AcadeMedia AB

STO:ACAD

Earnings Call Analysis

AcadeMedia Reports Positive Q1 Growth

In the first quarter of 2023, AcadeMedia saw a commendable start with over 10% turnover growth, reflecting strong organic growth in student numbers of more than 5% and organic revenue growth of over 6%. The international expansion is notable, contributing to 26% of the company's revenue outside Sweden, including new preschool openings and acquisitions in Germany and the Netherlands. The overall net sales grew by 10.5%. Despite high inflation, AcadeMedia kept its adjusted EBIT steady at SEK 151 million, with a margin decrease to 4.4%. They await improved compensation for their costs in January 2024 with the school voucher revision. In preparation for future development, a share redemption program is proposed to aid their ongoing international growth strategies.

Remarkable Growth Amid Economic Headwinds

AcadeMedia kicked off the new school year with outstanding organic growth. The number of students and children under the company's wing expanded by 5.1%, with net sales leaping by 10.5% - a testament to robust segment performance, with the sole exception being the Adult Education segment where a mild decline was recorded. The fuel behind this growth was not just the addition of new members to the AcadeMedia family, including FAWZ in Germany and Winford College in the Netherlands, accounting for 3% of the growth, but also a positive 0.5% currency tailwind. Yet, despite the robust top-line expansion, inflationary pressures weighed down, keeping adjusted earnings before interest and taxes (EBIT) static at SEK 151 million and nudging the margin south to 4.4%.

Proactive Measures Against Cost Inflation

With the rise in costs due to inflation, including spiking rent expenses, AcadeMedia foresaw the challenges and structured its finances in anticipation. The gentle decrease in electricity costs, with the aid of a SEK 20 million government subsidy, provided some relief. Investors should note that a reprieve is on the horizon with the annual school voucher revision slated for January 2024, promising compensation for the increasing cost environment.

Robust Performance Rolls Into Strong Cash Flow

Reflecting upon a rolling 12 months, the numbers echo the company's solid performance - net sales at SEK 15.9 billion, adjusted EBIT of SEK 965 million, and a steady EBIT margin of 6.1%. This financial stability is cemented by a solid free cash flow of SEK 729 million.

Preschool and International Segments: Engines of Expansion

A key driver of AcadeMedia's growth narrative was the Preschool and International segments, with the number of children swelling by 14.5%. Expansion efforts materialized through the launch of 6 new preschools in Germany. This strategic maneuver boosted net sales by 21.8%, fueled by both organic growth and acquisitions, while currency effects sprinkled an additional 1.7% in sales. Importantly, adjusted EBIT and margin also enjoyed a slight ascension from the previous year, propelling optimism into the future.

Compulsory School Segment Stays Resilient

In the Compulsory School segment, student numbers grew modestly by 1.4%, or 2.4% once adjusted for restructuring. The acquisition of two new schools brought an influx of 624 students. This segment also witnessed a healthy 7.1% increase in net sales, buoyed by the annual school voucher revision and government electricity support. Adjusted EBIT remained steadfast at SEK 51 million, indicative of AcadeMedia's ability to navigate the treacherous waters of inflation without capsizing profitability.

Upper Secondary School: Balancing Growth and Inflation

The Upper Secondary School segment recorded a student number increment of 2.7%, translating into a 7.5% surge in net sales. Here, growth spiraled from new campuses and increased capacity utilization. Nevertheless, adjusted EBIT and margin contracted slightly as the segment grappled with inflationary challenges, including rent hikes and a 4.1% salary increase starting September. There's a silver lining, however; a proposed 3.4% school voucher hike in Stockholm for January 2024 hints at pending fiscal respite.

Adult Education Weathers the Storm

Despite a 2.2% decline in sales within the Adult Education segment, largely due to decreased municipal business volumes, efficiency measures seemed to bear fruit with a bump in profitability – adjusted EBIT climbed to SEK 48 million, marking an uptick in the margin to 13.2%. This indicates AcadeMedia's skill in sustaining segment health even as certain revenues wane.

Strategic Acquisitions and Leverage of Private Markets

Not resting on its laurels, AcadeMedia made a decisive move post-quarter with the acquisition of Berghs School of Communication, a revered name in communication education, reaffirming its commitment to diversification and fortress building in the private education market.

