Nilfisk Holding A/S

CSE:NLFSK

Earnings Call Transcript 2023-Q2

[Elisabeth Klintholm, executive]

Good morning, and welcome to Nilfisk's earnings conference call for the second quarter of 2023. My name is Elisabeth Klintholm, and I'm the Head of Investor Relations and Group Communications here at Nilfisk. I have the pleasure of welcoming our newly appointed Interim CEO, René Svendsen-Tune on the call this morning. Together with our CFO, Reinhard Mayer. They will present our Q2 '23 results this morning.

On this call, we'll cover 3 topics. First, Rene will give an update on the numbers and key drivers for the quarter followed by a business plan 2026 update. Then Reinhard will give a more detailed run-through of our financial performance in the quarter, finishing off with our outlook for '23, which we reconfirmed last night.

We appreciate that you take the time to listen in on the call this morning. The presentation will take less than 30 minutes and we look forward to taking your questions at the end.

Moving on to Slide 2 for the usual practicalities. Before we begin today's presentation, please note that this presentation including remarks from management may contain forward-looking statements that should not be relied upon as predictions of actual results. For more details, I refer to this slide and the disclaimer in the report. And with this, I pass the word on to you, Reinhard.

[Reinhard Mayer, executive]

Thank you, Elizabeth, and good morning to all of you. Thank you for joining us on our earnings webcast today. I will start out with a few words on the CEO change. Torsten Turling resigned as CEO of Nilfisk in June 2023 and has asked for an early release from his duties. This request was accepted by Nilfisk's Board of Directors yesterday, August 17. René Svendsen-Tune steps in as interim CEO from today, August 18, while staying a member of the Board of Directors.

Rene has been a member of the Board of Directors at Nilfisk since 2017, and was Deputy Chair at Nilfisk from 2021 until yesterday. Prior until January this year, Rene served as CEO of GN Store in Nord A/S and GN Audio for 8 years. With Rene at the helm for the interim period, we will continue the rollout of Business Plan 2026. With this introduction, I hand over to you, Rene, for an overall introduction of our Q2 2022 results.

[Rene Svendsen-Tune, executive]

Thank you, Reinhard, for this introduction, and good morning to all of you, and thanks for dialing in to this call. I'm pleased to be able to step in after Torsten asked the Board from an earlier release due to family reasons. Nilfisk needs someone to continue supporting the business just as planned.

Torsten, Reinhard and the leadership team have done a very good job as architects and implementers of the Business Plan 2026 strategy. Going forward, we will continue to deliver on this plan. We are in the process of recruiting a new CEO, but until then, I'm happy to use my experience, to ensure, to support, continued focus and progress with developing the business successfully.

And with that, we move to our key highlights for Q2 of 2023 and a short Business Plan 2026 update. Please go to Slide 5. Nilfisk second quarter 2023 results showed satisfactory progress in line with our plans. Total revenue came to EUR 276.5 million. This represents a solid organic growth of 4.3%. Revenue was driven by strong growth in the service business and solid growth in the Professional business, while revenue from Consumer and Specialty declined.

Looking at the regions, we saw very strong performance from both our Americans region and APAC, while the market slowdown remained visible in EMEA. Revenue benefited from the ongoing easing of supply constraints. In the quarter, the temporary output challenging from Querétaro that affected revenue in Americas in the first quarter were solved. We also saw supply constraints within Americas plants easing. And as a result, output grew steadily in the quarter. We do note, however, that the order book remained elevated, primarily within the industrial range in Americas.

The gross margin reached 40.4%, meaning that the margin recovery that we have seen over the last 6 quarters continued. The margin recovery was driven by price management, lower freight cost and business mix, while headwinds from inflation, lower volumes and negative mix effects from higher share of revenue from Americas partly offset some of the tailwinds.

EBITDA reached EUR 38 million, and the EBITDA margin before special items came to 13.7%. The solid EBITDA margin improvement of 1 percentage points from Q2 of last year was driven by higher revenue and changed business mix, which was partly offset, however, by headwinds from inflation as well as from annualized effects of the 2022 investments in the business plan '26. Finally, free cash flow improved significantly to EUR 40.1 million in the quarter. This was driven by a strong improvement in operating cash flow from improved results and lower working capital. Overall, the satisfactory Q2 results were in line with our plans, and we reconfirm our outlook for the full year of 2023.

