Thank you Natalie, the investors we are having good morning. Welcome to the first-quarter 2022 Earnings Call of the Schaeffler Group.

Mr. Rosenberg, Group CEO, and Mr.

Bauer, Group CFO will take you through the presentation slides prepared by the IR team. May I remind you to limit the number of your sequential follow-up questions to one so that everyone has the chance to participate in this call.

Without farther a do, I leave the floor to Mr. Rosenfeld Klaus.

The floor is yours.

Renata, thank you very much. Ladies and gentlemen, welcome to our Q1 earnings call.

I'm here from Herzogenaurach. We shared with you this morning our release and also the presentation, and we will now guide you quickly through the key pages.

I would start as usual, and then Claus takes over for the deep dive into the financials. Let me start with page 4.

That is our summary and overview page. Here you have the key messages.

Let me start with the sales. Sales growth in Q1, 1.9 percentage points on an FX adjusted basis.

That is, compared to the significant comps Q1 2021, was as you all know, one of the best quarters ever in terms of sales. It's a very solid development in all the three divisions.

We are happy with development in particular taking into account the headwinds that we had to deal with. What sticks out is the double-digit growth in industrial.

15% is clearly showing how well this business is on the way. The EBIT margin 6.9% also here clearly below Q1 2021, but you all know 11.2% last year was an outlier and 6.9% is a solid margin for the first quarter 2022, in particular taking into account the input cost inflation, and -- and headwinds, we have seen in the market, free cash flow positive $14 million, that includes significant cash outflow restructuring.

So Klaus will take you through that in more detail. And what I'm really proud about as the strong order intake in E-Mobility, $2 billion.

You will see from this release that we have changed gears here. We'll from now on report every quarter our order intake in Automotive Technologies.

The $2 billion is more or less the lower end of our target range for the full-year, so significant success. I can say already upfront the majority of this order intake comes from three big transactions, and most of them are best business.

So I think it's a good proof point that we are well underway to establish Schaeffler as a important supplier in the immobility space. And don't forget there's also $1.6 billion order intake from the other three divisions with a strong book-to-bill ratio of 1.7, clearly shows the growth potential of the automotive tech division.

You all know this and we'll probably discuss this in more detail in our Q&A session. The geopolitical and the macroeconomic situation is challenging.

I think I would even say increasingly challenging. Every day, some news that we have to take into account and clearly heterogeneous developments in the various regions and divisions.

We'll also go into a little bit more detail here. In particular, on the situation in China.

And all of that has led us to a guidance that we now published yesterday. You'll remember that we suspended our guidance on 8th of March.

I still think that was the best responsible way to handle it. Our guidance now, going forward is clearly cautious.

It is built on certain market parameters that I will explain at the end of the presentation. And it reflects the unprecedented, complex, and uncertain geopolitical and macroeconomic environment.

I think being cautious and being prepared for this is the only way to deal with this. We see an environment that clearly requires a Management team that manages this day-by-day and understands both the risk, but also the strengths of the organization.

And that leads me to Page number 5, highlights and lowlights. I think I can already see here the strength of Schaeffler is that we have three decent businesses that lead to a diversified setup, and that has clearly comes through also in the first quarter and will help us going forward.

Positive the $2 billion order intake also the out performance, it's something that I would like to mention on a 30 basis points, it's not very strong but you will see later on with the composition. Automotive Aftermarket, strong sales development.

Klaus will comment on their profitability. There is a one-off impact in there that he will explain.

Strategically the Automotive Aftermarket in such a market situation is important. You-all can imagine when people can't buy cars or don't want to buy cars or can't afford new cars, they will repair cars.

And that's a very simple logic that we have seen in other crisis situations that is a good hedge to the Automotive Technologies business, And we expect that the aftermarket development -- aftermarket business will help us to manage the uncertainty around us. And industrial exceeding for the first time in a quarter $1 billion is a good sign that this business is able to grow double digit.

It's driven by a variety of sectors; you know our new setup with the four market clusters. And it is double-digit despite a situation that -- you saw also the details here, wind in China has under-performed due to the lack of subsidies and the situation in China.

So you see also here, this broad-based portfolio helps us to outperform the market. Last but not least, I would like to mention our efforts to handle the high factor cost inflation.

The guys have done a great job in price recovery efforts. Clearly and also here different in the three divisions, our pricing power in aftermarket industrial is, you will understand this, naturally higher than an Automotive Technologies due to the different structure.

