Afry AB (AFRY) Earnings Call Transcript & Summary

Dear all, I would like to welcome you to the Capital Markets Day for ÅF Pöyry. It's a pleasure having you all calling in. And of course, this year, our Capital Markets Day is slightly different. We will do this digitally today. And for the next 2.5 hours, it will be really, really good for us to talk about our story, our growth story going forward. We're a small team here in Stockholm now, COVID-safe, but we also have colleagues who will participate from Finland, from Switzerland and also from Germany. So again, a warm welcome to this Capital Markets Day. Today, we will talk about our growth journey, our next growth journey. So there are basically 5 key topics that we will present to you today. We will cover our position in our core markets in the key markets that we are operating in, how we see that going forward. We will talk about those segments that we are targeting moving forward. We call them transforming segment where we see secular growth. We will also today present to you basically our new growth platform when it comes to digital. And of course, we will talk about sustainability and finally, how we drive operation, basically how to make sure that we have world-class operation. That are the 5 topics that will be the main theme of the next 2.5 hours. So by that said, the agenda today, I will start for the next 30 minutes to frame a bit where we are now as AFRY, but also talk a bit about a few key topics moving forward. One of the topic is digital. That will be an essential part of our growth story. I will also cover a bit how we see the situation in our core markets. Then I will leave it over to Juuso Pajunen, who's in Finland, our CFO, and he will cover -- he will give you a financial update, but also talk about operational platforms that we have been working a lot with this year. After that, our Head of Sustainability, Marie Trogstam, will talk about our position in sustainability and our ambition to be a leader in sustainability. Then we will have a short break. And after the break, I will introduce our divisional presidents. They will talk about our transforming segments, 2 segments that we will have a strong focus in industry. So we will have Malin Frenning, Robert Larsson. We will have Nicolas Oksanen, Richard Pinnock and Roland Lorenz. All 5 of them will present the situation, and they will focus on our 4 core segments moving forward. Then we will have a summary, and we will open up for questions. And I know that there are several of you have booked one-to-one meetings starting up at 3:30. So that's the rough agenda for today, and I'm so happy that you have taken the time to spend the next 2.5 hours with us. Okay. So let's start then. And before moving into talking about AFRY, it is clear that I will say it's maybe an understatement to say that we are living in a demanding global environment. We are facing a climate challenge or a climate crisis, you could say. We have a continued urbanization that also drives a lot of needs, not the least in infrastructure. There's still geopolitical uncertainties, and we have, of course, the ongoing pandemic that has affected us all and still do. We have distracted technology fits, and we will hear a lot of them. If it's in automotive or is it in the transformation to clean energy, we can see those basically in all segments. And there is still an economic volatility across the world. So for sure, there are several sectors globally affecting all of us. However, what we see is that the need for sustainability and also using digitalization is increasing fast. We have all seen it over the last, I would say, 10 years. But I would say both -- right now, we say this is an exponential increase in sustainable and digital solution around us. And we, as AFRY, we will play a key role into that. But it is absolutely clear that for us at AFRY, 2020 became something else than what we had planned for. As you all know, we closed the deal with Pöyry, biggest acquisition in the history of AFRY in 2019, and then we moved into 2020 with our growth plans. Now what happened, of course, that in the beginning of this year, we had the pandemic hitting us. And I would say, for the first -- especially quarter 2 and 3, it had a significant impact of our business, where, I mean, we have seen the worst GDP drop in the modern time. And for us, we saw significant impact in the automotive segment and related supply chain. We had a period during the spring when it was basically a stop in that business, and that affected us a lot. And we have also seen other sectors like private real estate and infrastructure affecting us. And as you all know, we have seen a lower volume, both in quarter 2 and quarter 3 for AFRY. So when that happened, of course, we started to look on mitigation actions. First thing was actually to transform the way we work to take basically 17,000 employees from working in office, sitting with clients, working on a project at sites to distance working using digital tools. That was a big transformation, and we have done it in a good way. Secondly, we have to focus on protecting our balance sheet and profitability, especially since we saw the fast decline in our industrial segment. That meant also that we had to activate a lot of significant cost savings short term and continue to work on our long-term sustainable cost savings. We had already started the repositioning of Energy that was accelerated. You will hear more from that from Richard Pinnock and we took also more activities in the automatic segment. Robert Larsson will talk about that. And that kind of was a big part of our activities during quarter 2 and quarter 3. Now -- so that we have done this year. Now looking on our current market situation, I would say it's more or less the same as we communicated in conjunction with our quarter 3 report. We have seen a stability in the majority of our core segments, including automotive, however, from a much lower level. So that's the overall situation. But of course, the ongoing pandemic creates uncertainty, but I would say that both we as a supplier and our clients have learned to maneuver in the current environment. So our feeling is that we have bottomed out. But still, there is uncertainties, of course, related to the ongoing pandemic. So that basically frames 2020, that has been a lot for us to mitigate the COVID-19. But I feel very strong now that after a rough quarter 2 and a quarter 3 that we feel that the market is more stable and we have activated a lot of excellence. And now we are looking for growth moving into 2021. And that's basically the story of today. One thing is clear that the whole society is going through a real sustainable transformation. And for us at AFRY, we are uniquely positioned into that. And you will see as a theme of our presentations today that we are moving towards more and more sustainability in a position in how we act, but also what we do at the client side. And not only that, we all know that the EU Green Deal, they talk about investment on the size of EUR 1 trillion over the next decade. Many of those areas will drive business for companies like AFRY for us. We also see the EU Taxonomy as something that we will comply with, but we also see it as a business opportunity for us. I have also sent in our commitment letter to the science-based target, and that is something that we are working a lot on. And we have also joined the 1.5-degree business playbook. These are a few examples that Marie Trogstam will talk more about, about the position for AFRY into sustainability, but also how that will drive business for us moving forward. And I also wanted to mention that we have over the last 2 years, I would say, also set the base at AFRY with code of conduct that enables us to take on projects globally and feeling extremely solid in the way we act and how we drive those big CapEx projects. Richard Pinnock will talk about that as a part of our energy business as one example. So that's a frame of what we have done and what we are doing in the area of sustainability. That affects all part of AFRY right now. So with that said, as a part of basically working with our strategy because we have reviewed that during the spring, summer and we are presenting today, we have updated our mission. And the mission is basically the purpose of a company, why do you exist? And we're very happy to update our mission. And our mission today is that we accelerate the transition towards a sustainable society. That's basically why we exist. That's our new mission, and we are very happy about that. And that makes our new updated vision simply making future to the strong mission and a strong mission that's basically frames what we are as a company. Then, of course, in AFRY and most companies, people is everything. Our ability to attract the best ones with the best competence is key. And this statement basically frames the way we look on the -- basically, the people perspective. We are inclusive and adverse teams with deep sector knowledge. I will talk about when ÅF was founded at some 125 years ago. And when you look at the history, one thing is clear. We have had deep sector knowledge over all these 125 years. That's a part who we are, but also the fact that we are inclusive and diverse, and we see that as a big part of our people strategy. The fact that we also have rebranded and we have become AFRY for many years as ÅF has been a key for us, sorry, to position us into not the least in sustainability. And the way we attract our employers and the next generation is key. And we have been ranked very high at ÅF for many years. And last year, we rebranded to AFRY. And I'm super happy that we still are ranked high on different kind of areas. So for example, we are ranked as one of the most equal companies in Sweden 2020. We are still on a top 10 position when it comes to young professionals, for example. We are #11 in Universum ranking, we used to be on the top 3. So clearly, since the rebranding, we will fight our way back to top position. But I'm right, I'm happy that only after 1 year with AFRY, we are still ranked very high up on those lists. And interesting also is that we are actually ranked as the #1 employer when it comes to researchers in Sweden. So we have a very strong foundation, strong base also with AFRY in attracting the best employers. Now let's talk before I move into a few other facts about our company. Let's talk a bit about the growth journey. And I will not spend so much time talking what happened 100 years back, but we're a proud company. We were founded 1895, that makes us 125 years old. We became a listed company 1986, and we changed the name to ÅF in 2008. In 2008 roughly, that was also when the growth journey took off. From being a company with less some SEK 4 billion, we have, over the last 10 years, grown to be a company on SEK 20 billion-plus. We have done that through organic growth to shift through the different technology shifts, but we have also been a very strong company when it comes to acquisitions. Over the last 10 years, we have made roughly 100 acquisitions, 10 in average per year. Just only the last 4 years, we have acquired 43 companies. And it was as late as 2012 when ÅF entered infrastructure big time. At that time, the business in infrastructure was less than SEK 1 billion. So over the last 8 years, they have grown from roughly SEK 1 billion less in infrastructure, now roughly SEK 8 billion, that's SEK 1 billion plus every year. So when you summarize that. Yes. And of course, 2019 was an extremely big year. That's when we concluded the deal with -- that we joined force at the Pöyry. And Pöyry is a proud company founded 1958 by Jaakko Pöyry. And that together enable us to become AFRY. So when you summarize those years, you have said, over the last 10 years, we have had a 15% growth year-on-year. And if you just look on the last 4 years, of course, including Pöyry, we have been growing with 18% year-on-year. So it is a strong growth journey. And today, again, we will present for you the next growth journey of AFRY. Talk about Pöyry. I know that people have raised questions, how is it going? Are you done? Is it working as you have planned? And I would say, we have done a successful integration of Pöyry. Without Pöyry, we would not be able to set the management team, the organizational structure and also the AFRY culture as we are creating it right now. We committed when we did that acquisition to take out SEK 185 million in cost synergies. We delivered SEK 212 million or if even SEK 218 million. I think that's a mistake. It should be SEK 218 million. And we also set a base for SEK 120 million in 2020. We have over-delivered also on the SEK 120 million, Juuso will talk about that. We actually are at SEK 150 million today. So without the integration of Pöyry, without joining forces, that would not have been possible, and we delivered even above our targets. What is even more important is that we have with Pöyry also increased our project capabilities. And we also have a better footprint, a better mix in what we do. I will talk about that also a bit later. Not only the mix in the country perspective, but we also have a better mix towards those transforming segments that we will talk a lot about today. You will hear a lot from Richard, how we are taking on Clean Energy, our position in process industry and pulp and paper. We have gained a stronger footprint in infrastructure, and we also have a management consulting business that we did not have before. And also, we are now -- we are -- we have a platform now that we can scale in a different way. And people asks about governance, what kind of governance do you have in AFRY. I would say it is the combination of ÅF being very successful in history in the local business full P&L locally. That's a part of what we do. But on top of that, we have also gained now a structure for driving global CapEx business more centrally driven. And we are both. So we are still a decentralized company with P&L as far out as the possible for the small projects, the service business, et cetera. But when it comes to our execution on big CapEx projects, of course, we drive that in a very structured and also central way. And again, we can also scale the counter platforms in a different way moving forward because we have the size. So I would say that looking on Pöyry and acquisition, when we started to look on that, it has delivered what we wanted, and I'm actually really excited on what we can do jointly together in AFRY moving forward. There are also a lot of questions about top line synergies. And it's, of course, not easy to say this, we would have been winning stand-alone. This is coming. But these are 4 examples or products that neither of us could have taken before. We have some big projects in Finland, where we have joined forces together, also how we work jointly with our base in Sweden, our biofuel based plant. We have offshore wind in Vietnam. We have big projects in Denmark, Germany on the infrastructure, and there's another board and pulp mill in Finland. And those are only a few examples of large-scale products that we have been winning since we joined forces together with Pöyry becoming AFRY. So of course, everything is not perfect. We have a lot of work to do, but I will say on all the boxes that we looked on before we took on Pöyry, I'm really pleased on what we have been achieving together. And I will say the integration and the acquisition of Pöyry has been a success. Then if you take one step up again then looking on AFRY. Of course, these are 2019 numbers. And as I talked about before, we have taken top line hit this year due to the COVID effect on the areas that we have seen. So this -- but last year, more than SEK 20 billion in sales, 17,000 employees and we have now offices in some-40 countries. And again, it's been a tremendous growth journey that we have done. But what maybe is more important is that if you look on a few of these key targets that we have looked at. 2017, we were some-#3 in the Nordic. We are now #1. You could debate 1, 2, but we are in a top position in the Nordic. And if you look on the 70%, 2017, roughly 50% of our sales was packaged in a product. Now it's 70%. I think you will hear more from Robert, for example, that our industry division have really gone a journey from a lot of professional service more and more climbing the value chain, selling a package that can be a team delivery, but a product delivery. Today, 70% of what we sell, what we execute is packaging a product. 80%. 80% of our sales today is in the 5 countries: Sweden, Finland, Denmark, Norway and Switzerland. 2017, we were a Swedish company with some international niches. 90% of the sales was in Sweden 2017. Now we have a much better platform and also a platform for growth. And finally, 70% of our revenue today is going into those 4 segments that you will hear a lot about today. Again, 2017, some 55% was in those. Clearly, the reduction in automotive have supported that transformation. But still, this -- for me, these 4 areas is actually the foundation for taking the next step in the AFRY growth journey. Now and then people say, well ÅF or Pöyry, AFRY is a complex company. I would not say we are. Basically, we are operating in 2 segments, 2 big segments: infrastructure, industry. So that's the segment. And then if you look on our geographical position, our markets, as I said on the picture before, there are 5 countries that sticks out where 80% of our revenue goes to that as you know, the Nordics plus Switzerland. And if you look on both infrastructure and a large majority of the industrial portfolio, that's our core focus of those markets. And in those markets, we have a scalable platform. We have one-stop shop, a broad offering. Then we have also an international structure for niches energy process industry. And we are looking on -- you will hear a lot about life. Robert Larsson will talk about some interesting potential in those segments. There, we go international, and we have basically even a global structure. And then again, 70% of our revenue goes into these 4 segments. And that's basically frames AFRY. So I would not really sign off that we are that complex. And we have now with the platform we are creating, we are creating a systematic way to scale in those different both from the markets, but also in those segments. So that basically frames the journey so far, what we have created over the last years, the platform, joining forces with Pöyry. So with all that said, we also have said, besides revising our mission, simplifying our vision, we have also set a new ambition for us. And we have an ambition to become a European leader in sustainable engineering design and advisory with a global reach. That frames the ambition of AFRY. And how are we about to do that? So this, again, then is the strategic framework that I also introduced this presentation with. I presented to you who we are and I will say the foundation of us, and I talked about our ambition. And now the next coming, I will say, more than 2 hours, we will talk a lot about these 5 areas that's basically built up our growth journey ahead. How we drive growth in our core markets? Secondly, which we think is extremely important. We are targeting those transforming segments where we can see secular growth. There's a lot of changes going on in those. And we have a strong position in the clients' value chain. And those are infrastructure, food and life science, clean energy and bio industry, 70% of the AFRY portfolio. And thirdly, we have digitalization, and we have worked with that for many years, but we have now a new platform, how we at AFRY are taking on digitalization. So basically, digitalization as a new strategic growth platform. Fourth, how we take a position in sustainability. And the fifth, how we operate, how we drive our business, how we make sure that we have a lean operational model. Those 5, that's the framework of the next growth journey for AFRY. And you will hear now more about that moving forward. I will start with only 1 slide talking about the -- the core markets. And just start with a simple slide, how we have been developed and how we have taken position over the last years. In 2011, we were only strong in Sweden, also reflects, if you remember that we had a majority of the sales in Sweden. Now we are a strong -- we are top position in Sweden, Finland, also in Switzerland. We are on the top 10 in both Norway and Denmark. But clearly, we have ambition to become a top player in those markets. We also believe that looking forward, there are variances, differences between the markets. But for sure, we see there's an underlying demand for infrastructure bio-industry, clean energy and food & life sciences in the Nordic and including then Switzerland, and we also have some other countries we are operating in. So our ambition is clear. We want to become -- have top positions in our core markets. And as you can see, we are not the top 3 in all countries. And we need to defend where we already are strong. And we are targeting these transforming segments that you will hear more about. And we are now ramping up recruitment, driving organic growth. We had to protect ourselves quarter 2 and 3, but I can tell you, we are now ramping up our growth journey also organically and the M&A agenda. As you have seen, building AFRY has been a lot of M&As. And going forward, we are now ramping up M&A. Both bolt-ons but also strategic platforms. And you will hear from Juuso that also our balance sheet is healthy and strong. So we can take that now and drive that forward. So that frames, basically, how we see our position in those core countries. And again, you will hear more from our different divisional heads about that. Now I have a few slides about digitalization, AFRY digital and how we see that as taking a position in a new strategic platform for growth. It's very important to say that we are not starting from scratch in the opposite. Over the years, also through acquisition, we have created a strong foundation for digital. We have today a solid position of supplying digital professional service or project to our clients. We are helping a lot of clients becoming more digital broadly at AFRY. And we have a very strong base. We have some more than 2,000 call it, experts in digital. Many of them are organized in our Industrial Division at Robert Larsson, and you will hear a lot from Robert about digital. So for sure, a lot of our people have done a fantastic work in delivering digitalization to our client. But now we have worked together with all the divisions, and we have agreed, we will accelerate our digital journey with a new platform, a new thinking that goes across our company. Sorry. And for that, just give you a bit of a glance of what kind of projects we have. [Presentation]

