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

Hi, everyone, and a warm welcome to Alimak Group's Capital Markets Day 2023. My name is Matilda Wernhoff and I'm Chief Strategy Officer at Alimak Group and also your host for today. We are very happy to have you with us, those of you that are here at epicenter and those of you that are joining the live stream. And today, you will get the opportunity to get to know Alimak Group much better. We have an agenda full of exciting presentations and also plenty of time for your questions. So we will start this day off focusing on the group topics covering the New Heights Program, Group Financials and Sustainability. We will then move on to our first divisional presentation with Facade Access and an update on the transformation program. After the break, we will have the presentations on the new division Height safety and Productivity Solutions and strategy updates for Construction, Wind and Industrial. As I said, we also have plenty of time for your questions today, so we will have 1 Q&A session before the break and 1 after the break. [Operator Instructions] we also have an exhibition here today behind that screen. I think most of you might have already seen it. And I encourage all to take the opportunity during the break and during the mingle to visit that and see our products and talk to our experts. Just before we jump into the first presentation, I would like to run through a couple of housekeeping rules. Please make sure to put your phone into silent mode. Safety is our #1 priority. And if something were to happen, it's good to know that we have 4 emergency exits. We have 2 on this side of the venue. And we have 2 at the back, one to the left and one to the right. And at the emergency exits, you will also find fire extinguishers. And the meet up point is where you entered the building at the entrance to epicenter but I hope we will not have to use them today. And with that said, I would like to welcome our first speaker, up on stage, our CEO, Ole Kristian Jodahl.

