Arcticzymes Technologies ASA

OSE:AZT

Earnings Call Transcript 2020-Q1

[Jethro Holter, Chief Executive Officer]

Okay. Welcome to the Q1 presentation. Before we kick off and go through things, just some practical things. Of course, this is a bit different to usual. So we've -- since we're all in home office and can't meet together, we're doing this by video teleconference. And so what I would kindly ask is that you ensure that you have your microphones muted. This will help to reduce background noise. And if you are sharing your video, please turn that off because it helps us have the best bandwidth to prevent dropouts during the presentation.So today, it's myself, Jethro Holter, now the permanent CEO of Biotec Pharmacon; and we have Børge Sørvoll, our CFO, who will join us in -- late in the presentation. So for those of you who are not watching the stream live, I will tell you which slide number on, so we're going on to Slide #2, the agenda. So in terms of the agenda today, what I'm going to do is we're going to walk you through the Q1 highlights. Then we're going to look at each of the businesses in turn, looking at ArcticZymes first, then Biotec BetaGlucans. We will then give you a quick update on our response to the coronavirus situation. Børge will take over after that and will walk you through the Q1 financials. And I'll come back and tell you a little bit about the activities around the corporate strategy.So we're now moving on to the next slide, which will be Slide #4, and that is the highlights for Q1. So we had a very good quarter last quarter. That was one of the best quarters we had. And now for Q1, we had an even better quarter for Biotec Pharmacon, where we've had our best quarterly performance ever, so we're delighted and proud to share that with you. And one of the things that we said going into 2020 is that our goal for 2020 is to drive the company into profitability. And we already got off to a good start, achieving for Q1, we've achieved a positive EBITDA of NOK 13.8 million, and that's compared to minus NOK 3.9 million for the same quarter last year.So what was driving the sales here? Firstly, ArcticZymes, again, has its best quarter ever, bringing in NOK 18.5 million. That's growing 135% compared to the same quarter last year. So the growth drivers for the quarter in ArcticZymes were strong sales in the therapeutic segment. This is supported by the Salt Active Nuclease product portfolio, and I'll come back to that in a bit. It was also driven by upsides related to and our enzymes being used in corona diagnostic test.The BetaGlucans business also had a very good quarter as well. It drove sales of NOK 15.8 million, growing by 100% -- almost 130% compared to the same quarter last year. What's really important to stress and highlight here is that if we put coronavirus aside, business is progressing as planned.So we're moving on to the next slide, and that is where we're going to go into ArcticZymes business, and I'll walk you through that. And we're going to move to Slide 6 and talk about the commercial achievement.So in ArcticZymes, as you saw, we -- as I mentioned before, we had our best quarterly financial performance as yet and achieving NOK 18.5 million in product sales. We also had a very good EBITDA. Our EBITDA was almost NOK 15.5 million. So a very, very good performance for us. And there's 2 main factors that really contributed to that growth. First was the Salt Active Nuclease product portfolio, and this is a portfolio that is used in the therapeutic segments, where the enzymes are used in the manufacturing processes of viruses using gene therapy and vaccine production. And if you just go back a few years ago to 2016, we had 0 sales there. We grew that business very rapidly. In 2019, it accounted for 25% of our overall sales in ArcticZymes. And now in Q1, the growth continues in that segment. And the growth is through new customers. It's through existing customers putting in repeat orders. It's also the size of the orders. We're getting increasingly larger orders coming in. And I think Q1 is very interesting for us because we're now starting to see the really large individual orders coming in where we sent orders out in a magnitude of greater than NOK 1 million. So moving forward, we do expect the trend to continue and with orders increasing in size as customers mature and also as we expand the customer base in the therapeutic segment. The second part that drove Q1 sales for ArcticZymes was very much about upsides with Cod UNG and DNases being integrated into COVID-19 diagnostic test by several of our customers. I think this is good for ArcticZymes because at the end of day, we can contribute towards the fight against corona, and this is our way of doing it, by enabling other customers. However, we do need to put this in perspective. Because we consider these upsides, we consider this transient. And I think, when you look at this, the corona situation is peaking, and of course, there's a lot of demand for testing. But over time, that is going to -- the need for testing will subside. So the need for test will subside and also the need for our enzymes. So I think that's why we consider this a transient, short-term thing, but we expect this to continue while the peak is in place.However, what's important here is not just to focus on the short term. It's really about the long-term here. So what we really want to do is really support our customers, partners in developing what we call the next-generation COVID-19 test. Because at the end of the day, what we're going to have to learn is to coexist with coronavirus. It's not going to go away. It's going to be there, and we're always going to need test. So we want to do is to support those customers, develop those tests that will be needed in the future.So -- and what I must stress again, as I stressed on a bit earlier, we have to -- when you look at coronavirus, it's great. It's giving us nice upsides. But if we put it to a side and we look at our business, we have good -- we have growth in -- the sales are growing according to plan. And we've got the -- when you take corona to one side here.So with that, I want to move on to the next slide, #7, and this is about innovations. And with ArcticZymes, we're continuing to innovate. We've launched a new formulation of DNase and -- of our dsDNase. And when it comes to DNases, we need -- customers need these in different formulations. So by formulating them differently, it means that we capture all customers out there that maybe need the enzyme at different concentration with -- like different chemicals in and out. That's what we do. We change a formulation so that we can provide different formats to our customer.We also filed a new patent application relating to one of our novel ligases in the pipeline. And this ligase is interesting because it has