So this was just a few examples of what we are doing today. You will hear more from Robert Larsson, but the fact is that we are not starting from scrap, we have a very strong base. And with all that said, we are raising our digital ambition. We have now an ambition to become the driver of industrial digitization and being the best at applying that in our core sectors. And for that, we have now set a specific revenue target. So within the next 5 years, we target to triple our digital revenue, and that will then make up more than 20% of the overall group revenue in 5 years from now. And that's an ambitious target, but we have a full commitment to deliver on that, and we are driving AFRY towards delivering that target. And why do we think that we can be that driver? Well, there are different way of seeing it. There are different sector more advanced in digital. Media, banking, telecom, I would say also automotive is quite advanced. But there are many sectors, these transforming sectors, infrastructure, bio-industry or energy, buildings even that are in the early phases. And here with our deep sector knowledge and digitalization, we can play a role helping those clients to become more digital. And we are doing that not only by driving technical solutions in some areas. We are looking on 4 perspective. How do we accelerate our offering in these core sectors. But also how do we make sure that we become more digital broadly? And thirdly, we are also looking at internal digitization how to connect our ERP all the way to our clients, becoming more internal digital and also how can we use that more in creating digital sales model, delivery and our commercial model. So over the next years, we are looking on AFRY from a whole perspective when it comes to digital. And again, I want to emphasize, we have some 2,000 experts in different competence areas, like AI, IoT, et cetera, all of them used in transforming those core sectors that we're looking at. And we have done a lot of analysis over the last month, and we feel strong that we have a good base and that we will accelerate that journey. And this is just an example. When we are looking on those sectors of kind of platform thinking that we can scale jointly in AFRY, meaning that not each division creates their own solution, but that we can create a platform thinking that we then tailor make out in each of the segments. So we see these as examples of needs in different sectors, and that's what we are planning to do. And to do that, to support that journey, we will also create something that today have the working name AFRY Digital X. And what is that? Well, it's actually a unit that will be working together with the division to scale digitalization. And our ambition is we will launch that by beginning of next year, and this is to have some 200 employees in that by mid-next year. So what's the purpose of that unit? Well, we want to rapidly scale our digital offering. How can we combine and work together. And then, of course, using a divisional and the client interface to deliver all those things that we develop. Being the engine and facilitator to enable systematic investment in digital. So we -- instead of doing it in different areas twice, we will look at it jointly. Function has come an interface towards external partners because, for sure, we will work more and more in different ecosystems with partners and to have an interface for that. And not the least, drive systematic M&A in the digital space. Those are examples of task for Digital X. But key is that AFRY Digital is everything. It's not Digital X, it's the Digital X together with the divisions where we have a lot of confidence today. So that basically frames my introduction part, where I've talked about where we're coming from, the platform and looking on the market and how we take on digital. And with that said, I will now leave it over to Juuso Pajunen, who will talk about our financial update and how we are taking on best-in-class operation. And for that, we have use Juuso in Finland. So Juuso, the stage is yours.

