Within the newest earnings name, Melexis (ticker: MELE), a key participant within the semiconductor trade, reported Q3 2024 gross sales of €247.9 million, which remained in line with the identical quarter the earlier yr and confirmed a slight 1% enhance from Q2 2024.

Nevertheless, the corporate has adjusted its This fall gross sales forecast to between €200 million and €210 million, citing stock corrections at European and U.S. automotive prospects and a projected international automobile manufacturing decline.

Consequently, full-year gross sales estimates have been revised downward from round €1 billion to roughly €935 million to €945 million, with gross revenue margins anticipated to be above 43%.

Key Takeaways

• Q3 2024 gross sales regular at €247.9 million, a 1% enhance from Q2 2024.
• This fall gross sales forecast adjusted to €200-€210 million attributable to stock corrections.
• Full-year gross sales estimates revised to €935-€945 million, with gross revenue margins above 43%.
• Progress in sensor merchandise and design wins in Asia and Europe.
• Plans to launch 5 new Past Automotive merchandise in 2024.
• Income from China up 9% within the first 9 months of 2024.

Firm Outlook

• Melexis anticipates continued development in international automotive gross sales and manufacturing in 2025.
• The corporate is adjusting stock ranges to facilitate a faster return to development.
• 5 new merchandise focusing on robotics, different mobility, and digital well being are set to launch in 2024.
• Capital expenditures for 2024 are projected to be round €60 million.

Bearish Highlights

• Stock corrections at European and U.S. prospects affect gross sales forecasts.
• Gross revenue margins have barely decreased attributable to low yield and small price components.
• Pricing negotiations are difficult amid buyer pressures for reductions.
• Issues over potential pricing pressures in China attributable to public sale dynamics.

Bullish Highlights

• Sensor product phase, notably magnetic place and strain sensors, is experiencing development.
• Income from China considerably outpaces total firm efficiency with a powerful pipeline of design wins.
• The IHF forecasts a 2% enhance in international automobile manufacturing in 2025, with a shift in the direction of hybrid and electrical autos.

Misses

• Full-year gross sales estimates revised downward attributable to decrease projected This fall gross sales.
• Gross revenue margins anticipated to be above 43%, a lower from earlier estimates of above 44%.

Q&A Highlights

• China’s gross sales efficiency stays sturdy, accounting for over 27% of income year-to-date in 2024.
• Future price reductions anticipated to be within the low single-digit vary, mirroring pre-COVID reductions.
• Subsequent monetary outcomes announcement scheduled for February 5, 2025.

Melexis CEO Marc Biron and CFO Karen van Griensven mentioned numerous components influencing the corporate’s efficiency and outlook in the course of the earnings name. Whereas going through challenges akin to stock corrections, pricing pressures, and slight gross margin decreases, the corporate stays centered on innovation and market development alternatives. With an emphasis on new product launches and strategic pricing discussions, Melexis goals to take care of profitability regardless of the uncertainties within the international automotive market.

Full transcript – None (MLXSF) Q3 2024:

Operator: Good day. And welcome to in the present day’s Melexis Q3 2024 Outcomes Convention Name. All through in the present day’s recorded presentation, all members will likely be in a listen-only mode. Later, we’ll conduct a question-and-answer session. [Operator Instructions] And now I wish to hand the decision over to our host, Marc Biron, CEO. Please go forward, sir.

