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Earnings Call Transcript 2020-Q3

[Håkon Rypern Volldal, CEO & President]

Okay. Welcome everyone to Q-Free's Third Quarter 2020 Presentation. My name is Håkon Volldal. I am the President and CEO of Q-Free. And with me today, I have our Interim CFO, Trond Christensen. It's not, I have to admit, every quarter we look forward to presenting the results. But today, I am pleased and quite proud to present a strong third quarter. Before we get to the beef, I would like to spend 2 minutes to recap for people that don't know too much about Q-Free, a little bit about our business. We are a traffic technology company with a long history of innovations. That's why we call ourselves a prime mover in traffic technology. We were founded in 1984, headquartered in Trondheim, offices on all continents and in 16 countries. Approximately 400 passionate employees from 35 nationalities and references from 50-plus markets. We have 2 main business areas. One is electronic tolling and the other is Traffic Management. We have a large installed base of solutions. We have more than 40 million tags sold worldwide. We have 2,000 lanes, tolling lanes in operation, collecting money for tolling operators. And we have more than 50,000 active automated license plate recognition software licenses. On the Traffic Management side, more than 35 traffic -- 35,000 traffic controllers installed to regulate traffic signals. We monitor more than 500,000 highway lane miles and we provide road information services for more than 25 million people. In essence, we address the 3 key challenges in traffic today, which are congestion, accidents and pollution. And we do that through our 3 main solution concepts: Q-Flow, optimizing how people and goods move; Q-Safe, to make roads and travel safer; and Q-Clean to stimulate sustainable transportation. And we have a wide range of products and services that we offer within these different solutions. The thing about Q-Free is that we don't only sell products and services and talk about the good impact that we have on the world, we actually do have a real positive impact with concrete results. I'm not going to go through all of these cases, but we have real tangible results when we, for instance, install congestion charging systems or truck tolling systems. We do event management, lane closure, ramp metering projects that optimize traffic flows, reduce accidents and fatalities and also contribute to a greener world. I mentioned in the previous quarterly report that we contribute to the UN sustainability goals. And we have selected sustainability goals 3, 8, 9 and 11. And I'm pleased to see that somebody out there actually picks up on the real impact that we have. Valuer came out with a report on corporations that are aligned with the sustainable development goal number 9, and I think we are quite honored to be mentioned along with Betel and Dupont, for what we do when it comes to industry innovation and infrastructure. So Q-Free, I think, is one of the hidden gems in the ESG world. We have real revenues and real impact. What about that? Now to the fun part, the summary. Third quarter was a very strong quarter. We delivered on profitability, driven by an attractive product mix. We had low operational costs, thanks to our proactive and rapid response to COVID-19 back in March, April, which resulted in significantly improved EBITDA and EBIT year-on-year and quarter-on-quarter. We have healthy cash flow from operations. We reduced our net interest-bearing debt, and we have improved our liquidity and investment capacity. And finally, we had a very strong order intake of NOK 354 million in the quarter. Despite the pandemic, our book-to-bill was 1.7, and we have a solid order backlog for the coming quarter and also for 2021. Moreover, I would like to point out that one of the effects we see of the COVID-19 pandemic is that it takes a bit longer to get contracts signed. But I want to make you aware that we have been awarded, selected for projects with a value in excess of NOK 300 million, where the final signature is missing. So once these signatures have been collected, we can announce the contracts, and we hope to do that in the fourth quarter. So given that, also the fourth quarter looks extremely promising when it comes to order intake. If we look at the highlights, revenues were down. We anticipated that. 13% down year-on-year, primarily due to reduced product sales and delayed project deliveries caused by COVID-19. However, EBITDA was up. We delivered NOK 32 million with a 15% margin, which is up from NOK 31 million last year. However, bear in mind that last year was positively impacted by a pension adjustment of NOK 9 million. So excluding that, EBITDA, or correcting for or adjusting for that, EBITDA was up 48% year-on-year. Order intake, as I said, NOK 354 million. A very strong quarter, driven by some key contracts that I will comment on a bit later and then a book-to-bill of 1.7. I mentioned the NOK 300 million in awarded but not yet signed contracts. And finally, the NOK 24 million in positive cash flow