Inwido AB (publ)

STO:INWI

Earnings Call Transcript 2020-Q1

[Operator]

Ladies and gentlemen, welcome to the Inwido Q1 telephone conference for year 2020. Today, I'm pleased to present CEO, Henrik Hjalmarsson; and CFO, Peter Welin. [Operator Instructions] Speakers, please begin.

[Henrik Hjalmarsson, President, CEO & Executive VP of North]

Thank you very much. Good morning, everybody, and welcome to this presentation of Inwido's first quarter 2020 results. My name is Henrik Hjalmarsson. I am the President and CEO. And with me, I have Peter Welin, CFO and Deputy CEO. I'm going to you take through some highlights in the quarter, a short update on the COVID-19 status and update by business area and then a short summary of the business outlook. Peter will then go through the detailed financials, and I will wrap up with a summary. And there will, as usually, be plenty of time at the end for questions. Next page, please, Page 2. I just starting off with a brief summary of Inwido for those of you who are new to us. Inwido is the largest window group in Europe and one of the leading door manufacturers. We are a clear market leader in the Nordic region with a strong position in the U.K. and Ireland as well as a niche position in Poland and an emerging e-commerce position in Germany. We are about 4,400 employees in 11 countries, and we sell -- market and sell all the spectacular brands you'll see at the bottom part of this slide. Next page, please, Page 3. So starting off with some of the highlights of the quarter. Given the turbulent situation with regards to COVID-19, we are relatively happy to report the quarter with modest sales growth, and particularly that it's the fourth consecutive quarter of strengthened margins for Inwido. We saw increased order intake, 9% up, and strengthened order backlog at the end of the quarter, 12%. And particularly pleasingly, we saw an order intake turnaround in business area North. E-commerce continued to grow nicely at 19% in the quarter and with a strong order backlog at the end of the quarter. I'll come back to that. We saw continued strong performance in the larger Danish units with nice growth as well as profit development. A positive development in the largest unit in Finland with good efficiency and good cost control. And as I'll come back to later, U.K. was a key geography where we saw COVID-19 impact, particularly at the back end of the quarter. Next page, please, Page 4. If we look at the quarterly numbers, we saw modest sales growth of SEK 5 billion to SEK 1.448 billion, organically, that was 1% down. Our operating EBITA strengthened with SEK 3 million to SEK 48 million, which means that the operating EBITA margin strengthened by 20 basis points to 3.3%. Order intake was 9% up. And pleasingly, as I said before, not only South continued nice growth, but also North -- Business Area North continued -- or started growing their order intake. The order backlog at the end of the quarter then was 12% up. We had a nice operating cash flow of SEK 33 million, which is slightly below the SEK 50 million of last year, but we also had a more challenging working capital position to start with. So I'm overall pleased with that performance. All in all, that means that the net debt versus operating EBITDA came in at 2.3x versus 2.8x a year ago. That means that we continue to work with strengthening our balance sheet. That's a slight increase versus the end of the year. And that's, as Peter will come back to, mainly driven by currency effects on our lending. Next page, please, Page 5. If we then look at COVID-19 and the impact on the group, first of all, very pleasingly, we have very few cases where employees have been sick enough to be forced to seek care and thereby be confirmed COVID-19 positive. Our priorities have been to protect the health and well-being of our employees to limit the spread of the virus, but also importantly, to keep the businesses running. I think this testaments to the fact that we've done that pretty well. We've seen some mixed customer activity in the quarter, but nothing that we would Continue considered to be material yet. The consumer direct installation business model in Finland has been impacted by the measures taken by the Finnish government. And basically, at the back end of the quarter, the U.K. market activity came to a halt following the government directives with regards to the battle of the virus. All factories are running, except for 3 in the U.K. that we were forced to close following government decisions, and those 3 represent roughly 5% of the group's production capacity. Next page, please, Page 6. We have seen some disturbances in material supply so far, but