Skanska AB

STO:SKA B

Earnings Call Transcript 2024-Q1

[Antonia Junelind, executive]

Good morning, and a warm welcome to the presentation of Skanska's First Quarter Report for 2024. My name is Antonia Junelind. I'm the Senior Vice President for Investor Relations here at Skanska. And here to present to you the main events, operational financially from the first quarter is our President and CEO, Anders Danielsson, and our CFO, Magnus Persson. They will provide their first presentation. And after that, we will move over to questions. We will open up for questions for those of you that have gathered here in the room for us, but also those of you that are joining us online. And we will then recommend that you use the HD audio link to call to us and ask questions. But we will get back with more information on that. So with no further ado, I then leave it to you, Anders, to start with the presentation.

[Anders Danielsson, executive]

Thank you, Antonia, and welcome everybody. It's good to see you. Before we start, I wanted to look at the picture here of a beautiful building in Seattle. It's called [indiscernible], and it was also here that we had our record lease earlier this year.The first quarter for 2024, it's a mixed performance. We have construction with somewhat lower results, but we do have a strong order intake. Residential Development, we can see increased sales compared to last year, but it's from low level still. Commercial Property Development, no divestment in the quarter recorded. We have improved the leasing that is helped by this lease we made in Seattle. Operating margin in investment properties, solid performance. So no transactions in the quarter. Operating margin in Construction, 1.8% compared to 2.8% in last year. And return on capital employed in project development overall is negative due to the write-down we communicated in the fourth quarter last year.The same for investment properties, we took impairment charges in the fourth quarter there as well. Return on equity is also impacted by that. Of course, the rolling 12 number is 5.9%. We do maintain a robust financial position that is essential for the company and really important for us going forward as well. Carbon emission, we managed to reduce those with 58% if you compare to our base year 2015. If I go into each and every stream now, we start with construction. So the revenue is slightly below last year, but pretty much in line. The order book is really strong. SEK 47 billion. And we have a book-to-build of 117%, which is on a very good level. So the order backlog is on record level right now over SEK 250 billion, really strong. Operating income, SEK 670 million lower than last year, giving us an operating margin of 1.8%. We have a strong order intake mainly from the strong U.S. operation and also the Civil operation in Norway. The order backlog is high, as I said, and the result in the quarter is impacted by costs related to a U.K. project that we won 10 years ago and we have done a thorough analysis of that project and taken the impact of the consequences and write it down with SEK 370 million. Rolling 12 months operating margin was 3.3%, slightly below our target of 3.5%. If I go to a residential development, revenue has increased. We have SEK 2 billion in Swedish in revenue in the quarter. And that's because we have sold more apartments of course. So we have seen an increase from a low level, though, but it's encouraging to see that it's starting to go in the right direction. And we also managed to start more projects since we have sold more as well so that we try to keep a good balance between those. Operating income, SEK 23 million, and return on capital employed was negative due to what I just said. So increased volume still from low level, but we can see that the strongest market here continues to be Central Europe. We also took losses in our low-price segment book look of SEK 146 million in the quarter. So if we exclude the book-look operation, we had a healthy operating margin of 8.9%. So we can see the underlying performance in our residential development operation is on a healthy level. Going to Commercial Property Development. We have operating income negative SEK 166 million in the quarter. We had impairment charges here of SEK 156 million related to the U.S. project and the return on capital employed gives us a negative 2.6%. 21 ongoing projects corresponds to SEK 27 billion upon completion in total investment, and we have 73% leased. We have completed 22 projects, and that is equal to SEK 12 billion in total investment. So there are a lot of good projects to divest in the future. No divestment probably starts in the quarter, and leasing activity was solid total 70,000 square meters and again, a record lease here in Seattle earlier. Investment properties, no investment during the first quarter and a stable performance and a solid operating income of SEK 50 million. And we have an occupancy rate at 91%. So that is on a good level. We are, again, targeting high-quality office building and the 3 largest cities in Sweden, and the ambition is to build up a portfolio of between SEK 12 million to SEK 8 billion due for some years. And moving back to construction now and look at the order bookings. You can see the blue bars that represent the order backlog quarter-by-quarter. You can see the different lines here on the order bookings rolling 12, the gray land revenue on the green line rolling 12, and book-to-bill percentage-wise on the yellow line. So here you can see the development over time, over some years, and we are on a historically very high level here. And if I look into the geographies, it's more of a mixed picture. We have, overall, a strong book-to-build over 100%, 113% totally in the Nordic, but that is driven by the strong Norway civil market, Norwegian civil market. You can see here, Sweden is slightly below 100%. We have a weak order intake in Europe in total, 76%, but very strong in the U.S., as you can see, 135% book-to-bill. So overall, 19% month of -- 19 months of production in the backlog is on a historically high level as well. With that, I hand over to Magnus.