Earnings Call Transcript 2024-Q1

[Operator]

Welcome to the AcadeMedia Q1 2023. [Operator Instructions] Now I will hand the conference over to the speaker CEO, Marcus Strömberg; and Deputy CEO and COO, Katarina Wilson. Please go ahead.

[Marcus Strömberg, executive]

So good morning, everybody, and welcome to this Q1 interim report from AcadeMedia that also represents the new school year for us. And I will just start to make some initial remarks, and then I will hand over to Katarina to go through the numbers.

And this school year has started, in fact, in a very good way. And what is very positive is the organic of the company. So we have continued to grow more than 5% when it comes to students, and we have also had an organic growth of more than 6%. And this gives us a turnover growth of more than 10%.

And of course, we have invested a lot in organic growth and we have also developed our campuses. We have built one unique position when it comes to vocational training, both at Upper Secondary Level and also at the Adult level. We have continued our international expansion. And in fact, now 26% of the revenue is outside Sweden.

We have continued to start organically with preschools, 6 preschools in Germany this could be a start and we plan to start around 15 this year. And we have also had an accelerated acquisition strategy with bolt-on acquisitions in Sweden. We have invested in a private paid school group in the Netherlands, added dedication in Germany, and we have also acquired one of the most well-known education brand in Sweden that is Berghs that is totally private paid. And this is also a way to develop our strategy and the way to the road map 2030 that we are working against.

The Board has also proposed a voluntary share redemption program, and this is also very important for us because we think that the share price don't reflect the position that the company has for the moment. And with this program, we hope to have a share that we can use to continue our international development. And with that remark, I will hand over to Katarina and she will go through the numbers.

[Katarina Wilson, executive]

Thank you. I'm Katarina Wilson, and I will walk you through our first quarter, which is a seasonally small quarter of our new financial year '23, '24. So moving on to Page 3 highlights quarter 1.

Strong growth, as Marcus said, a number of children and students grew by 5.1% and net sales grew by 10.5% with growth in all segments, except in the Adult Education segment, where volumes in the municipal business is still coming down somewhat, but at a slower pace. Organic growth, including smaller bolt-on acquisitions was 6.5% and the acquisition of FAWZ in Germany and Winford College in the Netherlands contributed 3% to the growth.

Changes in currency impacted positively 0.5% in the quarter. Despite continued high inflation, adjusted EBIT was in line with last year, SEK 151 million and the adjusted margin decreased to 4.4%. This quarter is the third quarter where we've seen the full effect of inflation, including increased rental cost about SEK 35 million in the quarter compared to last year. And in addition to inflation and increased trend, we're also seeing the annual salary revision from September of 4.1% impacting this quarter while we will see the full effect from the annual salary revision in the next quarter.

Compensation for higher cost levels will come in January 2024 with the annual school voucher revision. Electricity costs decreased in the quarter compared to last year, and we also received electricity support from the government in total SEK 20 million. Items affecting comparability, minus SEK 6 million related to transaction costs as well as insurance compensation related to fire in a compulsory school in the last financial year.

Cash flow is normally negative at the beginning of a new school year related to working capital and the free cash flow in the quarter was somewhat more negative than last year, minus SEK 127 million, due to lower prepaid income in Norway, and this is entirely a calendar effect.

So moving on to Page 5, rolling 12 months, which -- this is only really with 1 quarter from full year '22, '23 numbers. Net sales rolling 12 months amounts to SEK 15.9 billion and adjusted EBIT to SEK 965 million and the adjusted EBIT margin of 6.1%. And free cash flow is solid at NOK 729 million.

So jumping to Page 8, development in the quarter by segment and starting with the Preschool segment. And this segment has changed name to Preschool and International segment reflects the recent additions, Winford College, with compulsory and secondary schools in the Netherlands, Media Design Academy, Adult education in Germany, both of these acquired in this quarter. And as I, we said, acquired last year with Compulsory and Upper Secondary Schools in Germany.

The number of children increased by 14.5%, with growth in all countries, except in Sweden, where Preschool is closed in the quarter. And if we adjust for these closures, the number of children increased also in Sweden. Growth was driven by acquisitions and 6 new preschools that started in Germany in the quarter. And the plan in Germany is to start 15 new preschools during this full year.

Net sales increased by 21.8% compared to last year and the organic growth was 10.3%. Adjusted for the acquisitions, that contributed 9.8% and currency development had a positive effect of 1.7%.