nothing that I would consider to be material. It's been linked to Northern Italy and China. But as I said, nothing material yet. We monitor the situation daily on a business unit level, and we have detailed plans for rapid cost out if and when the demand development requires that on a business area and a business unit level. And the fact that we have a good track record of adapting our cost levels to fluctuations in demand, which is then further supported by our decentralized operations model, gives us a good possibility to manage the situation.Next page, please, Page 7. If you look at the development in Business Area South, we saw good growth and a strong order backlog. The larger Danish units, as I said, continue to deliver well with nice growth and good profit development. E-commerce grew by 19% in the quarter, which means that they were 10% of group sales. And order intake grew by 38%. So very nice to see. As I said, the U.K. business units were forced to a shutdown at the back end of the quarter, thanks to government directives. And we saw continued good development in Ireland, albeit held back slightly at the back end of the quarter by COVID-19 development. As you can see in the chart on the top right-hand side, sales grew by 9% to SEK 603 million. And as you can see in the chart on the bottom right-hand side, the EBITDA margin grew by 10 basis points to 11.0%. And the order backlog at the end of the quarter was 7% -- 17% up versus the same time last year. Next page, please, Page 8. If we look at Business Area North, it was really pleasing to see the order intake turnaround in the quarter. We saw a good profit recovery, as I said, in the largest Finnish unit. We have good work in terms of efficiency and cost control. The larger Swedish units were held back by a weak order backlog at the start of the quarter, but we had a strong order intake, and hence, at the end of the quarter, a strong order backlog in both Sweden and Finland, partly fueled by a slight continued recovery in the industrial markets. The consumer direct installation businesses in Finland were impacted by COVID-19 negatively as were at the back end of the quarter, the Norwegian business unit. As you can see in the chart on the top right-hand side, sales were 5% down to SEK 801 million. And as you can see on the bottom right-hand side, the reported EBITA margin -- operating EBITA margin shrunk slightly by 0.5 percentage points to minus 0.2%. And the order backlog at the end of the quarter was plus 9% versus the same time last year. Next page, please, Page 9. If you look at the business outlook, we obviously entered quarter 2 with a good order backlog. But I would say that the outlook is more uncertain than I think it's ever been, thanks to the COVID-19 situation. Consumer demand will be impacted by rising unemployment, but a lot of other factors, such as government stimuli, house prices, potential changes in behavior. We already see a dispersed, I would say, development of the consumer intake, and the way -- the exact way this is going to impact us going forward is going to be -- is too early to say. The -- we've seen some continued signs of industry market recovery in Sweden and Finland, but the continued outlook is very dependent on the outcome of the COVID-19 spread, which will impact likely the financial situation, but also logistics and access to labor. We see that an extended shutdown in the U.K. will impact the time of recovery there. We see an underlying demand in Ireland, which does create market potential, but obviously will be impacted by COVID-19. And we do, however, see an e-commerce segment where we expect to continue growth after the nice development we had in the first quarter. Next page, please, Page 10. If we look at the short-term focus, it will, for us, be about managing our way through the COVID-19 impact. We will continue with proactive and aggressive cost management in the face of potential changing demand. We will continue to strengthen the balance sheet as we've done successfully in 2019 to create resilience if the turbulence and the market impact increases. We will continue our investments in e-commerce growth to capture an increased potential in this situation and also build on the nice momentum we have coming out of the first quarter. And we will also work to take the opportunity to strengthen our positions in our key geographies and key segments through this dynamic market. And in essence, I would say that we are preparing for the worst, but we're obviously hoping for the best. Next page, please, Page 11. And with that, I'm going to hand over to Peter, who's going to go through the financials. Take it away, Peter.

