Knaus Tabbert AG

XETRA:KTA

Earnings Call Transcript 2022-Q4

[Operator]

[Audio Gap]

The CEO, Wolfgang Speck; and the CFO, Carolin Schurmann, will give you a presentation on the results in a moment. [Operator Instructions]

We are looking forward to the results, and I hand over to Mr. Speck.

[Wolfgang Speck, executive]

Thank you very much. And I would like to welcome you to our report on the 2022 financial year of Knaus Tabbert. And to put it in a nutshell, 2022 was again a very exceptional and very challenging year. Demand for our products remained high and brought us to new records in order intake. And, at the same time, an extreme shortage of motorized chassis for motorhomes led to significant underutilization in our factories.

In Hungary, for example, about half of the workforce was out of work for months. And that fact that we jumped over the EUR 1 billion turnover mark underlines the group's high level of adaptability and performance. And the Knaus Tabbert Group has successfully developed in this difficult environment. EUR 1.50 billion turnover, almost 30,000 vehicles sold and EUR 70 million EBITDA, yes, I could say -- yes, I'll say we have done our homework, and we have repositioned our company.

And an essential building block for this is our multi-brand strategy for chassis suppliers, and we have killed and shown the field in 2022. This means that we have invested further in our future, in state-of-the-art production capacities and in forward-looking vehicle technologies.

We were already able to reap the first harvest in the fourth quarter, and we are particularly proud of this. An impressive final quarter. Not only confirms the correctness of our measures, but also underlines great potential of our strategy.

In the fourth quarter alone, we were able to generate EUR 356 million, more than 1/3 of the total annual turnover. And this fourth quarter with EUR 39 million EBITDA, delivered more than half of the full year result. And this quality of results is to become the new normal for Knaus Tabbert.

Our building block of our strategy is our new multi-chassis philosophy, and this leads us to the next page. We have addressed supply chain issues with vision in terms of a long-term sustainable strategy. This means bringing new chassis suppliers on board, switching production to more caravans in the short term and, above all, sticking to our well-trained team, with 15 new model variants based on new chassis from Mercedes, MAN, Volkswagen, and Ford, we have succeeded in making a real breakthrough. In other words, we have made a change of strategy at the right time and with success.

Our multi-chassis strategy will make us significantly more independent of individual suppliers in the future. Security of supplies has increased significantly, and we have reduced our dependence on individual big players in the market. In addition, it also increases the attractiveness of our product portfolio.

And with the Volkswagen chassis T6.2, we have not only added a new chassis to our product range. Now based on the T6.1 chassis, we have created a completely new vehicle class in Europe, short, compact, versatile, family-friendly, modern, luxurious, parking-friendly. We have shown courage and we achieved the seemingly impossible and hit the bull's eye.

Not to mention the fireworks of new products that we launched last year. We have presented a whole armada of new and innovative vehicles, 13 motorhomes and 2 caravans as part of a model offensive for the current 2023 season. That was not the matter of course.

In fact, with the order situation and the feedback from 2 major trade fairs, the caravans along in Dusseldorf last year and the CMT in Stuttgart this year, we can say today that we really hit the mark with this product offensive. And this is true both in terms of the distribution and the new models among the different segments and brands and with regard to the allocation of the chassis to our brands.

Despite the short time, we got it right on the dot. And that is a great achievement of the entire team which cannot be valued highly enough. And on this point, a warm welcome, thank you to more than 4,000 enthusiastic people working together as a great Knaus Tabbert team.

The new models have already achieved good sales at the trade fairs, which is always a positive sign for customers' acceptance and have immediately taken up positions in this segment in terms of sales figures.

Products in line with the market is one building block, but the general market development, another. That leads us to the next page.

Tourism in Germany is strongly characterized by mobility, and the Knaus Tabbert Group, which is with its broad portfolio of caravans, motorhomes and camper vans as well as a digital rental brand, benefits with its range of products from the trends towards more individuality, freedom, independence, regionality and sustainability in holiday travel. And the main driver is the high demand for motorized leisure vehicles. In 2023, the shortage of semiconductors led to a shortage of electric vehicle components such as control units, steering systems, et cetera. And as a result, factories in Europe came to stand still at times despite unbroken high demand. And of course, there was a shortage of motorized chassis for motorhomes and the drop in production caused the decline in new registrations in this segment.

Motorhome dealers were sold short in some places and yet 218,301 recreational vehicles were newly registered in Europe in 2022, 91,000 of them in Germany. And the German and European markets both are still at high level, what we see still as of today.

And the market potential is huge, almost every 4 adults in Germany can imagine taking a caravaning holiday within a 5-year period, and that is good 14 million people. We also expect additional growth impulses from the development of new markets as well as stronger market penetration.

