MTU Aero Engines AG

Good morning, ladies and gentlemen. Welcome to our conference call for MTU's preliminary full year results 2020.

We will start with a business review presented by Reiner. Peter will give you the financial overview and a more detailed view on our OEM and MRO segment.

Following that, Reiner will give some updates on our guidance 2021. After that, we will open the call for questions.

Let me now hand over to Reiner for the review.

Yes. Thank you, Thomas, and welcome also from my side.

As you know, the aviation industry has been seriously affected by the COVID-19 crisis. Passenger traffic was down 66% while cargo traffic remained quite robust.

For 2021, IATA expects passenger traffic to improve by around 50%, but 2019 levels are not to be expected before 2024. Anyhow, the situation around the latest virus mutants might change the recovery pattern of the industry.

The commercial OEM business experienced major declines both in new engine deliveries and also in aftermarket demand. In consequence, we also faced a sensible reduction of shop visits in the MRO segment, which was partly used to accelerate MRO work on the GTF retrofits.

Strong demand from the air cargo market further helped to mitigate some of the reductions. In the 2020 earnings release, Boeing announced the deferral of the Boeing 777X entry into service date to the end of 2023.

This fact, together with the slower recovery of the widebody market than expected combined with higher cost of capital, led to a partial write-off on our GE9X program assets of about EUR 70 million. This effect is part of our adjustments in our EBIT adjusted figure.

Even in difficult times, there are also some good news. For our independent MRO business, we secured contracts worth over USD 5 billion.

For our military business, a long-awaited order has been signed. The German Air Force ordered 38 Tranche 4 Eurofighter under the Quadriga program.

Delivery of the EJ200 engines powering these planes will start in 2023. So if you remember, we reinitiated the guidance for 2020 with our half year results last year.

Details will follow in a minute. The important thing is that we were able to meet or even slightly exceed this guidance.

I think this is a big success in such a volatile environment. Our quick and effective actions enabled us to navigate through the crisis fairly well so far.

For the future, we remain alert that our increased liquidity platform offers some comfort. 2020 was a very challenging year, but we want our shareholders to benefit from this performance.

After suspending our dividend payment for 2019, we plan to reinitiate dividend payment for 2020, and we will propose a dividend of EUR 1.25 per share at the year's AGM on April 21, of course, subject to approval by the Supervisory Board. So let me now hand over to Peter for the key financials.

Yes. Thank you, Reiner, and also a warm welcome from my side.

Starting with a brief look on our full year 2020 key figures on a group level. Revenues decreased 14% to almost EUR 4 billion.

In 2020, we had a small FX headwind. So organically, group revenues were only down 13%.

Group EBIT adjusted declined 45% to EUR 460 million, resulting in a margin of 10.5%. Respectively, net income adjusted is down to EUR 295 million and free cash flow decreased to EUR 105 million.

On next page, comparing these numbers with our revised guidance from 2020. Revenues ended up more at the lower end of the guidance range at roughly EUR 4 billion, slightly lower in later MRO inductions mainly on the GTF and the unfavorable U.S.

dollar exchange rate movement, especially in December, were the main reasons therefore. EBIT adjusted, net income adjusted were both more at the upper end of the guidance range.

And finally, we achieved a significant positive free cash flow, thanks to our solid cash management in the crisis. Overall, given these circumstances, a very successful outcome after the worst year the aviation industry has seen.

Now let's have a look on our 2 business segments. In the OEM segment, total revenues were down 23% to EUR 1.5 billion.

Military revenues increased 5% to EUR 480 million mainly driven by the Eurofighter engine. On a quarterly basis, revenues were up strongly at 38% in Q4 2020.

Commercial business declined 32% to EUR 1 billion. And within that, organic OE sales were down by around 25% in 2020, reflecting production rate cuts at Airbus for the A320neo and Boeing for the Dreamliner and lower B-25 series sales compared to 2019.

Q4 '20 OE sales were down roughly 40%. Organic spare part sales declined in a high 20% number in 2020, which is in line with our expectations for the full year.

On a quarterly basis, spare parts were down in the 30% range. This is a slight improvement sequentially compared to Q3 driven by continued strong demand on platforms with freighter or military applications and a slightly higher demand sequentially for B-25 spare parts.

EBIT adjusted was at EUR 280 million, resulting in a margin of 18%. Moving on to the commercial MRO segment.

Here, the revenues were down 7% to EUR 2.5 billion. Organically, they were down 5%.