Adjusted EBIT and margin were somewhat higher than last year, though this first quarter usually is a smaller quarter.

Higher operating costs in all countries, driven by inflation, rental costs -- also, we had in this quarter higher maintenance cost in Norway with SEK 7 million, and this is also entirely a timing effect. All in all, cost increases were offset by the annual school larger revision. Items affecting comparability, minus SEK 6 million related to transaction costs from acquisitions.

So moving on to Compulsory School, Page 9. The number of students increased by 1.4%, but adjusted for restructuring units, the number of students increased by 2.4%. We also added 2 new schools in the quarter with an acquisition with 624 students in total.

Net sales increased 7.1%, also positively impacted by the annual school voucher revision from January 5.3% as well as SEK 5 million in governmental electricity support. Adjusted EBIT was in line with last year at SEK 51 million and this is despite continued high inflation, the margin decreased to 6.4%.

Inflation continued to impact operating costs and rent increased by about SEK 10 million compared to last year, somewhat offset by lower electricity costs. The annual salary revision 4.1% from September affected the quarter by SEK 2 million. And there's more positive items affecting comparability, plus SEK 1 million related to insurance compensation for the fire last year.

So Upper Secondary School, Page 10. Student numbers increased by 2.7% and net sales increased by 7.5%. Growth is mainly coming from 5 units that have opened over the last 3 years, admitting 550 additional students as well as from capacity expansion. The 2 campuses that opened last autumn has increased the number of students by 13% compared to last year. And in total, capacity utilization increased in this segment to 86.9% according to plan.

Revenue increase is also coming from the annual school voucher revision that was 3.9% from January and about SEK 5 million in electricity support. Adjusted EBIT and margin decreased compared to last year due to higher operating costs caused by inflation. Rent increased by SEK 20 million due to indexation and the annual salary revision 4.1% from September, affected the quarter by SEK 5 million.

About 30% of the Upper Secondary School segment schools operate in the Greater Stockholm area, where the school voucher increase for 2023 was 1.8%. And this increase is not compensating for the current inflation, including the annual salary vision. However, compensation for the high cost level will come in January 2024 with the annual school voucher revision where the preliminary indications from Stockholm indicates an increase by 3.4%.

Moving on to Adult Education, Page 11. Sales decreased by 2.2% due to continued lower volumes in the municipal business area, where sales decreased, but at a much lower pace by 13%. Capacity adjustments in this business area and cost-cutting measures implemented last year now showing effect and profitability increase.

Sales in the labor market services business was in line with last year, and volumes in the new matching contracts are still much below expectation. Demand for higher vocational education remains high and revenue increased by 7% and operating profit was in line with last year. In total, adjusted EBIT in this segment increased to SEK 48 million, and the margin increased to 13.2%.

I would like to point out that the first quarter like last year is a seasonally strong quarter, impacted by lower personnel costs due to vacation and the assessment is that the Adult Education segment margin for the full year will be closer to the range.

And as Marcus mentioned, after the close of the quarter, Berghs School of Communication was acquired, and this is one of the world's leading schools in the field of communication. And Berghs will stay in the privately funded market.

Moving on to Page 13, free cash flow and investments. Cash flow in the first quarter is normally negative related to working capital and the free cash flow in the quarter was somewhat more negative than last year, minus SEK 127 million. And as I mentioned, this is due to lower prepaid income in Norway, entirely calendar effect.

Maintenance CapEx as a percentage of sales was 1.8%, and this is the same level as last year. We saw a somewhat higher level in '21, '22, where we had CapEx related to the new campuses that we opened last year.

Page 14. The financial position remains strong. Net debt, excluding IFRS 16, was in line with last year, SEK 1.3 billion. Leverage ratio, including IFRS 16, was lower than last year and well below the financial target of less than 3. Net debt, including property-related lease liabilities was higher than last year due to expansion in capacity and growth.

Lease liabilities also increased from January 2023 due to indexation of rental costs adjusted to SEK 400 million. And leverage, including lease liabilities, was [ 0.4% ] in line with last year.

And with that, I would like to conclude, Page 15, financial performance versus target organic growth at 6.5%, which is within our target adjusted EBIT margin of 6.1%, which is below target and the target on capital structure is met. The Board is proposing, as we earlier communicated, the dividend of SEK 1.75 per share, which is unchanged from last year.