from operations, which means we have increased our available credit and cash at hand to NOK 181 million. Year-to-date, we are also catching up. First quarter was weak. Second quarter was a major improvement. And the third quarter, I think, is a very strong quarter. So we're down on the top line 11% year-on-year. EBITDA is catching up, 8% margin, NOK 50 million, down from NOK 62 million last year, NOK 53 million if we adjust for the NOK 9 million in pension effect in the third quarter last year. NOK 744 million in accumulated order intake, which is actually up 4% versus the order intake at the end of third quarter 2019. And we now have a book-to-bill ratio for the year as a whole of 1.2 despite delays. Our order backlog is then at NOK 1.17 billion at the end of the third quarter, and that does not include frame agreements, which means we're up 7% year-on-year. So of course, with a strong order intake, we also increased our order backlog. A bit more details. As you can see, the result is driven by an improvement in gross margin. We're up almost 6 percentage points on the margin side. That is thanks to high profit revenue streams, like service and maintenance, software revenues and also the fact that we have delivered projects with healthy margins. We have no sort of red projects with low margins. We're doing fine on the project delivery side. Also, the OpEx is down 7.1%. If we adjust for the pension effect, we're down from NOK 120 million in run rate expenses last year to NOK 103 million this year, so almost 17% down. That means EBITDA is flat, again adjusting for the pension effect, we're up 48%, which better sort of reflects the underlying performance of a big improvement in underlying performance and a healthy EBITDA margin and also a good EBIT contribution in the quarter of NOK 18 million. That also means the year-to-date figures have improved. We maintain a good and healthy gross margin, up more than 6 percentage points versus last year. We are slightly up on OpEx. Again, if you adjust for the pension effect, we're down. And please remember that we have a currency -- a weak NOK versus our major trading currencies, U.S. dollar and euro. So the nominal increases are actually -- or reductions are actually bigger. Year-to-date, NOK 50 million in EBITDA, which bodes well for upcoming covenants in the fourth quarter. We are above what we need to have. And also we're now positive on the EBIT line. So strong performance in the third quarter and starting to look okay for the year as a whole. If you look a bit more into the details and starting with the revenues. That's the only sort of weak point, the way we see it at the moment, we're down 13%, and we expected that. 2/3 of revenues came from tolling, only 22% from Traffic Management and 11% from assets held for sale. And if I go to the next slide, it's easy to sort of comment on what's behind this. Tolling is down 14% from the third quarter last year, primarily due to reduced product sales, reduced sales of tags, in essence, and also some delayed project deliveries because time lines tended to slip a little bit due to travel bans and capacity issues on the customer side. It's starting to improve. I think the other projects we have ongoing now, most of them are on track and time lines remain fixed. But there are a couple of projects that have slipped a little bit from the third quarter into the fourth quarter and the first quarter next year. Traffic management is down 9%. That is also mainly due to reduced product sales of traffic controllers and delayed rollouts of some or software solutions. Expect that to improve. And I'll get back to that in the outlook section. Assets held for sale, same story, we have healthy sales, but we struggle to install the products. We're not always allowed to go out on customer sites to do the commissioning and the installation. Again, hoping that that will improve, in particular, in the North American market going forward. But as a whole, we're down 13% year-on-year. And year-to-date, down 11%. It's then, I think, quite impressive to actually improve profitability by 48% despite the 13% revenue decrease. And it's driven by the attractive revenue mix. We had high share or high-margin software revenues and also low operating expenses. So if you look at the margin development, we hit the low point in the first quarter. We promised to restore profitability and bounce back from that weak quarter, and we've done that. We had a good second quarter and a very good third quarter. Tolling is the engine in the third quarter, delivering NOK 38 million in EBITDA and an EBITDA margin improvement of more than 9%. Traffic Management is slightly negative. Again, difficult market situation in the U.S. with the lockdowns and budget constraints. Bear in mind that the Department of Transportation in almost every U.S. state is dependent on revenues from gas taxes and also some provisions from -- or extra budgets from the federal authorities. And when traffic is down close to 30% in 2020, of course, revenues for the DOTs also come down quite significantly, which means they don't have the same