the nail on the head. Liquidity is after taking care for our people and their families. The very most critical subject we have - we assume that we have continually - continuously access to capital markets, and particularly, bank loans. We have secured and committed credit lines. So from that respect, also taking a close look at our outflows is what we manage and what our most focus is on. So in that respect, it's day by day. There are currently more bad news to come before the situation is going to improve, but we take the liberty to also look very closely and regularly to China.

We will now take our next question from Patrick Hummel from UBS.

Excuse me, operator. We still have a statement from Mr. Diess. So if we could just wait until we take the next call.

Oh my apologies.

Okay. Thank you.

Okay. Yes. Getting back to China, I think it was well discussed already this morning. Frank gave some details. I think we are quite hopeful that because China shows that this crisis can be managed if you're tough on the, let's say, disciplinary measures and focused on re-launching the economy and pushing. I think it's too early to judge how we're going to end up in China. But if it really can be contained in this kind of first quarter, and then we get back to normal again, I think China is not yet lost for this year. And so many people have discussed China or the huge exposure of Volkswagen to China as a risk. I think it's - actually, it's an opportunity because I'm quite confident about China, whereas Europe and the rest of the world is quite uncertain today because it will depend a lot how good can we manage the crisis and how strong will governments react to stimulate the economy afterwards. So getting to Europe - but if we are optimistic now and if we assume that probably we are a bit early in detecting the - and we have learned from China. And if we would assume that we can react in a better way than - the same way than China, then we talk about a lost quarter, basically, which is probably the most optimistic scenario, and it can be worse. But I would say still, it can be - if we are optimistic, it can be done. Second question was ID.3. Yes, I think also discussed in public. ID.3 is our first really updatable, upgradable architecture - software architecture. The cars are - I have been visiting the plant last week. The cars are in good shape. It's extremely fun to drive. I think we are very confident in the plant. Our salespeople are very confident about the product, product substance. And many ID.3s are driving around near Wolfsburg - around Wolfsburg, and everyone is enjoying. So what's the problem? We still have to, let's say, fix a few software instabilities. For us, this is a challenge because it’s the first time we really move in an area where we run a kind of an Internet device on open road. So we have to make sure that it works reliable, and we don’t confront our customers with some launch problems. That is why we are cautious. If – let’s say, if we compare ourselves, some of our peers or, let’s say, the more - on the more innovative side probably would already sell the car and call it a better version. We don't do that. We want to fix all problems. And only when it’s super quality and satisfies every customer, we will launch the car, but we are confident that, that still can happen in summer. It will happen in summer. There will be now constraints in how we work together also on the software side because we have to reduce the size of the teams. We have to work more on remotely from different locations. But this community - software community is trained to do that. We stay focused. So yes, we are confident to launch the product in summer. If we – we’re also talking to shut down the plant for a few weeks, which still would allow us to achieve the planned volume. And the second thing about CO2 compliance, as Frank mentioned, are the batteries - battery supplies. It's a tough supply chain. I think you will have half an hour later to really get into the details. The plants are build up. And there will be, for sure, also some influence from corona in the ramp-up of the plants, but I still hope that the ramp-up will run smoothly and with the right logistics and infrastructure and the right dedication. So I would say, from both sides, software and batteries, it can be done. You then mentioned e-tron. I think e-tron is a success story for us. Only in the first two months, e-tron could take over the lead in some of the markets in Norway. In Germany, it’s leading the premium EV market. So the product is well received, but also e-tron ramp up depends on battery supplies, and you might raise one or the other question later to our specialists. But also, I think, situation is improving continuously and will improve further more. So all in all, we are - that is why we - all in all, we still believe and we trust that we can achieve our CO2 targets in 2020 and '21.

Thank you. Just as a follow-up, from a technical perspective, can you update the software over-the-air for the ID.3...

Yes.

Once it’s ready?

Yes, we can - not the entire car, but crucial functions we can update.

Thank you.

We'll now take the next question, yes, from Patrick Hummel from UBS. Please go ahead.

Hi. Good afternoon, everybody. I also have two questions. First one for Herbert Diess, please, regarding the political situation right now. It seems that, of course, in the midst of the crisis, the political focus, stimulus rises on providing liquidity to all industries, to avoid bankruptcies and to keep people in their jobs and make sure they get paid. What do you think happens a few months out? Do you expect widespread car-specific stimulus to kick in, in the major markets, so that we could see a substantial recovery in H2? And would you expect such car-specific stimulus to be skewed towards lower emission vehicles that would make it easier for you potentially to be CO2 compliant? And my second question goes to Frank, please. Your net liquidity situation, I think, everything above €20 billion is what you would call a comfort zone. Can you also talk about what is an absolute minimum to ensure business continuity for the next few quarters? And what would you expect to happen to working capital specifically in the next few months? What's falling faster? Is it demand? Is it production? How are you going to maneuver through that from a working capital standpoint? Thank you.

