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Melexis NV
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Hello, and welcome to the Melexis Q2 2021 Results Call. My name is Josh, and I will be your coordinator for today's event. Please note that this conference is being recorded. [Operator Instructions]I'll now hand you over to your host, Francoise Chombar, to begin today's conference. Thank you.
Thank you, operator. Dear audience, it's a pleasure to welcome you again to our Q2 2021 earnings conference. And today, we are 3 speakers. So as usual, Karen Van Griensven, our CFO; and myself, Francoise Chombar, and today also Marc Biron, future CEO. So let's cover some top line and financial background first. And after that, we'll be happy to answer any questions you may have. Q2 2021 comes with another sales record, EUR 159.1 million, just shy of EUR 160 million, an increase of 58% year-on-year and an increase of 2% quarter-on-quarter. As in Q1, we are not constrained by demand, but by supply. And Q2 was probably the worst in terms of managing expectations from customers. This being said, we have risen well to the challenge of allocating the available material fairly across our customer base. Our teams have done and are still doing a wonderful job and I join our customers in praising them for their resilience and solution-oriented attitude. In the first half of 2021, the outperforming product lines were embedded lighting, temperature sensors and the magnetic sensors product family. Let me give you some more color on each of those 3, starting with magnetic sensors. When we look at position sensors and our latch & switch products, they have gained traction in automotive applications during the first half of the year, not surprisingly. In the adjacent markets, the current sensor and also the latch & switch products have been particularly successful. And that confirms our strategy and the recent launches of dedicated adjacent products for those 2 product lines. Temperature sensors grew well, both in automotive and in adjacent applications. And we see greater volatility in the months to come because adjacent demand is usually more fluid, less predictable, as we all know. But in Q2, we also cleared the largest part of our backlog demand, thanks to capacity increases on the supply side. COVID-19, however, remains a factor to reckon with, as it continues to disrupt our supply chain, particularly in some countries in Asia, who usually forcefully react to any outbreak. Then finally, our embedded lighting product family grew tremendously in the first half year, paving the way to more than just comfort functions in cars. Networked lighting has an ever-increasing role to play in the communication of information like warning of a hazard or emergency. But light also interacts with the car occupants. For example, when he's using a headset or to just indicate battery charging, and light interacts also with voice recognition and navigation systems. Our leadership in interior automotive lighting is now being extended to novel and stylish design of exterior lighting, serving equally as an interaction tool with the outside world. Melexis ICs shape the future. The products we launched in the second quarter exemplified how well our teams are delivering on our strategic intent. Indeed, all of the Q2 launches built further on our patented Triaxis Hall technology, which continues to provide a bedrock to bring value to our customers. Let me give you 3 examples. In adjacent, we launched a new magnetic sensor for position measurement in HMI applications. HMI is human machine interfacing, but they also serve door closure detection in white goods and access control systems, anti-tamper for smart metering and contact joysticks. So quite a breadth of applications. Secondly, in automotive, we brought to market a new magnetic position sensor for advanced steering and braking applications and also new family members, especially conceived to support the heightened temperature operation in both hybrid and electric vehicles. And last but not least, we launched a next-generation current sensor for automotive power conversion applications. To conclude, Melexis is well positioned to play a leading role in the transformation of our markets. And I'm happy to be taking up another role from August onwards with a company that is in a marvelous place full of opportunities. I consider it an honorable ending of my CEO tenure and an honorable beginning for the new CEO with his crew. Marc, handing the stage now literally to you.
Thank you, Francoise, and thank you for the time spent with me during this transition period, but even more important, thank you for all your advices and all your guidance given during those more than 20 years working together in Melexis. Thank you for that. As we mentioned during our Analyst Day in June, our product centers around planet and around people. They contribute to making our planet more sustainable, making home energy more efficient, promoting clean energy and eliminating pollution. Melexis products also contribute to improving people live, for example, by upgrading point-of-care equipment or smart wearable device or making the car safer and more comfortable for the users. We see those contribution translating already into business today and even more so in the future. We continue to work hard to address the ongoing supply chain issues. Combined with an expected strong demand for the remainder of the year, we are upgrading our guidance for the second time this year. Even if car sales have risen sharply following the uptake of the economy post lockdowns, nobody expects worldwide that car sales will exceed estimated volume anytime soon. The more important trends for Melexis is that the car of today and especially the electrified vehicle are much more semiconductor-rich and even in particular, much more sensors and driver rage. It's why we can truly say that Melexis IC shape the future. Moreover, Melexis strategic intent to diversify beyond automotive is well underway. We built on our fundamental competencies and technologies we have been using in automotive. Before handing over to Karen for the financial results, I want to conclude by saying that we have sound strategy, and we will continue and develop such a strategy. We have a great product. Those products are wanted all over the world, and we will continue to expand our portfolio, thanks to our innovation and also our innovative experience.