desirable features that are being specifically requested by our customers. And these features you cannot get in other commercially available ligases today.And to put this into perspective so you sort of understand what a ligase is, a ligase is really like a DNA glue. It sticks DNA together, genetic material together. It's a bit like in the home. You get something -- you get your nice pressures valves and you drop it on the floor, and you need to stick it together. And you know if you have the wrong glue, you can't stick your valves back together. It's the same thing in the DNA world. Ligases can stick certain parts of DNA together but not all, so sometimes you need a specialty glue or specialty ligase in this case. So hopefully, that makes you understand what a ligase is.We plan to launch this enzyme later in the year. What we need to do is get it up to commercial manufacturing, commercial scale quantities first before we launch that product. Once we get it up to that level, then we will launch this enzyme.I'd like to give you an update on the ArcticZymes M&A status. We -- during the quarter, we initiated acquisition discussions, negotiations, actually with European-based enzyme company. Despite our best efforts, we were unable to reach a fair price to make a transaction worthwhile without excessively overpaying. So I think with that, both parties realized that it was best that we terminated the negotiations in good faith.So what next? Well, we have, obviously, other targets we've been talking to, and we are advancing those negotiations further. However, with -- what we will see is the progress on M&A activities will be limited at this time due to the international corona lockdowns we're seeing. Until they're lifted, it's going to make it difficult for us to progress those discussions. Originally, our target was to do an M&A deal in the first half. But with the corona situation, that's going to delay that. So I do not see us managing a deal in the first half of the year.Anyway, if you put the M&A to a side, you see we -- with the -- our organic business is growing very nicely, so I think that's fine. We can live with delaying the M&A until after the corona situation is moved on.So I'd like to switch gears and talk about BetaGlucans and give you an update there. And overall, BetaGlucans had a very, very good quarter. We achieved just over -- just under 130% growth in sales compared to the same quarter last year. Also Q1 -- for Q1, BetaGlucans operated as a profitable business. And that links to what we had said, we want to make sure that Biotec Pharmacon and its subsidiaries operate profitable, and that's what we've achieved for Q1.If we go through each of the businesses in turn. For animal health, we achieved growth in sales for the quarter compared to the same period last year. This was mainly due to a large order that came in actually earlier than expected from a main customer. So with that, we do need to expect fluctuations in sales in the remaining quarters. Our expectations for the year are unchanged for animal health. We know that this is -- for the year, it will not be a growth business. It will be a steady state business, but that is to expectation.When it comes to consumer health, we achieved growth in sales of the M-Gard products compared to same period last year. Growth -- a lot of growth here continues to be through new -- bringing in new customers. And also similar to ArcticZymes, we suspect there's upsides related to bulk B2B sales to manufacturers who are targeting immune defense against coronavirus. Again, if you put coronavirus aside, we do see growth in the business as well...On the adjuvant, SBG, we have secured 2020 purchasing commitments to support the continuation of clinical trials in neuroblastoma. So with that, we expedited the first SBG order in the first quarter, and we expect to expedite further orders in later in the year.The discussions that we've had are very much advancing regarding the long-term licensing agreement. We have several discussions backwards and forwards now, and that process is advancing and looking promising.When it comes to Woulgan, we -- our sales, there's a small increase in sales compared to the same quarter last year. You got to be in perspective that we are only supporting our existing customers, so sales are very much in line with our expectation. In terms of the divestment process, that is going very well and as planned. We're now in that stage where we've been reaching out to potential targets we've approached, and we're already getting positive responses back from some of those targets. But now it's really following up on those targets, and that's where we are today. I'd just like to say a little bit about the corona pandemic and company responses. Every company has a response in how we're handling that. Some businesses has a negative impact. Other business has a positive impact. For ArcticZymes, we have a positive impact. We're on Slide 12 now. And since -- and that's good because we are able to offer something to help the fight against corona through our customers. So what's important here is that we need to ensure that we protect our core business to ensure we can manufacture and deliver product to our customers, and that's what we have done. So our first priority has been to protect our employees, the supply chain and our customers. And these are just some of the measures that we've implemented.Firstly, we've implemented strict hygiene measures in everything we do. The important thing is we also ensure that we are able to continue our daily operations, so we have also backup resources. And we keep those separated from the main resources, so when people are manufacturing, if somebody gets sick, which we hope not, we have backup resources that can go in to ensure that we continue manufacturing. For some of the products, we've increased the manufacturing capacity to help in order to take advantage of upsides as we did in Q1. In terms of personnel, we have nonoperational staff who are working from home office. We want to keep only the essential personnel for production, shipping, packaging in the office. Everybody else is working from home office. And then the last component is we've put more -- we're stocking the warehouses more frequently, but more importantly, we are working very closely with logistic partners and freight companies to ensure that we get prioritized with our products so they get to ship out to our customers. So at the end of the day, I think we have -- despite the corona situation, we're very much working. In terms of doing business, we are doing business as normal by implementing these measures. And this is across the business. This is for ArcticZymes. This is for Biotec BetaGlucans as well.So with that, I'm going to stop and hand over to Børge, who's going to walk you through the Q1 financials.

