HELLA GmbH & Co KGaA Q1 2022 Earnings Call Transcript

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

Question: Akshat Kacker - JPMorgan Chase & Co, Research Division - Analyst : Akshat from JPMorgan. Three from my side as well, please. The first one on near-term cost inflation and the flexibility that you have in the business. So are you adjusting your production structures, personnel costs or investments in line with what you're seeing in the market right now? Or do you see this as a temporary hiccup? And you want to be ready for the sharp rebound in auto production? Also on that point, I was trying to gather all your comments on the business environment on this call. Am I right in believing that you still expect margins to improve sequentially in Q2 versus Q1 as Q1 is a seasonally weaker quarter? That's the first one, please. Rolf Breidenbach - HELLA GmbH & Co. KGaA - Chairman of Management Board, President & CEO of Hella GeschSftsfnhrungsgesellschaft mbH With regard to our, let's say, near-term flexibility, of course, we try to flexibilize as much as possible to -- on the one hand achieve, let's say, under the current circumstances the best cost base possible. On the other hand, we have to be ready, so we cannot afford telling our customers that we have reduced capacity, be it with regard to investments or with regard to personnel. So it's a balance we are currently managing. Of course, we are more flexible with regard to personnel cost than investments, because when we talk about launches, we have -- at least, to install limited level of capacity, of course, when we're talking about capacity increases, which we also have planned here and there. We are a little bit more reluctant. With regard to the margins, we expect second quarter being a bit weaker than the first one, because I already made comment on the increasing project-specific costs, the now more and more realizing material price increases, and also the reduced payments from the -- reimbursement payments from the customers. Ulric Bernard Schaferbarthold - HELLA GmbH & Co. KGaA - MD of Finance & Controlling and Member of Management Board - Hella GeschSftsfnhrungsgesellschaft mbH And perhaps to add, from today's perspective, we are not anticipating a higher sales that we compared to the first quarter with this weirdness of the bottleneck situation. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. SEPTEMBER 28, 2021 / 12:00PM, HLE.DE - Q1 2022 HELLA GmbH & Co KGaA Earnings Call

Question: Akshat Kacker - JPMorgan Chase & Co, Research Division - Analyst : And any broad range that we should think about in terms of percentage? Rolf Breidenbach - HELLA GmbH & Co. KGaA - Chairman of Management Board, President & CEO of Hella GeschSftsfnhrungsgesellschaft mbH It's too early to say, because we are currently pushing hard to come into a ballpark, which is acceptable for us. But it's, of course, you can imagine, very tough negotiations.