Yes, you're right. The first focus of politicians in Europe and Germany, as far as I understood is on liquidity to make sure that, that competent companies will not fail because of that. And we think that there will be support as well on the supplier side, which is probably the most - in some aspects the most vulnerable part of our business. And also when it comes to dealers, we also - we agreed already a few measures about the credit lines the dealers receive from us. So I think that should be manageable understanding that there is a big support from politicians throughout Europe to make sure that the industry is not failing because of corona. When it comes to stimulus programs, I think it's still too early. Even politicians don't think yet in such thing. Also we have to say it's probably the biggest impact corona has is on the development of the - economic development of growth and what’s going to happen afterwards. So we would welcome such programs. But I think it’s too early, and I think those programs will be discussed between the VDA here in Germany and ACEA in Europe. But I can imagine that after, let’s say, managing the now time-critical point of the crisis, we should start about thinking how we can revitalize the industry after the crisis, and I hope for such programs. But so far, we don’t know any details, and I think it needs - requires a certain type of consolidation because such things have to be agreed between politicians and our representatives. So far from side. We think, is an advantage for complying with CO2? Yes and no. It depends on how the stimulus or how you can imagine stimulus programs. We think that the mix should not be so much different after, let’s say, the corona crisis because people’s priorities will remain the same. We are well prepared with all our electric cars hitting the market basically midyear. The cars we have in the market are well received. We have relatively long lead times for the deliveries because we basically outsold on some of the electric cars, like the electric-up, electric-Golf. Also the plug-in hybrids are basically sold out through half of our years. So yes, it’s possible to achieve the targets with the current mix. We hope that through the year, we even can probably gain some more share of EVs and PHEVs if we maintain battery supply as planned.

Thank you.

Yeah. Hi, Patrick. Regarding the question you had on net liquidity. I mean, you know that we basically have a strategic target, the 10% of revenue and for the years closer by, greater than €20 billion. This is basically the framework under normal circumstances. Why are we so focused on net liquidity? Because it also is very relevant other than EBIT for the rating agencies. This is the key issue. You know our business model, the support and the - also the contribution to the P&L we need from financial services, but we also have a lot of refinancing to be done on an annual basis. So we are in close contact with the rating agencies. I think we have proven over time that we are as predictable as it gets in our industry. We have - we did it over the last couple of years all relevant KPIs. So we certainly will be able to explain the volatility we are having through corona within that number. From today’s perspective, it is even more important to have full access to credit lines, commercial paper markets and capital markets. But certainly, not going under €10 billion is my personal floor, and as close to €20 within those days and weeks is certainly where we try to manage it. But there are a lot of question marks in terms of how long will factories be closed, how much can we optimize the in and outflows from other sources, so that's pretty much the situation. You know that we improved the inventory situation in the last two months of calendar year 2019, I think, by roundabout 130,000 units. That certainly helps. But obviously, the next couple weeks we will daily update our numbers.

And more specifically, Frank, if I may follow-up on working capital, is there any chance that you can more or less synchronize production with demand? It feels like demand in Europe is probably because of all the lockout completely falling off a cliff, and you haven’t shut down all your plants yet. So is there a risk that there’s going to be a lot of cash absorbed by working capital in the next month or two?

I mean, certainly, we need to very carefully balance the act, particularly also in the German premises. So focus is, as you rightly point, in the direction that inventory management is particularly critical. I’m looking over to Christian because he certainly is a key driver in terms of how effective other than the production area we are in that respect. So you can rest assured. This actually gives me quite comfort just anecdotically to refer to meetings we are having once or twice a day over the last couple of weeks. Every brand, every senior manager was talking about without being asked for pushed about liquidity and inventories. And this is truly encouraging. And you know us five years ago that would have not been the focus, and now handing over to Christian.

Maybe, Patrick, you allow me two remarks, first on what happens to demand. Currently, you're, of course, right, given the fact that most of the dealers are closed, we see a plummeting in demand. But that’s the reason why we give interest-free payment periods to our dealers. What would that mean? The dealers can still pull cars from us. Technically, we then sell these receivables to our bank, which effectively generates liquidity from the European Central Bank. So in terms of automotive liquidity, we actually generate the cash by driving the receivables through our Volkswagen Bank. Second remark, when you ask about car stimulus, you essentially ask what’s the assumption on the demand pickup after the crisis is over. Maybe I’d just like to point out two things. One is, we have an order bank of about 2.5 to 3 months, existing in our books that we can deliver. Second, as you know, Europe is - 50% of the market in Europe is commercial. So our commercial customers, if they are in regular lease cycles, will, once everything is hopefully over, come back to more regular ordering because just lease cycles extend. So while we're not totally relaxed, we feel we’re pretty confident that demand will pick up as expected.

Thank you very much.

[Operator Instructions] We will now take the next question from Horst Schneider from Bank of America. Please go ahead.

Good afternoon. It's Horst here. Thanks for taking my questions. Yes. I want to constraint myself really just to one question. Maybe a question to Herbert Diess or maybe to Frank, I don’t know. Could you maybe explain to us the logic or the consequence of a plant shutdown? How can we calculate the best the costs coming from that? The plain assumptions I would take, I would look at your daily production in Europe or monthly production, roughly, I don't know, 450,000 cars. I would multiply that with average selling price. And then I would calculate the fixed cost that you have got on these sales. It takes me to quite substantial numbers. It takes me maybe to - yes, I don't know, 30% leverage assuming it will take me to a significant cost impact. Is that the right way calculating that? I know that you also have got this [indiscernible] schemes and you get some refund from the government. But leaving that aside, how can I best calculate the costs for a plant shutdown? Thank you.

Let me start with that, Horst. The rules and regulations do vary country-by-country. And we are basically, as we speak, negotiating with the respective authorities how each individual case is being treated and what type of support is available by law and regulation. So there is not one number, but I think your assumption is right. It is certainly a major drain, and we are pulling on all levers to work against it. But I think there is not one number, not even in Europe, because the rules are quite different in each and every jurisdiction.

But if the calculation is right, then the cost would amount to €100 million to €150 million per day, right?

I never did pretend that this would be an easy exercise.

Okay. Thank you very much. And all the best by the way.

We will now take the next question from Michael Raab from Kepler. Please go ahead.

