FLSmidth & Co A/S

CSE:FLS

Earnings Call Transcript 2023-Q1

[Mikko Keto, executive]

Good morning everybody. I would like to welcome you to FLSmidth Q1 '23 Investor Presentation. Together with me, I'm joined by Roland Andersen, our Group CFO.The usual forward-looking statement caveats are on the screen now. The highlight of the quarter one was that we have an excellent start on our transformation journey. Mining EBITA was 9.6% is adjusted and also that take into account that there's an underlying dilution from mining technology part of the portfolio, 2 percentage points. So adjusted EBITA 9.6%, annual at TK 2 percentage points higher. It's good start for the year.Order intake cost was solid 15% supported by volume that we acquired from mining technology. Revenue was especially good for the quarter. We are progressing well with our transformation journey. Also regarding synergy takeout. We are slightly ahead of the plan and we reduced to about 800 full time employees in mining, and also as a part of the cement transformation journey, about 500 from cement.Moving on to cement, the cement order intake mix starts to pay pretty good. So it's 60% services, and 40% products and capital. Profitability is at our target level 4.3%. So in cement also, everything is going according to plan. Transformation has started it's full on this year and out of his transformation, we will come leading mining technology and service company. And cement will be green cement technology and service company. So our company will look very different from what it was sometime back.One of the significant achievements in restructuring has been reduction of the NCA backlog and that reduction has been mainly achieved by NCA setting exits from contracts. And from the start of the NCA, we have come down in the backlog 45% only in a space of about half a year. So I will say that's very significant achievement. We are exiting NCA fast.We're also maintaining our guidance for the year. And when you're looking at the KPIs for this first quarter, we are right on guidance as we planned.Regarding sustainability, there are a couple of positives, which is improvement in spend with the suppliers who are committed to science-based targets, improvement in women managers, and slight concern regarding health and safety. And we are addressing that one and there's a link for that one when we are exiting labor service contracts. And we are now putting extra emphasis on that one. While we're exiting those contracts that until we have that contract that everybody's working in a safe manner and a willful attention to the safety.If you look at then the mining order intake. Product order intake is modest due to timing of the opportunities. We announced one significant order for the first quarter, which was full gold flow sheet. Since closing on the books, there was another good order from -- significant order from Chile regarding mills. So from our point of view, the capital order intake is more about timing. And activity level is still good stable in mining. And we are focused on getting orders that we want. So we are very selective with orders. We want to get orders which are technology product orders with the good margin and low risk. We chose the orders and pipeline is still good.Service order intake growth was solid supported by volumes coming from mining technology. And in both categories, our order intake margin is increasing. You will be very proud when you will see the results from the revenues later on. You will be proud of us. We don't venture into the areas that we don't want to go. We are a solid technology product and service company.Revenue is very good mix in terms of having 60% of the revenue mix coming from services and also growth in service revenue source that our supply chain works like a Swiss clock. We can deliver spares, wears on time as planned.One of the biggest highlights compared to the consensus estimates is that we are right on guidance with our adjusted EBITA margin for mining and as I said earlier, it will be 2 percentage points higher will add [ dialogs ] on impact from mining technology volume. So real progressing in our EBITA journey.Cement order intake decreased year-on-year and it's very -- we are very selective in capital product order intake what we take in. The mix starts to be better in order intake showing 60% share of the service and 40% of the capital. The start of the year for service order intake was a bit slow first month, second month, but the end of the quarter we saw increase in the service order intake. Year-on-year it's down 40%. But if you look at the sequential, there's a growth between quarter 4 and quarter 1. And our focus is to continue growing services in the coming years and that will fund our journey to green technology company.Slightly different mix in the revenues. Service share 56%, but all-in-all happy with the revenues and happy with the EBIT 8 percentage. As we speak, we are reducing operating entities in cement as a part of the simplification. We are moving toward principle company model simplifying all the operations and we completed first round of delayering in cement where we saw 500 colleagues leaving the company. So we are much leaner operation in cement compared to the past.One of the most significant achievements in my books is that we are very fast exiting NCA. So we've seen since the start more than 40% reduction in the backlog. When you look at the numbers, the revenue for the quarter was modest. So most of the exits have been through contract terminations and [indiscernible] is about the exit and that has been successful. We continue to support our customers finding new suppliers. While we are exiting, we continue negotiating with a few parties about possible sale of some of the assets here.Then I'll hand over to Roland, please.