And we have 2 significant growth levers for the future. Firstly, the full utilization of the newly created production capacity; and secondly, the shift of the product mix back towards high turnover and high-margin motorized motorhomes.

Our perspective lies clearly and visibly ahead of us, that means profitable growth. Our order book provides a really solid basis for this. Due to the continued high order intake, the order backlog as of 31st of December, as in the previous year, by the way, was around EUR 1.2 billion or 30,711 units. And this, of course, gives the planning security for the year 2023.

Around 58% of the order backlog are motorized vehicles, means motorhomes and camper vans, which have a higher absolute profitability. And the already mentioned multi-brand strategy for chassis suppliers also contributes to this, which has once again increased the versatility and attractiveness of our portfolio for customers. Yes, caravaning is a growth market.

While buyers of recreational vehicles are predominantly the 50-plus generation, more and more younger people, especially younger families, are becoming enthusiastic about this type of travel and the rental market also plays an important role for the customer group, because renting gives people the opportunity to experience caravaning. And this also accommodates to the growing trends towards the sharing economy. In this respect, the success of our own rental brand, rent and travel, but also many strategic partnerships with a wide variety of rental companies, boost our order intake.

Yes, the fourth quarter finally brought a big boost in deliveries and 2022 financial year ends with strongest quarterly results in the company history. This is a headline of today's press release, a strong message that we are very proud of. And the fourth quarter indeed shown with record figures with EUR 356 million, the highest turnover to date, was achieved in one quarter. Knaus Tabbert also showed strength in the results, the adjusted EBITDA margin was 11% and contributed significantly to achieving the forecast.

And we must not forget this, we have held on top our workforce for long periods of time against the backdrop of the increasing shortage of skilled workers despite interrupted supply chains and weeks of production downtime. Not only that, but we have also continued to strategically build our workforce. This has weighed on our profitability in the first 9 months.

Now we can reap the harvest. This strong team now provides the corresponding [ fruit ] to pursue the targeted growth cause with full force. And we will hire even more people to fill our new factories with life.

In the past business year, we have invested unwaveringly in the expansion of our production capacities and the use of new technologies. And it is an old saying that today's investments are tomorrow profits.

And the construction of a 20,000 square meter production hall, which started in autumn 2022 will be completed in May this year, by far the largest and most modern hall in the Knaus Tabbert production network. It will, in future, contain the most modern production lines for the automated manufacturer of all site walls, floors and roofs of our vehicles.

But also at the site in Hungary, we have invested, among other things, a 240-meter long assembly line in new buildings with 7,000 square meters in 2022. And also our colleagues in the luxury segment at MORELO in Schlüsselfeld, we have taken the first step towards doubling capacity in the high-margin luxury motorhome segment.

And our technical production capacity at Knaus Tabbert will already amount to 35,000 units in 2023.

And our factories are looking forward, of course, to innovative products. And, yes, continuous innovations and new technologies play an important role in the quality and persuasiveness of our diverse product range. And our goal is to be perceived as the innovation leader in this market and to secure a competitive advantage with newly developed features, products and innovative solutions for recreational vehicles. More than 100 employees are working on this in the innovation center at the Jandelsbrunn side, creating completely new ideas and solutions or improving existing ones.

Now [indiscernible] has a total of around 200 brand protection rights, usage patents, design protections rights and technical patents in these key markets and lightweight construction and electrification in caravan or motorhome construction requires stable, lightweight and high strength structures, and we succeed in this with our frame technology.

We are particularly proud of the Knaus [indiscernible] caravan. It is a caravan that combines several innovations, lightweight construction combined with significantly increased strength, safety and stability of the housing structure. In addition, a surface that heals itself as if by magic which makes slight surface damage disappear automatically after exposure to sunlight.

And by using the pioneering fiber frame design for the first time, we can achieve greater efficiency in production. Automated and robot-assisted assembly processes are now possible. And this is just one example of how we want to use our high level of innovation to make the caravaning experience for our customers, not only safer but more comfortable and more enjoyable, but also more sustainable.

And the clear statement from me at this point, our path to the future of caravaning is gas-free, electric and digital.

Yes, I would like to take this opportunity to thank you for your interest in Knaus Tabbert and your attention. And my colleague and CFO of the company since December 2023 -- 2022, Ms. Carolin Schurmann, will now guide you through the exciting world of financial figures. And afterwards, we are happy to answer your questions. Carolin, please, your stage.

