Preliminary Q4 2023 HELLA GmbH & Co KGaA Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Sanjay Bhagwani - Citigroup Inc., Research Division - Analyst : Also, I've just got 2 more or less. The first one is a bit more structural. So when I talk about the pricing pass-through, so what has fundamentally changed on the ground, because let's say, like in '21, we were talking about literally no pass-throughs then you got somewhere around 30% and now it is 80% and now you're even guiding for more than 80%. So have you structurally changed some KPIs of your sales force? And yes, so any REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 16, 2023 / 8:00AM, HLE.DE - Preliminary Short Full Year 2022 HELLA GmbH & Co KGaA Earnings Call more color on that that will be super helpful because -- and is there also an element where you share the best practices with Faurecia's sales force who seem to have a good read record in passing through? Yes, that is my first question, and I'll follow up with the next one.

Question: Sanjay Bhagwani - Citigroup Inc., Research Division - Analyst : That is very encouraging. And if I can follow-up on this one. So now I mean, I can imagine that the processes are set. So first thing, the pass-throughs can come through much more faster. And then in terms of negotiations, are you basically going, like if you can provide some color on the nuances here that are you basically doing the bundled negotiations and then breaking down different components? And what sort of benchmarks are you using, particularly for not very quantifiable inflationary components like wages? So any color on that will be very helpful as well. Ulric Bernard Schaferbarthold - HELLA GmbH & Co. KGaA - MD of Finance & Controlling and Member of Management Board - Hella GeschSftsfnhrungsgesellschaft mbH Yes. What we do is we are taking the reference of May 2021 in terms of pricing. So we take the bill of material and really the individual parts and we compare the increases within these parts, for example, on the single semi. And this is then the increase which we are valuing. And in general, you can say that most customers have now also professionalized or operationalized the proof so that they are also doing audits then on these analysis, we are doing in terms of the increases, and this is then the basis for discussion. In general, we talk about the raw material increases. So most relevant is certainly the material -- all material increases, but also energy is important, logistics and also what we call over -- or the additional inflation on salaries, which we are also taking into account, not the normal level, but what comes on top. And this is then the basis for the start of the discussions. And the outcome is very different in how agreements then are taken with customers. It's very, very different. But at the end, some take increases on part levels, some connected with some volumes, some are doing one-time payments at a certain point in time. So that's very different.

Question: Sanjay Bhagwani - Citigroup Inc., Research Division - Analyst : And the last one from me, more on the near-term. Like, I think January has not been very exciting because of the China, but how do you see the visibility on March, April? Do you have strong visibility there in terms of the volumes and the profits?