After Germany activated stage 2 of its 3-stage emergency gas plan, we provide our views regarding the potential impact on the industrial names in our DACH coverage if Germany moved to stage 3, i.e., gas supply rationing. The key message is that while none will be able to hide, simple exposure to Germany does not factor in who is protected by being ''system relevant''. Our scenario analysis would see average downside risk of 7%/15% to our base case adj. EPS 2022/23e, which sits 3%/10% below consensus. While we would not call the bottom, much looks reflected in the price for the mid-cap industrials, also supported to some extent by our price-book approach. Phase 3 might lead to a 2.2% drop in Germany''s real GDP, driven by knock-on effects Based on analysis by five leading German economists (Prof. Dr. Gornig et al.), the move to stage 3 could result in 2.2% contraction of German real GDP in 2023 (BNPPE: +1.7% growth) including 13.5% decline in industrial production in Q223. The authors base their view on gas supply rationing, which drives several knock-on effects, such as ongoing supply chain disruptions and a spike in natural gas prices, fuelling inflation further, which in turn is weighing on consumer demand. German production exposure highly divergent, energy costs at 0.25-0.8% of sales Based on our analysis of the direct production exposure to Germany we were surprised by the divergence by companies, ranging from as low as ~5% at KBX to as high as ~90% at JUN3. Yet food and beverage suppliers were classified as ''system relevant'' during covid so the simple focus on the exposure to Germany might be a false friend. Energy costs represent only 0.25-0.8% of sales, and from 1% (RAA) to 10% (KRN) of adj. EBITA, but the latter''s order book reaches well into FY23. We make no recommendation changes, but would prefer plant engineers at this point We might see 10%/25% downside risk to consensus based on our scenario approach, which is comparatively minor...