Our core MRO business was down in the high 20 percentage range, widely compensated by a higher workload for the -- for GTF retrofits. Q4 MRO revenues were down 8% driven by lower shop visit demand and a weaker U.S.

dollar. EBIT adjusted decreased 48% to EUR 136 million, resulting in a margin of 5.4%.

The lower EBIT adjusted margin results from a higher share of GTF warranty work, lower utilization and some bad debt provisions already booked throughout the year. At this point, I hand back to Reiner for some words on our guidance 2021.

Yes. Thank you, Peter.

For 2021, we still face a lot of uncertainties from the COVID-19 situation. The recovery of air traffic is expected to gain strength over the year.

The spread of new virus mutants, and as a consequence, extended on new travel restrictions make forecast for the recovery part very difficult. And please keep in mind, Q1 2020 was a very strong pre-corona quarter, which makes comparison between 2021 and 2020 also very difficult.

Our guidance is based on current information and recovery expectation for 2021 from IATA. They expect RPK to be up by 50% in 2021 compared to last year.

But this needs to be monitored, and we will update our guidance if necessary during the year. Based on this and the 2020 actuals, we update our outlook for the year 2021.

We expect military revenues to be slightly up, commercial OE will be slightly up as we see some small growth on the GTF and business jet lines while widebody is expected to be a bit weaker. Commercial spares are expected to be up low to mid-single digit, main driver will be the recovery of the V2500 and strong demand for freight aircraft.

As indicated at the Investor and Analyst Day, we will see significant growth in the MRO segment. Latest estimation -- estimates are a bit below our initial expectations mainly on lower GTF and regional jet volumes.

Overall, MRO revenues in U.S. dollar will increase between 15% and 25%.

This includes an increase of the core MRO business by mid- to high single-digit. And please have in mind that GTF work is a low-margin business in the MRO and, therefore, puts ongoing headwind on the MRO EBIT margin.

So to sum it up, based on a U.S. dollar rate of roughly $1.20, we expect total group sales to end between EUR 4.2 billion and EUR 4.6 billion.

The EBIT adjusted margin is expected to be in the range between 9.5% and 10.5%. Net income adjusted is expected to grow in line with EBIT adjusted number.

And the cash conversion rate is confirmed in the range of a mid-double-digit percent number. So that's from our side, and we are now happy to answer your questions.

A couple of questions from me. First of all, regarding your forecast for commercial spares in 2021, has anything changed on that forecast versus what you said at the Investor Day a couple of months ago?

And then secondly, obviously, Airbus has firmed up its A320 build rate plans for 2021 about a month ago. What sort of impact is that expected to have on your working capital this year?

No. On the spare parts, not -- I mean they have lowered a little bit compared to what we said on our Capital Markets Day.

So in Capital Markets Day, we said some slightly to high single digit. Now we said low to mid-single digit.

But that belongs more to the PW1100 shop visits forecast. So you see that we have also lowered a little bit our revenue expectation for the commercial MRO, not in the 20s, so down to 15% to 25% and also a little bit less spare parts consumption on the shop visit, and that's reflected also in the OEM segment.

Airbus build rates, I mean I think Airbus this morning said something like going to rate 43 in Q3, rate 45 in Q4. So that would mean a slight increase in working capital at the end in the OEM segment.

But I mean we have -- there's a lot of uncertainty around working capital at the end of the year. That is also due to the fact that nobody knows exactly how the recovery in MRO shops shoppers will be.

So when do we really fill up also with -- the inventories with new spare parts. So that's why we have given a wide range in the cash conversion rate.

So there's a lot of uncertainty, obviously, around the cash flow.

But in principle, we have included in our guidance rate 40 also for the first quarter and a slight increase in Q3 and Q4. So I think it's in line with what Airbus mentioned this morning.

First question is, could you share the organic spare performance in Q4 for each of your 3 main engine programs? And second question is around freighters.

We know freighters have been a very strong area. So I guess how did the spares for freighter aircraft across CF6 and PW2000, how did they perform this past year?

And if you can share the specific numbers, could you at least comment on how it performed versus capacity trends for dedicated freighters, which has been in the plus 20% range?

Well, in the spare parts, I mean I mentioned that in the spare parts as a whole in Q4 were down roughly 30%. So the B-25 sold in the range of down 40%.

So PW2000 and CF6, slightly up, I would say, up to -- low to mid-single digit both together; and the rest, let's say, down 30% roughly. So when you add that up, you come to the 30% in Q4.

