Thank you, Natalie. Dear investors, dear analysts, good morning.

Welcome to the First Quarter 2022 Earnings Call of the Schaeffler Group. Mr.

Rosenfeld, 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 questions, follow-up questions to 1 so that everyone has the chance to participate in this call.

Without further ado, 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, 1 of the best quarters ever in terms of sales is a very solid development in all the 3 divisions. We are happy with the 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 underway.

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 the headwinds we have seen in the market.

Free cash flow positive EUR 14 million. That includes significant cash out for restructuring.

So Claus will take you through that in more detail. What I'm really proud about is the strong order intake in E-Mobility, EUR 2 billion.

You 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 EUR 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 3 big transactions and most of them are BES business.

So I think it's a good proof point that we are well underway to establish Schaeffler as an important supplier in the E-Mobility space.

And don't forget, there's also EUR 1.6 billion order intake from the other 3 divisions with a strong book-to-bill ratio of 1.7x, 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.

the EUR 2 billion order intake, also the outperformance is something that I would like to mention. 130 basis points is not very strong, but you will see later on where the composition.

Automotive Aftermarket, strong sales development. Claus will comment on the profitability.

There's a one-off impact in there that we 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 Technology business and we expect that the aftermarket development -- aftermarket business will help us to manage the uncertainty around us. Industrial exceeding for the first time in a quarter EUR 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 4 market clusters.

And it is double digit despite a situation that you saw also in the details here. Wind in China has underperformed 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 also here different in the 3 divisions.

Our pricing power in aftermarket and industrial is, you will understand, naturally higher than in Automotive Technologies due to the different structure. But also Automotive Technologies, 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. So 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 are 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 reach now a level that is not going to continue to rise, but it's uncertain what that means and that has impacted in Q1 our input cost.

The sales recovery will roll in in the coming quarters.

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

Here let's again recap the year 2021. China was a record quarter, the best quarter ever so you need to look at this minus 5% or the 0% in 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 lockdown that started end of March. Clearly the lockdown 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 6 major locations, 12 clients. Not all of them are impacted by the lockdown, but only our Taicang campus.

That is in the Shanghai area. And what I'm really proud about 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 have there the major headlines that I 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 EUR 2 billion E-Mobility stands for itself. This is the starting to the year, EUR 2 billion to EUR 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.

1 of which is in the U.S., 1 in China and 1 in Europe and at least 2 of them are best projects. So also that starts to pay off and we will now see what the rest of the year brings.

The request for business is still very high and with all the regulatory changes and expectations, there were some rumors in the morning 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.

#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 1 achievement of Jens and his team and that is this cooperation between REPXPERT, that's our major sub-brand for the garages; and truckoo Corporation, 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 environment, the aftermarket is a very important stabilizer and a business that has lots of potential despite the setback that we saw in the first quarter also due to the Russian and Ukrainian situation.

12% on Industrial. I already mentioned EUR 1 billion double-digit growth except for China.

The sector classes and the market classes pay off. Industrial automation are really going well.

Machine tools, an old strength of Schaeffler, contributing the industrial distribution. One of our best-performing businesses well underway and here pricing measures have already contributed in the first quarter.

They will be completed during the months in terms of full impact and we are well on track to shelter our margin profile against the higher raw material energy and logistic costs. 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 1 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 opens up 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 3-months order book, that's not a surprise.

But still positive development expected and particularly, 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 are 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, continuous 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 1 -- for Industrial where we are above 1.

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 discuss with the business has now been in place since nearly 4 years and it's a very good tool to make sure that we spend our capital and allocate all 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.

A, that we will continue and 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 green steel, but also in opening up a new supply chain -- a European supply chain for rare earth material for e-motor production. So all of this I think demonstrates that we take sustainability very serious.

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 growth 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 said.

Tough comps with Q1 '21 still or 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 sales reduction foreign exchange adjusted by 3.2%, 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 kind of more flavor on what the situation in China is.

You all heard about the local lockdowns 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 Taicang campus for the last week of March and then also the beginning or the major part of April. We reopened since and are in a 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 1,500 employees in this closed loop that means in the facility so at least in a controlled environment and every of this employee is monitored and tested daily. So it's a quite significant effort to keep the production running at the time, but I think we will continue obviously every effort to maintain production in our locations in China.

The most important point on this slide is maybe in the green bar at the bottom. What we expect is that we will maintain the 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 right side, we had only a very limited impact in our Q1 results, little bit of a 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 lockdown 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 basis points to 450 basis points versus the baseline of the prior year and also said 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 IHS forecasted obviously without any Ukrainian situation on the horizon, also without any understanding how strict the 0 COVID policy will be enacted in China.