Thank you, Matilda, and welcome also from my side to all of you. Very nice to gather here today. And as you know, we have announced the new financial targets and also sustainability targets this morning. So of course, that's the main task today to try to explain how we will get to those new targets. But it's 2 years since we last met. That was the first Capital Market Day we had in the group. So this will be number two and that's when we launched officially also the new Heights Program. So I will also give an insight in what we have done and now also what's the next steps of this. And what I will also try to show you today is that the group is now a strong, resilient industrial company, well diversified, and we are driving sustainable, accelerated profitable growth. That was really what we set out to do in the new Heights Program, and it's also what we deliver upon now. We have had strong operational performance. I would say, throughout, you see it more maybe in the last 2 quarters. And then we have also made a very smart and good acquisition of Tractel, which we are managing well. So we are accelerating and therefore, we also now raise the bar. But first, I also want to address this that you often read in the newspaper. You know many people, especially when you may be here in Sweden, refer to us as big [indiscernible], the Swedish [indiscernible] or the construction hoist company and we are not. First of all, Sweden consists of 1% of our sales. So we are a truly global business. And then when it comes to the construction hoist side, yes, construction hoist, that was the basic invention but that's just one condensed piece of the overall business of the group. And we are diversified in segments. We have the Industrial division. We have Wind division, which are purely Industrial. We have on the HSPS side, maybe half of that business also ends up in the industrial segments. We have the construction business, which you would think is maybe construction but this is temporary machines that we sell typically to rental companies, which then place -- they place in the market where there is a temporary need. That is when you build an industrial site or you refurbish an industrial site or a building or a bridge or any type of infrastructure. So the exposure to construction per se, it's limited. It's not by far, not the whole group. And the exposure to residential is even much lower. So this is important to understand. Looking back, I think this is also an important piece of our history that I often get questions around, so I wanted to address this a little bit. You know that old Alimak, and I refer to old Alimak that was prior to '17 when 2 major acquisitions was made. Then that was the, let's say, the Alimak rack and pinion technology, Industrial division and Construction division, maybe as you see them today. That was always delivering. That was pre-'17 delivered 16% and higher EBITA. But then the group made 2 significant acquisitions, which doubled the group but also lowered the profitability 5 percentage points in the beginning of 2017. So that had a big impact on overall group profitability. Then also, to be honest, these acquisitions carried with them issues, they were not integrated in the most optimal way. And it was never really fixed during that time frame. So that has been one of the main tasks and also then why when I came in June 2020 that we launched a new program to really ensure that we would fix these problems and also start to get to a point where we deliver upon the financial targets of the group. So we launched then this New Heights program. At the last Capital Market Day, we said this is 3 steps. Basically, it was to set the base in place. It was to raise profitability and then to come into [ models ] where we can start to deliver profitable growth. And I come a little bit more back into each of these. So the first phase was really to get the vehicle or a structure or an organization that can drive this organization forward. It was a very huge [ patres ] organization coming here. So we condensed that into 4 divisions at that stage, which were fully owning the P&L empowered and they were driving the business. So that's the real vehicle that we still do have a very important piece. Then making these divisions customer and market-oriented, sounds obvious but it was a heavy product focus in the organization previously. So that was an important part of actually -- and how and why we structured the divisions the way we did. Connected to that, of course, to drive product and solution development because taking more control over your own destiny, making sure that we remain the leader and this is also something that we have now started. I will show you more examples of, and I think it's -- we just basically see the start of. Then, of course, service has always been an important part of the group. It used to be before something that Alimak took very well care of. But we also felt that it was an opportunity to accelerate and integrate this in a different way. So we moved it from being a separate leg to be integrated into each division. So each division have the full asset life cycle responsibility driving both new sales and after sales. And I think lastly but maybe most important of it all is to recognize that people is the most important asset of this group, and therefore, we need to put programs and activities in place to make sure we take care of that asset. And really empower these assets so that the organization can drive together -- get the best out of every individual we drive in the same way. And that's also something I strongly feel that we have been able to do and are on the way really of -- because this is a journey that we are driving forward. The second step was to secure margin improvements. And then we launched the restructuring program, and you see some effects of that during the first phase there but then it was really to set the division strategies because these were due and they needed to really get into what is it that we need to drive. That had effects on construction and also industrial because we widened the product -- we saw that from a market perspective, we were too product focused. So we widened, we have a wider product focus in these divisions. For industrial, it was really the first time that we got an industrial organization in place really attending to these customers globally with a clear focus and also working segment by segment. And there, we see that we have developed a lot of solution specific for the Marine segment specific, for the Cement segment now, driving volume and business going forward. Then we refocused Wind division. That was one of the acquisitions, which actually carried 1/3 of the business, was Tower Internals, a business that didn't make margins. So we decided to get rid of that. That's, of course, painful when you take a SEK 900 million business and take it down to SEK 600 million but that we have been through, and that business now is very well positioned going forward. And then it was to launch but also gather the Facade Access business and to start to launch that also that fixing program, if you like, because Facade Access was something that never really had made margins, and they were losing money at that stage. So we have been able to lift it but it's also been a difficult journey with everything. We refined the strategy but now we really have the medicine that you will hear more about today because Tractel which we have known for quite some time. They run that business very profitable. So now it's about applying that same type of methodology onto our business. The third step was profitable growth, and this should be then driven by organic growth going forward and also, of course, acquisitions. But to be able to do that, you need the base in place. So that was step 1 and 2. So then we said from '22 and onwards, we should be able to deliver growth -- profitable growth. And that we did. We grew 9% organic in 2022, even though Wind was still down minus 21% through the year. So strong growth in the other 3 divisions. And we started to look at acquisitions. And there, as you know, we did Tall Crane and Tractel. Tall Crane, Canadian operation, which is doing rental of our Alimak machines into the construction market in Vancouver and also services. So relatively small but very profitable and nice add-on to the Construction division, something we closed last summer. Then the other major acquisition is, as you all know, Tractel which we will hear more about today which is a very profitable, big company, of course, as you know, SEK 2 billion but with a 20% EBITA margin coming into the group, so much more profitable than the group. But you could say, in a way, similar to old Alimak. So -- but with these 2 acquisitions in '17, which had a completely different profile. And so this we closed in November. And as you know, this or as I've also said many times, acquisitions will continue to be an important part of the strategy going forward and a growth element. We will not be an acquisition machine but it will be something that we constantly look at and will drive actively. It's a fragmented market with a lot of opportunity. So this is basically who we are today. It's an organization with 5 divisions where now Tractel is fully integrated. And each of these divisions own their full P&L. They own their balance sheet. They have the full asset life cycle responsibility, meaning they drive the customer needs and understanding the product portfolio, the services and take that all to the market. Facade Access contains the old Facade Access, which were hardly making money in Alimak. And they contain now also 40% of it is actually the Facade Access business from Tractel which was making 20%. So altogether, this is around 10% margin today but with a huge upside potential that you will hear more about. Construction also got a piece from Tractel, the ScanClimber, a Finnish mast climbing work platform brand that is now also then integrated into Construction, Industrial and Wind, more or less remained like they were. And then we got this new division, HSPS, Height Safety and Productivity Solutions, which also Philippe will talk more about today, which is a pure Tractel business, very resilient, high-margin and somewhat different. These are smaller products, lifting and safety products, which is mostly sold through distribution with high margin and a good resilience in the business. So and also this -- as I said, these divisions are then owning the service potential, and you see the service share of all of this. So it's a relatively high service share in each of the divisions. There is a high potential for service in each of these divisions and that has also been a contributing growth factor during the last 2, 3 years, and we foresee it to also be the same way going forward. So well diversified and a global footprint and solid division is now and a solid structure driving this forward. I talked about innovation and product development. This is of course a very, very important piece that when you are a market leader and you want to have some sort of control of your own in the future, you need to be close to your customers and you need to develop products and solutions that they are ready to pay for. And that we have put a lot of efforts on and accelerated. And it's very nice to see when you go and meet people in the product development phase today, they see tons of opportunities and we have so much in pipe. So this is an area I just feel that we have started. And you see some few examples here. The Medius 350. It's a product we have never made before. It's actually a machine that can transport people, developed out of a machine that only can transport material. So we have made the full cage. And so it's a buildup of a simpler machine, something that was never done. So it's opened up a new market opportunity for us. The Tracrod is something from HSPS, where they have different products combining it into 1 solution, where we create a safe and effective solution to dive into confined space for workers. Sold mostly through municipalities. Then we have focused a lot also on digitalization, so we have developed this platform by Alimak or we also -- it's called my BMU, if you talk about the Facade Access market. It's my Avanti for the Wind. So it's a digital platform where you can get operational data for your machine or technical data for your machine. So fully operational where the customer can follow and control the usage of the machinery. You will also get more about this later today. And as an example, on the Industrial side, we have made a specific machine for silos, fit-for-purpose type of product, which we have sold quite a lot of. So new developments that are driving growth in the group. And as I said, basically just the start of this. We are also supported by an attractive market overall. So you see some examples here. What I would maybe like to talk about is, for example, Health and Safety. It's a given that workers should be able to move up and down in a safe way but it's also the health aspect here, which is important, of course, someone who is tired at work because they climb ladders or run up and down, they get more likely to make mistakes. And also after a long work life, if you have been doing that your whole work life, you're also -- your retirement is most likely not to be as good as it can be if you are having the right equipment or tools to move safely up and down and avoid lifting heavy stuff. So this is something a trend that we see everywhere and driving fundamental growth. Urbanization and Infrastructure investments, of course, land is scarce, it's more happening in smaller spaces, 15-minute cities, more are built at height. And also on the infrastructure side, lots of investments going, and there is typically also need for our machines, both from a temporary perspective but also from a permanent perspective. And then industrialization also, if you like, on the -- we have seen globalization for a long, long time but now it's more localizing, manufacturing again, so local or regionalized and that feeds more investments into industrial facilities, which is also good for us, both when they are built and also when they are in operation. So fundamental support in the market for this type of business. And that leads to that -- overall, we feel that we have done well. We have a solid structure in place. We are driving product development and have a good position with our customers. We have made this very nice acquisition. And here, we now have synergies to generate. When we made Tractel acquisition, this was a very nice company, and then you need to choose how do you integrate the company. But the first and the foremost when you integrate such a business is that you need to take care of the value that you actually acquired. You don't want to tear down or start to destroy this fantastic thing that you acquired. So that is what we put focus on first and then is the synergies to come. So synergies, we said '24, '25, '26, you know is when we will realize synergies. And we see a very strong drive in the organization, which is again empowered to realize these things. So these things are happening. And that's another reason why we strongly believe that we are well set to lift the margin bar even higher. So on the revenue side, we are now lifting from 5% to 7% to the 6% to 10% target on the revenue side. It's the total growth, so also including M&A, which will be an important piece, as I've talked about but not the [ definitive piece ], the organic growth needs to be the fundamental thing here. We have the EBITA margin, which [ we then say ] coming from 14% to 16%. We are already now rolling [ 12. ] Beyond that, we are at 16.2%. So we are saying now the next level is beyond 18% within 2 to 3 years. Then the leverage ratio. Today, we have 2x and that we are raising to 2.5. We still feel that it's a conservative target for a type of company and the size that we have, and that will also open up for us to continue to be active in the M&A on the acquisition side, where we see, as I said, it's a fragmented market. And small- and medium-sized companies, and we can go after both products, services or technologies, so something we would like to do. The dividend policy remains unchanged. But we are also, as you know, updating and extending our sustainability targets. We used to have the one to the left here on the CO2 side to reduce from Level 1, 2 and 3 with 30% by 2025. We are on track on doing that. But now we're also raising the bar there. We say that we will go for science-based targets. So that's the next step now that we will do on that part. Then we are bringing in these other 3 to take care of the full ESG. So we say that our employee Net Promoter Score should be above 40%, then we should be 25% of the peers, top 25%. We say that on the injury side, we should be below 2, LTIFR, and that is also a stretch for the group. Of course, we aim for 0 harm. That's the target of the group but you also need to have some sort of realistic stepwise approach here. And then that we should do a full ESG assessment of minimum 80% of our direct material suppliers. So that also allows us to also cover that perspective fully with our suppliers. So that's basically the targets. And what I would like to say now from the beginning, then you will hear more from the team members, which are here. That will give more flavor, and we will do the Q&A after or a little bit later. So with that, I say thank you.

Thank you, Ole, for giving us an update on the group financial targets and also an update on the New Heights program. Our next speaker will share some more details on the Alimak Group Financials. We would like to welcome up on stage Sylvain Grange, our CFO, who before the Tractel acquisition used to be the CFO of Tractel. Welcome, Sylvain.

