Q-Free ASA

OSE:QFR

Earnings Call Transcript 2020-Q4

[Håkon Rypern Volldal, CEO & President]

Welcome to Q-Free's Fourth Quarter and Preliminary Full Year 2020 Results. My name is Håkon Volldal. I'm the President and CEO. And with me today, I have Trond Christensen, our interim CFO.Let's get started. We have quite a bit of material to cover today, and we hope it will be an exciting presentation to watch.If we start with the summary, we think the fourth quarter this year was a solid quarter. We had 4% growth year-on-year. So we're back on a growth track after a couple of quarters with declining revenues. Profitability was good, NOK 25 million and 10% EBITDA margin despite NOK 4 million in extraordinary expenses related to structural processes. Cash flow was strong from operations, NOK 31 million in the quarter, and we also maintained our available liquidity entering 2021.Order intake and pipeline, NOK 205 million taken to backlog or order -- as order intake. Plus the announced NOK 30 million frame agreement in Norway, which is not included in order intake or backlog. At the end of the fourth quarter, we had 400 -- or in excess of NOK 400 million in awarded contracts that are pending the final signature. Some of those contracts have been announced, but there's still a backlog, and I'll come back to that. So also very pleased with the current momentum in the market with respect to order intake and order flow.A bit more details then. NOK 255 million in the quarter in revenues, up 4% year-on-year. Margin was good and significantly up from last year, where we only had 4% margin. Cash flow, as I said, strong. Order intake, good. Full year 2020 revenues down 8%. The NOK 889 million, I think were negatively impacted by product sales caused by COVID-19, both on the Tolling side and on the Traffic Management side. We saw lower product sales than we expected. EBITDA improved 1 percentage point, up from 2019, so NOK 76 million, and 8.5% margin versus NOK 73 million last year or -- and 7.5% margin. NOK 67 million in cash flow from operations, which in our company is a strong year in terms of cash flow.Order intake close to NOK 1 billion and a book-to-bill ratio of 1.07. The order backlog at the end of the year was strong, close to NOK 1.1 billion, and that does not include frame agreements, versus NOK 1,080,000,000 at the end of fourth quarter 2019. So it's in line with last year.If we look at the fourth quarter details, what is driving the improvement in the EBITDA is a more attractive revenue mix, leading to higher gross margins. So we're up almost 3 percentage points on the gross margin. In the quarter, we have lower operational expenses than 2019. And consequently, we also improved the results, the EBITDA. EBIT is negatively impacted by NOK 20 million in impairment of Parking assets based on current -- what we perceive is current market value of other Parking assets. Those assets are for sale, and we're working on selling those assets, but we had to take an impairment based on what we think is a realistic value of those assets.We also had an impairment in the fourth quarter of 2019 related to Parking and Infomobility, which was higher. We had NOK 58 million last year. We're done with the impairments now. We think Parking has almost no value in our books. And Infomobility, unfortunately, we cannot bring it back up again, but they had a strong year in 2020. And, so to speak, could have justified a higher value in our books than they have, but you cannot reverse impairments.The full year results, down 8%, as I said, driven by negative product sales. Gross contribution up, and the gross margin is up significantly, 5 percentage points, driven by a higher share of high-margin software revenues and an attractive product mix overall and also higher margins on projects delivered compared to 2019. OpEx is slightly up. Bear in mind that the Norwegian kroner has been extremely weak during the parcel of 2020 compared to key currencies for Q-Free, like the euro and the U.S. dollar, in particular.So if we had similar exchange rates in 2020 as in 2019, it would have been lower. Anyway, EBITDA, up 4% year-on-year. Margin, up. And EBIT, even though negative, significantly improved versus 2019. And without the impairment, of course, it will look better. So we hope that this is the last year where we have to actually bring negative impairments into the P&L.Some more details on the key items. If you look at the revenues, the NOK 255 million in revenues in the fourth quarter, 62% came from Tolling, 22% from Traffic Management and 16% from assets held for sale.On the Tolling side, it was fairly flat year-on-year, a slight increase of 2%. Traffic Management, very stable compared to 2019, whereas assets held for sale had an increase of 18% related to installations of the announced Weigh in Motion orders from Ukraine. So all in all, 4% revenue growth.Year-on-year, all business areas are down. Tolling down 7%, caused by lower tax sales. Tax sales are down more than 60% in 2020 compared to 2019. Projects have been postponed due to travel restrictions and limitations on the customer side in terms of facilitating installations and deployments. Tenders have been delayed.Traffic Management is down 11%. A difficult situation in the U.S. with limited funding of the state