Hi. Thanks. Mike Raab, Kepler Cheuvreux. Please excuse my shortcoming bit. I wasn't able to follow your explanation this morning about the expected timing profile of further cash outflows related to diesel. So could you please just as a housekeeping issue remind me of that? Thank you.

Yeah. I think there was also some misunderstanding this morning from one of the colleagues with respect to the difference between the items hitting the P&L and what is basically on an annual basis the related cash payments. From a P&L perspective, since 2015, €31.3 billion of special items have been booked, including the €2.3 billion in the 2019 accounts. And the cash out for diesel until December 31, 2019, is €26.2 billion, if I'm not mistaken. And an additional payout in calendar year 2020 of approximately €2.9 billion is being assumed and a bit north of €1 billion in '21. This is very best we can currently assume. So there was a bit of a confusion, and I appreciate the opportunity to clarify that for that audience again.

All right. Thank you. All the best and stay healthy. Thank you.

We will now take the next question from George Galliers from Goldman Sachs. Please go ahead.

Thank you for taking my question. I just had a question for you, again, kind of on profitability and a stress scenario. What kind of volume drop in Europe can Volkswagen brand sustain and still remain breakeven? So some of your competitors have provided some insight into what kind of volume decline can be withstood and the company would still be breakeven? Can you give that kind of insight for Volkswagen brand? Thank you.

Sorry, just to clarify. Do you mean for the group or for the brand, George? You said brand, correct?

Specifically for Volkswagen brand, correct. Yes.

Okay. Thank you for that clarification.

Yes, roundabout, I would say, 60% is probably a good number to look at. Obviously, also a set of assumptions being applicable, but this is pretty much a number, which you could carry away.

And just to clarify. Would that be a 60% decline or 60% of where the volumes are or were in 2019?

I think roundabout at 60% utilization of capacity. This is what the assumed interpretation is.

Thank you.

We'll now take the next question from Jose Asumendi from JPMorgan.

Thanks. Jose Asumendi at JPMorgan. Frank, can you talk a bit about Financial Services? What happened in the last financial crisis in Financial Services? What lessons - key lessons learned did you take from the last downturn? How well capitalized is the business? And any thoughts around refinancing, how you finance the Financial Services entity? Thank you.

Yeah. Hi, Jose. Certainly, Financial Service is a central part of our business model. I think from - in all respects, it's fairly capitalized for that type of business. What matters the most in the crisis - and I've seen quite a number of crisis in all those years - is the quality of your portfolio. That is the best protection you have. And I think we've proven over decades that we are able to secure - have been able at all times to securitize our assets because we are known for quality portfolios. And that's what we can build on. We have a highly diversified portfolio. It's widespread with portfolio predominantly in retail. We are very international. So we have also a very international footprint and diversified portfolio in that respect. So in that respect, I’m quite comfortable, and you also know from all the years that we have been quite conservative in the way we allocate to reserves and the way we set residual values. And we also are not known for buying junk paper, as you know from the U.S. It's a big market, but it's not a market we are in. We feel reasonably comfortable, but we will certainly watch very closely how the new car and used car markets are developing. But from today’s perspective, I think we are reasonably well prepared, but obviously, length and how intense the situation will evolve over time is the test.

Thank you.

The next question comes from Stephen Reitman from Societe Generale. Please go ahead.

Yes, good afternoon. Two questions, please. First of all, maybe an easier one, and that is the cash flow in 2019. I think at the nine month stage, Frank, you were warning that, obviously, you had a very good figure for the first nine months, but you're going to be facing higher ramp-up costs, higher CapEx and other items and inventory build costs. So not so be too optimistic about the fourth quarter, but in fact, one of the key elements of your preliminary results the end of February was very strong free cash flow, the €13.5 billion. And I think - I'm sure stock would be reacting in a very different way, had it not been for the current crisis. So could you say how much - what has changed in the way of operating business and the stability of that beyond the crisis? My second question is about the guidance or the sort of indications for the first quarter results. You mentioned that you might expect a halving of the 2019 figure from the operating performance based on the figures here. We don't obviously have your wholesale figures. We now have your retails, which are obviously backward looking. But if I just look at your retail figures that you published for the first two months, you're down 14%. And if you take out China, which, in the main part, is below the operating line, you're basically flattish. So it seems quite as high gearing to halve the operating profit based upon which we’re basically affecting you - reflecting performance in Europe and in rest of the world, excluding China. If you could just make some comments on that, please.

Yes. Let me see. Hi, Stephen. Let me see if I did get the intent of your first part of the question correctly. I think there is no miracle behind the strong numbers for cash flow in 2019. I think it’s better focus and better balancing of production and stock. I think people all know the individual targets, and we are closely monitoring. I think it’s also a much better understanding within the organization that this is a very strong and important KPI for our stakeholders. And I think that is coming through. I think if I look at what has happened in Q4, I think we certainly saw that the pressure and the focus on inventory management has been acknowledged, and we improved quite a bit in the last couple weeks. If I look at Q1, the situation is, as I indicated, in terms of the overall profitability number, cash flow, I think we are certainly trying to get as close as possible as to the 2019 Q1 number. In terms of profitability, what we should not forget, we had quite a bit of volatility in our derivative valuations. Raw material prices have been very volatile, unfortunately, with a negative impact in Q1. So the impact in March is to be seen, but we’ve clearly seen February year-to-date that this was an area which was more negative than in Q1 '19.

Thank you.

[Operator Instructions] The next question comes from Angus Tweedie from Citi. Please go ahead. Please ensure your mute function is switched off.

Sorry about that. Can you hear me now?

Yes, very clear line.