Thank you very much, Matilda. Good afternoon. Let's start immediately with a few key recent numbers. We present here the rolling 12 months order intake, revenue and gross margin since Q1 2021. Those are reported numbers. First, I'd like to repeat here that we have been growing organically. We grew organically in 2022 by around 10%. We grew again in Q1 2023 despite some macro headwinds. My second comment relates to the fact that order intake has been higher than revenue in the last few quarters. That means we are increasing our backlog and this obviously provides some comfort moving forward as far as the revenue is concerned. Tractel was acquired and closed on 21st of November 2022. So obviously, the Tractel acquisition is making a big impact overall on the growth of order intake and revenue. Regarding gross margins, Tractel has been accretive on our average gross margin. But it's important to say that on both legacy Tractel and legacy Alimak sites, we have had very resilient gross margins. This shows that the group has been able to weather the inflation of raw materials in 2021 and 2022 as this has implied a very active management of our cost base and the effective sales pricing policies. When it comes to the EBITA, the Tractel acquisition is making the biggest impact in terms of absolute value. But in percentage terms, the higher EBITA percentage comes from a large extent, to a large extent, from the operational improvements. If we take Q1 2023 versus Q1 2022 on an aggregated basis. So as if Tractel had been acquired on first of [ Jan ] last year. Roughly half of the increase in EBITA percentage is coming from operational improvements. We have a higher revenue, a very stable, stable plus gross margin, control SG&A. That means a better drop-through and a higher EBITA margin in percentage terms. So we are not having only a good business, Tractel to Alimak. We are working on improving the profit organically. We are growing. We are profitably growing, and we are delivering on the New Heights Program. We propose here an overview of the group on an aggregated basis. And so if you take the rolling 12 months sales by the end of Q1 2023, we are SEK 6.8 billion group in terms of revenue with a 16.2% EBITA margin. Combining HSPS, Industrial and Construction divisions, they make roughly 60% of our business. And those 3 divisions are the highly profitable divisions with EBITA margin ranging from 17.5% to 21.5% profit -- EBITA profit. Wind is now the smallest division with just below 10% of the total revenue with an EBITA margin which has been growing in the recent times. We believe the Wind division is on the right track to improve its EBITA due to a combination of rebounding market, very tight cost control and an improvement in the positioning of the offering. By the end of Q1 2023, Wind has been at 14.1% EBITA margin. Facade Access is making the balance, roughly 30% of the total revenue. And this is the least profitable division of all the Alimak divisions. We are slightly below 10% of EBITA margin. As I mentioned by Ole, that's basically 20%, 20% plus from legacy Tractel and close to 0 from legacy Alimak. So this is definitely where we see the biggest potential upside. Looking forward, we believe we have the ability to improve the EBITA margin of all divisions but within Facade Access, this is where we have the biggest potential. Let's now move to cash flows. We are showing on the left-hand side, the evolution of our operating cash flows since Q1 2021 those are 12 months rolling cash flows and reported numbers. One can see the decrease in 2022, which is basically related to the disruption in the supply chain. We had to increase our stocks to be able to serve our customers. We see that the supply chain situation has been stabilizing in the recent months. And so we have been able to increase again our operating cash flows, combining a strong focus on the day-to-day working capital management. And then together, we are in a better position but we believe there is more to be done. We are not fully satisfied with the level of working capital we are having today. So again, as a potential for improvement in the future. On the right-hand side, we are showing capital expenditures as a percentage of revenue. We have been below 2% in the last quarters, 1.6% today may look a little bit low. But we believe looking forward, we can stay below 2%. We are a CapEx-light business model. We are doing the final manufacturing steps and assembly work. So really that 2% expectation is reasonable. In summary, I would say that we are and we should be a cash-generative business. So as I just said, we focus on cash flow in the short term. That's important because we want to deleverage by the end of Q1 2023 factoring 12 months of Tractel EBITA, we were at 2.87% of leverage. And that follows the successful rights issue we made in Q1 but that will come down in the near future, thanks to our efforts to generate more cash flow. Deleveraging is both an [ end and a mean, ] being at a lower level, will allow us to go back to the M&A trail, as mentioned by Ole, we live in a very fragmented universe with plenty of good opportunities, which we believe can create value to our shareholders. So we want to be in a position to finance more acquisitions in the future. The other capital allocation priorities are the investment in our product portfolio, and that comprises mostly the efforts we conduct in innovation. And any investment we make, we can make to improve operational efficiency. That includes investment we make in our manufacturing facilities. Beyond M&A, product portfolio and operational efficiencies, we obviously plan to deliver according to the dividend policy, and I will come back later to that policy. On this slide, we are showing the synergy estimates, which we communicated when we announced the Tractel acquisition. So Tractel and Alimak, we have been together as one company for close to 7 months. And I would say that today, 7 months down the line, we still feel very comfortable with those numbers. We think we will deliver those SEK 150 million synergies by 2026. As far as sales are concerned, we see a wide range of cross-selling opportunities. First, within the divisions, and in particular, within Facade Access, where legacy Tractel and legacy Alimak have complementary offerings and to some extent, complementary geographical coverage within construction as well, where we have the new mast climber offering of ScanClimber coming into the division. But we see opportunities as well, cross-selling opportunities between the divisions. And in particular, we trust that the HSPS products can be sold to the customer base of the other divisions. Regarding costs, we have set up a number of very active work streams internally. We are working on SG&A. We are working on sourcing. And we are working on the supply chain in a wider sense. If I just come back to sourcing, legacy Tractel and legacy Alimak were buying similar or even identical components, obviously, sharing, benchmarking will lead to some cost savings. We are very comfortable with that. Maybe one last comment regarding the synergies in terms of split by division. Today, for relatively obvious reasons, we expect Facade Access to be the main division generating synergies. And overall, taking together cost and commercial synergies, we believe Facade Access will generate roughly 50% of those total synergies. Before I come to more details around the updated financial targets, I wanted to share with you the historical numbers of a very good company, Tractel which I joined in 2008. And really, the main purpose of this slide is to show the strengths and the resilience of the Tractel profitability over a long period of time. So if we look at the last 12 years, there has been no year below 19% of EBITA. And I could have come back to pre-history, even in 2009, the year after the Lehman collapse, we were very close to that level. And the drivers of this very resilient and high profitability still apply today. Global leadership in niches with high entry barriers, premium quality products and continuous operational improvements. However, Tractel is now part of the Alimak Group, and that opens new opportunities. And in particular, in terms of sales perspective, there are some cross-selling opportunities, which I alluded to a bit earlier, which become possible for Tractel. So we feel relatively strongly that being part of Alimak will allow Tractel to deliver more growth than what it has achieved in the past. And this cross-selling potential is one of the reasons why we have increased the growth target to 6% to 10%, including M&A. There are some other drivers behind that growth target. We feel confident that we operate in markets which are growing. And those -- this market growth is supported by the mega trends, which were listed by Ole. That's another driver behind the growth target. And then the third key pillar or driver for this growth target are the efforts we put into new product development and innovation. So taking everything into account, 6% to 10% is something we feel comfortable with. EBITA margin was 14% to 16% by the end of Q1 2023. We're at 16.2%, that was obvious that we had to update that. And taking into account the expected synergies, the potential for other operational improvements, including within Facade Access, we have updated the target to above 18% within 2 to 3 years. Leverage has increased from 2% to 2.5%. We felt 2 was over prudent given the business model, it's a cash-generative business model. The fact that now with Tractel, we are increasing the profitability and the resilience of the profits and benchmarking ourselves with other comparable companies into Nordics, 2.5 is still on the prudent side and allows a little bit more flexibility to finance new acquisitions. Finally, the dividend policy remains unchanged. We have a dividend payout ratio of 40% to 60%. But maybe most importantly, beyond that policy, we have an ambition, and that ambition is to grow earnings per share and dividends per share every year. Thank you very much.