Thank you, Jonas, and greetings for all the participants from [indiscernible] and Finland. So I will take a couple of words on the financial update where we are and also where we are going. And few words on best-in-class operations and on the journey that we have taken, but also where we are going forward. So if we go to the first slide, basically, what has happened recently is unforeseen macroeconomic environment where now from the picture, you can see that Sweden alone dropped 8%, 9% in second quarter of 2020. And that in a way in the middle part of the European countries, for example. So we are coming from an extremely difficult macroeconomic environment. But despite that one, what has happened to us and if we see our numbers and we take a step to the next slide, we have been losing a bit of revenue. But at the same time, we are still on a fairly good level. If we look at the EBITDA line, we have been more or less flattish. You can see in the middle, the rolling EBITDA for the past 12 months, we are slightly down. But given the circumstances, given the macroeconomic turmoil, we have been faring very stable. And at the same time, despite everything that is happening around us in the world, we are improving our balance sheet position. We are at 2.0 on net debt to EBITDA without IFRS 16 and excluding the items affecting comparability. That means that if we take our financial targets, we have very well room to take the next step on growth via M&A, 0.5x EBITDA means roughly SEK 1 billion room for M&A and still be within our financial targets. And at the same time, we are in the middle of quarter 4, which is in cash terms normally a good quarter. So we are fairly strong in our balance sheet, and we have room to take the next steps. So with these months, I would like to reiterate our financial targets. So on the next slide, we will keep our financial targets unchanged. If we now take a look on those ones, growth 10%, how have been faring on these ones. 2015, '16, '17, '18, we have been right in the vicinity of the 10%, and 2019, of course, with Pöyry acquisition has been a big one on a 40% level. Our constant average growth rate is 18% for those 5 years. Then we need to remember that this 10% target excludes platform acquisitions like Pöyry has been. So those we are always making on top of the normal target. What I can say is we have delivered growth as we have been indicating and targeting. When we go to EBITDA, we are at 10% in the target level. We have been very flattish around the 9%, '15, '16, '17, '18, '19, '19 being still an integration year, and we are still more or less flattish around 9%. This is obviously then the step that we need to find our tools and medicines to take the next leap forward, no matter when. I will talk a bit further on this one in the following slides. And then the net debt to EBITDA, like I said, 2.0 at the moment, leaving quite a lot of room for M&A as we see fit and as we see opportunities in the market. So then let's go to the following slide, and let's start talking about the lean operations. What we have ongoing is a Lean AFRY project. The whole purpose of that project is rebuilding a scalable foundation to our operations. And what does it mean? For me, I see our offering and our AFRY as a house. There are 3 building blocks as the foundation at the bottom of everything. Those are transactional service centers, digital platforms and centers of excellence. These ones will create frames and structures that allow us to be lean and efficient. On top of that one, we have all the time the decentralized decision-making culture, we are not sacrificing that one. We are not changing the AFRY DNA. Decisions are being made close to the client, close to the employee in the levels where you have the best power to make the decision. So the foundation blocks should provide transparency and timely information and timely tools to make those decisions. And then on top of these foundational blocks, then we start building the divisional offering and in the end, serve our clients. And then if we think about what is the target of the Lean AFRY project? In a very simple terms, we want to break the pattern the revenue has been growing, but the EBITDA has been stable. So if you just take '14 to '18, so excluding the transformational year of '19, revenues have been growing from 19 to 14 -- SEK 9 billion to SEK 14 billion. But at the same time, the EBITDA has been more or less flat. We have been on the 9% levels. So we want to break that pattern. And then if we look a bit deeply on the following slides, what are we doing and what does it mean? The first part of the building block is the efficient transactional service centers, the back office support, however you want to call it. We have taken the first steps already from late 2018, the Pöyry deal was announced in December 10, if I recall correctly in 2018. And immediately after that month, and then on the closing in late February 2019, we have gone to the post-merger integration, realization of the cost synergies, we delivered SEK 218 million against the target of SEK 180 million. Ticked the box, done, closed, successfully executed. But we, at the same time, knew that we have long tail with IT and facilities. Now we go to 2020, 2021, already in February 2020, we told that we are targeting a SEK 120 million cost savings. What we mean can now say that we are on track. We are -- just today, the realization is not the SEK 150 million. But at the same time, we need to remember to understand that the world around us has changed quite a lot. So at the same time, what I can say is that our baseline is different than in February 2020. And our ambition is different than in 2020 February. We are pushing this one forward and that's why also I know that you would like to hear me use word integration synergies. We are fast integration. We are looking for the efficient -- efficiency and scalable platforms that go beyond the integration. And that's why we are talking about Lean AFRY rather than second wave of Pöyry integration. So what we are doing is we are building up the transactional services, but at the same time, we want to leverage our scale in the core countries. We can buy better, we can consolidate better. If you take IT, you take facilities, but also of the smaller ones, mobile phones and so on. When we leverage our scale, we get better terms, cheaper price and thus better margins. So this is what we are now doing at the moment. And then we have the second building block, digitalization, digital platforms. For me, as the CFO, ERP is the big thing. But obviously, underneath that topic, we have also AutoCAD and the professional tools that we can use better and better reap the benefits of efficiency. But from my perspective, ERP is the one that we are -- that will have the back office and the foundational impact throughout our organization. What do we target with the ERP. It is basically removing friction between businesses and thus, improving project margins. People can see these projects are ongoing, which has either resources, which has need for resources. And then you can trust corporate project manager. "I'm here," our project manager calls you, "I would need you book the hours" and everything else happens in the back office automatically. That means that we share the culture, we share the land. With a little by little, the collaboration improves and frictions goes away. Then obviously, modern tools allow digitalization, allow automatization, optimization of back office support. This work is now ongoing. In 2021, we start the implementation of first wave, and then we continue country-by-country targeting our core countries first until we have implemented the whole AFRY. This is a big journey ahead of us, but we have done it. I have done it personal with Pöyry. We have taken many of these steps earlier. And we systematically continue that work to take it to the globe. Then the third building block on the following slide are the excellence centers. So given our global presence, our footprint in the developing economies, we are in a very good position to import a bit lower-cost engineering into higher-cost countries. We have been continuously doing that one, but we have been doing it from an opportunistic perspective, from a mixed sporadic base of working within a division, very good base of working. Take process industries, who have Poland and China in the delivery centers, very strong, very integrated offering towards our clients. So -- industrial and digital solutions, same from India and China; or energy from Thailand. We have seen that it can be done. But at the same time, maybe we have not concentrated into this delivery model enough, and we can do it with the holistic view, structured base of working even better, bringing at the same time, better value added for our clients, but also expanding our margins. So this is the third foundational block for our Lean AFRY. If we take then, what does it mean? If we go to the final slide of my words, we will see basically that this is one of the key things, the whole Lean AFRY, the pre-foundational blocks, our transactional service centers, digital platforms and excellence centers. Those are, give or take, 50% of our journey growth to 10%. So if we take consensus of October '20, I think it's 8.4% give or take. Obviously, it includes a bit of slap from COVID. But from that, that we start pushing our journey towards it then. And if you put it in a more of 50% is coming from lean AFRY, shared services, operational excellences and then the efficiency supported by ERP. Whether it's project margin expansion, whether it's more efficient back office operations, whether it's simply intangible cultural improvements, that is a place that can deliver us quite a lot of value. And that said, we have done it as a corporate. We have -- I have done it personally with my legacy portfolio. I have no doubts that we have interesting, but also fruitful journey ahead of us in these topics. Then we have the second part of this one. It is a fact that we will not reach 10% without growth. We have lost a bit of revenue now during the past 6 months of COVID. But even ignoring that one, we would need to grow a bit. And the whole idea then is that when we have the best-in-class operations, you can't grow the fixed expenses, SG&A expenses and to pace your revenue growth. So every time you take organic growth, take 5% -- 5% organic, 5% M&A, you need to grow a bit less in the expense side. And then you are taking the step towards the 10% margin. If we want to have that growth, we need to have that growth, and we need to be investing also in that growth. The other part comes, obviously, from M&A where you have an interesting multiple player game. But at the same time, every time you buy something, you need to bring the companies within AFRY platform, within AFRY ways of working and thus do it a bit more efficiently than earlier. So with these 3 steps, I'm confident that we can basically transform ourselves from 8.4% current EBITDA, 8.7% previous year EBITDA to the 10%. You -- know, obviously, you will ask from me, when will it happen. I can guarantee you it's not today, but at the same time, tomorrow is not that far away. So with these ones, we reiterate our financial targets, 10% growth, 10% EBITDA, 2.5 on leverage, and we are simply making future. Handing back to you, Jonas. Thank you.