budgets to install new traffic technology. We hope that that will change after the election, that there will be a stimulus package, and that traffic will pick up. It has started to pick up and is approaching now 2019 levels. And that that will translate into more activity on the Traffic Management side. Because underlying market growth and performance is strong, but it's just difficult market conditions at the moment. Assets held for sale, same thing. Actually, a good improvement driven by product mix. And also I think good progress, especially on the Infomobility side. But we're up year-over-year, but also they see a decline in revenues. So I think, thanks to the cost reduction measures, all businesses have profited from that, but tolling is the key driver this year. It was different in 2018; then Traffic Management was the key driver. That's also the benefit of having 2 legs that when 1 is struggling a little bit, the other will perform strongly. Order intake was a positive surprise in the third quarter. We booked NOK 354 million, very strong increase, 72% increase over last year. Tolling accounted for NOK 236 million out of those NOK 354 million, traffic management close to NOK 100 million. And the 3 key contracts behind this were a renewal of the roadside equipment delivered to our Portuguese customer, Ascendi, back in 2009 to 2011. We will renew that roadside equipment, meaning cameras, readers, [ trend ] -- lane controllers. The contract has a value of close to NOK 130 million. Deliveries will start this quarter and will continue into 2022. A second key contract for Q3 in the third quarter was the 2-year renewal with the Virginia Department of Transportation for a statewide ATMS system that we have developed and delivered. This means that the delivery will be extended until September 2022. And this is a sticky system, so the potential for continued renewals of this contract is absolutely there. But it's great to have renewed that contract, 2-year, NOK 55 million. It's a big, big win for us, and it improves sort of the underlying recurring revenues on the traffic management side. Another important contract in terms of recurring revenues and high-margin revenues, the NOK 30 million extension of our back office software contract in Norway, which means it will last at least until mid-2021. So that was a big win for us. These 3 contracts then accounted for a little more than NOK 200 million. And the rest of the order intake, NOK 130 million, NOK 140 million, was composed of small and medium-sized contracts. Order backlog, 7% increase year-on-year, 12% versus the previous quarter, which means we have a healthy backlog for the fourth quarter. We booked NOK 210 million in revenues in the third quarter. In the fourth quarter, our backlog is NOK 245 million. That means there is a tendency for some of the backlog to slip a little bit because of the pandemic. So we cannot guarantee that the NOK 245 million will actually be taken as revenues in the fourth quarter. But then again, there were also some smaller purchase orders coming in that are not currently part of the backlog. So I think this is a good approximation for what we expect in the fourth quarter. Also, as you can see, more than NOK 400 million secured already for 2021 and NOK 500 million from 2022 and beyond. Available funds, very pleased to see the increase in available credit and cash at hand. We have doubled our available credit. And more importantly, we have increased our cash at hand by NOK 50 million from the third quarter last year. A lot of investors were worried back in the third quarter of 2019, we were a bit worried. NOK 78 million is not a lot of cash when you fund a global operation, but with NOK 181 million available, we have enough capital to fund our current investment plans. And the key driver, of course, behind the increase is the improved EBITDA, also a positive contribution from working capital. Bear in mind that we also repaid some of our debt in the quarter. We reduced that by NOK 9 million. And then there were some currency effects, taxes and other things that contributed negatively. But all in all, up NOK 5 million quarter-on-quarter. No big changes on the balance sheet. It's a healthy balance sheet, we think. It's stable around NOK 900 million. I think the most important thing is the net interest-bearing debt. We are currently at NOK 233 million, have reduced that by NOK 11 million in the quarter. And we are well inside the loan covenant for the fourth quarter and also for the first quarter of 2021 and possibly beyond. So it looks good at the moment. Now the outlook section, what do we expect? I have to repeat this strategy slide because it's important to us. We have more or less finalized the first phase. It remains to divest parking and Infomobility, as we comment in our report. It's hard to divest businesses in the current business climate, with the travel restrictions and cross-border M&A activities being extremely challenging because it's almost impossible to meet physically, and it's difficult to plan ahead for an operational takeover. There are ongoing discussions