But also Automotive Technologies and Matthias and his team have done a great job here to pass this on. This is not just changing prices in a catalog as you know, it has to do with transparency.

It has to do with trustful relationships to our key customers. And I can say, I'm happy to see what's coming.

This is, as you all know, not yet reflected in Q1 and Claus will give more details on this. That's on the positive side.

On the lowlights, for sure, the global macroeconomic situation is difficult. Risks have further increased.

Uncertainty and unpredictability, that is something that we're dealing with, and I think, for a responsible management team, it's very important to prepare the company to adjust for difficult times ahead. Market headwinds are complex.

It's not only COVID. Don't forget, we're not talking about this, but COVID has also impacted us in the first quarter because we had less people that we wanted because of sickness.

That has also impacted to some extent, our capacity utilization. We have the trade and supply chain constraints, and clearly, a continued impact on cost and lead times.

Cost for raw materials have increased, and hopefully, reached now a level that has not continued to rise. But it's uncertain what that means, and that has impacted in Q1 our impact input cost.

The sales recovery will roll in, in the coming quarters. We have added one page that you probably have seen when you prepared yourself for the call.

And that's page number 6. A little bit of an overview on how we are performing in the top-line in the various businesses across the different regions.

The page is here to again show you how diversification impacts our business. We know that you're all very focused on Automotive Technologies.

Its 61% of our business. And you see the share of industry has now reached 27%, aftermarket 12%.

That gives you I think again a good proof point for the diversified setup that we see as an advantage. And you also see that the regional balance is -- has improved.

Europe 42, America 22, Greater China 23, and Asia-Pacific 13%. You'll see the top-line growth numbers FX adjusted, and you would certainly asked the question, what was wrong in China.

Here, let's again recap the year 2021, China was a record quarter. The best quarter ever.

You need to look at these minus 5% or the 0% of industrial against that development. The Q1 numbers in China have not been materially or let's say have only been impacted in a very minor manner by the lock-down that started the end of March.

Clearly, the lock-down has then continued and has impacted -- and will impact our April results. Claus will give you more information.

What I can say upfront, we have six major locations, 12 plants. Not all of them are impacted by the lock-down, but only our tight sung campus that is in the Shanghai area, and what I'm really proud about that is -- is that our management team in China has been able to negotiate with the authorities very quickly the ability to continue to produce in what is called a closed loop production manner.

That means that our employees are able to do their jobs as long as they stay in the plant and we have done the utmost possible to provide them shelter and food, and security and I can tell you, while the situation clearly makes everything more difficult. The fighting spirit of our Chinese team to bring this back to normal is outstanding and gives me a lot of confidence that we will manage the situation as we have managed other similar situations in China before.

Now quickly through the divisions, I'm not going to do this in all detail, but you see the numbers for automotive on Page 8 and we have there the major headlines that I had just mentioned. Let me already go to Page 9 with the Order Intake because that's the most important message.

We will from now on give you quarterly information and the $2 billion E-Mobility stands for itself. This is the start into the year, $2 to $3 billion is our target for the full year.

And after we overachieved the target last year, I think we are well on track to achieve the same for the year 2022. We're getting credit for what we have built in the last years, and I can tell you the new successful nominations here are predominantly living driven by three major Projects.

One of which is in the US, one in China, and one in Europe. And then at least two of them are our best projects, so also that starts to pay off.

And we will now see what the rest of the year brings. The requests for business are still very high.

And with all the regulatory changes and expectations, there were some rumors in the morning with what our new Minister of Transportation has in mind. We will adapt to this.

We think that the trend towards E-Mobility is unbroken and may even accelerate. You know our scenario, and that, from my point of view, is very well in line with market expectations.

Number 10, Automotive Aftermarket. I think I mentioned the key points.

Claus will explain the positive one-off and will also go into detail what that means going forward. I just want to quickly mention one achievement of Yen and his team.

And that is this cooperation between REPXPERT, that's our major sub-brand for the garages and truckoo cooperation that's a digital ecosystem for garages, and shows that digitalization is one of the key drivers for success in our aftermarket business. I can tell you again, in these kinds of environments, the aftermarket is a very important stabilizer and a business that has lots of potential, despite the setbacks that we saw in the first quarter, also due to the Russian and Ukrainian situation.