Thank you so much, Juuso. Well presented, clear as always, and I know that you will also be up for the one-to-one meetings, and you will also be here for the questions. But well presented Juuso. So then we have covered -- I talked about the digitization and the markets. Juuso talked basically how they're #5 now on this list of our growth journey, the scalable platforms and our lean operational model. And now I want to introduce Marie Trogstam, who will talk about the theme that goes across everything, sustainability and how we at AFRY are taking a position into that. So welcome on stage, our Head of Sustainability, Marie Trogstam.

Thank you very much. Thanks. And as Jonas started off saying, we are currently experiencing global challenges within, for example, health, the climate and the economics. And for example, then started off with the climate change. Based on science, we know that we need to stay well below the 2-degree Celsius target. And according to carbon law, we need to then cut the global CO2 emissions in half by 2030, and reach close to net-zero by 2050, in order to limit the global warming to 1.5 degree target where we need to aim for. And this means also that the emissions must peak already this year. Another important global challenge is also the rising sea levels that actually means that 1 million people will be affected by 1 centimeter of rise. Another one is the extreme poverty that we're actually decreasing but due, unfortunately, to COVID-19, we see now an increase for the first time in decades. Another important challenge is the biodiversity loss, where we see the 6 mass extinction of wildlife that is accelerated by human activities. And the last global challenge I want to mention is that 2 billion people are living in countries that are already suffering for water stress. So these are the challenges. But then where is it that we want to be? It is kind of widely accepted now that the recovery during and after COVID-19 must be aligned with the 1.5-degree target, but also towards the 2030 sustainable development agenda. So the technical solutions, as we've heard a lot already, are already there. But in order to reach this exponential development, we need to find the sustainable options that we can leverage at scale within, for example, sectors of energy, industry, buildings and food consumption, digitalization and then also sustainable finance will support that. And we have, for example, then the EU Green Deal, as Jonas mentioned, that will be materialized, supported by EUR 1.3 trillion, I should say, for that sustainable investment over a decade. And also in addition to that, we have the EU Taxonomy that will help us as a company as a guiding framework to know what sectors and economic activities we should focus on in order to accelerate this sustainability transition. And here, AFRY is coming as Jonas already mentioned and Juuso as well, about our key transforming sectors within clean energy, bio-industry, infrastructure and then food and life science that actually constitute then about 70% of our business. And hence, sustainability is truly integrated into our business. In order then to understand where we can actually make a difference, we need to speak about the impact we can have, and we look of course through the whole value chain. Upstream to our suppliers, our own operations would also with major focus on the downstream. And of course, we need to minimize the negative impact to have the footprint but the focus will be to maximize, optimize the positive impact, the handprint we have downstream through our sustainable solutions. And then we will add this net positive impact we can have. So the next step then. What is sustainability for us and how will we address it? The first part is that with lots of experts around the globe with both deep and wide expertise in terms of sustainable solutions, we need to make sure to walk the talk in terms of also improving, continuously improving our own climate impact related to how we travel, how we actually then have the facility energy usage. But also to continue, as Jonas also said, to focus our efforts on diversity and inclusion and the ethics and compliance part as well. And indeed, it's key also to measure our improvements. And we have here our CO2 emission target to cut our own emissions in half by 2030 and then leverage this for the net zero target until 2050. So the next area we will focus on is transforming our company at scale, and that means, of course, to improve how we integrate sustainability into our broad offering. And one way of doing that is to start by updating our sustainability e-learning to make sure that all our employees are actually aligned with what our clients are requesting in terms of climate awareness, but also that we know about low-emission techniques. We will also continuously improve the way we measure in terms of both footprint and handprint and also make sure that to access -- then assess how we are EU Taxonomy aligned, that will be key moving forward. And then to sum this up, of course, as we've said a lot of times now, we will focus on where we actually have the biggest impact. And that's within the 4 transforming segments. And then this very key statement that we actually can be the enabler for the sustainability transition and we will have a continuous commitment to the sustainable development goals, the UN Global Compact and other key and important sustainability frameworks. We have also a great focus on different indices, and we have quite recently received an upgraded MSCI rating from A to AA. And we're also focusing on the carbon disclosure project, where we have a B rating. And then just to stress, the EU Green Deal and the EU Taxonomy will support our growth and AFRY is then well positioned to be an enabler aligned with EU Taxonomy in terms of our presence, our ambitions and our offerings and also in areas as climate change mitigation, climate change adaptation and the transition to circular economy. And we will indeed focus on climate action, both for our own operations. And as Jonas said, we have just handed in our commitment letter to the Science Based Targets Initiative to align our own work with science-based approach. But then also, of course, climate actions will be affecting our offerings. And I would like to mention 2 important areas here. And the first one being that we are now launching a new target for the pulp industry to reduce the water usage with at least 20% and our Head of Process Industries, Nicholas Oksanen, will come back to that. And then the other important area is here that we will then exit any new build coal project from January 1 in order to -- that the decarbonization of the energy industry is, of course, key to facilitate and reduce the reliance on fossil resources and specifically, coal power generation. And our Head of Energy Division, Richard Pinnock, will come back and speak more about this important step just in short. So since we are now the enabler for the sustainability transition, of course, we also want to leverage that by being a core partner in different cooperations. And the first one is, as also Jonas mentioned, the 1.5-degree business playbook that supports us in our climate strategy work and also gives us the latest research and well-renowned scientists, such as [indiscernible] being part of that. We also have the Swedish government commitment to climate change measures. And here, we have our Head of Infra division, Malin Frenning, being part of the government committee on climate action by the business community. And then we are truly proud about our cooperation with the Gapminder Foundation, where we jointly then work to find systematic misconceptions about the world. And then through this fact-based world view, also soon launch a knowledge test on how we will improve the basic knowledge about the 17 sustainable development goals. Another important area for us is to work together with United Nations as a key enabler also for the global transformation and we've been participating in the high-level political forum towards the sustainable development goals. And also then in Madrid last year, we were part of group executive management in the top 25, where our key topic in the multistakeholder dialogue was to drive the initiative, how we could use and leverage the experiences from a Nordic perspective also into developing economies in terms of the energy transition. And related to that, I also wanted to mention the renewAfrica initiative that is focusing then on how to scale up renewable power in Africa and where Jonas participated in a meeting quite recently with the Executive Vice President for the European Commission, Frans Timmermans. So by this, I'd just like to end by saying that we really focus on being the enabler for the sustainability transition, both in terms of our own operations, but also with a focus on our sustainable solutions and how we can leverage specifically in the 4 transforming segments. So thank you very much.

Thank you so much, Marie. I have to say that joining this company more than 3 years back, there are many reasons to be proud. But what Marie just presented is truly a reason to be proud working for AFRY. Everything that we do in sustainability. So with that, we have heard the first 3 speakers, and we have now a very short break, fill up coffees, take a short break, and we will be back in 5 minutes. So thanks for listening, and see you back in 5 minutes. [Break]

Okay. So welcome back to all of you. I hope you had a good short break. So now we are coming to a part of this afternoon where we will listen to our divisional presidents talking exactly about those transforming segment that we will invest into moving forward. And the first one on stage is Malin Frenning, who will talk about infrastructure, a big topic for us. So welcome on stage, Malin, let's talk about infrastructure.

So thank you, Jonas. So I am Malin Frenning, heading the Infrastructure division. I'm very happy today to go through and introduce the journey ahead for us. But before we do that -- but before I do that, I would like to maybe start with the most important, what we do with our clients and show some projects that we have been working very proudly with during this year and previously. So I start with the film. [Presentation]