Department of Transportations. But we're hoping that, that will change now. But it has been a tough year for Traffic Management in terms of bringing in purchase orders and work. Assets held for sale down 4%, predominantly in Parking.So in terms of revenues, the minus should have been a plus. But anyway, it's a lot better than what we feared back in March, April when the pandemic hit us.What's important to mention is that almost 40% of our revenues are now recurring. So if we decompose the 2020 revenue base, the NOK 889 million and look at what kind of revenue streams are recurring, what revenue streams are nonrecurring or one-off and what revenue streams are fairly resilient.The 39% that are recurring come from long-term service and maintenance contracts on the Tolling side with a guaranteed minimum payments per year. We have software back office contracts related to transaction volumes. We have Tolling Ferry services invoiced every single year. We have ALPR solutions. We have multiyear time contracts. We have long-term operation and maintenance contracts for our ATMS or Traffic Management software. And we also have multiyear traffic signal controller contracts. So all of this is good. It provides a solid base to build from.Also, we have revenue streams that are quite resilient, meaning they vary, but within a certain range every year, and they also are fairly stable. So Tolling product sales, a bit exceptional in 2020, but usually quite stable. ALPR firmware licenses and also Traffic Management controllers, one-off sales. Not to the same customers, but every year, we have a certain volume that, that will come.On the nonrecurring side, we, of course, have special projects on the Tolling side. We have service and maintenance upgrades or up-sales. We have Traffic Management projects and also Infomobility Parking projects. But all in all, the recurring share is increasing, and that represents, as I said, 40%, which is a good development.EBITDA. If we adjust for the nonrecurring items, we have not done that in the P&L with a specific line item in the P&L. But to compare apples-to-apples, in 2019, we also had some extraordinary expenses that we adjusted for. So last year, you could argue we had NOK 15 million in underlying EBITDA. And fourth quarter 2020, we had NOK 29 million, which is almost a doubling of the profitability. And after a weak Q1, we have now delivered 3 solid quarters based on a good cost base, a higher-margin revenue mix. And I think, going forward, we will be able to deliver solid margins as I will come back to.If you look at the EBITDA contribution from the different segments. In the quarter, Tolling has a significant improvement of NOK 31 million from Tolling versus NOK 11 million in 2019. Traffic Management, stable. Again, a difficult year with limited business. Assets held for sale, minus 1 compared to a small profit last year. So it's Tolling that sort of drove the results in the fourth quarter and also for the full year. We had NOK 104 million from Tolling in 2020. The margin improved. Traffic Management, breakeven almost, which is quite an achievement given the difficult business climates. As we have announced new contracts and the momentum is picking up, we are quite excited about the outlook for Traffic Management in '21 and beyond. Assets held for sale, fairly stable and group function, stable. So it's down on the Traffic Management side and up on the Tolling side year-on-year.If we look at the order intake, NOK 205 million might look a bit low. But bear in mind that we also signed a NOK 30 million Tolling frame agreement in Norway. So we're back on the road side in Norway. And we had a backlog of NOK 400 million in awarded contracts that have not been signed yet, but NOK 240 million out of these NOK 400 million have been signed in January and February 2021. So we've been able to convert those awarded contracts into definitive or final agreements with the customers. About the Stockholm announcement and also the big Traffic Management win in the U.S. announced earlier this week represent parts of the awarded but not signed book at the end of 2020. So the order intake in the first quarter of '21 will be extremely good.Tolling accounted for most of the order intake in the fourth quarter. Traffic Management and assets held for sale, contributions around NOK 40 million each. Even though order intake was NOK 205 million in the fourth quarter, and some might have expected a higher amount, we are quite pleased with the content of the NOK 205 million. They include -- or they don't include the NOK 30 million frame agreement, but it's a very important contract for Q-Free. It's long-term recurring service and maintenance part, 4-year frame agreement with first delivery expected in 2021 for the actual toll stations and then long-term service and maintenance on top. And there could also be new mini tenders adding to the contract value. So this contract will be booked as order intake as we receive the purchase orders for the installations.We had a good fourth quarter in Infomobility related to Weigh in Motion of trucks. We had 2 big contracts signed in Ukraine and Saudi Arabia. Delivery started end of the fourth quarter and will continue this year. And additional sales, definitely possible. Some new systems have actually