Harvia Oyj

OMXH:HARVIA

Earnings Call Transcript 2020-Q1

[Tapio Pajuharju, Chief Executive Officer]

Welcome to Harvia Q1 reporting. My name is Tapio Pajuharju, I'm the CEO of the company. Next to me, exactly on the 6 feet distance, is our CFO, Ari Vesterinen.

[Ari Vesterinen, Chief Financial Officer]

Hello, everyone.

[Tapio Pajuharju, Chief Executive Officer]

We'll run through the numbers and then the happenings during the first quarter. And I think very happy to announce that the Harvia team once again has done a very good job, together with our customers and partners and a very solid drive for the Q1. I think it's good to remember also that last year, the Q1 was a very strong performance, and I think we were fighting against that. And I'm very happy that we were slightly exceeding both on the top line and on the bottom line the performance of '19. We'll run through the numbers and then the actions during the first quarter. We'll also have a bit of a recap on our strategy. And on top of that, we'll have Ari detail on the financials. And thereafter, we have an opportunity to entertain questions for Harvia. I think all in all, the revenue growth was strong and solid. We were slightly exceeding our guidance. With the comparable currencies, we were slightly below that on a 4.8%. Very strong growth on the Scandinavian countries. North America, both our heater and equipment sales as well as the Almost Heaven complete sauna sales performed extremely well. I'm very happy to announce that Germany, now we are back on track and we're posting a good solid growth on the German market. Sauna rooms, I think, not only in the U.S., but also in the Europe, Mainland Central Europe with the exception of Finland, we experienced a very, very solid and favorable growth on the sauna. And I think on the bottom line, we were passing the 20% benchmark and roughly on the same level as last year. So very, very strong performance on the profitability. I think most of you may remember that we signed the deal for the EOS acquisition and now going to close it at the end of the month, and we'll come in the details regarding that. Regarding the virus, I think we are not immune. But I think for the time being, we've been blessed with very minor impact, both on the operations as well as on the customer feedback. But not immune on that. Then jumping on the detailed numbers. I think top line experienced -- and exceeded EUR 20 million, 5.6% top line growth, with the comparable currency slightly below the 5%. So we had a bit of a tailwind, thanks to the currencies, both on the U.S. dollar as well as on the Russian ruble. Profitability, very good and solid, EUR 4.2 million and exceeded the 20% benchmark, but the mark's on the 20.6%. And then the operating profit is partly diluted due to the expenses related to the EOS deal, and that's why we posted a EUR 3.1 million on the operating profit.Cash flow, very strong and solid, and I think Ari will entertain the details behind that. But we've been posting a lot of efforts on the customer receivables, and that's paying attention. Net debt, EUR 24.3 million and equity ratio quite solid and good. And I think the leverage is now at 1.4. And when we make the acquisition at the end of the month, we'll briefly go beyond our guidance. So that one will be roughly under 3. But Ari will share the details regarding that. Overall, I think no major changes on our 3 strategic cornerstones on that one. Maybe on the innovation and sauna and spa products, you've been seeing that we've been very good and successful in the complete sauna sales. On top of that, we've been continuing the more advanced sauna heater sales. And I think the Harvia Cilindro Spot has gained a good speed and a good distribution in that respect. At the same time, I think on the visual, on the bottom left, you will see a wood-burning heater. That's Harvia GreenFlame that just came out of the gates and hitting the stores in Finland as we speak and later in the Scandinavia. That's one where we have a bit, we call it enhanced feelings, thanks to the large glass door for the heater. On top of that, this has a cleaner burning process. And on the CO2, we have reduced 70% emissions on that one. And if you take a rough equation and a logic on that, on the small particles, roughly 1/4 is reduced by this Harvia Legend GreenFlame launch. Premium side, we also been good on the premium end of heaters with the Harvia offering. And then with the sauna ones, I think, on top of the Almost Heaven Saunas, especially in the Central Europe, we've been on the higher price points rather successful. Distribution platform, especially in Scandinavian countries, we've been gaining more on the premium side. And on top of that, we have opened the doors to the professional channel, and that's paying dividends as we go. Central Europe on all of the markets, also the same phenomenon available. And then on the other markets, I think we've been able to put in front of the consumers as well as the professional customers, more of our core range on -- and the premium offering as well as the accessories, safety railings and the control units as well. Productivity improvement continued solid, but I think it was a bit hampered by the precautions taken due to the pandemic. But overall, very solid performance on that one. Regarding our capital investments, the first quarter was a bit soft in that respect, but we'll gradually do more during the coming quarters. And at the end of the year, we'll be roughly on our guidance regarding the investments in that respect. I will not dive deep on the EOS, but it will be closed at the end of the month. And at the same token, we are happy to welcome Mr. Rainer Kunz into our management team, and then we start integration on the first days of May forward, and we'll keep you posted on the developments regarding that. Regarding the pandemic, and I think no company, no [ Fini man ], no one is basically immune to that. We, either. But I think, thanks to the learnings from China, we were quite well prepared, and then we were able to take exact right measures for the operations. And I'm very happy and very humble, thanks to all of the team members joining this effort. And so far, we've been staying healthy. We've been staying fully operational in most of parts of the business, and we have had no victims for the virus for the time being. Some of our customers have been impacted by these ones, and especially the ones in Italy, France, Spain, nowadays in Russia and on the Arab countries have been partially or completely closed for a short period of time. Some of those have been making inroads back to the business now on April, but I think we need to keep thumb on the pulse and then continue monitoring and