[Roland Andersen, executive]

Thank you for that, Mikko. So if we have a look at the total thing consolidated, a revenue of DKK 6 billion, gross profit margin of 23.2% and adjusted EBITA of DKK 362 million and adjusted margin of 6%. Reported EBITA margin of 3.9% and clearing financials and tax and so on a bottom line of 84 million.If we look at the next slide, gross margin, reflecting good improvement in mining, but also that the exit of non-core activities is required and still loss-making on gross profit level. So 23.2% for Q1. Mining moving forward to 25.4%, cement roughly flattish, and non-core activities still loss-making on gross profit level.Our SG&A cost compared to the same quarter last year is obviously up. Mining technologies is now included in our cost base. And we also have integration costs sitting here. It drops a bit compared to Q4 as a percentage of revenue. And as we move forward here, we will see -- increasingly see synergies taken out of the SG&A cost base over the next 3, 4, 5 quarters.The group's combined EBITA 6% is still reflecting ongoing transformation journey. On the right-hand side, we've tried to do the traditional EBITA margin bridge. So compared to the same quarter last year, where we had a little bit of acquisition cost before the closing. And adjusted EBITA margin last year of 7.2%, then our revenue is considerably up, give us a 4% EBITA margin increase and predominantly NCA is pulling that a bit back again, as we saw in the previous slides.Mining technologies is about 1.5% dilutive on a group level basis and with a few other adjustments and adjusted group EBITA margin of 6%. Integration costs of DKK 127 million equal to about 2% leaves us with the group EBITA margin reported for first quarter of 3.9%.Our net working capital increased. It's mainly driven by lower accounts payable, but also a buildup in work in progress. We ended at 10.6%, which is in the range we have sort of indicated we will be between 10% and 11%. And that means that net working capital is increasing by DKK 720 million for the quarter.And if you go to the next slide, that means that on group level, our CFFO was minus DKK 404 million. A little CFFI, we had some CapEx and also sale of some real estate back and forth. So free cash flow for the quarter for the group minus DKK 428 million.And that brings us to financial gearing that is well below our capital structure targets. So a leverage ratio of 1.0x, slightly up compared to previous quarter, but well below our target of 2x.All-in-all, we will maintain our guidance. So mining, DKK 16 billion to DKK 17 billion in revenue and 9% to 10% EBITA margin. We are well out of the gate for the first quarter of the year. Cement, DKK 6 billion to DKK 6.5 billion in revenue and an EBITA margin of 4% to 5%. And non-core activities will still be DKK 800 million to DKK 1 billion for the year and an expected loss of DKK 250 million to DKK 350 million.And on the group, that adds up to a revenue of DKK 23 billion to DKK 24.5 billion, with an adjusted EBITA margin of 6% to 7% and a reported EBITA margin of 4% to 5%. So we are still expecting to spend around DKK 550 million in integration costs during the course of the year. We have spent DKK 127 million coming out of Q1. The adjusted EBITA margin is still roughly diluted by 2% from the inclusion of mining technologies.And the guidance for noncore activities is still included as part of the DKK 1.2 billion total expected loss that we guided in the outset last year for the 3-year period that we expect to close down that business.Then we have included a slide here that illustrates a little bit progression on our transformation plan on the different groups in our business. First of all, in mining, we're progressing well on the synergy out take. We have reduced by more than 800 people in Q4, Q1, in line with what we communicated and expected, and we're planning the next wave of synergy takeouts during the second half of this year when we finally will merge the acquired legal entities of TK and start shutting down the systems from them and merge data into one FS mid-unit country by country, region by region.A little flavor on our risk and management derisking approach. 84% of our PoC revenue is now related to what we classify as lower risk orders and the comparable numbers in last quarter, same quarter last year was 58%. So moving forward on the derisking part.Same for cement, a little flavor here that cement is also derisking both their percentage of completion but also their backlog. And cement has continued the simplification of the operating model. They've reduced the number of employees by some 700 people since the same quarter last year, predominantly by pulling away from smaller countries where we, no wonder, no longer want to be present in cement and also a significant delayering of the organization.NCA, most predominantly the order backlog reduction, as Mikko mentioned, significant progress in that part of the business. And on group level, we communicated that we are simplifying across the board. We have about 150 offices that needs to go to half and about 30 of them have now been vacated, admittedly the easy ones first, but yet significantly progress and that will start to hit in the numbers as we move forward.On the pure-play separation of mining and cement, we have now defined the separation principles. And internally, a project has been defined to complete a full separation of mining and cement no later than end of next year, and that is progressing well.And with that, I think we can give it over to Q&A.