[Carolin Schurmann, executive]

Thank you, Wolfgang. This is hard to match, obviously, on the financials, which are a bit more dry. But nevertheless, I'll try my best. A very well warm welcome from my side also to our earnings call, and actually to my first earnings call for 2022 with Knaus Tabbert.

For those who haven't met me yet, let me introduce myself briefly. My name is Carolin Schurmann, and I followed Marc Hundsdorfin December 2022 in the position as CFO of Knaus Tabbert. Prior to Knaus Tabbert, I've been working for more than 25 years in various finance and nonfinance position in the global auto industry for companies such as Opel, General Motors and BMW. Now I'm excited to work with a highly engaged Knaus Tabbert team on the continuation of the profitable growth path of the company in the trending leisure vehicle market.

As Wolfgang already mentioned -- we can go to the next chart, please. As Wolfgang already mentioned before, 2022 has been a challenging year but also a year that opened up new opportunities for Knaus Tabbert, in my view.

We have invested in the expansion of our own sites to follow the growing demand for our vehicles. This capacity expansion was funded by a promissory note in the amount of EUR 100 million successfully issued mid of 2022. We were able to secure about 67% in fixed interest with this prom note and that happened prior to the following interest rate hikes, which was good for us.

The first 9 months of 2022 were challenging for Knaus Tabbert. Reduced chassis supplies, driven by the global chip crisis, and the prior-mentioned strong dependency on basically one supplier in the premium segment caused low plant utilization. Thanks to our production flexibility across our plants, we were able to partly compensate for it by filling the gaps of motorhome production through caravans. Nevertheless, the EBITDA results lagged in the first 9 months through these external factors.

In parallel, the entire Knaus Tabbert team has been working very diligently and focused on diversifying our product portfolio offers, shown in Wolfgang's presentation before. The incoming supply of chassis from the new suppliers were good and bad at the same time. Good because we had the planning securities so urgently waited for our production in Q4. Bad because high chassis inventory levels at the end of Q3 in conjunction with 9 months prior lower EBITDA rates brought the financial KPIs, such as net debt ratio and equity ratios, to levels that were not satisfactory to us and we were not used to.

We've been working with our banks to receive a waiver on the financial covenants to support the supply chain-driven working capital requirements through the year-end but also throughout 2023. I'm very happy to announce, with the ending of financial year 2022, we have honored and are compliant with the waived financial covenants.

On the basis of the chassis supply, the capacity investments made and the well-trained workforce we have held on to, we were able to deliver an exceptionally strong Q4 performance that I will walk you through in one of the following charts.

The main focus of the entire Knaus Tabbert team in Q4 was to deliver on our revised outlook from 20 -- August 2022, which was being on the net sales side, above EUR 1 billion and delivering more than 6% in adjusted EBITDA margin. We are happy to announce that we clearly achieved this goal.

The year-end results also allowed us to continue our policy of proposing a dividend to the general assembly of EUR 1.50 per share or a total of EUR 15.6 million distributed to our investors. This corresponds to a payout ratio of 54% of consolidated net income.

Next page. This shows again the summary of the key financial figures already talked about by Wolfgang. Just to briefly go through, we have 1 point -- more than EUR 1 billion in net revenue, to the exact, EUR 1.0495 billion in net revenue, EUR 70.1 million in adjusted EBITDA and a 6.2 -- 6.7% adjusted EBITDA margin as well as a solid order book of EUR 1.3 billion that gives us security and planning for 2023.

Next page. Here, the details of our key figures. You can see here, we were able to consistently grow the top line year-over-year. The 2022 net sales are 21.7% above the prior year. The net sales of the premium segment amounted to EUR 918.8 million, representing an increase of 24.1% versus prior year. The luxury segment contributed with EUR 130.7 million in net sales to the overall results, which represents an increase of 7.1% to the prior year.

In Q4, we were able to increase net sales versus prior year significantly by 55.9%, with premium segment contributing with an increase of 61% and resulting in an all-time quarter high, driven by favorable product mix towards high-priced motorhomes and camper vans. The luxury segment also contributed with an all-time high net sales and an increase of 24.3% versus prior year.

One key performance figure for us is the adjusted EBITDA. This amounted to EUR 70.1 million in 2022 and has grown despite the low utilization and inefficiencies of the first 9 months by 15.5%.

The adjusted EBITDA margin was with 6.7%, about 0.3 percentage points below the prior year, affected by the lower earnings quality in the first month. The Q4 adjusted EBITDA margin of 11% shows a strong increase of 4.8 percentage points. Main driver was a better product mix of high-end motorhomes, a better plant mix with increased capacity in Hungary and longer production schedules up to year-end to produce as much as we can and deliver the products to our customers.