And I mean that also, I think, answers your second question more or less because the PW2 and the CF6, especially, have that freighter applications. And both, as Peter mentioned, were slightly up in the year.

So I think that's in line with what you asked, I think. Or...

So with the freighter spares within those programs, were they slightly up or were they up. Certainly being more -- because I think you're talking about the...

The freighter applications were up, definitely. The entire program, CF6 and PW2000, was slightly up.

But the -- especially for the freight applications, they were definitely much more up, sure.

Right. I mean how do they -- I mean any comments on how it compares to the freighter capacity, which was kind of up in the plus 20% range for the recent months?

I think it could be similar, but I'm not sure actually. Maybe we come back -- we'll come back with the question later on and -- to ask IATA, but we don't have it actually here.

I have three, if I may. So the first one was about the margin evolution in 2021.

When we look at what you said at your CMD, you said you'd expected OEM about flattish in margin and MRO seeing some pressure. Arguably, the mix got a little bit better in MRO and a bit worse in OEM.

So can you just provide a brief update on this? And the second question will be on the free cash flow.

In 2020, you had some headwind from provision consumption. And in Q4, you also had receivable headwinds.

So first part of the question is, can you explain a bit what were the provision used in H2 this year? And second part of the question is, when we look to 2021, what's baked into your guidance regarding working capital and provision consumption impacts?

Yes. Some technical questions.

So segment margins, I would say, I mean I said at the beginning that I mean we have lowered a little bit the spare parts expectation and increased a little bit the OE -- new engine expectation in the OEM segment. So obviously, that leads to -- as you know, the business mix is a little bit worse compared to what we said on our CMD.

So I would say that the OEM margin will be something like I mean mid to the high teens, so in that range; and MRO something like what we have seen in this year, so around 5%. But that's very -- I mean the high volatility also or the broad range in the revenue expectation for the MRO segment in part also comes from -- so the unclear situation, what the material content will be in the shop visits.

So as you know, I mean the building in of new spare parts in the MRO segment does inflate the revenues but puts pressure on the margin because the MRO generates no EBIT with building in new spare parts. So -- but I think when you want to model MRO, I think a 5% margin, around that, is a reasonable assumption.

Free cash flow in 2020. I mean there are a lot of moving parts, obviously.

So as you know, for example, all of our provisions are U.S. dollar provisions.

So we had the movement of the U.S. dollar at the end of the year to $1.23.

So that leads to a revaluation of provisions in a significant amount. So that reduces technically the provisions.

And you see that as a negative in the cash flow statement. We do a lot of shop visits, obviously, for the PW1100.

So the shop visit building also reduces the provisions. We did not book any -- especially if you compare that line with last year, we didn't book a provision for management variable -- management compensation.

So that is also the bonus payments. So that is also not there.

And we -- also, when you compare it to last year, so we shipped less engines, we shipped less spare parts. So -- and we booked less warranty provisions, for example.

So -- and so that ends -- if you add that all up, you come to a negative development in the second half year. In 2021, I mean, as I said, we have a broad range in the cash flow assumption.

And so as such, I mean the most volatile element in the free cash flow assumption is obviously the development of the working capital. So longer payment terms we grant to airlines.

So it's not clear when we really see the inflection point or the ramp-up of shop visits in the second half year and what it all means for working capital. So -- but a slight increase of working capital at the end of the year is I think a reasonable assumption.

You mentioned, I think, to Rob's question earlier that the reason the guidance on MRO and spares have gotten slightly weaker was because of some different assumptions on the GTF. Could you talk a little bit about what those assumptions were?

And then secondly, on the OEM margin, it was obviously very strong in Q4, around 22%. Is that a run rate that we can be thinking about for 2021?

Or are there some unusual items in there that we need to be thinking about?

I mean the OEM margin in the Q4, you're right, 22%, but you also saw that the military revenues in Q4 was -- were extremely strong. So that is the reason why that's a rather unusual margin, I would say.

So going forward, I think I mentioned that already at -- in Chloe's question before that it's rather something like, let's say, a high-teens margin is, I think it's a reasonable assumption for the OEM segment in 2021.

Okay.

Regarding the slightly reduced outlook for the MRO and spare parts revenues were based, as you said, on the GTF. And that's, as Peter said already, a lot of uncertainty.

How many shop visits we can do on the GTF this year, it depends also on the availability because the GTF engines are the first one being back in the air. So it's a little bit more difficult really to forecast how many shop visits and what is the precise content of the shop visits will be in this year.