[Peter Welin, Deputy CEO & CFO]

Okay. Thank you, Henrik. Then we go to Page #12, please. On this page, we can see the income statement for Q1 this year and also Q1 last year. And to the right, we can see the income statement for the next 12 months. Sales was plus SEK 5 million compared to last year, organically, minus 1%, and organic means that we have adjusted for currency impact. We have a slight decrease in gross margin from 22.3%, down to 21.9%. However, we have been able to compensate this lower gross margin by lower overhead costs. And thereby, operating EBITA has been improved from SEK 45 million to SEK 48 million, an improvement by 6%. Margins from 3.1% to 3.3%, 20 basis points improvement. EBITA was plus 7%, whereas operating EBITA is plus 6%. And the reason for that is that we have, in Q1 this year, a minor positive restructuring costs from adjustments from last year. If we then look further down in income statement, we can see that profit after tax and earnings per share, the EPS, is down by 83%. And the reason behind this is the currency impact. Inwido has several loans in other currencies than SEK. And with the weaker Swedish krona at the end of the quarter, we had an income adjustment from currency impact. And the impact in Q1 this year was SEK 0.59 per share. And thereby, we have a lower earnings per share this year compared to last year. If you then look to the right, we can see the rolling 12 months or the latest 12 months. Net sales was SEK 6.6 billion. Operating EBITA, SEK 648 million. And the margin is 9.8% now. Small improvement compared to end of last year, then we had 9.7%. And then earnings per share has then been reduced to SEK 70 per share and the decreased content from the currency impact. If we then turn page, we go to Page #13. On this page, we can see the sales development in Q1 2018, 2019, 2020, to the left, and we can see the order intake in Q1 '18, '19 and 2020. Sales was then plus SEK 5 million compared to last year. As I said before, slightly above last year. And organically, meaning adjustment for the currency impact, sales is down by 1%. North has a negative sales growth of 5%. And if adjusted with currency, North had sales -- negative sales growth of 6%, whereas South has an improved growth by -- or had a sales growth of 9% in the quarter. And if I adjust that with the currency impact, it was plus 7%. If we then look at the order intake to the right, we can see that order intake has been improving this year compared to last year, plus 9%. And here, we are very glad to see that both North and South has a positive order intake compared to last year. North has shown negative growth last quarter. But now in Q1 2020, we have a positive growth in north by 7% compared to last year, mainly driven by the industry markets although the consumer market also show some growth this year compared to last year. And then South, plus 12% in order take this year compared to last year. And here, the e-commerce was the main driver behind the improved order intake compared to last year.If we then turn page, we go to Page #14. This page shows the order backlog from Q1 2015 until Q1 2020. And we can see that order backlog has been improved this year compared to last year due to the higher order intake in Q1. We can see the order backlog is now plus 12% compared to last year. If you then adjust for the currency impact, order backlog is still positive. It's positive by 8% compared to last year. And as Henrik said, we have positive order backlog compared to last year, both in North as well as in South. North has a positive order backlog of 9% compared to last year and South has a positive order backlog of 17% compared to last year. The backlog of North is driven by the industry market, but we also have a higher backlog on consumer sales in North, whereas the backlog of South is mainly driven by the consumer markets. So Inwido has now higher backlog compared to last year, which, of course, is positive across the