Okay. Thank you. My question was just on the Financial Services business. At the end of the year, you had an equity ratio of 12.7%. Could you confirm what the minimum equity ratio you can have in the bank? Am I correct in thinking it’s about 9%? Thank you.

I think you have individual equity minimum targets, you get basically assigned from the European Central Bank. You have to differentiate between the Volkswagen Bank, which is an entity being directly supervised by the European Central Bank. Their respective equity ratio, I’m pretty sure, is probably in the range of 14% or something along that line. So you've seen the average for entities, which are not directly effective in banking, I think 12.7% for the average is a top notch number, together with a strong quality portfolio. I think this is a pretty strong cushion for the volatility to be expected over the next couple of weeks or months. But roundabout 13% is a strong base, and the bank - banks tend to be higher capitalized based on ECB requirement.

And is there any way of thinking a blended figure for the group?

Sorry. Did I get your question right? Did you want a blended with the group...

Well, just - I appreciate the bank has a higher equity ratio than the less regulated portions. But I mean, when looking at the high-level numbers, is there a 9% figure or something that we could take for the group? Or is that too conservative?

I think if you break it up, I think roundabout the non-banking business is in the range of the 9% and the bank roughly at 14%. So that pretty much ends up with the blended 12.7% roundabout. So I think from today’s perspective, you might – there is no need or no assumed capital increase in Financial Services, if that might the question you have in mind.

Okay. Thank you very much, Frank.

We will now take the next question from Henning Cosman from HSBC. Please go ahead.

Hi, good afternoon. Thanks for taking the question. Frank, thanks a lot for that 60% utilization number for the VW brand breakeven point. I think that’s going to be talked about a lot. Is it possible to give similar numbers for the group as well and whether that's including or excluding China? And of course, I’m trying to put it in perspective with 50% of profitability in Q1 as well. I think I wasn't so much after the absolute level, but maybe how you think about that. So I guess, when 60% utilization is the breakeven point and you are thinking of 50% down, I guess that, if it was linear, the equivalent of 80% utilization in the brand or if we could extrapolate that for the group? So if you could just talk around these dimensions a little bit more to maybe help us in the sort of best way you can to understand what we should be modeling or anticipating? Thank you.

Now, Henning, I think particularly for competitive reasons, this is a difficult question or set of questions and level of detail you are looking for. I think related to the Volkswagen passenger cars, at least I want to give you guys a flavor, but there are certainly huge differences as it pertains to Chinese factories, European, North American or Latin American, and those numbers do significantly vary. So in that respect, regrettably, I have to be quite limited because this is very sensitive information. And if I relate back to Herbert, the normalization, which we all hope for, is taking place at different times in the respective regions. And we all need to make sure that we are not predictable in any way, shape or form for the difficult path to recovery against our competitors. So I think it’s in the best interest if you not go into more details at this point of time.

Are you prepared to just say direction for the group, if you need less or more than the 60% to be breakeven on group level before China? Is that acceptable?

I think, Henning, at this point of time, I think we would like to leave it where I left it.

Understood. Thank you.

We will now take the next question from James Omidria from Legal & General [ph] Please go ahead.

Good afternoon. It’s a follow-up on Jose's question on the Financial Services business. You mentioned the used car market. You do have a substantial amount of lease assets on your balance sheet, and one of the key components of your business is managing those residual values through the used markets. So what plans would you have to manage residual values if the used vehicle market in Europe was shut for several months? What options would you have available? Thank you.

James, it's Christian, if you allow me to take that question because, of course, driven by the sales organization together with our Financial Service organization. So first of all, of course, we currently see limited demand for used cars as we see limited demand for new cars. That’s a short-term impact. Given that there are almost no transaction, you don't really see impact to the values in our lease. So if this is a four - even one quarter period, then two things happen, one is, to a certain extent, you have limited supplies since all manufacturers probably will build less cars. All other things equal, if you have less supply, you probably have increase in prices, at least I assume a stabilization. Second, obviously, we will - when we restart a launch with relatively aggressive used car programs that are already in the making. So we'll probably give free interest rates for our customers with similar programs to make sure that clear - that dealers can clear their stock which is stabilized used cars because that, of course, pulls then demand for new cars. So maybe coming back to an earlier question on stimulus, used car demand is certainly something that we need to foster, but I think we have a lot of instruments in place, one of them, of course, is Financial Services. So at this point in time, in summary, we don’t expect a bigger impact on our lease assuming that the crisis last, let’s take something between four weeks and a quarter.

Its great. Thank you.

The next question comes from Tom Narayan from RBC. Please go ahead.

Hi, yes. Tom Narayan, RBC. Thanks for taking the question. A quick history lesson for me maybe. In 2009, your automotive working capital was a significant source of cash. Just wondering if you could kind of contrast that what's going on now? And then just two real quick housekeeping things. Is there a chance in a stretch scenario that the government's postpone CO2 for 2020? And then, did I hear you guys right, the Navistar bid from TRATON - the current bid is off the table? Thanks.

CO2 postponement, I’m not sure whether that would impact seriously our bottom line because we are basically geared up to achieve the targets. So the orders are out there. Many of the product is already sold. And we are geared up for the battery supply, so we have contracts. So I would say that's probably too late. For some of our competitors, be that an alleviation maybe, I don’t know, but that has to be discussed on a different level. For us, I think it’s just too late to take such decisions now, and it wouldn’t really impact our strategy. Then the other thing was 2009, yes. Yes, with respect to cash flow, I wasn’t in this seat in 2009. But from the strong net cash flow performance we had in 2019, I take quite a bit of comfort. We certainly will adjust 2020 production programs further to what we already did. The corona impact will be taken into consideration and will reflect. So in that respect, I think, we are probably as strong in terms of net cash flow generation, even stronger in a position than we ever were. And the discipline has definitely significantly increased. In terms of Navistar, no, we’ve not pulled the deal. We still believe it is strategically a good idea. But certainly, we will watch like hawks the liquidity situation and development and the prioritization of all activities we are contemplating.