already been won and will be booked in the first quarter of '21.A NOK 30 million contract extension of the back office software contract secures transaction services until January 2022. So that's a good win for us. And also a nice ALPR contract in the U.S., high-margin software revenues in the U.S., NOK 15 million with extension opportunities.And then what really excites us these days is the current inflow of bigger projects. So in early February, we announced the renewal of the Stockholm congestion tax system. Originally delivered by Q-Free back in 2005. So we have operated that system for more than 15 years. And we are quite proud and pleased to be awarded the contract from Trafikverket in Sweden to continue our services. The roadside equipment will be upgraded in '21 and '22. And then we have 10 years of recurring service and maintenance with potential extensions on top, which will add to the contract value.Also, the NOK 90 million contract in the U.S. is a really nice win for us. It's a new statewide, what we call, advanced Traffic Management system. Initial deployment in 2021, late third quarter, early fourth quarter, accounting for 20% of the contract value. And then the remaining 80% will be a 10-year recurring revenue stream. Potential new task orders on top. So again, the NOK 90 million could grow.The order backlog is flat compared to end of 2019. Bear in mind that no frame agreements with no minimum committed volumes have been included. So there are some contracts that could potentially be added, but we don't want to change the principles we have used for reporting backlog. So we stick to the same principles, but bear in mind that there are some contracts that come on top.The expected delivery schedule, NOK 176 million scheduled for the first quarter 2021. The first quarter is usually a bit weaker on the revenue side. So the seasonality is the first quarter is weak, and then the remaining 3 quarters are fairly sort of, relative to the first quarter, better and fairly evenly distributed.So we have NOK 348 million secured for the remaining part of 2021, which means the backlog for 2021 is in excess of NOK 500 million. And then you can add a big part of contracts on the previous page related to Sweden and the U.S. And also, bear in mind that we have contracts that we are waiting for the final signature on, that will be hopefully announced in the coming weeks. So the backlog will grow definitely for 2021, but happy to see already NOK 500 million there.If we look at the liquidity, we're also quite pleased with our current financial situation. We have maintained our cash reserves. So we have NOK 75 million in cash at hand and also NOK 100 million unused credit facility. So it's fairly stable compared to the third quarter of 2020. Some -- of course, the EBITDA helps. We have some working capital changes that are positive, but we also paid down or reduced our debt by NOK 12.5 million in the quarter. So the debt repayment, the lease expenses and, of course, reduces cash. But in spite of that, we are almost at the same level as for the end of the third quarter, which is good.On the balance side. The balance sheet, I'll not go through every detail here. But it's important to notice that given the currency fluctuations, the balance sheet adjustments can, in certain periods, be quite significant related to currencies. So what you see here in terms of a drop in total assets and equity liabilities is partly related to currency and, of course, also partly related to impairments.If you look at the equity and liability side, what is happening now is that we are -- or a lot of the financial institutions and people that took part in the convertible bond placements back in May 2020 have decided to convert to equity, meaning our debt obligations will be reduced by almost NOK 70 million and converted to equity. So the equity ratio in Q1 2021 will be significantly improved, our debt obligations will be reduced and, of course, also interest expenses will come down. So that's a positive thing happening in Q1 '21.Net interest-bearing debt is at SEK 229 million. Of course, will change somewhat when the conversion has been done.Now to the part that excites me the most, and that is outlook and summary. We have a 3-step plan, which is to focus, build and then scale. And to summarize a little bit what has happened in 2020, we went from 5 business areas to 2 business areas. We are now focusing on Tolling and Traffic Management. So we're a more focused company, operating in fewer markets. Some might see that as a negative development. We don't. We do a lot more business in our core markets. And that means when we do more business in fewer markets and are able to almost maintain revenues, we make more money. So part of the cost reductions we have done and part of the strengthened presence that you see in certain markets is related to a more focused approach. We have closed down over the past years several of our offices. That doesn't mean that all these markets are not served, but they're not served by our people in a physical building in that market. So we continue to be very focused in terms of our presence, and we want to build our market share in our key markets before we start to expand.After a challenging Q1, when we announced our plan, we have