12% on Industrial, I already mentioned the billion double-digit growth, except for China, the sector clusters and market clusters pay off, industrial automation really going well, machine tools, an old strength of Schaeffler, contributing the industry distribution, one of our best performing businesses, well under way. And here, pricing measures have already contributed in the first quarter.

They will be completed during the month in terms of full impact, and we are well on track to shelter our margin profile against the higher raw material, energy, and logistics cost. I mentioned wind.

That was a little bit of a disappointment. We think that is only short-term because the trend towards renewable energies is unbroken and many economies of the world count on wind as one of the key drivers for the energy transition.

Let me say a word here. The energy transition is clearly something that we have to deal with in a short-term manner when it comes to cost, but it open ups significant opportunities for our industrial business.

Also, think about the potential hydrogen. We have not been as outspoken as others on this area, but we are well on track to build our market here as one of the suppliers for stacks or components that is able to industrialize with high quality.

13, gives you the order book. Also here, interesting to see clearly, the trend shows a little bit downwards in terms of three months order book, that's not a surprise, but still positive development to be expected and in particular, the innovative and new solutions for robotics and food and packaging industry are interesting for us going forward.

Let me come to 14, one of the standard pages that you-all know. Capital allocation is not a new topic, we're talking about this now since years.

All the things we have put in place, I think are now, well underway and pay off good discipline in terms of CapEx, continues monitoring of what we do. The idea to focus on the reinvestment rate and not in terms only on CapEx ratios is the right thing to support the different strategies in the business.

You see this clearly when you look into the numbers for E-Mobility where we are above one for industrial, where we're above one while in the businesses that are more mature businesses, bearings and engine transmissions, the reinvestment rate is below 0.5. I'm proud to say that the CapEx committee that we run where Claus and myself, together with Andreas Schick discussed with the business has now been in place since nearly four years, and it's a very good tool to make sure that we spend our capital and allocate our capital wisely.

This is also important because the sustainability becomes a very important element of our steering model. That is on Page 15.

Please go to that page next. We all know how challenging the situation is, but I would like to finish this first part of the presentation with a clear statement that we will continue to stay the course on our strategy that we have explained to you through the road-map 2025.

And that sustainability in that strategy is one of the fundamental building blocks. We will continue on that path.

There's a lot to do here: The necessary energy transition, the question of energy security goes hand-in-hand and gives new impulses when it comes to sustainability, sustainable energy supply. You saw what we did in terms of sustaining materials.

Not only for purchasing green steel from H2 GreenSteel, but also in opening up a new supply, a European supply chain for ROCE material, for E-Motor production. All of this I think demonstrates that we take sustainability very seriously.

Our climate action plan is under review. It's part of our multiyear planning.

And here, I would like to say that we see this, not only as an obligation, but also as a significant business opportunity going forward to create new and additional gross potential for Schaeffler Group. With this more positive note, I hand over to Claus for the numbers.

Thank you very much, Klaus. Good morning, and welcome also from my side.

Let's right jump into the sales. Much of that has already been set.

Tough comps with Q1 '21. Still, all the peak, if you will, of the recovery after the corona shutdown in 2020, but we still managed to grow foreign exchange adjusted by 1.9%.

On the right side, you see a little bit of commentary, but Klaus already hit on all of it, Automotive Technologies, the sales reduction foreign exchange adjusted by 3.2%, with -- which then is offset by the strong sales growth in industrial, with Automotive Aftermarket just slightly growing with 2%. You see on the right side, down, every region grew, except greater China.

Klaus hit on that also already, and for that reason, we added the next slide as more flavor on what the situation in China is. You all heard about the local lock downs, especially in the Shanghai area.

I think Klaus explained to you already, the left and the middle part of it, where we have been impacted on our for the last week of March, and then also the beginning or the major part of April. We reopened since, and in our closed loop production, as Klaus explained, which we have around 1,500 of our 5,000 workers in that location in the closed loop production and working 1.5 shifts as of now.

The middle portion, Klaus touched on also already, maybe only one comment. As Klaus said, we have to keep all 1500 employees in this closed loop.

That means in the facilities or at least in a controlled environment, and every employee is monitored and tested daily. So it's a quite significant effort to keep the production running at that time.

But I think we will continue obviously, every effort to maintain production in all locations in China. The most important point on this slide is maybe, in the green bar at the bottom, what we expect is that even that we will maintain a closed loop and slowly ramp up throughout the second quarter.

And by the end of June we think that the situation will have completely normalized from a financial impact. On the bright side we had only a very limited impact in our Q1 results.