with interested parties, and we will, of course, announce immediately when we have something concrete and tangible. But that's the only missing part in terms of completing the first phase of our refocusing of Q3. We are now running the business more or less through 2 autonomous business units, Tolling and Traffic Management. We have optimized and focused our resources and investments, as you can see from the OpEx development. We have raised new financing. We have a healthy capital structure. So the only thing that remains is the divestments. We are, therefore, from an operational perspective, focusing on step number 2 in this plan, how to lead. And basically, that means to build the reputation as the #1 technology provider in Tolling and Traffic Management. Specifically in Tolling, we want to secure our position in current core markets. We, of course, want to grow, but you need to protect and defend your existing business before you start to add on. And we need to maintain our technology lead in DSRC and ALPR tolling technologies. We want to cost optimize our solutions because we see that price is important, and we want to become the first mover in road user charging. On the Traffic Management side, a little bit the same story in terms of securing current key contracts. By securing the existing markets, we, of course, can turn our attention to new markets. We need to advance and also merge our central signal management and statewide traffic management platforms. And we continue to expand our stand-alone product enhancements. Today, we actually announced LaneAware for airports, which is based on the work zone management solution that we have developed. And then as a third step, we want to scale our standardized solutions to selected new target markets. But we are right now in Phase #2, and I want to comment on what we're doing there. If we look at Tolling first, we said that we want to secure our existing core markets, and we've done that. We've actually shored up our presence in our 8 key markets. And these key markets will not only provide a stable recurring revenue base for Q3, but they also provide exciting new opportunities. So it's not static. I mean all these markets will give Q3 ample room to grow, and to grow profitably. Because when you have an organization in place in these markets, it's much easier to do that, do do a new project with high margin, than it is to enter a totally new market and build something from scratch. In Norway, we have roughly NOK 30 million in annual service and maintenance revenues from the road sides, AutoPass. We have NOK 25 million in recurring revenues from ferry tolling, and we have close to NOK 70 million in annual transaction-based software revenue. So more than NOK 100 million each and every year. Sweden, the same, NOK 35 million NOK roughly in annual service revenues. There are new projects coming up in terms of renewing Stockholm and Gothenburg. So there could also be system delivery revenues on top of that. Portugal, stable high service revenues, roughly NOK 40 million in recurring revenues. We won the Ascendi contract, which will give a nice contribution on top of that. Slovenia, again, stable recurring service revenues from truck tolling, NOK 50 million. And on top of that, NOK 20 million in recurring revenues from ATMS. Australia, NOK 15 million in recurring service revenues annually. We have delivered the cross-city tunnel projects in 2019 and 2020, and we are currently rolling out the Queensland project, NOK 55 million contract with Transurban in Australia, which is on track and looks good. Thailand, NOK 25 million in annual tag sales. Q3 has close to 100% of the tag market in Thailand, and the market is growing. We won a NOK 70 million contract with Don Muang Tollway, which we are working on, and which will impact revenues positively in the fourth quarter and also in 2021. Chile has been almost 0 when it comes to recurring revenues, but now we're out of the warranty periods, and we see NOK 6 million to NOK 8 million in stable recurring service revenues annually. We have delivered the NOK 20 million Ruta 68 contract. And just recently, we won a NOK 20 million tag order to Vespucio Norte. I have to comment a little bit on that contract because in the announcement, we said it will be delivered in 2021. The deliveries will actually be spread over more years. So it will take some time to fulfill that contract. But is nevertheless good to have those tag volumes every year. U.S. also NOK 25 million in annual service revenues from ALPR services. We're growing that by more than 20% each year, and the growth prospects are good for the U.S. So there are new projects and new clients to work on. Bottom line is Tolling looks solid in our existing markets. Also, the Traffic Management business is, I think, in a good state at the moment. We have just renewed the VDOT agreement. We have West Virginia as a key customer, we have PENNDOT, we have GDOT, we have Florida DOT, we have Iowa DOT. I mean, all these DOTs, they provide a solid foundation for Q-Free's business. When we have prolonged and extended these contracts, it