Next page shows the revenue breakdown. I already mentioned the left-hand side by business segment, so I'll look more to the right hand and mid side for the revenue by product category. The revenue by product category in million euros and units versus prior year shows a significant pickup in caravan sales, especially driven by the capacity utilization through caravan production in the first 9 months, a record high of 18,000 caravans produced and sold.

With half of the year and push in the production and sales of motorized vehicles, we were able to outgrow the net sales in motorized vehicles of the prior year, too.

Next page. The operating cash flow only slightly positive with EUR 2.8 million. The net income and noncash items were basically absorbed by the working -- increased working capital requirements driven by the chassis inventories and inventories of unfinished vehicles caused by the missing parts of the still slightly disturbed supply chains. And as such, not optimal, but I think a good movement.

The balance sheet elongated along increase of working capital and the investments made in 2022 by EUR 215 million versus prior year. A consequence -- as a consequence, the equity ratio developed unfavorably from 37.2% to 26.4%. It is worthwhile to mention that we were able to improve this ratio compared to Q3 due to the solid Q4 net income performance.

The net debt increased about EUR 100 million versus prior year. Main driver was the funding of the capacity investments and the working capital increases. The net debt ratio increased from 1.6% in 2021 to 2.8% in 2022. However, compared to Q3, we were able to significantly improve the net debt ratio through the solid EBITDA performance in Q4.

Next page. So outlook and guidance for 2023. What's our outlook? Knaus Tabbert is looking positively into 2023. Based on the order backlog of EUR 1.3 billion as of the end of December 2022 as well as the expected positive product mix effects and the changed purchasing strategy for chassis, the Management Board expects strong revenue growth before price increase effects, in 2023 financial year.

Price increase towards dealers of Knaus Tabbert Group are generally planned in the range of 6% to 8% in the 2023 financial year. We expect the adjusted EBITDA margin ranging between 7.5% and 8.5%. However, this requires an easing of the supply chains which are still tensioned currently. And consequently, the availability of components and other materials in line with the carefully considered planning premises. Further, this expectation is based on the assumption that the global economic and industry-specific environment, particularly with regard to the further unfolding of the conflict between Russia and Ukraine and the supply chain situation, will not deteriorate further than expected.

Okay, that summarizes our presentation, Wolfgang's and mine, and we would like to thank you for your attention for now and would like to open up the Q&A session.

[Operator]

[Operator Instructions] And we already received the first questions. It would be lovely if you could let us -- tell us your name and the company.

[Unknown Analyst]

Yes. This is Ellis, First Berlin.SP999 Can you hear me?

[Wolfgang Speck, executive]

Yes, we can hear you, Ellis. Good to have you in the call.

[Unknown Analyst]

Just a couple of things to start off here. The margin guide looks a little bit conservative after what we saw in the fourth quarter. I was just wondering if you could give some background behind that.

And then also, I'd be quite interested to hear if you're -- what feedback is from the dealers these days in terms of customer behavior. Is the macro uncertainty impacting buyer decisions? Just if you can give some color on that, that would be appreciated. And I'll leave it there.

[Wolfgang Speck, executive]

Thank you for asking that. First -- the first topic is about the margin guide. I mean based on what we experienced last year in 2022, and we all sitting in that call, remember that we've been struggling a lot based on shortage of chassis supplies. And those types of disturbances was mainly caused by things in the outside world. So I mean, you remember that we had COVID issues, we had the Ukraine war, we had specifically the close of the Shanghai harbors and a lot of stuff happened. And we still -- I mean, based on that, we still feel, to be in our guidance, not too bullish based on the last quarter and even -- I mean, we have a quite very good start in the first quarter of 2023, so it's based a little bit on the experience looking backwards.

And the strategy is for this year to say, okay, let's surprise the market by beating our guidance quarterly, to surprise the market with good news, and this is what should happen, and that is what we are working for this year.

So -- but to make a long story short, I would say we have a good chance, and that is what we strongly believe in, to walk towards the higher end of the guidance and possibly also to beat that.

Your second question was on feedback from the market and dealers. What we see, we have different indicators. One is the fairs, and we opened this year with the CMT in Stuttgart with a great success. We occupied the biggest hall in Stuttgart the first time. And so that -- also when you look to pictures, people made on the CMT every morning amid couple of hundred people waiting to enter to the show and also to the Knaus Tabbert hall.

So from that point of view, I would say that the market is still bullish. People are really keen to buy products. Looking to the dealer places, we see that -- and that is one indicator, the utilization of the finance line of the stock levels are still low. Of course, not on that low level what we saw, I would say, in average in 2022, but still lower compared to what we saw in 2019. With other words, there are still relatively low stock levels and a lot of headroom in the financing lines for the dealers to buy products.