Thank you, Marc, and good morning to everybody. Yes, some more comments related to the financial results. So yes, sales came out at -- for the second quarter at EUR 159 million, an increase of around 58% compared to the same quarter of the previous year. and an increase of 2% compared to the previous quarter. The euro-U.S. dollar exchange rate evolution had a negative effect of 4% compared to the same quarter of last year, and no impact compared to the previous quarter. The gross result was EUR 67.1 million or 42.2% of sales, an increase of 73% compared to the same quarter of last year. And an increase of 3% compared to the previous quarter. R&D expenses were 12% of sales. G&A was at 4.9% of sales, and selling was at 2.3% of sales. The operating result was EUR 36.4 million or 22.9% of sales, and selling was at -- which is an increase of 260% compared to the same quarter of last year and an increase of 5% compared to the previous quarter. The net result was EUR 33.5 million or EUR 0.83 per share, an increase of 246% compared to EUR 9.7 million or EUR 0.28 per share in the second quarter of 2020, an increase of 21% compared to the and an increase of 21% compared to the previous quarter. The Board of Directors also decided on an interim dividend of EUR 1.3 gross per share. And the shares will start trading ex coupon on October 19, 2021. Regarding the outlook, Melexis expects sales in the third quarter of 2021 in the range EUR 158 million to EUR 163 million. And for the full year 2021, Melexis expects a sales growth between 24% and 27%. A gross profit margin of around 42% and an operating margin of around 22% at the midpoint of the sales guidance and all taking into account a euro-U.S. dollar exchange rate of 1.18 for the remainder of the year. So I would like to open now the Q&A session. So please, operator, go ahead.
[Operator Instructions] Our first question comes from the line of Matthias from Kepler Cheuvreux.
First of all, for me, I'm wishing you all the best, Francoise. I guess all good things have to come to an end once but I'm sure it will be replaced by plenty of other good stuff and also goodluck to Marc as well, of course. And then regarding my question, you mentioned already supply chain constraints in Q2, probably the worst quarter. Would it be possible to put a number on it? And how do you see this evolving in the coming quarters? Do you think really that Q2 was the worst? I say Nissan recently made comments that for them Q3 would potentially be the most impacted. How should we think about this going forward? And how much of a constraint is this on sales evolution?
Okay. Thanks, Matthias, for this intervention. Thank you for your nice words. There is a good ending, and there is also a good beginning. All good things also have a beginning. So I'm very positive about that, both for the team and Melexis and of course, also for myself. On your question, so why do I say that Q2 was the worst, that was in terms of managing expectations by customers. What we see today is that, let's say, customers are more -- they are not yet accepting completely because they are continuing to push, of course, for more delivery. But what they are accepting is that there is a limit to everything. And they are also accepting because we explained it well to them that we try to fairly distribute whatever we have across the board so that everybody keeps running. And we are also very attentive to potential overstatement of current demand or really needs, current needs because, of course, we know it's not a solution, but it's very human to -- when you have a shortage to exaggerate your future demand or even exaggerate your current demand. So we have multiple ways. It's difficult sometimes, but we have multiple ways at least to sense and identify where the need is the highest. So that was the most difficult. Of course, downstream, yes, the impact of the allocation that we did is still coming so that -- for example, in Nissan now says, yes, the worst is still to come, yes, because they are downstream, and there is a time delay in seeing the impact of that. Q2 was also the worst for us because in Q1, we still could deliver out of inventories that we have built up because as you will remember, we were extremely proactive in -- already in the summer last year, taking the decision to increase wafer starts and to keep our inventory at a decent level for the tsunami that would then be coming, but we also did not expect that the tsunami was going to be so [ vehement ]. So in Q1, we still could deliver out of the inventories we had built up. In Q2, that inventory was gone and the extended capacity was not completely, yes, in the works yet. But in the remainder of the year, we should see that coming those capacities, those gradual capacity extensions anywhere in the supply chain, so not only at our suppliers, but also at our test facilities. And so the -- there is now a relatively predictable way in which we will -- we have allocated and will be delivering to our customers. And that brings a lot of calm, both on our side, though the situation is still tense. It gives a lot of calm with the people dealing with the supply chain and with customers. And it gives also a good predictability towards our customers on what is possible and what is realistic and what is, in fact, not possible until later. So in that sense, that's why I said Q2 is probably the worst. And now it's building up and continuing to see where we can improve as much as possible because that's also what our customers are expecting from us and what we are delivering. I hope that answers your question, Matthias.