Marc Biron: Thanks. Pricey viewers, thanks for becoming a member of the Melexis Q3 2024 earnings name. In Q3, our gross sales reached €247.9 million, which is inside our steering. It’s in keeping with the Q3 of final yr and it represents a 1% enhance from Q2 to Q3 this yr. This being mentioned, subsequent to the strong gross sales in Q3, discussions with our automotive prospects beginning in September point out that, based mostly on their present order ebook for the steadiness of 2024, they might finish up with increased inventories than desired. Through the previous couple of months, now we have already had bulletins concerning the auto trade, with international automobile manufacturing down by greater than 5% in Q3 2024. Our present order ebook would end in gross sales for This fall, which is in keeping with our full yr steering of round €1 billion. Nevertheless, now we have determined to imagine this stock correction at our prospects, which can result in decrease gross sales for Melexis in This fall. The place we beforehand labored to keep away from bullwhip impact, we now acknowledge that we’d not current it absolutely and thus we’re additionally impacted. The stock correction that Melexis determined to imagine in This fall follows a interval of provide allocation and is centered on automotive prospects in Europe and within the U.S. Based mostly on what we all know in the present day, international automotive gross sales and manufacturing are forecasted to develop in 2025. We anticipate that taking such stock correction now will allow us to renew our development trajectory ahead of it could in any other case be the case. It additionally exhibits our buyer orientation and it gives readability to our stakeholders. Usually, such stock corrections are adopted by a brand new upturn in demand, for which we’re already getting ready. Returning to Q3 2024, our efficiency was primarily pushed by our magnetic place sensors, each in automotive and Past Automotive purposes. We additionally had development in strain sensor, sensor interface and present sensor. Within the third quarter of 2024, Melexis has continued to introduce a number of improvements. For instance, now we have expanded our Sensor portfolio, now we have continued to deal with security necessities with our Triaxis magnetic product for improved steering and pedal place software. We’ve got additionally launched the Triphibian strain sensor with a digital output designed for thermal administration of electrical automobiles. And now we have enhanced our present sensor, bettering each isolation capabilities and practical security compliance for demanding automotive purposes. In Q3, we had additionally encouraging variety of design wins with an growing quantity realized in APAC and particularly in China. These are some examples of design wins concluded in Q3. We had an necessary design win for embedded motor driver for EV powertrain in China and one other one for HVAC software in Japan. We had additionally a number of design wins for embedded lighting software in Europe and in addition in China. These examples display that we proceed to win enterprise globally and that is throughout the automotive platform and no matter the kind of powertrain. Now, I’ll hand it over to our CFO, Karen van Griensven, who will share some monetary insights.

Karen van Griensven: Thanks, Marc. So, hiya everyone. A bit extra on the monetary outcomes for the third quarter. So, the gross sales got here out at €247.9 million, steady versus the identical quarter of the earlier years and a rise of 1% in comparison with the earlier quarter. The euro-U.S. greenback change charge evolution had no affect in comparison with the identical quarter a yr in the past and a detrimental affect of 1% in comparison with the earlier quarter. The gross end result was €108.2 million or 43.7% of gross sales, a lower of 5% in comparison with the identical quarter of final yr and steady in comparison with the earlier quarter. R&D bills have been 10.7% of gross sales, G&A was at 5.1% of gross sales and promoting was at 1.9% of gross sales. The working end result was €64.2 million or 25.9% of gross sales, a lower of 10% in comparison with the identical quarter of final yr and steady in comparison with the earlier quarter. The web end result was €51.2 million or €1.27 per share, a lower of 10%, in comparison with €56.8 million or €1.41 per share within the third quarter of 2023 and a rise of 4% in comparison with the earlier quarter. Now wanting additional forward, Melexis expects gross sales within the fourth quarter of 2024 to be within the vary of €200 million to €210 million. For the total yr 2024, Melexis expects gross sales to be round €935 million to €945 million, beforehand round €1 billion, with a gross revenue margin above 43%, beforehand above 44%, and an working margin above 24%, beforehand above 25%, all taking into consideration a euro-U.S. greenback change charge of 1.08 for the rest of the yr. For the total yr 2024, Melexis expects CapEx to be round €60 million. Operator, now you can open the Q&A session.

Operator: Thanks, ma’am. [Operator Instructions] And our first query comes from Sandeep Deshpande from JPMorgan. Please go forward.

Sandeep Deshpande: Yeah. Hello. Thanks for letting me on. My query is, you’ve talked about in your launch that you just’re seeing some form of stock correction at some buyer or prospects. May you speak about what number of prospects you’re seeing this development at at this level and the way lengthy do you anticipate it to proceed into 2025 or that is — do you anticipate this to be only a fourth quarter phenomenon? And I’ve one fast follow-up after that.

Marc Biron: Yeah. I feel what we see for the pushout is that, it’s coming from our European prospects and U.S. prospects, nevertheless it doesn’t come from China or from Asia. I’d say additionally it doesn’t come from our distributor. We’ve got, let’s say, 30%, 35% of the income coming from distribution and we don’t obtain pushout requests from these channels. In abstract, it’s coming from the European buyer.

Sandeep Deshpande: And do you anticipate this to proceed pushing out within the first half of subsequent yr or do you anticipate that that is it now and there received’t be any additional pushout from right here?

Marc Biron: We don’t have indication that this stock correction that we at the moment are digesting will proceed in 2025. However we additionally don’t have clear indication that it’ll not proceed. I imply, it’s a bit — there’s uncertainty, as a result of now we’re digesting these stock corrections. However as I discussed, we don’t have indication that it’ll proceed.

