Siltronic AG
XETRA:WAF
| US |
|
Johnson & Johnson
NYSE:JNJ
|
Pharmaceuticals
|
| US |
|
Berkshire Hathaway Inc
NYSE:BRK.A
|
Financial Services
|
| US |
|
Bank of America Corp
NYSE:BAC
|
Banking
|
| US |
|
Mastercard Inc
NYSE:MA
|
Technology
|
| US |
|
UnitedHealth Group Inc
NYSE:UNH
|
Health Care
|
| US |
|
Exxon Mobil Corp
NYSE:XOM
|
Energy
|
| US |
|
Pfizer Inc
NYSE:PFE
|
Pharmaceuticals
|
| US |
|
Palantir Technologies Inc
NYSE:PLTR
|
Technology
|
| US |
|
Nike Inc
NYSE:NKE
|
Textiles, Apparel & Luxury Goods
|
| US |
|
Visa Inc
NYSE:V
|
Technology
|
| CN |
|
Alibaba Group Holding Ltd
NYSE:BABA
|
Retail
|
| US |
|
3M Co
NYSE:MMM
|
Industrial Conglomerates
|
| US |
|
JPMorgan Chase & Co
NYSE:JPM
|
Banking
|
| US |
|
Coca-Cola Co
NYSE:KO
|
Beverages
|
| US |
|
Walmart Inc
NYSE:WMT
|
Retail
|
| US |
|
Verizon Communications Inc
NYSE:VZ
|
Telecommunication
|
If you don’t study any companies, you have the same success buying stocks as you do in a poker game if you bet without looking at your cards.
Utilize notes to systematically review your investment decisions. By reflecting on past outcomes, you can discern effective strategies and identify those that underperformed. This continuous feedback loop enables you to adapt and refine your approach, optimizing for future success.
Each note serves as a learning point, offering insights into your decision-making processes. Over time, you'll accumulate a personalized database of knowledge, enhancing your ability to make informed decisions quickly and effectively.
With a comprehensive record of your investment history at your fingertips, you can compare current opportunities against past experiences. This not only bolsters your confidence but also ensures that each decision is grounded in a well-documented rationale.
Do you really want to delete this note?
This action cannot be undone.
| 52 Week Range |
45.28
92.75
|
| Price Target |
|
We'll email you a reminder when the closing price reaches EUR.
Choose the stock you wish to monitor with a price alert.
|
|
Johnson & Johnson
NYSE:JNJ
|
US |
|
|
Berkshire Hathaway Inc
NYSE:BRK.A
|
US |
|
|
Bank of America Corp
NYSE:BAC
|
US |
|
|
Mastercard Inc
NYSE:MA
|
US |
|
|
UnitedHealth Group Inc
NYSE:UNH
|
US |
|
|
Exxon Mobil Corp
NYSE:XOM
|
US |
|
|
Pfizer Inc
NYSE:PFE
|
US |
|
|
Palantir Technologies Inc
NYSE:PLTR
|
US |
|
|
Nike Inc
NYSE:NKE
|
US |
|
|
Visa Inc
NYSE:V
|
US |
|
|
Alibaba Group Holding Ltd
NYSE:BABA
|
CN |
|
|
3M Co
NYSE:MMM
|
US |
|
|
JPMorgan Chase & Co
NYSE:JPM
|
US |
|
|
Coca-Cola Co
NYSE:KO
|
US |
|
|
Walmart Inc
NYSE:WMT
|
US |
|
|
Verizon Communications Inc
NYSE:VZ
|
US |
This alert will be permanently deleted.
Siltronic AG
You don't have any saved screeners yet
Good day, and welcome to Siltronic's conference call on the Q2 results of 2018. Please note that this call is being recorded and also streamed on Siltronic's website. This call will be available as an on-demand version later today. Your participation on this call implies your consent with this.At this time, I would like to turn the conference over to Petra Muller, Head of Investor Relations and Communications of Siltronic AG.
Thank you, operator. Welcome, everybody, to Siltronic's presentation of the Q2 2018 results. Chris von Plotho, our CEO; and Rainer Irle, our CFO, will comment on the market development, our financial figures and will be available for Q&A afterwards. Please note that our presentation contains the usual safe harbor statement and applies throughout this call and the presentation.Today, we have updated all documents relating to the Q2 reporting. They are available on our website.And now I turn the call over to Chris for opening remarks.