Our next question comes from the line of Stephane Houri from ODDO BHF.
Yes. Me too, I'm wishing you the best Francoise, for your next adventure. The first question is on the current situation, if you could please describe the current situation. Maybe by highlighting what are your lead times, the inventories in the chain as you see them? And also maybe the pace of current bookings and if there is a double ordering in the chain that will be helpful. And that's my first question.
Okay. Thank you, Stephane, also for your nice words. So the impact on the different product lines is somewhat different because we have supply lines that are -- that involve different countries, that involve different complexity of the value chain. So lead times, it depends a bit what you call lead times. If, of course, the capacity had -- was there. And the original lead times were respected. Yes, we could deliver according to lead time. Now what we see and then you hinted at it as well is the risk and the potential risk of double ordering, which I said in my previous reply that we are very attentive to that. And we have ways to find out, let's say. And meanwhile, we're very good at finding that out. though, of course, nobody is perfect. But at least, I think we managed that pretty well. So additional volumes that were not in our long-term capacity planning, of course, cannot be built up as fast. So that takes time to build up. In some cases, yes, if we want to increase capacity, in normal times, it would require maybe 3 to 6 months. Today, it requires much more than that, up to 1 year. So that -- if that happens, of course, the lead time then goes up to 1 year or more. But if we look at how we have leveraged that, in fact, for our own test facilities, for example, the long-term planning, we invest always ahead of time, and I can refer also to the Sofia building. It took 3 years to build that building. But at the same time, we take action to standardize, for example, our equipment park as much as possible so that, that leverage is at our hands as well. But of course, today, machines or equipment, test equipment also take a longer time than in normal circumstances to get delivered. And the same is true for capacity at our suppliers where you take the wafer fab. There is still capacity potential upwards, for example, in Corbeil. And at our assembly suppliers, we have always also done long-term -- like with our wafer fabs, a long-term capacity planning that goes over 2 years, let's say, where we see that we now take gradual capacity extensions or we qualify second sources, whether it's for raw materials, at our current suppliers or qualifying new vendors. Those have always been options that we have weighed off against each other. Does that complete your question? The answer to your questions, Stephane?
Yes. Yes. In fact, there was also the point of level of inventories in the chain as you see it? Have they increased or not at all, they have not changed since Q1?
The level of inventory is more -- well, it has increased a bit because, of course, it increases a bit with higher demand which we are seeing right now, but it's expected to remain pretty stable over the next months to come. Thank you, Stephane. If you have a second question, may I park that one until we have done the first round of questions?
Sure, sure, absolutely. Okay.
Our next question comes from the line of Ruben Devos from KBC Securities.
Just coming back on the order book. Obviously, the commentary suggests order activity appears to remain red hot, maybe looking beyond 2021. Just curious whether you could talk a bit about the characteristics of the order book today. Does it include orders that will be delivered in 2022, products specifically are in relative higher demand? In terms of discussions with your customers, what are so the expectations they have from Melexis for next year? Just trying to get some feel of whether the strong momentum we're seeing could carry over into next year as well? That's my first question. And I have a second one, maybe later --
Okay. I will answer, Marc will answer. The order book is still very strong. I mean it did not -- has not been weakened in the last week. Customers are still ordering on the high level, let's say. Of course, customer accept difficulties and try to navigate, let's say, and we are all a bit creative to deal with shortage, and we support the customer in this process. but the order book is still strong. And your question is towards 2022. Yes. As far as we see, we don't see any weakening, let's say, in '22. But what I can perhaps say is that it's clear that today, the customer order with a longer time horizon than before. Yes. Now we have really already order for the end of '22, which is a bit atypical. And it's probably because the customers want to show their commitment to Melexis and then they order with the longer time horizon.
Yes. Can I follow-up on that. Can I ask a second question?
If it's a real follow-up on that one, yes. Otherwise, we ask you to wait for the second round. Thank you, Ruben. Go ahead.