But the forecast was that there was a significant price relaxation especially in the steel area in the second half of the year. Now as you know that the 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 guidance that we released yesterday, but maybe there is another impact of around 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 input cost 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 necessarily the main 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 are 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 and hedged for a very significant part of the year with 80%-plus. But even if you have 20% of 2% of your bill of material increasing by 3x and 4x, it's still a significant impact as you easily can calculate.

Back to the waterfall chart, you also see what Klaus already mentioned. Positive price impact, EUR 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 and Industrial divisions and a little bit lagging, but as expected and flat in Automotive Technologies. These are very difficult customer-by-customer negotiations that we are towards the end now of.

Of course we try to gain as much of the price recovery then also retroactively for the first quarter, but that will be then used 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 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 might not be the most appropriate comparable for this outstanding extraordinary time here. But if you go back to the second half year of 2021, then we are about 100 basis points below what our gross profit in Automotive Technologies was in the second half of 2021, which actually lies 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 on that.

You see the overhead development is clearly in line with our sales development and sales increase and that despite the fact that 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 sales 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 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 are 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.

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

You see here little bit more flavor. You see our 4 sectors on the left side top and what you see is that 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% in E-Mobility and 11.6% though on a lower basis for chassis systems.

Maybe also interesting to mention and Klaus touched a little bit on that already. The outperformance with 130 basis points rather low and below our expected range 200 basis points to 500 basis points, but we always were clear that from a quarter-to-quarter standpoint there might be some fluctuation.

And I think we had significant outperformance last year and now it swings 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 the very upper end of our outperformance range. I think everything else, EBIT waterfall is following gross profit what I already explained.

So therefore, we can go to Automotive Aftermarket. You see the Automotive Aftermarket with almost double-digit growth in all regions except Americas.

I'm rounding up Greater China with 9.8%, but we have 2 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 OES segment.

The independent aftermarket was on the prior year level. Here I want to talk a little bit about the EBIT bridge on the right side and see and lead your attention to the onetime 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 7%, which would be more in the range of plus/minus 0 if we wouldn't have the onetime impact. Therefore, the 13.6% is clearly impacted by about a number greater than 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. Sales first time over EUR 1 billion in a quarter for this division with outstanding growth almost 16% over strong prior year quarter.

You see the outlier 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 renewals market cluster with minus 8.5%.

Both indicators are reflective of the subsidies of offshore wind generators in China and obviously will normalize as we go forward here. Maybe you see also on the bottom left industrial automation with an outstanding growth of almost 50%.

There is a small impact of Melior Motion in there of around EUR 4 million to EUR 5 million in sales. Melior Motion, you remember the acquisition that was closed end of February and we therefore have consolidated Melior Motion for the first time beginning 1st of March.

So there's 1 month of Melior Motion included in this growth. But even without that, 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 chart, that volume and price clearly was offsetting the increased input costs mainly driven 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 bigger adjustments that were in the past.

But our logic is once we correct it for an event, then we will continue to also correct it 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 EUR 0.21 are clearly on the same level as the second half of 2021.

And ROCE 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 1 of the weaker ones whereas last year's last 12 months had still the COVID impact of 2020 in it.

So still with 13.1%, we are right in the range of our midterm 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 or 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 net working 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 is not a bad result. You see on the left side the CapEx ratio is clearly higher this quarter than in the first quarter of last year.

It's about EUR 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 EUR 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 former factoring financing program by EUR 35 million to offset some of these impacts.

If we normalize for these 2 impacts, then we have an underlying free cash flow before M&A activities of EUR 137 million I think also a strong result. In regard to maybe another explanation here the line M&A, EUR 62 million of cash outflow.

I mean, that is clear and that is related to the Melior Motion acquisition.

Last page. You see the leverage ratio solidly at 1.0x.

I mean, most Importantly, you see a little bit of a liquidity structure change on the left side on the bottom. That is due to the fact, and you know that we were very transparent about that, that we redeemed a bond on March 1, 2022 which reduced our gross debt and our cash position by EUR 545 million.

And with that, we do not have any maturities coming up before March of 2024. The cash balance is still strong with over EUR 1 billion -- EUR 1.2 billion.

And besides that cash position we have still, as you know, EUR 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 assumption for our 3 divisions.

I start with Automotive Technologies. As I said before, our guidance is built on cautious assumptions.

We have basically said we want to 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 million.

That I think shows why we think cautious is the right qualifier here. Why have we done this?

Because there are still significant uncertainties from the geopolitical situation and also from the COVID lockdown 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 IHS 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 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 you should not just take these numbers and plug them in in your models for our Industrial or Automotive Aftermarket growth 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 8th of March and you have this in the backup, you'll find the numbers.