been able to deliver 3 solid quarters, and we're quite pleased with the current sort of underlying profitability of Q-Free. And also our funding gives us quite a bit of comfort around our ability to handle our debt and also finance our ambitious growth plans.We are now in the second part of our 3-step plant, which is to build a strong presence in existing core markets. So one thing is to close down offices in markets where we don't have a lot of revenues. But another thing is to actually build and strengthen your business in your target markets. And also, we want to build our reputation as the prime mover in traffic technology.So what are we doing and what have we achieved? This is one of my favorites. I've used it in the past presentations, and I will not go through all the details, but it basically means that in Tolling core markets are secured and continue to offer exciting opportunities. We have the frame agreements in Norway, which builds our -- or strengthens our position in Norway. We have the Stockholm upgrade projects, we have the ALPR contract in the U.S. and also contract one in Portugal. Contract one in Spain, that is also handled more or less by our Portuguese team. So all in all, I mean, we continue to add things to our 8 core markets that builds presence and builds profitability.On the Traffic Management side, we have been able to sign quite a number of long-term contracts with the key Department of Transportations that now drive an increasing revenue stream of recurring revenues. We have been able to do quite a bit of business with the state of West Virginia. So West Virginia DoT has been a statewide ATMS customer since 2008. We have GDOT since 2015. We have [ BDOT ] since 2016. We have iOS since 2020. And also Colorado as a statewide ATMS customer. So quite a number of big states that are now key customers and basically, giving us the opportunity to build our ARR and new recurring revenue streams. So it's a much more stable business than just a few years ago. These long-term contracts give us monthly recurring revenues and also opportunities to obtain certain task orders and project deliveries on top of that sort of recurring base.In 2021, the opportunity pipeline looks quite promising. So even though we are present in fewer markets, I think the pipeline is more attractive than it has ever been. We are looking at opportunities. If I only look, not at the Mickey Mouse contract or the small stuff, but only contracts with a value in excess of EUR 1 million and what has been announced to the market in terms of timing of awards, we are looking at almost NOK 2 billion in potential order intake. Of course, we will not win all of it. Our historic win rates on contracts that we're aiming for has been close to 60%, but it gives you sort of an idea about all the contracts out there that we're fighting for. And of course, some of these have already been won with Stockholm and the ATMS contract, and there are more to come. So I think it's exciting to see that after a slow 2019, slow 2020, the order inflow will definitely increase in 2021.Now, our ambition is not only to sort of protect existing markets we -- and build market share in existing markets. We also want to become the prime mover in intelligent traffic solutions. And what exactly do we do there? A lot of people think that Q-Free does too many things, and we have so many products and services. I disagree. I think the portfolio is quite okay now. I think we have -- if you sort of group the different things that we do, we have certain products related to radio communication and dedicated short-range communication technology, DSRC technology, tanks and readers. We have world-class license plate recognition, software systems and imaging systems, cameras. We have a Tolling back office software platform. And then we're also working on pioneering some future road user charging technology. But basically Tolling, I mean, that offering consists 3 key components you can see at the top.On the ATMS side, we provide centralized software systems for freeway management and traffic signaling and also local traffic controllers, hardware for -- and that's it. But we aim to be the best at what we do. And we continue to bring out new innovations. We -- on the Tolling side, I would like to mention a couple of things we're working on. One is a new imaging system. It will be used for the new contracts that we have announced on the Tolling side. It's all-in one unit camera system with flash camera, video triggering and license plate recognition. It has improved dirts, dust, snow resilience, reduced weight and size, cover multiple lanes and also gives us the opportunity to perform the installations in a flexible way and also reduce time to get the system up and running. Such key improvements on the Tolling side, which will enable more cost-efficient systems and also improved performance of the systems out in the field.Then we are working on new road user charging technology. There's a debate going on in several countries, whether one should replace all taxes and -- related to owning a car or personal vehicle with a distance-based scheme where you pay per kilometer or mile driven. So we are working on technology that will allow that to be introduced. It's highly flexible in terms of what kind