Okay. Just because as Marc mentioned that there's longer-term visibility. It relates to what I was thinking about in the past, we used to see just-in-time inventory management that looks to be -- that looks to become a thing of the past. So actually, I was just curious of your thoughts with your customers and the OEMs reevaluating the inventory policies, whether you could share some of your thoughts on how these changes in inventory management may have an effect on Melexis in the longer term?
Well, that's something that we are currently discussing, of course, with our customers. It's -- for everybody, it has been a focus today in delivering or in managing the delivery short term. I think the -- and we are in the midst of discussing how could we, in future, avoid this happening again. And it's clear, and I said it already at the last earnings conference, it's -- for now, it's the end of the JIT principle, the just-in-time principle because it has become totally incompatible with the realities of making semiconductors. Semiconductors have become much more complex, complex in the sense of the more and more technologies, which we are not in, but also complex. If you look at our products, some of them are extremely complex and advanced as far as integration of features, different heterogeneous integration of new materials are concerned. So these are really have become really complex systems that demand that we altogether in the supply chain, look at it differently. But that is too soon to tell how that will play out. I think everybody should now -- yes, look back and learn the lessons of the past and see how we can do it better in the future. Thank you.
Our next question comes from Francois-Xavier from UBS.
I have just one question on the gross margin. We have seen in the last few quarters and the latest comments from TSMC from the foundry players that they are increasing the price. Some are more aggressive than others. I mean, Vanguard then UMC, I know it's not part of your suppliers, but TSMC just recently said that they will increase the pricing in the second half of the year as well. I believe TSMC is not the main one, but you are using them. And I just wanted to have your view on -- how do you see the cost of manufacturing for Melexis maybe in the second half of the year and maybe in '22? And what is the pricing development of your own product? I mean, can you -- do you manage to pass any cost inflation to your customers where that -- in the past, we always talk about 0% to 5% price decline every year? So just wanted to have your view on this, yes, gross margin moving parts, please, would be great.
Yes, Marc speaking. You are right. Indeed, we are also -- we have also faced some price increase at some of our suppliers, not all of them, but indeed, some of the suppliers came back to us. To answer your question of how we will deal with this. You probably know that part of our business is done via distribution. And we have, in June, increased the price of the product going into distribution. And now we are evaluating how we will deal with this price increase. Yes, likely that we will push toward the customer this price increase, but we are still in -- I mean, we evaluate the best way to do it and the best level because, indeed, the competition is also doing the same, that we are evaluating the best way to pass this price increase.
Can you remind us what is your exposure to distribution then on percentage of sales? I thought it was like 20%, 25%?
Yes, indeed, 25%.
Yes. Okay. So on the automotive side, you won't pass to the customers. Is that the right way to look at it? On the direct sales?
Not do it yet. The distribution is indeed mainly the -- what we call the adjacent and then the automotive. And for the rest, we are evaluating. We did not yet take a position. But yes, the idea is to pass at least part of the cost increase to the customer.
At some of the cost increase is also not yet fully known today. So this process is ongoing. There are still a lot of unknowns. But indeed, we will try as much as possible to balance the inflation from suppliers and yes, also pass on where we can to customers.
But when you say unknown, Karen, I mean, the gross margin for the full year is 42%. So did you bake in any headwind in the second half from the manufacturing foundry side?
So far, it's based on what we know today. But what we don't know, we don't know.
Our next question comes from the line of Marc Hesselink from ING.
Looking at the nonautomotive part, again, quite a big step-up over the quarter. And given that you are supply constrained. Is there a way you make -- how do you prioritize which clients go first? And is that the case that in this case, some of the nonautomotive business as a priority?
Yes. Thank you, Marc, for your question. Well, it's a complex thing to decide on who gets priority over whom. It's also a complex set of, you could call it, KPIs or data that we're looking at. But also, indeed, our strategic intent very much direct the final decision that we take on this one. We tend to prioritize customers that are loyal to us or have been loyal to us. We tend to prioritize those businesses that are sustainable longer term. Typically in automotive that will be, of course, the strategic for growth opportunities. and in adjacent, it is also a strategic intent. And of course, with adjacent, what you see is either you take the business now and you have it for maybe a longer term or you decline it and then it's gone forever. So those are also elements that we take into account when making decisions. But it's a very complex thing that decision-making and it involves our -- the best of our market knowledge and the best of our people. So far, I think we're doing the right or taking the right decisions going forward. Yes, that is also something that we explain to customers. And Marc mentioned that we are extremely creative and our customers are also sometimes extremely creative in finding ways to -- yes, to keep the business going.