latest 6 quarters. We have shown lower backlog compared to last year, and this means that we have a little bit better start in Q2 this year compared to last year.If you then turn page, we go to Page #15. On this page, we can see the margin -- operating EBITA margin and operating data for Q1 for 2018, 2019 and 2020. We can see the margin improvement this year compared to last year, 3.3% compared to 3.1%, although we are below the level of 2018 of 4%. This year, we have a negative growth in Q1, organic growth of 1%. Despite the negative growth and lower volume, we have been able to improve the margins. We have lower gross margin, but we also have lower overhead cost. And that has compensated the lower gross margin, also compensated the lower volume. And thereby, we have a result improvement of SEK 3 million compared to last year, SEK 48 million compared to SEK 45 million, an improvement by 20 basis points looking at the margins. So Inwido has now been able to improve the margins 4 quarters in a row, even though volume has been lower during these quarters. If we then turn page, we go to Page #16. This page shows to the left net debt and net debt versus EBITDA. And to the right, you can see the cash flows from the operating activities in Q1. Net debt has increased now in Q1 compared to Q4. This is normal. Our net debt is always at lowest level in Q4 due to the seasonality. Working capital is always at the lowest level. But now in Q1, net debt has increased by SEK 120 million due to the working capital, but also due to the currency impact from a weaker Swedish krona. So net debt has increased from SEK 1.7 billion end of Q4 to SEK 1.8 billion end of March this year. So however, comparing to last year, we see an improvement. We can also see that net debt versus EBITDA is now 2.3 compared to 2.8 last year. So an improvement by 50 basis points compared to end of March last year. To the right, we can see the cash flows from operating activities in Q1. We had slightly lower cash flow this quarter compared to 2019. However, if we compare our cash flows from operating activities to previous years, we can see that we are above the level of 2017 and also above the level of 2018. And the main reason for that is our improvements when it comes to working capital. Cash flows and working capital has been a focus area of Inwido last year, and we have improved our cash flows, and we have improved our working capital. And as you can see, we are on positive cash flows in Q1. If you compare the '17 and '18, we had negative operating cash flows in Q1. So I'm very glad to see that we are gaining from our activities when it comes to our cash flows improvement. If we then compare the cash flow this year compared to last year, we must say that the working capital was too high in end of 2018. And thereby, the improvement was larger in the beginning of 2019 compared to the beginning of 2020. But still, we are above the level of '17 and '18, which is very positive. If you then turn page, we go to Page #17. This is the same page we showed on the Capital Markets Day in November last year. This page shows the main bank loans we have within Inwido. Our main banks are Nordea, Handelsbanken and Svensk Exportkredit. We also have some minor loans -- local loans within the group, but the main loans are these 3. And as you can see, Nordea will expire earlier as 2024, whereas Handelsbanken and Svensk Exportkredit will expire in 2022, both of them. So it means that Inwido don't have to go out to the financial market and make a refinance until year 2022. So no refinance this year or next year. And if we look at the liquidity, we can say that we have very strong liquidity, available funds, including the unutilized credit facilities. It's just above SEK 1.6 billion end of March this year. So we have a strong financial situation when it comes to our liquidity. And then go over to Page #18, and Henrik will make a summary. And thereafter, we will open up for questions.