Sandeep Deshpande: Understood. Thanks a lot.

Operator: We’ll now transfer to our subsequent query from Man Sips from KBC Securities. Please go forward.

Man Sips: Sure. I wish to concentrate on the non-automotive half. Additionally, there we see a under par efficiency in comparison with the Capital Market Day indications over within the longer run till 2030 and it was indicated that you’d see their development of shut to fifteen% CAGR. Now, given the numbers, you’re hinting at 7% to eight% for this yr. Are you able to point out what’s taking place there? Thanks.

Marc Biron: Yeah. We affirm certainly that over the long-term, we’ll develop by at the very least 15% for the Past Automotive. However as a way to attain this development, we have to develop the product after which to market the product, and to have a design win for the shopper. And now we’re certainly on this course of to develop and to launch the product. For example, in 2024, we’ll launch 5 Past Automotive merchandise, for instance, for some robotic purposes and people are — these merchandise that may generate the expansion sooner or later.

Man Sips: And these new Past Automotive merchandise, are you able to give some indications what sort of merchandise are?

Marc Biron: Sure. And in the meanwhile, we’re in growth. We’re working quite a bit on the robotic software. It’s merchandise that we use within the joint of the robotic, for example, both the place sensor to measure the place of the joint or driver as a way to actuate the joint. That is, let’s say, for the robotic. And likewise that now we have launched not too long ago what we name the Tactaxis, which is a tactile sensor as a way to give the sense of contact of the robotic and that is for the robotic side. We’re additionally creating particular merchandise for the choice mobility, primarily for the e-bike or for the bike and a bit long run, as a result of it will likely be launched a bit later. However we’re additionally engaged on what we name digital well being and bi-sensing affect. However within the order of the discharge, it’s first robotic, then different mobility after which the digital well being biosensor.

Karen van Griensven: Yeah. We additionally had a launch of a product for the service, I feel, within the first half of the yr, the place now we have the primary design win.

Marc Biron: Sure.

Karen van Griensven: So that could be a product that’s already launched and the pipe is filling with the primary design now within the third quarter.

Marc Biron: Precisely. It’s a driver used within the server, the massive knowledge server?

Karen van Griensven: Yeah.

Operator: Thanks. We’ll now transfer to our subsequent query from Ruben Devos from Kepler Cheuvreux. Please go forward.

Ruben Devos: Sure. Good morning. Thanks. And simply the primary one on the gross margins. I feel, based mostly on the brand new your outlook for 2024, it seems that you’re kind of anticipating a 2-percentage-point to 3-percentage-point decline in gross margins sequentially in This fall. May you discuss concerning the shifting elements for that decline? Is that completely volume-driven or is all pricing coming in decrease than what you initially anticipated? And as regards to the diversification of the foundry companions, to what diploma might that have already got considerably of an affect in This fall, but additionally in 2025?

Marc Biron: Yeah. The explanation of the marginally decrease GPM now’s, there are a number of causes which are all coming collectively. We nonetheless don’t have an ideal price of yield or good yield for our modern product and we’re engaged on it as a way to enhance it. However in the meanwhile, we’re nonetheless impacted by this low yield. Yeah, there’s additionally the gold price adder, which is working towards us, as a result of we have to pay a price adder to the meeting home, relying on the gold price. There may be additionally the re-evaluation of the stock.

Karen van Griensven: Sure. There have been many small price adders within the curve. There may be not one, sturdy one. It was many smaller, of which truly Marc truly talked about crucial ones. However certainly, it unfold over many alternative small explanation why truly the gross margin was barely decrease than within the earlier quarter. However this may be very totally different quarter-on-quarter, truly.

Marc Biron: There may be additionally the decrease quantity, which is taking part in an impact.

Karen van Griensven: Yeah. Which is clearly momentary. Additionally, price of yield is meant to extend or enhance within the subsequent yr.

Ruben Devos: Okay. Thanks. After which, simply on China, I feel, by way of the geographic efficiency, additionally APAC improved. You talked about sturdy traction with design wins in China. May you possibly present extra perception into the kind and scale of alternatives you see in that market? Thanks.

Marc Biron: Sure. To begin with, certainly, in the course of the first 9 months of 2024, the China income — the income coming from China has elevated by 9%, whereas total we’re near flat. However in China, it has elevated far more than for the general Melexis. And by way of design win and alternative, it’s growing quarter-after-quarter. And now now we have certainly, it’s one of many primary areas by way of design win and alternatives is China. And as I discussed additionally at first, yeah, we didn’t obtain push out from China.

