Alimak Group AB (publ) (ALIG) Earnings Call Transcript & Summary

Hi, everyone, and welcome to the Alimak Group's Capital Markets Day 2021. My name is Matilda Wernhoff and I'm Chief Strategy Officer at Alimak Group, working with strategy and M&A. And I'm also your host for today. And I'm very happy to be your host given that I've been heavily involved in the group strategy process and the divisional strategy process, which you will hear more about today. Today, you will also get to know our team and the industries we serve better. So we are very happy to have you with us. We have a full agenda. So let's get started with a short video showing the wide range of customers that we serve, from the highest buildings in the world to wind turbines far, far out in the ocean. Please roll the camera. [Presentation]

So that was a short introduction to what we do. And today, you will get to learn a lot more about us and the industries we serve. We will start this day with an introduction by the Alimak Group CEO, taking you through the group strategy, but also commenting on the updated financial targets that were press released this morning. He will be followed by our Executive Vice Presidents, who will take you through their plans for profitable growth, covering the BMU division, Construction division, Industrial division and then after break the Wind division. Please note that after these divisional presentations, there will be a couple of minutes for written questions. [Operator Instructions]. After the divisional presentations and the questions, we will ask our Group Technology Officer up on stage, and she will present the group sustainability strategy and also very excitingly, launch our first official CO2 target. The last presenter today will be our new CFO. So you will get an opportunity to meet him, and he will present the group financials. And then we will round up the day with a longer Q&A session where I will ask the full team up here on stage with me and you will be able to then both sending your questions via the webcast, just like in the divisional presentations, and you can also call in with your questions, and phone numbers will be available roughly 10 minutes before the Q&A session starts. But with that, as I said, we have a full agenda. So let's get started. I would like to welcome up on stage our CEO, Ole Jodahl.

Thank you, Matilda. And a warm welcome to this first ever Capital Markets Day for the Alimak Group. I'm very excited to be able to present and discuss with you today, our updated group strategy and way forward for profitable growth. I'm also proud to be able to present several members of the leadership team that will take you through more details about the divisional strategies, our sustainability ambitions and also our group financials. Our vision is to move people, material and businesses safely to New Heights. It reflects our role in society and also the value we create for our stakeholders. It reflects our sustainability ambitions and also contribution to workplace safety. The group have a strong foundation. All the way from it was founded by Alvar Lindmark back in 1948 and soon thereafter when he invented the first rack-and-pinion hoist, the world had seen. And since that moment, this hoist has been taken around the world and is still the leading product in this industry as of today. The group has a leading market position with a unique know-how and expertise within vertical access solutions for professional use. We have a global footprint with around 70,000 units installed around the world. And also a very solid aftermarket business connected to this. We are present in a vast number of segments. And with our aftermarket knowledge and presence, we are in a unique position to help our customers from a complete asset life cycle perspective, driving optimized total cost of ownership. We also have a leading portfolio of leading brands like the Alimak, the CoxGomyl and the Manntech in our BMU business, the Avanti in our wind business and Alimak Service for our service business. These are globally known for safety and reliability. We have also a strong balance sheet and cash conversion, which puts -- gives us financial flexibility and a position to invest strategically. So in sum, a great company with a lot of potential forward. But we are also supported by some strong megatrends. Urbanization has been here around for decades as we all know, but here, things are changing. More and more people talk about the development of the 15-minute city. These are cities which are coming up around the bigger cities where they say people will spend 80% of their time. They will live here, they will work here, they will socialize here. That means that it's a lot of new urbanized areas consolidated, where also, of course, it will be a lot of construction and also at hoists to get everything into this space. We also see, of course, digitalization. And I think we all can agree that during the last year, the world has most likely taken a 10-year leap. In our industry, the digitalization is not yet so present, but it's coming, and we are already investing a lot in this and are in a position to take the lead also here. Then sustainability. This is, of course, something, it's not enough just to talk about anymore. This is something we all have to do. And for us, with our product portfolio, where we have a long life all the way up to 20 to 30 years. This is our business to make sure that products live long and we help our customers throughout the whole life of this. And of course, safety. Safety for us is our DNA. We create products which are supposed to work at heights. So this is what we do every day. So that now unions, governments and corporations around the world drive this trend is, of course, very supportive to our business. Strong trends that all puts us in a great position forward. But the group has potential to improve. The group has not delivered on its growth target and EBITA targets over the last years. For growth, we have seen that it's more or less flat over the last couple of years with the exception of 2020, where we saw a big dip. And as for EBITA, the group were there prior to the 2 acquisitions done in 2017. But afterwards, the group has not managed to get back. As for the leverage target and also the dividend target, the group have a strong financial position and good cash conversion, so that we have managed in a good way. My main priority as the CEO is to deliver on the group's financial targets. And in October last year, we launched what we call the New Heights program. This consisted of 3 steps. First one was establishing the base, which was basically the focus we had last year. We developed a new vision and core values to set the culture we wanted in the group. We also set up a new organizational structure and connected through that, launched a restructure. We developed a value creation model for the group and also started and kicked off our division strategies. Step 2, which is this year what we are into, is securing margin improvements. And this is, of course, now first of all, to deliver on the restructure to lift the group profitability, stabilizing the organization also, of course, after a lot of changes and start delivering on division strategies. All for us to moving forward, deliver profitable growth in the years ahead. The new organization that we put together was these 4 divisions, Construction, Industrial, Wind and BMU. And you can see they are more or less the same in size. Profitability wise, we have 3 divisions, which is delivering more or less good, solid profitability, but we have issues in 1 division, something we work hard to -- or a lot to address, and you will hear more about that today. These divisions got the full responsibility for the business. They are controlling the full P&L. They have the responsibility for the OEM sales, the aftermarket sales and also the commercial models connected to this. So this aftermarket business was moved into these 4 divisions. And this provides -- or this gives the opportunity for these divisions to control the full business, of course, and drive total cost of ownership towards our customers. Another vital part of Step 1 was to put together a capable team. And I'm very proud to have this diversified and committed leadership team now in place to drive the development forward. And with me today, you will meet David. He is Head of our Construction division. He's new in this position. But he has been with the group for a while, heading up the Australian business in the group very successfully over the last years. Then we have an external person for our Industrial business, Salomeh. Very happy to have her on board and she will also present today. For the Wind and BMU business, we have Jose Maria and Mark. They have been with this business since prior to the acquisition, but this is really the first time they get the opportunity to fully manage the business on their own. Then we have a new CFO, Thomas, which you will meet today. We have Charlotte on the group technology, sustainability and IT, and she will also be here talking about our sustainability ambitions today. We have Matilda, Head of Strategy, M&A and business development in addition to also taking us through this day. And of course, last but not least, a new function in the group, people and culture, where we have Annika taking care of our most important asset, making sure our people blossom. The third element was to create the group value creation model, and this starts with our culture, who we are. And so that was the vision, the core values and also the organizational structure enabling this. And the core values we have is taking ownership, move fast, set the limits and be inclusive. We also, of course, had to drive our strategic enablers in this. And here, we put the customer in focus. We see that the customer is the most important for us. So therefore, all decisions that we drive in our daily life and in our daily business must be centered around the customer. In addition, we are the leading player in this industry. So driving technology development, securing that we remain and manifest our position as the leader in its industry. Technology leadership is vital. Also, of course, to make sure that we utilize our assets, our own assets in the most effective way, driving operational excellence and continuous improvement in our daily business. But of course, also taking care of our most important assets, securing that we have both operational and strategic activities around our employees, driving and facilitating the best workplace for our people. All circled with sustainability and digitalization. These are enablers that are part of this whole thing. Becoming really a data-driven business, digitalize our business towards our customers, our offer, but also, of course, digitalize ourselves. And sustainability, as Charlotte, I'm sure will say today. It's not the icing on the cake anymore. It is the cake. A result-driven culture, an organization where people take ownership, move fast, challenge the limits and are inclusive. All decisions centered around the customer. Is this something the customer is ready to pay for? Become transformative by nature, manage the daily operations, while at the same time, also drive the strategic elements constantly moving forward, deliver sustainable relationships, sustainable operations and sustainable solutions, deliver on our financial targets and our sustainability targets. Then coming to service. Service is a very, very vital part of the group, running 12, it consists of around 35% of the turnover, but it's well beyond 50% of the group profitability. So this is a very important part today and it will be also a vital part in our development forward. What we have said and what we have done is that we have put now the service responsibility into each division. So that each division makes sure from a customer perspective that we develop the right value proposition. The products, the services and the commercial models, how we take this to customer. Are we selling it one-off? Or are we actually creating performance-driven contracts. This now sits in the divisions to drive this. And since we have this leading position in the service business, we are in a great position to continue to drive this and make sure that this will be and remain both a growth contributor and a profit contributor to the group forward. We have also announced this morning that we are updating our group financial targets. The New Heights program also about this, how we as a group can develop and ensure that we are delivering on our financial targets. And then as a natural part is also, of course, to look into and making sure that we, as a management team, are committed and drive towards these targets. And these are the targets that we now have. The group revenue target has moved from being a 6% target organic to be 5% to 7% growth over the next years. The EBITA target has moved from being a firm 15% target to be a range between 14% to 16% EBITA. Our leverage target remains the same, but I would like to highlight that if we would make a bigger acquisition, we could overshoot this 2x leverage, but of course, with the aim then to drive us into that range again as soon as possible. And then lastly, we have also updated our dividend policy. It used to be around 50%. Now we give it a range, 40% to 60%. I really hope that you will see today that we have developed a clear vision and a road map to capture the full value potential for the group going forward. We have updated our financial targets to reflect the value that we believe we can and must create. It also reflects our sustainability ambitions and contribution to workplace safety. The group has a strong foundation. We now have a customer-oriented decentralized organization with a highly committed leadership team to drive this forward. We are in a strong financial position and are able to invest in growth-enhancing activities, including M&A. Thank you.