[Operator]

[Operator Instructions] And our first question will come from Christian Hinderaker with Goldman Sachs.

[Christian Hinderaker, analyst]

Let's start with orders, please. If we back out the 1 billion or so lower level of large orders that we've seen this quarter versus the first quarter of last year, I think we get to about 3.8 billion mining order number for the quarter, and that effectively is flat year-on-year. I'm just interested in how that's developed with regard to the split between price and volume as well as the extent to which you think orders might have been impacted by your active decision to derisk the order intake.And then secondly, mining service orders were up 15%, and you said that that's been supported by the acquisition of TK or mining technologies. I just wondered if you could quantify the contribution from TK within the service business specifically.

[Mikko Keto, executive]

So if I start with the service orders, so most of the growth in service orders is actually coming from additional volume coming from mining technology. And what we've been doing in service is that the mix is getting better. So we are -- we canceled some of the larger labor contracts in the first quarter, and it means that it could have been renewed. So we are exiting kind of basic labor and moving away from that one. So that will have a slight negative impact on the volume. So at the same time, if I look at the mix of the service, it's dominantly spare parts, wear parts, higher-level services, which are possessing higher margin as well and no labor issues and then kind of a refurbishment and upgrade. So actually, the mix is getting much better. But that is a little bit limiting our ability to call top line fast. But we actually -- in the other categories, we continue to increase order intake. So I think it's -- what we see for full year, my expectation is that on top of the mining technology added volume that there will be small growth in order intake for services. And in order intake, we've seen improvement in margin compared to last year. So top line margin in service is better than a year ago. So that will support the volume a bit.Then on the capital side, what we see is that the market is good, active, stable. Good, active, stable means that is similar to last year because last year was really good for the capital business. And we are quite selective in what we do there. So I would say that we are getting orders that we want to get. And I know that in the first quarter that there was opportunity to take more volume in, but we decided not to because that was kind of low-quality orders just to kind of support the top line.Our focus is that if you look at our technology and product portfolio that we focus on the core elements: mills, crushers, hedge [ BTR ], pumps, so for the core elements. So I believe that we are doing well there and also that it's also the timing. Since closing of the books, we got a nice order for large mills in Chile. So in capital, it's quite a lot of our timing, but my expectation is that it's positive, stable for the year. And so far, we are getting the business that we are targeting to get. So -- but we are turning down more business compared to the past, so that if there's a low margin, high-risk kind of cases with a lot of engineering is not our business anymore. So it has some impact.

[Christian Hinderaker, analyst]

Maybe we can turn to margins now. Clearly, a stronger-than-expected performance, and you've highlighted the mix from higher service revenues and the improvement in SG&A from restructuring. I just wonder if you can talk about the impact of price cost dynamics. And I guess in particular, how underlying costs are trending if we ignore the headcount and sort of structural office reductions that you've taken. In other words, that you want a per head or footprint basis?

[Mikko Keto, executive]

I could actually comment the kind of product cost, and I think Ron could comment on the overall company costs where we're heading there. So if I look at the margin improvement in order intake, both in capital and service, so we've been able to cover inflation plus a bit more. So that means that the top line margin is higher. And what we're seeing is that the last year, it's still in the first quarter, we have not seen a decrease in input costs. So there seems to be still inflation in the supply chain, meaning that if you look at the prices of the component sourcing, there's still inflation in the chain from -- but it will be less this year than last year.But my expectation that input costs which are kind of product cost for the production cost, both in service and capital, still go up this year, but less than in '22. And I think, Ron, if you want to comment about the kind of organization SG&A.

[Roland Andersen, executive]

Yes. So what we're planning to do on the SG&A side, if I understood it correctly, I think cement, of course, will complete the delayering over the next half year. So in mining, we have taken first wave out of the synergies, which was basically our front end with double roles and so on. And in second half, we are now preparing to do the legal entity merger, combine the systems into one system or entry module. And that means there's a second wave of synergy takeout in the entire support functions of the company. That will happen in Q3, Q4 and then have full run rate impact from 1st of January with the DKK 560 million that we have communicated. But all the stuff that Mikko talks about and I talk about is still giving mining and EBITA adjusted for the year of 9% to 10%.