Ruben Devos: Okay. Thanks.

Marc Biron: And it exhibits, I feel, that China is a powerful area for Melexis. No push outs, excessive enhance and a really, very wholesome design win and enhance of alternative within the pipe.

Operator: Thanks. We’ll now transfer to our subsequent query from Francois Bouvignies from UBS. Please go forward.

Francois Bouvignies: Thanks very a lot. Simply wished to return again to a few of the questions on the stock correction into subsequent yr. I imply, if we glance up to now, when the stock correction occurred, 2019 for example, it hardly ever occurs for just one quarter. It lasts — it’s a one-year course of to digest all inventories. And I used to be questioning why it could be totally different this time, in case you suppose that it may be just one quarter and why it took so lengthy for Melexis particularly to see this down cycle versus many different merchandise. In order that’s my first query and I’ve a comply with up, if that’s okay.

Marc Biron: Yeah. Why it took so lengthy? As a matter of truth, let’s say, we had LTA with our buyer and I feel the LTA has blurry a bit the image. Yeah, we have been additionally — we keep longer than different in allocation on some merchandise, and doubtless, it has additionally influenced the conduct of our prospects. And I feel as , it’s a bit extra normally. Yeah, some necessary platform has been pushed out by the OEM over the past six months to 9 months, and I feel these push out of these platform clarify additionally why our buyer needs to get a extra wholesome stock on the finish of the yr.

Francois Bouvignies: And why would you counsel just one quarter? I imply, in case you look up to now, it’s normally a for much longer course of than one quarter. So why would that be totally different this time?

Marc Biron: After we mentioned with our buyer and we mentioned since in September on this side with our buyer that all of them talked about that with these push out, they arrive again to a wholesome stock state of affairs at their palms. I can simply repeat what the shopper advised us.

Francois Bouvignies: Okay. Thanks, Marc. And possibly my comply with up is on pricing. Clearly, we’re on this finish of the yr negotiation interval. We hear that autos, I imply, makers are clearly in wrestle, asking for lots of reductions. How ought to we take into consideration the pricing subsequent yr for Melexis? How do you are feeling concerning the pricing negotiation proper now within the present surroundings?

Marc Biron: Yeah. We’re certainly in the midst of the costs negotiation. It has not been completed. I’d say, yeah, the amount is a query that there’s certainly all the time a correlation, let’s say, between the amount and the pricing, which enhance complexity. We’ve got the LTA, which continues to be legitimate for 2025, which we’d like additionally to take note of within the pricing negotiation. And all these parameters are taking part in a job. After all, we all know that, yeah, we can’t actually implement the LTA. However I feel it’s a great foundation for dialogue on the price. From what I see, we could have a price discount, which has similarities to what we had earlier than COVID.

Francois Bouvignies: Much more. You don’t see extra strain than regular into the pricing, primarily due to LTAs?

Marc Biron: Yeah. As I discussed, there’s certainly, as regular, a whole lot of expectation. However however, now we have our modern merchandise, that are actually bringing new options available on the market. Yeah, there’s the amount, which is a part of the dialogue and now we have our LTA as a fundamental. And all in all, I do imagine we’ll attain the standard price discount on the finish of the yr.

Francois Bouvignies: Understood. Thanks very a lot.

Operator: We’ll now transfer to our subsequent query from Marc Hesselink from ING. Please go forward.

Marc Hesselink: Sure. Thanks. I wish to come again on the stock correction, simply to be sure that I absolutely perceive it. I feel you mentioned that with out the stock correction, you’d finish up on the steering vary. In order that implies that the stock correction is one thing like €60 million pushed out from the fourth quarter. And you then talked about that you just assume that it’ll occur. I’m unsure if I perceive that phrase accurately, as a result of I’d suppose that that is based mostly on the orders that you just obtain from the consumer. So what’s the half that you just assume or might it nonetheless be totally different from that €60 million push out that you just anticipate?

Marc Biron: What we imply is we add order as a way to attain certainly the This fall end result. However the buyer has despatched the order to Melexis up to now and now we have the order. However now that the shopper requested us to push out of This fall. And after we imply we assume, it implies that now we have determined to just accept these requests.