That's the reason why we slightly, let's say, decreased or made a broader range of the MRO growth for this year.

And you can...

So it's not -- go on, sorry.

You can also see -- I mean it's a little bit more difficult to get the engine also in the shop because I mean some of you follow the A320neo utilization, and that is currently comparably high compared to other platforms. So airlines are also not willing to ship -- to really do a shop visit now.

So therefore, it has become also a bit more difficult compared to our expectations in November.

Okay. But -- so it's your view on the market as opposed to some customers have come to you and said, we're going to delay something because of different assumptions, et cetera?

Yes.

It's actually Christophe Menard. Yes.

Three questions on my side. The first one is on the -- I mean on the technical aspect of the R&D guidance in 2021.

Can you guide us to what level you expect to have both at the expense or at the EBIT -- the P&L level and the capitalized level? So that's the first question.

And second question was more a bit longer term. I mean in the press release, you're mentioning that automation and the utilization are still central areas where you're investing.

I was wondering if you could kind of quantify longer term or midterm what impact you see on your margins going forward. I mean OE and -- I think it applies to both OE and MRO.

And still -- third question, still a bit longer term. You discussed during the presentation the recovery in traffic.

I mean we don't know exactly where it's going to be in 2021. But assuming that we go back to normal by 2024, it still assumes that traffic will recover quite strongly beyond 2021 with double-digit numbers.

What does it mean in terms of your MRO sales? Because would they amplify that level?

I mean could we be back to the 20% organic growth we've seen in the past? How should we think about the post-2021 MRO sales growth organic?

So total R&D, I would say, let's say, company expensed R&D will -- I mean we have seen a reduction overall of roughly 20%. And you see that in the appendix of our earnings release.

So to a level of, let's say, EUR 150 million. So that is part obviously of the -- on the one hand side, the reduced capacity in our -- for our R&D stuff, we were in short-term working in Q2 and so on.

But also the postponement of certain R&D projects like the improvement projects on the different GTF programs also -- I mean also in coordination or in alignment with Pratt and GE. So we postponed them.

And obviously, we have to recover that because that's -- because entry into service of these improvements should be in 2, 3 years. So we're going to see an increase of company expensed R&D in 2021 versus 2020.

So 5% to 10% or something like that. So how that is reflected in the P&L, I wouldn't give you an answer because under IFRS 15, now it's really -- a part of that is booked into revenues, in the cost of goods sold.

Some things are capitalized and some things are shown in the P&L as R&D. So it's a widespread issue R&D.

But the major part will be capitalized. So I would say that also capitalized R&D will increase by 5% to 10% or so.

That is a good assumption. But that can vary obviously a little bit.

Christophe, coming to your second question, very difficult to answer how the investment in automation and things like that will impact our future OEM EBIT margin. But I think the principal target is to keep it in minimum as it is -- as it was before corona.

We need these investments because we are on a, as you know, high-tech location in Germany. And in addition to that, we also will invest into, let's say, further investments into West Coast countries.

So global footprint also in the OEM business as we did in the MRO. In the future, we need to keep the margin or to slightly increase the margin.

I think it's necessary. It's a must to do that to -- as I said, to keep the margin or to improve it slightly.

The MRO organic growth after 2021. So the organic growth without these GTF, I would say, as a rough estimation, we can say mid to long term, it will be a high single-digit number.

I mean the 20% -- 15% to 20% we saw in the past, I think it would be very difficult to repeat it year-by-year, but I think high single-digit is a fair assumption going forward.

It's Harry Breach here from Stifel.

Harry, we can hear you. We recognize you.

I'll be changing my name on the next call as well. I just had three questions, if I can, though.

Firstly, just thinking about commercial MRO, clearly, we're here in mid-February, airlines worldwide, especially in Europe, are delaying their capacity plans later on in the year. How confident -- what's your confidence level with your shop visit bookings this year for commercial MRO, particularly in the second half?

How firm are they? That's the first question.

Second question, though. Just on the GTF, I think if I remember well, back in November at the CMD, you spoke about the level of GTF production being down about 1/3 in 2020 compared with 2019.

Can you give us maybe some idea in 2021 sort of where GTF production sort of should be either in number of units or a percentage change? And then maybe turning back to MRO just for a minute.

Zhuhai, can you give us any feeling of the contribution, the equity income from Zhuhai in 2020, please?

Yes, I can. So Zhuhai, that is -- so we had -- in 2019, we had EUR 50 million equity income from Zhuhai; and in 2020, it was EUR 40 million.