So let's start then. We are 6,000 engineers and designers that work with our more than 13,000 clients. We are in 5 core countries and 3 countries where we have a niche of our portfolio. And today, more than 70% of our clients are from public. And we are also having more than 90% of our business in projects, and that has improved over the years. So in total, we are 40% of AFRY regarding net sales. Let's start with our client segments. And I just want to emphasize the 3 segments that we are working with. This is the client or how we address the market segments. It's not similar to our organization, which is more based on competence areas. But this is how we go together, meeting the possibilities and opportunities and also our client needs. Let's start with the real estate first, where we have several subsegments like commercial buildings, public, hospital industries and also residential buildings. And the whole real estate sort of segment is then the share of net sales with 45%. The transport infrastructure with roads, railways, airports and also seaports. Yes, that is a segment that we have in 8 countries today, and representing 36% of our total net sales. The third core segment that we have and meeting the clients in is within water. And the subsegments that we are working within is the water utilities, but also the industrial. And that is a smaller client segment compared with the other 2, but it is important and growing. And you also heard Marie mention the water part, and I will come back to that further on. In the fourth segment, yes, that's where we meet our fellow divisions and where we work together in AFRY. And these are 2 examples of subsegments where we go together, the energy infrastructure and mining, and you will hear more about that further on today as well. And that is representing 14% of our net sales. Infrastructure is coming from a long history of growth. Growth has been a part of our DNA for more than 10 years back. And you heard Jonas talked about that before. And for infrastructure in ÅF at that time, it started already in 2012 with approximately a net sales of between SEK 1 billion and SEK 2 billion. And that increased up to 2019 with almost SEK 8 billion, or to be exact, SEK 7.6 billion. And over these years, the profitability has been stable between 10% and 12%, which you can see in the graph, ending up end of 2019 slightly declining sort of directly under 10% due to the integration with Pöyry Infra that caused the lower margin during the year. So focus from that from 2019 has been to leveling out the decrease and stabilize the profitability moving ahead. So the focus has been on productivity and efficiency, but also improving units that we have sort of -- had sort of a challenge with the profitability. But we have also sort of worked very much -- a lot of with our costs in that part. And also, I would say, reviewing our portfolios. And not only in one country, we have worked with all our countries in doing, I would say, what was needed for further growth to consolidate but also stabilize us moving forward. So then moving into 2020, I need also to sort of mention COVID-19 because the pandemic has also sort of, I would say, hit us a little bit in the real estate segment and challenged us. And I would say the pandemic is still here, and we have seen that mainly in some segments, Jonas mentioned a few, but I can also say that we have seen a slight sort of decline or postponements in, for example, in municipality segment that, of course, affects several parts of our business. So then how did we see upon the market so far? And what have we seen during 2020? Yes, to summarize, we saw a mixed market development. And again, from the client point of view with our 3 segments, let's start to say that we are acting in 5 core, 5 main markets with a very strong sort of demand of our services. And within real estate during 2020, we had or we were sort of coming from a very high level of investments in the market. And I think everybody said also -- every report said it was cooling down a little bit. And we saw that it was a negative market development during the year in real estate due to the COVID-19 pandemic. In transport infrastructure, the market was more resilient overall. And we also see largely the investments even from also, yes, I would say, the government sort of budgets. But also, I would say, a very strong sort of development overall. Water, the water market was stable with healthy underlying demand. And that shows also potential for further growth. So how did we do then, 2020, in the division? Yes, in the real estate, we had a solid performance in par with market despite, I would say, COVID pandemic. In transport infrastructure, we saw lower growth in some markets due to the needed or the need of integration and also consolidation from many years of growth. And I would say the consolidation was needed to sort of act upon already then. In water, we had a strong development compared to the market, and that is also within sort of the healthy underlying demand that was driving that. So then how do we see it on the next step? Yes. And what are we doing now? I think moving out from 2020 to sort of more into the agenda for 2021, we had a very solid performance or strengthen -- or platform to stand on. And we have a strong position in our home markets, together with other AFRY divisions. And we also have a very strong client relations and solid domain knowledge. So I think coming back to sort of who we are, we have a strong sort of, I would say, knowledge about the industry, engineering part and the ability to create design. So we have a strong platform moving ahead from everything we did now in 2021 -- or 2020. We have then initiated actions for 2020. We have settled now a very firm strategic action plan, a fight plan that have sort of included many areas. And these are just a few examples on how we are then meeting the challenge we saw. What we are now sort of -- have done partly on is that we are now sort of using the broad portfolio or -- of clients that we have in AFRY. We are then combining offers across AFRY domains. We are also diversing customer base, which means that we are also addressing clients in the entrepreneurs, but also in other sectors now related to the sort of digital environment that we are with in the connected society. We have initiated recruitments. Pricing optimization is something that we have worked with a lot. And also what Juuso said previously, the center of excellence. We have also initiated a plan now for not only sort of increasing the profitability, but also ensuring growth and using the center of excellence as one of the tools. So for all these actions, we have already started. So it's check, check, check on all of these items for taking, I would say, the next step in 2021. And we have already seen effects, which is good. Like, for example, in Norway and in Sweden, where we're both in project management, but also in our transportation business. And talking about Norway then, in 2020, just to sort of talk about one specific country, we had some challenges in Norway. And you know that we have another role in the Norwegian market compared with many of our competitors. And that means that we were more exposed during the COVID sort of period with being the project management sort of execution. We were more in the execution phase. But that is also a trend that has now changed. So now the market is starting up again. So also there, we see positive effects from the agenda that we have sort of set. We also have an active M&A agenda, and that was also what both Jonas and Juusa talked about. And finally, the action also regarding the expansion of service offerings along our client asset life cycle. This is something we are also sort of now putting a lot of effort into to secure and use the, I would say, the possibilities with digitalization and also based on what the clients' needs are. And then moving into -- further into 2021. We have strong ambitions moving forward in the next year. And since we have already started and checked sort of on a lot of items, we see that we will continue to execute and also deliver on the agenda for growth, both organically and also on the acquired growth. We are continuing with broadening the offer for our clients, and we also increased the share of the digital services. And that is not anything we just say. This is something that we see as a demand now for or from the clients. So I think that we are in the best spot ever for doing the digital journey together. And we're also diversifying the customer base, as I said previously, working very close with entrepreneurs, but also other actors within the connected society. So how do we see it on the market moving ahead? We know about the market in 2020. It has been a challenging year in certain areas and more sort of nonchallenged in other. But how do we see it on the market moving forward? Yes. I think we have a strong market position in the infrastructure area. And that means also that the strongest area for us, or the strongest segment moving ahead is the transport infrastructure. But let's start with the real estate. And I think that everybody is aware today that the real estate is in the spotlight for many sort of angles. It's regarding sustainability. It's regarding governance. It's a lot about social sort of aspects. And everything is now sort of putting a lot of demand into these sectors. And we can talk about the green focus with the climate sort of actions that needs to be taken within a building or around the buildings. One other trend that we see is the increased e-commerce, which means that the logistics around the infrastructure in general, in a city, for example, is sort of put on the high pressure and also transforming for multi-purpose reasons the buildings that exist. So many sort of opportunities. And coming back to what Marie and Jonas said regarding the green deal, it has been singled out in the green deal that renovations are key going forward. And we can also see a trend shift between public to private, et cetera, and public is increasing. And we can also see between residential and nonresidential how that is sort of moving a little bit. But nevertheless, renovations is key. Transport infra, holistic view on mobility, increased investments in rail. And that is something that we see overall, that the rail-borne traffic will increase. And the portion also between rails and road moving onwards is crucial. Water and -- is also an area where we see a lot of positive trends. Not only due to that it has been high up on the political agenda from a pandemic point of view, but also climate and renovation, et cetera. So many possibilities, but the strongest segment is within transport infrastructure. So we have a very clear agenda moving ahead with 3 major client segments. And where the real estate part is to continue client value in the changing market, we have, I would say, continue to balance the project portfolio across the segments but also across the life cycle. And also the new service areas, like the energy and facility management that are key, and again, digitalization and sustainability. Moving over to transport infrastructure, diversified portfolio and customer base, global selected offers. It comes back to what Jonas said earlier, we are a decentralized organization and we are now starting to use in a more sort of structured way, our competence is also cross-border. That means that we can use tunnel competence from one country into another, for example. And the third is that we are strengthening the platform in our home markets and specific focus then on the Nordic and Switzerland. And finally then, the third segment on our way forward is water. Water is essential for all development, and we have had that on the agenda for some time. And I would like to stress the fact that this is more important than ever. So here, we will use the full AFRY broadness in the portfolio with the footprint in both industry, in buildings, in transport. And to secure that we will use also the competence that we have in different countries. And also expand together with our fellow colleagues in the other divisions. So our journey ahead is quite clear with 3 priorities to become the top 3 in Nordics. And the first priority is to win market shares in home markets. The second is expand our service offerings. And the third and maybe the most important, and where I probably should have started, but I would like to end with that. That is, of course, then our employees and all our skill consultants, being an attractive employer and securing and ensuring diversity and also inclusive teams. So that's all from me. Thank you.

Thank you so much, Marlin, for well presented. And then we have talked about the infrastructure. Then I want to introduce Robert Larsson, who will talk about interesting topics. I know that Robert will talk about what's going on in automotive, where we are repositioned, but also about our growth ambition in interesting segments like Food & Life Science. So welcome on stage Robert Larsson.