A little bit of sales loss in the last week of the quarter, as already mentioned, but other than that the main impact really is to be expected in April and therefore also in our next quarter. We expect, as I already mentioned, no second lock-down and a complete normalization then starting in Q3 and the second half of this year.

That leads me to my next page showing you the gross profit development. I'll start with the waterfall chart and the most prominent bar in the waterfall chart, which is obviously in the middle production cost.

That shouldn't come as a surprise. That is mainly the input cost inflation that I think we were very transparent about since our Q3 call last year.

The Q1 was in that regard about as expected. We gave you the range of 350-450 basis points versus the baseline of the prior year.

And also set that we expect actually a little front loading in Q1 and Q2 with a relaxation then in Q3 and Q4. That was due to the fact that at that time all forecast as prominently it is forecasted obviously without any Ukrainian situation on the horizon, also without any understanding how strict the several COVID policy will be enacted in China, but the forecast loss that there was a significant price relaxation especially in the steel area in the second half of the year.

Now, as you all know, that situation on both accounts has dramatically changed. But I can report that our Q1 was from a material price and cost inflation impact right as we expected.

We now expect, though, going forward for the second half of the year, not the relaxation that we had in our outlook so far, but that's reflected already in our new guidelines that we released yesterday. But maybe there is some other impact of around a 100 basis points to be expected.

That is mainly driven by energy. And then our direct impact of energy.

And then also the impact of energy cost for steel suppliers. Their cost structure also increases by the significant import costs of energy, and they try to obviously transfer that to us, as the customers.

We told you that our normal model for sourcing steel is to enter into fixed-price contracts for the calendar year, which we also said wasn't necessary the name or wasn't necessarily the only model for 2022. We wanted to benefit from a potential price reduction in the second half of the year.

So there's some half year contracts, there's also some index related contracts and this is obviously the risk, that we are now factoring in with maybe another 100 basis points and energy. Although only about 2% of our bill of material end hedged for a very significant part of the year, with 80 plus percent.

But even if you have 20% of 2% of your bill of material increasing by three times and four times, it's still a significant impact as you easily can calculate. Back to the waterfall trial.

You also see what Klaus already mentioned to the positive price impact, $50 million. That's obviously not offsetting the complete production cost impact, but it's -- actually, I think we are very progressed in our Automotive Aftermarket industrial attributions and a little bit lagging.

But as expected in the selecting Automotive Technologies that these are very difficult customer by customer negotiations that we are towards the end now. Of course, we try to gain as much of the price recovery, then also retroactively for the first quarter.

But that'll be then news to come in our Q2 call later. I have to say though, that we also did not give normal price reductions -- contractual price reductions in Automotive Technologies.

So normal -- under normal circumstances, the price column here for Automotive Technologies would actually be negative because we have contractual obligations to reduce price every year. And these, we have not conceded in Q1, so there's also, if you will, implicitly already some price recovery effect for Automotive Technologies in these Q1 numbers.

Lastly, on the bottom right, you see the gross margin differences between Q1 of last year and Q1 of this year. Klaus already mentioned it more on an EBIT level, but here you see the gross profit impact for Automotive Technologies minus 5.6%.

As we said, I think it's in the expected range for Q1 and Q1 2021. It might not be the most appropriate comparable for this outstanding and extraordinary time here, but if you go back to the second half or half year of 2021, then we're about 100 basis points below what our gross profit in Automotive Technologies was in the second half of 2021, which actually lays exactly in the range of expectations that I explained so far.

Let's go to the next page and overhead I won't spend as much time of that. You see the overhead development is clearly in line with our sales development and sales increase.

And that despite the fact that we do you see that reflected in the number in R&D, that we increasingly spend R&D money for E-Mobility projects, and also in the selling category. Some of the inflationary impacts in freight costs are reflected and obviously due to our very significant phase increase in industrial, also some volume impact is reflected in these numbers.

Let's go to the next page and talk about EBIT. EBIT is clearly following the the gross profit development.

Here, I want to lead your attention to exactly the same point on the bottom on the left side with 6.9%, we're significantly below the 11.2% of the first quarter of last year. But if you now compare the 6.9% with the EBIT margins of the second half year of last year, then you see, we are clearly in the range that we expected.

It will actually talk about the automotive margin impact that's mentioned in the key aspect, then when we talk about Automotive Aftermarket a little bit more in detail. Let me come to Automotive Technologies.