Okay, and also -- is that also feasible in the gross margin, you prioritized the products with the highest gross margin?
It's -- I would say, it plays a certain role, but it's not the first because it's not the first element that we take, but it -- yes, of course, it plays a role. We would be stupid if we wouldn't take that into account. Nevertheless, the -- in Melexis, we have always made short-term decisions with a view on the long-term strategic intent. And that is, I think, how we are also dealing with these difficult decisions today. it is not different than how we did it in the past.
Okay. And then if I do understand it correctly, at the beginning of the startup process, you have a certain amount of wafers that you can order and that you can fully discretionary decide what's going to be pushed on that wafer? Is that the way to think about it?
Yes, it's more or less that. Yes, indeed. So there is an available capacity that, of course, we feel and we maximize as much as possible. and then we distribute over the businesses that we see, yes.
Our next question comes from the line of Robert Sanders from Deutsche Bank.
I'll just take one question then. It just would be if you could just sort of describe the level of tightness in your core markets like magnetic sensors, I mean, are you seeing OEMs willing to do sort of incredible things to swap out designed in products at a late stage, given short supply as we're seeing in microcontrollers? Or is this not really happening in your core markets?
On the magnetic product, yes, sometimes, indeed, we cannot deliver the product of choice, let's say. But then in discussion with the customers, we can find an alternative product that fits also the application and this kind of -- this is the kind of the idea of innovative initiatives that Francoise mentioned. Yes, sometimes we use a Plan B, let's say, and we are able to provide another product that fits the application. And this we can do for sure in the magnetic product because we have a huge portfolio of products. We have Gen 1, Gen 2, Gen 3. And in between those different Gens, we have different kind of products, then we have a bit more flexibility, let's say, to be innovative. When we have an ASIC for one customer, we cannot be going to do this because it's a single product to a single customer.
Yes, yes. and what you hinted at, Robert, also is the potential lack of microcontrollers. You cannot replace one-to-one a microcontroller with a Melexis product or vice versa for that matter. However, what we do see is that some of the functions or some of the Tier 1s, let's say, when they look at their system, they can choose alternative ways to service the OEM in - with a pump, for example. And they have maybe a system with a pump that is -- that has a microcontroller. And they have a similar pump that maybe has our integrated product drivers because as you might remember, we make integrated products. That means that some of the products -- driver products, but also some of the sensor products, they integrate a small micro processor, that's why we call our products edge sensors and edge drivers as well because they do a certain amount of computing for a particular function. And what we noticed indeed is that OEMs will look at their portfolio of choices for pumps. And indeed, we sometimes get interesting requests for delivering an integrated product that then is used in a system that is similar but not completely the same as the other pump that uses a standard microcontroller.
And this favors companies with large portfolios like yourself rather than the small narrow players, basically.
Well, you could say that -- You could say that, though there is a high amount of luck involved as well to what is possible. But what we see is indeed and what is important is that we gain a lot of market intelligence by all these -- by talking to not only our direct customers about this, but also because OEMs are approaching us from that perspective. Usually, we talk to OEMs for future-oriented technologies and future-oriented solutions. In this case, we come to know a lot about the current state of where they buy what. And that helps us also to understand that there is, yes, quite some additional potential still for Melexis products in future as well. So even if we cannot just simply have a one-to-one replacement for microcontrollers, we do see that the potential for new business is fantastic by having those discussions with OEMs that we -- in others in normal circumstances, we would not have had. And that brings a lot of market intelligence. So that's also a silver lining of such situations.
Our next question comes from Varun from JPMorgan.
And best wishes to you, Francoise and Marc for your new roles. I actually have 2 minor clarifications on questions that were asked earlier. The first one is on your order book. you mentioned that you're receiving longer-dated orders now. So can you just make a comment on your backlog duration, i.e., how much of your backlog is for delivery starter slated for 2022? And then secondly, based on your comments that you made in reference to your gross margin, it seems like we are at the peak gross margin level at least for the near term, for the next 4 to 6 quarters. Is that the right way to think about it?
Maybe first, the question on the GPM. So yes, we got -- we have 42% in Q2. We also -- in Q2, we also -- we also guide 42 -- around 42 for the rest of the year. So this is indeed the norm or the structural gross margin moving -- we expect moving forward in the next quarter, if that answers your question.