Thank you very much, Jonas. I hear that my microphone is working, so I'm really happy for that. So I will provide you some -- with some details. Let's make this one working first. I will provide you some details on what we see ahead of us in Food & Life Science. And there will also be an update, a general update on what's going on in the division. First, to help you with some dimensions regarding the division and what we're doing. We ended 2019 with SEK 5.8 billion in net sales. About 30% of the business in 2019 was projects. For us, it has been very important to try to increase this share of business because it helps us to climb the value chain and capture more value. The vast majority of our business is in Sweden. And from a Nordics perspective, the division has been growing in both Denmark and Norway, but it is still true that we are not present in Finland. So -- and what we do for clients can be categorized into 3 buckets. It's about developing our clients' future products and services. We design, connect and optimize manufacturing capabilities and assets. And we add digital services on top of our clients' solutions. When it comes to ambition, we see that we should be the Nordic leader with a global reach and the partner of choice. Now moving forward here. With a bit shorter time perspective, 2020 has been much about responding to COVID-19, which has had a significant impact on our clients' business and, of course, as well as on ours. With a little bit longer perspective, we also see -- we can conclude that both Automotive and Manufacturing segments have been sluggish ever since mid-2019. We have announced that we have accelerated our positioning within Automotive segment. But with a more strategic view, I would say, there are also this shift in business mix. And there are 2 aspects on this one. The first one is that what used to be 30% of projects is now at 40%, which is a healthy increase. The other one is that the strong growth -- strong organic growth in Food & Life Science, the last 2 years, has shifted the market mix for us in kind of spreading out the bets, so to say. And you have read the quarterly report, you can see that our business in the second quarter was very slow, and there was somewhat of a recovery seen in Q3. And just like Jonas said before, Automotive still from a low level. A bit more looking into the markets. On this slide, you have the 4 major market segments on which we are operating. Currently, I would say that they are about roughly equal in size. I will come back to Automotive and Food & Life Science later on. But starting with Manufacturing then. Despite all this turbulence throughout the year, we see that majority of these drivers are intact. There is one change, and that is a bit connected with the quest for resilience and redundancy. Global supply chains are likely to become, let's say, not local but at least regionalized. And in Tech, Defense and Civil Protection, it's -- this segment is big time benefiting from the digitalization lead that we are all experiencing currently. This means that technologies like IoT, cloud, AI and 5G, they have never been more relevant than now. Now the bit on Automotive then. And it's quite clear that the market, the automotive OEMS, they are in rapid transformation. And it is happening really fast now. You certainly know that Tesla is currently the highest value car company in the world. But you may not know that NIO, a long-term AFRY client, very recently became #6 on the list. With sort of automotive time perspective, both of these ones can be considered to be start-ups. Recently, both Volvo and Scania also made bold claims about -- or bold statements about what position they want to achieve in the future and also the requirements on the product portfolio they have to get there. As to make it very simple, it is going to be all about software, software that is enabling new services that will drive the revenues for the automotive OEMs going forward. The consequence of this is, of course, obviously, there's going to be a lot of demand for software. But there is also going to be, we believe, a market for outsourcing through managed services. The market remain global and technology driven. And from a Swedish perspective, significant, roughly 20% of the IT and engineering consulting market in Sweden. With this about clients and the market -- and their markets, what are we doing? Yes. We are shifted our kind of wanted position, which means that we are moving our center of gravity. And I would say that there are 3 dimensions to keep in mind here. The first one is that we want to leverage design an R&D or engineering. This means that we will be involved earlier on in the vehicle programs from the clients. We shift from hardware to software. We shift from on-site services to projects. And I believe the illustration to the left will help you to understand how we see this happening. This is well in line with the directions chosen by our clients, and the change in service models is supported by agreements with them. So it is fair to claim that clients are becoming more and more ready for the digitalization, but they're also becoming more mature. And a few recent examples of what this looks like. Hitachi ABB as well as Alfa Laval, they are taking advantage of new technology to help their production or operational efficiency, flexibility as well as quality. A significant client within logistics, they want to add digitalization services on top of their current product portfolio. Buildings is really interesting. The fourth picture from the left, it's what happens when you combine experts in buildings with experts in digitization. They come up with an app that is helping reducing the climate footprint, of course, based on AI. But it's not only managing all these building utility systems in the building, it is also helping all the residents to make smart choices about what is the best going forward. Clearly, there are also some concerns. The ever-increasing connectivity put focus on cybersecurity. So moving into Food & Life Science then. Food & Life Science is not at all new in AFRY. What is new, however, is the opportunities that has been created by the progress made during the last years. The market itself is driven by the increasing and also aging population on the planet. But maybe even more important is to increase wealth, which means that there is more money to be spent. The market has demonstrated years of stable growth, and we believe that there are good opportunities for using digitalization to cope with the ever-increasing demands for efficiency and quality. So to be a bit more granular, the markets -- the market can be divided into food, into pharma and med tech. And as always, each of them has its own set of specifics, as you can see. Especially, within pharma and med tech, it is all about complying with regulations. And fully understanding these regulations is a fundamental qualifier in order to be relevant for clients. To the right, you see health, which can be considered as an adjacency. It's formally not a part of the food and life science market itself, but it is clearly driven by the same market forces. So we claim that we have a strong market presence to build our further expansion on. And what does this look like? Well, on the left on this slide, you see, it's all about designing and installing complete production lines. The examples are from Oatly, and from Vistin Pharma in Norway. It is about upgrading products. There is a global diagnostic company who asked us to upgrade the future products range to make sure that they are IoT and cloud connected as well as GDPR compliant. AFRY into the health segment now. AFRY is leading the National Norway e-Health digitalization framework or program. And with the ever-increasing complexity, there is a lot to be done within the field of hospitals, of course. So this is kind of where our starting point, and we are present in all of these ones. Now looking at the historical growth rates of these markets, we can conclude it's about 4%. The outlook going forward is kind of favorable also. And given the strong growth -- organic growth for AFRY during the last 2 years, we have achieved a position as either #1 or #2 within each of these segments. And despite the growth, we don't see that we will be limited by market shares by any means. It's still a very fragmented market. So going forward, obviously, we will continue to grow organically, but there is certainly an opportunity to accelerate this growth to explore what could be considered as a full potential scenario. So trying to summarize all of this, we are really happy to conclude that we are digitally capable. And we also firmly believe that we are positioned for growth. I told about how we think about this automotive repositioning. Clients are becoming more ready and also more mature when it comes to digitalization. Food & Life Science is ready for next level to become the largest sector in the division or maybe even, by far, the largest sector in the division. And this is underlining kind of -- this is building up to our ambition to be The Nordic leader with a global reach. So thank you very much.

Thank you so much, Robert. Well presented related to our industry division, but also position in digital and also a very interesting segment in food and life science. So that's Marlin and Robert talking about these 2 areas. Now we will talk basically about 2 big sectors for us. We will let -- we will talk about the process industry and bio industry, and we will talk about energy -- clean energy. So we will have Nicholas Oksanen and Richard Pinnock. But before that, I want to have Roland Lorenz, Head our Management Consulting Business, that has created a unique position within AFRY, where we are a leader in strategic consulting for those 2 sectors to set better scenes into clean energy and bio industry. So Roland, the stage is yours. So it's all yours, Roland.

Thank you very much, Jonas. And indeed, the transitions in bio industry and in the energy sector are providing secular growth opportunities for AFRY, with development strongly driven by the international sustainability agenda including the green deal and the green recovery. We as AFRY have unique position since we are able to provide a one-stop shop in both sectors, having services across management consulting, engineering, CapEx projects, operations and digital solutions. And already today, we have an excellent starting point with more than 4,000 experts in Europe and globally, a combined revenue of more than SEK 3.8 billion after Q3 closing, delivering an EBIT margin contribution of approximately 10%. So let's have a closer look at the opportunities in these -- both sectors. In bio industry, we see a global shift with evolving legislation and changing consumer behavior, driving demand for packaging and hygiene, resulting in the need for new production capacity and even if graphic paper demand is declining due to digital media. Can you please go to the next slide? Growing sustainability awareness is calling for continuous development of new value-added solutions in sustainable packaging and in advanced bioproducts, such as biomaterials, biochemicals and biofuels, just to name a few of them. Resource scarcity is increasing the pressure to fully utilize raw material and waste streams, which calls for reuse, recycling and the circular economy approach, supported by digital solutions throughout the value chain. On the next slide, we are showing what we mean when we talk about bio industry, from the forest as a raw material along the different value chains to the various end products. Overall, we see a growing bio industry with an annual growth rate of 2.3%, resulting in impressive number of SEK 8,000 billion business by 2030. And especially in packaging and hygiene, we are faced with a steady demand increase of SEK 1,000 billion by 2030. And the growing biofuels and biochemical markets are also providing sizable short and midterm opportunities for AFRY. And all of this requires continued investment in new build capacity, replacement and into conversion. When we go to the energy sector, and when we look at it closely, then we see a huge transformation towards clean energy and therefore, we are really faced with an ever so interesting sector that is going through significant changes due to the shift we are seeing from fossil fuel generation to renewable energy and other clean technologies. The graph on the left side, when you go to the next slide, shows what needs to be done to bring global emissions to required level for sustainable development. But to make it all happen, significant investments will also be needed into the underlying energy infrastructure. And this is not just the Nordic or European challenge. Decarbonization of the energy sector, combined with increasing global electricity demand coming from other sectors like mobility and industry will present a huge global challenge, which calls for sustainable solutions. On the next slide, you see that the graph on the left, where you can see that this rapid expansion of renewables required alongside a steady decline in fossil capacity. And to achieve this emission targets and to reduce climate change, we are looking at a required investment into renewable energy of 8,000 gigawatt by 2040, which is equal to the investment of 400 large offshore wind parks every year. For AFRY and our core markets in energy, in the Nordics, in Europe, in Middle East and in Asia, we are looking at significant demand for investments. And only in Europe, we are talking about grid infrastructure investments of SEK 4,200 billion by 2030. And in addition to that, the renewables and the grid infrastructure, we see other clean technologies presenting significant growth opportunities. For example, in biomass, in hydro, in nuclear, in carbon capture and storage, and in hydrogen. On the next slide, you will see that AFRY management consulting complements AFRY's unique position in bio industry and in clean energy, allowing us to take a holistic view of the bio industry and clean energy transitions. And with a team of more than 450 sector experts around the world, we are in a position to provide a distinguished offering for decision-makers in these 2 sectors, along forward-looking market analysis, strategic advice, operational excellence and transaction support. Management Consulting allows us at AFRY to stay connected with the leading companies and get involved in important development at early stages, which creates sizable opportunities for AFRY, for our clients and, of course, for the progress towards a more sustainable society. And that's why we are keen to grow Management Consulting division further to become a leading adviser for the transition in these 2 sectors. With these words, back to you, Jonas.