Let's move to Slide 6 for an update on business plan 2026. In the quarter, Americas delivered an impressive 17.8% organic growth. In Q2 of last year, growth in Americas was temporarily muted due to the tornado incident that destroyed our only U.S. based distribution center causing a temporary supply disruption.

In Q1 of this year, lowered market demand and supply bottlenecks also muted demand. But in Q2, growth was so driven partly by pricing, but also by increased shipments from our production facilities in Americas. As promised, we resolved the temporary output challenges from Mexico and as I mentioned before, we continue to see supply constraints easing. Both of these factors resulted in steadily growing output.

Moving on to strategic priority of developing service as a business that delivered 12.3% organic growth in the quarter. As a result, services share of total revenue reached 27.8% in the quarter. This is up from 25.8% in Q2 of last year. The contract attachment rate continued to increase at 10.4% in the first half of 2023, up from 8.9% in the first half of 2022.

Finally, the service EBITDA margin before special items reached 24.8% in Q2 of '23, up from 23.8% in Q2 of '22. I would also like to highlight 2 products that we launched in Q2 as part of our strategic initiative leading with sustainable products.

Firstly, we launched a new SC4000, which is a highly renewable and productive ride-on scrubber with connected features that deliver consistent and safe cleaning outcomes. The primary target segment for this machine is contract cleaners with secondary segments being retail and healthcare. We also launched the SC370, which is a compact, easy-to-operate, walk-behind scrubber and dryer for cleaning in congested areas and tight spaces. For this machine, the primary target segments are contract cleaners, retail, hospitality, education, with secondary segments being [indiscernible] light industry.

Finally, a few words on the progress with new ways of working. In May, with our Q1 report, we announced that the implementation of structural efficiency measures. We implemented a large part of these measures in June and expect to harvest the structural efficiencies in the second half of 2023. In addition, we are well underway with building our more customer-focused operating model, including establishing the regions. This, we will follow up in the coming quarters. So Reinhard, over to you for a run-through of the financials. So please go to Slide 7.

[Reinhard Mayer, executive]

Thank you, Rene. Moving on to financials on Slide 8. Our revenue of EUR 276.5 million was EUR 4.5 million higher than in Q2 2022, leading to revenue growth of 1.7%. Adjusting for foreign currency and other organic growth reached 4.3%. Revenue was driven by a very strong organic growth of 12.3% in the service business and by a solid organic growth of 3.7% in the Professional Business.

Within Professional, the branded part grew 4.5% organically, driven by Floorcare, while high pressure washers declined. Private label declined 6.2% organically, as sentiment for this business remained soft. Service revenue benefited from the initiatives laid out in business plan 2026 including positive effects from pricing efforts. Service also grew as a result of the increased shipments of parts compared to Q2 2022, which was impacted by the tornado event at the U.S. distribution center at the end of March 2022.

The Specialty business declined 5.3% organically due to lower demand in both EMEA and Americas. Revenue from the consumer business declined 7.8% organically, in line with market demand. As in Q1, continued price management benefited revenues across the business. We know that we finished Q2 2023 with an order book that remains elevated but at a lower level than in Q2 2022.

Moving on to Slide 9 for commentary on revenue by region. Looking at the 3 regions. Growth was very strong in Americas and APAC, while the economic slowdown is visible in EMEA. In EMEA, revenue declined 4.3% organically in the quarter. Lower demand in Germany, France, Denmark and the U.K. drove the decline, and this was partly offset by price management. In total, EMEA delivered revenue of EUR 155.7 million.

To ease the transition into our new reporting structure, we also share organic growth for I would put an "old Branded Professional business." And that means in EMEA, the Branded Professional business delivered minus 3.7% organic growth. In Americas, revenue came to EUR 100.1 million in the quarter, which corresponds to organic growth of 17.8%. This growth was driven by price management and from increased shipments from our production facilities in Americas.

Growth also benefited from relatively easier comps as the second quarter last year was heavily impacted by the tornado and in the U.S. The Branded Professional business performed in line with the Americas region and also delivered 17.8% organic growth. Diving 1 level deeper into LATAM, growth was driven by both higher volume and pricing efforts.

U.S. and Canada benefited from the ongoing easing of the supply chain constraints in our Americas plants and that we resolved the temporary output challenges from our Mexican factory, which impacted growth in Q1 2023. APAC delivered revenue of EUR 20.7 million or 19.1% organic growth.