means that the bread and butter business is there, and we can go out and hunt for new opportunities. Also, we can leverage some of the technologies we have developed for these customers to target new customers. So our main focus over the past few years on the traffic management side when it comes to state-wide systems has been VDOT. And of course, a lot of smart solutions and functionalities have been developed for VDOT that we can now export and sell to other clients. So it's also -- looks good from a stability point of view in the traffic management business, and there's still ample room to grow in North America. So the short and medium-term contract pipeline is solid. Year-to-date, we have, as we mentioned previously, won roughly NOK 750 million in new contracts. If we take everything which is in the pipeline for the fourth quarter, it's another NOK 750 million. I don't expect Q3 to win all of those contracts. I don't expect all of them to be awarded in the fourth quarter. But given that we have more than NOK 300 million in awarded contracts and some new things on top of that, I think we will end 2020 with a very healthy order intake. I cannot comment on the NOK 300 million. There's a reason we haven't announced it, and that is we need the final signature from the customer before we do that. So it's out of respect to our customers. The reason they are not announced is that, okay, we're waiting for the final signature. Why are we doing that? Well, it could be a standstill period. Some of these are tender processes where customer -- competitors complain could be that the customer needs to summon a board or a management team to sign the final paperwork. It could be that a contract needs to be ironed out the final details. So various reasons, but the key message here is that we have been selected as the #1, the preferred supplier of a solution, and that's another NOK 300 million on top of what we have won. If we look at the order intake potential for 2021, it's -- with the current knowledge that we have, it looks fairly similar to 2020, close to NOK 2 billion. I don't expect Q-Free to win all of that, but we should win a big portion of it. Historically, our hit rate has been close to 60%. And of course, during next year, there will be new contracts popping up that we are not aware of at the moment. So the SEK 2 billion, I think, could also increase. It's important to comment a little bit on what to expect after the pandemic or even during the pandemic. Initially investments were put on hold, especially in North America. But based on the experience, what we saw after the financial crisis back in 2008, 2009 and how important infrastructure spending was when you sort of look at the different stimulus packages, we expect somewhat the same during or after the COVID-19 pandemic. If we look at America specifically, because that's an important market to Q-Free, in particular for the Traffic Management business, rebuilding America's infrastructure seems to be a perennial favorite of any presidential candidate. Trump has proposed a $1.5 trillion infrastructure program. Biden has proposed up to $2 trillion spent on traditional projects like roads, bridges and public transportation. I think regardless of which candidate that will actually win the election, I think infrastructure will be an important part of restarting the engine and get the economy back on track. So we expect to benefit from that. We have suffered in 2020. We expect to benefit from it once the stimulus package has been approved. Why do we expect to benefit from it? Because we continue to innovate and improve our offering. So we are not standing still. Even though sales has been a bit slower than we expected in 2020, we have invested and we continue to invest in continued leadership in our core DSRC technology. We have a wide range of transponders, receivers. We have world-class ALPR/ANPR and imaging systems. We are launching a new camera system, brand-new camera system this year. We are investing into the future road user charging technology. We have a pilot that will be launched in Norway next year with a brand-new technology for how to do distance-based tolling. We have developed industry-leading ATMS software platforms from traffic signaling to highway or freeway management to combined systems, integrating signaling into freeway management systems. And we have advanced transportation controllers and cabinets. So we have a strong offering. We continue to put out new products and services constantly, and we continue to invest, and we have sufficient investment capacity to bring our development projects to fruition. And that also means we will capture our share of the pie once the market comes back. So again, I have to repeat this because I like it a lot. A very strong quarter. Profitability is strong, cash flow is strong and order intake and pipeline is strong, and we remain positive with our outlook for the fourth quarter and 2021. So I think that concludes our presentation today. There are some questions that have been posted, so I will go through that. I might need some help from Trond.