Thank you, Sylvain. Now we have talked about delivering profitable growth but how we do it is also very important to us. So therefore, I'm very happy to welcome up on stage, Charlotte Brogren, our Chief Technology Officer, who will present more about sustainability. Welcome, Charlotte.

Thank you very much, Matilda. And great to see so many of you here today. I will now spend the next couple of minutes to talk about how we work with sustainability in Alimak Group. But first, I actually would like to highlight that our business is about sustainability. Our core business is to ensure that people can work safely at Heights in various industrial segments, in the infrastructure segments and at construction sites. And safe and good working conditions is actually being addressed by several of the United Nations sustainability development goals. To stay relevant today and tomorrow for our customers, for our employees and as a business partner. Sustainability can't be an isolated activity. That is performed by a special sustainability department. It must be integrated into everything we do and -- sorry, need to press a little bit harder. But -- and as you heard here from Ole previously, we have now launched new sustainability targets that no longer only address the environmental part but also the social and the governance part. And I'd like to give a little bit more flavor to why we have selected these targets. First of all, happy and high-performing employees is the foundation for everything we do. And therefore, we have said that we should have an employee Net Promoter Score above 40 and that will position us in the upper 25% compared to our peers. It should, of course, be safe to work for us, and that's why we just recently launched our vision, 0 Harm. And now for the first time, we also have set a target, a KPI to ensure that we are working towards this vision. And we are using the KPI lost time injury frequency rates, which basically means how many hours do we lose because of injuries related then to million of hours worked. And then, of course, we have our carbon footprint target that we set 2 years ago that we are working hard towards the reach and as you also heard from Ole, our aim is now also to go and commit to science-based targets over the next 12 months which will put further -- which will then make us come even further than the target that we set 2 years ago. And then, of course, manage our value chain is of key importance both from an environmental perspective to reach the carbon footprint but also, of course, from a social and governance perspective. And we have now intensified our work to assess our suppliers to ensure that we are parting up with the right suppliers and minimize the risk in our supply chain. To work on all these aspects, we have to integrate sustainability in a broad and holistic perspective in all we do. And we have set a framework for that, that consists of 3 parts: sustainable relationships, sustainable solutions and sustainable operations. Sustainable relationships is about how we interact with all the stakeholders around us. Customers, suppliers, shareholders, employees is about who we are. Solutions, the same about solutions is about the products and services that we provide. And of course, with the aim with the maximum customer benefit but also with the aim to minimize the environmental impact over the lifetime. And then sustainable operations is about our factories, sales offices and service organization and to make sure also that we internally live our own values. Since the New Heights Program, we have started a number of activities to address this important topic, and I just want to highlight a few of them. We have, for example, launched a program called Women Lifting Women in order to share and build a larger network about the women in the group but also then to inspire more women to take on leading positions. My colleague in the management team, Annika Haaker, has also lately introduced a number of very important processes for us to manage talent in a good way. And of course, even though we are now a larger group, it doesn't matter how large you are as a group. You can't solve everything within the company. You have to work in an effective ecosystem while we also have increased the number of collaborations with industrial partners with academic partners and other organizations. And one we are especially very proud of being partner of is engineers without borders, which is a volunteer-based organization working to solve engineering challenges around the world. Becoming more digital or using digital technologies to improve our products is a core element of each all division strategies, and that has led to that we have been able to launch more intelligent solutions but also tools that make it easier to plan using our products, install them and use them. And all of that is both good for the wallet of our customers but also good for the planet. And working over the lifetime with the products and the tools will allow us or give us a much better chance to improve the utilization of the products, less downtime and also extend the lifetime, which is extremely important in order to be able to address the scope 3 of our carbon footprint target. We have also introduced a number of activities to save energy across our operations and we have had programs to move our electricity to green sources. And I'm very pleased that by end of last year, we could see that more than 75% of the electricity used in the group was actually coming from renewables. And in order also to improve operations and services, we have made a partnership with a smaller software company in order to improve specifically the service part to ensure that we can have planned a service in a good way and ensure that we have the right spare part at the right time, at the right service [ van ] which is a very important piece in order to go more towards predictive maintenance, which is also saving both money and carbon footprint for us and for our customers. So many, many activities are underway and more will, of course, come. So what about the results so far? For the carbon footprint, which is the target that we launched 2 years ago, we can already see now that 2022 compared to 2019. In our own operations and traveling, we have actually been able to reduce with more than 30%. And then when it comes to Scope 3, which is basically what is happening at our suppliers, how we transport material, how we transport our products out to site, how we install them and how we use them. To address that part, we are using a methodology called Life Cycle Analysis, and we have now been able to cover almost 50% of our major product lines using that methodology which is a key thing in order to know so that we know what actions should we do to be able to address the Scope 3. Here are 2 examples, 1 from Facade Access and 1 from Construction. And as you can see on Facade Access, it's the upstream part that is the biggest part of Scope 3 for that type -- for that division. So here is very much about what material are we using and how are we designing that type of products. On the Construction side -- on the Construction division is actually the usage phase that is the biggest contributor to the Scope 3. And here is about now to see how can we develop and utilize better drivetrain technologies, take care about all the -- yes, how we operate those machines over the lifetime. So and what I would like to say with this is that there is not one size fit all to address the Scope 3. We have to tailor made that to each division depending how the business look like. And last but not least, people, people, people. Last year, we actually had -- we launched our first sustainability week in the group. And the aim with this week was to increase the awareness and increase the understanding of all our employees about this important subject. The week was a great success and very many ideas were generated but what was even more important, a great engagement from all our employees about this very important topic. So I'd like to sum up my presentation about saying for us in Alimak Group, sustainability is not the icing on the cake. It is the cake. And now with these new targets and a good engagement from the whole organization, we have a good -- very good momentum on moving forward. Thank you very much.

Thank you, Charlotte, for giving us an update on the Alimak Group sustainability targets and also the progress so far. That concludes the group topics, and it is now time to move on to our first divisional presentation of today with Philippe Gastineau presenting the Facade Access transformation that he launched as part of the Tractel integration. Welcome up on stage, Philippe.