And also when you look backwards, what we did in 2023 -- I mean, 2022, we made a decision to speed up in the caravan towable production. We added 4,000 units to our production plan. So with other words, instead of 14,000, we delivered 18,000. We produced and delivered 18,000 caravans last year to compensate a little bit the shortage of motorized chassis.

And this is also a signal for us. Everything what we produced was sold to the dealers and dealers have been able to sell that to end customer. And the result is what you see in registration charts. So we increased dramatically our market shares in most of all European countries. In Italy, we are above 50%. In France, above 35%. By the way, we are #1 tranche in caravans. In Europe, we are meanwhile above 20%. So in all countries, we had been able to increase market shares. And this shows also still the appetite of our customers to our brands, Knaus, Weinsberg, Tabbert, T@B, MORELO. So we still see that we are in a good position in the market. And innovation, I mentioned that point, is key also for the customers. Meanwhile, specifically for the younger customers, they're asking for gasless caravans. They would like to have a plug-and-play system, not to complicate, and that is what we are able to deliver.

And also when you look to the order income, you see that -- we saw that on our presentation, it's still on a high level.

The macro, that was the third point of the question, the macro-economic situation. I mean, everybody is following, of course, the decisions made by ECB specifically in Europe, because this is our market, what we saw again is the increased -- the interest rates. At the same time, we saw the difficulties in the bank sector. So there is conflict in target what to do. And this is something we have to follow carefully.

But the good point in that, also when we talk about interest rates, as you know, 85% of our products bought by end customer are paid in cash and just 15% financed. And this is also something which gives us a relatively high independency on interest development. But we have to be careful.

And also when you look to inflation rate, we see that it is going down step-by-step. But I mean, we have to accept that the big ease will be coming, first of all, in the year 2024.

So I mean, again, looking to caravaning market, we see still a strong demand, healthy market situation. And where we see -- we have good position to grow, according to our guidance, to show strong growth in, again, in 2023 to deliver a nice EBITDA this year. So yes, that's more than just to put in, but to give you a clear, clear view on that, yes.

[Carolin Schurmann, executive]

Yes, maybe to add to -- yes, to the first question. Yes, sorry, to the first question, how would Q4 results -- why wouldn't they carry on? Or why is our guidance a bit different from the Q4 results? Just to give you a little bit of flavor, we really pushed hard, obviously, and focused on motorhomes. So the mix was, in Q4, extraordinarily focused on high-value motorhomes, which was one effect, which will level out throughout 2023 year where you probably run more on a normalized but still motorhome focused mix.

And the guidance obviously goes along with our budget and business plan. And in the quarters, we have some seasonality such as vacations and trade fairs, which have different impacts, which we didn't see in Q4 so much. And it really tried to use the underutilization time that some of our employees also had and pushed that into the Q4 where we had overutilization or very good utilization. And with this, over time, that we could compensate with the undertime schedules of the employees in the first quarter. So some benefits there.

One question to Montega before we continue. We also have some questions in the webinar chat. So you will organize that, right?

[Operator]

Yes, I will read them out. But -- so we can take one question from the chat, if that's fine for you.

Could you please shed some light on the organic sales growth in 2023? An example, before price increases of 6% to 8%.

[Carolin Schurmann, executive]

Yes. I mean, we -- Yes, go ahead. Sorry, go ahead.

[Wolfgang Speck, executive]

Okay. Okay. I mean it's ahead of the price increase you already mentioned, which we indicated 6% to 8%. It's mainly driven, first of all, by market growth, that what we see, by the change of product mix towards to the more expensive motorhomes. I would say, these are the 2 main topics.

And also, we have to take into consideration that we increased our capacity, I mentioned that 35,000 units. So some investments have been done. They are now ready to be utilized. And also, based on the better chassis supply situation, we see that in combination of all the topics I mentioned now, that we can deliver significant growth in '23 compared to '22. But Carolin, please add your comments on that.

[Carolin Schurmann, executive]

Yes. I think to step on to this, we made up our minds how we best can communicate this in a qualitative manner. I think last year, we guided on a significant growth. And this year, we guided on a strong growth. And I guess, this is probably where the question comes from. So what should we expect in the differentiation between significant? I think significant, we saw more like more than 10% last year. And for strong, we would expect more than 20%.

[Operator]

And we received a few questions from Mr. Christian Glowa. What is your CapEx expectation for financial year 2023?

[Wolfgang Speck, executive]

Carolin, I would hand over this to you, please.