[Henrik Hjalmarsson, President, CEO & Executive VP of North]

Thank you. So if we look at Page 18, a short summary of the quarter. I think it's fair to say that COVID-19 will have long-lasting consequences for all industries, also for the window and our industry. But exactly how that will impact us, it's too early to say. We continue to monitor and follow the recommendations from local authorities, and we continue to prioritize the health and well-being of our employees contributing to limiting the spread of the virus, but also importantly, keeping our businesses running. Quarter 1 has given us a good start with improved margins for the fourth consecutive quarter as well as good order intake and improved order backlog and now both in Business Area South and Business Area North. We have developed detailed plans by business unit and by business area by site for rapid cost out if and when demand development so requires. And importantly, we have a good track record as a group of adopting our cost levels to fluctuations in demand, and that's even further supported by the decentralized business model. With that, we thank you very much. And we open up for questions, operator, please.

[Operator]

[Operator Instructions] The first question we have is from the line of Adela Dashian from Handelsbanken.

[Adela Dashian, Analyst]

A couple of questions from me. First of all, you highlighted an outlook section of the earnings release that you're prepared to initiate cost-reduction measures if demand falls as a result of the virus. Could you give us some more information on what we can expect those actions to potentially look like if we reach that point?

[Henrik Hjalmarsson, President, CEO & Executive VP of North]

Well, Henrik here, I'll start and Peter can fill in. I think it's important to note that already at the back end of the quarter that we initiated considerable cost activities. And actually, a rough calculation that says that at the back end of the quarter, given the situation in the direct sales to consumer businesses in Finland and the development of the U.K., we've taken out something in an annualized -- paid something like 9% of our overhead cost and about 5% of our production cost. And we do that by -- and that's -- all in all, it's probably in the order of magnitude of SEK 200 million of costs that started to come out. Obviously, we do this by business unit and by business area, so it's very difficult to go into specifics. But we've developed plans whereby we can adopt the production capacity in all the direct labor and production costs associated with that, but also the overhead cost by business unit. And we have to say that the decisions and the possibilities given by local governments, obviously, to -- with the temporary layoffs, et cetera, is something that we then use to adopt our cost base to weather through any areas where we have impact.

[Adela Dashian, Analyst]

Okay. But did you start seeing the benefits of that already in Q1? Or do you expect the majority of it to come in the second quarter of 2020?

[Henrik Hjalmarsson, President, CEO & Executive VP of North]

The majority of that will come in the second quarter of 2020. But also, these measures have been primarily taken in the areas where we have the most considerable impact of the COVID-19 spreads. So in the U.K., we've taken out the vast majority of our costs, but also we've taken out basically all deliveries at the moment. So it's really to compensate for the state of the deliveries where we are working to take out corresponding amount of cost.

[Peter Welin, Deputy CEO & CFO]

But once again here, very small amount in Q1. So it will come from Q2 and further.

[Adela Dashian, Analyst]

Okay. Good. And then on the consumer renovation market, especially in the Nordics, I mean, it's subject more to the coronavirus here, especially the majority of your sales come from this specific segment. What are you doing to mitigate the risk further to clients in the consumer sales?

[Peter Welin, Deputy CEO & CFO]

I mean, overall, the if you look -- are you talking specifically -- I didn't catch it. Are you talking specifically about Business Area North or was that in general?

[Adela Dashian, Analyst]

Generally for the consumer sales specifically.

[Peter Welin, Deputy CEO & CFO]

Yes. So I think the -- in terms of the consumer sales, #1 key activity is actually to continue to bolster the e-commerce activity. So we saw really good development in the e-commerce segment with 19% growth in the first quarter and a strong order intake of plus 38%. That's actually probably driven by a consumer renovation -- strength and consumer renovation sentiment. The development is different by geography. We have to admit that. And what we're continuing to do is actually leveraging the activities we've done before, not only in e-commerce, but also in, for example, the installation proposition that we've developed with Elitfönster På Plats in Sweden and the consumer direct sales activities in Finland. In some areas, those activities are held back because of COVID-19 restrictions. And to face that, we focus on taking out and mitigating with costs until we can come back and work under normal circumstances. Yes.

[Adela Dashian, Analyst]

Okay. And then finally, if I may just ask about your outlook on acquisitions. I mean, I assume that's not #1 in your priority list at the moment. But is it fair to assume that the current situation will result in further opportunities to buy companies that have taken a harder hit than you have due to the virus outbreak?

[Henrik Hjalmarsson, President, CEO & Executive VP of North]

Yes. I think fundamentally, M&A, given the situation is off the table at the moment, and we're focusing on creating resilience in our balance sheet. But I think it's fair to say that the overall industry across Europe will be impacted by this. I would be surprised if we don't see some bankruptcies even in some of our key geographies. And we will also likely see more targets come available at the back end of this. But as I said, at the moment, that's not a priority for us.

[Operator]

The next question we have is from Carl Ragnerstam from Nordea.

[Carl Ragnerstam, Analyst]

It's Carl here from Nordea. First of all, I mean, looking at your order intake, it seems quite decent, as you said. Can you give some comment on both the North and South on the order intake in April?