Thank you.

As there are no further questions, I’ll now turn the call back to Helen Beckermann.

Thank you, operator. We actually do have two more questions that I received per e-mail from Michael Blank from Egerton, who couldn't take part in the call. So the first one I'd like to direct at Frank. We haven't covered it yet. We have the question.

How is the - how is it looking with dividend payments in 2020 relating to the business year 2019? And then Michael is trying to look very forward into the future. He would like to know dividend payments in 2021 for 2020.

Yes, I wish I would know those numbers, too. That was certainly related to the business here 2020. This is way too early to make any guesstimates and what’s the respective dividend stream, particularly from China would be in 2021. For this year, as it relates to the business to calendar year 2019, I think we expect lower dividends. We had a peak - the range of €3.6 billion. And I think that number for this calendar year is probably closer in the range of €3 billion. That’s what I would assume.

Okay. Thank you, Frank. And the second question I would direct towards Herbert.

In relation to our production stoppages or adjustments reflecting corona, do you see the chance that we use our summer holidays to catch up on production, especially in the German plants? What kind of flexibility do we have?

Yes. No, if there are chances in the market, we always have ways to catch up whenever the supplier capacities are there. And we always have the flexibility to work holiday shifts, Saturdays. Normally, we achieve those agreements because it's beneficial also for the - for blue-collar people. So that is what we're doing all year round. Would we be able to catch up two weeks? Tough, probably, but still possible. Three weeks? Yes. But let’s say, probably not a month or so of production. That’ impossible.

Okay. I think that is everybody in the line for our first section today. At this stage, Herbert will be leaving us back to task force mode, and we'll move over to our experts on battery. And again, you can log in the line to prepare yourself for Q&A questions. So we'll take about 15 minutes presentation, and the second half we'll use for Q&A. Okay. I would like to introduce now Frank Blome. He's the Head of Group Components in relation to the business unit battery cell, and he will take us - give us an insight into our battery cell technology. Over to you.

Thank you very much, and I’d like to get into a few charts, first of all, to explain about the battery strategy and the products. I will start with the customer expectations. That is, of course, attractive cost, long driving range, fast charging is becoming more and more possible and attractive. High electrical performance, a long safety life. Of course, the vehicle has to work between minus 30 and plus 50 degrees C. It has to be made and will be made for global use, and it will be robust. The availability will be high. And of course, maximum safety is another topic, what is for all the cars and especially for electric vehicles, a quite important task. The architecture of the vehicles and the batteries inside is giving us, in the case of the MEB, a range between 330 and 550 kilometers, and that’s been done by modules and scalability of modules. On the left side of the chart, you see 7 modules, that's the smallest battery, and on the right side, you see the full scale of modules into the battery, what gives us, finally, 550 kilometers of range. Getting into the inside of the battery system, that chart shows us the electronics in the yellow color or the orange color. We see the housing and the cooling around it, and we see the modules, and the battery modules is what we will get into now. We - driven by the fact that we need directly high-volume of battery cells, we decided to go for the two designs of battery cells, what is pouch and prismatic cells. So the pouch is the one on the upper left side and the prismatic. The other one, we can use both for our batteries. The modules will look very similar from the outside, and that gives us a chance to work with all the suppliers in the world and play technically and also commercially the cell market for us, make sure the availability is there. And also, we have a good situation for negotiation of prices by our colleagues from purchasing. We do not stop with production of batteries and cars. We also get into the recycling cycle and the entire battery cycle. The battery cell is step one. Then we get into the battery system. We produce in-house in Braunschweig, for example. The first life of the battery cell will be in the car. The battery can be returned. And after the module analyzers has been positively done, there is a chance to use the battery system in a second life. We can do mechanical recycling, and we do this also in-house. We have developed quite interesting technologies for that, too. After that, there will be a recycling step into hydro-metallic technology, what gives us a secondary raw material step, and that, finally, can go directly back into after cleaning of the material into cathode material and anode material and also the metals, what is basically aluminum and copper, and this can end up into a battery cell in the next step again. Some words about the next possibilities, the next battery generation. On the left side, 2020, we see what I’ve just presented, the two battery cell types for the MEB and the PPE. So Porshe, Audi platform and also the Volkswagen large volume group platform. We are working on higher energies and fast charging that one technology is giving us is a silicon anode we are working on up to the way to all solid state, what gives us a better range, so higher energy, fast charge, and on top of that, lower weight and better costs, too. As you may know, we have founded a cooperation, a joint venture this - the last year with Northvolt. Northvolt is a Swedish start-up company, quite powerful. We did that because the technology is very, very good. We were quite happy with the parts, the product, and that’s why we invested about 20% of the shares into. And yes, we founded a 50-50 joint venture and that will start production in 2024 in Germany in Salzgitter. We are building up the organization right now. We are setting up what we need to make sure this will be a successful plan a successful case, what fits into our strategy. On this picture here, I will show you an animation of the space we reserved. For our new cell manufacturing company. The space is able to produce 16 gigawatt hours. We can extend it up to 24, but 16 so far we decided to go for. The production area is about 180,000 square meters, and it is directly located into our plant in Salzgitter. And yes, that is it for the presentation. Now I'm glad, together with my colleague, Sebastian Fischer from Purchasing to answer your questions.