helping our customers to survive the very tough period. Our team has done an amazing job. And despite of some people taking extra guarantee vacations to keep our team members safe and healthy, we've been able to keep the productivity on a good level and our customer service on a good level. Minor delays in our shipments. And our partners have done an excellent job, even the Italian ones have been able to ship almost everything to the point. And for the ones operating with our China factory, minor delays, but trying and fighting extremely well to keep us in the business. The investment we made was, I think, learnings from the China, and we're very happy that our China team was helping Finland, helping U.S., helping Romania to fight the viruses. Availability of the key componentry has remained rather good. Minor delays and minor shortages. But I think at the end of the day, we've been able to cope quite well with our customers in that respect. So very happy for the extra effort and extra fight from the team. If we take a bit of a deeper look on the revenue by market area, repeating the Scandinavian, good performance, mainly Sweden, but I think Norway and then Denmark following quite nicely behind. North America, both on the heaters and equipment sales, very good solid performance. And Almost Heaven Saunas have been doing a very good job both on our direct sales, our Internet sales as well as our web store partners in that respect. And Germany, very happy to announce that they are back on track and have posted a very solid growth. There is not one single reason for that, but I think we've been making multiple baby steps of improving our distribution and then taking share on the sauna sales together with our partners on the German marketplace. Russia has been a bit of a challenge, and I think the ruble shock for the consumers was one. The other one was the complete lockdown after the virus breakout, and that also basically paralyzed some of the authorities, especially on the border control and on the import process was taken down for a 10 days period. Now gradually returning back to normal, but I think there will be some issues, but that's Russia as usual. So full of surprises, still a big market and we keep on serving the market as we speak. Then on the division by product groups and categories. Sauna sales, very good. And I think that's good in that respect as well. Then we are able to present the complete offering of Harvia in front of the consumer. So in that respect, it's increasing the average purchase very nicely. And I think we also be learning how to sell medium and some premium heaters with the entry and mid-price-point saunas, in that respect. Heater sales, I think very solid development in most of the market, but not up to the 5%. And then on the other hand, the steam generators, due to the Russia, Arab countries and some of the Asian countries, we fell below prior year performance on the steam generators in that respect. Then having a bit of a more detailed look on the market by market, and I think maybe putting a bit of a focus on the domestic market, which is still a very large share of our business. And I think when looking at the exact development number, that doesn't tell the tone of the voice on the marketplace. When you look at the heaters alone, I think the team has done great job together with our partners on the marketplace, and we are gaining share clearly more than the market in general and also on the accessories. The one where we did not succeed as planned and expected was the project sales and some of the sauna room sales on the domestic marketplace. Scandinavia, very solid job in Sweden, and I now think that we've been making some headways for the premium channel and gradually gaining share on the professional. But I think it's good to remember, it's a very conservative industry, and it takes time to gain foothold on the professional channel. Germany, very happy that after the challenges on '19, we are back on track on the Germany. It's still not walk in the park, and I think we'll gradually continue seeing Germany on the top line. And together with the EOS, we also can address the professional market and the premium market with multiple offering, and I think that will give us more foothold for the Central Europe. Other European markets, slightly shy of the 5% benchmark, and that's mainly due to the Italy, Spain and France. Russia, I think there was a bit of a delay in some of the shipments for the end of the quarter 1, and then I think there is a bit of also of a recovery from the currency for some of the consumer-related products. North America, very solid performance continues. And then other countries, it's mainly due to the Arab countries and Asia where we are posting a negative figure on that. But all in all, a solid top line performance. Categories, as I said, sauna heaters is solid, but below our 5% due to the markets where the virus hit the most, France, Italy, even a bit of Austria, Spain and Arab countries. Sauna rooms, Central Europe, America, very good. Control units, I think that can be derived from the Russian and Arabian countries. Steam generators, the same reasons, plus Asia and the others are still a healthy 5% growth. I think this one is very important to remember that the Q1 '19 was extremely strong and solid. We were able to beat that. Very happy for that. Then the coming quarters will be more of a mediocre in the expectations. And then once again, the quarter 4 is going to be one of the sauna andSpa season highlights. I think we'll not entertain more on the sales by countries, nor on the performance in that respect. Just reminding that we work on all of the 3 sauna categories, the traditional Scandinavian sauna, the infrared sauna and the steam rooms. And still fair to say that we are very good on the classical Scandinavian sauna. We are learning how to make the hybrids, where we combine the classical Scandinavian sauna and the infrared. Not very good on the infrared as of yet and gradually gaining foothold on the spa steam rooms. We'll continue focusing on our cornerstones on the strategy, and I think we learned how to do -- how to increase the average purchase on the markets, both on the consumer markets as well as on the professional market. Geographical expansion, I think we'll not open many new markets, but we'll more improve our quality of distribution in the chosen markets. And then I think when we are able to get rid of the pandemic, we'll get speedy results on the productivity improvement on our operations. But on top of that, I think all of the processes we'll be fine-tuning and honing to deliver better productivity. Now I think it's time to pass to Ari, and we'll keep the 6-feet distance, please.