[Carolin Schurmann, executive]

So the CapEx expectations, we will be, I would say, something around EUR 50 million to EUR 60 million. And we will invest basically in the continuation of our Jandelsbrunn capacity increase, which will be basically ready and up running mid-year. And we will also invest into a second plant increase for luxury vehicles in MORELO, as for capacity increases, I would say. The rest is really also maintenance and efficiency investments that we do on a regular basis.

[Operator]

And how do you think about working capital development in financial year 2023, especially with regard to inventories in 2023 year-over-year?

[Carolin Schurmann, executive]

Yes. I mean, obviously, with the growth, working capital goes along, right? So that is always in conjunction with each other. But nevertheless, we see a quite high inventory levels driven now by the chassis supplies. We are trying to optimize those during the course of the year. We will still be on high levels comparable to 2022, in my view, throughout 2023. And what we also experienced still is that we have missing parts. I think we currently see a bit of an easing, but we still see disturbances of missing parts, and that could be something easily like a mosquito door missing for our camper vans. And with that, you don't have an -- you still have an unfinished vehicle, and you need to basically still rework that when this mosquito door arrives. And so that takes some time, and it will sit on our inventory before we can deliver it to our dealers. So we still see that on higher levels but are having a strong management focus on it, trying to optimize that for our purposes.

[Operator]

And what are the financial covenants after the debt refinancing?

[Carolin Schurmann, executive]

I mean we cannot disclose them in detail, but what we arranged with our banks is basically alongside our budget plan 2023, the requirements that we see with the working capital that I just explored about going along with that. So we will have kind of a waiver throughout this year 2023 and actually plan to return to our original financial covenants of 30% in equity ratio and 2.75% of net debt ratio in Q1 of 2024. So the net -- the debt refinancing did not impact the original covenants agreed upon with the syndicated loan, and they are exactly the same there.

[Operator]

And we received a few more questions via line, Mr. Rizk Maidi.

[Rizk Maidi, analyst]

Yes, can you hear me?

[Wolfgang Speck, executive]

Yes, we can hear you.

[Rizk Maidi, analyst]

Yes, first of all, welcome, Carolin. Just I have a few questions. So a few on the near term and one on the long term. So near term, can you just talk about how do you see -- what's your base case now for the German registration market and perhaps the European market for 2023?

And also, Carolin, if you could help us with -- if you look at the entirety of 2022, how much do you think the margins were held back by the higher mix of caravans? Again, I originally thought that both caravans and motorhomes have the same margins, but you seem to suggest that's not true. So if you could just help us with this, and I'll start here.

[Wolfgang Speck, executive]

So let me start with a short comment on the market development, specifically in Germany. I mean, this is based a little bit on our own view to the market in combination with the CIVD, the Caravan Industry Association in Germany, delivers based also on ECF assumptions. And it's expected that we see still headroom to grow compared to the last year '22. I mean you have to take into consideration that in '22, when you evaluate the registration numbers, you have to take into consideration that this was not driven. The drop-down, we mentioned, was not driven by decreasing market development. It was just driven by the missing ability of all OEMs in Germany and Europe to deliver to the market.

So again, it is expected, based on the CIVD assumptions and our point of view, that we will have a nice increase.

And also, when we look to the most recent registration charts, and we can have a look to the first 2 months in February -- January and February, and that's just our specific point of view. So we have been able in the segment of caravans to increase our market shares compared to the last year, January, February from 22% to 26.7%. And when you look -- and that's just talking about Germany.

And when you look to the market share of Knaus Tabbert in the segment of motorhomes, last year, in January, February, delivered 9.4%. And this year, we delivered 13.9% market share.

So besides the question, do we have headroom to grow along the market? You also have to evaluate, are we able to beat the competitors? And what we saw during the first 2 months, I can clearly -- I can give a clear answer, yes, we are able to beat also the competitors.

[Carolin Schurmann, executive]

Yes. To the -- to your second question on the margin. The margins, especially in Q4, were higher because of more high-value motorhomes. So we have some differentiation within the motorshomes. We have some entry-level motorhomes and also high-end motorhomes. And we produce a lot of high-end motorhomes based on Mercedes-Benz as well as MAN as well as Volkswagen during this time.

And then the same is true, obviously, throughout the year that we see there a little bit of a better mix from more of the high-end vehicles that are now in the market that produce a little bit of a higher margin in that mix respect.

The -- you are right, we have, most of the time percentage-wise, a better margin overall. However, it's always better for Knaus Tabbert, in order to produce more EBITDA in total and absolute numbers, to produce the high-end motorhomes on a production spot basically, which generate higher absolute EBITDA.