[Henrik Hjalmarsson, President, CEO & Executive VP of North]

No. It's too early to say anything about April at the moment. So we were happy about the state where we closed the quarter and order intake weathered well all the way through -- on a total level, all the way through the back end of March as we closed the quarter. And we're obviously working to continue to leverage that, but the situation going forward is, as I think everybody will testament at the moment, is very uncertain.

[Carl Ragnerstam, Analyst]

Okay. Perfect. But I guess, April is significantly weaker than the numbers we have seen in Q1, right?

[Henrik Hjalmarsson, President, CEO & Executive VP of North]

Yes, as I said, we'll -- on the commentary, we'll focus on the first quarter, and it's actually too early also to say anything conclusive about April. But the closure -- the momentum coming out of March was still strong. What we have in April is we have an Easter impact, which came earlier than last year. And hence, we're actually not going to see the overall situation for April until we close the month. So it's a bit too early to say.

[Carl Ragnerstam, Analyst]

Okay. And regarding Denmark, the order seems also there quite nice. I mean did you see any lockdown effect in Q1 in Denmark? And what have you seen in that market, I mean, when exiting the quarter?

[Henrik Hjalmarsson, President, CEO & Executive VP of North]

I mean, overall -- from an overall perspective, not really, no. Demand has held up well. Consumer demand has held up maybe in Denmark better than almost any other geography actually. So the market has been stable for us through this, both on the e-commerce sales side, but also on the traditional business side. We obviously did see some impacts from the lockdown with higher sick leaves impacting operations, but nothing from a material or from a market perspective.

[Operator]

The next question we have is from Kenneth Toll from Carnegie.

[Kenneth Toll Johansson, Financial Analyst]

Yes. So the order book was pretty strong, I think, in the end of the quarter. How has the order intake developed compared to the traditional seasonality? Did you -- so I'm particularly interested in the second 2 weeks, call it, in March. Did you have a much slower order intake then? Or was it still strong in the end of the quarter?

[Henrik Hjalmarsson, President, CEO & Executive VP of North]

At the order intake versus sort of a traditional profile held up pretty well through -- all the way through to the end of March. So also March was positive in terms of the order development. What we have seen is we have seen a slight continued recovery of the industry market, which is, as also, as Peter said, both particularly in Business Area North. But the first is a normal profile, the order intake situation held well all the way through until the last couple of weeks of March.

[Kenneth Toll Johansson, Financial Analyst]

And you're not getting any signal from the industrial markets that constructions are being delayed or that they have problem on their side, so to say?

[Henrik Hjalmarsson, President, CEO & Executive VP of North]

The one area where we have been impacted is the U.K. and also Ireland. We have -- particularly in Ireland, we have some industry market exposure. And there actually, construction activity has been halted. In the other geographies, none so far. I think it's also too early to say. I mean operation has been kept going and the sites have worked. What is going to happen in the long run is more difficult to say. Where we have seen positive impact actually and almost considerable positive impact is on the apartments, so really the condo side. So condo renovations and sales to condo associations has been strong in the quarter, whether that's due to available capacity to actually do these renovations now that the industry market in Sweden and Finland has been a bit softer, I don't know. But there, we've had a positive impact in the quarter.

[Kenneth Toll Johansson, Financial Analyst]

Okay. And do you believe the market has been as strong? Or do you have a feeling that you take market shares?

[Henrik Hjalmarsson, President, CEO & Executive VP of North]

Yes. Our feeling is that particularly -- most particularly on the order intake side, we've been taking shares. And we think also, as we actually don't have the numbers reported from the different associations yet for the quarter, but we -- our feeling is that we've taken some share in the quarter. We have experienced from before that in a dynamic situation like this, we, as the leading player in Europe and a strong market leader in the Nordics, is a stable place to go to for your deliveries in turbulence. So we think that we have an opportunity to take some share.

[Kenneth Toll Johansson, Financial Analyst]

Also in Finland, you said that the sales and marketing model where you basically knock doors to sell and install windows or have come to a hold, and I would guess that the sort of industrial side is still running in Finland. But is there another way to get to the consumers in Finland at the moment? Could you try to push e-commerce or change the business model? Or is it just a stop?