And the Board is also proposing a voluntary share redemption program of not more than SEK 275 million with the intention to determine the redemption amount to a maximum of 30% above the volume weighted average share price. And this program, the proposal is that it will take place in February, March 2024 after the announcement of the second quarterly report. And with that, I would like to open up for questions.

[Operator]

[Operator Instructions] The next question comes from Stefan Knutsson from ABG.

[Stefan Knutsson, analyst]

I have a few questions. First, on the Upper Secondary profitability. Can you just go into more detail what has changed since Q2 to explain the drop in profitability year-over-year as you also had a lot of -- quite a lot of tailwind from higher utilization here in the quarter.

[Katarina Wilson, executive]

So the underlying effect of this margin decrease is, of course, that the school voucher, especially in Stockholm, 1.8% will not really compensate for the inflation that we see now. And what's different in this quarter compared to last quarter is that we also have the salary revision and it's only SEK 5 million that is impacting the quarter. But because this is a small quarter, of course, this is coming through in a big way.

Also, we were saying in the last quarter that we had good cost control and we did. And quarter 1 is a quarter where we do some purchasing for the new school year and of course, with inflation that is also impacting. But [indiscernible] we saw last year that the school voucher apart from Stockholm was pretty much compensating for cost increases, and that's what we are assuming that we will have the same effect in January.

[Stefan Knutsson, analyst]

Okay. But I think it's incorrect to refer to the 1.8% in school voucher as you have said that it's 3.9% as an average for the whole segment. So that's a reflection there. But shall we interpret this as it will get even worse next quarter then because you will have a full quarter of salary revisions?

[Katarina Wilson, executive]

We will have 3 months of salary revision, that's correct.

[Stefan Knutsson, analyst]

And for next year, when do you expect the salary revisions to take place as normal in April or?

[Katarina Wilson, executive]

Yes. It gets to come back for teachers always.

[Stefan Knutsson, analyst]

Okay. Okay. Perfect. And going on to the Adult Education segment then...

[Marcus Strömberg, executive]

Let me just comment on the salary. Yes, excuse me, Marcus here. You, just to comment on that. Last year, the salary revision was 2.2 [Audio Gap] this year, it's 4.1. And next year 2024, it will go down a little bit. So it was the new agreement. So you should keep that in mind. And also, if you look at the school voucher, voucher will also be affected because the municipality also increased the salary in the same range.

[Stefan Knutsson, analyst]

Yes. But I think that you will not expect a large positive deviation next year. You indicated 3.4% up on the school voucher here in the quarter.

[Marcus Strömberg, executive]

Yes, yes. But that is very more positive than it was last year. And we have very big schools in the Stockholm area, and so we run the business quite effective. So -- but the problem for this quarter is that the salary -- that the school voucher was just 1.8% this year. .

[Stefan Knutsson, analyst]

Yes. Okay. Perfect. Then on the Adult Education segment and the -- was there any temporary drivers for the profitability here in the quarter?

[Katarina Wilson, executive]

Well, we see the profitability, especially in the municipal business area really going up, and this is related to the cost-cutting measures and the restructuring programs that we did perform last year. So this is all according to plan.

[Stefan Knutsson, analyst]

Okay. Because I'm quite surprised by your guidance then on approaching 9% to 11%. It looks like, given the strong start, that it should be very reachable.

[Katarina Wilson, executive]

But I think I tried to say that quarter 1 is a seasonally small quarter and you have effects from vacation. And so this is impacting the quarter. And this is similar to last year. We also had a very strong quarter 1 last year. It's a similar seasonality.

[Stefan Knutsson, analyst]

Okay. Perfect. And then just a last question on free cash flow generation. What is happening there? It looks like you're tying up a lot more working capital these days. I mean, the trend for free cash flow generation as a percentage of EBITDA has come down for 2 years in a row now.

[Katarina Wilson, executive]

Working capital in this quarter in particular, it's related to Norway and it is entirely a calendar effect. So I'm hoping that it will jump back next quarter. And quarter 1 is usually a negative free cash flow quarter.

[Operator]

The next question comes from Karl-Johan Bonnevier from DNB Markets.

[Karl-Johan Bonnevier, analyst]

Just to come back to Adult Education first. When you look at the restructuring, you are down on the municipal side. Do you feel that you are more or less through it? Or given the kind of volumes, you see for the moment or is there more to come?