[Børge Sørvoll, Chief Financial Officer]

Yes. Thank you, Jethro. And I have to say, even though -- you can take one bite. Even though the world around us changes, I would say that our financials remains the same. It's been good to be here in Tromsø to talk about our performance for the first quarter. And of course, the growth in our -- and performance we achieved in the fourth quarter has now continued into the first quarter as well. And we have been delivering historic good figures. So even though we have reduced our resource base and our expense base, we have managed to drive sales and productions in the first quarter. And that brings us straight into the cash flow for the first quarter. And as you can see, we are now delivering a positive cash flow for the third quarter in a row. We had fourth -- first quarter changes in cash of NOK 4.4 million. And you can see that we have a significant increase in our receivables. They've gone up now to NOK 24.7 million. They're actually up from NOK 13.2 million at the beginning of last -- or at the end of the first quarter last year. And they are also up by almost NOK 10 million from end of the year 2019. And of course, this is a result of solid sales during the quarter and especially in the -- you can say, in the second half of the first quarter. And of course, as some of our payables, especially within the BetaGlucans side, is driven by sales, it is natural that we see an increase in the payables. So the payables have gone up from 7 -- from NOK 10.4 million to NOK 17.3 million this year. But looking at the change from end of last year, there's a -- we actually have a reduction in our payables. So we actually have a pretty good position now going into the second quarter.We are also experiencing a significant increase in our cash flow from operations. We can see an improvement of close to NOK 9 million when looking at Q1 this year compared to Q1 this year. We had NOK 5.9 million in cash flow from operations this year and minus NOK 2.6 million in Q1 last year. And of course, with all of these figures, this gives us a cash balance of NOK 35.7 million at the end of Q1, a position that we are actually quite comfortable with right now.And I think it's also important to say that we are still seeing some cash effect of the restructuring that we did in December last year. This is a cash effect that will continue well into 2020. But of course, in the second half of 2020, all of the restructuring cash effects are out of the balance sheet as well.Okay. Moving over to our sales. And of course, we had growth in all areas of the business this quarter. Both companies have been driving sales in the first quarter. And as Jethro talked about, ArcticZymes sales now, they have gone up by more than 135%. They are now at NOK 18.5 million compared to NOK 7.9 million in Q1 last year. And we are also experiencing good growth in the BetaGlucans side of the business, where we have seen sales excluding Woulgan that will go up from NOK 5.7 million to NOK 14.6 million, that's close to 150% increase in sales.And of course, animal health is the one that has been driving this one, where we have close to NOK 10 million in sales. But we also have seen an increase -- as Jethro talked about, we also see an increase in Consumer Health, and we also seen an introduction of revenues for the adjuvant side of the business.So even though -- as Jethro talked about, even though we have decided to divest Woulgan, we secured NOK 1.2 million in revenues for this part of the business as well. So it was just a marginal increase, but it is sort of the same as we had last year in Q1. And we will, of course, continue to serve our customers now until we see a closing of the divestment process. And given these figures, we have group revenues of NOK 34.3 million, up from NOK 14.8 million or close to 130% now this year. And it's a number that we are really proud of now for this year. Okay. Going into the profitability. And our figures are now starting to look like kind of the standard financial models