You see here a little bit more flavor. You see our four sectors on the left side top.

And what you see is bit, especially in the new business areas, E-Mobility and chassis systems. So our future, we have continued to grow significantly with double-digit percentages here, 18.4 and E-Mobility and 11.6 though on a lower basis for our chassis systems.

Maybe also interesting to mention, and Klaus touched a little bit on that already. The out performance with a 130 basis points, rather low and below our expected range, 200 to 500 basis points.

But we always -- we're clear that the -- from quarter-to-quarter standpoint, there might be some fluctuation. And I think we had a significant out-performance last year and now it brings a little bit back, you also see It's mainly driven by a distortion in China.

So China might still have delivered finished cars to the market, but the supply chains below that impacting us to the OEMS was already impacted. to some extent.

I mean, we will tell you later in our outlook and prognosis that we clearly expect for the full-year to be in our range, actually, with the sales price recovery at a very upper end of our performance range. I think everything else, EBIT waterfall is following gross profit what I already explained.

Therefore, we can go to Automotive Aftermarket. You see the Automotive Aftermarket with almost double-digit growth in all regions except America s.

I'm rounding up Greater China with 9.8%. But the other two regions clearly above the 10%.

And Europe, we have very tough comps, Europe was exceptionally strong in Q1 of 2021, but that clearly will normalize as we look and go deeper into the year. You see also that we mainly grew in the always segment, the independent aftermarket loss on prior year level.

Year, I want to talk a little bit about the EBIT rates on the right-side term, and see, and lead you attention to the one-time impact, which was a deferred cost reimbursement of a service provider in Europe and is reflected in the SG&A expenses. Here you see a plus seven which would be more in the range of plus minus zero, if we wouldn't have the onetime impact.

Therefore, the 13.6% is clearly impacted by about a number greater than a 100 basis points, so it shouldn't be necessarily carried forward. But we will talk about our expectation for this division also in our explanation of our guidance.

Next slide is talking about industrial. Much was already said.

The first time over 1 billion in a quarter for this division with outstanding growth, almost 16% over in the strong prior year quarter. You see the outline regionally with China being flat.

And Klaus mentioned the reason and you see it also then on the left side on the bottom in the renewal market cluster, with minus 8.5%. Both indicators are reflective of the subsidies of offshore wind generators in China, and obviously it will normalize as we go forward the year.

You see also on the bottom left, industrial automation within outstanding growth of almost 50%. There is a small impact of Meliormotion in there of around €4 million to €5 million in sales.

Meliormotion, you remember the expectations that was closed in the end of February, and we therefore consolidated Meliormotion for the first time, beginning 1st of March, so there's one month of Meliormotion included in this growth, but they're -- even without that, its a very significant growth in this market cluster. You see on the right side that with the 11.4%, that we are almost at the level of the prior year EBIT with 11.8.

That clearly indicates and you see it explained in the waterfall drought that volume and price clearly was offsetting the increase the in input cost. Mainly by steel, logistics and energy.

Next slide, please. Net income.

I think nothing out of the ordinary. Very little adjustments in EBIT.

As you see, these are slight corrections of adjustments of bigger adjustments that were in the past but our logic is once we correct it for in event, then we will continue to also correct that going forward, but nothing really to report here out of the ordinary, which leads me then into the net income. Net income you see it here earnings per share with €0.21 are clearly on the same level as the second half of 2021.

And royalty with 13.1% is actually 1.6 percentage points higher than a year ago. But please remember, we have now, in this last 12 months period, pretty strong quarters, maybe with the exception of the third quarter of last year, which was one of the weaker ones.

Whereas last year's last 12 months had still, the COVID impact of 2020 in it. Still the 13.1% we are riding in the range of our mid-term targets and I think a good result.

And that leads me to the free cash flow commentary slide on the next page. Clearly a significant reduction of free cash flow as compared to the comparable quarter last year.

So now, last year was clearly distorted by the V-shaped recovery with working capital distortion still, let me rather say, working capital adjustments with CapEx still ramping up last year or still at low level last year. So lots of dynamics going on, but despite the headwinds and obviously the networking capital, seasonal and expected increase especially as it relates to accounts receivable in the first quarter and still managing to have a positive cash flow.

I think it's not . You see on the left side, the CapEx ratio is clearly higher this quarter than the first quarter of last year.

It's about $20 million in additional cash outflow that we financed this quarter as compared to last year. You see on the bottom right, then always very important our bridge, and Klaus mentioned it already on a high level, but significant payouts for restructuring.