[Magnus Persson, executive]

Thank you. So we'll start with the P&L for the construction part. Top line, we decreased revenues with 3% quarter-over-quarter, and that's in local currencies. We had a gross margin of 6.2% compared to 7.2% same quarter last year. And the difference between the quarters in terms of gross margin is basically all explained by the charge we take in the U.K. here. So if we exclude that, we're performing at the same level as last year. And I have to say, overall, the construction portfolio is continuing to perform at a very high level. We have the stability that we have been looking for and that we have developed over some time. So quite pleased with that. S&A, you can see, 4.3% well under control. And then the operating margin, 1.8% is basically a consequence of gross margin and S&A then. Looking at different geographies. Nordics came in at 3.2% margin. So up a bit then from the same quarter last year and Sweden is flat at 2.3%. So stable performance there. And then we have the European part, and this is, of course, where we find the charge from the U.K. project there. As Andres has already said, the background to the charge, it's a contract that we bid and won for 2014, and is 10 years back. The risks in this contract are of a kind that we do not or we have not mandated our organization to bid for jobs like this today since we enforced a new stricter bidding regime in 2018. So this is very much a legacy from the past that comes up now. And unfortunately, it takes us now in this quarter, and that's sort of the background to the charge here. And if we look in the U.S., 3.3%, still performing very well, slightly lower than the same quarter last year, but there's no read-through in that normal quarterly variation. Or if you look on this on a rolling 12-month basis, we are now at just above 4% margin in the U.S. And of course, it's very pleasing to see that we have such a strong financial performance in our strongest markets, where we're also successfully booking a lot of new jobs. If we look at residential development, a fairly big change in revenue here, moving up to SEK 2 billion from around SEK 600 million in the comparable quarter. And it's not a super good market today either, but it's quite clear that the market is improving. We are now selling units again to a slightly higher pace. So this is very positive, and it's indicative of course, in the revenue numbers and in the sales figures, you will see a little bit further on them. Gross income, SEK 165 million to 8.2% gross margin. And this is weighed down also by the losses that we have in our low price offering to the market, that's called the BoKlok product that we have. S&A, 7%, of course, too high to be stable for us. But if you look on the nominal values here, we have around SEK 140 million in S&A. We have quite successfully taken down the sort of structural costs in the organization to meet an expected lower market there. So I think we'll handle this in a good way and we will continue to adapt where we feel the need to do that. And then operating margin, 1.1%, and the operating income of SEK 23 million, that should be.Look at different geographies. Essentially, none of the geographies are performing financially, but it is all due to the BoKlok losses here of SEK 146 million that impacts all over the place here. They are present in all the different geographies. And the majority of the costs from BoKlok comes in the European part. If we strip out the effects from Boklok you can say we are at a stream level performing with a gross margin of around 12% to 13% with a bit higher in the European part and a bit lower in the Nordic part. And this is, of course, quite important for us and also, of course, to communicate that when we sell units to the market today, we can achieve sort of a decent profitability on that given the costs that we carry with us we go into the projects. So a lot here in terms of the financial results has to do with our low-price offering. Homes started and sold. We sold 511 homes quite a lot more than last year, 130 we started with 459 new homes, which is also not fully double the amount of the comparable quarter, but quite close. So you can see us, we managed to sell. We also feel confident that we can start a bit more new projects, which, of course, is good. And you can see in the graphics on this slide also in the chart, the sales and the start curves are starting to turn and move in a bit more positive direction. So that feels quite good. And of course, we hope that this morning's announcement from the Swedish Riksbank will also be further positive to the housing market in Sweden. Effects, of course, are not to be seen yet, but in the coming weeks, we will hopefully, be able to see how that reads through into the market. If we look at homes and production, we had 3,700 homes in production at the end of the quarter, significantly down then since 1 year back, which is not so strange with the low sales. We have not wanted to start a lot of new projects. Of this, we have sold already 51% and had 772 units that were completed but not yet sold. Of these 770 units, 370 of them belong or are sort of part of the low-price offering in BoKlok. So that's a majority of what is lagging in terms of our sales here. And it is still so that, that part of the market is and has been hit the worst by the current situation on the housing market. You can also see here in the chart that despite that the sales rate is sort of low, the home ton production is coming down, we still have a significant amount of units to offer to the market to see that you can simply add up the light blue part and the green part of the bar here which is comfortable as we see and hopefully, the market will sort of continue to improve a bit going forward, it's important to have an inventory to offer from, then you can sort of capitalize a bit quicker on any changes to the market. Commercial Property Development, a very silent quarter. We made no transactions. We booked a gross income of SEK 31 million and then S&A of SEK 195 million takes us down to a loss on the operating income level of SEK 166 million. In that, you can say that we had a write-down or impairment of one asset in the U.S. in the isolated quarter, driven by an overall sort of increase of expected yields in the market, but also in the specific properties case, sort of a change in leasing expectations in that micro market that has led us to make this impairment. But no transactions in the quarter. If we look at unrealized gains, they're roughly in line with last quarter. We are SEK 300 million lower coming down a little bit. And in that, we, of course, have some growth impacts, whereas I just alluded to in the U.S. part of the portfolio, we have due to the changes of the interest curve in that market, decided to up the yields a bit, which leads to a change in the surplus values of the U.S. properties to the tune of SEK 600 million. But then we have some positive effects actually in the same respect for some Nordic and European properties, where we increased the surplus values based on the market outlook and also current discussions with potential investors. So that's positive. And then we have the realized gains, which you can see on the orange line here that are having around SEK 1.5 billion to SEK 2 billion on a rolling 12-month basis. The completion profile, we had at the end of the quarter, SEK 12 billion invested in properties that are completed but not yet sold. These were leased to 74%, 73%, which is roughly in line in the terms of leasing with what we had in the fourth quarter. So not a lot of change in that. We completed one property during the quarter that moved into this bar here. Then you can see we expect to complete in Q2 properties for close to SEK 2 billion and closer to SEK 3 billion in the third quarter and then a fairly large bar, a large amount of expected completed investments in the fourth quarter. And those of you who follow us and remember the fourth quarter report, you note that this larger bar was actually placed in Q3 when we presented the fourth quarter results. So we've had delays in 3 U.S.