that we all like to see, where we see an improvement on a regular basis. And in Q1, of course, we, the group, delivered NOK 13.7 million on an EBITDA level. And this is, by far, the best quarter we've ever had. It's actually an improvement of NOK 17 million compared to the same quarter last year. Of course, the majority of this can be explained by increased sales because we have also managed to reduce our operating expenses. We have reduced them from NOK 17 million in Q1 last year to NOK 13.6 million this year. Two of these millions can, of course, can be explained by reduction in personnel expenses. We had a restructuring that we did last year, but we also have seen some natural exits last year as well that influences these numbers. And these savings are -- do we expect to -- really, are we expecting to continue going further on in 2020.External services that has been a bigger part of our expenses, it's just a small part of our expenses now if you look at the pie chart, the yellow side. Now it represents only around, I'd say, around 10% of our expenses. But we expect this one to increase as we -- as the world opens up again, and we see that activities are picking up. But of course, we are -- we want to secure our good EBITDA going forward as well now.Going into the ArcticZymes side of the business. ArcticZymes continues its good trend that we've seen in the last few quarters. And now they had revenues of NOK 18.5 million. And as we said, they were up by 135% compared to the same quarter last year. Operating expenses are marginally up by NOK 0.3 million. And of course, this is due to the restructuring we did last year, where we transferred personnel and also ArcticZymes is taking a larger portion of the group allocation expenses now that we -- the majority of our focus is towards this part of the business. And this is, of course, something we expect that will continue going into the second half or the third -- the second and third and the fourth quarter of 2020 as well.But ArcticZymes' EBITDA ended up on NOK 10.5 million for the quarter. And of course, this is an increase of close to NOK 11 million for the year comparing quarters to quarters. And this is also NOK 1.5 million better than the historic good Q4 2019 result that we presented a few months ago. And also we see that, as Jethro said, it's important to stress that we also see sales growth of products that is outside of the coronavirus.Yes. Going into the BetaGlucans side of the business. We have seen improvements in all areas of the business. And as I said a little bit earlier, sales in animal health, they account for almost NOK 10 million in the first quarter, which was, of course, a significant increase compared to the Q1 last year. We also see that with strong sales, we also experienced that we have -- that our expenses go up as well. And that can be seen by our gross profit. So even though our revenues have increased by NOK 9 million, our gross profit has only increased by NOK 3.5 million. And this is because we experienced the majority of growth in our low-margin business now, at least for the first quarter. But due to that and also because of the divestment process we initiated last year, we have scaled down our activities within the Woulgan part of the business. And as a result of that, that we have reduced our operating expenses by close to 50% now. We have gone down from NOK 6.5 million last year to NOK 3.5 million this year. And this, for the first time ever, we have managed to drive a profitable quarter for the BetaGlucans side of the business. And this gave an -- our Q1 performance was NOK 4.3 million on an EBITDA level compared to minus NOK 2 million last year. And this is, of course, in alignment with what Jethro said that we wanted to drive this business into profitability going forward now. And this is the first steps in the right direction now.And I think with that, I will leave it to Jethro to take us through now the corporate strategy and some of the outlook for 2020.

[Jethro Holter, Chief Executive Officer]