As expected, the $160 million that we paid out in Q1 2022 is already more than half of our annual plan. So it's always a little front-loaded because a lot of these structural measures will hit 1st of January.

So that was not unexpected, but clearly a high number and not to be annualized. And then you see also here, we increased our formal factoring financing program by $35 million to offset some of the least impact.

If we normalize for these two impacts then we have an underlying free cash flow before M&A activities of $137 million. I think also a strong result.

In regard to maybe another explanation here, the line M&A $62 million of cash outflow. I mean, that is clear and that is related to the Meliormotion increasing.

Last page, you'll see the leverage ratio solidly at 1.0. Most importantly, you see a little bit of liquidity structure change on the left side, on the bottom that is due to the fact into and all that we're very transparent about debt that we redeemed a bond on March 1st, 2022, which reduced our gross debt, and our cash position by €545 million and with that, we do not have any maturities coming up before March of 2024.

The cash finance is still strong with over a billion, $1.2 billion and beside that cash position we have still, as you know, $1.8 billion in uncommitted -- in committed unused credit lines, which brings our available liquidity and holds our available liquidity above the 20% level of last 12 months, net sales. And with that, Klaus back to you.

Thank you. Let me finish the presentation with the last chapter, the outlook please.

Page 30. Here you have the new market assumptions for our three divisions, I'll start with Automotive Technologies.

As I said before, our guidance is built on cautious assumptions. We have basically said we wanna use the assumption that we see similar production volumes like last year, 77 million cars.

That is a discount of 3.5 million cars versus the latest IHS estimate of 80.6% that I think shows why we think cautious is the right qualifying here. Why have we done this, because there are still significant uncertainties from the geopolitical situation, also from the COVID lock down in China.

So we would -- if I look at the table from the light-vehicle production, allocate the discount predominantly to Europe. Also here in Germany where I just predicted a 19% growth rate.

And then to China, let's see how that develops. It's better to be on the safe side in these days than being too optimistic.

Then for Automotive Aftermarket and the industrial, you don't have similar indicators. We're using GDP for Automotive aftermarket and Industrial production figures from Oxford economics, that's not an ideal proxy, but a good indicator, but we have to say that -- that we should not just take these numbers and pluck them in, in your models for our industrial Automotive Aftermarket grows.

Assumptions, they are just indicators. Let me go to 31.

There you see the new guidance as of yesterday, if you compare this to the suspended guidance as of aids of margin, you have this in the backup. You'll find the numbers, we reduced sales growth from seven to nine to six to eight, and also reduced EBIT margin from six to eight to five to seven.

And on the cashflow side, we think will make $250 million at the floor end. This is a function of the divisional guidances.

And I would like to comment a little bit on the gross guidance as you know, we're not giving numbers here, we're following the German accounting rules, and using the same format as last year. Probably the most interesting one is the outperformance 200 to 500 basis points.

Let me talk here about the composition of this. This outperformance number was decided as a midterm target at a time where there was no real price recovery, there were always price concession.

This out-performance was always composed of the ramp up volume effect above the market volume plus price concessions, and now it includes also the price recovery clause. You can assume that if we talk about 200 to 500 basis points, that will come out here at the upper end of the range if not above.

Then you have the terms moderate growth and considerable growth, what does that mean? Moderate growth from our understanding is a mid-range single-digit growth rate, and considerable growth is a high single-digit growth rate if not two digits.

I can say we are clearly positive on industrial. Don't forget the 15% growth rate in the first quarter and we think that Automotive Aftermarket can also grow up above the indicator GDP that is 3% to 3.5%.

If you put that in your models, you will see that the sales growth number is within the range of the six to eight for the time being. Again, this is cautious and we will update our thinking as we see more about the second quarter, and then the EBIT margins a function of this.

We have given you a floors above four became above 2.5. I have to say I don't like that number.

Mid-term targets have been higher, but it reflects the environment and we want to also hear be the reasonable with what we're giving you, so 2.5 is the floor that we will defend in this year. And then above 12 and above 11, ladies and gentlemen is unchanged to the suspended guidance from 8th of March with this.

Let me come to the summary page and try to wrap it up. Good Q1, clearly a tougher Q2 expected, due to the headwinds.

We think that in particular in such an unprecedented environment our balance regional and divisional diversification is an advantage. We are coping with an amalgamation of headwinds that we've not seen before.