Thank you so much, Roland. Well-presented, and I think we have set an interesting base now for -- talk a bit more deeper about what we are doing in the sectors, bioindustry and also clean energy. So thank you so much, Roland, and then I will introduce Nicholas Oksanen, who will then talk a bit about our position and what we are doing in Process Industries, but specifically in bioindustry. Hi, Nico. So I leave it to you. The stage is yours, Nico.

Thank you very much, Jonas, and welcome all to the bioindustries. It's a very exciting world because of the fact that the trends are supporting the bioindustries and also, our clients are changing their business towards bio, so excellent opportunities. So what are we? Process Industries division has a turnover of SEK 3 billion, and the EBITDA margin is over 10% is stable. Our operations are global, with 3,500 experts which are located mainly in the Nordics. Next, please. Our segments cover bioindustry, including Pulp & Paper, biofuels, biochemicals and other advanced bioproducts. In these segments, we have a strong #1 position globally. In non-petroleum chemicals, we are positioned #3 globally. And in mining, we have #8 position with a strong growth target. Next, please. Our unique service offering covers the entire client value chain and life cycle. And we have a strong office space in Sweden, Finland, Brazil, but we serve our clients globally. Next, please. The bioindustry transition brings all our segments closer to each other as clients in different segments are moving towards bio-based business. Our strong knowledge in our bio-based business brings advantages in new growth areas as we have a strong technology know-how and understanding of the entire value chain of the clients' business. To grow in this bio industry, we want to strengthen our position globally in Pulp & Paper, but we also want to strengthen our competence and position in advanced bioproducts, biofuels and biochemicals and then also expand offering in industrial digitalization and sustainability services to meet clients' targets in safety, green deal and efficiency. We aim to stabilize our business through diversification in different sectors and services. Next, please. When we look our financial position, we have a continued good growth in core markets, and our major projects implementation continue as planned. Currency effects had a significant impact in year-to-date, coming mainly from Brazil. With the same currencies, the organic growth year-to-date amounted to 5.3%. When you look for profitability, so it's on a stable level. However, it is impacted by the COVID-19 pandemic with longer decision-making processes for the new projects. But the year 2020, we expect to be stable. Next, please. When we look at our market potential, I must say that we have great opportunities to grow because of the fact that, of course, in Pulp & Paper, the market growth is 2.3%, and our market share is 40%. But then when we look at our growth, so it's based on market growth, but also growth in food products, packaging, hygiene and advanced bioproducts. And then when we then look this non-petrochemicals markets, so that's growing 5% annually, and the market size is 3.5x bigger than Pulp & Paper market. And when we take into account that we have a market share of 11%, so huge growth opportunities exist. Then when we even move further in mining and metals, the market share is 4%, and the market size is 3x bigger than chemicals. So that's clear that this brings us huge opportunities, and we will expand our business from Nordics to other regions. Next slide, please. The key items for our profitable growth are: so we will grow in the bioindustry; in the chemicals; the non-petroleum side; and also the mining and metals in selected regions and also organically and by defined M&As. Then we will strengthen the client interface through our key account management, including all AFRY services. Then we will move up in the value chain and leverage the knowledge base through our smart solutions, meaning strengthen our digitalization, the environmental services and also the health and safety services, develop our new services and also innovate through our clients together in -- through the research and development. Of course, the organization efficiency will be strengthened with engaged and motivated people an attractive brand. Stability is very important in our business. That will be increased through diversification in segments and also in both in CapEx and OpEx projects. The stable OpEx business through our local offices close to our private clients bring stability but also supports our CapEx business. Then our smart solutions support move up in the value chain and leverage our excellent knowledge base. Next slide, please. As a summary, so for the profitable growth, we will grow in our core segments. Stability will come through our smart diversification, and the margin improvement will increase through value by delivering smart solutions and utilizing offshore excellence centers. Then, as Marie Trogstam said, we want to highlight also our sustainability commitment, helping our clients to reach their accretive targets. This means that we are committed to provide sustainable solutions to reduce pulp industry water use with more than 20% to meet our client sustainability targets. While this commitment among our clients, water use is a key performance parameter and continuously monitored. Both clients have water reduction as their sustainability target. Through our key segments and experience, our strong process technology know-how and our value chain understanding, we can reach the ambitious target together with our clients. That's all from the bioindustry. And as said, so we are looking forward to grow and take the opportunities which are there on the market. Thank you very much all. Back to you, Jonas.

Thank you so much, Nick. Well-presented, and it's amazing to see the opportunities we have. And of course, our positioning in the bioindustry and Process Industries is a result of the combined of F and Pyry. So well-presented, Nico. So then we have talked about Infrastructure, we have talked about the industry and for the life science, we talked our Process Industries, bioindustry. So then we have one more speaker from the divisions, and that's Richard Pinnock, who is sitting in Switzerland in Zurich, and is eager to present our position and thinking around clean energy. So Richard, the stage is yours.

Thank you very much, Jonas, and greetings to everybody who has tuned in. And I have the exciting time to talk about the clean energy drives and some very key decisions that we are -- we've made and how we're going to grow further. But if I can start with the first slide, please, and talk just a little bit about how does the Energy business today look? So we are #4 globally, and we are well positioned in each of the specific focus markets that we're operating. We really operate in 4 main segments, and that is our biggest segment, if you just look at our sales in the first 3 quarters of this year, is our renewables and thermal section. And here also, I just want to try back. And when I talk here, think about what Roland presented in terms of the opportunities that we have. And you will see in all the sectors, we have huge opportunities to grow. So it's not the market that is going to restrict us in growing, it is our own ability on how we can take advantage of the opportunities that are there, which I will come to in a minute. What's also important is that we are global, and we are operating in more than 32 countries. And the other important point to remember is we are 100% project-based. And of the 100% of project-based business, we are -- 80% of that is in fixed lump sum contracts where we're delivering the services to the client. So the management of this is very, very important for us. So we are well positioned overall, globally. And we are well positioned within our various segments. But how are we doing? And if we go to the next slide, we'll be talking quite a lot about the repositioning actions. And the last Capital Markets Day, we talked about that in terms of what we've been doing and the decisions that we have taken, specifically in terms of those actions, be it the divestments, be it the management in terms of driving the business in a different direction. And I have to say, I'm very proud of all the 1,800 people within our business today in terms of our journey into the target corridor of 8% to 10%. And I think that's clearly indicated in the last few years in terms of what our journey has been. So we're currently operating now in that corridor and, of course, we have done this at the sacrifice of the top line growth, and this has not been on our agenda this year. And of course, we went into COVID, we've had to deal with that or my colleagues and Jonas has been talking about that, and I think that we've learned quite a lot in terms of what this is. But it has had its effect on us in delaying start-up of many projects, but also in our business, particularly in the hydro side, the really the stop of borders, the closing of borders that have prevented our experts from traveling. However, despite all of that, we really have solid pipelines going forward, which is really exciting for us. Let me go to the next slide, just very quickly here, just want to tick a few boxes. We believe that the repositioning activities that we have done now is complete. We've also had a lot of focus, Juuso talked a lot about that, in terms of looking at the organization and really trying to become lean in terms of what we are doing, which, of course, has helped us. And we've had tremendous permanent savings that we have activated already this year, and last part of that will come into next year. But again, here, we've taken advantage. And although COVID had its difficulties, it also had a lot of opportunities and being able to work now in a flexible way has really taught us a lot. And this, of course, is going to be something that we will take into the future. But then, of course, also on our people side here, just one particular aspect is we spent a lot of time in terms of developing and training our project managers. In the fixed lump sum project, it is so important that we keep control of all of those, so focusing in terms of that training has been really important for us. If we then look at the next slide, and here, I think just to give you the real extent of the challenge that is facing us. And if you look at this picture, all I want you to look at is that below, let's say, above the 1.5-degree line, which Marie has talked a lot about, up to the dotted line of 3.5, which is the current pathway that we're on in terms of global warming, what has to happen for the industry is that all the non-CO2 or clean energy, nuclear, hydro, renewables, has to really go into that dark patch in the middle of the graphic. That's the challenge that we have if we are to meet the 1.5-degree. So this is exciting for us because it creates a lot of opportunity for us. Of course, we need to act faster than what we're acting if we're going to continue to move towards more cleaner energy overall. So if we go to the next slide, just keeping that in mind, there are many opportunities for us, which is exciting. Solar and onshore and offshore wind is increasing dramatically, if you go back to the curves that Roland talked about. Bioenergy, waste-to-energy is something that is really a huge requirement, and Malin touched on that as well in terms of urbanization. But with this intermittency, pump storage schemes are really starting to grow, and we're seeing a large development in terms of that. And of course, connecting everything together and bringing clean energies over long distances to areas where it's not so easy to have clean energies, we see that HVDC interconnection schemes are going to be playing a large role. And of course, lastly, there is a lot of new technologies that we've got to keep our eye on. So a lot of opportunities are out there for us. And of course, what's exciting is how well-positioned we in AFRY are to take opportunity. And in the next slide, what we've tried to show you here is looking at the business position, the business case for AFRY, versus the sustainability and where the different, let's say, technologies and opportunities align. And you can clearly see that where we are focusing at the moment is in the top right hand, and there's a lot of opportunities, which has a strong business case for us. There are some in the developing side. That, of course, is a strong sustainability picture, but maybe not so strong at the moment in terms of the new technologies in terms of the business case. But what really sticks out here is in the bottom right-hand corner is new build coal. And clearly, although it's a strong business case and we've seen that from a sustainability point of view and specifically the AFRY commitment, it is just really not what we should be focusing on. And in the next slide, as Marie has already stated, we have now taken the decision that, as of next year, we will be exiting any new build coal. We will continue, of course, to support our clients who are in their own transition journey, and our focus really is going to be helping them in terms of their own carbon offset investment programs. And there's a number of those that we want to get involved in to support them through that process. So of course, going into the future, if we look at the next slide, really for me, and this is really exciting for the team, is we really now that we've got the platform strong, we really now want to start accelerating our growth. And here, we want to be not #4, but #3, and it's a tough target by 2023 to move up to the #3 position globally. And how we want to do that is we need to become #1 in a couple of niches. And the ones that we have chosen, which if you go back to what Roland showed you, there is tremendous opportunity. We want to be #1 in offshore wind. We want to be #1 in pump storage schemes and HVDC connections. And of course, we want to continue to accelerate our digitalization program because in the curve that Jonas showed you earlier, there is huge opportunity within the Energy sector. So what we, of course, want to then do is with becoming number one, if we go to the next slide, is the real strategic intent, is we want to be able to take our European leadership position to accelerate the energy transition in the developing economies. And this is going to be absolutely key for us. Because if we don't, in the next slide, and if we continue on the current pace, what we are going to see is [ Mr. Gutierrez ] up to his knees in water. We're going to have growth with wet feet. This is important how we can drive this. So in summary, what we want to achieve now is accelerating our profitable growth. We are in the corridor, we want to get to the top of that corridor, but we want to do that within clean energy. We want to position ourselves. We're already there in many areas, but we've got to take that next position. And this is going to be done not only organically, but in certain niches, it's going to be done through strategic acquisitions. As we have said, we want to exit coal. And of course, at the bottom line, we want to strive to accelerate the energy transition in the developing economies. Jonas, thanks very much, and I hand back to you.