[Christian Hinderaker, analyst]

Finally then, on just inventories, they're around DKK 4 billion and only up really a little bit sequentially, I think DKK 88 million you said in one of the slides. I'm just interested in the development in inventories. You had a very strong sales mix and service towards spares and wears. One might assume that that might lead to lower inventories? And then secondly, how we should look at potential working capital developments more broadly as we move through the remainder of the year?

[Roland Andersen, executive]

Yes. So inventory is actually expected to be slightly up, the more service business we get on a relative basis. So inventory is slightly up in Q1, and that has supported our order intake in service and also our revenue execution in service. So what we have said is that net working capital for the year will hover between 10% and 11% in total. And also longer term, when service becomes a bigger ticket of our combined business, working capital should stay below 15%. So to the extent we succeed in building a bigger and stronger service business, we will most likely have inventories on slightly higher levels than we currently see.

[Operator]

Our next question will come from Lars Topholm with Carnegie.

[Lars Topholm, analyst]

A couple of questions on my side. Maybe to start with a follow-up on the net working capital from your question from just before. So are you seeing any change in the net working capital level or for that matter, the cash generation in Q2. The reason I ask is because you're stating your work in progress will be inversed in the coming quarters, but that just makes it a receivable, which still working capital? And then a slightly related question. Can you comment on your free cash flow from core and from noncore activities, respectively, because the cash flow statement doesn't give that split?And then a final question, you mentioned on Page 13 on non-cores that your negotiations that could lead to a sale of part of these activities. I just wonder if you can comment on what the cash flow implications could be of that? Would that result in any significant cash outflow?

[Roland Andersen, executive]

Yes. Thank you for that, Lars. So on our net working capital, we are currently executing on projects, both in our own legacy business and also in the former TK business. And I think it's fair to say that some of the projects on the TK business have different milestone profiles, milestone payment profiles than our own business. And that means that we're currently building up work in progress. And as you say, work in progress will then be invoiced and then collected. And there's no issues with that. That's how it will play out. So to the extent that we execute as we should, it will be invoiced, the customer will accept that and then pay the invoices. So that's also why we have said that net working capital will be between 11% -- 10% or 11%, and it will be swinging over the year.So it's not the only cash flow item. We also have restructuring costs, we have severance payments. We have significant losses in our NCA business that needs to be cleared out. And we're also clearing Russia out. So nothing new in that. That's exactly as we have communicated it. 2023 is not a great cash flow year. We've said that we expect CFFO to be positive for the year, but not large. And that's still how it is. So I'm not going to give you a precise guidance for Q2.Now on the sale of NCA, we are contemplating potentially to sell parts of NCA. And we don't know where that ends, but the talks are ongoing, and then we will come back once we know more. That's not going to be a great cash inflow or outflow. This is a loss-making business, that's not great. It's a business where we have strong IP rights. That is great, but some of the parts, it will not be a great value on that expectedly. Yes. So I hope I answered some of it, Lars.

[Operator]

Our next question will come from Gustaf Schwerin with Handelsbanken.

[Gustaf Schwerin, analyst]

Yes, Gustaf Schwerin, Handelsbanken. I have a few questions on NCA. First of all, if we look at the reduction of the backlog here. How much more of the remaining part you think is in scope for termination? Have you done it all now? Or should we expect the remainder of the backlog plus the additional 300 million, 400 million actually being sold? The first one.

[Roland Andersen, executive]

Yes. So there's no change in what we have guided the market, right? We still expect the majority to be either executed or canceled over the course of '23, '24 and then with the tail end in '25. So that's still the expectation. If or when we may sell part of that, we will revisit the full execution time lag of the remaining backlog and then come back. But for now, there's no change in that expectation. So the remaining 2.1 billion will predominantly be delivered this year, next year and the tail end in '25.

[Mikko Keto, executive]

And our evaluation criteria for potential buyers is that [indiscernible] will take backlog and then people involved in the NCA business. So in -- as Ron said before, the purchase price is not the matter here. It's basically backlog and then numbers of people and offices related to the NCA and that will be our criteria, whether it makes sense to sell it, if there's a buyer or just to execute the backlog. So we are ready to execute the backlog fully ourselves and exit the business that way as well. So it's -- but if there's a buyer and meets the criteria that we have, then we are willing to sell parts of it. But we are also equally ready to execute it fully.