Thank you, Ole, for giving us an update on the financial targets and also on the New Heights program. During today, you will get a lot more insights from the divisions on the next step of the New Heights program as well. And speaking of that, it's time to introduce our first divisional presenter. I would like to welcome on stage Mark Casey, Executive Vice President for our BMU division, who will take you through his strategy to improve profitability within the BMU division. Welcome, Mark.

Thank you, Matilda. So I'm very pleased to be here today to give you an introduction and to explain to you a little bit about what our group or what our division is doing within the group. The key trends in our market and the strategy going forward to improve the profitability and the profitable growth of the BMU business. Just some words about myself. I've been 16 years in the BMU business. I'm based in Dubai, and I've been running the division for the past 3 years. Some short facts about the BMU division. So we have really a very nice installed base of around 13 -- over 13,000 machines. We have about 1/4 of the revenue of the total Alimak Group business. We have really 4 business segments within our division. First of all, we classify the higher complexity BMU market. This is -- represents 17% of our sales today, and we are using the Manntech brand. And we have a unique position in this market. We are the clear market leader worldwide. And I will show you soon some unique references where we are using our equipment in the building. Our core market is the what we call it medium complexity BMUs. This is -- we are using a manufacturing our CoxGomyl brand of BMUs. And this is the core market. They are manufactured in Spain and distributed all around the world. These are typical buildings from 120 meters higher and higher. The third segment is what we call low complexity market. This is typically airports, shopping centers, hospitals or large footprint buildings. We have very few sales in this market segment and we are underrepresented in this market segment. I will show you in a few -- within the strategy, how we intend to address this going forward. Of course, very importantly, 30% of our business is parts and service. This is also very important for us. And we, as a division, understood the more and more the importance of this once we became part of the Alimak Group. So here is our reference list of some of the highest buildings in the world. Of course, very noticeable on the left is Burj Khalifa, standing at 823 meters. Which we have 21 machines in this building. And we have a team, a full-time team of people situated in the building, servicing the machines 24 hours a day, 365 days per year. Another really interesting reference here is in New York, is a One World Trade Center, a very iconic building. And my particular favorite is a Shanghai Tower in China, standing at 632 meters, a very unique building and a challenging project for us. What I would like to point out here is with these very tall buildings, we're not only cleaning the facade. We maintain the facade. We change glass at 500 or 600 or 700 meters high, sometimes up to 1 tonne of weight. And we maintain the LEDs and other items on the facade. So it's really the full range of access in a building. I would like now to show you a short film so you can really see what is our products, and so you get a better understanding of what actually the products look like. [Presentation]

So I hope that was a short introduction to the BMU business that you now see when you see 2 people in a cradle cleaning or maintaining the facade of the building that you look up next time and see the roof and see the machine which is connected to it. Hopefully, will be a CoxGomyl or Manntech system. I would like now to introduce a typical business case for us, so you can see what our customers are demanding. This is a recent order which we won for SEK 23 million in March of this year. It's a 375-meter building in Guangzhou in China. We are delivering 3 CoxGomyl BMUs sometime in '19 -- in the next year. What I would like to highlight here is the long-term nature of our business. Our projects run typically from 6 months until several years. So in this time, which we are manufacturing the machines in our factory, the core part of our business is project management. We make sure that we -- these -- the machines when they turn up and they arrive at the construction site that they're able to be lifted and fit seamlessly into the building. As you know, every building is unique and every machine is also unique. Another case, which I would like to highlight is one of our very iconic bridges in Australia. This is the largest single order ever received by the Alimak Group business at SEK 330 million. It's a special bespoke gantry manufactured in our German factory by Manntech and is replacing 4 existing machines which have been on the building since the early '70s. The existing or the old machines only were able to reach or access the sides of the building. Now we need to -- or the customer asked us for a solution where we can maintain 100% of the building as they need to paint a treat and to access all areas of the bridge to make sure that it's structurally safe. So we have studied the manufacturing. This contract is split into 3 main areas: Being first the design; second is the manufacturing; and thirdly, the installation. So we now have finished completely the engineering, and we start this year to manufacture the units, the very special units in our Manntech factory and start delivering at the end of the year. And the installation will then continue for a few years after to until we complete the project. And most importantly, we will be maintaining this asset for the next 25 or 30 years in our service teams going forward. Coming to the financial performance. I think we can really split this into 2 areas: before COVID and after. So before COVID, the business or the division was actually tracking between 4% and 5% profitability constantly each quarter. Unfortunately, during the -- one of the impacts of COVID has been some volatility within the division and we have suffered from factory utilizations and lack of access to customer sites. Actually, reporting losses is a major concern for the division. We have a lot of activities in place. We have taken action, and we have plans to make sure that going forward, the last quarter was the last quarter that we delivered losses in the BMU division. It is our view that this business should be double-digit EBITA in the long term. However, as the business is very long term, has a long-term nature, then we believe it's going to take some time until we achieve this. But this is where we're headed. Pleasingly, we saw good growth in quarter 1, and we hope this is a trend -- or we believe this is a trend going forward in the future quarters. Key trends in the BMU industry. Some of the key trends which we see is 3 important trends for us. First of all is urbanization. And the so-called rise of the secondary city. Today, we are sitting here in Stockholm, where the majority of high rises have been built. You see secondary cities, for example, Gothenburg, which is also close by, which now starts to have high buildings being built. We see in London, the main cities, in Edinburgh and Manchester. In U.S.A., it's similar with the major centers and then secondary cities like Pittsburgh, starting to build higher and higher buildings. So this is a real key trend we see in the industry. Second is digitalization. There's a revolution in the real estate industry. People would like to understand what is happening in their building and how they should manage the assets in the building better. We are very pleased to say for the past year, have equipped all our machines out of the factory with digital capabilities, and we are now able to understand and see what our machines are doing in the field. For example, in the future, I would be able -- the customer would be able to understand which we know was cleaned at which time or when the machines were used at which time. We also learn from the use of the machines and be able to design better machines, which is better for our customer going forward. We'll also be able to focus on the total lifetime cost of the machines and service at the right time and the right period, making sure that the machines are fully utilized at all times. Thirdly, and most importantly, health and safety, safety is in our DNA. We are working at heights. It's an important segment or important for our business and also as the emerging markets become more and more conscious that good safety is good business, then they are looking for more and more reliable products at such as -- and companies such as ours, which guarantee good, reliable products and safety. So moving on our strategy for profitable growth. We have 3 areas, which I will discuss where we are working at the moment. One is operational and two are forward-looking. So first is operational efficiencies, then the replacement, refurbishment and service growth and expanding the product offering. So firstly, operations. As I said earlier in my presentation, we have been suffering from utilization and efficiency in our factories and our offices. We have taken a complete review -- we've had a review underway of lean manufacturing, and we are making plans and carrying our plans to make sure that we are utilizing our factories and our staff in the best way. With sales processes, we believe using digital tools going forward, much more, we are able to give the customer better and quicker and faster information. And of course, quality. We have had some issues in the past with quality, and we want to make sure that we are developing and delivering consistent quality as a leading and the #1 player and making sure that our customers are satisfied. So these are 3 operational focuses, which we are carrying out. The second is a very exciting opportunity. As we said at the very beginning, we have over 13,000 machines around the world. And a significant portion of these machines are older than 10 years old, and we have machines which are 40 and 50 years old still in the market. This opportunity has been emerging in our business as the BMU business is no longer a new business, it's actually maturing. And as it matures, these assets get older, buildings are lasting longer, and our customers want to have the most modern and up-to-date machines. Therefore, we have developed offers, and we are doing renovations, refurbishments and offering new machines. These obviously have unique characteristics because we no longer have a construction crane as when you build the building, we take machines by helicopter or through the building. But as engineers and project managers, we are ideally suited to solve this challenge for our customers. So the next growth opportunity for us is currently, we just offer BMUs and service of BMUs. We are developing products for the light range. These are larger footprint buildings for hospitals, for schools and airports, as I said, and for important markets like the U.S.A. So we are expanding this and we will soon hopefully, we will be releasing products for this product segment. Secondly is an exciting development of automatic cleaning. We are working with some leading players in the industry about how to clean buildings automatically. We believe that this is maybe a revolution in the industry and we need and will keep close to these developments to make sure as a market leader that we are following and tracking the developments in this industry. Again, so the next is a branded service offering. Replacements, refurbishments to our service customers and all customers for all our assets. And of course, this remote connected connectivity of the machines in the future will drive an interesting business opportunity for us. So in conclusion, we have a solid plan to bring the business back. And it is not acceptable to of course, to have losses in the division. And our view is that this will be a double-digit business going forward. So in that -- with this, thank you.

Thank you, Mark, for telling us more about the BMU business and how you will improve profitability going forward. I see that we have a couple of questions from our listeners. Well come up here on stage with me.

So the first question is what potential do you see in growing the service revenue going forward?

So the service revenue worldwide is quite underrepresented. So we believe we have quite a small market share, and it's a very fractured business worldwide. So this is one of our main focuses in the business going forward that we are able to offer more service to our customers and that we are really targeting all these asset base that we have because we still have some way to grow in this business.

Thank you. And we have one question here related to China. How important is China for you as a market? And do you see opportunities for profitable growth also in this big market?

So China is a very big market for BMUs. We are far focusing on a niche policy at the moment. So we are the market leader for the imported products, which represent a small percentage of the overall market. We think that this is the best position to be in at the moment because it only -- it provides growth or small growth, but good profitability. And we have other areas we need to focus on in the medium term, and we will come back to China at a later date.

Okay. And a question related to Sydney Harbor Bridge, the case that you presented. So can you give an update on that project and how it's going?