We are an experienced management team that stands together. We monitor and try to proactively mitigate what we can mitigate.

Most important is serving our customers best. I already mentioned that our Chinese colleagues doing -- are doing an excellent job here to achieve that, and clearly, we are building on the resilience of the organization, on the increased effectiveness, the efficiency of our production, synchronizing sales and production volumes is key.

Managing working capital properly, and clearly pushing through where we can our price recovery. Action number three, the secular growth drivers off from all point if you intact, there are business opportunities in such a situation.

The strong companies can go for them in a much better way than the ones that are weaker. Disciplined capital allocation helps and there's clearly commercial success momentum in all three divisions to deliver on their transformation plans.

As I said before, we -- the guidance -- this cautious, it reflects the environment as good as we can, but let me also, end with a more positive tone. We'll stay the course.

We are used to headwinds, we're used to drawing the right conclusions under pressure. And I can tell you our strategy will be implemented, even with more vigor than before.

Sustainability and digitalization remain fundamental building blocks. So there is fighting spirit and we will ensure in this environment that our operating performance and in particular the cash-generation remains intact.

With this, I hand back to you Renata. And for the Q & A.

Thank you very much, and we're now looking forward to your questions.

Thank you, Klaus, and we open the calls for the Q&A. Yeah, Natalie, you can open to

Good morning and thank you for taking my questions. The first one will be on the rawmat and energy headwind.

If I understood it correctly, you're now pointing essentially to have a bit more headwind factoring in energy. And I know you don't really want to comment on an assumed net impact, but I'm still trying, if you would comment on that.

And if not, could you give us an indication if the rawmats are easier to negotiate than energy, is there any difference? Or essentially the same?

And then during the presentation, you highlighted that you essentially didn't give price downs in auto in Q1, is this a proper cancellation of the price downs, or is it just pushed to the right and you would assume OEMS to ask for more than next year if there's visibility. And then the second block on China, we had other suppliers highlighting, I mean, obviously the challenges which are in the market currently, but also following the strict lockdown policies of the government that the most of the experts they have in the market would actually seek to return to Europe, which might cause some disruption in the leadership of the factories run there, and could lead to additional disruption.

Is there anything that you would fear from that in your organization?

Thank you very much. Two very important questions.

I will take over the last one and Klaus will try to answer what we can answer on the roadmap and the energy cost. Clearly, the situation in China is challenging for experts.

We have also seen that some of our experts have reiterated their concerns and want to come back, that we can adjust. We have since years, a very strong Chinese team that is well connected.

You know that Schaeffler has a little bit of a peculiar Executive Board structure where we have dedicated regional CEOs, so our CEO in regional China -- greater China reports to me, sits on our Executive Board, he participates in all board meetings. He is a Chinese - German or a German - Chinese, speaks fluent Germany, is there a since years and has a management team that is a mix.

The CFO there is European, the COO, so the one who ran our 12 factories is an American citizen, he returned, but we see for us no disruption in the way we manage this. I think we are blessed in this situation because we have always focused on the regional aspect here and have this dedicated reporting lines but overall, I think you're absolutely right this is a challenge.

And what would you expect in a world that obviously becomes more de -globalized, you need to find the right solutions not only for localization and for supply chains but also for the supply chains of human capital. And what we try to do is, and I do this was town halls, I do this was regular calls, is to keep our Chinese colleagues as close as we can.

And that has worked well so far, but the brain drain in terms of management talent is clearly something that all the companies have to watch out for. And I hope and when the overall geopolitical tensions reduce a little bit that this will also normalize.

There are still fantastic business opportunities in China, don't get this wrong. And we have customers who are desperate calling for our personnel I think so.

We will continue there as we said, but maybe a little bit more challenging circumstances. Claus over to you for the moment.

So everything you said about the material price impact and recovery action, I can confirm you asked whether it would be in different what kind of cost we tried to recover with our customers. Invented different -- in the different divisions, if you have a tool to just increase list prices, obviously then you can mix into that pricelist adjustment.

Every cost component that you think is appropriate, as long as the market is ready to absorb the price increases. We have to watch a little bit the marketplace.

Also I cannot trust you unilaterally increase prices. And I'm talking here about the more distribution driven business in industrial and Automotive Aftermarket.

In regard to the automotive OEMs. You heard it from other suppliers and from us many times in the past, it's very complicated individual negotiations customer by customer, sometimes part number by part number, where you have to approve your case with detailed cost breakdowns.