Thank you very much, Frank. Very good insight. I think you guys have asked on numerous occasions to cover battery. So that was the first from outside. We’d like to now open the Q&A. And operator, I'll pass back to you.

Thank you. [Operator Instructions] We will now take a question from George Galliers from Goldman Sachs. Please go ahead.

Thank you. My question is, can you just confirm what chemistry you're using for the first wave of electric vehicles on MEB? I think you previously disclosed that you are using NMC 6-2-2. Could you just perhaps confirm that and also give us some color as to when you would migrate to 8-1-1 chemistry? And what are the constraints on doing that today? Thank you.

I can answer this. We will start with 65% of nickel, so 65%, 15% of cobalt and the rest 20% of manganese. We will get into 8-1-1 in the next year. And step-by-step reduce cobalt, and yes, make sure we do have the right performance in cost and technology into the batteries.

Okay operator, can we take the next question, please?

Certainly, the next question comes from Stephen Reitman from Societe Generale. Please go ahead.

Yes. A question about the Salzgitter operation. In terms of costs, how do you think you're going to be able to compare with operations in Asia or even indeed in Nevada? I guess, the advantage that Tesla has, at least, is principal solar power in the factory process. And I guess, in Asia, it’s cheaper labor. How competitive do you think you can be with the German production side? Thank you.

The German production side, of course, has to perform in technology, has to perform also in cost. It’s clear that there are countries where we have a lower labor, but, finally, 80% of what has been in the bill of materials or in the cost of a battery is a bill of material. So 80% is material cost. That means working on technology, getting the cost down and the technology up to a highest level is quite important for us. And with our joint venture in Salzgitter, we do have a good chance to bring our technologies in to develop, together with Northvolt, on all the important aspects, and make sure our suppliers are under pressure, too. We still work with our suppliers. They are very important for us, too. And all that together will give us quite good advantage in competition on the mid-term run.

Thank you.

The next question comes from Patrick Hummel from UBS. Please go ahead.

Yes. Thanks again for taking my questions. Two, please. The first one, can you talk a little bit about the supply chain risk on the battery sales side, from your previous presentations, for example, in Frankfurt, at the auto show, you mentioned that the ID.3 will be getting sales exclusively from LG's Poland plant. I just wanted to double check if that is still the case so that you're basically single sourcing here, at least for the early days? And based on your latest checks, and I know everything is in flux with the virus, but how would you assess the risk of supply chain disruptions on the battery side that would put you in a weak spot here? And then the question, I'm not sure if Frank is still here. Frank, if you are, can you comment a little bit on the contribution margin of the e-up! and the e-Golf, assuming that the ID.3 ramp-up curve faces some delays, which I guess nobody can rule out today. How bad would that be if you compensate for that with higher e-up! and e-Golf volumes? Thank you.

Sebastian here. The first question was about the supply chain for the ID.3 and you mentioned one supplier, but the situation is that we’re starting with one supplier, but then ramping up with a number of three suppliers in Europe. And we have additionally suppliers for the U.S. and the Chinese market, and therefore, we think we have a broad supply base, not relying on a single sourcing for our MEB sourcing in that term. I think the second question was about the disruption risks for the supply chain. I don’t know whether you are targeting the reference [ph] Corona situation, then I would have to say, this is like the whole supply chain affected for the battery as well. So we are updating the situation constantly, but it is, compared with other procurement parts, a similar situation. In general, if you think of the raw material supply situation, we would like to state that at Volkswagen, we don’t purchase raw material for battery cells itself. So the raw material sourcing is in the responsibility of our first tier suppliers for battery cell modules. And what we obviously do is that we have a very precise picture of the volumes and periods covered by our suppliers, and therefore, we do not see any risk or need for action on the raw material side. That means for the VW battery demand, we think the raw materials secured for the foreseeable future.

Can I just follow-up on that, if you don’t mind, does it mean that you don’t actually know what the raw material situation is for your Tier 1s for the cell makers because you're not sourcing the materials directly? Do you have any visibility?

No, no, I want to say, firstly, the responsibility is with our first year suppliers. Secondly, we do have a very precise picture. We do have the obligation of our first year suppliers and their contracts. We A, secure raw material supply, and B, we have a very precise picture and permanently updating that with our suppliers. So - we don't see, from that perspective, no immediate task for us as VW to interfere in that business. In addition, we do monitor ourselves the development of the entire value chain to identify any vulnerability to be able to react to them early on together with our suppliers. This is the whole picture.

Thank you.

Patrick, I'm still there. So let me answer the – it’s basically like a waterfall. e-up!, e-Golf has been the very best we had for a long period of times. They have been positive in terms of CO2 compliance, but they certainly have not been financially the CFO stream. Therefore, the MEB based products, starting with the ID.3 is a major shift in the right direction also from a financial perspective. And in terms of getting to the level we are shooting at the ID.4 is also driven by the body style preferences of the customer, but also the learnings we assume at this point of time is basically what we assume to be at the level of a Golf. And that is the waterfall in the cascade I was talking about. So e-up!, e-Golf are important, but as a bridge to MEB and the product thereof.

Okay. Thank you.

The next question comes from Angus Tweedie from Citi. Please go ahead.

Hi. Thank you for taking my question. I was just hoping to talk about cell and pack costs. Some of your competitors are talking about being at $100 for the cell costs at the moment per kilowatt hour. Can you confirm you are at that level? And how you see that progressing to 2025? Thank you.

We are on a good track here. We work hard on the cost and also on the performance issues, the performance targets, and we are quite well on track. Of course, it is a market, right now, where competition is growing, and that helps us, finally to get there or even below.