We reduced sales growth from 7% to 9% to 6% to 8% and also reduced EBIT margin from 6% to 8% to 5% to 7%. And on the cash flow side, we think we'll make EUR 250 million at the floor end.

This is a function of the divisional guidances.

And here I would like to comment a little bit on the gross guidance. As you know, we're not giving numbers here.

We are following the German accounting rules and using the same format as last year. Probably the most interesting one is the outperformance 200 basis points 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 was always price concession. So this outperformance 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.

So you can assume that if we talk about 200 basis points 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 2-digit. So I can say we are -- it's clearly positive on Industrial, don't forget the 15% growth rate in the first quarter.

And we think that Automotive Aftermarket can also grow 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 6% to 8% for the time being.

Again this is cautious and we will update our thinking as we see more about the first -- the second quarter. And then the EBIT margin as a function of this, we have given you floors above 4% became above 2.5%.

I have to say I don't like that number. Midterm targets have been higher, but it reflects the environment and we want to also here be 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 balanced regional and divisional diversification is an advantage.

We are coping with 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 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 are from our point of view 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 3 divisions to deliver on their transformation plans. As I said before, the guidance is 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 are 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, for the Q&A. So thank you very much and we are now looking forward to your questions.

Thank you, Klaus, and we open the call for Q&A. Dear Natalie, you can do that.

The first one will be on the raw mat and energy headwind. If I understood it correctly, you're now pointing essentially to 100 bps 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 raw mats 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 the 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 most of the experts there 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?

Two very important questions. I would tackle the last one and Claus will try to answer what we can answer on the raw mat and the energy cost.

Clearly the situation in China is challenging for experts. We have also seen that some of our experts have reiterated the concerns and want to come back.

That we can digest. 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 that reports to me sits on our Executive Board.

He participates in all Board meetings. He's a Chinese German or a German Chinese, speaks flu in German, is there since years and has a management team that is mixed.

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 are absolutely right. This is a challenge and what would you expect in a world that obviously becomes more deglobalized.

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 with townhalls, I do this with regular calls 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 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 parts and our things. So we will continue there as we said, but maybe with a little bit more challenging circumstances.

Claus, over to you for the moment.

So everything you said about the material price impact and recovery actions, I can confirm. You asked whether it would be in different what kind of cost we try to recover with our customers in the different divisions.

If you have a tool to just increase list prices, obviously then you can mix into that price list adjustment every cost component that you think is appropriate as long as the market is ready to absorb the price increases. I mean we have to watch a little bit the marketplace also and I cannot just 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, I mean 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.

And there indeed it is a difference, whether it's a direct material that we are trying to recover or indirect production cost like energy and other components. And it's much more -- the negotiations are much more constructive when it's about steel and even more difficult when we are talking about indirect cost increases like energy.

In regard to the cost recovery and net impact, I mean your observation was also correct to not jeopardize our leveraging 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 at this time by being a little bit awake in regard to our recovery targets.

But I mean I think it's reflected to some extent in our bridges that we are making progress in that regard admittedly not yet 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 including retroactive recoveries. So therefore, that's for now almost [indiscernible] that we didn't want to give something that we then had to fight to get back.

And it's a negotiation position for now, but it is not secured but will be secured within the next few weeks and is 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 China situation.

Claus explained it very well. Let me add.

I think your question has 1 important element. This is not a onetime event.

And what we learn 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 3 divisions is a key competitive advantage.

Thank you for the detailed slide on China. I've got 2 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 3 big transactions and most of that is the battery electric business.

So what proportion of this EUR 2 billion can we say is, let's say, going into the battery electric cars? Is this more like 60%?

Is it more like 50%? That is my first question.

And my second question is what are these systems or components? Are these like the transmissions or this is like a 2-in-1 system or this is a 3-in-1 system?

Those are my 2 questions.

No, I think we -- I can quickly answer them. These are 3-in-1 systems and more than 50% comes from BEV.

But again you will understand we have decided for the time being 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 will certainly over time see different applications, different markets.

But I can only recommend look at the hybrid development in China at the moment, what's happening there. It's more popular than people think.

And we are clearly benefiting from the new development in BEV in particular 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 BEV side as well.

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

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

And we have a second half then on May where we also use the help of DZ Bank. There is a conference on the 24th and 25th where my colleagues will be and then European Orders JPMorgan, 8th of June.

So lots of activity. I would also like to mention the Hanover Fair, a special event because this time it's again in person.

And Stefan will be there with his team to present the successes in Industrial for our customers. Whoever is there is cordially invited to join our booth.

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

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

That's the every 4 years Automotive Technology customer event. It's clearly an outstanding event every 4 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 4th 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.