[Rizk Maidi, analyst]

Okay. That was quite clear. And then secondly, just on the long-term picture. Maybe perhaps, Wolfgang, if you could just comment on the medium-term targets or the 2025 targets. Obviously, you've been faced with exceptional outside conditions. What's the thinking there in terms of the timing of achieving those? So that's the first question there.

And then secondly, maybe if you could elaborate on your Southeast Asian strategy. I think you pointed out in the report that Malaysia is the sort of first entry point there. Maybe just if you could elaborate on the strategy and how big this market is.

[Wolfgang Speck, executive]

Yes. So the question on the long-term market expectation. I mean what we see is that the registration number in the European market, we see that, year-by-year, and when we look towards '25, '26, '27 that the market has the ability to jump over the 300,000-registration number, first of all.

Secondly, how close are we, as Knaus Tabbert benefit from that? I mentioned that we have now an installed technical capacity of 35,000 units. We mentioned 2 years ago that we are working towards the 50,000 units in technical capacity. This is still the plan. But at 2 years ago, we mentioned in '25, this will be happen -- this will happen.

But when you look to our CapEx, you see that we slowed down a little bit to get the right balance between growth and stability in the balance sheet, to -- also to focus much more on creating free cash flow, and that is what we will do in 2023 and the years onwards. But at the same time, we would like to support our growth story.

So just to make a long story short, yes, we believe that in the coming years, I would say 2 to 3 years, we are able to jump over the EUR 2 billion sales hurdle. That is what we announced, and that is what we will deliver. Again, possibly not in '25, but around that. So I mean, we have everything we need to make -- to deliver a great story from Knaus Tabbert.

Talking about the Southeast Asian strategy, yes, last year, November, we received the first 2 homologations for -- to cover caravans in the Malaysian area and by Malaysia.

I mean, when you look to the Asian region, which today, approximately 700 million people are living there. So we see that's a strong market. We do not believe that China is the right market. And also, based on the discussion on decoupling, those relationships we see that as the end markets, it would be the better choice for us. We can also reach countries like Australia or even Japan. We are already in a strong position in South Korea, as you know. So in one of the leading positions in segments, caravan, vans and motorhomes.

And these are also nice news that we have been able to receive the homologation in South Korea for the first diesel-powered camper van. This happened just a couple of days ago. So we really speed up in South Korea to develop a new market for the Knaus Tabbert Group.

Malaysia, by the way, is also a hub, not only for us, but also for big car producers due to the fact that this -- that the main worldwide logistic chains are crossing to the street of Malacca, containers coming from Shanghai to Singapore and then onwards to West Canal up to Andaman. So I mean most of the worldwide logistics and container shipments are crossing Malaysia, and that is the reason why we also see Malaysia would be a good logistic hub for developing this area.

Secondly, to have direct access to the supplier market over in this region. And yes, that's the reason. We are on a good way, but this is something we will develop step-by-step in the coming years. So it means, first, establishing an import company to be able to sell in that area, products which are produced and still coming from Europe. Then we will start with semi knockdown and, maybe in some years, complete knockdown. And then the next perspective is to start then with production activities. But this is something, I mean, which we need to be patient coming to 4 to 5 years in terms of production activities in Asia.

[Operator]

And we received another question by audio line.

[Charles-Louis Scotti, analyst]

Yes. It's Charles from Kepler Chevreux. I just have two more questions. Maybe can you come back on the -- can you give us some indication on the phasing of growth for next year. I'm guessing that H1 will be a -- will have favorable base effect, so H1 will have a stronger growth than H2.

And my second point, recently, Trigano announced that they will launch maybe some cheaper models for the next season to maybe try to support demand because they think the prices are too high. Can you maybe comment on that strategy? And what would be your pricing strategy?

[Wolfgang Speck, executive]

I would like to start with some comments on the pricing strategy and then talk a bit about the growth expectation H1 versus H2 and the whole year. I would pass over then to Carolin.

I mean when you look to Knaus Tabbert, I mean, we are the only, only producer in the whole Europe which is already covering a price range from roughly EUR 15,000 on the entry side up to EUR 750,000 [indiscernible]. So we are very proud to have a full range where we can play around -- on the dealer places.

And I would say we see no need, when you talk -- when you see the caravans to offer cheaper products than the EUR 15,000 I mentioned. I mean, of course, we have -- always have to have a close look and to have to prioritize also the quality of profitability. And we see not that we are as, Knaus Tabbert, forced. And this is maybe different to the strategy of Trigano. We see not that we are forced to lower prices, to develop products on a lower price levels. This is not part of our strategy. I would say it's just a way around.