Thank you. Thank you, Matilda. Hello, everyone. My name is Philippe Gastineau. I had the honor of leading Tractel for 6 years. And I now have the honor of leading 2 of Alimak Group's Divisions. I'll be presenting the first one right now, Facade Access. I joined Alimak end of November last year. And I toured the world for approximately 2 months to meet everybody in the Facade Access division. So not very good for my CO2 emissions. I'm sorry, Charlotte. But that was really the best way for me to understand the differences between the 2 legacy organizations. And as an introduction, I'd say we are addressing -- the 2 legacy organizations are addressing the same market, right? Permanent access type solutions for buildings, for infrastructure but we are addressing it -- we were addressing it in very different ways. The legacy Facade Access way was about products and technology and manufacturing. That's the way they looked at that market, looking mostly at the premium end of that market and the medium -- mid -- and mid-market as well, whereas the legacy Tractel part of the organization was looking at this market as an EPC contractor market, as a projects business, not as a product as a manufacturing business. And that's quite different way of looking at the same business. And of course, we had differences in profitability, substantial differences in profitability. So first thing I did is embark with my team in a transformation program. It has 12 work streams. It looks at every part of our business from sales, how we sell, how we tender, how we execute projects, where do we source our machines from, everything is -- we're leaving no stones unturn, right? So 12 work streams, 6 of which are closed by now and 6 of which will be continued until the year-end. I'll go more into details as to the transformation we're going through. We are a SEK 2.1 billion business with a 9.1% EBITA margin 12 months to end of Q1. And as Sylvain pointed out, we are not the most profitable part of Alimak. And to be quite clear, I like to be top tier student in the class. I don't want to be the last student. I like to be the first student. And I think this is also the case for my team. So it is clearly upon me and upon us as a team to get us to the top tier student in the class. We are enjoying close to 30% of services, spare parts, inspection, maintenance, training, part of our sales. So substantial part of our sales is around service business. And we're providing all sorts of permanent access equipment, both the very bespoke highly engineered ones on -- for infrastructure and for buildings as well as the medium range or the simpler products that we install on buildings -- buildings and infrastructure. Now there's 3 important things about this merger of the 2 organizations you need to know, and I'll explain all 3. The first one is this one. Legacy Facade Access was looking again at the premium end of the market, the highly complex part of what we're delivering for buildings in particular. And had developed a whole set of product portfolio around that. Legacy Tractel was looking more at the medium to lower scale of that segment. Again, same market but different segments. What this means is today, we have an organization that can deliver all products from the highly complex, highly engineered to the very simple ones for that specific market. So we have complementarity of the product portfolio between the 2 organizations. And on the small diagram, that basically means we can address any and all sorts of access -- permanent access topics on a building to deal with any sort of Facade or any sort of infrastructure building, through the Facade Access product portfolio. But you'll see on here some other pieces of equipment such as the [ 4S ] systems, safety ladders, guardrails. And these are typical products that Tractel brought into the group, now HSPS and that's one of the cross-selling opportunities that we're referring to, right? So in any tender from Facade Access where there is a guardrail, a safety ladder, a horizontal lifeline to be installed as well that's coming from the Height Safety and Productivity Solutions division, the other side of my brain. Second thing you need to know about this business, combined business is geographical focus. We had 2 organizations that actually were looking -- had developed their business differently, right? The Tractel legacy business was essentially a North American business, 71% of sales, North America; 20% in the EMEA and a small presence in APAC essentially in Singapore. So Tractel legacy, North America, Europe, Singapore. Tractel Facade Access on the contrary was mostly EMEA, 50% of sales, a strong presence throughout Europe, Middle East, strong presence in APAC, Hong Kong, Shanghai, Australia and a minor presence in America. Now of course, when you combine the 2, it makes a very nice fit, right? So we now have a business that is more or less 37%, 38% between North America and Europe -- EMEAI, not Europe, EMEAI, and then a slightly smaller business in APAC. And not only that but actually, those countries where one legacy organization was stronger than the other, those countries were complementary as well. So we were -- we Tractel legacy were very strong in Singapore. Facade Access legacy was very strong in Hong Kong and Australia and Shanghai, right? Tractel was strong in France. Facade Access was strong in Netherlands, Germany and Spain. So we are lucky in the sense that the complementarity is also at the country level. This also means that one of the first things I did is create a regional team, right? So 3 regions, 3 teams, and I'll come back to that. That was the first thing I did as part of the transformation program is to create a team, and we actually have a team -- one of the team leaders in this room with us, Matthew. Third thing, important as well, our combined installed base of assets, BMUs but not only BMUs, it's huge. More than 10,000 assets across the world, large presence in Europe, obviously. We estimate about 40% of these assets are more than 20 years old. So this is all very good business for service but it's also a very good business for retrofits. And retrofits is where we make a lot of money and a lot of margin. So this is clearly key in our strategy going forward to push the services and push the retrofit even more than we've done in the past. And I know Alimak has been pushing the services in the past, and we're going to continue doing that but pushing even more on the retrofit side. Again, with this huge asset base with a large number of them being more than 20 years old. Right. I'm going to spend a few minutes on this slide but again, what's important is that it's a process. It's quite deep within the organization because we are merging 2 organizations that again had a different approach to the market. So we're talking about people, we are talking about individual competencies. We're talking about processes. We're talking about IT tools. So of course, it's not a 5-minute exercise. I'll still take you through a few of these topics that we are changing at the moment. First one is organization. And the first point I already discussed, which is we have these 3 regions more or less of the same size, APAC being slightly smaller, 3 teams. And it's just -- so 3 teams, which means 3 leaders and 3 regional teams around those leaders. And it's not just about time zones, business cultures, languages. It's also because those 3 regions have different opportunities and different challenges each. So I want my management. I want to increase the management input into what we do, and I want those managements to be located as close as we can to our customers and our teams. The second thing we looked at is we are actually dealing with 2 different -- very different types of customers where -- when we are looking at selling of new equipment versus selling services, spare parts and retrofits. The first type of customer is the typical EPC contractor. That's the key market for selling new equipment, whether it is for buildings or infrastructure. The second market is more facilities managers, property owners to whom we are maintaining those assets over a long period of time and to whom we are proposing these retrofit jobs. On the first segment, the EPC contractor, we need specific skills to be able to address this market around project management, typically, around contracting, around claims management, right? So and we can't have those skills everywhere. We want to have density of our business, and that's why we created centralized teams in every region that will deal specifically with sale of new equipment. So we have 1 team based in Toronto to cover North America. We have 1 team in the U.K., 1 team in Luxembourg, 1 team in Dubai to cover EMEAI, and we have got a few teams in APAC. And those teams are dedicated to dealing with the EPC contractors, making sure we engage properly with the EPC contractors, making sure we take care of the terms and conditions when we're engaging and making sure we're delivering the margin. At the same time, we're also -- we also have, as I just showed, a very substantial part of our business around services and retrofits. And we want to push retrofits. So those teams are very local and there's basically 1 per country where we are very present, okay? So centralized teams for the EPC contracting business, setting of new equipment, services -- local services team to deliver the services on the ground in every country. On the commercial side, we changed quite a few things, right? We used to have 2 brands, we now have 3, right? So that means brand management needs to be adapted. And it's not a one answer for the world. Actually, it's adapted on a country-by-country basis. Some countries will maintain 1 brand and some countries will maintain 3, right? And it's in a certain way for the sale of new equipment, the branding is not that important, right? Because the general contractors do not necessarily care much about the brands but it is very important on the services side because we go to the property owners or the facility managers, and we are the OEM, right? So we need to make sure we manage the brand as thinly on a country-by-country basis. Channels to market, we have approximately 100 channels to market to manage. So we looked at the 2 channels to market from the 2 legacy organizations, merge them and kept most of the distributors and the relationships we have to cover 100 channels. And so it's a combination of our direct sales force, distributors, installers, sometimes in some countries, we have the 2, right? Sometimes in some countries, we have competing distributors, which we are managing, right? So we went through that process as well. That's pretty much done. Tendering and margin expectations. That's probably one of the key differences as well between the 2 legacy organizations. Clearly, we, as legacy Tractel had higher margins expectations, right? So in some parts of the world, we have upped those margin expectations and therefore upped prices. And that's typically the case in North America. In North America, Tractel legacy was quite a big organization. So we reversed, integrated the legacy Facade Access organization into the legacy Tractel organization. So it's a running concern, right? The job is done in North America. We have all the systems. We are pushing out these new tenders out to the market. Everything is aligned. We're using the same tool. So work is more or less done in North America. There's still quite a lot of work to be done in EMEAI and in APAC on that front. But basically, we're pushing margins up. right? We want to bring in those tenders. We want to bring in those orders into our backlog of a better quality than was done in the past as Facade Access. Contract management is another topic, right? I see all contracts above [ 1 million, 1 million dollars, euro, SEK 10 million, ] I see all of them. right? And we need to make sure we engage with EPC contractors in the right way, right, with the right terms and conditions, not too onerous for us. Last but not least, operations. So project management, again, differences in approaches from the 2 legacy organizations. So we are running a full program to hire train, coach project managers to be able to deliver these projects, make or buy, the 2 organizations were different there again, right? It was make as Facade Access. It was buy as Tractel. So today, we have the option. We can choose to do one to do the other. And it really depends on a case by case, tender-by-tender case, whether which one we choose but we have the choice. And then, of course, every time we can merge offices, get synergies from procurement, we -- the 2 legacy organizations were buying motors, they were buying drives, they were buying wire ropes. So we are merging all this to make sure we get the procurement synergies that we are expecting out of this. As a concluding remark, I'd say I now know this organization for a few months. The transformation is well underway. Again, we've done most of the job on the North American side. There's still a lot to be done in the 2 other regions. I feel extremely confident that this is going to be a good journey and that we will go from being the last in class to being #1 or maybe #2 in the class because that's what -- that's the position we like to be in as Facade Access. Do you agree, Matthew? Thank you very much.