Good afternoon, ladies and gentlemen. After a positive start in Q1, Q2 came in even better. Wafer demand remained strong, especially memory, but also logic as well as automotive and industrial applications contributed significantly. ASP continued to increase in the second quarter of 2018. Due to further ASP increases and less headwind from the U.S. dollar than originally expected, sales came in at EUR 361 million, 10% higher than Q1.Our EBITDA in Q2 reached EUR 146 million, and our EBITDA margin was 40.4%. EBIT came in at EUR 124 million, and ROCE was at 64.2%. The net profit for the period improved again and came in at EUR 98 million. Our net cash flow reached EUR 67 million in Q2 and recorded net financial assets of EUR 603 million at the end of June.Because of the successful business development, we slightly increased our forecast for the full year 2018. We'll present the details later. Supply/demand situation is unchanged, with demand being higher than supply. We were able to increase ASP again and believe there is some room for more increase in the second half of the year, however, at a lower pace than in 2017.IHS Markit forecasts wafer demand to grow by around 5%. However, we believe that underlying demand, especially for 300 millimeter is higher but limited by wafer supply. Basically, all end applications contribute to the demand growth, but particularly memory is very strong.Let's take now a deep dive into the smartphone area. Growth rates in smartphone production are somewhat slowing down. Content in smartphones, however, is growing faster than the unit cost. The expected growth rate in 2018 is slightly down compared to last year. This is mainly driven by the fact, and I think you all know that, that this year, high-end smartphones have not been trying as much as expected. But on the other hand, content in somewhat in low-end smartphones is increasing more and more. So we see a bit of a shift in the smartphone product mix, which impacts the growth rate by around 1%. While unit growth is expected to be around 4% in 2018, content growth is expected to be around 7%.You might be well aware that according to releases by smartphone producers, content in the future will increase by integrating more cameras, more memory and more sensors. In the same content story, it's also true for the automotive applications. The number of passenger cars per use are predicted to be more or less stagnating over the next years. Content, however, is growing by 7% between 2017 and '22. All applications in the car are contributing through this. Biggest contributors are advanced driver assistance systems and connectivity. More image sensors for parking assistance, traffic sign recognition, lane-keeping as well as weather sensors for blind-spot monitoring or ultrasonic sensors require fast processing and large memory.In the field of connectivity, smartphone integration into car infotainment using Bluetooth and wireless LAN will drive growth. Afterwards, it will be the integration of mobile connectivity using LTE. Vehicle electrification will also have some positive impact. Main drivers of the carbon dioxide reduction efforts in the EU, the China EV mandate and Dieselgate. The car industry view is that the combustion engine will stay mainstream over the next few years, but decreasing. Hybrid cars are expected to grow, while pure electric cars will be a niche over the next years. We estimate growth in 300-millimeter wafer starts to be roughly in the area of 2 million wafers per month in the next 3 years. If all projects by the semiconductor industry come in as announced, we believe the biggest contributor will be the fab extensions and new fabs outside of China.Let's have a short look at 200-millimeter market. According to research data, 200-millimeter demand will grow by 3% between 2017 and 2020. Focus of growth are automotive and industrial applications. Those applications currently produce some 200 but also migrate to 300 millimeter. We do not believe that the expected growth is attractive enough to consider major investments. However, we do believe that the 200-millimeter supply will stay tight for quite some time as only limited capacity expansions were announced by wafer producers.So this was the overview. I would like to hand over to Rainer for a detailed presentation of our Q2 financials.