Marc Hesselink: Okay. Okay. Okay. Received it. After which the second can also be going again on the price dialogue. You mentioned there’s a correlation between quantity and price. I assume that you just imply that each time quantity is excessive, the price is best or the opposite method round. However I may suppose that on the present market the place inventories on the shoppers are nonetheless comparatively low they usually actually have to take a look at it then. I imply, truly, what they in all probability will is decrease quantity and decrease price, or is that not the best way to consider it?

Marc Biron: Yeah. It’s all the time certainly. The target, let’s say, of Melexis is certainly to optimize the income and on the identical time to optimize our profitability. And the negotiation is certainly all the time how can we discover this optimum between the amount of subsequent yr and the appropriate profitability.

Marc Hesselink: Okay. Okay. Thanks.

Operator: We’ll now take our subsequent query from Michael Roeg from Degroof Petercam. Please go forward.

Michael Roeg: Good morning. I’ve a follow-up query on the LTAs for 2025 and the road was a bit blurry, so I missed a few of it. So I hope I don’t ask one thing that has already been answered. May you point out roughly how a lot of the amount for subsequent yr is roofed by LTAs? And can these LTAs finish in December 2025 or is there nonetheless a until in 2026?

Marc Biron: The overwhelming majority of the LTAs finish in 2025. We’ve got with some prospects LTAs which are a bit longer, however the majority is in finish of 2025. The issue is the amount which are, let’s say, written within the LTA are far to be not real looking versus the present state of affairs. The LTA has been signed, in case you bear in mind, in finish of 2022, for 2023, 2024, 2025, and in 2022, we have been in the midst of the chip scarcity. After which the shopper has signed LTA with very, very excessive quantity, which is, as a matter of truth, not legitimate now. I can’t reply your query as a result of I feel it’s certainly not related anymore. And that’s why I discussed…

Michael Roeg: Okay.

Marc Biron: … we’re utilizing this LTA in our price negotiation.

Michael Roeg: Okay. I perceive principally the contracts have been a lot increased than what you anticipate to be transport in This fall, Q1 and so forth. However would you say that half your prospects have an LTA or is that additionally tough to reply how that works out?

Karen van Griensven: 40%.

Marc Biron: Yeah. Certainly. What now we have within the LTA is a little more than 40% of the amount.

Michael Roeg: Okay. Clear. Thanks. I’ve two tiny questions, so hopefully I can do two as a substitute of 1. The primary one, what are the forecasts from Commonplace & Poor’s for development in automobile manufacturing subsequent yr and do additionally they have one thing concerning the combine change subsequent yr?

Marc Biron: Yeah. The IHF forecasts 2% international automobile manufacturing enhance in 2025 versus 2024.

Michael Roeg: And have they got a powerful combine change from ICE to hybrid and EV, or is it a modest development and penetration of these two classes?

Marc Biron: I don’t have precisely the knowledge, the final data from IHF in entrance of me.

Michael Roeg: Okay.

Karen van Griensven: No. But it surely’s extra in China than for the remainder of the world. So in China, it’s normally easier.

Marc Biron: Nicely, geographically, China is growing greater than the remainder of the world.

Michael Roeg: Okay. That certainly suggests the place the combo is heading. That’s clear. And the second tiny query, I seen within the steadiness sheet that the prepayments have gone down by €20 million. Is that going ahead the run charge for each quarter?

Karen van Griensven: Are you able to repeat the query?

Michael Roeg: Yeah. I seen within the steadiness sheet that the prepayments to your provider have decreased by €20 million versus final quarter?

Karen van Griensven: Yeah. However that — you see a rise within the short-term present property and that’s actually — it’s moved from…

Michael Roeg: Okay.

Karen van Griensven: … short-term, however the complete continues to be the identical.

Michael Roeg: Okay. So, truly, there have been no…

Karen van Griensven: No.

Michael Roeg: … prepayments coming again to you?

Karen van Griensven: No. That’s for 2025.

Michael Roeg: 2025.

Karen van Griensven: The contract is so good that within the second half of 2025, we’ll see repayments by our provider.

Michael Roeg: And is {that a} degree of funds of, say, €15 million or €20 million each quarter, the identical quantity or is it — will it fluctuate strongly?

Karen van Griensven: It will likely be a hard and fast quantity per quarter. Yeah, it’s fairly fastened. There are two contracts. In 2025, it’s the primary contract on which we could have repayments. I feel within the vary of €16 million or so, I feel, per quarter, €16 million.

Michael Roeg: Good. Thanks.

Operator: Thanks. And we’ll now take our final query from Robert Sanders from Deutsche Financial institution. Please go forward.