Yes. So this project is split into 3 phases over many -- over a few years. So we have now completed 100% of the design and the design is finalized. We are, at the moment, well through the beginning of the manufacturing of the first unit, which we hope -- which we believe we'll be shipping out by the end of this year. And the installation teams are already -- last weekend, they took off the 2 units, old units off the bridge in preparation for the new unit to arrive.

Yes. And that was on Australian television, right?

Exactly. This was on Australian television a few days ago.

Yes. Okay. Thank you, Mark. And it's now time to move on to the next division on the agenda. I would like to welcome up on stage the Aussie in the team, David Batson, the Executive Vice President for the Construction division. Welcome, David.

Thank you, Matilda. I must say I'm very proud and honored to represent the Construction division today. As Ole mentioned, since 1948, the Construction division has been in the DNA of Alimak. My name is David Batson, I'm the Executive Vice President. And prior to being the Executive Vice President, I joined Alimak in 2016 as the Managing Director of Australia and the Pacific and New Zealand. In the coming presentation, I'll describe our division and the opportunities we see moving forward. So let's have a look at the division facts. We're 27% of the group sales -- rolling 12 months, 27%. We have revenues of SEK 990 million. And we have an installed base, which I'd like to call the population of 16,000 units. Our Construction Equipment represents 59% of the sales for the division. And when I talk Construction Equipment, I describe that as hoists, mass climbing work platforms and transport platforms. We also have rental operations representing 27% and these operations are in Australia, Benelux, Germany, France and Switzerland. We also have used equipment representing 1%, and we see great opportunity moving forward in the used offering. And the service and parts business, 13%. And services, I mean not just labor but the services we offer on a construction project. And we see that as a growth opportunity as well. Let's have a look at what we do in the Construction division. [Presentation]

So now let's take the opportunity to have a look at our product offering. Our construction hoist, our core offering. They are temporary installations. You'll hear later from the Industrial segment of permanent installations, but these are temporary installations. They come in a variety of sizes and pay low capacity from 2,000 kilograms to 10,000 kilograms. They come in mid-speed and high speed, mid-speed, meaning they're most productive in the smaller buildings and high speed as the building gets higher and can come up to speed, can move materials and people faster. We have a large hoist called a mammoth, it's 3.5 meters wide and 5 meters long. Mass climbing work platforms. These products are in single and twin drive, meaning they work on 2 musts. And they're used to install the facade on construction projects, but not only on new projects, but on refurbishment projects. And we see some growth opportunity in this area as well, and I'll share a little bit about that as we move forward. Our transport platforms, differing from our construction hoist, these are open caged. They are for passengers and materials, depending on which part of the world you're from and depending on the laws in that part of the world. They are 10 to 12 meters per second. And then modular. And what that means is you can use these materials and transport platforms in conjunction with the hoist product on the same mass section or multiple mass sections on a project. And then we have the scaffolding transportation system, a new offering, which is about the horizontal and vertical movement of products to make it more efficient and more productive for the installers of scaffold and the dismantling that. I might switch now to the global footprint. Let's have a look at our manufacturing facilities. We are in Changshu, China, Skileftia in Sweden and Zaragoza in Spain, close to our customers where we manufacture our products. Our customers are either rental or end user customers, such as construction companies owning product. And we -- and they're all serviced by -- in 21 countries by our own sales companies or 47 separate countries through our distribution network. You may recognize some of the customers, Skanska and Ramirent, those of you that are dialing in. And we see great further geographical expansion, and I'll elaborate that as we move forward. Our customer case study as you've seen previously from the BMU division. This particular case study is close to my heart, of course. It's based in Sydney. You can see the Sydney Harbor Bridge, as Mark mentioned before, in the background. This precinct is actually called Barangaroo, and we've been partnering with the developer of the precinct Lendlease. 1 of the world's largest construction companies since -- well before 2013, so over 10 years of collaboration. The buildings you see on the right are called the International Towers 1, 2 and 3. And Alimak were a partner with Lendlease on that project. The building on the left, we also recently completed with Lendlease. But as you can see, I've highlighted 2 buildings in the middle, One Sydney Harbor and Two Sydney Harbor. And the interesting thing about this project is the common tower. We own and rent a common tower and a common tower is a structure that is bolted on to the facade of the building as it goes up and it moves material and people through that common tower, but it's serviced by Alimak construction hoists. On either side, whether mid-speed or high speed, whether twin or single, but it's a logistics solution to increase productivity on that site. What I also like to highlight is that we work closely with Lendlease in this instance to make sure that we optimize the offering, and we think that's good for sustainability. We work closely with application and project management. I mentioned the twin and single cars of various speeds, but we install, we jump as the building is going up, we jump and we dismantle. But we also service and support, making sure efficiency and productivity is maintained. Also, we work to Lendlease's global minimum requirements, the highest safety standards that I've seen in the world on construction projects. So having been with this company for 10 -- over 10 years and being challenged to improve our safety on site, we think this holds us in really good stead in the future, not only in Australia but all over the world to keep meeting those standards. The other important fact is these assets were connected. So that we can monitor and improve the productivity and efficiency of those products. Let's have a look at the financial performance of the Construction division. Revenues and order intake have been impacted by COVID-19. However, you'll notice that order intake was declining pre-COVID-19. But what is pleasing is to see the order intake in Q1 2021. We also had margin improvement, and that was a reflection of the organizational changes we made with the New Heights program, increased utilization of our factories and also careful management of our supply chain and also our pricing. We've previously communicated in Q1 that we see H2 actually improving depending on the vaccination program globally and the effects of that, but also the GDP growth across the world. Let's have a look at some key trends in the industry. You heard from Ole and again from Mark urbanization. I think that was a very clear message. But I'll give you an example of my own, which is Sydney again, where they have a large metropolitan city. And you would assume it's got 1 CBD or 1 city, 1 high rise, but it isn't. It's actually 3 cities in 1. So North Sydney, the CBD of Sydney and [indiscernible], all coming up out of the ground higher, so people being -- can be closer to work, as Ole mentioned. I want to talk about emerging markets. We see this as a trend globally. And we noticed that based on global data that the emerging markets are outperforming the construction GDP, construction compounded annual growth rate, which is 4% between '20 to '25. And these emerging markets are outperforming those in the coming years. And I'll share a little bit about how we want to capture that. And then digitalization. We spoke -- we heard Ole speak about digitalization before, but the industry has had rapid change since COVID hit. And also the ecosystem of a construction site is demanding more digitalization, the more use of data. I'm pleased to say that we have industry participation, not only here in Sweden, but in Europe, where we're working closely with the participants in the industry to see how the productivity or the factory of a construction site can improve going forward. And we have a key role to play. And I'll show you going forward how we may be able to capitalize on that opportunity. Health and safety, of course, we have a zero-harm policy in the industry. And it's very vital working at heights. As you know, the Construction division, as you've seen. It's important that we maintain high levels of health and safety, not only in the manufacturing and use of our products. But also the use of our products and the installation of them on-site. And then environment. When I look at environment, I think of the noise pollution of a construction site, and the industry trends about trying to reduce that noise pollution. I think about green solutions and different power consumption on the construction site. And the third one I would like to highlight is the recycling. The recycling of materials, whether they're materials taken out of a construction site or how we can recycle the materials we're delivering on to a construction site or products. And I'll share a little bit about that going forward as well. So what's our strategy for profitable growth? We want to expand our footprint, whether that's through our own sales companies or whether that's through our distribution networks. We want to broaden our offering, and we want to digitalize the customer value proposition, and I'm going to spend some time on each one of those as we move forward. So firstly, expanding our geographical footprint, what does that mean? We see white spots in Africa, Middle East, Latin America, Eastern Europe. We have and are implementing plans to take advantage of those white spots. We see rental and news to target markets where it makes sense as an offering. During the COVID pandemic, many customers retained capital and look for rental as a solution during that time. And also, it meets the UN sustainability goal, number 12, which is responsible consumption. So we think this blends well. In China for China, it's a different market. It has its own commercial challenges. But we believe we can be selective, and we believe we can grow in that market. We have new leadership, and I'm confident that we can move forward. Broadening our customer offering. What we're going to do is we're going to continue to spend our R&D investment in our core offering. We're going to expand our mass climbing work platform range and its accessories, and we'll continue to introduce new products, as you've seen like the STS or the scaffolding transportation system. In addition, the services offering, which I mentioned services, not just the labor, but the services we offer on a construction site on the whole ecosystem on how we can play in the logistics flow of equipment, not only products, materials but also manpower or the people that are utilized on that site. Application engineering, refurbishment, project management, the installing, the jumping, the dismantling, as I've mentioned, the service and preventive maintenance, the parts, the familiarization and operator training, but also the asset management solutions. And when I talk about asset management, it's not just the iron or the management of the iron and the logistics of the iron and moving in and out of a construction facility. It's actually the management of that asset to make sure we get the greatest productivity for our customers. We want to work closely with them as we move forward. The digitalization of the customer value proposition. We have 3 key areas: the pre-purchase, the reach and engage. We just launched our new web page in February. We want to expand our efforts in our reach and engagement with our clients. And we think the portal is a great way to do that. The customer value ecosystem, the utilization analysis, the analysis of the utilization of the equipment on site, rightsizing the equipment going forward, giving customers an opportunity to be able to select and rightsize the product. And the digitalization of the service offering and My Alimak, which is a customer portal is a very, very good delivery for that. And things like BIM, BIM modeling. We've had thousands of downloads. We've had many, many engagements with clients in the past 12 months. Service manuals, the ability to see assets online. We think these are all opportunities, as you can see on the right-hand side of the screen to have a better engagement, to have a better Alimak moment with us going forward. But that big data is also something we can use internally in our production facilities, the robotics, the innovation that we can bring into our production facilities going forward is critical. And if that means there's more automation, we can then redeploy our people where they can best add value. And we think there's great opportunity there as well. So in summary, we have stronger construction activity, as I mentioned, in the coming compounded annual growth. We have the trends of urbanization, the emerging markets, the digitalization of our industry. And we believe we're well placed to realize our growth ambitions. Thank you.