Thank you, Philippe, for sharing the journey that you are currently on. Now we have heard about the new financial and sustainability targets, an update on the New Heights Program as well as the Facade Access transformation program. So I'm sure that you in the audience have a lot of questions for our presenters. So it's time for our first Q&A session. [Operator Instructions].

Okay, so I welcome up on stage Ole, Sylvain, Charlotte and Philippe. Thanks. So do we have any questions?

Okay. My first question is on M&A. So when can we start to see you doing acquisitions? And how much of the revenue target would you say comes from acquisition?

To take the last first. The bulk of the growth needs to be organic. So that's what we are driving and measuring all divisions on. That's organic growth. So that's what we [ believe ] from going forward. But as you know, the target is also containing acquisitions. We have not given our exact split. But yes, it's a solid piece that needs to be organic. Acquisitions, we had 2.87 in leverage after quarter 1. We say that in principal, now it's 2.5. So that -- and with good cash generation like we're having, we should be able to actually drive acquisitions relatively soon again. We have a nice pipe. We work on the pipe, and it will be an important part of the strategy going forward without giving exact timing.

All right. And then in Facade Access, would you say there is any reason that the legacy Alimak Facade Access that they can -- because I know they focus -- you focus more on taller buildings. Is there any reason that you can't reach the same type of margins in that area as in the Tractel part?

I don't see any reason why. Again, we are through a transformation program that is quite deep because we are changing the culture. We're changing mindset. We're changing the tools. We're adding competencies. So it's on a 5-minute exercise. But again, as legacy Tractel, we did it. So there's no reason -- there's absolutely no reason why we can't do it as a combined organization. So again, no reason why we can't do it. So yes, I'm quite positive about the outcome.

Great. Last question because the EBITA margin target is pretty ambitious and I assume the Facade Access will contribute the most, could you say like, I made some calculations like 15% Facade Access margin? Is that reasonable to believe within 2, 3 years?

I can't give you a specific figure. But clearly, we have a good operational momentum in the group, which we need to take into account. We have synergies that we have basically not started to report upon as we speak. And then we have Facade Access that we clearly see that we should be able to -- as Philippe was saying, it's no logical reason why we shouldn't be able to manage that overall business the way Tractel has been doing it. So there is solid upside potential in this. So it's several areas that will help lift the margin going forward.

[indiscernible] I'd like to continue with the margin target. And given the synergy potential, what you have communicated as well as the potential to improve Facade Access profitability, I think it could be quite easy for you guys to reach 18% plus margin in the coming few years. So is there something that you are worried, something which is holding you back that you are not talking about 20% or more in 3 to 4 -- 2, 3, 4 years.

I think it's important to remember a little bit the history also. The group did never ever deliver on the financial targets before we then started and launched this New Heights program, and that was one of the main things that we -- that was the target of that program to ensure that we are delivering on our commitments. And that we were able to do within 2, 2.5 years, actually, which I am proud of. And now we feel that it's the right time to take the next step. We are saying plus 18, which means that it's plus 18. We also know that we live in a turbulent world with a lot of things around us. But also remember, it's not that -- we are not talking about 5 years out, we're talking about within 2 to 3 years. So I'd rather ensure that we are actually doing -- continue to do what we're saying that we should do. And then we can talk again when we have done that. So I'd rather like that type of approach. I don't know if you want Sylva to add?

I absolutely concur with your view. We want to be above 18% within 2 to 3 years. We are not saying this is the end of the journey.

So when is the next Capital Markets day?

You will be invited.

So you will be invited for sure. We feel passionate about this business. We see plenty of potential for improvements in various areas. But today, we are working on the plan for the next 2 to 3 years. We want to complete the Tractel integration. It will take time to uplift the legacy Alimak Facade Access margin. It's not a 5-minute exercise. I repeat Philippe's words. So we feel it's a nice step to have 2 to 3 years to go to 18%, and then we'll have another discussion.

Okay. You said that you have a high focus on a net working capital. And of course, everyone understands that why it's up or been up in the last couple of years. But what is the level compared to revenue, for example, where you see that it should be?

That's not part of our financial targets but you saw in the Q1 report that we increased working capital again in Q1 and that's more than just proportionally to the increase in revenue. So we can do better without providing a specific number. We are focused on that. I mean I would say that historically, legacy Tractel was highly focused on cash generation. And so being together, we can share some practices. [ There is a room for ] improvement, again, takes a little bit of time. It applies to all divisions but if we take Facade Access, it's related as well to the transformation. The way we work, we project manage, the business will have some positive effect on the cash flow curve of those projects. So you need to give us a bit of time but we see the road map and then we see that we can improve that.

One more, if I may. What has been the cash conversion at Tractel over the years and then return on capital employed? And then do you see that the new Alimak can reach the same levels?

I have to tell you very frankly, being from a private equity environment, ROCE was not exactly something which we followed very closely. But in terms of cash conversions, we were really on the high side above 80% and that's something which we should be able to achieve looking forward.

Yes, we had a question in the back.

Yes, so It's [indiscernible]. I have a question also on the margin side. I mean you sound very confident that you will reach basically double the margins in Facade Access and it's 30% of the business, that's 3 percentage points of -- on the margin on the group level. So I'm just curious, should we see the 18% as some kind of floor going forward in 2 to 3 years that you've seen that you can do even in a weaker market? Or how should we see the targets?

It's also this thing that we say we are confident that there is no fundamental reason why the overall -- or the legacy Facade Access business of Alimak Group should not be able to make what the Tractel Facade Access business has been doing. And we are working on that, and we will improve that. How fast exactly before you can maybe reach those type of levels, we have not said that this is a 2- to 3-year type of journey. It is a journey. And that, it's a job that needs to be done but we also have other jobs that needs to be done. And that's why we are -- some of this, we believe that we feel relatively confident, as you say, that we should be able to deliver above 18% within 2 to 3 years. And that's our focus. And these are the main areas that we will work on -- that we will -- to achieve that. Next steps, we will have to take later. So I'm not giving exact time frame but we -- this is what we are working on.