Sorry, can I follow-up on that? And just on my follow-up, could you confirm then that you're at that level with the competition for packs and cells at about a $20 premium?

I didn't got the question.

Can you confirm that the cost per kilowatt hour of the cells in your EVs are about $100 and that the total pack cost is about $120? Thank you.

Yes, I would say, in ‘25, we are far below that. So yes, I confirm.

Thank you.

We will now take the next question from Henning Cosman from HSBC. Please go ahead.

Thank you. I just wanted to ask about - you had this time line where you are showing the progression to new anode [ph] material and then eventually complete solid state. So just in terms of your technological leadership, you have, of course, this 800-volt system in Porsche. Is this something that's desirable and technically possible to cascade down into the MEB range as well? My understanding is that, that helps, especially with the charging time, and that's a potential area of technological leadership for you. Could you talk around that a little bit, please?

Yes, Henning, you are right. The 800-volt helps very much by charging. Charging the car needs to go much faster than discharging. What means is this - this is a level of the specification, what is most difficult. Our goal is to, later in the game, come to a charging time what is comparable to filling up the car with gasoline today. Of course, that's tough. But we see some technologies getting there in the future. And the 800-volt for MEB is, right now, not really an option because it adds cost to the system. Of course, the more 800-volt systems will get into the markets, the less expensive it will be. So if semiconductors and so on and so far would be on a high scale level already, 800-volt would be cheaper. But right now, this is not the case. So the 400-volt system has some cost advantages. That's why we do the two different technologies. Another thing I’d like to mention is that we are working on different technologies, one quite promising technology coming from the company Quantum Scape. We are owning a share of Quantum Scape, too, and we see some good progress here. That solid-state battery cells technology, of course, that needs some more time and research, but we are getting closer and the parts are getting more and more robust. And we see that this will become - can become a next game changer in the market.

And if I may follow-up. I mean, my understanding is that even today, on the Taycan, for example, you can't fully utilize the 800-volt because some of the electric components bottleneck to that. They can't basically handle that system voltage. Are you, in your own component plants now, working on components that will handle that voltage?

We are utilizing the 800-volt very much in the Taycan. And we have to reduce, for example, the power within charging driven by a higher state of charge of the batteries. And yes, we are working on in-house development, in-house production also. The Taycan electric drive is being produced at Porsche.

[Operator Instructions] The next question comes from Horst Schneider from Bank of America.

Yes. Thanks again for taking my questions. First of all, my question is if the demand for the ID.3, ID.4 in total for the MEB cars is larger than you imagine. Can you satisfy this demand? In other words, is there flexibility in your supply contract that you can also get more batteries where needed? Or that's a quite unrealistic assumption? Thank you.

For the time being, we are quite fine, where there are contracts we have in place for the MEB. Time being there is no need to adjust the volumes. We have a good strategy, and we are just now about executing that. And if needed, with a long lead time, but there is no immediate use for that, that we could, of course adapt because I explained earlier that we do have more than one supplier available, and therefore, I think, we have - we are well prepared for the years ahead.

What is again the capacity you have got to buy in 2025, the gigawatt hour -- in terms of gigawatt hour?

Just to give you a rough calculation. In the year ‘25, we are expecting up to 3 million battery electric vehicles a year. That means roughly 300 gigawatt and that 300 gigawatt are evenly allocated between Asia and Europe, with a little contribution from Northern America. And that means that we are - have a well - very good global footstep of battery supply because our strategy is to source the battery cells in the region where we are going to produce the battery electric vehicles.

We will now take the next question from Tim Rokossa from Deutsche Bank. Please go ahead.

Yeah. Thank you for taking my question. Again, it's Tim from Deutsche Bank. Frankly, quite a bit of experience in the automotive industry coming from a supplier in Daimler now at VW. Can we maybe talk about the relationship of the electric vehicles will change between suppliers and OEMs? Are we actually talking about you on the OEM side now doing a lot more in-house versus what you have previously done with suppliers? Or is this really just a temporary phenomenon, where you have to go into sale manufacturing to prevent any shortages, and longer term, we will just revert back to the same relationship that we had? And also, when you do talk to the cell manufacturers, do you get them to sign these longer-term contracts over the whole life cycle of a vehicle or potentially even a second life cycle like you are used to with your traditional suppliers?

Tim, thank you for the question. You are well informed on our history. The - in my days as a supplier, it was quite balanced, who’s doing what, and that changed, I think, 10, 15 years ago. The OEMs, the car manufacturers were getting more and more into electronics, into software in these days. And that is changing the relation of developments very much. The cell manufacturing, to us, is not only building up capacity. It’s more to set technology targets to show the suppliers what is possible when. And finally, it's a question of the market and the suppliers' performance if we scale this up to a higher level or it will stay on a level as it is right now. Right now, it's below 10% of what we need in the Volkswagen Group. But of course, there are other opportunities can be more if it makes commercially and technically sense or can stay on that level if the supplier landscape can perform on that in these regards. The MEB cells and modules are quite interesting for the complete automotive market. That is what we hear from our suppliers. They are scaling up into these formats, into these technologies to sell these to other car manufacturers, too. And of course, they give us - that gives us, a bit, a chance of being more flexible, having all the development power behind new technologies, lower costs, and so on and so forth. So I hope I answered your question with that.

Yeah. Thank you. I have a follow-up to that, actually. When you do talk to Tesla, they are of the deep view that having done the power electronics in-house is also a key advantage, not just design manufacture with Panasonic [ph] Do you share that view, and do you feel like you have to do a lot of the power electronics and the [indiscernible] management in-house?