Revenue was supported by strong growth in China after the COVID-19 lockdowns were lifted. Growth in APAC was also driven by strong demand in Australia and New Zealand. The Branded professional business in APAC delivered an impressive 20% organic growth.

Turning to Page 10, where we look at the gross margin development. The gross margin continued to improve and reached 40.4%, the highest in the last 6 quarters. The gross margin benefited from price management, lower freight costs for overseas shipments, material cost improvements and product mix effects, mitigating the negative impact of cost inflation and lower volumes.

Let's look at the 3 buckets impacting the gross margin. Compared to Q2 2022, pricing and mix effects benefited the gross margin with 3.7 percentage points. In addition, tailwinds from lower freight and distribution costs benefited the gross margin with 2.1 percentage points. Headwinds from lower volume and price increases on raw materials impacted the gross margin negatively with 4.2 percentage points. Summing up, the gross margin increased year-on-year by 1.6 percentage points.

Moving to Slide 11 and some comments on the overhead cost ratio. In Q2 2023, overhead costs came to EUR 88.7 million, an increase of EUR 3.1 million compared to Q2 2022. This corresponds to an increase in the overhead cost ratio from 31.5% to 32.1%. Let's have a deeper look into the evolution of our major spend categories. Sales and distribution costs rose EUR 3 million from Q2 '22, driven by cost inflation, including merit, higher freight cost for last mile delivery and continued investments into BP '26.

Administration costs rose EUR 1.6 million from Q2 '22, driven by cost inflation and investments into our new ways of working which includes the ongoing digitization efforts. R&D spend increased by EUR 0.6 million from Q2 2022, and stood at 2.9% of revenue in Q2 2023, an increase from 2.7% in Q2 2022. The increase was driven by investments into our modular platform and software development.

Total R&D costs decreased by EUR 0.1 million. For a more detailed overview of the dynamics, we provide a split in overhead increases into 3 categories. The largest part of this increase stems from increase merit, which is the annual salary adjustments and general inflationary pressures. Investments in the BP '26 and into our innovation pipeline also drove the overhead ratio increase. While a smaller part was driven by higher cost towards last mile freight and distribution expenses.

In the quarter, we recorded other operating income from the planned sale of an idle property site in Italy. This one-off income benefited the cost ratio in Q2 2023.

Moving on to Slide 12. EBITDA before special items amounted to EUR 38 million in Q2 compared to EUR 34.5 million in Q2 2022. The EBITDA margin before special items increased to 13.7% compared to 12.7% in the same quarter last year.

Price management benefited the EBITDA margin offsetting the majority of the margin pressure from increased costs on raw materials and from declining volumes. The margin development also benefited from lower freight and distribution costs. The increase in overhead costs negatively impacted the EBITDA margin. We expect to see our overhead costs declining in the second half of 2023. As the structural efficiency measures announced in May '23 and initiated in June will begin to take effect.

Moving on to the positive development in cash flow in Q2 on Slide 13. Free cash flow improved significantly in the quarter and amounted to an inflow of EUR 40.1 million. This was an increase of EUR 29 million compared to Q2 2022. Let's have a look at the key drivers of this development. The inflow increase of EUR 29 million was positively impacted by the nonrecourse factoring program that we initiated in autumn 2022.

Factoring reached EUR 30.1 million at the end of Q2. Cash flow from working capital was also positively affected by our lower inventory levels. In Q2, the realization of a 2-year interest rate cap instrument sale resulted in positive net financial income, which also benefited the cash flow. As a result, cash flow from operating activities for Q2 2023, improved by EUR 25.2 million with a net inflow of EUR 43.6 million compared to a net inflow of EUR 18.4 million in Q2 2022.

Cash flow from investing activities for Q2 was a net outflow of EUR 3.5 million, compared to an outflow of EUR 7.3 million in Q2 2022. Due to positively mentioned sale of an idle property in the quarter. CapEx positively impacted the cash flow by EUR 0.6 million. Summing up, in a very challenging environment, we managed to achieve a very strong free cash flow of EUR 40.1 million in the quarter. Total net interest-bearing debt declined by EUR 76 million compared to Q2 2022 and came to EUR 291.5 million. The gearing was reduced to 2.2x, compared to 2.7x in the same period last year.

Next page, please. This concluded the financial sections.