[Ari Vesterinen, Chief Financial Officer]

Sure. Thank you, a respectful distance. So hello once more. Here, the table of the financials. The revenues growth, 5.6%, it's really organic growth. There isn't any effect of any acquisitions. The EOS acquisition was mentioned. It will be taken to our books probably from the 1st of May, so that it will be 2 months in quarter 2 in the books. The adjusted EBITDA improved very nicely. And in fact, actually, the relative profitability improved from 24.5% to 24.7%. And the same happened also to adjusted operating profit. If you have been reviewing our other numbers, you noticed that the operating profit -- accounting operating profit went down. And the reason is really the EUR 1 million acquisition-related costs, which are taken in IFRS accounting standards as expenses of the time period, even if we will have really income for that acquisition for a long time. So now they are post as expenses, the EUR 1 million, and they have been adjusted from the adjusted operating profit. But for instance, the earnings per share, they are not adjusted. The EUR 0.13 actually would have been EUR 0.17 if there would be an adjustment. So we've been -- with adjusted figures, we've been improving also the earnings per share. The operating free cash flow has improved very nicely. And we are happy for that, especially in this situation where cash is king. And the main reason is actually that we have been able to reduce our net working capital by almost EUR 5 million or almost 25% of the total net working capital. And it means in practice that we have been collecting money quite actively, reminding our nice customers to pay in time, but we have also made there some special arrangements. We have agreed, for instance, with one of our biggest customers, very reliable customer, that they pay much quicker their outstanding liabilities for shipments and we pay a small fee for that through our bank. So that has been also one reason to reduce the trade receivables. But there are still trade receivables, and they have been collected now much faster than in the past. Our investment level has been now quite careful, EUR 300,000 only in Q3. We've been conservative right now and observing the situation, but we have a normal replacement and automatization investment program going on. So we improve also our efficiency of the production and plants all the time, but with smaller investments currently. So net debt has decreased actually quite much, 23%. We have been able to increase our cash about EUR 6 million compared to last year, and that's the reason why the net debt has gone down. Actually, we have exactly the same -- almost the same bank loans at the end of March than what we had a year ago, but now the strong cash position has decreased our net debt position. And the leverage has gone down also. Actually, the leverage long-term target is that we will move between 1.5 to 2.5. Now we are even under the 1.5 level for a while until we will finalize the EOS acquisition, and then the leverage will bounce back on a higher level and slightly over the 20.5, probably to 3 at the end of Q2. But this is the normal fluctuation what we are prepared for. As you see, net working capital, minus 24%. It's nice. And the adjusted return on capital employed is really, really high, 38% almost. We have eliminated there goodwill. So that's related to the normal operative employed capital. Equity ratio, very strong, 57%. We've got also a few new colleagues in our group during the first quarter, mainly in Finland. So the average headcount has increased from the end of the year, 395 to 399. So here, you'll see on the left picture how the net debt has really gone down. And at the same time, also the leverage ratio, net debt to adjusted EBITDA. And we have a very strong cash position at the end of March. A year ago, we had EUR 8.9 million. Now we had EUR 14.8 million and EUR 8 million altogether unused credit lines. So Harvia is in a very strong cash position and also in a safe position whatever happens on the market. Cash flow is also in a good shape. So finance costs on our P&L, they went down. Actually, the normal finance payments for our loans, the interest rates, they are pretty the same from quarter to quarter. But now since we have a EUR 25 million interest rate swap, its fair market