Thank you, Chris, and welcome, everybody. Sales was up 10% compared to the first quarter and reached EUR 361.3 million. We saw a little volume and further ASP increase. Also, the U.S. dollar went a bit stronger from $1.23 in Q1 to $1.19 in Q2. Adjusted for FX, the growth was 7%. Gross margin increased quite a bit to 42%.EBITDA. Higher ASP also drove the positive development of our EBITDA and EBITDA margin. EBITDA at EUR 146 million in Q2 was nearly 20% up compared to Q1. The EBITDA margin was up and reached 40.4%. Compared to Q2 last year, EBITDA margin increased from 15% to 34%. EBIT increased from EUR 97 million in Q1 to EUR 124 million in Q2. ROCE increased to 64%, which is due to high profit and low capital employed. Going forward, we will obviously see a normalization with higher CapEx.The steady increase of the net profit continued in Q2 2018. Our net profit nearly tripled and came in at EUR 98 million after EUR 35 million in Q2 2017. Compared to the first quarter '18, net profit rose by nearly 20%. While Q2 last year was burdened with EUR 2.7 million of hedging expenses, we had a positive hedging income of EUR 4.4 million in Q2 this year. Income tax expense in Q2 was EUR 24 million. Tax rate was 20%. For the average of the year, we expect the rate to be somewhat lower.And the balance sheet, equity rose to EUR 720 million at the end of June. The increase is mainly due to the profit of EUR 98 million. Equity ratio, though, is slightly down as we received a significant customer prepayments, i.e., liabilities. Our net financial assets improved in line with the net cash flow and increased to EUR 603 million.On Page 15, the pension page. Basically, no changes, no news on interest rates and pensions basically stable.Page 16, under net financial assets. The positive business development caused net financial assets to increase further, reached EUR 603 million, obviously an all-time high. Main impacts were the dividend payment of EUR 75 million in April and incoming prepayment from customers, which equal EUR 116 million net, I mean, more received than paid back.CapEx was low in the first half of the year and will significantly increase in the second half. Please remember that EUR 223 million of our liquidity relates to customer prepayments. CapEx. Some of our projects -- I mean, all of our projects are advancing very well, and so we decided to accelerate a bit and to make some down payments already in 2018 that we had originally planned in 2019. Therefore, our 2018 CapEx will be a bit higher at around EUR 260 million to EUR 280 million. Just before EUR 80 million of those will be base CapEx to sustain business and around EUR 110 million for the 70k capacity addition that comes next year. Another EUR 50 million to EUR 70 million will be for the new crystal-pulling hall that we are building in Singapore. And then another EUR 20 million already for the capacity expansions in 2020. The net cash flow continued to be high at EUR 67 million in Q2. We will obviously see lower cash flows in the second half of the year. CapEx was EUR 45 million and will be significantly higher in the second half.And with that, I would like to hand over to Chris for the outlook.
Thank you, Rainer. We remain very positive for 2018. Based on the successful business development of the first half of 2018 and what we know about the second half, we slightly increased our outlook for sales, EBITDA margin and CapEx. We expect sales to be close to EUR 1.4 billion and EBITDA margin to be approximately 40%. As the euro is somewhat stronger against the U.S. dollar than anticipated at the beginning of the year, we now expect a negative FX impact on sales of around EUR 60 million and of around EUR 40 million on EBITDA. Our CapEX will increase to around EUR 260 million to EUR 280 million, as we have decided to make some down payments to our suppliers already in 2018 for previously announced capacity increases in 2020.With this, we close our presentation and are now available for your questions. Operator, please open the Q&A session.
[Operator Instructions] We've received the first question. It comes from Amit Harchandani from Citigroup.
A couple, if I may, to begin with. Firstly, Chris, you've talked about the CapEx being fully forward related to capacity additions in 2020. Are you in a position to give us some color in terms of how you're thinking about the magnitude of the capacity additions in 2020? Is there anything that we can read between the lines, for example, the EUR 20 million prepayment would suggest at least 10,000 wafer start in 2020, but I assume the number is higher. Just at least give us some insight on that and then I have a follow-up. Thank you.
Amit, it's Rainer. We decided we will not disclose the exact amount of our additions going forward. You know that we previously always said that we know we want to somehow maintain our share, that's the plan. The projects are going well ahead. Everything we are adding in 2020 is already sold today at very attractive LTAs.
Okay. And maybe if I could then follow up separately on the topic of demand. You talked about memory demand being quite strong during Q2. There has been some concern in the market about certain push outs by Samsung, also certain impact of the pricing evolution on the NAND side, could you kindly confirm if you have seen any changes in terms of visibility or the discussions with regards to pricing because that's a function of tightness? Any incremental color that you could give in terms of forward-looking demand coming from the memory segment at least?
We showed you that 1 slide on what we expect the capacity additions will be -- that's a bit -- 2 million wafer starts in the next 3 years and quite a bit of that is memory. I mean, memory -- the memory guys are the ones that are adding most capacity. We have looked at the additions at all of our customers, I mean, not just on paper but also in reality, how big they are building and at what speed. So that's a lot of capacity additions coming on. We are following memory prices, which, yes, you're right, might be a bit down, but they're still quite high compared to the average of the last decade.
We have the next question, it comes from Peter Testa of One Investments.
Two questions please. But first one is you offered your views on what you thought was happening in that 200-millimeter market. I was wondering if you could share your comments on the 300-millimeter market. And how do you think about growth in capacity in the marketplace there? Then, I'll ask the second one.