Thank you, David, for sharing the exciting opportunities within the Construction division. Now we have a couple of questions for you. Welcome up here on stage with me.

Thank you, Matilda.

So do you expect a solid recovery in the second half of 2021 as societies open up?

Well, I think what we said in Q1 is that we believe there should be improvement and that's based on the vaccination rollout and the GDP globally. So we're carefully monitoring that.

And can you comment a little bit more on your China for China strategy and what will be needed to be successful there?

Well, I think, firstly, we need to develop products for the local market. It's the world's largest hoist market. It is an opportunity, and we think allowing our people to develop products and services and commercial offerings in China, being selective is the best way forward.

Okay. Thank you. And here, we have a question related to service. So what potential do you see in growing service revenue going forward?

Absolutely. I think I mentioned before, harvesting the population. So as we grow our population globally, I believe that there's a great opportunity to work with our customers, and they have various needs depending on it's -- whether they would like us to work with them or we do it for them. We think there's a great opportunity to support their efforts on construction sites with parts and services, as I mentioned, not just labor.

Okay. Thank you. And when do you expect that your expanded offering will begin to contribute to growth of order intake?

Well, we're doing work now. We're not waiting. We're seeing that work coming through. We believe we build on that foundation that we have in certain territories. We have strong markets in the U.S., the U.K., Australia and Europe and the Nordics, and we just want to build and expand that geographical footprint and we should see things flow from there.

Okay. Thank you. Thanks a lot, David. And now it's time to move ahead in our agenda, [Operator Instructions]. But with that, it's time for our third out of 4 divisions and I would like to welcome the newest member of the group leadership team, Salomeh Tafazoli, who's our Executive Vice President for the Industrial division. Welcome, Salomeh, both to the group and up on stage.

Thank you so much, Matilda. So I'm Salomeh Tafazoli. I started Alimak Group, the 1st of June. And it's been almost 3 weeks now, and I'm really, really happy to be here. Now if you ask my manager Ole, he thinks that my honeymoon period is over. So I better start delivering now. My background is within the garage industry and automotive industry. Most recently, I was the Vice President of Sales and Marketing for Europe, Middle East and Africa in an American company called Snap-on. And prior to that, I have been working for Volvo Group in different positions, in operations, sales and strategy. Together with the industrial team, we have developed this plan. It has been a bottom-up plan, which means that people from different level of the organization has been involved. So we look brightly into the future where we want to be even closer to our customers and make sure to offer them a total solution. Our aim is to see a stable profitable growth within the Industrial division. So what do we do? Let me start by giving you some more information about what we do within the Industrial division. Unlike some of my colleagues, we do not have one customer target. We have plenty. And since we have so much diversity within our customer, we have decided to divide our customers into 4 segments. The reasoning to this specific segments is to base what we need to focus on when we present our value proposition towards our customers. Now before I tell you a little bit more about these segments and our customer groups, just a little bit of the facts. We, within the Industrial division, we contribute to 24% of the total sales of Alimak. We have 8,000 units installed, and that is mostly in Western Europe and in the U.S. And we contribute with SEK 917 million. So to our segments. First of all, our largest segment, which is kind of our backbone within our division, the heavy industry. Here, we have customers such as cement plants, ports and power plants. Now these customers have 2 things mostly in common. The first thing is that they want applications that we called rack-and-pinion. Those applications are more rough and tough and can handle challenging environment. But also you can put the lift on the building. The second thing is the long service agreement that we have with these customers. Our second segment is oil and gas and marine. This is a segment mostly dominated by traction application. We were actually quite weak in the traction application until we acquired in 2014, our Norwegian HasTech. Thanks to our Norwegian company, we are now -- we have a good competence center. And a couple of years ago, we actually launched a marine lift in our traction application, and I will tell you more about that. The third segment is a very interesting segment. Not only can we grow a lot in this segment, but it actually takes us from being a part of a building to be the core in our customers' operation. Here, we have customers such as retail distributors. And then the fourth segment, special engineering. Here, we have special lifts and special applications on special constructions. Just to give you a good example is the lift that we have in the London Oprah house, where our lift can manage 1 full truck of 24 tons. And coming from the truck industry, you would know that, that's a lot. Now for you to understand what we do and how we operate in our customer sites, we have a short movie. [Presentation]

So I've seen this movie plenty of times, and I can still tell you that it gives me goose bumps. It's pretty amazing products we have. So now to the After Sales. After Sales is extremely important to us. Since we are mostly integrated in our customers building for 25 to 35 years, the new sales price of a lift is only 25% of the total lift life cycle. The rest is actually maintenance, parts, repair and refurbishment. As you can see on this slide, we are a true global organization. We have our own sales and service personnel in 22 countries. And on top of that, we also have distributors. Now this makes us unique since we don't have too many competitors who can offer this kind of footprint and especially not when it comes to service. But it is also our strength since we can be so close to our customer in their own environment and really understand what they need. So to the financials. 2019 was a stable year for us. And then COVID came. And 2020, as for many other industries, we saw dip. I'm very glad to say that we see an increased activity level in our order intake again. When it comes to revenue, we are still affected by the COVID situation in 2020. What is important for you to understand is that it takes about 3 to 18 months until we get an order and we can have installation and invoicing. And then the EBITA. Isolated in Q1, we can see a very good EBITA due to favorable product mix and the cost saving program that we launched last year. Historically, we have been on a 19% level, which is very good. But obviously, we want to approve -- we want to improve from those levels as well. So what is the key trends that we see in our industry. First of all, the geographical development. We see an increased activity in Africa, Middle East and in most parts of APAC. But we also, after years of outsourcing production to emerging markets, see a trend of domestic and regional production. And we see this especially in the U.S., in the U.K. and other parts of Europe, for instance, here in the Nordics. Service. Our customer wants to focus on their core business. Therefore, they require out of their supplier to take a complete solution of their products. Now this is great news to us since we are so strong when it comes to After Sales. And then healthy -- health, safety and environment. As all my colleagues have said before me, and I know that my colleagues will say after me. This is an area that likely we see a demand that is increasing everywhere in our industry. So now to the strategy of our division. We have 3 main areas that will take us to an even more profitable growth. Be closer to our customers and really understand what they need out of our products. That's what we call segment focus outside in perspective. Geographical footprint, where should we be? And what should we offer? And then service. Service is 58% of our turnover today. We just have to be agile and up to speed. We must be best-in-class when it comes to service. So with that said, what does this mean more concrete for us? Segment focus. How can we add value with our products to our customers. Based on the different segments, our customer has completely different needs. We will make sure to have an organization that supports those needs fully. We will have sales and service people dedicated to the different segments where we see growth. They will be trained. So they know exactly the right and -- the right applications and solutions for those customers. And then we will make sure to have an engineering back office supporting our frontline when it comes to advanced technology and specification. We will have segment expertise within our product management team. Their job is to commercialize and package our offering in the best possible way, so it gives really good value to our customers. We are right now defining where we will have direct sales and service personnel and where we will partner up with distributors. Where we partner up with distributors, it's extremely important for them to understand what we require of them, but also what they can require of us. Our distributors is our face towards our customers. And it's our job to make sure that they are as professional and knowledgeable as possible. In some areas, like for instance, marine, we have opportunity to grow. As I told you before, we launched the marine lift that was in 2019. Now due to COVID, we need to relaunch that product. Just to give you a small flavor, marine or ships that was built in 2020 was about 800 units. The forecast for 2025 is 1,900 units. And these are ships that are above 2,000 tons for instance, like a container and ferry. We have not focused enough in certain areas. An example of that is Eastern Europe. We need to put much more energy in these regions, not only Eastern Europe but also APAC and Middle East Africa. We need to take more of that market. And then the traction competence. We have a strong traction team in Norway. We see most of the growth being in APAC and Middle East Africa. We need to strengthen that team where we see growth. I think, especially after the COVID hit us, we all realized the importance of digitalization. I come from the automotive industry. And here, diagnostics is one of the most important areas going forward. In the lift industry, we still have a journey in front of us. Being a global organization, we must be on top of this issue and be up to speed. We need to work with proactive maintenance. We need to work with service from a distance and 24/7 support. This is what our customer demands of us. But also as we grow in some geographical areas, as I've said to you, being East Europe, APAC and Middle East Africa, we must make sure to invest in service hubs. Now in the Industrial division, as I said to you before, we see a bright future. We have knowledgeable personnel. We have good quality products, and we have a really strong brand name. Now we need to focus, we need to structure and we need to prioritize. By doing all this, we will make sure to have a profitable growth with our customer as our #1 asset. By doing all of this, our business will reach New Heights. Thank you so much.

Thank you, Salomeh for telling us more about the wide range of opportunities in the Industrial division. And I also have to say, super impressive presentation for only being here for 3 weeks. Imagine what you can accomplish in 3 months or few years.

Thank you so much, Matilda.

Now we have a couple of questions here from our viewers. And the first question is, which market segments, geographies or application areas, do you expect to show the strongest development going forward?

Well, when it comes to segments, I will say that we see a growth in every segment. And when it comes to the geographical areas, that will be especially Africa, parts of APAC and Eastern Europe.

Okay. Thank you. And can you describe your initiatives regarding digitalization and sustainability for the division?

Sure. Now since our products are at site for 25, 35 years, we need to be able to handle digitalization when it comes to service even better. With that said, by having maintenance from a distance, that will actually require that we don't need to go to site, flight to site as much as we should have done otherwise. And obviously, that will affect the sustainability that we're trying to achieve. But also, I think, since we have products being maintained, in our nature, we are a very sustainable division.

Thank you. I agree. So do you expect from the recovery programs in U.S., U.K. and Europe, increased investments in infrastructure, will that benefit your division?