[Katarina Wilson, executive]

I think we always have to be agile when it comes to Adult Education. That's the nature of the business. For now, we are through it. But we're trying to always comment on the fact that the market economy can change and unemployment can go up and down quickly. So we are always ready to scale up or scale down when needed. But for now, we are through it.

[Karl-Johan Bonnevier, analyst]

Good to hear. And looking at the acquisition of Berghs School of Communication, what kind of synergies can you normally get out of that kind of operation? Because I guess it's a decent-sized adult education operation, but looking at profitability over the last year, I've seen they've struggled.

[Marcus Strömberg, executive]

So they have struggled a little bit with the rental contract. They have entered a very nice, a very beautiful building, but quite expensive. And they didn't have any synergies. We run a lot of different businesses in Stockholm. So I think we can find synergies when it comes to this. And we also think that when it comes to our, what we call [ Berghs School ] where we run 12,000 students for the moment, is also a possibility for us to use this brand in different ways to improve our position in both private paid education and also in Berghs School of segment. And that is very important for us.

[Karl-Johan Bonnevier, analyst]

And when you look at the high vocational side, this year is still going to be a growth year for you in total looking at that?

[Marcus Strömberg, executive]

Yes. We are at all-time high this quarter.

[Karl-Johan Bonnevier, analyst]

And then just to get your feel for it on a more high level. When you look at the ongoing cost inflation and the kind of voucher price increases you have indicated and the potential you see for maybe efficiencies in your operation, increasing occupancy and so on. What kind of natural kind of margin impact would you expect for the full year this year? I appreciate that Q1 is a seasonally small quarter for you.

[Marcus Strömberg, executive]

It's a small quarter, but we have looked into the school -- it's very early stage when it comes to the school voucher. But so far, it looks like the same as last year that we will be compensated for the inflation. And we think it's a good move from the Upper Secondary in the Stockholm region. And when it comes to Compulsory Schools, it looks like 5% up in Stockholm and that is a good indication.

[Karl-Johan Bonnevier, analyst]

So the full year, basically a balanced situation when you look at it.

[Marcus Strömberg, executive]

That is what we look at. But as I said, it's quite early so far. It's quite early. This is just what we indicate when we look at the municipality budgets. But as you see, we also see that we are some under compensated by the municipalities. We have just made an investigation that showed that we are maybe 10% to 15% under compensated. So we are also working on the legal side to get the right compensation that our children and students should have.

[Karl-Johan Bonnevier, analyst]

Good. And good move also, I guess, by the Board to suggest this redemption program, even though I still think it's a little too complicated process given that share buyback should be so much easier to enforce and drive and maybe less costly as well. But when you look at the redemption program, is it -- are you planning to do it program, so to say, redeeming real share? Or are you looking to do it as a synthetic program issuing, say, redemption shares and then canceling them back?

[Katarina Wilson, executive]

Yes, the program will, in the end, if it's going to plan and if it's agreed by the AGM reduce the number of shares.

[Karl-Johan Bonnevier, analyst]

It's going to be like, say, 1/5 of the share are potentially going to be redeemed or something like that. That depend on the...

[Katarina Wilson, executive]

Yes, something like that.

[Karl-Johan Bonnevier, analyst]

Sounds like a good move given the strength of the balance sheet and the ongoing cash flow of the operation, I guess. And if you look at this year from an investment perspective, is there any big things that you see are coming up with the kind of plans you have for maybe next year, school starts or anything like that, that we should have in mind?

[Marcus Strömberg, executive]

So we have done a lot of acquisitions so far and maybe something more will happen. But the plan now is to continue the organic growth in Germany and to improve the -- and increase the profitability in Germany and maybe to do something more when it comes to Compulsory Schools in Germany and also to develop now the business in the Netherlands. So we will make some organic moves in the Netherlands and then to continue and strengthen the quality and profitability in Sweden.

[Katarina Wilson, executive]

And I think you also mentioned Marcus that we -- because the campuses that we opened a year ago has been really successful and very good capacity utilization. We're also looking at starting more campuses around Sweden.

[Karl-Johan Bonnevier, analyst]

And when you look at the campus strategy, Katarina, how many cities would be able to cater for that looking at your structure?

[Katarina Wilson, executive]

Well, I mean, we're mostly speaking of the 2 we opened in Stockholm last autumn, but we already have campuses in other cities in Uppsala and so, of course, it's the biggest cities that we are focusing on.