Let's move on to Slide 15 for the outlook for 2023. On the back of our Q2 results, we reconfirm our outlook for the full year 2023. We expect that the current macroeconomic uncertainty will continue in the second half of 2023, leading to some volume decline, particularly in the European markets. As a result, we continue to expect organic revenue growth in the range of minus 2% to plus 2%. Negative organic growth for the full year of 2023, though would require current ratings conditions to worsen.

The range for the EBITDA margin before special items is expected to be 12% to 14%. And with this, we have concluded our presentation. We are now ready to take any questions you may have. Operator, over to you.

[Operator]

[Operator Instructions] Our first question today is from Kristian Tornoe from SEB.

[Kristian Tornøe Johansen, analyst]

I have 3 questions. So first one is on the search for a new CEO. So when we've given you continue to stay on the board, should we assume that you are fairly advanced in the process of finding a new CEO then.

[Rene Svendsen-Tune, executive]

So Rene here, I cannot say so much about it. I mean, Torsten resigned back in June. We kicked off a search for a new CEO right away. And this process takes time as you appreciate. And of course, exactly when it is concluded, it also depends on the candidate when this person can start and then. So there will be a new CEO. The process is running full speed, not affected by the fact that I'm stepping into this role and stepping down from my Vice Chair position.

[Kristian Tornøe Johansen, analyst]

All right. Fair enough. Then just to growth. So you highlight here that there's obviously an easy comparison in the U.S., given what happened at your distribution center in Q2 last year. Maybe just to hear your thoughts and the assumption then for the second half of the year. So as I recall it, obviously, you did catch up on some of these so-called delayed volumes in the second half of last year. So are you expecting sort of a tough comparison in the second half of this year and then to what magnitude?

[Reinhard Mayer, executive]

Well, thank you, Kristian. I mean the point of highlighting that we had easier comps was an obvious one so on that side. On the other side, I think we also faced in the second half of last year, supply chain constraints, while we also saw first time the easing in the European demand. And this is difficult to judge how the second half is going to run. That's why we -- from an outlook perspective, still are a bit wake in a way. We have seen so far a good trading.

And I would say, the improvements we have seen in the second quarter, especially from our manufacturing side gives a good momentum for the second half. How the demand finally will develop in the second half? I don't know. But yes, that's why we have confirmed the outlook as it stands today.

[Kristian Tornøe Johansen, analyst]

But is it right? -- let me remember that volumes were fairly strong in the second half of last year in the U.S. compared to Q2. I mean, is it fair to say that there's a tougher comparison for you in the second half?

[Reinhard Mayer, executive]

That is a fair statement that the compare is tougher than for the first half.

[Kristian Tornøe Johansen, analyst]

And then just my last question, this contract attachment rates in connection with Q1, you said it was 11% and I would say it's 10.4% for the first half. So with a bit of math, it seems like it was lower in Q2 than it was in Q1. Can you just confirm whether that's right?

[Reinhard Mayer, executive]

Yes. I mean it's not like that. It's a composition mix first of all. I mean, you recognize that we had more equipment sale in the second quarter. And respectively, I mean, in different categories, so this is, let's say, not a straight linear development. So it fluctuates a bit. The overall trend is still there. So you will see quarter-to-quarter slight moves depending on the compares.

And as the first quarter was relatively soft from an overall equipment sale. I mean the service attachment ratio for the relevant product categories are impacting the ratios. The trend overall is fully intact, but it fluctuates quarter-to-quarter from the various product component sales.

[Kristian Tornøe Johansen, analyst]

Okay. And what is the biggest reason for this fluctuation? Maybe I didn't listen there probably just didn't understand. So you say you have more equipment sale and that gives sort of a headwind to the contract attachment rate.

[Reinhard Mayer, executive]

What I say is following, I mean, the contract attachment ratio is a ratio of contracts attached to equipment, which we sell with a service contract. And if you sell, for instance, much more vacuum cleaners, then it's a different ratio, then if we would sell more Floorcare. And this composition is going to change quarter by quarter, but the overall trend is so to say, intact. And that's really the underlying message, which we give. So we might have, let's say, slight deviations from quarter-to-quarter depending on product mix sale.

[Operator]

The next question is from Claus Almer from Nordea.