[Henrik Hjalmarsson, President, CEO & Executive VP of North]

I think there are -- we're working across all the geographies to leverage the fact that we have -- in all our strong markets, we have positions in all the channels and routes to market. If we take an example of Finland, we have seen a challenge in terms of the home installation and direct-to-home sales model. On the other hand, we've seen improvements in the retail business there because we've done more of that business to retailers instead. And we've also seen some other activity compensate for that. So also the channel to the market, the middle man of the installers are then actually going to other types of activities, and that's generating that could be part of the explanation for the strong development on the condo association sales, for example.

[Kenneth Toll Johansson, Financial Analyst]

Okay. And then finally, one issue you usually have now in the spring is that you have to plan your manning in your plants, maybe in January, February or so. And then you sort of hope that the orders come in, in the right levels. So you haven't manning in the plants to cater for the volumes. Do you feel that your planned manning for next 2 months or so or -- is appropriate? Or do you have too many or too few?

[Henrik Hjalmarsson, President, CEO & Executive VP of North]

Well, I think, in general, I'm going to take the opportunity to actually complement the senior leaders and the managing directors, the business units have done a really good job in staying incredibly close to the situation and even more so than normally. And if we normally plan on a monthly and weekly basis, almost daily taking activity. So I think at the moment, we have actually, probably at the moment, some pockets of too low capacity. And in particular, we've done -- you've seen that the e-commerce order intake and e-commerce business developed nicely. We're straining those production sites at the moment. The industry development, for example, the project business in Sweden has been doing nicely. We're straining those capacities. But overall, I'd say that we are in line with where we wanted to be to meet the current demand.

[Operator]

[Operator Instructions] We have a question from Roland Könen from Value Holdings.

[Roland Könen, Fund Advisor]

Yes, from my side, 2 of them. First question is with regard to your industry segment. If you look at your order intake, do you see any kind of stocking of your customers, so securing doors and windows? And the second question would be on your dividend. Do you see -- or have you discussed the possibility to pay later this year a dividend if everything, hopefully, calm down? Or do you think for this year, there will be no dividend?

[Henrik Hjalmarsson, President, CEO & Executive VP of North]

So please just repeat, which segment were you referring to in your first question? I didn't quite catch that.

[Roland Könen, Fund Advisor]

To the industry segment. So I think the customer of the industry may be doing stocking of their inventory to be secured that they have the windows and doors on board.

[Henrik Hjalmarsson, President, CEO & Executive VP of North]

So to answer those questions. So to -- the question number one, no, we haven't seen that. In general, all the products that we sell, basically, 99% are made to order. So it's designated for the individual projects that where it's supposed to be installed. And in basically all cases, our customers on the project sites have no ability to store the products really. So we haven't really seen any effect like that. Whether there's been an impact in terms of how they plan their projects, so they've done window installations earlier or later, and that might have impacted, but we don't really know. So that's hard to say. If you look at the dividend question, I mean, the Board made the call in relation to the AGM to change the recommendation or the suggestion for a dividend. Whether there will be a discussion later in the year in the Board, depending on the development for an extraordinary dividend, I don't know at the moment. And actually, I would say it's too early to even have that discussion because now we're focusing on creating resilience in our balance sheet and weathering through the situation the best way we can. And we'll get to the best way to create that shareholder value with the Board when that's appropriate.

[Operator]

At this time, we have no further questions in queue. I would like to hand back to the speakers.

[Henrik Hjalmarsson, President, CEO & Executive VP of North]

Okay. With that then, thank you very much for listening in, and we thereby close this call. Thank you. Bye-bye.

[Operator]

Thank you. Ladies and gentlemen, this concludes your call for today. We thank you very much for joining and ask that you disconnect your lines. Have a great day ahead.