Absolutely. I mean these are markets where we have a huge installed base. And obviously, not only new products can we grow in these markets, but also in After Sales, service contracts make sure to not only prolong the service contracts we have, but also parts. So absolutely, this will affect us very positively.

Good to hear. And then we have one last question coming in here. Can you comment on when your planned product launches will start to contribute to the order intake growth?

Matilda, I cannot do that. We -- obviously, we're working with new products, and they will result in growth. But exactly when, I cannot go into.

There's a lot of things in the pipeline.

But There is a lot of things in the pipeline. Yes,

Okay. Thanks a lot, Salomeh. And once again, a warm welcome to the group.

Thank you so much.

Thank you. And with that, we have covered our CEO introduction and 3 out of 4 divisions, and it's time for a short break. When we come back from the break, you will hear from our Wind division, and we will also cover the group sustainability strategy with the launch of our first official CO2 target. And you will get the opportunity to meet our new CFO, who will present the group financials. And you will also have the opportunity to participate in a longer Q&A session with the whole team here [indiscernible]. And with that, we will be back at 14:35. See you then. [Break]

Hi, everyone, and welcome back to the Alimak Group's Capital Markets Day 2021. For any new viewers, my name is Matilda Wernhoff, and I'm Chief Strategy Officer at Alimak Group. We have 3 presentations left today before we will have our Q&A session. So let's get started right away. I would like to welcome on stage all the way from Spain, Jose Maria Nevot our Executive Vice President for the Wind division. Welcome, Jose Maria.

Thank you very much, Matilda. I will start with a couple of words about myself. I'm coming from Spain from Zaragoza, where we have our factory for the Wind business. And I have been in the group for now more than 12 years, taking different positions. First of all, as country manager, then I took the responsibility as Chief Sales Officer for the group in a global scale. And during the last 3 years, heading the activities of Wind for the group. But let's move forward. And let's see what is the content of my session. First of all, I will provide some insights about the business, the Wind business in the group. And second, we will be talking about the strategy for profitable growth. So short facts about Avanti and the Wind division in the group is that we represent 23% of the total sales of the group. We have the largest installed base of the group with 37,500 units by the end of last year that generates SEK 832 million. Those sales are amount for product families, service lifts, ladders, internals and services and PPE. Our core activities are service lifts, ladders and services where we have a strong position, a solid base to continue to grow. For the internals it is the group -- it's our strategy to have profit before revenues. Therefore, we are being much more selective when we are taking projects, and we are moving out of these product range. But let's have a look on the products themselves in a short video. [Presentation]

Good. I hope you enjoyed the video. That does continue about our footprint. It has been always, for Avanti, the aim to be in the 10 major Wind markets worldwide. So we have a very strong position in all these major markets by manufacturing facilities in U.S., in Brazil, in Spain, Denmark and China, but as well with sales and services offices in U.K., Germany, South Korea, India and Australia. So with that, we can provide a perfect setup for our customers. And in the future, we are ready to expand ourselves in function of our customer needs. And then we talk about the customers. This is actually our obsession. We have very long relationship and solid relationship with all the key players in all the categories. What does it mean that we select the -- we have 3 categories of customers in function of the activities that they are performing. They are producing towers. They are producing the wind turbine generators and blades or there are utilities that are selling the energy. And among them, we put as well the service companies. Then here, we have to highlight that most of them are global companies. They are working in a -- yes, worldwide. But it has to be signal as well that the ones that are working as OEMs in China as well as utilities, yes, I would say, somehow unique there. So they are not having so many activities outside China. So we are working very close with them in order to be able to provide our support for their targets, which are quite ambitious in terms of sustainability and digitalization. As a customer case, I select this one. But first, I would like to explain how it works with our customers. Normally, we are having frame contracts for several years and that provides a collaboration. Out of this collaboration, there are development projects, and this is one of the case. Here, we have been supplying service lifts for offshore applications, mostly in this case for Europe, but not only. And here, we have been in, yes, in all the value chain. So we developed the product. We integrate the product with our customers in the tower. We support the installation, the commissioning and the training. So it's a project that we are really proud of. Next, let's move in the financial performance. Here, you can see that we have, during the last couple of years, an average of order intake and revenue in the level of SEK 220 million with a significant drop in the last 2 quarters. Here, I would like to explain that this is basically due to our policy to exit from low-profit internals, but still with a very solid order intake and revenues on lifts, ladders and services, which are actually our core business. So we having a very competitive position as a base for our growth. Then we would like to highlight as well that we are having or continuing with the cost reduction programs. And as a result, we can see that the margin, the EBITDA margin that we are achieving in these last quarters is pretty good for our sector, but obviously, we have the aim to increase that to the level that the group is setting as a target. Yes. So now about the key trends, and I will take a little bit of time here to explain in order to have a clear view about this point. The first thing is obvious, everybody knows the wind power is growing. So the demand of renewals, in general, is growing for 20, 30, 50 and ahead. Solar is extremely relevant, but wind the second as well. So in terms of which values of growth, the latest analysis said that the growth, the compound annual growth rate is about 8.4% and is, yes, worldwide. There are some regions that have a better development as it could be Europe as well as Asia Pacific and there are some applications that are even higher than that. And that -- on that I referred to the offshore, where the annual average growth rate is expected to be 23% for the period until 2030. But then -- but I think everybody knows. The second is about the reduction of levelized cost of energy. That is a relevant point because we are in the middle of a transition from socialized systems to less socialized systems, which are the socialized systems? It could be the feed-in tariffs, which are applied in a lot of countries, the PTCs that are existing in every 4 years in U.S. and so on. So this is getting less support, I would say, from the government and it's normal. It's normal because the learning curve is at -- and now the support shouldn't be there. That was a positive lecture. We will not depend on the policymakers because the wind energy will be at the same rates as the other power sources. And -- but as well, there is a pressure on the supply chain for the sector itself, for the wind turbine generators and all the companies that are around. But this sector is extremely creative. And then it has faced this challenge with 3 aspects. One of them is innovation, and I will be back to that with sustainability because there are certain mechanisms and digitalization. So -- and that brings me to the third point, which is the higher capacity of the turbines. So the way that the OEMs face this challenge has been to increase the rate of power per turbine. So to make everyone understand, 2 years, 3 years back, the average of our wind turbine onshore was at the level of 2, 3 megawatts, nowadays is 5 and 6, mostly in Europe. When we were talking about offshore, it was between 3 to 5, 6, one of every MS. Nowadays, it is 10, 11, 15 and even the next target is 20 megawatts per turbine. So that makes that the expectations in the power per turbine is going to increase by 60%. And that has, even if there is a growth on gigawatts installed per year, this 8%, that's a direct effect in the number of towers. So the number of towers will reduce by 20% in order to have an idea about the numbers. In the last few years, the number of towers were wide, were about 20,000 units, and there will be 16,000 units. So you can say, well, the whole market is going down. But you have to put another factor here, which is actually the penetration rate of lifts and towers, which is not 100%. Actually, in U.S., it's only 11%. And in China, it's 56%. The expectation because of these bigger towers because in order to generate higher power, they have to be taller. We expect that in 2030, all of them will have a lift. So as a result of all these factors, actually, the number of lifts, which is our addressable market, worldwide, will remain in a range between 12,000 to 13,000 lifts going forward. Okay. Then in this situation, I think this is the most important part of the session. What is our strategy for profitable growth, leadership in our core business, growth in safety and services and review of potential expansion in renewals? I have been working with my team for several months on that. And I think we are quite proud about the result of this new strategy. The first one, leadership in core business. It has 2 different areas. The first one is, we think the first one is related to the new generation of innovative digital and sustainable lifts. So we will have the lifts connected, and we'll have -- through this connectivity, we will have the big data. We will be able to generate algorithms in order to make predictive maintenance and that will have a direct effect in the -- positive effect in the total cost of ownership, one of the key drivers for our customers. We will extend our offering. And here, I'm talking about full protection system and disruptive ideas to have a vertical access in wind turbines. And finally, lean and sustainable operations. Obviously, in our sector, this is amassed. So it's not the piece of the cake. And here, I would like to highlight one case in order to understand how we are working. For that, in terms of sustainability, we are collaborating with external bodies. And in this case, through the University of Linköping, we have a group of experts that are working with us in order to have the assessment of the life cycle of the lift. And that is bringing a very interesting data, and where we can actually reduce our CO2 print -- our -- from our customers. So we have preliminary results, and we now understand by facts, with data, where we have to act. And basically, in this case about the maintenance, but not the maintenance itself or the petrol, which is used by the technicians to get to the turbine for maintenance is actually because we have to stop the turbine when we are doing the maintenance as it is supported for today. Therefore, we will, yes, work in that direction in order to minimize the climate impact. And by the way, we will obviously, continuous improvement our supply chain. And then the second area, which is a little bit related, as David mentioned, for China. China, it was, it is and it will be the biggest market worldwide. So we have been there for more than 15 years now. And actually, we have a success story. We have been growing over time, and we have been profitable in a, I would say, decent manner. So -- but we think that we have to change something now. And you will say, why? If it is working, why should you change? Well, it's basic. The OEMs that started in -- between 2000 and 2005, it was mostly under agreements and licensee contracts of western OEMs, mostly Europeans. Over this time, they have been able to develop their own turbines, blades, generators as well as towers. Then the towers, actually, they are meeting their local standards and as well their customer expectations. So we have to do to make a change here. So we are going to have a more Chinese approach. We will develop a pipeline of product strategy for China, and we will have a local research and development center over there in order to fulfill our customer expectations. The second initiative is the growth in safety and services. When we are talking about safety, you have to be aware that the mission of Avanti has always been safe work in wind turbines. So it is in our DNA. In the other hand, it has been recently announced as well that it is expected nearly 0.5 million of new technicians that will come to the sector by 2025. And obviously, all these people will need to be properly equipped to work safely in the wind farms. So it is, for us, a natural step to extend our offering in those products, and which products I'm talking about is harnessers, majors, positioners and rescuers. As I mentioned, China is different with our standards. So this initiative will have 2 versions, the Chinese and another one, which works for the rest of the world. About services, as I mentioned earlier, we will have a new technology in the service lifts. So that will allow us to make a new value proposition with digital services. Other aspect is that there is a relevant number of towers, worldwide, that are getting all. So the park with towers or wind turbines with more than 15 years, it's already quite big and is going to increase very much in the coming years. But that doesn't mean, even if they were designed for 20 years of life, that they will dismantle these towers. So there will be extension. So we will create some kits in order to extend the life of these service lifts, and we will also make -- we will make some safety kits in order to upgrade all the installations with the current state-of-the-art in terms of safety. And finally, in a fact-based analysis, we will consider the gigawatts installed, gigawatts that will be installed in the future, the number of tower manufacturers as well as our footprint that could be in other divisions. We will analyze all these countries, and certainly, we will increase our footprint going forward. So then finally, these areas, safety and service are the ones that will make us a profitable growth. And finally, we will have a review of potential expansion in renewals. We are on the early days, but we believe that it's interesting and logical for us to enter in this area. The customers are -- and customers are the same, and they are seeking exactly the same targets, which are to increase the efficiency and the profitability of the wind farms. This is -- in order to reach those goals, you absolutely need that the blades are in correct status. So we aim to bring our program for visual and thermal inspection of blades by using drones and system, automatic or robotic systems to make their repairs. So if I sum up the session, I would say we have a very strong foundation with lifts, ladders and services. We are exiting the low-profit internals. We have very long relation and solid relation with the key players in the sector. We have almost perfect footprint. And this is the base for the profitable growth that will come with the strategy, basically being the leader in our core products and the growth in service and safety. And furthermore, we will review our expansion out of the tower. Thanks.