[Gustaf Schwerin, analyst]

And can you comment roughly how much in scope for sale of the 2.1 billion?

[Roland Andersen, executive]

No, no, we're not going to comment on that now.

[Gustaf Schwerin, analyst]

Okay. And then just lastly, can you explain how you get to the same number as you've guided previously DKK 1.2 billion accumulated loss given that you're actually making a big reduction now in the backlog.

[Roland Andersen, executive]

Yes. So in the outset, we estimated to lose DKK 1.2 billion, and some of it is already lost. So we lost a big ticket last year, we've lost something in Q1 and then the rest over the course of the remaining execution period.

[Gustaf Schwerin, analyst]

All right. I would imagine that the accumulated losses would be lower given that you've terminated a significant part of the backlog.

[Roland Andersen, executive]

But that is not the case for now.

[Operator]

Our next question will come from Claus Almer with Nordea.

[Claus Almer, analyst]

Also a few questions from my side. Roland, you mentioned that you expect a positive free cash flow from operations. What about the free cash flow? How do you see that for this year? Yes. Is that still also going to be positive?

[Roland Andersen, executive]

That's a good question, Claus, and we talked about that before, but I'm not going to comment more on that. I'm not going to comment more on that. It's not going to be a great cash flow year. We're doing a lot of restructuring, the remaining backlog on Russia, NCA, back and forth. So it will be a little wobbly. But we are in relatively good control and my best guess is that we will have a positive CFFO for the year, and then you can deduct a bit of CapEx and tax payments and then we are there.

[Claus Almer, analyst]

Okay. It was worth a try. Then talking about the mining margin, then 9.6% in Q1 adjusted. Traditionally, you have a lower margin in Q1 compared to rest of the quarters or the full year. And in this year, we should also start to see the benefit from the cost-saving initiatives. So everything equal, shouldn't the mining division at least aiming for the high end of your margin guidance?

[Roland Andersen, executive]

Yes. I hope so, Claus. So let's see how it plays out.

[Claus Almer, analyst]

Okay. And then just a follow-up on that part. Mikko, you mentioned that we're going to be proud when we're going to see the margins in the orders you're signing currently. How should we translate that to a thing we will put into the excel spreadsheet?

[Mikko Keto, executive]

Well, it's of course, difficult to translate kind of levels of proudness in terms of numbers. But when we look at the backlog and the old backlog when it's turning to revenues and most of the kind of old backlog will be out in '24. And the mix in terms of new stuff and all stuff is getting better. So in that sense, it's very good actually what will come out. But of course, it's a gradual change because, especially the capital business, we start to -- is about the mix of the kind of lower margin backlog and higher risk backlog, what we are now executing. And then because the execution quite for example, if you talk about the mill, what we now got an order last week, it's easily 2 years. And also, it's not only about margin but also the risk -- that risk profile is much better, as Ron highlighted then that we'd be really selective that we focus on quality of the orders for the -- and core technology, not engineering this and that and the steel structures.

[Claus Almer, analyst]

Okay. We're looking forward to see those projects being delivered in the P&L, so well done.

[Mikko Keto, executive]

You can tell me when you feel that we can be proud.

[Claus Almer, analyst]

I will do that.

[Operator]

Our next question will come from Kristian Johansen with SEB.

[Kristian Tornøe Johansen, analyst]

Yes. So just regarding this 2 percentage point dilution from mining technologies. So from what I understand, there was this 2 percentage point dilution in Q1, and that's also what you expect for the full year, so the 35 that we should expect sort of 2 percentage point dilution in each quarter during the year? And can you just elaborate a bit more on phasing, I would expect that to eventually start to level off?

[Mikko Keto, executive]

So maybe I will first comment. So the pickup in service will be fast because then, of course, then firstly, we need to pick up the new orders for the higher margins. So I would expect to start to see in service revenues, gap kind of closing in the fourth quarter. But then the capital business, it takes a bit longer because I don't think we execute any new capital orders for mining technology this year. So that will be then for the following year. But the service, I'm expecting order intake to be at the same level as current FLSmidth and toward the fourth quarter and then is starting to kind of come in as a revenue. I don't know, Roland, if you want to comment about --

[Roland Andersen, executive]

That logic is right. It's going to be a little wobbly right. So as Mikko says, service will turn around faster, right, and then there's a backlog to be delivered that we can't change. And expectedly, this dilution will then fade off once we come into the new year. So on average, 2% is best guess for now.