So the equity income fell EUR 10 million roughly from -- when you compare 2020 with 2019.

GTF build rates, slightly up. So for the A320neo engines or the PW1100, flat to slightly up.

And what the growth in 2021 will be the engine for the A220, so the PW1500, and also some growth on the PW1900 from the Embraer jets, so altogether. But the biggest volume obviously is the PW1100 for the A320neo program.

But if you -- when you combine all of these 3, then you have a movement slightly up.

The MRO firmed out their orders. I mean that's a good question.

They are a never firm. But we -- first of all, we have a visibility, I would say, for the next, whatever, 4 to 6 months.

On the other side, you know we have a strong order book in the MRO. We gained new orders in the magnitude of EUR 5 billion last year.

So I think also the -- let's say, the outlook for the second half is quite good. So I would say high certainly that we can meet our targets.

So I do not have too much -- too many doubts about that, actually, yes.

Right. That's really clear.

And you have to have in mind, we don't have so many European customers. We have a lot of U.S.

customers, Asian customers and so on. And I think the situation you mentioned was especially related to a lot of European airlines.

I've got a couple that are technical on accounting and then one maybe broader-market question. I wanted to ask first about mix in the OE business.

There are a couple of things you've guided on. One is slightly lower revenue growth in MRO than I think we were thinking about back in November, the other is slightly lower margin in OE.

Are those 2 things related? And if we're doing maybe less proactive maintenance work on the GTF fleet than we thought about, is that the driver of the lower growth in the OE and the lower margin in -- sorry, lower growth in MRO and the lower margin in OE?

And a related question on that. Can you give us any insight into -- I mean my assumption is that all of the revenue recognition driven by the spares component of that proactive work in OE is done on an IFRS 15 basis.

So revenue is recognized as cost is incurred at the assumed program margins. Can you basically give us a view on how dilutive that might be to cash conversion in 2021 or how diluted you've assumed it is?

And the second question is a bit broader, but a bit simpler. Your commentary around traffic assumptions this year and IATA.

I think those IATA assumptions are probably a bit more positive than maybe several of the airlines that are reporting at the moment and your comments on that seemed slightly hedged. I mean if you had to say one way or the other whether the risk on those IATA numbers was to the upside or the downside, what would you say?

And what would the potential impact on guidance be?

Let's start with the more technical things. So regarding the guidance, I mean I think I answered that 1 or 2 times already.

So the major reason why we have lowered our MRO guidance a little bit is around a little bit lower shop visits in the PW1100 program combined with less material consumption in the shop visits. So -- and obviously, when we consume less material in the MRO, means we book less spare parts revenues on the OEM side.

So that -- these two things are related. But obviously, on the OE side, we have one element, lower spare parts of -- yes, spare parts sales from the PW 1100, that is one element, but also a higher assumption for new engine business compared to what we said on November.

Now we expect it to be slightly up, as I pointed out. So better outlook for the A220, also a slight increase in the A320neo engine, and that is also pressurizing the OEM margin.

So these two elements are a little bit related, yes. What you said on the cash conversion, first thing, yes.

So the spare parts, we book in the OEM segment for the PW1100 are linked to IFRS 15. So we booked the spare parts with a margin, and this margin is related to the profitability of the respective FHA contract.

So that is true. And it's not exactly linked, obviously, to cash flow because I mean, typically, these -- the A320neo customers or the PW1100 customers have flight or contracts.

So some have -- they pay on a monthly basis. Some pay when the shop visit happens.

So -- but typically, you get -- on average, I would say, you get the money earlier. So it's, I would say, a slight tailwind to cash conversion, not a headwind.

Regarding the passenger traffic development, I mean you know there's a wide range of -- let's say, of different assumptions on that. They are -- I think our forecast is based on the plus 50% RPK growth this year, but IATA also released a negative scenario with only plus 15%; the others, about being more positive.

So as I said, we have based our guidance on the plus 15% number, but what we also do is some, let's say, worst-case or best case scenarios, my -- our assumption is let's wait the first couple of months this year, and then we will -- maybe in the Q1 number, we can update our forecast and guidance, what we have seen since then. But I think today, it's too early to make a clear statement, what happens if.

I just hope everyone is well. I just had one question, please.

It was -- and the headline this morning on Bloomberg, it said you haven't been invited to talk on ITP. I just wondered whether -- if you were invited, whether you'd be interested and if you were interested, do you think GE and Pratt would be comfortable with that given the conflicts of interest?