[Håkon Rypern Volldal, CEO & President]

There is one question concerning the revenue that is down due to COVID delay, are you expecting a rebound in Q4? Yes. As I said, the backlog for Q4 looks stronger than what we reported as revenues in the third quarter. So we expect revenues to come up from the third quarter in the fourth quarter. Do you expect that the crisis will create a new wave of consolidation? Will you open to participate? I think there will be a little bit of a shakeout. I think some companies will struggle. Some companies will manage through the crisis. We -- I think Q-Free will definitely remain standing when the dust settles. I don't think we have current plans to consolidate the industry. I think for us organic growth is the most profitable way going forward. I think that's how we spend our money most wisely. But if there is a structural opportunity to combine businesses or create something that really has merits, then I think that's something the Board will assess. There is one comment. Can you comment a bit more on the last paragraph of the outlook page in the report regarding inbound M&A inquiries? Yes, we are, of course, in the process of divesting some of our businesses, and that also means that we are approached by potential industrial buyers and financial buyers or strategic partners. And sometimes these discussions also revolve around other assets than what we specifically have listed as assets to be sold. But I think it's fair to sort of -- the reason we put it in the outlook is that we want to inform the market that these discussions are happening and ongoing. But unless there is a specific proposal on the table that has been deemed to be both attractive and feasible by the Board, and we get to a stage in the negotiations where things are definitive, I don't think there will be any announcements. But if we get to that point, of course, we will disclose the information as part of our continuous obligation -- reporting obligation. There's one question. Can you comment on the competitive position of Q-Free within Tolling and Traffic Management and whether this has been impacted by COVID-19? I think what we have done during the pandemic is that we have really tried to accelerate some of our development efforts. And I think I commented on that in the first quarter and also the second quarter report and now in the third quarter report. Some of the products that we have launched, we have spent the time wisely. We have been able to drive these sort of road map initiatives forward, which means we bring new products and solutions to market. And I think that increases Q-Free's competitiveness. I also think the pandemic plays to Q-Free's advantage in terms of how the industry will operate because fewer companies can actually just go out and buy projects, meaning it's stupid in this environment to go out and bid for a project with a loss just to gain market share. I think all companies need to manage their P&Ls responsibly, and we have tried to do that for many years now. We cannot afford to do a project simply to gain market share. We need to do projects that deliver profits. And I don't think that's sort of something that every player in our industry does. So I think those players that haven't done that, that have sort of played to market share rather than profitability, will struggle a bit. And for Q-Free, that is beneficial. So I -- if anything, I think from a competitive position, I think Q-Free has grown stronger during the pandemic. One question here. How is the development in alternative technologies, the DSRC and its challengers? We see -- well, the main alternative to DSRC is satellite-based tolling, GNSS. That's a very expensive technology to roll out, basically because the telematics device that you have inside a vehicle is so expensive. So the only places where they use GNSS, to my knowledge, on a broad scale, would be in countries where they do truck tolling, because there are fewer trucks than personal vehicles. If you need to sort of invest hundreds of euros into a device that you need to put inside millions of cars, the total amount you need to invest is quite significant. So up until now, I think satellite has been a competitor to DSRC in the truck tolling segment. Going forward, I think we can expect the cost of the telematics device for satellite-based tolling to come down. But will it be competitive to -- with DSRC? I don't know. I think we have -- it will take some time before they get there, and also there are some privacy concerns. Nevertheless, we are investing into a similar type of technology, which we call the road user charging technology. We will have the technology based on satellite-based positioning where we can charge per kilometer. So it will be a new device put inside a vehicle