Thank you, Jose Maria, for telling us more about the Wind division. We have a couple of questions from our viewers. And we'll start with a question related to the trends. Will the onshore to offshore wind trend have any effect on your business?

Yes, thank you for the question, Matilda. Well, of course, yes, it affects any trend in the onshore and offshore affect our business. In the onshore case, we are talking about the megawatts per tower is going from 3 to 5, 6. And in the case of offshore, it's going from 5 to 10 to 15 range. Therefore, the -- yes, there is direct implication in the gigawatts installed. Well, it's growing, but there is a direct affection on the number of towers, which is this 20% decrease in the volume of towers that affects the business compensated by the higher penetration rate in China and U.S.

Okay. And also, the Wind business has reported negative growth during several quarters. When do you expect to be back in a growth trend?

Well, the issue with the internal started in 2019. okay? And then we have been affected since and still during this year, we are getting affected. As a matter of fact, and that it was announced on the quarter first results, we are expecting a reduction of order intake about SEK 60 million this year and a reduction of revenues of SEK 100 million, okay? But still, the base for service lifts, ladders and services is keeping growing. So my expectation is that we stabilized the business during this and next year. And from there, we will have this profitable growth.

Okay. Thank you for good presentation and also good answers to the questions.

Thank you, matilda.

It's now time to move on to the next topic in the agenda. And that's the group sustainability strategy that our Chief Technology Officer, Charlotte Brogren will present, and she will also present our first official CO2 target. Welcome, Charlotte.

Thank you very much, Matilda. And I'm super excited to be here today to talk about a very important and highly relevant topic, sustainability. I joined Alimak Group as CTO almost 4 years ago. And as the CTO, I work and support the divisions on important subjects like innovation, IT, digitalization and now also sustainability. Prior to joining Alimak Group, I worked on similar matters for ABB for many years, and I've also been Director General of the Swedish Innovation Agency, Vinnova. So you have now listened to a number of very nice presentations here from my colleagues, and I will now try to sum this up a little bit, but from a little bit different angle from the sustainability angle. And we all know that we are facing a number of so-called grand challenges ahead of us. It's a climate change, it's urbanization, it's demographics and now with COVID-19 also pandemics going forward. As many of these challenges actually have been created by how we used to solve problems in the past, we all now have to change and act differently because we won't solve the challenges of today and tomorrow by the old way of thinking. Though there are many perspectives on how we are, for example, going to solve the climate challenge, everyone also now agrees that the industrial sector has a very important role to play to come up with innovations that are both -- are good for the environment, but also to drive the business forward. And of course, we, in Alimak Group, will do what we can in the areas where we are active. That is a core part of our strategy. That I hope you have seen and heard from my colleagues. For us, sustainability is not the icing on the cake. It is the cake. And to do this, we have, over the last months, set up the framework to guide our work in this important matter going forward. Setting up the framework, we have used and been inspired by the 17th -- by the United Nations' Sustainable Development Goals. And we see that these goals -- these global goals, have in a very unique way, been able to not set different aspects against each other. They have been able to combine both environmental, social and business aspects in one set of goals. That is unique and that is what has inspired us here. It's no longer, as it used to be in the past, that we should stop development in order to be environmental friendly. Now we all agree that we need development, both to contribute to a better society, but without jeopardizing the planetary boundaries. And out of the 17 sustainable goals, the 8 here shown on this slide are the ones that are most relevant for us in the work that we do. So what do we aim that these goals or the framework should lead to? You have here today heard about our financial targets from Ole and the other colleagues. And we can only say that these financial targets will only be able to be achieved if we also, while working on the other actions, also reduce our carbon footprint. Because if we don't do that, we will no longer be relevant as a technology leader, as a supplier of products and services to our customers, as an employer to our talents that we have today and to future talents and, of course, also for investments from owners and the financial market. So we have now set the target that we are aiming to reduce our carbon footprint with 30% over the next 5 years. And the financial target and the sustainable target, they are mutually dependent on us. So next, I will go now into the framework and go a little bit more into the actions that we are planning. So sustainable relationship. That is how we interact with all the stakeholders around us, customers, employees, suppliers, shareholders. This is really about who we are. We will continue, of course, to conduct business in a responsible manner, and we also count that our business partners are doing the same. We embrace diversity at our workplace because that drives creativity and innovation. And of course, we have zero tolerance towards any type of discrimination. We are also active in the ecosystem around us in several different initiatives on the Swedish and European level to form the future of the industry that we are active in. Two examples: Smart Built, a strategic innovation program here in Sweden; and the Construction Robotics led by Aachen University. And both these programs have the aim to invent new design and work processes to drive productivity, safety and sustainability. Because if we want to stay relevant for the talents we have today and for future talents, we must show the change that we can make to society. Second, sustainable solutions that is the products and services that we provide. First of all, we use -- when we design products, we use the environmental aspect as a part of the design guidelines. We also have a highly skilled global service team that, together with a smart system of replacing and having spare parts available, will allow our products to last for very many decades. Our rental business, that David talked about earlier here, is also a very important step towards higher circularity. We work, as Jose Maria said with Mistra REES, a research program headed up by Linköping University to see -- to conduct life cycle analysis of our main product lines today to see where we can do further improvements in design and during the lifetime of the products going forward. We are also following the very interesting project HYBRIT about carbon-free steel generation led by SSAB, LKAB, and Vattenfall here in Sweden because if they are successful, that will also have a big impact on the -- on our products and the carbon footprint of us. And of course, it's not just about our products. We want to help our customers to both improve their productivity, while minimizing the carbon footprint. A very good example is from the Wind business presented just previously here by Jose Maria, about having our service, the wind -- the service wind lift giving good service in a safe and fast and efficient way and then allowing the wind parks to have short -- having a very high uptime. Another good example is the BMU business headed by Mark that enables that you can maintain facade buildings and other infrastructure to keep them alive for a longer time. The Sydney Harbour Bridge project earlier presented here is a very good example of that. And then if you go to the construction. Here we work in partnership with many partners to see how our machines, hoist platforms, et cetera, can be part of a total logistics chain. So that we more -- construction site can do what is normally on a factory floor, having the right material at the right place, at the right time, minimizing unnecessary waste and also waiting time. And then, of course, safety. As a technology leader, we, of course, take a very active part in the global standard committees driving safety for our products and segments further. And then the third part of our framework, sustainable operations. That's about our factories, sales office and our whole value chain. And of course, we need to minimize the carbon footprint across all our operations. Number one, implement energy-efficient measures; number two, use energy sources from renewable energy. And we are extremely proud that our biggest factory in Skellefteå, part of David's Construction business is powered to almost 100% of renewable energy. Here also digitalization can help us to improve our efficiency and reduce the carbon footprint further, automating internal processes, using remote service possibilities and not having to go out in the field for all the service locations. And of course, a safe, inclusive and engaging workplace, where people can develop their skills and blossom is also key for us to achieve these targets. Because if we are not relevant and interesting for today's talent and tomorrow's talent, we will not be able to make a change because it will be people with the right mindset and with the right skill that will make a change -- a sustainable change. So with all this, we think we have a good pace, a good plan and good actions underway to meet the target set. And while we are on this journey, we also see that beyond 2025, we will have a good headwind to even have further reductions going forward. And by that, I thank you so much for your attention.

Thank you, Charlotte, for telling us more how Alimak Group is and will contribute to a more sustainable world. Now we have reached the final presentation of today. We would like to welcome on stage our new CFO, Thomas Hendel, who's been with us exactly 1 month today. Before I hand over to him, I would just like to remind you that, after his presentation, we will have a longer Q&A session. And then you will be able to submit your questions via the webcast exactly like you could do for the divisional presentations, but you can also call in with your questions to the phone numbers that now should be visible on the screen. But with that, over to you, Thomas.