[Marcus Strömberg, executive]

What is very interesting to see that this has really impacted our market share in Stockholm. Stockholm is a very important market for us. 50% of the children go to private operators and 25% of them go to us. So every fourth student in Stockholm go to AcadeMedia school.

And what we see now is that we have taken market shares both from the municipality and from our competitors. And we think that, that is a result that we have invested in the campuses. We have invested in quality. So -- and I think in the coming year, it will be a battle around the best quality. That will increase the market share and that will also increase the profitability.

[Karl-Johan Bonnevier, analyst]

Good to hear and all the best out there.

[Operator]

The next question comes from Beltran Palazuelo from DLTV.

[Beltran Palazuelo Barroso, analyst]

I have 2 questions, if I may. First of all, I know it's still very early regarding the vouchers but regarding, let's say, the increases you expect. So just to maybe a little bit of negativism in all the questions I'm hearing. So with the vouchers you're expecting, you would -- would you expect to be reasonable to have some margin expansion from last fiscal year? Or you think it's not reasonable? That is my first question.

And then my second question -- congratulations, I think, for, let's say, the share buyback or the redemption how you want to call it. And just to better understand here from Madrid, it's a bit more difficult to understand. How has this decision come? Because as I understand, let's say, the biggest shareholder was more, let's say, focusing on, let's say, organic and inorganic expansion of the business and was not willing to, let's say, to give capital back apart from the, let's say, from the dividend. So how has this decision come? How was, let's say, the rationale in the Board meeting? And maybe so we can have more information.

[Katarina Wilson, executive]

Thank you, Beltran. I will start with your first question. I think it is too early to say anything about margin expansion related to the voucher. We still don't really have any decisions on school vouchers. This is very preliminary. This is really early. Usually, we communicate this much, much later. But it's something we follow closely. And the system proved to work well last year.

Most [Audio Gap] fair school voucher, and it did compensate for the cost and this is what we're seeing again this year. So it's too early to say something about that right now. I don't know the share redemption program, how the Board made that decision. I don't know if that's a question for us really. But Marcus?

[Marcus Strömberg, executive]

Maybe it's difficult, but I don't how you answered it, good thing because this is a way for us to invest in ourselves. And now it is optional for the shareholders to take cash from their shares. And the price will be 30% above the price that we will have when we go into the program. So because it's voluntary. And I think it's a good and quite easy program to understand. And hopefully, it will work out in a good way. And if it works out in a good way, it will be a possibility for AcadeMedia to use this also in the future. So it will be possible for instance, for Mellby Gård, you can ask them yourself, what they will do. So it's a possibility for them if they want, they could increase their ownership or they could sell shares. And that is the same for all of the shareholders. And this will also reduce the number of shares, which is also positive. So when we have looked into this program, we think it's a quite good way for a company like AcadeMedia to give it like a voluntary option for the shareholders.

[Beltran Palazuelo Barroso, analyst]

No, no, totally agree, Katarina, Marcus, I think it's a fantastic decision. It's a decision that I think it should have been done earlier, but we're expected later than never. But I totally support the decision as a long-term shareholder. Just how does this come out because if I'm not wrong, in the last, I think, AGM, there was, let's say, a couple of shareholders pushing for a share buyback and at the end, nothing happened. So why did this happen? Well, it's positive. And yes, I think -- yes, thank you for answering.

[Marcus Strömberg, executive]

Just a short comment on that because when we had the annual meeting, last year, it was still quite uncertain what would happen with the voucher. But the voucher developed quite well last year. We think it will do the same this year -- the coming year. So maybe that has also changed the situation a little bit. And in fact, we have a very strong balance sheet and the Board also think that the share price is undervalued.

This is a way to show that they think that the share price is undervalued. And because if we have the right share price, it's also a possibility to use AcadeMedia to use the share when we do some more international expansion. So I think that has been the background to the discussion.

[Beltran Palazuelo Barroso, analyst]

Great. Very useful and all the support for the coming fiscal year.

[Operator]

[Operator Instructions] There are no more questions at this time. So I hand the conference back to the speakers for any closing comments.

[Marcus Strömberg, executive]

So thank you very much for your time. We wish you all a good day. Thank you.

[Katarina Wilson, executive]

Thank you. Bye-bye.