Yes. I think we said very much that the market is extremely tight. Demand of capacity additions in this year is very, very low. So what we see and what we read from customers is that their inventory is coming further down. We see a lot of customers that are basically out of stock or at a -- at very few days. We also know from quite a few customers, including some larger ones that they actually reduced wafer starts for lack of wafers. So this 300 millimeter is very, very tight.
And then your view on capacity growth in the marketplace going forward like you expressed on 200 millimeter?
Yes, I mean, I think we don't want to provide detailed guidance on what we believe our competitors are doing. We think that everybody is working to certain degree on capacity additions. Customers, the view of customers is that, that seems not to be sufficient. Customers are coming to us. They would like to sign, get additional wafers in -- I mean, right now in 2019 and 2020. And there's also customers talking to us about additional demand beyond that.
Okay. And then the other question was just around on your guidance and your comments around pricing and how it reflects in the guidance. Clearly, in the quarter we just experienced, you had a very strong growth margin expansion sequentially. You're effectively telling us the pricing is still increasing sequentially, but at a lower rate from last year, but you really don't put much in the view in terms of how this will come through in either gross margin or EBITDA margin, or gross margin tied to the EBITDA margin, I'm curious as to why? Is there anything else on the cost side that's accelerating? Or the sequential price increases really stopped? Just to get some understanding as to why because otherwise I don't fully understand your guidance.
No. I mean, I think our guidance on the cost side is that we're still achieving a lot of cost reductions. But on the other side, we also have significant headwinds from price increases from suppliers and also from electricity cost, and also from cost of living adjustments. So all in all, that might be more or less a wash going forward. Price increases are still coming. It depends on what terms we have with customers. Some are quarterly, semiannual or increasing share also on a long-term contract. We see price increases to some degree every quarter. Next year, there will be additional LTAs coming online at higher prices. In 2020, there will be even more additional -- even more LTAs coming online with then again higher prices. So we are positive that prices continue to climb, which is -- what we don't disclose is the speed of price increases we are expecting.
All right. But you're still seeing -- you have the quarterly contracts all over, those are also still seeing sequential price increases? Or is the price increase mostly the function of the LTAs and some of -- or maybe some of the longer contracts falling over?
No, it's both.
We have our next question, it comes from Achal Sultania of Cr?dit Suisse.
So 2 questions. First on the competition that everyone talks about in China, like there has been some changes at the NSIG group in China. It seems they're trying to become slightly more aggressive in trying to get the home companies producing 300-millimeter wafers. Can you provide any update in the last quarter or so that you've come across any data points which suggest that Chinese competition still needs to do a lot in order to catch up on 300 millimeter? And then I have a follow-up.
I truly believe that we don't have any information that you don't have on your desk. I mean, they're -- you read a lot about projects. We've -- I mean, usually they're only talking about capacity and money, but not about how they want to obtain the technology. I think everything we said in history holds true, and it would take a decade to generate the technology in an environment that is still moving at extremely high speed. So somewhere, we're catching up is extremely complicated. So we are relaxed when it comes to the Chinese project.
Okay. And Rainer, maybe a follow-up on the seasonality. So obviously, when we think about seasonality going into Q3, usually Q3 is the strongest quarter in terms of wafer demand because you've got the smartphone market picking up. Should we expect somewhat of a normal seasonality this year as well or do you think that because of the changes in the memory market, there is a potential that this year may be slightly different versus previous years and bulk of the growth that comes going forward is mainly pricing and not volumes?
Yes. I mean, seasonality is something you see typically in the markets when it's not fully loaded. In the current environment, we actually don't expect to see any seasonality, I mean, which would say that we will continue a slow upward trend.
The next question is from Martin Jungfleisch of Kepler Cheuvreux.
I have 3, if I may. And the first one is on ASP development. Was this mostly driven by ASP increases in 300 millimeters? Or is the 200-millimeter area also still contributing well? Also, do you expect further price hikes in 200 millimeter? Or will the future ASP increases be just from the 300 millimeter side? Then, second question is on ongoing capacity expansions in the markets. There has been some news on some expansions by your peer, GlobalWafers, that could potentially lift their market share. Could you possibly comment on that? And if you still see the market behaving rationally in regards to capacity expansions? And the last question is a technical one on taxes. Income tax in Q2 was EUR 24 million with a tax rate of around 20%. Your tax rate guidance is in between 15% and 20%. Should we now assume that you would reach the higher end of the guided range for the full year?