We see that our brands, Knaus Tabbert, which is, by the way, the leading brand in Europe in caravans and we sell caravans up to EUR 100,000 in specific customer segments. And also when you look to MORELO, it's also when we talk about increasing capacity in MORELO, we don't talk about a new product which will open up the entry point of MORELO spectrum. No, it's just a way around. We create additional capacities to have more capacity on the high-end price level.

So with other words, we feel comfortable with what we have. And this is also a big difference compared to Trigano. We count on innovation. We count on digitization. We count on e-mobility. We account on gasless systems. And innovation, this is something where people in the outside world is willing to pay additional money to have and receive the best product in the market. And this is just our strategy, and we will stay on that strategy.

[Carolin Schurmann, executive]

Yes. To the other question, that is when -- the question that you mentioned, how does the growth look like in the first 6 months or is expected for 2023? And as you indicated, it will be, definitely because we had very low months last year in 2021, during this time, underutilization, you will see a stronger than strong growth, let's put it this way, for 2023.

[Operator]

Well, we have another person who has a question. [ Valentine Mori ]. Mr. Mori? Unfortunately, we cannot hear you. Maybe you have chosen the wrong microphone. You can also place your question in our chat.

We received the question from Mr. Mori. Could you share any indication on the impact of the more diversified supply of chassis on the cost base of the group. One would certainly expect a weaker negotiation power. What is your view on this?

[Wolfgang Speck, executive]

Yes. I mean when you have a look to the chassis suppliers now and the models offered and then used in our product portfolio from MAN, Volkswagen, Ford, the Stellantis Group, Mercedes, I mean they are meanwhile not -- so we don't see a big price differentiation between those different suppliers since products from the Stellantis Group, we had been faced with really extreme price increases during the last 2 years. So meanwhile, they are more or less on the same level compared to MAN, Mercedes, Ford, Volkswagen. So that makes no difference.

And the second part of the question is, do we see that we have a longer -- that we have a leverage to start renegotiations? I would say time will come where we will sit together again also with some of those big players to renegotiate prices when they see that customers like Emerson are not the best and first choice for that product.

[Operator]

And before we come to an end, one last question from [ Mr. Vena Friedman ]. What amount of the receivables was factored to bank's end of 2022?

[Carolin Schurmann, executive]

Yes. So we had a total basically outstanding receivable of about -- trade receivable of EUR 33.5 million. Thereof, we have a factoring agreement with Wells Fargo. Basically, that was about EUR 21.4 million at the end of December. And our total dealer financing line that was used by our dealers was EUR 213 million, which represents about 61% of the total lines available. I hope that hits the question.

[Wolfgang Speck, executive]

I would like to add one thing. I mean, when we talk about factoring, it's not this type of factoring. When you think factoring, let me say that way, what it costs. I mean, what we do is the financing of the dealers' inventory. And we have big players like Consors Finanz, Wells Fargo partner and so on. And Wells Fargo was one partner in the dealers' stock financing, but they had only been able to deliver this type of financing, and that is why you see that factoring in our balance sheet. So the motivation was not to shorten balance sheet by selling this to the Wells Fargo, it was just because they offer no other products to help dealers financing their stock.

[Operator]

We received another question from Mr. Maidi. Can you please talk about the percentage of units in the backlog are for the rental market. And how does this compare to last year?

[Wolfgang Speck, executive]

Yes, to the rental market, it's -- you can easily use that number. We always sell roughly 30% to the rental market, more or less, mainly coming from the motorized vehicles. And this is more or less on a stable level, sometimes 33%, 35%, something like that.

And by the way, what we see, I mean just to add one information to that question, what we see is a really strong demand coming from the rental markets, not only from our own rental business, rent and travel, but also from other big players in the market, for example, [indiscernible] camper, they big players, you know them for sure. So we had not been able to fulfill that demand.

And the demand, we missed roughly last year 2,000 to 3,000 units. I mean, their demand overshoot last year our capacity. So this is a solid bank also into the future to deliver or to sell our production capacities to the rental market. We have very, very close relationships to them.

[Operator]

It seems that there are no further questions. And thank you very much, Mr. Speck and Mrs. Schurmann for the detailed presentation and your time answering all those questions. I'll hand over for some final remarks to Mr. Speck.

[Wolfgang Speck, executive]

Thank you very much. Good to have you in our call. And also, we are, again, of course, very proud to had been able to deliver what we promised last year, to jump over the EUR 1 billion hurdle, to deliver the profitability or to overdeliver also in percentage to EBITDA margin, also to have -- to deliver very good news on Q4 and this is something which -- yes, it's always nice to tell about nice stories, for sure. We will continue to talk about surprising and nice stories also in 2023.

Thank you very much for your support. Thank you very much for having you with us and all the best. Thank you.