And maybe to add some color to that. There is some inertia in our business, and this particularly applies to Facade Access because it's a backlog business. So we have a backlog, which is 18 months to 2 years. And overall, the quality of the legacy Alimak backlog is not the same as legacy Tractel. So there are some mechanisms which does not allow us to say all the job will be done within 2 to 3 years in Facade Access. It's likely to take more time.

Okay. And then on the growth side, I mean you're raising your growth target but the organic part portion of it, how should we see that over time? Do you see that it should be -- how much [ retracted ] from year to year? Because as you introduced with saying that Alimak is not a construction business, which I think people -- that's the perception that it is. So I'm just wondering a bit on you can elaborate how cyclical you think you are and how we should see the organic growth targets?

Yes. I think people often refer back to what Alimak Group was here in Sweden when it was listed, then it was very cyclical because then it was the legacy piece, which was mostly about the construction. And now this group is completely different with the stepwise acquisitions and the way we are set up today. So we are completely a different business today than what we used to be. So there is a fundamental resilience in this business. We are supported by these global trends, which are also there to help feed growth. So and then we are organized now like a market-driven -- customer-driven organization where we work closely with our customers to understand their needs and thereby develop solutions and products that will help them in the daily life. Construction market earlier, we were more selling a hoist. Today, we work with our own construction sites, developing logistical concepts, how to optimize the flow of people and material at a logistical site. Then when you are in that type of the business, which we are moving towards and are taking part of now, then you also become much less cyclical. So we feel that we have really made fundamental steps in that way to quantify it. I can't really give you a good figure. But that organic growth is a fundamental piece of our business for these reasons that are in our hands, and that's what we are driving. And actually, that's also how we are following the divisions. You know that they only have target based on organic growth. So that's what we want to see. Then we will more spice it up with acquisitions and what we can add there. But that will also be an important part but not the driving factor.

Maybe if I may add one and to repeat what Ole said earlier, in all divisions, we have quite an important service segment, which is -- because I think your question is what is your exposure to cycles. This service component is not really exposed to cycles. And that is a big component overall in the group, it's a little bit below 30%. The second, there are many mitigating factors against cycles. Diversification is another one. And I would mention as well the different book-to-bill patterns, depending on the divisions. We said earlier that in Facade Access, the book-to-bill pattern is 18 months, 2 years can be several years. If you take HSPS, which is the other division led by Philippe, book-to-bill pattern is a few weeks. So if there is a strong recession tomorrow morning, the different division will not be affected the same way. So really, our exposure to cycles in general is mitigated by all those factors. And our exposure to construction is only one of the end applications that we're exposed to industry, to energy and other markets.

Hi Sylvain, a follow-up on the cyclicality thing. Is it fair to say that if you were to get into a recession, at that point of time, the highest -- the share of the highest revenue bid, which is the aftermarket will sustain profits. And given the relevance of the working capital needs of the business, cash would be released. So if you sell less new equipment, you have a positive impact on cash flow as a consequence of significantly lower working capital. And at that point of time, the group margins increased because of the greater weight of the aftermarket heads giving you some resilience.

So, yes. And the -- I mean, regarding working capital mechanism, absolutely right. And then -- if I look at the, let's say, it's a part of the business, which I know the best track that is exactly what happened after the Lehman collapse. We had a very high cash flow generation because the working capital came down, that's absolutely. In terms of margin, we don't disclose the respective margins between service and new equipment. But yes, services in general in the group are delivering good margins. And if we had a recession, that will support us. But again, I come back to my book-to-bill pattern. If I look at the Facade Access business of Tractel the revenue in 2009 was higher than 2008. So if we have another lehman collapse tomorrow morning, we like to grow the revenue Facade Access because of the high backlog. It's the exposure to cycle really is spread over time in our business.

Maybe a question for Ole. If you consider yourself not being exposed to construction markets, to a large extent, anymore. What would you say are your 3 largest end markets. And what do they account for in terms of sales?

We don't disclose any type of split exactly in that same I don't say that it's not an important piece, the construction market, of course, the construction market is an important piece of the group. It's just to make the point that this is not what it's about. This group is about so much more, and then also what we see about these days when there is a lot of discussion about the interest rate hikes and when the property companies are going down on the stock exchange here, we are going down because they believe that we are exposed to residential also, I think. But that is even a smaller piece of that whole cake. So I cannot give you a segment split. Still, of course, construction market is an important part. But look at wind is an important business for us. It's a big division, all the industrial segments where you have marine, you have oil and gas, you have cement, you have yes, it's a vast number of segments in that business. On the construction, you have all the infrastructure elements, which are coming into this, et cetera. So we are very widely spread in that sense.

Understood. And then maybe two questions for Philippe. Firstly, on the regional split between Tractel and legacy Alimak, it was a big difference do you see major margin differences between the different regions, and that might be one reason for what Tractel performed much better than legacy Alimak.

That is not the main reason for the difference in the margins between the 2 legacy organizations. I think the main difference lies in, first of all, the margin expectation when you take a new job on. So there were lower from the -- on the legacy Facade Access side than they were on the legacy Tractel. So at the time of signing, you already know you have less margin in the job. And then there were differences in how we execute projects. Again, a very strong culture of project management on the legacy Tractel side and a much lighter one on the legacy Facade Access side. So you sign a project at a certain margin and then on the Tractel side, you tend to manage that margin and you end up with more or less the margin you're expecting and sometimes on the legacy Facade Access case, that was not the case, right? You were losing margin along the way as you execute projects. These are, for me, the 2 main differences in the difference in the way the 2 legacy organizations were functioning.

I guess that answered my second question as well because that is now what you're going to change then to price.

Correct. Now that has already changed in the work streams I explained the 6 that have finished, that's already changed for the tender part, right? So at the time we receive a tender to the time we sign a contract, those targets have been changed already. So that's done. Now we're working on the second part. And the second part, in North America, we had a very large legacy Tractel organization. So it's simple to integrate the smaller Facade Access team into the larger North American organization. But it's going to take a bit of time in Europe and APAC to make sure that on the project execution side, we don't lose margin. We claim when we have cost increases that are due to our clients. So it's all about project management, contract management, claim management, and that takes more than 5 minutes to put in place.

And then when we exit 2023, all of that should be in place, I guess, and then what are the lead times from your order intake until you're delivering.

I'll refer back to what Sylvain has just said, which is that I inherited a backlog backend of last year when I joined Alimak. And that backlog has more or less an 18 months lifespan, right? So we're looking '23 will not be enough to just get all the older backlog from Facade Access out of the way. It will still -- there will still be some of that in 2024. But what's sure is that all the new jobs we're taking on are with the new expectations.

Good. I think we have time for one more question, and we have received one here for Charlotte from Livestream. So Tobias is wondering how does Alimak focus on digital solutions and the new heights program creates opportunities for revenue growth and market expansion. And what is the projected impact on the company's financial performance in the coming years from these projects?

I can answer the first part, but not on the financial impact. I mean, everything we do has to -- is doing to support the financial targets that was presented. But we are using digital technology in a broad perspective, first of all, to improve our own processes, how we work internally get rid of manual work, automate processes, get out of using paper and Excel and so forth but then integrate better controls of our products will allow us to lower weight of products to perform better to allow our customers to use the machines in a better way to predict when service is being needed, not just do it on a time basis, but actually on a real need. So there is a waste of opportunities of using digital technologies also in our sector.