Thank you very much, Matilda. Yes, it's really -- I'm super happy and excited to be here, taking up the CFO position of this fantastic company. And I also believe it's a very interesting phase to be to come here as a newcomer. I have a long experience from -- and contributing to controlling a finance management agenda in industrial environment, both from ABB and from Saab. I will start my presentation with a short recap of the Q1 performance, and then we go further fill our financial strategy, the capital allocation and, finally, the foundations that we see and I see to deliver on our financial targets. Q1 was, in general -- was kind of a proof point for us that we were coming back a bit and a recovery from our performance. When it comes to order intake, we had organic growth of 7%. And actually, 3 out of our 4 divisions showed growth. And in wind, as you have heard from Jose Maria, we are stepping out from the low-margin tower internal business deliberately, so to say. So that was the order side for Q1, building the backlog a bit. The revenues, it was pretty low revenue in Q1, but that was, of course, a consequence of the backlog that we started going into the 2021. We believe now that we have a very good leverage going forward when we start to increase revenues. I mean, we have a lowered cost base, and we -- just for your information, about 1/3 of our total cost is actual material cost. Service, you have heard it from our CEO and the division managers today. Service is a very important part of our business model. And now with the new customer-centric divisions that we have formed, they are driving service, a very important part for them as well, of course. And as you can see here, the data from this slide, we are -- have a good development on the service volume, which is important for us. Declining volume 2020, obviously, we had to do something in trigger to cost reduction program, which aiming to reduce costs, the cost base by SEK 60 million, on the annual run rate, with a full impact second half of 2021. And I'm happy to report back that we are on track on that cost reduction program. The Q1 EBITA was a proof point on that with 11.2% EBITA margin in spite of the low revenues. And what you -- we can see also here, 3 out of 4 divisions were actually according to plan. We had an improved gross margin year-over-year with 1%. Operating expense is lower, both temporary and sustainable savings. The temporary meaning that we still have a little bit of lower marketing activities than a sustainable level. I mean we travel less, for instance. And then also, just to remind you and me that we have still a negative impact from an exchange rate when we consolidate the group into Swedish crowns. Focus -- even more focus going forward now with the new team will be to improve the gross margin. We believe the revenue gross margin is a key in actual to drive profitability. And what we use, that improvement, both to improve bottom line, obviously, but also to give us room and possibility to invest in our product portfolio to be more competitive. What areas are we working with, with terms of improving them? Yes, basically everything, what you can affect the gross margin pricing, price management, both to try to compensate, of course, for the raw material price increases as everyone see now and also to work internally with discount process, et cetera. So an active price management. Project control and execution, a lot to work with the -- to avoid margin slippages in our backlog going forward and then increased revenues, of course, in service, which has a higher gross margin than the group average. Operational excellence, meaning both manufacturing units and project execution. Just to conclude, the guidance for 2021, which we gave after Q1, is that we expect an improved business climate second half with continued COVID-19 impact in Q2. Also explicitly guidance on the volume, on wind and Jose Maria has talked about this. But in financial terms, it's actually a SEK 60 million impact year-over-year on orders and about SEK 100 million year-on-year on revenues for these tower internals reduction. A little bit more going forward then looking forward, but we have had a very stable cash conversion. And that's one of the characteristics of this group actually. But -- and we have reduced working capital constantly now the last quarters. We will, of course, focus still on the terms of payment of new contracts and to meet -- pay milestones in the projects is a key to get paid and have a good cash flow. Regarding our leverage, our net debt-to-EBITDA ratio, we have had the financial target of 2x, as you know. And we have been constantly below that for quite some time. We had an equity-to-asset ratio of 66% after Q1, which gives us a very strong balance sheet. And from a financial flexibility point of view, we have an unutilized RCF, the revolving credit facility, of SEK 1.9 billion after Q1. But at end of the day, it's the total shareholder return that matters. And Alimak has delivered about 10% yearly of a total shareholder return in the last years and coming from a market cap growth of about 8% and a dividend yield of about 2% average per year. And from a dividend point of view explicitly here shown is that with the extra kroner per share that was decided from the Board at the 2020, we have actually delivered upon our dividend policy during this period. Capital allocation. Yes. What are we going to do with the money? Yes, we are -- I mean, we believe that the shareholder value will be most positive if we invest in our profitable growth, obviously. So that will be the investments. Talk about CapEx, certain areas, working capital, but also, once again, the investments -- selective investments in our portfolio to increase our competitiveness. M&A is definitely on our agenda as well. We need and we like to have an M&A pipeline coming up from the divisions and the business driven, and then we -- so that we definitely are on our management agenda. We will continue to deliver on our dividend policy and holding a strong balance sheet, which we believe is very important for a long-term business. So to wrap up and conclude both this presentation and the rest of the day, it's actually what our foundations and our road map to deliver on our financial targets and our newly defined financial targets communicated this morning in the press release. We believe, as we have a very strong global market position and with good portfolio of brands, we also believe that the market demand is there. We believe that we have also the external factors, megatrends is also talking -- supporting us. We have a large installed base service, once again, very important for us. The New Heights program going into Phase 3, profitable growth from 2022 and onwards. That has been according to the plan all the time. Operational excellence, we have a lot to do. We will continue to work, and we -- both on -- with the manufacturing, product execution, going for cost efficiency, continue our cash generation and a good cash conversion. And we have a strong balance sheet, which is a good position, a good base to invest in our growth going forward. And so me as a newcomer, but still some weeks in the group, I certainly believe that we have a very strong base and good foundation to have the chance really to meet our financial targets. By that, thank you.

Thank you, Thomas. And that was our last presentation for today, and it's now time for the Q&A session. And with me on stage, I have the full team of presenters from today. And for this session, you will also be able to call in with your questions, and the phone numbers are available. Please do that.

But we have a couple of questions that already have come in, and we will start with one related to the financial targets. So the revenue target of 5% to 7%, is that organic only?

No. The revenue target that we have set now for 5% to 7% is for total growth. That includes -- organic is part of it. But of course, we will drive our business, and we expect this to be the significant part of that target organic growth.

Okay. Thank you for clarifying that. And here's a question related to the steel price. So what is the impact from the recent steel price increase on the divisions? We understand that several have backlog with long lead times and significant steel content.

I don't know, Thomas, you want to...

Yes, I can tell you. I mean, as the nature of our business is different, we can say that in BMU and wind, where we have long commitments, long contracts with fixed prices, sometimes it's, of course, harder to compensate to the full for that impact, but we are working hard to minimize it. It -- we are coming out good, we must say, in construction and industrial. But I mean it's a problem issue for everyone, all companies. So it's not underestimated, but still we -- so far we have seen a minor impact you can say.

Okay. Thank you. And I see now that we also have a couple of audio questions coming in. So I would like to hand over to the operator.

[Operator Instructions] We have a question from the line of Mattias Holmberg from DNB Markets.

On the China strategy, I know that this is something that was highlighted also with the IPO with the opportunity to grow in China. And in particular, in the construction equipment segment, when I look back over the past couple of years, it seems to be very challenging market with, I think, 2 of the 3 largest players going into bankruptcy. So I'm just curious to hear what your view is on the Chinese market, in particular, for the construction segment and perhaps what the challenges are that has led to some of these larger players going into bankruptcy and how you intend to avoid or overcome these challenges with your China for China strategy? So that is my first question.

Yes. I think, David, do you want to address it?

Yes. Thanks, Ole. Thanks, Mattias. I think it's a very good question. We plan to be very focused on our discipline in where we participate in the market there. We want to allow our team down there to design products for the local market, but we're going to be extremely selective. And the challenges have been, in relation to bankruptcy, obviously, some people making decisions that we wouldn't make. So I think going forward, we'll be very careful, but we believe there's great opportunity there as well.

Great. My second question is you've gone through all divisions and talked about your strategy for profitable growth. And you've also mentioned sort of more or less as a separate note the potential for further M&A. So I'm curious to hear if you see M&A as a central part of this strategy for profitable growth in any particular division? And if not, where do you see the biggest M&A opportunity going forward?

Yes. Definitely, M&A will be an important part of the growth journey for the group, and we see this potential in all divisions. It's related to service. That's an interesting area for us to drive and acquire. It's related to the product assortment. That can definitely be. It's related to geographies. Technologies also interesting, but also definitely it would be interesting to add a new product portfolio to the group. So definitely, M&A will be an important part of the strategy going forward.

There are no further telephone questions at this time.

Okay. But we have a couple of web questions that has come in. And linked to the M&A question, we have a question here on what areas of interests that we have for future M&A?

Yes. I think basically, it's the ones I just mentioned. So service is an area. And everyone has talked a lot about the service potential today, and that we want to further grow and M&A would be a natural way also to continue to grow that. We do also see from every presentation that on the product assortment, there are more things to be done for the group. So that would be an interesting area. We are a global company, but still it's many markets where we do not have our own presence. So that could be a way to also expand geographically. So there are many areas that we are interested in doing and not at least also technology to help the company or the group make some more leaps in that area.

And we have 1 question here related to growth. So what will drive the group's organic growth during the following years?

That, I would say, is the New Heights program. It's these core elements of, of course, focusing on the customer, focusing on the market, understanding the needs, working closely with our customer, developing our product portfolio, developing our service portfolio, bundle this, making sure that we have commercial models. That will help customers get the full benefit of our portfolio, but also getting into the ecosystems of our customers to understand more what we can do in these ecosystems. So I would say that's the fundamental part of the New Heights program to not be depending on the market development, but starting to get control ourselves of our own destiny.

Thank you. And we have 1 question here related to service market shares. So how large market shares do you have on service in the different divisions? How large share of the installed base do you service?

Yes. I don't have exactly in my head now. Maybe Thomas have exactly the split in each division, but we know from a group perspective, this is around 35%. It varies in the different division. The division with the highest share is industrial. But there is a significant potential in all divisions. But naturally, it's also a bigger potential when it's talk about fixed installations. So -- and that would be industrial, that will be BMU and that will also be wind. But definitely, the construction market is what we also work hard to -- because we think it's even more that we can do in the customer ecosystem from a service perspective. So definitely, we see potential in all divisions.