David, first of all, as you know, our main focus is definitely on organic growth. It was and it will be on organic growth.

But however, we always look at some market opportunities, and we follow this situation with great interest. And as you said, at this stage, we have not been invited to the process.

What we know is that they have started the process just with the PE companies. But as you said, if they would open the door, I think we would be interested to have a deeper look on that.

What will be the reaction of GE or Pratt, we have to discuss that with them. Yes, there are some areas of potential conflicts.

But on the other side, as you know, there are always solutions for that.

I have two. The first one would be on spare parts and your view essentially on pricing going forward because for 2021, I would assume you've got some shop visit improvements, but spare parts growth, obviously, isn't extremely strong.

So is there some offset from pricing baked into your guidance? Or have you seen any reason to fear some softness going forward?

And the second one is actually quite technical, again, sorry. There -- in the press release, you mentioned a one-off on the 777X, and I suppose that is linked to the G&A jump that we see in OEM in Q4.

So could you just quantify a little bit what that one-off is? And provide some color on what you still have on your balance sheet on the 777X program?

Sure. So I mean the -- we have capitalized roughly EUR 130 million on the -- or we had capitalized roughly EUR 130 million on the balance sheet.

So these are intangibles. So capitalized entry fees, capitalized R&D, but also working capital position, let's say, raw materials and so on.

Total assets are EUR 130 million. And you have to do on a regular basis on these impairment tests, obviously.

And I mean you have seen the announcement from Boeing that they have deferred the program or entry into service of this program by 2 years, to the end of 2023. And that stacked together with higher cost of capital, which we had to apply on that.

Because basically, in that process, you have to compare the net present value from the program with the assets we have on the balance sheet. And so the net present value obviously has suffered from the deferral of the program and higher cost of capital.

And so we had to write off roughly half of that. So EUR 70 million is roughly the write-off, which we had to do on the G&A program, and that is adjusted in the EBIT adjusted number.

Oh, the first question -- your first question was around the spare part price increases. So overall, I mean the list prices of the EOM is out.

So the average price increase is in the range of 4% to 5%. So there's no -- so that there's no deviation in 2021 from that, let's say, the long-time trend, which we have seen also in the last years on average.

So that would suggest that essentially, your entire spare parts growth in 2021 is just pricing, so you've got no volume benefit.

On the other side, you have to have in mind, this is -- this price increase, that's -- not every customer pays, effectively, the 4% to 5%. There are also some discounts on spare parts, as you know.

And so -- but it's difficult really to quantify that, yes.

You may have touched on this, but I -- sorry, I might have missed it. The bad debt provisions in the commercial MRO, have you mentioned how big that number was?

No. We had -- we gave an indication, something like mid-20s million euro number.

Sorry, if you have already answered those. I had some issue with my phone.

The first one, could you just clarify exactly how much incremental personnel cost hit you are expecting to suffer in 2021 versus 2020? And then my second question is if you can comment on your current discussion with airline on the scope in your MRO shop for both the passenger engine first and then also for freight engine.

So here's the thing, I didn't get your second question, Milene. What was the...

If you can comment on the current discussion you're having with your airlines in terms of around the scope on the passenger engine first and then also for cargo engine, if some airlines are asking you because they need maybe their engine quicker to do a bit less on the freight side.

Yes. I would say -- so the freighter, all our freighter customers want obviously the engine as early as possible.

I mean I think given the freighter rates which are in the market, so they bring everything in -- they want to bring everything in the air, which is possible. So they want -- but the limit is not so much.

So they don't do financial engineering, let's say, postponing -- I am over into the future, but they want to have their engines quick. That's definitely the case.

On the passenger airline side, there's obviously a trend to do smaller box cuts. So there's a little bit of a deferral of MRO work into the future.

That's -- so they want to have a quick -- back quickly, but there's also a limitation of scope due to financial issues. That's definitely the case, yes.

And then on the personnel cost, I think I'm not sure I can answer it actually because there are many pieces around that. On the one side, we have the direct personnel costs.

Last year, we benefited from these short-term -- short-time work. This year, we do less of that.

So that's a slight headwind. On the other side, we have less headcount on board.

This year, we have less leasing staff and things like that. So it's -- we have to put the number together.

I can't give you the precise number, actually. So...

Okay. I think that's fine for now.

Thank you all for joining. And as always, if further questions are there, contact the IR team.

Thank you very much. All the best.