-based projects in terms of when they are expected to be completed. And it's a mix of reasons. It's delays in some of the supplies. We have been hit by a strike in one of the cities, and we also have to make further adaptations to accommodate tenants. And when you have this situation where something is expected to be completed close to the end of the quarter, it only requires a few weeks of slippage and then you end up in the next quarter. So that's the reason. There's no sort of structural change to it, just move between quarters there. And these are now leased to 51%, those that we expect to complete in Q4.  In terms of leasing, we leased 70,000 square meters in the quarter. Of that, we had this major lease that took up in the property that was to 50,000 square meters or loan in Q1. And we are on a rolling 12-month basis, which is sort of the best way, I think, to look at leasing also now leasing around 240,000 square meters. So it is improving. But the status of the leasing market remains the same if we look across our different geographies, with the European parts still being the strongest. After that, we have the Nordics. And then we have the U.S. market that is still considerably weaker than the others here with a return-to-office trend that is going quite slow, to be frank. Investment properties, well-performing properties. So there's not a lot of things that are sort of happening every quarter here. We booked an operating income of SEK 50 million in the isolated quarter, made no changes to the expected market valuations and the occupancy ratio on the average for the portfolio remained at 91%.If we look at the whole group, then we had the operating income from our business streams of SEK 576 million. And then we have the central stream, including the headquarters that comes in at minus SEK 160 million quite a lot down then from the minus SEK 159 million last year, but this is more due to a periodization effect. So those of you who sort of try to forecast where we are with this, I can assure you, there's no structural change to the costs in the central stream here. It's just a movement between different quarters, even if the Q1 comes in quite low here now. Net financials goes up to SEK 225 million. And the whole reason for that is essentially that we are able to place our access liquidity in a more favorable sort of interest rate climate. So we get better paid for the excess liquidity that we have. That explains the uptick here. Taxes, SEK 197 million, and a tax rate of 27%. Unusually high for Skanska and the background to this is that we've had over the last few years, sort of in several markets, slightly increasing nominal tax rates. But this has not been seen too much in our numbers because we are normally so heavy profit-wise on selling properties in the Northern countries and especially Sweden, that is a very tax-efficient way of sort of earning our profits. In this quarter, we don't have any such divestments. So the whole nominal effect here comes right through into the P&L for us, which is why that explains the sort of majority of the high tax rate there.Cash flow. We had a cash flow in the quarter of minus SEK 4.9 billion. And inside that, you will see that we have slightly lower net investments, nothing strange with that because we have started a few new projects over the last year or 2. And at the same time, we're working hard on divestments here. So that is coming down. But then we have working capital that has a quite substantial negative impact in the isolated quarter here, and I will come back to that. So minus SEK 4.9 billion in the quarter. And then we come to working capital. We had SEK 2.7 billion negative cash flow from working capital from construction in Q1. It's an unusually large sort of cash flow impact from that, and I think it warrants an explanation. But if you recall, in the fourth quarter, we had a quite substantial positive impact from working capital then. As many clients sometimes would like sort of to advance certain payments before they close out their financial year. Then in the first quarter, we sort of have to pay that back by doing work to a lower pace of invoicing from our end. So what comes in, in the fourth quarter sort of goes out in the first quarter. So this large part of the flows that you see in Q1 is a consequence of what happened in the fourth quarter. Overall, in terms of working capital, if we stretch out a time perspective a little bit, we still have the same observation as we have communicated over a number of quarters now that we are slowly, slowly sort of moving down in the free working capital level in the company. It is becoming harder to negotiate the front-loaded payment profiles for us. We still do a very good job with it. But this is probably attached also to the fact that money is associated with the cost these days also for the clients. So still a high level here. But as you can see, this is very slow, but still noticeable trend downwards that we are keeping our eyes firmly appealed on to be able to handle that in a good way. Investments and divestments. Here, you can see that we are moving from being deep down in net investment territory now into becoming more neutral. The green line here is approaching 0, which essentially means that over the course of the last 12 months, we have invested as much as we have divested them. In terms of capital employed in our property development and the investment property streams, we closed the quarter at SEK 65.2 billion, up then from SEK 60.2 billion in the fourth quarter. We had SEK 22 billion or SEK 21.5 million in available liquidity at the end of the quarter. And of that, SEK 9.4 billion was constituted by credit commitments from banks and third parties. This was -- we have of that around SEK 9.8 billion is financial liabilities that we have external debt, that is sourced 50% approximately from banks and 50% from the credit markets. You can also see the maturity profile that we think is well assessed against our own capital commitments over the coming years.Finally, financial position. We closed the quarter with SEK 56.7 billion in equity and SEK 4.6 billion in net cash and an equity-to-asset ratio of 35.3%. So we remain with a very solid financial position, noticeable in terms of capital and liquidity, something that is very important with the line of business that we're in. Anders?