of parameters that you would like to base your charges on.So given certain political goals or goals related to traffic, you can change the rates and change how every person driving a vehicle is actually charged. How much are you charged in the morning during peak hours or rush hours compared to driving at the middle of the day, what kind of vehicle you own, where you drive, et cetera. It's secure and enforceable, meaning we take into account problems with the spoofing and jamming and hacking in general, to sort of protect the revenue streams and the user. It allows interaction with the user to make conscious decisions about where you want to go based on price information. It protects privacy. So there's no big brother watching. It's sort of a thick client compared to a thin client. It's applicable to all eligible vehicles in a bold user charging system and is compatible with the EU standard, which basically says that you should be able to drive around in Europe without having to think about complying to all the different unique systems in every state or every nation.So those are 2 key developments on the Tolling side. Exciting technology. One is almost out in the market. It will be launched in the coming weeks. And the new road user charging technology we are piloting in 2021. So we're looking forward to report on the progress on that.On the Traffic Management side, we have big developments happening now. We are bringing all our centralized software solutions onto a single platform. It's a single off-the-shelf ATMS solution. It unifies freeway and single management. And Q-Free is the only player in the industry that actually is an expert in both fields. We know freeway management and we know single management, and very few other companies do that. So we bring the best of 2 worlds into one platform for our clients.It improves mobility across local inter-city and regional traffic operations, and it has lots of functionality, singles, event management, analytics, connected vehicles where you can distribute signals directly to the car, ramp metering, dynamic message signs, a lot of different items coming in. And it's all based on one single technology stack and with a common user interface. And it allows us to sort of scale our Traffic Management software systems much more rapidly and with ease compared to the old base.So that brings me to the third part of our plan, it's a little bit into the future. We are, in '21, focusing on finalizing or even -- finalizing the current ongoing developments, but we will never stop. So there will be new developments. But we're focusing on building presence in existing markets and really getting or earning the reputation as the prime mover in traffic technology. Once we've done that, I think, in 2022, 2023, we are going to embark on the journey where we start to scale these standardized solutions to selected new target markets. Then we have a solid base of existing markets and customers providing a solid revenue base with good profitability, and we have solutions that we can easily take to new markets without adding a lot of cost, and that's important.This slide might look a bit complicated, but I'll not -- I'll try to simplify it for you. I sort of looked at the scalability of our current offering, where you, on the one hand, have a fully customized solution built for one customer only. That's not scalable. And on the other side of the spectrum, you have the off-the-shelf solution or 100% scalable, takes no time.If you look at Tolling, a lot of our products and services are off-the-shelf or close to off-the-shelf. There have been a couple of things that have been difficult to scale, and that is the back office software. Capturing all the data, integrating with the customer software systems, making sure transactions are billable, that's sort of a unique setting because our customers use different systems, and they have different regulations they need to comply with. So a back-office software system has been sort of a customized product you sold, and it means that there is a limit on how many projects and customers you can actually serve at the time. And the risk is quite high because it's new features that you develop.What we're doing now is that we are taking the time to standardize our back office system. It will never be 100% off-the-shelf product, in my opinion. But it can be a 60% solution, meaning 60%, 70% of the functionality is standard. It's reusable. It's there. You don't change it. And the remaining 30%, 40%, you can customize. You can adapt to customer APIs and then whatnot. That's an important thing for us to do before we enter new markets. That work has been going on for quite some time, and we're getting closer to a solution that will give us a scalable -- a much more scalable back office on the Tolling side.The rest of the products, the DSRC products, the cameras, the ALPR, that's already scalable. So what's lacking then is the third-party integration. And there, we have spent quite some time to standardize our procedures, work processes, et cetera. So we're able to take on more work and deliver more projects with the same number of resources. So what I'm saying is that on the Tolling side, we are moving quickly towards a quite scalable solution, and I'm happy with that.Traffic