Of course, we are working on this too, on these topics. Finally, it is always a question of what do you want to make, and what do you want to buy and that follows technology and costs, of course. We will see. For this - these days we are buying the power electronics but we are challenging ourselves day by day and asking the questions always, is that right? Do we have to do more in-house or buy more externally? Of course, if you do it in-house, you need to invest, yes, that is the downside of that path. But we do whatever is - makes sense for us to be competitive and have the right products for our customers.

Maybe one additional remark to the contract. So we, in general, follow the same approach, which we do for, let’s say, conventional purchasing parts. That means that we have contracts with our suppliers over the whole life cycle of the cars. That means long-term contracts would give both parties suppliers and us a good prognosis and stability for planning.

Thank you.

We will now take the next question from Christian Ludwig from Bankhaus Lampe. Please go ahead.

Yes, good afternoon. One question on your battery sourcing strategy. With the cooperation with Northvolt, you will have a certain amount of, let’s say, direct sourcing for battery cells. How is your strategy going forward? Do you intend to keep that kind of share stable, so as you grow, you will grow your own battery manufacturing capabilities? Or will this just be a one-off, and you will continue to source from different suppliers going forward?

This is very much depend on how the market performs and how our joint venture performs. Of course, this is - the make or buy decisions on these topics will be made case by case. And right now, we are trying to bring quite interesting and performance technology into production in our joint venture. But of course, if there are other options helping us to become more competitive, we will prove these and get into it.

And a quick follow-up. Do you feel at the - is one cooperation enough in Europe? Or wouldn't you need 1 in North America and 1 in China as well?

Good question. We haven't answered this so far, but we are proving some options. And if it makes sense for us, we will probably make a decision sooner or later on this, too. Right now, what we are doing is the research joint - the research shares of QuantumScape supporting us a lot in technology. Northvolt is a quite performance technology. What will be in production ‘24 in Germany and a year earlier in Sweden. And China is, of course, a question where we are working on and haven't made a final decision so far.

When we - could we expect such a decision?

Well, in these days, very difficult to answer.

If I could add to that as well, Christian, you heard Frank’s comment on the priority of liquidity this year, especially, and that has tough priority. So we said we will time and prioritize any M&A activities accordingly.

Okay. Thank you very much.

We will now take the next question from Jose Asumendi from JP Morgan. Please go ahead.

Thanks very much. Jose, JPMorgan. Just maybe longer term, as you think about your relationship with Northvolt, do you think Northvolt could be a supplier that could supply maybe 30%, 40% of the volumes in Europe, not 25 down the road, but maybe 2028, 2030 on the road? And then as we think about the other components around the vehicle, maybe, could you just remind us your house view around electric motors? Is this a component that you want to produce in-house or is this a component that you think you could actually leverage all other suppliers out there? Thank you.

So for the electric motors, we already do in-house production at Porsche and also at Volkswagen. In our plant in Salzgitter, we are producing the status of the electric motors for the MEB. And then Kassel, we are producing the rest of the drive and the completion. So that's already a part of an in-house case. And we do have a quite competitive technology, very low resistance. And very good efficiency, what ends up in a good range of the vehicle with the same battery. So efficiency of electric drive, of course, is important to get to a perfect range of the car. To Northvolt, again, yes, this is - right now, we have made a deal for - with the Swedish Northvolt AB, supplying us in ‘23 and the joint venture supplying us in ‘24. And the rest, time will show. It’s very dependent on competitiveness and technology.

Thank you, gents.

Sorry, excuse me, operator, I think we have one last participant in the line. And after that, we would like in the interest of time to close today’s event.

Certainly. We will now take the final question from Tom Narayan from RBC.

Hi. Yes, Tom Narayan, RBC. Thanks for taking the question. I have a follow-up question with on Angus' question. Where could cost per kilowatt hour go? How far down can that pricing go at, let’s say, saturation? Is that even worthy of a question? And then you mentioned earlier that the goal is to get the charging the same time as filling up at a gas station. Just curious, that would necessitate the public charging infrastructure to be dramatically overhauled, would it not? Or are you referring that to be - that calculus to happen at home charging? Thank you.

I mean, the question of the - where could the costs go in euros per kilowatt hour. I think it's - we are challenging the €100 per kilowatt hour, and this is our first goal to achieve, and then we will see further. I think it's difficult to answer generally because there are different technologies behind those costs, and therefore, I think we can't give a comprehensive answer to that at the time being. And to answer on the time of charging, our goal is to get, sooner or later, in the range of 10 minutes, 5% to 80%, above 80% - the battery will limit the charging time, but 5 to 80 would be for Autobahn or highway applications, the right goal, we think. And for the public infrastructure, we do have our IONITY joint venture. We are working on a lot of topics in the U.S., and we also developed a charging system within the group components of Volkswagen with an installed battery in the system, so we can go for high charging power, even in areas where the power connection to the network is limited. That’s a quite interesting product. What is in use in different applications in the region over here. And yes, the wall box is also a product what will be and is available with Volkswagen logo and Porsche logo and so on and so far. So of course, that is important to make sure our customers are happy, and we are working on that.

Okay, thank you. Thank we would like to now come to an end to today’s events. Thank you all for your participation. Thank you to my colleagues in IR, to our speakers today and also the internal colleagues who support us on the event. Frank mentioned quite a bit. Q1, it’s around the corner. For your information and event planning, it will take place on the 29th of April per conference call as usual. In the meantime, if there are any further questions, of course, the IR team is available this afternoon and going forward. And finally, I would like to wish everybody in the call and all your families good health during this very unusual period. Thank you very much. Bye-bye.

That will conclude today's call. Thank you for your participation. You may now disconnect.