All right. Martin, I think it was 4 questions. I mean, the first one ASP increases where from. I mean, the simple answer, it comes from everywhere. Not only the 300 millimeter and 200, but also particularly from smaller diameters. Recently -- but I mean, the 300 millimeter is definitely the area where we will see higher price increases going forward, particularly when we are going from an environment of brownfield extensions to greenfield extensions. I think the second question was on the extensions of GlobalWafers. I mean, we read what you read. I mean, we have no insights from them on what and at what speed they're actually going, so I think we do not want to comment on that. We believe the industry, though, is still behaving rationally. I think that, I mean, customers are definitely demanding from the industry more additions than our currently -- than we currently see and the market is still very tight. On the tax rate, I mean, there are this -- there's many things that influence tax rate in the quarter. It was -- in Q1, it was much lower. In Q2, it was 20%. The small things like in the U.S. tax law, you count contributions into the pension fund versus expenses, right? We typically make contributions only once a year, or on the deferred taxes, you now usually see that you book deferred taxes once a year and not every quarter. So there's a reason -- lot of reasons why tax rates can be a bit higher or lower. And in the average of the year, we expect it to be between 15% and 20%, meaning lower than what we saw in Q2.
The next question is from J?rgen Wagner of MainFirst Bank.
You mentioned that your customers ask for more capacity that you actually can expend. At what time do you think your current sell capacity will be fully booked with LTAs?
That's actually a very good question. And please accept that I can't give you a too detailed answer, but it will definitely be sooner than we had expected previously.
The next question is from Rob Sanders of Deutsche Bank.
Maybe just a question on the longer-term CapEx outlook for 2019, 2020. If just from a modeling point of view, clearly CapEx is quite elevated this year. And then I was just interested if there's any mix effect between epi and polished in the quarter? And then lastly, just into next year, is it a fair assumption that, that 200 millimeter should grow faster than 300 millimeter in terms of pricing?
I mean, going forward, we will continue to add capacity, but I think it's a fair assumption not to assume that the CapEx will go down. I'm not sure I got the second question on the epi polish mix. Was that a question on volume or a question on CapEx?
A question on contribution margin because, obviously, there are different contribution margins and mix in the quarter.
Yes. I mean, what we said is obviously that the price for an epi wafer is higher. Contributions margins are -- at current prices are high for both polished and epi wafers, definitely. And what was your third question?
Yes. It was with 200-millimeter pricing next year because, I mean, obviously you're -- people are adding 300 but hardly any 200, so I would expect that. But I just wanted to get your thoughts on.
I know, I mean, we are not adding 200-millimeter capacity. What we do is, we extend in 300, and going forward, there will be -- the industry sooner or later has to decide on greenfield. And for greenfield capacity prices, we'll still need to go up significantly, quite a bit actually from the current status. So obviously, going forward, we would see more increases in 300 millimeter than in any other diameter.
We've received another question of Amit Harchandani of Citigroup.
Just as a follow-on question, if I may, just thinking longer term. Besides, of course, the focus on your core business, which is bulk, I guess, silicon wafers, are you -- I mean, is there any change in your thought process about potential adjacent areas in which you would like to expand? How would you look to deploy your cash in addition to, of course, CapEx and the stated dividend policy? Just wondering if you had any updated thoughts on these things.
Well, our view on applications, which are not 100% silicon-related, we still continue to look at silicon-germanium. We still continue to look at calcium nitrite. On silicon, we still continue not to look at silicon carbide, although silicon carbide has huge growth rates, but from a very, very low level. And we are convinced that silicon carbide-based semiconductors will be in the niche in the future, and we still stick to what we said before at the beginning when we went public, we were not that profitable. We then said, we will think about how to use the net cash position in the future, that's what we did. We decided to pay you dividend to pay out this April for the first time. EUR 75 million. With the development of this year, I think it's fair to assume that there might be one also next year. And I also said -- I always said, one day, the industry and one day Siltronic will need significant additional capacity. And then the net cash position of EUR 600 million is a good starting point. And this did not change.
Got it, Chris. And just to clarify, I'm sorry if I missed it earlier, but have you commented on how the inventory level at your customers are looking like across different segments? I know they were running at very low level. Is that still this case? Could you maybe quantify relative to normal levels where they are across your various end markets, but -- I'm referring to the wafer inventories at your customers.