[Kristian Tornøe Johansen, analyst]

Understood. And then just asking again about the NCA backlog. So just to understand the dynamics when you cancel a risk of these orders in the backlog. The cost -- the loss you originally expected from that project. I mean, do you still carry that, or I mean, what's the impact on the P&L in the quarter from these backlog results?

[Roland Andersen, executive]

Yes, I understand the question. So if it's loss making and we just cancel it, are we then not saving money? And that may be the case in some of the orders, and some of the orders, we may pay our way out. So for now, plus/minus, we are not changing the full DKK 1.2 billion the question we had before also. But everything else equal, if you're doing it properly and a bit more and so on, it should be better doing it than not doing it. For now, we're not changing the full guidance.

[Kristian Tornøe Johansen, analyst]

No. That's perfectly clear. So the cost related to lowering the backlog, is that fully taken in the quarter? Or is there any delayed costs into Q3?

[Roland Andersen, executive]

So that varies a little bit. Most is taken in the quarter. There may be a few more coming in Q2 on the stuff we did in Q1.

[Operator]

Our next question will come from Nick Housden with RBC Capital Markets.

[Nicholas Housden, analyst]

I suppose 2 very quick ones. I did ask would be, firstly, on the mining service orders. Could you maybe just give us a sense of how much of that order intake relates to mid-life overhauls, which I think for some of the peer group has been quite a profitable source of orders and revenues in recent quarters?

[Mikko Keto, executive]

So if I look at the order intake and mix is dominantly spare parts, wear parts, and there could be what is sometimes called as a capital spare, which means that the expense is there, which is the kind of main body of the crusher or then a mill. So there are some large kind of spares as well, but less on refurbs and in refurbs, we are also careful that we undertaking refurbishments that are upgrades for our own technology, existing technology rather than engineering assignment for the NCA type of refurbishment. So there's -- so share of that one is smaller and quite small for the quarter. So it's mainly spare parts, wear parts and then high value-add services, less refurbs.

[Nicholas Housden, analyst]

Okay. Great. And then a related second question would be on the 70-30 order split between service and equipment in the mining division in Q1. Is that about the level that we should be thinking of going forward sort of now that you're very much focused on lower risk sales? Or do you think that maybe it will maybe trend a little bit toward --

[Mikko Keto, executive]

I would say that over time, we'd like to be closer to that number. But still, for the next 1 or 2 years, I think the split is closer to 60-40 because, as I said, in product business, there's a timing -- a lot of timing difference between the quarters. So -- but over time, while we are increasing service business, we would like to be closer to 65 to 70, but that needs to come from growth of the service rather than a decline in the capital business of our core products. So that's why I said it will take a bit of time and the areas in service that we are planning to grow much faster than the market and we talk more about that in the coming months, what we have done there. But it's service needs to grow into that split rather than capital to shrink. So I think once we've done the kind of restructuring, once we define it as we have now, what are our core products and technology, we want to keep and win market share there. And then grow service faster than the capital over time to increase the sale. I don't know if that was going to clean of explanation.

[Operator]

[Operator Instructions] And our next question will come from Tomi Railo with DNB.

[Tomi Railo, analyst]

It's Tomi from DNB. Can you comment the old [indiscernible] group orders and sales levels in the first quarter?

[Roland Andersen, executive]

So we're not calling out separately the order intake from ex-TK. So we're not doing that. What we're saying is that out of total revenue, our revenue expected is below DKK 3 billion for the year.

[Tomi Railo, analyst]

And how much was that in the first quarter?

[Roland Andersen, executive]

We're not calling that out, but --

[Operator]

All right. And at this time, there are no further questions in the queue. So I would like to turn the call back over to management for any additional or closing remarks.

[Mikko Keto, executive]

I'd like to thank you for your time and questions. As I said in the beginning, we are well on our way with our transformation journey, and they will be visible in the EBITA improvement, both in mining and cement. We will call for pure-play mining, pure-play cement, both being separate entities at on next year, focus on quality of the earnings and be very selective of the order intake, what we have and be a leader in the -- of the pack in terms of having technology in mining what's needed for the customers. And thank you for your time and look forward to talking to you soon again.