Thank you, Børge. A very nice overview there. So we're going on to Slide 20 now, and this is the corporate strategy. And in December, if you recall the December investor update meeting, we talked about implementing a new strategic direction, which we're doing. And part of that was that ArcticZymes is -- will be representing the core business moving forward. And so with that, one of the things we need to do is look at the corporate brand, and we're looking at doing corporate rebranding now. We think it's certainly timely to refresh Biotec Pharmacon's brand position and its external facing image. So the proposal here is to rebrand Biotec Pharmacon under the new name of ArcticZymes Technologies. And we think this resonates very well with the company's core business. As we said, that is going to be ArcticZymes moving forward.Secondly, it fits with the future of corporate strategy because with ArcticZymes, we want to build out. We want to grow it. We want to evolve it beyond enzymes with our technologies, hence, why the word technologies fits very well and future-proofs -- is a name that future-proofs the business.And you cannot forget ArcticZymes has a positive and strong brand position out there, particularly with its customers out there. ArcticZymes is very well known. It's trusted. There's a lot of motivation around ArcticZymes. And of course, and I think as well is that many of our shareholders, yourselves, have a lot of trust in ArcticZymes. So it's only natural and fitting that ArcticZymes becomes part of the parent company name moving forward. So it's a process we've kicked off, and you will hear more about it in the coming months.As said, we have -- we kicked off a new strategic direction, which we implemented in December, and now we're executing on it. And this has got off to a really good start. And we're certainly progressing according to plan. We're already seeing the benefits of the structural reorganization in terms of reprioritizing the activities we do. And we're also starting to see the evidence with respect to performance. And I think Q1 is a testament to that. You see the Q1 performance really contribute to the #1 goal we have for this year in driving Biotec into profitability.So with that, that's where I'm going to stop. I just want to say thank you for your attendance and listening. I just want to remind you that we do have the AGM on the 14th of May, and that's in Tromsø. And one thing we ask is, since we do have the corona situation and we have to respect social distancing to protect all of ourselves, that you do not physically turn up in Tromsø. I hope you understand that we have to follow these really strict rules to protect ourselves, the employees and yourselves. So we do ask that you kindly send in your proxies.So with that, we are very much open for questions. And if you have questions, then please just unmute your microphones and after that put back on mute so that we keep the noise level down. So thank you.

[Børge Sørvoll, Chief Financial Officer]

Hopefully, you will be able to unmute your microphones and everyone that is on the -- that is dialing in. [Operator Instructions]. And also if you are...

[Unknown Analyst]

[ John Eric ] speaking. Can you hear me?

[Jethro Holter, Chief Executive Officer]

Yes.

[Unknown Analyst]

Just a question on the sort of, how do you see the sales development continuing through the year? Obviously, the animal health side is a bit of a batch sale with large orders coming in every now and then and not on a regular basis. But on ArcticZymes and the growth you've seen now, which is fantastic, how do you see sort of the rest of the year continuing?

[Jethro Holter, Chief Executive Officer]

So on the ArcticZymes side, firstly, ArcticZymes, we see 2 things. That's both correct. If we take corona side, the sales outside of coronavirus, we expect to continue as planned and with a -- you can see the numbers before, historical numbers, and you can see the kind of the growth expectations and the guidance we gave for the next 6 years. And I think with that, we're very confident in that, that trend will continue. Of course, what is -- also, we're getting a little bit extra headwinds right now, which is short term. That's with the coronavirus. And this -- we can't say how long that trend will last. So I think here, we will see it continue a little bit longer, but I can't say how long that will continue for. So we do expect continued growth in the ArcticZymes business.And with Biotec BetaGlucans. As you quite rightly mentioned, animal health, we do not -- that will be a flat business. And yes, that's what we've always communicated. That's to expectation. We have seen growth in consumer health business. And that again, setting aside coronavirus, we have seen that growth in that business. And adjuvant isn't something where we have typically had sales before. So now this is new business. I can't say anything about those numbers due to confidentiality with our customers. But we do have expectations for more revenues in the year related to that.And then Woulgan, I think at the end of the day, we are supporting existing customers. So I think we -- it's about -- and we're not actually out growing business with new customers due to the divestment. So I think that is the best kind of guidance we can give at this time. We -- and of course, we're able to continue as a business and produce and get products out. So that's important as well. It's about being able to operate as well during the corona situation. So I think here, I think it's that 2, so.

[Børge Sørvoll, Chief Financial Officer]

Any other questions?

[Unknown Analyst]

[ Mads Mikkelsen ] calling in. For the medium-term, post the COVID, which initiative do you see driving the sales growth for ArcticZymes the most? Would that be better marketing and in-house, or marketing and customer education, or with existing products? Or would it be more like new products, or M&A?