valuation increased very nicely since the fixed interest rates went up a little during Q1. So we were showing only EUR 0.1 million interest -- net interest costs. As I told earlier, we are a bit conservative now in the beginning of the year with the investments. We had EUR 0.3 million investments, mainly in machinery in Finland and in our China factory. A year ago in January through June, we were in the middle of the integration of the Almost Heaven Saunas in U.S. And during that time, we acquired, for instance, the production and warehouse premises there. So these -- the investments increased the level of investments last year. Okay. Here, we see the structure of our shareholders. We have still over 50% nominee registered shareholders. That means in practice outside Finland, international funds, international individuals. We got also a new biggest shareholder at the end of November, Onvest, having 12.3% of the total shares. And then the households, we have now 16.7% of total shares. As you see from the slide that -- as we had in spring 2018 altogether, we got about 2,000 new shareholders. Now at the end of 2019, it was already 5,200 roughly. And now end of March, end of quarter 1, already 6,800. And mainly that increase of the shareholders come from Finnish households. So everybody, welcome to the shareholder club of Harvia. So we have had great interest for our shares among the households. And the Board of Directors, management and staff had altogether 9% of the shares at the end of quarter 1. Just a reminder -- just to remind, our long-term financial targets. We target the growth rate of over 5% in net sales. Profitability target is over -- in EBIT, adjusted EBIT over 20%. And the leverage ratio somewhere between 1.5 to 2.5. And we really stick to these long-term targets, but we haven't ever given any annual guidance. So this is a longer-term target, what we are targeting every day and every year, but long term. And our dividend policy, you have probably already noticed that Harvia was paying on the 15th of April the first part of the dividends of EUR 0.19. And the Annual General Meeting authorized the Board to decide up to -- other EUR 0.19 per share during the next fall. So Harvia is paying the dividends twice a year. Just as a reminder. Okay. I think this is now the corner of our presentation. Any questions, comments, please?

[Tapio Pajuharju, Chief Executive Officer]

So now we are ready to entertain questions or comments. There seem to be at least 2 on the screen. The first one comes from Petri Kajaani, Inderes. How willing and able are your customers in spa, gym and hotel industries to invest in sauna and spa project during these times?I think it's a very good and valid question. And I think we don't have a very detailed fact on that. But we've been experiencing that the ones who have been longer-term in the business, they've been utilizing the time slot for upgrading and repairing the premises. And then the ones who either are on a very tight budget or tight balance sheet, they've been needing to put them on hold. But I think it's good to remember that currently, we estimate that from Harvia sales, roughly 10% to 15% come from the professional channel. And I think even with the EOS, they mainly involve with the sauna heaters in that category, not in the steam generators on that category. And then most part of the business is coming from the premium consumer, and -- but that's the level of detail we can currently share with that. I hope this is a good answer for Petri's question. Next one comes from Timo, and it's directed to Ari. Asking to comment on the shareholders' loans. And I know that -- but currently, we don't have any shareholder loans.

[Ari Vesterinen, Chief Financial Officer]

All shareholder loans were paid back at IPO in March 2018. We don't have shareholder loans.

[Tapio Pajuharju, Chief Executive Officer]

And the question was continued. Can you get any tax benefits with those? But currently, they are paid out and no tax benefits to be expected.

[Ari Vesterinen, Chief Financial Officer]

Yes, that's right. We're all paid now.

[Tapio Pajuharju, Chief Executive Officer]

Do we have any other questions either from the on line or from the webcast?

[Operator]

[Operator Instructions] Our first question is from Maria Wikstrom from Danske Bank.