[Claus Almer, analyst]

Yes. Also a few questions from my side. So the first is to you Rene. Could it be a scenario that you will take the full responsibility of being a CEO or should you only expect you to be there for a few quarters or months or how it's going to play out? That would be the first one.

[Rene Svendsen-Tune, executive]

I think we have tried to be very clear here. So I'm stepping in until we have a new CEO in place. There is no idea or plan that I would somehow go back to operating jobs again. So we are recruiting a new CEO. We don't know exactly how long that takes. I'm here until this person is in place.

[Claus Almer, analyst]

Okay. That makes sense. So given the efforts to restructure Nilfisk and improve Nilfisk, Torsten had probably a big saying and reason to implement these things. And how are you going to make sure that you can step in one-to-one to the responsibilities that Torsten was going to do?

[Rene Svendsen-Tune, executive]

I mean, I think we -- nothing is easy, but I mean we are working on the Business Plan '26. This plan has been discussed, of course, intensely also with the Board. So there is full backing from the Board. And in that sense, of course, when I come here, I have no intention or plan to change everything.

We are working exactly with this stuff as it was planned and directed by management so far. Torsten and I may have different styles on how we do things, but we're going to do exactly what Torsten and Reinhard and the team was -- is already implementing, and we will continue that.

[Claus Almer, analyst]

Okay. In the report, I don't think you mentioned that the cost effect or the cost-saving initiatives of the EUR 10 million to EUR 12 million, which was in part of the Q1 report. I just want to make sure that you still expect to have this cost saving in 2023?

[Reinhard Mayer, executive]

Yes. I mean no change to that. Hence, we have not thought that there is a meaning to report anything on this. What we stated in Q1 report is still the ambition and plan for 2023 and the annualized effects thereafter?

[Claus Almer, analyst]

Okay. Good to have that clarified. And then my final question goes to the backlog. One of your key peers saw a significant positive impact from lower backlog. Why is there this difference between Nilfisk and tenant? So you're not seeing this impact? And maybe also if you can clarify or quantify the impact from the SAP rollout that hit the revenue in Q1. How much did that impact positively sales in Q2?

[Reinhard Mayer, executive]

Glass. First of all, I think overall, we have a completely different product and country mix. That's one underlying driver. And the second driver of difference, that's why we cannot one-to-one compare it. And we have also given some words and language to it in the second quarter.

We do see an easing of our supply chain constraints, but we are not completely over that. And I'm not commenting on our competition report. I can only comment that we see an easing and have not yet fully, let's say, released all the constraints. And that is most probably the difference and gives you the answer.

[Claus Almer, analyst]

Okay. And then I'll just try a follow-up if I may. In the second half of this year in your guidance for the revenue, how much impact do you -- in the other end of the range, do you include from the backlog relief?

[Reinhard Mayer, executive]

Well, that sits also together with the uncertainty in the markets. On one side, and we stated here in the report, we have still a very strong order book, which is elevated to prior periods. We have also been declining a bit. So that is the dimension of market slowdown, specifically in the European region.

And how exactly this dynamic plays out for the second half that is too difficult for me to predict. Hence, when we have more clarity on that, especially after the third quarter, I think we can give you more guidance. There are a couple of very strong moving parts is our market demand in Europe and in the U.S., whilst our ability to unlock some of the still existing supply chain constraints, which has what to do with output. We have improved, but we are not yet at the best level.

[Operator]

Next question comes from Casper Blom from Danske Bank.

[Casper Blom, analyst]

Also a couple of questions from my side, and I'll also take them one by one. I'd like to start out if possible, if you could speak a little bit about pricing dynamics. Obviously, you've been raising prices the last couple of years, so as your main competitors. Now we're -- I mean, are we getting to a point where prices have been raised so much that we can start seeing any signs of price competition, maybe also from smaller competitors around the world. Any signs or anything like that?

[Reinhard Mayer, executive]

Yes. Thank you, Casper, for the question. I mean, yes, I mean, pricing, of course, has its limits, especially when volume declines. And on the other side, we have seen strong, let's say, movements here, which we have also displayed in first and second quarter, and you see the effects.

But I would say, yes, the competition is on. On the other side, we still see overall the industry being quite affected by still high sourcing cost. And here and there, I mean this is not easily lifted and the inflation overall in the relevant markets are still super high. So there's no reason to believe that there's much more price pressure to come, but I cannot talk for the market, nor can I talk in specific to a certain competitive, let's say, deals.