But Karen, is that the peak level that you expect? I mean, even for 2022, is that the sort of level that you expect?
Pardon?
Is this a level of gross margin that you expect even for 2022?
We don't guide yet on '22. But all in all, we have a good product mix for the moment. That gives us gross margins of 42% for the time being. There are other things at play in the market. But all in all, we expect that we have our gross margin quite well under control, that if not so much leverage upwards moving forward, but also downwards, we don't see major risks at the moment.
And on the backlog duration?
I can answer that one. It's very hard -- we do, for example, not disclose the book-to-bill because it's very hard to make that happen because our customers have a very diverse order behavior and order channels, et cetera. What is important in this case is that we can now or there is now with our customers an openness to discuss these longer-term commitments than there was before. I think everybody now realizes in downstream, let's say, everybody realizes that -- we cannot prolong the way we worked in the past, but that we have to be much more forthcoming and also our customers and our customers' customers has to be much more forthcoming in providing visibility. And those are the discussions and that's the good thing about it. Those are discussions that are now ongoing with customers. And we are very happy that this -- that we can do this now that there is this openness because they realize that they have a role to play in providing the right visibility. And we also have a role to play to explain to our customers why certain areas are difficult and where the risks are and what are the type of information that we need from them in order to be able to secure deliveries to them longer term. And that's the good thing about it. So it's not so much about how much is now -- how -- at how much is the backlog longer term, but rather how conscious is now the awareness in the whole supply chain that we have to work together differently than in the past. And we have to start working together in the first place. So that's a very good thing. That's definitely also a silver lining of this crisis.
And our next question comes from the line of Michael from Degroof Petercam.
I also have a question on the supply chain and not downstream to your customers, but more upstream because you are also limited by the supply chain. And your guidance for Q3 and the full year suggests 2 more quarters of flattish sales. So I was wondering when do you expect your wafer supplier to be able to boost your capacity so that you can get more wafers and grow beyond the 160 in sales.
Well, that's something that we are doing all the time. We make long-term plannings with all of our suppliers, and of course, also with our wafer supplier, which, of course, you know is most of the time X-FAB. X-FAB still has quite some capacity available at their newest facility, which is in Corbeil, South of Paris. We have been working with them since about 3 years, something like that, to qualify quite a number of products -- quite a number of products in certain technologies at this fab. And the same is true for other fabs. So also for Dresden, we have been qualifying. So we have been in that process for a longer time already. And I think that 2022, we will continue -- or the rest of this year but also into 2022, we will continue to work on this and see where we can boost capacity either by debottlenecking or by adding real complete new lines. Gradual process, there is no digital -- it's not digital, it's rather analog as we are taking.
Yes. But of course, the goal is more wafers, simply put?
The goal is more output. And of course, amongst that, it is also more wafers, yes.
Yes. And so 2022, more and more output, more wafers, that is something that could be happening. Is that visibility good enough to suggest that it could already happen in the first half or maybe [ build upon it ] gradually?
Yes. As Karen just mentioned, we will give guidance on 2022 in February.
Okay. That's a smart answer. Good. Thank you for the clarification.
You're welcome.
[Operator Instructions] We do have another question from the line of Stephane from ODDO BHF.
A lot of questions have been asked, obviously, but I still have 2 kind of housekeeping questions. The first one is to really understand what's in the financial results this quarter and how we should model it going forward. If you have an idea on that would be helpful. And also on the tax rate, not for this quarter, but maybe going forward, how should we model the tax rate.
All right. So on the financial results, we had an exceptional result in Q2 related to the unrealized revaluation of our inflation hedge. So this -- it's exceptional. And it can also be in the other direction moving forward. So on the fiscal results, yes, we guide for the year around 15%. Moving forward, long term, we always put forward 15% to 20% as guidance.
And in your definition, is 2022 long term already? Or should we stay in the middle of what you're doing today and what you're guiding for the future?
For the?
The tax rate for 2022? Will it be already higher than in 2021 or...
It's too early. We don't guide yet on '22, sorry.
Okay. So we have no further questions in the queue at the moment. [Operator Instructions] Okay. So we have no further questions, so I'll hand you back over to the host.
Okay. Then thank you for all the questions. I hope the answer satisfying to you. And we are looking forward to meet you again at the next earnings call, which is scheduled on October 27. Thank you, everybody, and have a nice day.
Thank you very much for joining today's call. You may now disconnect your handsets. Hosts, please stay on the line. Thank you.