[Maria Wikstrom, Analyst]

It's a little bit of a follow-up to Petri's question earlier, as it's good to use the like a proxy for the financial crisis. I mean, what will happen this time around? I mean, maybe for the heater sales for you guys. But now what brings the new element here is the pending -- or the EOS acquisition, which will be closed at the end of the month. So is there anything you have heard from Mr. Kunz that, I mean, how has the business developed during the last weeks that could give us a little bit tools, I mean, now when we start incorporating the figures to our estimates.

[Tapio Pajuharju, Chief Executive Officer]

I think we will learn in more detail in the coming days. But I think for the first quarter regarding the U.S. performance, we've been hearing very solid news and no major issues. Mainly favorable news. But then for the April, we don't have a detailed data. But I think we'll get that in hand very, very soon. But we don't expect this, as also, I think implies for Harvia. This is rather resilient business. On the other hand, I think no one has a good crystal ball for the future, and it's a bit of a grayish. But whatever may come, I think we have bit of a buffer and delay when it's coming. And if it's something coming we also been very agile and can adjust some of the levers quite fast. But currently, we don't expect anything major to happen. And if something would happen, we know it's quite early enough to make any actions based on that.

[Ari Vesterinen, Chief Financial Officer]

Yes. We are really careful with the situation. But on the other hand, sauna, sauna heaters and these products are mainly related to this cocooning trend. When people are spending time at home, they also refurnish their houses and places. So we hope and think that it might also bring sauna and heater sales during these times.

[Tapio Pajuharju, Chief Executive Officer]

And I think regarding the travel industry, even if that will be hurt for a longer time, people need to take holidays, need to have mini breaks, then maybe domestic travel will gain a bit of a share. And hence, I think the spa, hotel spas, gyms, they will have the same value as in the past. And especially for the replacement part, I don't foresee any major issue in that respect.

[Maria Wikstrom, Analyst]

Okay. And then my second question on the -- you mentioned that the sauna room sales didn't go exactly as planned in Finland. We're talking about the domestic sauna sales. And I think here, I mean, you had a new cooperation with Kesko and you set up a new factory in Estonia to basically supply for the total like -- I mean, what you need in the sauna room. So can you a little bit elaborate, like, I mean, what's -- I mean, what didn't go as you planned that the domestic sales were quite muted in the Q1?

[Tapio Pajuharju, Chief Executive Officer]

On the sauna heater sales, we are very happy for the performance and the results. On the sauna room sales, which is also including the project sales, I think we were -- maybe we on purpose didn't elect to take some of the project because we saw that there is maybe not a lot of profit or maybe no profit on the deals. And then for the individual sauna room sales, they were only slightly below the -- it's mainly from the projects. And then on the -- if commenting on the business we started with Kesko, we are still in the very early phase. They have 140 stores on the chains network. And currently, our offering is available in 40-ish, 40-plus stores. So we are gradually building up the distribution. And I think it's good to keep in mind that we are not entering into a vacuum. They have had an incumbent supplier and the incumbent supplier had some inventory, and those are gradually basically going down. And now we are building the distribution as we speak. We also have the intention to take it for their stores in Sweden. But that has not started as of yet.

[Ari Vesterinen, Chief Financial Officer]

The production in our new place in Estonia has started well for this sauna fences and components. So we are happy with that.

[Maria Wikstrom, Analyst]

Okay. And then the final question that -- I mean, the -- although you don't foresee much impact from the COVID-19. But if we -- I guess, the sales ended up not meeting your forecast that we see a negative impact from the COVID-19. You mentioned that there is something you could do in order to safeguard the profit. But given you are basically already having very high profitability and it's very lean organization, so what are the measures that you can do if -- I mean, if things doesn't look like as you foresee them now?

[Tapio Pajuharju, Chief Executive Officer]

I think most of our costs are people related, and then they relate to some of the operations supporting the sales and marketing. Those we've made scenarios what to do, how to do. And I think in the current circumstances, we've been openly discussing this with our people as well. And I think people are very voluntarily understanding what the situation is. And most of the things can be done on a voluntary basis. But if things tend to change for longer term, then for sure, we are not immune for more drastic actions, either. But I think -- and then most of our sales and marketing-related costs are derived from the top line. So they are automatically adjusted. And then there are some levers we can push and pull. And at the same time, I think with the slower than normal demand of some of the key raw materials, we've been seeing that maybe there is also potential to redesign or do some new deals in that respect. So I think we have multiple levers how to address the situation if and when it pops up.