Into there indeed, it is a difference with its direct material that we are trying to recurring or indirect production costs like energy and other components. And it's much more epic.

The negotiations are much more constructive when it's about steel. And even more difficult when we're talking about indirect cost increases, like -- like energy.

In regard to the cost recovery in net impact. I mean, your observation was also correct to not jeopardize our leverage in negotiations that are not completed and quite frankly, now go from a first wave into a second wave.

If you will, with the changed environment. I think we would stick this time by being a little bit wake in regard to our recovery targets.

But I mean -- I think it's reflected to some extent in our bridges that we're making progress in that regard. Admittedly, not -- not completely reflected in our Automotive Technologies bridge and that comes, I think to the last segment of your question.

We did not execute contractual price reductions as one of our negotiation tools and it's not at this point with many customers. We did not have a final or we do not have a final agreement on what the recovery level, the recovery amount, and the technique to pay the recovery and including retroactive recoveries.

Therefore that's for now almost that we didn't want to give something that we then have to fight to get back. And it's a negotiation a position for now, but it is not secured.

And that will be secured within the next few weeks. And there's also no indication of what will happen going forward in next year.

I already indicated that we initiated already the next waves in regard to price increases and additional headwinds that we are seeing due to the geopolitical and trying situation.

And Klaus explained it very well. Let me add, I think your question has one important element.

This is not a onetime event. And what we learned at the moment from the 2022 Q1, Q2 experience, is something that we will take forward into the planning for '23.

Price increases need to be somehow sustainable, and as we said before in a speculating environment of pricing power, and that's different in the trade divisions is that key competitive advantage.

Thanks. lot.

Hello. Thank you very much for taking my question ladies and gentlemen.

And thank you for the details of slide on the China on that. That's very helpful as well.

I've got two questions as well, particularly on the E-Mobility order intake. So just trying to understand this, as you mentioned, like majority is coming from the three big transactions.

And most of that is a bet reelected business. So what proportion of this 2 billion can you say -- let's say, going into the battery electric cars?

Is this more like 60%? Is it more like 50%?

That is my frustration. And my second question is in -- what are these systems or components?

Are these like the transmissions or this is like a two in one system? Or this is a three in one system?

Those are my two questions.

No, I think we are -- I can quickly answer them. These are three in one system and more than 50% comes from BEV.

But again, you will understand we have decided for the time being that we not give -- that we don't give more detail on the order intake. Once again, I can say we are well on track to build our market position from where we are coming into this E-Mobility space.

And, you know, our scenario, the famous 40, 40, 20 and that is from our point-of-view going forward, also the right measure. While the capital market is always looking at combustion versus BEV.

I can only suggest to you that you look into the hybrid development in China, where hybrid is at the moment seeing a significant demand. And that tells us again that this is not just black and white.

I believe as you believe, that hybrid has a certain transition element and we'll certainly over time see different application, different markets. But I can only recommend look at the hybrid development in China at the moment, what's happening there is more popular than people think.

And we are clearly benefiting from the new development in BEV, particularly in the United States. But the world is more balanced than just BEV versus combustion engine.

And don't take this defensive, take it as an advice that again, this is going to unfold over years in a manner that we need to all jointly predict. And I'm very confident that Schaeffler has a good future on the best side as well.

Thank you. That's very helpful.

You're welcome.

Well, thanks a lot. It's a busy day for you today and we clearly appreciate that you all participated.

We are on roadshow starting on May 11th. Deutsche Bank organizes this also then on the 12th.

And we have a second half on May where we also use the help of Deutsche Bank. There's the conference on the 24th and 25th, where my colleagues will be and then European Orders, JP Morgan, 8th of June, so lots of activity.

I would also like to mention The Hanover Fair, especially then because this time it's again in person and Stephanie will be there, the 16th, to present the successes in industrial for our customers. Whoever is there is equally invited to join our booth.

I will also be there. It's an important event.

And then another highlight in the year is our Schaeffler Kolloquium Bühl. Some of you may know, some of you may have been there.

That's every four years, Automotive Technology customer event is clearly an outstanding event every four years. It's also global, it goes around the globe and we will also invite those that are interested to that event.

Q2 will be presented at the fourth of August H1 release that will clearly be an interesting event. Until then, we look forward to engage with you.

The team IR is available. Thanks a lot again for joining today and all the best for all of you.

Good luck and see you soon. Bye-bye.