[Casper Blom, analyst]

Okay, okay. Then a question regarding overhead cost and I apologize if it's me being slow. But I think, Reinhard you said that you expected overhead costs to decline in the second half of the year. Maybe if you could just detail out, is that compared to the first half of the year? Or is it compared to the second half of last year? And is it a decline in absolute numbers? Or is it a decline relative to revenue?

[Reinhard Mayer, executive]

Well, first of all, I think it needs to be seen and I don't think that you are slow in understanding. So let's say eradicate this topic. I think you are fast understander. The thing is, I mean, it needs to be seen, and I think we mentioned that in the Q1 call. It's about the level of overhead costs we had then in Q1 -- that's the first reference point.

And to the other question you have had, it's an absolute overhead cost reduction, which we assume for the second half and going forward. Given the structural improvements, which we had now initiated in the first place in June and here and there will conclude during Q3. So those will help to reduce overhead cost in absolute terms. And the ratio, of course, is depending on the revenue side, which I have difficulty to concretely predict as of now.

[Casper Blom, analyst]

Okay. So a reduction in absolute overhead costs in the second half of the year compared to the first half of the year, right?

[Reinhard Mayer, executive]

Correct.

[Casper Blom, analyst]

Yes. Okay. That's very clear. Then my third question on the whole supply situation. Is it still circuit boards and hydraulic solutions that are giving you any problems? And maybe also if you could sort of discuss -- the sort of expected time line in when this will be fully resolved and then partly as that question also, if and when these things get resolved, would you then sort of expect that you would be able to start improving on that too high American order book that you have right now?

[Reinhard Mayer, executive]

Yes. Thank you for that question. I mean, yes, the predominant constraints are still around the PCB boards, the electronic components. And I think we highlighted in the last call as well. That these, of course, reside with some components which have, let's say, already a history behind itself.

So where the constraint cannot be easily overcome. And that's why we have guided that this supply chain constraints go off slowly, but surely, and we see that. Is it going to be by end of the year? Is it going to be early next year? Difficult to predict. There's a dynamic in there, which depends as well on our suppliers. We are working strongly and heavily on these improvements. But I cannot give you a precise date. So think about we improve the speed of improve, I cannot give you good guidance on because I don't really know on this one, but we improve quarter-by-quarter.

[Casper Blom, analyst]

And when that improves, then you will also start to -- how could you say work off that American order book? Is that fair to say?

[Reinhard Mayer, executive]

Correct.

[Operator]

[Operator Instructions] And the next question is from Mads Quistgaard from Kinergy.

[Mads Quistgaard, analyst]

I have 2 questions, and I will take them one by one. So first, on the Americas, the manufacturing output. Could you talk a bit about what you're doing today in order to increase capacity in the Americas? And what have you been doing here in the third quarter? That would be my first question.

[Reinhard Mayer, executive]

First of all, I mean, we are working on additional suppliers to deliver the relevant, let's say, PCB boards. That's the first thing. The second thing is we are also working on capacity expansion in different sites, and that is the second lever, which will allow us then, so to say, to tap into the opportunities. Which we have on the order book and in an overall increasing demand when we have that capacity available. So these are the 2 main levers.

[Mads Quistgaard, analyst]

Perfect. Then my final question is on Europe. It seems as most of the countries are hit by the macroeconomics. And actually, most of the countries at least I expect them to get worse in the second half of the year. So maybe you could comment a bit about your expectations specifically for EMEA in the second half?

[Reinhard Mayer, executive]

Yes. I mean, I think we highlighted it already somewhat in Q3, Q4 that the demand slowed down. We have seen the slowdown, let's say in the first quarter and continued in the second one.

Can I predict the European economy? No. Can I predict the effect to that, which is inflation and more, et cetera. -- Not really. I mean we don't see a further, let's say, momentum in it, but I cannot give you a good prediction. So at the moment, and that's one of the reasons why we still keep this way position because the uncertainty is still in the market and is there.

[Operator]

This concluded our Q&A session and I hand back to CEO, Rene Svendsen-Tune for closing comment.

[Rene Svendsen-Tune, executive]

Thank you very much. And thanks to all of you for your good questions. There is a chance to follow up through the day with Investor Relations, and with everything you may have. It was good to talk to all of you. Much appreciate it. Thanks for now and be seeing or hearing you next time.