Well, the raw wafer level at some customers is very, very low, but we do not disclose how many days or whatever, no. We do not talk about KPIs or key figures of customers, but they are much more lower than they were used to be.
But have they come down quarter-on-quarter you would say, even further?
No additional comment.
The next question is from Sebastian Hou of CLSA.
I have 4. First one is on the prepayment. I remember in the beginning of this year, the company mentioned that prepayments are expect to receive over EUR 100 million this year. But if we look at comparing your prepayment balance in the first half this year versus first quarter last year, it's about EUR 153 million increase. So is it higher than your expectation?
No, it's not higher than our expectation. When we said it was above EUR 100 million, we were expecting it was significantly above EUR 100 million. And we will also see additional prepayments coming in the second year -- the second half of the year.
Okay. So you're aligned. Okay. My second question is the -- in terms of your long-term contracts, LTAs, I'm wondering how do you price those LTAs on the newly added capacity? Do you look to pass the depreciation burden to customers of the price increase on the wafer coming out of this new capacity will be much higher, meaning your price magnitude could be larger in -- sometime in 2020 compared to this year?
I mean, are you asking for prices for greenfield?
Yes. I mean, how do you price that? Because -- I just wanted to know that how do you -- do you want to pass the -- do you look to pass the depreciation cost to your customers?
I mean, we would -- I mean, rather look at the model and look at the return on capital employed and also on the payback period. And I mean, for brownfield, we would expect something like payback within 5 years more or less. And for greenfield [indiscernible], which is something that you ramp over, let's say, 5 years, would be impossible to achieve something like 5 years, but maybe in an area of a payback of 8 years or so. And the pricing and the cost and depreciation, all needs to be in the right order of magnitude.
Okay, got it. And you say -- you mentioned that your new capacity in 2020 is all sold out with attractive LTA, so can we assume that these are also committed with prepayment?
Yes. I mean, an LTA usually contains of a price and the volume, over several years, and a certain portion of it paid upfront in terms of prepayment. Otherwise, I mean, we wouldn't call it a real LTA.
Okay, we got it. Because some of your Japanese peers, they don't take prepayment but they also name it LTAs. But well, never mind. I'm just trying to understand. And do you have an [ ally ] to protection for yourself or penalty to customers? I mean, say, if, let's say, in the worst case, cycle reverses, can customers easily walk away with that kind of prepayment, they don't feel any pain?
I mean, I guess, that's what prepayments are meant for, right, to give certainty. But I think we do not want to disclose any more about the customer contract.
Okay. Last one for me is that earlier you mentioned the 200 millimeter customers inventory is very low and some -- they're even out of stock. And how about 300-millimeter wafer?
That was, I think, a general comment of all diameters, not a specific diameter. We see very low inventories at many customers.
Okay, because I think the -- one of your customers were locked. One of the -- your semi manufacturer or TSMC [indiscernible] the company -- that company has been accumulating some raw wafer imagery in the first quarter and continue to accumulate more in the second quarter. So I'm just wondering if that's just a specific case or is it a across-the-board issue?
Well, I think this is specific to TSMC, and please keep in mind that they had a very relatively weak Q2 this year. I does not -- for the future, it does not change at all.
At the moment, we have no further questions. [Operator Instructions] We've received another question, it comes from Gustav [indiscernible] of [indiscernible].
I just have one really quick one actually. Just with all the capacity additions coming going forward from you guys as well, I was just wondering what kind of a sustainable return on capital should we be looking at? And what kind of return on -- or sustainable return on capital are you targeting as well?
Yes. I think that's not an easy question. I mean, currently, the return on capital employed to our ROCE is about 60%, but obviously not sustainable. I mean, if you see the CapEx level that we have now and assume that going forward, it will obviously come down more in an area of some 40% or so, but we it really depends on a lot of contributors.
The next question is from [indiscernible] of [indiscernible] Asset Management.
Can you just comment a little bit on greenfield -- potential greenfield going forward post 2020, I guess? Your competitors have started to comment on that. And what is your view in terms of pricing to justify greenfield going forward?
This is a very good question. Of course, we think about that, but these are real costs that we do not disclose in public.
As we have no further questions, I would hand back to you.
So thank you, Chris, and Rainer, and thank you all for joining the call today. A replay of this call will be available on our website. The next reporting date is October 25. And I wish you all a nice day, and goodbye.
Ladies and gentlemen, thank you for your attendance. This call has been concluded. You may disconnect.