[Jethro Holter, Chief Executive Officer]

It's -- at the moment, yes, the -- what -- it's the product mix we have today. At the end of the day, there's 3 market areas we focus on in our ArcticZymes. One is the therapeutic area, which is relatively new to us. And that's through the SAN portfolio, and we're building out the product range there. There, we launched the M-SAN product back in Q4. We're working on other developments there as well, so this is really about supporting that business. So there's a lot of focus there. Obviously, molecular diagnostics, very much viral diagnostics, which have been in a long time. We've been -- our enzymes are used in, for instance, HIV testing, hepatitis C testing, and that's just a couple of viruses. And more recently, of course, now corona, our enzymes are used in that for the -- because it's a virus, of course. As well as that we -- our enzymes are used in cancer testing, all different types of diagnostic tests.And then another element is also the bench scientists, where we focus on selling our products into the molecular kit manufacturers who are making the kits for the bench scientists' use. So we're pushing in all those directions through the whole product mix. And of course, today, we have a very small portfolio, and hence, why we initiated the M&A process, so that we don't have to invent everything ourselves, we can bring in our enzymes. So I think, yes, we're working on driving sales as much organically with the portfolio we have. We are -- we have a lot of R&D initiatives in place to bring new enzymes out. So I think this is everything we're pushing on.In terms of sales activities, we are essentially -- our customer focus is B2B, and we focus on targeting other companies who are developing products or manufacturing. And I think that's where we have our core strength, and that's our core focus. We are not in the business of doing end user sales. That is a wrong approach and a wrong strategy for us. We don't have the product range, a large enough range or a product mix to go out and sell to academics at the bench. We are very much B2B-focused, and that's why we're very good in terms of how we've -- how we're set up to ensure that our customers get the security of supply. They get the highest quality products they can rely on and trust. So this is a little bit about our marketing positioning and sales. So I hope that helps to answer your question.

[Unknown Analyst]

My name is [ Trond Johansen ]. I'm wondering about if we can expect some updates on the study regarding Memorial Sloan Kettering in neuroblastoma? And when we can expect that?

[Jethro Holter, Chief Executive Officer]

What I can say is the clinical trials are still ongoing. And of course, what we're doing is we're supporting them through now regarding the SBG and under commercial terms. So at the end of the day, we are -- they're getting product, and we're making money on that, and that's what's important. We have to operate as a business there. But the main transition there is not really the clinical trials at MSK. It's more about the long term, securing the licensing deal. So that's something we're working on right now.In terms of time lines, I cannot -- due to the confidentiality we have there, I cannot tell you the time lines, but the point is, it's timely now to work on that licensing deal. And that's all kind of linked together. So that's a kind of -- so really, what we're focusing on is really now the commercial potential that is there. And that's the most important thing because clinical trials can go on and on and on, but of course, what we want to do as a company is to get the commercial potential there. So that's where we are at this stage.

[Unknown Analyst]

May I? My name is [ Kenneth Eliasson ]. I would like to step back a quarter. You said the manufacturing was increased by at least 10x. How is that progressing? And how -- do you see any restrictions on that at the moment?

[Jethro Holter, Chief Executive Officer]

So yes, what we're talking -- yes, so I think you're referring to in terms of ArcticZymes. So what we've done is we are increasing our -- the yield in production of some of our enzymes, and that's for meeting future needs. An example is in the gene therapy area. As when customers start out to develop their manufacturing processes, they start at small scale, then they start building into a very large kind of reactors because they need a lot more product. And of course, we have to scale our business as well so that we can supply those materials. So there's different ways of doing that. So one -- and one way we do it is, you can buy bigger equipment. You don't necessarily have to do that. What you can do is improve the yield through molecular biology and cloning. And that's what we're able to do. We're able to increase the -- get higher concentration of enzymes in the same reactor space. So that's one of the ways we're able to do that, and we can do that without investing in new equipment. But of course, as well as that yield, we are looking at scaling up with larger equipment as well. But for that, we will -- we do that also internally, but also using outside help as well.So I think here, in terms of how that's going, that's going very well. At the end -- today, we're very well positioned to be able to continue serving our customers' needs with the quantities of products they need. But those projects are progressing as planned.

[Børge Sørvoll, Chief Financial Officer]

Any more questions? Unless there are any more questions, I think we will just wrap up this presentation and the Q&A session. And then I would like to thank you all for listening in and wish everyone a nice day going forward now.

[Jethro Holter, Chief Executive Officer]

Likewise. Thank you.

[Børge Sørvoll, Chief Financial Officer]

Okay, goodbye.

[Jethro Holter, Chief Executive Officer]

Goodbye.

[Unknown Attendee]

Goodbye.