And we have a question here related to our new scaffolding lift. So how do you secure safety in the scaffolding lift? Scaffolding sometimes fall down. And also, have you started selling it yet?

So maybe David want to comment?

Yes. We plan to bring this to market next month. We have a very, very interesting channel that we'll talk about in that month. But our whole goal here is to make sure we go-to-market differently, and I'm really, really confident on how successful we'll be in this place.

And we have now a BMU question. So BMU problems surfaced in 2018 and the former management took actions to improve the performance of BMU that we are in losses now. What has been done since then? And what can -- when can we see the benefits of what we are doing now or in the near future?

Yes. Mark, do you want to comment?

So thanks, Matilda. So we have had problems in the project management side of the business in 2018 and difficult contract conditions. So we fixed, we trained and we invested in our project management teams over the last few years. And we have now fully made sure that we focus on 2 areas: scope and making sure that we deliver correctly on that scope. And also, the contract conditions that we are signing up to have changed vastly since we became part of Alimak Group, and we have much better contract conditions today. So that's probably the first part of the question. The second part that we have been -- last year, we took some actions. There were some one-off costs, which were put to make some reorganization. We closed some manufacturing in some areas in Europe to concentrate it, to increase our utilization and improve our utilization. So we believe once the access to customer sites become better then the division will automatically improve to the former levels of the 4% to 5% EBITA, at least.

And then I might add also, if I can. That I think the one important element here is actually the reorganization that we have done in the group. We have something also in the group called BMU business and they all set up, but then the responsibility was split out on all the countries. So -- and this is project business, which have a long lead time from the day you actually enter and start discussing projects with your customers all the way to you have finally signed the contract and installed it many, many years. So the ability to actually own that whole process I think and we think is very vital. And that was one of the key elements also now making sure that this division gets full control over its own business.

Thanks, Mark, and thanks, Ole. I see now that we have a new question coming in from our telephone lines. I would like to hand over to the operator.

We have a follow-up question from the line of Mattias Holmberg from DNB Markets.

And this, I think, is mostly to you, Ole. Now you've been with Alimak for a while, and there's been a lot of changes going on. And I mean this Capital Markets Day and the last one has explained quite in detail the work that you've been doing. But I'm curious if you could, in a simple way, if that's possible, explain to us what you see as the biggest changes organizationally to Alimak since you came in, sort of how does the management structure look? Where does the responsibility lie? I noticed the comment you made here, where previously you had something called BMU, but the countries were responsible for the projects rather than division. So could you please just talk a bit about this?

Yes. The former organization or the one that was here when I entered the group was focused on the countries, that the countries owned the business, and that's where the business was owned and driven. And actually also each of the country managers, which was more than 20, were reporting directly to me as the CEO of the group. In addition, the group had a group management team, where people were so-called responsible for different business areas. But they didn't really have the organization in their hands. They had maybe some few salespeople or some little staff, but no ownership of the final business. And everyone was reporting in, so it was, yes, high up in the 20 numbers, reporting directly to me as the CEO. That I changed and not only by me, but we worked on this as a team. We took a lot of input from everyone in the organization. And then -- and it was a lot of input through this. It was also a strong feeling that we were very product-driven. So that was an important input. And we decided, okay, this business to be able to grow forward, we need to be close to our customers, close to the market. So first of all, it needs to be market and customer-driven. And secondary, we need to take away that heavy metrics and make a clear structured organization, decentralized responsibility where each of this division have the full responsibility for their business. They make the decisions. They develop and have responsibility for the value proposition, as I like to call it, the products or the services or how we take this to market. And they also are responsible for manufacturing, the marketing, the full monte of this, the full P&L. So that's the core of the change, I would say, so if that explains.

There are no other telephone questions registered.

Okay, but we have a couple of more web questions that we have received. And this one is related to the wind business asking that the wind OEMs are reporting that they seek to expand their service business. Do you experience any competition from them in servicing of the wind tower lifts?

Yes. I guess, Jose Maria, you will handle that one.

Yes. Thank you, Matilda. The OEMs, they have changed over time their strategy. I would say, 20 years back or 15 years back, they were delivering the turbine. And that's it. So in the last decade, they have developed this new approach to take the order of the turbines as well as, first of all, 5, 10, 15, nowadays, even contracts for 20 years of service of the wind farms, okay. Then we are okay with that, right, because we can work as long with a utility when they have the ownership or under the OEMs contract. So that is not heavy impact with us because we are actually subcontractors of the OEM, of the utility as we have the expertise on the service list. I hope this answer the question.

Yes. Thank you. And we have another question coming in here related to shipping costs. So can you comment on the impacts from increased shipping costs on the business?

Thomas, and I will say, it's -- it will be about the same answer as for the raw material and steel price increasing. Of course, it's a challenge. And we have very much of dialogue and focus together with our manufacturing units primarily. And as with the steel pricing, we have a limited impact so far, but it's definitely an area to continuously observe.

Okay. Thank you. And we have another wind question here. So a lot of questions related to it. How big is the dependence on your last largest customers in sales and service?

You want to...

Well, the -- in this market, it's true that the last decade, there has been a concentration of the OEMs. So if in the past, we were talking about over more than 10 OEMs in Europe and about 50 in China. And in terms of tower manufacturers, more than 100 in Europe and even more than 500 in China. Nowadays, there has been a concentration, and there are basically 4 OEMs that are working globally, and then we have, yes, the Chinese. But with 5, 6, you take as well, 90% of the Chinese market. So our dependency on them because there are fewer number of potential customers is [ reverse ]. And then in the other hand, it is -- they have as well the dependency versus us because they need to have a long-term partnership with reliable suppliers, with a global footprint able to supply in all the places with the logistic, know-how, the technology in order to, for example, right now, be able to support this digital and sustainable agenda. So it's true that we have had dependency in this area of customers, but as well there is dependency from them towards us in terms of the supply and the services. And then that is the part of the OEMs that the utilities more and more because the wind farms are getting out of the warranty, they are taking care of their services, and this is a sector where progressively we are increasing our share in the market.

Okay. Thank you, Jose Maria. And we have a question related to circularity. So what steps are you -- are you taking steps to make your business model more circular?

Charlotte, do you want to...

Yes. First of all, we have a rental business, and that is circular in its nature. And also, as we now are looking at, for example, in the BMU business to have more focus on -- or increased focus on refurbishment, making the products last longer, that is a step in that. And of course, as many other companies, we are also looking into what the sort of the main theme of circular business, servitization of how can we actually provide the service as such, not just on the products, towards our customers. So there's a lot of activities ongoing and that, yes, we will see more of this going forward.

Exciting. We have a question related to service. So the service order intake was up 19% organically in Q1. How much was spare parts and refurbs?

We don't give that detailed level. But of course, we are very happy to see that we are able to continue to develop the service. And not at least also now with this organizational change that we have done, it's been a very, very important core focus for us to make sure we don't lose speed in the service business. And actually also during the pandemic, for maybe the first time, service business was somewhat hit during a downturn. Normally, it's the thing that is most resilient. So we are happy to see that the service business starting to come back because markets are opening up and that we also believe will continue to be an important part when markets are opening more forward.

Thank you. And we have a question here related to the BMU industry. Where do you see the BMU industry heading towards in the future?

Mark?

Yes. So it's an interesting question. The BMU industry has not really changed much in probably the last 20 or 30 years with any major developments. I think we are now driving some interesting and exciting developments, particularly around automated cleaning. I think there is a potential breakthrough or interesting ways to solve this and to make the service more efficient. And I think in the field of digitalization, understanding the asset, how the asset is being used and how we design better and how we service better the equipment to make sure that we have complete uptime -- a much better uptime than today. So then in future the BMU will become more important for the building that they can use it at any time in any way possible. So I think that there is some exciting developments coming in the industry.

Exciting. And we have a question related to our financial targets. So what is your gross margin target going forward?

We have not given out a gross margin target. As Thomas was saying, it's a very, very important measure that we are following daily and have a high focus on. I think one of the most important measure to actually drive the business. So -- and that's why we also address it today, but we don't have a group target that we communicate around that. No.

Okay. Now what -- now that the full potential program is in place, can there be more cost measures going forward during 2021?

Well, we -- basically, what we're also saying to our financial targets is that we should now with the EBITA move away from the adjusted terminology and actually start to work with a reported one. And with that, we also want to establish a sort of cultural change that we take the cost order benefit when they arise. It's our responsibility to make sure we constantly drive improvements. That said, that means that, yes, we will drive constant improvements. We are doing that as we speak today. We have done more since we actually launched the program in October last year, and that will continue. But that, I would say, is now part of our daily life, to take out costs -- wherever it's possible to take out cost, restructure, do these type of things, but we have nothing big in the plan. It's more that we do this on a daily base.

Yes. Thank you. And now we don't -- actually, don't have any more questions coming in. So with that, I think it's time to then round off the day. And I would just like to start by thanking all of you for very good answers to the questions and also the audience for really good questions coming in. And before I hand over to Ole for some final remarks, I would just like to take a couple of seconds to thank all of you for the presentations today. It's been really, really interesting and a terrific job. And I would also like to thank the audience for listening in and asking such good questions. And if you felt that you have any follow-up questions or that you have any questions that does pop-up after this session, please feel free to reach out directly to us. And yes, I would just like to say it's been a pleasure being your host today, and over to Ole.

Thank you, Matilda, and what way you have been a host. It's a big thank you to you for taking us through and making this easy for all of us. And also a big thank you to the team. I think also you have done an excellent job, and it's a team I'm very proud of. We missed 2 members here, but those people we'll meet for sure going forward. But thank you. And then I also want to thank all the listeners that has been with us today and those asking questions. This is, of course, important. We want people to be engaged around the company. And I hope that you all share our engagement and our belief and our commitment in actually making a change and delivering upon our financial and sustainability targets going forward. So thank you, everyone, and, yes, until next time.