[Anders Danielsson, executive]

so I will go through the market outlook. And if I start with construction, is mostly in line with the previous quarter. We have improved one of the building markets, and that is Central Europe, and we can see increased activity in residential construction, but also some encouraging signs from the industry there. So that has increased. U.S. remains the strongest market definitely together with the Norwegian civil market. Residential Development, we have seen increased activity, which is encouraging. And I expect that to continue if we see a lower interest rate, but it is from a very suppressed level. So our outlook over time is still a weak market, even though we see signs of improvement. Expected recovery will take time, and that's due to cost of living pressure. And we also have, as you've seen, impact on our low-cost or low-price segment that is expected to continue. Commercial Property Development. Same here, the outlook is still weak. Low transaction volume hesitant investor market. We can see that interest rate cuts and improved access to funding could improve and stimulate the market over the next 12 months remains to be seen. And the Nordic Central European leasing market is mostly stable. The U.S. leasing lagging a bit due to the back-to-office is still lower than the comparable figure in Europe. Investment properties, polarization in the occupier market is still there. The demand for high-quality spaces is really clear, and we can offer that, of course, because we have the right location, high-quality building, and the rents are expected to remain stable here. So if I summarize this performance in the first quarter, residential, lower result, very strong order intake. Residential development, improving volumes, but from low levels. Commercial Property Development, no divestment recorded. We have seen improved leasing and solid performance in the investment properties. And very important here. We are maintaining a robust financial position. So I hand over to Antonia to open up the Q&A.

[Antonia Junelind, executive]

[Operator Instructions].

[Operator]

[Operator Instructions]. Our first question comes from Graham Hunt with Jefferies.