Management is also in a similar position. The only difference is that the platform has been standardized between '17 and 2020. So we're already at what I would say, is 60% on the freeway management software. Without the standardization work that we have done, we would not be able to take on that USD 11 million contract that we announced this week and deliver that by September. It would have taken years. Now we can do it in a few months.So we are already there, and the goal is to bring it even further up, but also respecting that this freeway management, this OpenTMS solution will never be a fully standardized or off-the-shelf solution. But think about it this way, I mean, when people talk about Q-Free, they think it's difficult to scale. In my opinion, it's usually off-the-shelf and some tuning and minor adoptions. It means we are quickly getting to a position where we can profitably scale into new markets.Where are those new markets? I think there are quite a number of attractive Tolling opportunities popping up in Eastern Europe. So I think there are big tenders coming out in that part of the world, which we will take on. If you look at new markets on the Traffic Management side, we need to remember that each U.S. state is a separate market controlled by a separate DoT and therefore, we also think about the U.S. as a new market. So a new state in the U.S. is a new market for us. But there are also some expansion opportunities, taking our software and hardware controllers to Latin America, is a logical expansion and also see if we can bring it into certain parts of Europe.So I don't think we will be all over the globe in terms of new markets, but we will look at adjacent markets or markets close to where we are already located and where they use sort of the technology that we have developed where the ground is ready for the Q-Free show to come to town.Then we have decided to stick our neck out and try to be a bit more specific about our goals, both for this year, 2021, and for 2025. If you look at 2021, our outlook is quite positive. I mean, we have a lot of contracts coming in. Profitability on those contracts look good. And we have financing and funding in place. We have a shareholder base of shareholders that support us. So I think for 2021, a 10% organic revenue growth or above 10% organic revenue growth is possible, measured at least at 2020 currency rates. I don't know what will happen with the NOK. But assuming that the currency rates are fairly stable, we should expect more than 10% organic revenue growth. We expect order intake to grow even more. So book-to-bill should exceed 1.1. And we expect the EBITDA margin to exceed 10%.The enablers is -- or the enablers are, on the revenue side, are increasing annual recurring revenue stream. Our solid backlog, already more than NOK 500 million for 2021 secured, and several recent contract wins. I've announced some of them. And we have some, of course, leads that will be announced once the final signatures are there, and I think you will like some of them, if not all of them. I like all of them.Attractive contract pipeline and competitive offering. We are coming out with some new innovations, as I've talked about, both on the Tolling side and on the Traffic Management side. So we expect to convert those innovations into new orders, even though they will not be delivered in 2021, I think it will definitely help our order backlog. So again, it supports the book-to-bill above 1.1.And the margin, in addition to, of course, when you get more revenues, you get leverage on the bottom line if you maintain the gross margin structure, which is solid, and we do think we have that now. And also, we have an OpEx base, which makes it easier to deliver on that target.Probably more exciting is the 2025 ambitions that we have. We think 2021 is a year where we initially will have some challenges related to the pandemic, and then there will be sort of a rebound in the market that will continue. There are so many things happening in our industry. We are supported or we work in an industry driven by attractive megatrends. As I said, we have increasing recurring revenues, and we have also the opportunity over time to do bolt-on acquisitions to strengthen our offering in certain places. So we target a 2025 revenue base of between NOK 1.3 billion and NOK 1.5 billion. That's organic. Potential M&A will come on top. We have a quite ambitious goal to increase our margins from our current goal of above 10% to 15% to 20% EBITDA margin and then 10% to 15% EBIT margin. That is helped by an increasing share of software -- high-margin software. And also what I've talked about in detail, the higher -- or increasing scalability of our solutions. We have an ambition to be the prime mover in traffic technology, and we have a continued stream of innovation and very clear ideas about what we want to develop for the future. So I think in 2025, it's possible to believe that Q-Free is a very different company than we are today? We've spent a lot of years preparing the ground, building a strong foundation and with what we now have, I feel quite comfortable that we can deliver on these ambitions.So with that, I conclude my presentation, and we'll then see if there are some questions that have been asked during the webcast.