that will calculate the distance driven. And our technology can be a fat client. So you do the actual processing of the data inside this unit, which means you only send the aggregate amount or distance to a back-office system, which means it's almost impossible to track where you have been on the road. So the big broader issue or the data privacy issue sort of is handled in a better way than with the current devices. So I would say DSRC still in favor in many parts of the world. It's almost the go-to technology in Europe because of the European standard. It's the preferred system now in Chile. It's the preferred system in Thailand. It's the preferred system or technology in Australia. So I think main competition will come from satellites, but we're a few years away, and Q-Free is working on a better mousetrap. And then North America, it's an RFID market. And we have no intention of competing with the current system integrators in North America for RFID. We focus on the high-margin part in the U.S., which is a ALPR. There's one question, how much of the unallocated costs can you cut when parking and Infomobility are sold? Or should we expect these to be at the same level? I think we have streamlined our overhead costs quite significantly over the past 2 years. I don't expect the divestment of parking and Infomobility to hit group charges. I think what will disappear is basically the portion under assets held for sale. So I don't expect a big gain beside that. That's the reason we have tried to separate it out in the P&L to sort of show the impact on the business. There's also one question. What can you say about the pricing of the assets held for sale? I don't want to comment on that. We have some ongoing discussions with potential parties, interested parties. And in order to sort of protect our interest in those discussions, I shouldn't comment publicly on what we expect. If the price has increased or decreased during the year, I think -- initially, I mean, part of the reason why this was not closed early on was that we went into a lockdown situation in March, April, where everything stopped, especially in North America. So that, of course, impacted performance negatively. But due to cost reduction measures and also now some of the business coming back and then some good order intake in some of the businesses, I think value has increased again. So I don't think we're negatively impacted by COVID-19 right now, but it made divestments in the first 3 quarters of 2020, very difficult. So I hope it will be easier to sort of get to a reasonable and acceptable valuation for these assets in the coming months. One question, what is the status on the Ferry AutoPass projects? Are the installed projects working as planned? What about the pipeline going forward? Well, we have, I think, captured almost 85% of that market. We have installed our roadside equipment on the -- what is it called? Ferry quays or docks, so you can drive on board a ferry without having to pay someone in cash or with a credit card. You just use your tag or your license number. That part of the business is going well. I think a number of projects have been rolled out. They seem to be working well. There are additional ferry connections that had to be automated. But usually, it works the following way. I mean the ferry operator needs to win the connection, and that's sort of a concession they get from the Norwegian state. If you get a long-term contract to operate a connection for, let's say, 8 to 10 years, then you also invest in an automated payment solution. And that's when the ferry operators turn to Q-Free and ask if we can help them automate that process. So I think the total amount that we have sold these ferry solutions for would be close to NOK 200 million, and we expect some more connections to come on top. But the way we account for that is that these are long-running service agreements. So we take NOK 20 million to NOK 25 million in annual service revenues from this business every year going forward instead of booking everything as sales revenues. It's a service that we need to operate for the coming 8 to 10 years. So it's nice recurring revenue flows with some growth potential as new connections are won by customers that prefer Q-Free. And as I said, we have 85% of that market. So there's a high likelihood that the new connection will come our way if we remain competitive. I think that's more or less it, what I see on the Q&A side. So with that, I think we conclude this broadcast. Thanks to everyone watching live, and thanks to everyone watching a recorded version. We are, as I said, proud of the third quarter. It's a big step in the right direction and hope to get back to you in February with a strong fourth quarter and full year 2020 result. Thank you. Bye.