[Graham Hunt, analyst]

I'll just ask 2. The first one on U.S. construction. Just interested to see how you're seeing the margin profile of some of the order intake that you're getting there. I think one of your competitors in Europe is guiding to an improving margin outlook in the U.S. specifically. I just wonder if you're seeing a similar outlook in your order book and operations there, especially with some of those data centers coming in. And then second question, could you just help us understand how to think about these commercial revaluations upwards in Europe and the Nordics? How should we think about that in terms of your ability to sell those completed properties? And what is it that's holding you back from closing transactions there if you're seeing values actually increasing on a mark-to-market basis?

[Anders Danielsson, executive]

Okay. Thank you, Graham. I will start with the first question regarding the U.S. construction operation. We have seen over time that the quality in the backlog has improved significantly. If you go 5, 6 years back, we had a lot of dead revenue in the backlog, and that's sort of completed those projects. And so the quality is much higher now, and we perform on a very high level. I will not give you any forecast about the future order intake, but I'm very confident with the quality in the current one. And the second question, Magnus.

[Magnus Persson, executive]

Graham, this is Magnus. In terms of the revaluations, I mean it's quite simple, actually, it's based on discussions that we've had with potential investors. That's essentially it. And it's not immediately transferable into imminent deals closing a property transaction, these days can take some time, obviously. But that's the whole background to it.

[Operator]

Our next question comes from Arnaud Lehmann with Bank of America.

[Arnaud Lehmann, analyst]

I have 2 questions, if I may. Firstly, on U.K. Construction. You had this write-off in the first quarter. Is the project now completely derisked at those levels? Or is there a potential for more write-offs going forward? That's my first question. for U.K. construction? And secondly, on the working capital, you mentioned it was very positive in Q4. I know you have the reversal in Q1. Could you give us an indication of what to expect for working capital for the next 6 months and potential implications for your net cash position?

[Anders Danielsson, executive]

All right. I will start with the first one, and Magnus will take the second one. U.K. construction, this is an isolated project we won 10 years back. We have been taking on some risks that we will not take under the current strategy. And it's getting closer to completion now. It's not completed, but we are in a position in that project that we can oversee the cost to complete, we can oversee the revenue from the project. So this is -- we have done a thorough analysis of the project. So I'm confident that we have a good position there in the books. And we took the consequences this quarter.

[Magnus Persson, executive]

Arnaud, his is Magnus. In terms of your question on network capital, we don't give any guidance like that, and it's actually pretty hard to foresee it even for a person like myself who spends a lot of time with this and has access to all the information. So I think very good guess is to just see it as it is today. And I think just to elaborate a little bit, the net working capital in construction is constituted by thousands and thousands of payment plans in all our projects. So they change or the net working capital position changes essentially only with projects with a new payment profile coming into the portfolio and other projects with a different profile exiting the portfolio when we are completed with them. So because of that, changing the net working capital position is a very slow process because it means you have to churn the portfolio of jobs. So it's quite stable. And I guess within 6 months, the best guess is just to guess the same.

[Antonia Junelind, executive]

So in the meantime, I will take one written question that has been posted from the web. So let's see, it comes from [indiscernible]. The question goes, growing so much in the U.S. and Norway, do you have the organization already in place to handle these projects? Or do you see a risk for new loss makers when needing to hire people from the market? When do you plan to be finished with the turnaround of BoKlok? So 2 questions, really.

[Anders Danielsson, executive]

The first one is it's a relevant question, obviously, since we have taken on a lot of work in the U.S. and Norwegian operations. But our strategy is clear. We only bid for a project where we can see that we have the team in place. We don't run for volume. We prioritize profitability before volume. And we definitely are selective. So we turn down projects where we don't see we have a competitive advantage or where we see we don't have the right team in place. So I'm confident that we can fulfill and execute the projects we take on. Regarding Boklok, that's mainly market-driven. We had also some supplier issues in the U.K. So it's market-driven. It will take time. Also the segment, the low-price segment that has been hit most by the slow market. It's very difficult for clients in that segment to get financed by apartments.

[Antonia Junelind, executive]

[Operator Instructions].So I will now move to the next question, which is from Staffan Bulow at Nordea. Our large share of your order backlog are projects with high-risk profiles. Should we expect more charges?

[Anders Danielsson, executive]

I would say that we are very disciplined. We don't take on projects where we don't understand the risk and all the risks that we see, we price them, we also have healthy margins when we bid for projects. So I'm confident that the quality in the backlog is much higher today than it was 5, 6 years back.