Robert Sanders: Yeah. Hi there. I simply had a query about China. It does really feel like that enterprise was the upper margin a part of your small business, nevertheless it might turn out to be now the decrease margin a part of your small business simply because they’re rising they usually appear to be doing auctions and that’s the place you do appear to be a part of a two-supplier setup. So do you acknowledge that pricing strain ought to enhance in China simply because they use these auctions and that that would have an effect on your combine in 2025? Thanks.

Marc Biron: Yeah. There may be certainly some unction for some product household, however for positive not all of them. And certainly, when there’s unction, there’s certainly, as you talked about, some price strain. However however, it’s a really restricted a part of our quantity in China on this state of affairs. Then again, and I used to be in China throughout two weeks in September, all our innovation initiatives, modern merchandise are nonetheless very nicely welcome in China and the aim is all the time to deliver new merchandise, modern merchandise to keep away from the price competitors and this new product compensates, let’s say, the merchandise which are extra mature. This can be a technique now we have all the time used, and never solely in China. Because the starting, it’s why we insist a lot on the launch of recent merchandise. In 2024, we’ll launch 20 new merchandise available on the market. That is innovation and for this reason we’re in a position to maintain our profitability. It’s the case in China as it’s within the different elements of the world.

Robert Sanders: And do you anticipate — how do you anticipate the 2025 gross margins pan out then, on condition that presumably pricing goes to be extra of an issue subsequent yr and the regional combine goes to be totally different? What are you able to say? Thanks.

Karen van Griensven: Nicely, we don’t run forward with steering on 2024. There may be a whole lot of, yeah, uncertainty out there. However what we will say is that, we’re additionally engaged on our — yeah, on our provider base to counterbalance the price erosion that now we have all the time had up to now. So it’s not new price erosion. But in addition on the provider facet, we’re engaged on this to restrict the affect on our gross margin shifting ahead.

Robert Sanders: Yeah. Thanks a lot.

Marc Biron: We’re additionally launching merchandise which have a greater price construction and it’s additionally a part of the price negotiation. We all the time strive within the price negotiation to get, let’s say, an audit for a change and to have the ability to present a chip with a greater price construction sooner or later. It’s one other instance of what we attempt to get exterior the price negotiation.

Robert Sanders: Thanks quite a bit.

Operator: Thanks. [Operator Instructions] And now we have a follow-up query from Sandeep Deshpande from JPMorgan. Please go forward.

Sandeep Deshpande: Yeah. Hello. Thanks for letting me on once more. I simply wish to make clear, you mentioned that China rose 9% within the first 9 months of the yr. How a lot was China as a proportion of your gross sales in 2023 and the way do you see that creating in 2024 as a proportion of your gross sales in 2024? And a fast follow-up on the pricing negotiations as nicely. You talked about to a response to the sooner query that you just anticipate pricing to be prefer it was pre-COVID. Does that imply that you will note an even bigger correction now in comparison with — as a result of in the previous couple of years, you’ve seen price will increase in all probability and so is that this going to be a unique form of negotiation in comparison with what it was during the last three years?

Marc Biron: Yeah. Maybe I’ve expressed myself not accurately. What I wished to say is that, the price discount will likely be on the identical degree than the price discount earlier than COVID. I didn’t wish to say that we’ll come again on the pre-COVID price. It was simply concerning the proportion of price discount.

Sandeep Deshpande: Understood. And does that imply that pre-COVID, the price reductions have been increased? Is that the purpose you’re making?

Marc Biron: No. No. I wish to say that pre-COVID now we have all the time had, let’s say, a low single-digit price discount and I do imagine that it will likely be related.

Sandeep Deshpande: Understood. After which on China?

Marc Biron: Yeah. On China, in 2023, it was 26% of our income, and now, year-to-date, in 2024, it is a little more than 27% of our income.

Sandeep Deshpande: Thanks very a lot.

Operator: Thanks. It seems there are at present no additional questions. So, with this, I’d like to return over to Marc Biron for any extra closing remarks. Over to you, sir.

Marc Biron: Thanks. Thanks for all of the questions and for the dialogue. And I’m wanting ahead to debate once more with you in the course of the This fall end result and the total yr end result that would be the fifth of February in 2025

Operator: Thanks.

Marc Biron: Thanks all of you.

Operator: Thanks. This concludes in the present day’s convention name. Thanks on your participation. Women and gents, it’s possible you’ll now disconnect.

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