[Ari Vesterinen, Chief Financial Officer]

And we have really been working actively also in finance with different scenarios for the future, not only for this year, but the time after that. So we think that we kind of know what kind of steering measures we should take if something happens.

[Maria Wikstrom, Analyst]

And my final question then on -- as the Russian sales were impacted by the weakening of the ruble as well as the deteriorating pricing power -- purchasing power of the Russians on the imported goods. And is that -- for Harvia some 10%, if I recall right, it was more than 20% for EOS. So any comments there that, I mean, now given that Russia was the weakest market then the -- your sales are growing from that part.

[Tapio Pajuharju, Chief Executive Officer]

I think for the Russian part, we know that the demand is actually rather solid for the available cash of our current partners. I think that's the -- mainly the one which is delaying some of the coming orders. And we've been not willing to ship and increasing our credit risk on that respect.And for the EOS, it's slightly less than EUR 1 million for the heater and equipment-related sales, and it's offering that to the, what we call, premium, if not the super-premium client deal. And I think based on the past experience, their decision-making is not hampered by something like this. But I think Russian market, it's very important to monitor closely. And for the time being, I think what we read and hear on our newspapers, the local situation is maybe even worse than that with the virus. On the other hand, they've been facing much worse than this, and they will come out of the gates with a good formula. And sauna is an integral part of the Russian lifestyle, and people need to have their saunas and banyas operating. So most likely, if it's something really bad happens on the Russian marketplace, the consumer premium end will get a bit of a hurt. But the entry-level, mid price point, I don't foresee any major change on that respect. But temporarily, it can be volatile and it can be hiccups on a weekly and a monthly basis, but taking a bit of a longer horizon, don't see any major issues in Russian market.

[Ari Vesterinen, Chief Financial Officer]

And as I told earlier, that we've been able to reduce our trade receivables. We've been also able to reduce them in Russia. So our exposure of receivables has gone down there. So the risk has gone low.

[Tapio Pajuharju, Chief Executive Officer]

We try to keep now a very tight discipline on the Russian receivables going forward.Then we have a couple of questions on the webcast. The first one is from no Hocus Pocus, which I should have said no [indiscernible]. What is the current situation with Almost Heaven Sauna integration? Will there still be more margin improvement regarding Almost Heaven Saunas? We've been very happy for the integration and how it's been proceeding. And our team in the U.S. has really done a good job. And I think when we acquired the company, we were slightly on red figures. We quite soon were able to turn it into black figures. First, very small, single-digit profitability. Then we were passing the benchmark of double digit. Now happy to announce that we are on the very low teens. The first one, you can call it a teen. But I think we still have room to maneuver and I think do foresee quite a good opportunity to enhance profitability over there and when keeping in mind that we did not change any of the intercompany pricing of the heaters and equipments for the Almost Heaven Saunas. So the underlying total profitability of the Almost Heaven Saunas is clearly better than the direct posted EBIT of the Almost Heaven Saunas as a legal entity. Hope this is a good answer for your questions. Then we have [ Harit ]. Are the huge delays in the supply chains due to COVID-19? What is the future outlook? This one is something where I need to really thank for our partners and suppliers. And we've been blessed with very minimal delays. It's mainly been of shortages of shipping. If we order, say, 1,000 pieces, we'll be maybe receiving 3x, 300 and 100 short. But that has been replaced quite fast, or there has been a delay of often week or 2 for some of the components. So in -- quite small damages in that respect. Future outlook, even though we tightly work on our net working capital and reduce that, we've been increasing temporarily some of the inventory of the most critical componentry and some of the raw materials just to play safe on this one, and we've been keeping our customer service as a top priority in this respect. Then we have next one is from [ Johannes ]. Did you recognize any kind of weakness since mid-March? Or would you say that the development of the first quarter is also a good indication for the second quarter? As said, I think no one has a very clear crystal ball going forward. We see a bit of a grayish. But as we realize that this is not an industry which will be hurt the most and not the fastest. So in that respect, we don't expect any major change for the coming quarter and business seems to be continuing quite close to normal in that respect. And then for the time being, don't have any other questions on the webcast, and I hope I have covered all of this. Do we have any further questions from the on line, either? So we'd like to thank you.

[Operator]

There's no pending questions on the phone.

[Tapio Pajuharju, Chief Executive Officer]

Okay. Good. Thank you for the attention, and I wish you all a good day. Thank you. Bye now.

[Ari Vesterinen, Chief Financial Officer]

Bye.