[Antonia Junelind, executive]

So we have not received any more questions in the text fill. So, operator, I will ask sort of one last time if you can see if you can put the last people in the queue through to us here in the studio.

[Operator]

Of course. We have Mr. Kuglitsch again.

[Gregor Kuglitsch, analyst]

I've got a few questions. So firstly, on the BoKlok, can you just give us a sense of what you could do here? Obviously, you're wearing losses. I think that's been going on for a while now. Are you sort of drawing? I mean, I guess the question is, can you do cost-cutting of some sort, maybe shut the U.K. or something else? Or are you just going to wear it and hope that the market comes back? The second question is, can you just elaborate a bit more on the divestment discussions you're having? I mean it sounds like there's a bit of sign of life in Europe. Maybe you care to comment also in the U.S., there's anything going on. On the working capital question, I think you've historically talked about a range of sort of working capital to sales. Can you just remind us what you think is now reasonable to expect sort of given the orders you're booking now? And then maybe a final question for construction. You've had obviously a very large intake in Q1. I think Q2 also looks looking at the announcement is pretty strong. The question to you is are those orders basically longer duration orders, in other words, it sort of gives you a longer-term visibility? Or does it also mean we should be expecting a step-up in the revenue level, I don't know, let's say, from next year onwards? Just looking at the sort of cadence of those orders.

[Anders Danielsson, executive]

I can start with the first and fourth questions, and then Magnus can step in. BoKlok, what do we do? We're doing a lot of things. We don't have the market with us, and we are having done major reduction in the organization and a reduction in cost to mitigate that and find a healthy core of the business. This quarter, we were also hit by the supplier issue. We have a bankruptcy on a supplier that supplies modules. We have taken provisions for that. So the majority of the charges in the quarter are from that provision. So that is what I can say by that. The order intake, it's a large project, obviously. And usually, a larger project has a longer duration, and that's the normal case. I'm not going to give you any forecast regarding the revenue development going forward, that remains to be seen.

[Magnus Persson, executive]

Greg, this is Magnus. Divestment discussions. I mean, obviously, we have quite a lot of divestment discussions with the different investors. Some are more advanced than others, but it is still so that the divestment market is slow, I'd say, across the board, maybe mostly slow in the U.S. than in the Nordics, and in Europe, it's slightly better. But we have some discussions that are quite advanced. And then, of course, the number of lead contexts that are being that we hold discussions and generally speaking, we work a lot with that. So lots of discussions. In terms of net working capital, I guess you're also looking for the same thing, what to expect there. But my answer to the last question is quite difficult, and we don't give an indication. The levels you are referring to are 13% and 15%. I've said them myself from calls before, but just to word a warning, there are simple averages over the last 5 years. So it doesn't mean anything in that sense, but you need to have something to put into models. I think it's wise to use some sort of average over a few years in that. I think what's most important is what we bring up in these calls that we are, we consider ourselves to be lucky and strong in this. We are at a high level, but we can also see a slow trend that it is coming down a bit.

[Operator]

Our next question is a follow-up from Gram Hunt with Jefferies.

[Graham Hunt, analyst]

Just one coming back on U.K. Construction. Maybe I understand that you've done a deep analysis of that specific project, but maybe you could just confirm that you've also looked at all of the other legacy projects that were taken under the legacy framework and you're comfortable with the provisioning on those projects as it stands today just to give a bit of comfort around the order book.

[Anders Danielsson, executive]

Of course, we've always done a thorough analysis of all ongoing projects. This one is a special project, an isolated project. We don't have that business setup or contract model that we have seen in this project that was won 10 years back, we would not accept a similar setup in the contract today.

[Operator]

[Operator Instructions].

[Antonia Junelind, executive]

So I do believe that we have reached the bottom of the line of people that have tried to call in and have succeeded. I do apologize for the technical problems during the call. If there are any questions that have been left unanswered, please don't hesitate to reach out to the IR team and myself afterward. So with that, I will now conclude this earnings call. So thank you, Anders and Magnus, for your presentation and answers here today. And thank you for joining us here in the studio in Stockholm. And lastly, thank you to those of you that have been watching online. A recorded version of this broadcast will be available on our web page shortly. And we will be back with more comments on the second quarter report in July. Until then, have a nice one. Thank you.