The following is excerpted from the question-and-answer section of the transcript.
(Questions from industry analysts are provided in full, but answers are omitted - download the transcript to see the full question-and-answer session)
Question: Akshat Kacker - JPMorgan Chase & Co, Research Division - Analyst
: Akshat from JPMorgan. Three from my side, please. The first one on cost recoveries from OEMs. Can you please give us more details around the
discussions that you are having right now, not just on raw materials, but also on other inflation elements that are going through the P&L? How
have the current discussions been just with OEM? Also in this production environment of low volume and the frequent start-stops that you
mentioned, how do you negotiate the annual contractual price downs with OEMs?
The second question that I have is also on the medium-term negotiations on sharing the burden of structurally higher semiconductor costs going
forward. You mentioned in your presentation that you still think you can get back to the 8% margin level in the medium term. On the other hand,
what we're hearing from a number of OEMs that they are pushing back on suppliers on sharing a large chunk of the cost burden that they are
seeing right now. So how should we think about this going forward?
Finally, the last question on the semi linked shortages and auto production. Despite the Russia-Ukraine situation and the COVID surge in China, it
feels like semi is still the main bottleneck. And the industry as such keeps waiting for the sequential improvement in production levels. From your
point of view, when do you expect meaningful new capacity for the sector? Or do you think new capacity is offset by higher semi content per car
that we are seeing in the modern car today?
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APRIL 07, 2022 / 7:00AM, HLE.DE - Q3 2022 HELLA GmbH & Co KGaA Earnings Call
Rolf Breidenbach - HELLA GmbH & Co. KGaA - Chairman of Management Board, President & CEO of Hella GeschSftsfnhrungsgesellschaft mbH
Thank you very much for your questions. Let's start with the third one. With regard to the bottleneck situation, we still see that the shortage in
semiconductors is and will remain the dominating factor for the sales figures. This has not changed due to the Ukraine crisis or the COVID situation
in China. From our perspective, we will see a slight improvement in the third and fourth quarter of this calendar year and an even better situation
in Q1/Q2 of 2023.
But bottleneck will also be an important topic in 2023 because on the one hand, additional capacity will be available on the market. But on the
other hand, the demand per car, especially when we look at the fully equipped cars with autonomous driving functionalities on the one hand and
also the e-vehicles will increase. So we will see in 2023 an improvement, but still a bottleneck situation, especially for the, let's say, common
technologies relevant for automotive.
With regards to the cost recovery, we are in, from our perspective, very open and constructive discussions with our customers. We have already
signed first agreements and others are very close for signature. And the logic of these agreements is, of course, different from OEM to OEM. But in
general, we will get compensation for material and price increases for every quarter. So we look at the demand of components we deliver to the
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