Thank you so much. Richard, well-presented also from you. So thank you from Zurich. So with that, from Richard, we have actually come to the summarizing part of this presentation. So we have heard myself in the introduction; Juuso Pajunen; we heard Marie Trogstam talking about sustainability; then Malin, Robert, Roland, Nicholas and Richard about how we are seeing the segments moving forward. And I will just take a few minutes to try to summarize this. A lot of things have been said, and then we will go over to Q&A before we close at 3:30. And we have today then presented our next growth journey that we call our takeoff strategy, which actually is the takeoff of AFRY, which we created last year. We were a bit interrupted on the ongoing pandemic. We have mitigated that now, and now we are also ready to take off, of course, looking into next year. And there are 5 distinct areas. First, as we have talked about, how we continue to drive our position in our core markets. That's, of course, basically the base we have. We have 5 clear countries where we can scale. We are looking at organic growth. We want to attract the best. We will use our brand. We will also now reaccelerate our M&A agenda, also looking on strategic M&A platforms. Secondly, as you heard a lot about over the last presentations, how we can now focus even more on distinct segments where we see transforming trends. We have talked about Infrastructure, it's a wide segment, and we are well-positioned. Robert talked about food and life science as one promising, but actually with the digital platform we have, for example, in Industrial & Digital Solutions, we have a great base. We are repositioning in automotive, and we are creating a stronger base in industry and digital. Bioindustry, of course, extremely interesting with the trends ongoing. And finally, Richard talked about all the changes that needs to happen in the Energy segment, and we want to be a leader in that. So it's, I will say, if I compare to a few years back, it's very clear around those 4 segments and on top of that, our position in our core countries. Then digital. It is absolutely clear, and you have seen that, that our divisions are delivering a lot of digital services, projects and even solutions today, and we will continue with that. Robert has a long list on digital solutions in our division, and we will continue to drive that. But on top of that, we will also now look jointly for AFRY, how can we scale that further? We will use a unit called Digital X to scale it, and we have set a clear revenue target for AFRY as a whole. So we will invest in digitalization, we want to create new business model digitalization and we want to fully leverage our current digital base to our clients. That's a clear target for us. And I believe for the coming -- we believe, for the coming years, that, of course, digitalization will continue to increase dramatically. Fourth, sustainability. Also here, we are taking a position across the company in sustainability. Marie presented it very well. And finally, you also presented also our financial situation, but also how we have been working quite hard since the merger with -- since the joining forces with Pyry, how to drive a scalable, efficient, lean operations in our back end, new ERP system, but also how we can use our current footprint for offshore sourcing. So these are the 5 parts that combines the next growth journey for AFRY. Last slide. Sorry, wrong button. Last slide before we move over to Q&As. Zooming out even more, so what have we done? Well, we have presented today our growth strategy. And of course, it's a lot of parts in it, but that summarizes with these 5 parts that I talked about before. Our financial target is unchanged, and Juuso made it very clear we are going back to growth. It's been a troublesome 2020, but we have mitigated a lot. We have strengthened our balance sheet, and we are committed to reach that 10% EBITDA that we have set up, but also to go back to our growth target, 10%, 10%, 2.5%. We have also communicated today a growth target on our digital revenue. So we are -- we have a target to triple that, triple our current digital revenue, and that should be more than 20% of group revenue in 5 years from now. Finally, we have taken out SEK 218 million in 2019 as an effect of joining forces with Pyry. That was the cost synergies in relation to the deal. We then communicated that 2020, we will look on SEK 120 million. And today, Juuso presented that, as of today, we are above SEK 150 million as sustainable cost savings. So we will overshoot that target of SEK 120 million. And we have commitment in the area of sustainability. We have talked about the science-based target initiatives, and we have also announced that, as of beginning of next year, first of January, we are exiting coal new build CapEx projects. So this is just, I would say, the super summary of the things that you have heard today. So by that, we will end the presentation part of this 2.5 hour, and we will use the last roughly 15 minutes for any Q&A that you will have, and I will hand over to Cathrine Sandegren who will handle that. I will be prepared together with all my colleagues to answer any questions that you might have. So please, Cathrine. Do we have any questions?

Yes. Thank you so much, Jonas. We will now open up for questions. [Operator Instructions] And our first question is from Erik Paulsson in Nordea.

Can you hear me?

Yes, loud and clear, Erik.

Great. So I had a question regarding those synergies. If we go back a bit to the Capital Markets Day in 2019, you talked about synergies of above SEK 180 million. If we use this benchmark, how does the current yearly run rate synergies look like? Is it so that we should take those SEK 218 million for 2019 plus those SEK 150 million for this year so far?

To make it very clear, I will ask Juuso. I don't want to get into the Juuso area. So Juuso, how do you see that? How do we see that?

Erik, it is crystal clear that you need to add them. We delivered SEK 218 million for the integration synergies in 2019, and now we are on top of that one, delivering north of SEK 150 million. Then at the same time, when you are adding those ones up, you need to remember, as I said, we have now established a bit of new baseline. So we are not talking about the same world, we were talking pre-COVID. But all of that, north of SEK 150 million is sustainable and will come annually, basically. At the same time, if you recall, the SEK 120 million have communicated in February 2020, we said that we are, at the same time, planning to invest roughly SEK 60 million or SEK 50 million to SEK 70 million that we wrote it at that point of time into digital innovations. And now due to COVID, we have pushed those maybe a bit forward. So I would like to say that what Jonas also raised about our ambitions in the digital, we still have some investments to be taken on those parts. So like always, there are lots of pluses, there are also some minuses in this gap.

But clearly, Juuso, that the SEK 218 million needs to be plus the SEK 150 million. That's how we see the cost savings.

Yes.

Of course, after...

So in total then, SEK 368 million, right?

Yes. And we will, of course...

Yes.

Update you when we close our quarter 4 then when we look on the full year.

And our next question is from Dan Johansson, SEB.

I have 3 questions this time. First one on the progress on revenue synergies and potential cross-sales in Finland, Sweden, would it not make sense to make a bigger push of geographical expansion in the Industrial & Digital Solutions business, which is still a very local Swedish business and given the strong ties into Finnish Industrial customers that you gain now with Pyry?

Yes. I will leave it to Robert. But I think you're making a point, which I think also Robert did, we see food and life science. And I will say, Robert, true to say that, that is, for us, is more and more becoming an interesting international niche offering. How would you formulate it, Robert?

I hope you can hear me. I think, just like you say, Jonas, of course, kind of we believe that -- we see that we have strong offerings and good, I would say, favorable time testimonies also -- they seem to be happy with what we do for them, and I think it becomes a top priority for us, kind of this global reach, to go into that one in food and life science. But having this [ hat ], obviously, kind of with already strong presence that AFRY has in Finland, sort of bolt-on growth would be attractive. But I think it's about the right opportunity at the right time.

Truly said, and we have to also acknowledge that we saw a decline in automotive, even in 2019, that was accelerated during 2020. But what I also feel with the portfolio that Robert has with digital, we have a good base in defense, we have also the automotive, but we also have for the life science. For sure, we will push for growth. That's one question, Dan. Do you have 1 more or 2 more?