[Håkon Rypern Volldal, CEO & President]

There's one question. Are there still interest to acquire our Parking assets and Infomobility assets? And I would say, yes, we are working on, I think -- our priority is to sell the Parking assets. We have done impairments. So there is interest, but the impairment also reflects that the interest is not -- we're not talking about the transaction that will give a lot of value to Q-Free for the Parking assets only. But there is interest, and we aim to close that. And we have expectations to close that in the near future, meaning, hopefully, in the first quarter could be -- it could take some more time. It's very difficult to do M&A transactions these days when it typically involves cross-border transactions, and the buyer is not able to travel and see what they're actually getting. But we've been in dialogue with some potential interested parties for quite some time and hope to be able to announce that probably with -- in connection with our first quarter results for 2021.There is one. The expected delivery is currently low for Q1, but you have signed many contracts since the beginning of the year. So do you expect revenue increase in Q1 compared to last year that was low?I think we can expect a revenue increase versus last year. I think what we can definitely expect is a profitability increase versus last year. It is a bit hard to know these days, whether you can fully trust the backlog that you have. Normally, there are things coming in that will add to the backlog. So we're able to do more than the backlog entering a quarter. But what has been a bit surprising to see is that customers have decided to postpone certain deliveries. So if you have a backlog of NOK 200 million for a given quarter, you'll not be able to invoice NOK 200 million in the quarter. It might be NOK 180 million. Previously, that was not a problem. But due to travel restrictions and customers saying we can't handle it, there's some more uncertainty around when you do the actual installations. So there are things that have slipped from the fourth quarter into the first quarter, and there might be things that slipped from the first quarter to second quarter, but there are also things coming in that will be delivered on short notice in the quarter.2020 recurring revenues was 40%. What was the recurring revenue stream percentage in 2019?I don't have that figure in my head. I assume it was high 30s also. A tad lower than in 2020. If I were to guess, around 34%, 35%, but don't expect it to increase by 5 percentage points every year. It will take more time than that, but the amount is increasing definitely. So new contracts that are signed. We're working to sort of convert more of the contracts to recurring revenue streams, especially on the software side. I think the SaaS model is attractive. It gives us a more sort of predictable picture of the future. So where we can, we will convert typical project deliveries in the old days to more long-term recurring revenue streams. And that is what you see happening now on the Traffic Management side with, for instance, the contract we announced on, was it Tuesday? Tuesday or Wednesday? But there's a long service and maintenance period of 10 years with recurring payments.There's one comment or question. Our main shareholder has increased their share. Any comments on their plans with Q-Free?I shouldn't comment specifically on that. I think they -- in their bid or their offer documents, they outlined certain perspectives on Q-Free. But the fact that they have increased their holding from 4%, 5% back in 2000 and -- or late 2016 to almost 50% or 46%, 47% now indicate that they have a strong belief in the company and the underlying value of Q-Free. But when it comes to their specific plans, I think they should comment on that. We have -- we're very happy with Rieber & Søn as a shareholder, quite constructive and no bad experiences. So we are, as I said, happy with them. And we think they see Q-Free as an interesting investment.I think I've answered during my presentation a lot of the early questions. So I don't see additional questions here. So with that, I conclude this webcast. Thank you for your time, and see you in April for another interesting announcement. Thank you. Bye.