If I should also further comment on the financial impact maybe people, when you are driving these type of initiatives that we are doing here, if you take, for example, coming back to the construction market, this is about -- this is the future of the construction market, not only to apply machine there, but to make the full process integrated. I think in the future, we will see construction sites more be like an industrial site up to 4.0 where everything is scanned and planned and moving according to a certain structure. We are in these type of projects today with other actors in the construction industry. And then, of course, all the people and all the material, they are running through our machines. So then you need control over these machines. They need to be smart. They need to be able to document and to be able to be controlled. So today, we are not making money on these things, but we are leading the work in the industry on this, and we are convinced that, as an example, in the construction market, this will be a vital part where we will also make money in the future.

As an example, in Gothenburg on the other side of Sweden, there is a very high building being built now Karlatornet, where we have a number of construction hoists. And then if you look at the amount of waiting time, if you not have designed the hoist system in a good way, and measure the cost of people not being able to do the work because they are waiting to get up on the right level. That is a huge cost, and that's why it's so important that we can model how we are using the hoist in order to improve the logistics both flow of people as well as material on large construction sites. And that can only be done if the machines, we know how they operate and can control them in real time.

So now it's time for a break. And if you are joining the live stream, you have until 4:50 to stretch your legs and maybe grab a coffee, and for you that are here, I encourage you all to go and visit the exhibition over there and talk to our experts. And when we meet back here at 4:50, we will get an introduction to our new division height safety and productivity solutions. See you back then. [Break]

Welcome back to Alimak Group's Capital Markets Day. For new viewers, my name is Matilda Wernhoff and I'm Chief Strategy Officer at Alimak Group and also the host for today. We have three interesting presentations left in our agenda before we move on to the second Q&A session of today. So let's get started right away. Now it's time to get to know our new division, height safety and productivity solutions better. And for that, I would like to welcome back on stage Philippe Gastineau.

Thank you, Matilda. Me again, Philippe Gastineau, I'm going to present the new guy on the block, Height Safety and Productivity Solutions division. I'd just like to introduce the fact that it has -- the activity in this division is somewhat different from the rest of the group. We sell thousands of different products through 10,000 distributors around the globe. So that's clearly a difference. But at the same time, there's a lot of similarities with the rest of the group. We are active in the height safety and working at height segment. We are working on the same norms and certifications as we are for the other sister divisions. We are global. We have a lot of the end users that are the same clients. So a few differences, but a lot of similarities as well. We are a SEK 1.3 billion division, enjoying close to 20% EBITDA result. And as Sylvain mentioned earlier today, this has been a very profitable business for a long time, highly cash generative and it will continue to be so for a long time as well with 17% share of the business in services. The name of the division is a bit of a mouthful, height safety and productivity solutions, but that's what we do, right? We provide height safety products and solutions both personal protective equipment and collective protective equipment. So harnesses, you have an example next door, harnesses, anti-fall harnesses and lanyards but also guardrails, safety gates, those sorts of equipment. And at the same time, we also provide productivity tools, winches, hoists, individual hoists, whether they're manual or electrical, and we do that throughout the world. Maybe I'll spend 1 or 2 minutes of your time just showing you a few of these products and their application. [Presentation]

A few things I'd like to mention around this new division. The first one is we operate with very strong brands. Some of them have been I'm thinking about the Tirfor has been in operation for 70 years. And we still sell a lot of Tirfor's and Tirfor's are Greifzug in German, griphoist in the U.S., but they have the same product that we have been selling for a long time. They're in a sense, a household industrial name. So our end clients will go through one of our distributors and say, I want a Tirfor, right? So they point out to exactly that brand. Now of course, having such strong brands for such a long time enables us to exercise market power and pricing power in particular, right? So having these strong brands is an absolute huge asset for us. The second element is the exposure to very many different end user markets and applications, right? So we are a big provider of tools and technical solutions to the elevator industry, right? Our tools, Tirak, you have a couple of examples just next door. So our hoist, our winches are used on a daily basis as part of the method statements of our elevated clients to install new elevators. And those tools are specified in and they're used by all major Western elevator companies. But we're also in the fine rescue with our new confined space in particular and the Tirfor that I've just mentioned, we are in light manufacturing. We are in the utilities business. We are in the construction business. So we have a very wide array of end user and end applications. And that obviously gives us resilience through time. This slide is slightly complicated, and I'm sorry about that. But it's just what I wanted to show here is that we are a player in both the height safety and the productivity solutions market, but we are actually addressing a small niche of those two markets. right? So we don't sell hearing protection. We don't sell gas and flame detection. We sell anti-fall safety protection. So we are in those segments where the margin is high, the growth opportunities are great. This gives us two main things. One is we have the choice to go into another subsegment of those 2 markets, right, which is what we did a few years back in 2017, we invested in the U.S. in the safety gates and guardrail businesses, very profitable, high-growth businesses. We were not in those businesses prior to that, right? So it gives us the opportunity to grow in those adjacent segments. And the second thing is we decide which battles we fight. Those markets are huge markets worldwide. And some of our competitors are gigantic, right? We're talking 3M, [ Honeywell ], right? So we decide which battles to fight. And those battles we fight are those battles where our right to win is the highest. Do we have the right technology? Do we have access to the clients? Do we have teams in that country? And then we will select those battles to fight where our right to win is the highest. Take an example, we had the choice between going after the oil and gas harnesses, safety harnesses market in the U.S. where there are very big, very large, very entrenched competitors or to spend our money and resources in developing our confined space set of products and solutions and developing a new market with municipalities and underground network operators. We chose the latter because our right to win there is much bigger. So my job and my team's job is to decide on those battles we will find. Again, being a niche player. We sell 2/3 of what we produce through distributors, approximately 10,000 of those and 1/3 direct elevator, being a typical client we serve directly. So our work is twofold. One is about the segmentation of that 10,000 distributorship base. right? Not all these distributors are as important to us as all the others, right? So it's a 20%, 80% rule. We're going to be focusing most of our efforts on the 20% of those 10,000 distributors where which are going to bring us the most growth. And that's and we're going to help them and support them and help them with marketing and help them through innovation and marketing that innovation. The second battle is with the end users where we decide again, which ones do we want, which segments, which applications, with which end users, in which countries do we want to deploy what we know how to do best, right? Again, confined space is a typical example. That range of products and solutions didn't exist 5 years ago. We've developed it over a couple of years. It actually uses both anti-fall safety and lifting and handling solutions into one. And we're going after a segment that we didn't know anything about before we started attacking it. Underground network operators, people that go and take care of our sewers or gas lanes and those people need exactly that sort of application. So we decide which battles we go after into the end-user applications. We have a very -- we have an excellent business, actually. It's an excellent business, and it has been an excellent business for a long time, even well before I joined Tractel even maybe well before Sylvain joined Tractel, or maybe not. So it's a very resilient business, generating approximately 20% EBITDA, including in the tough years. And it's so far vastly growing business in the more recent times. So we've grown 20% in SEK over the last 4 quarters to Q1 '23, comparing Q1 '22 to Q1 '23. So highly cash relative high margins growing business, excellent business. How are we achieving this growth where we are focusing a lot of on innovation. We have a simple but effective gate system process to run through our innovation pipeline. I get involved in Gate 0, which is where we decide to commit company resources to deliver a certain product. I get enrolled in Gate 3s, which is the product launch. And we're running 40 to 50 projects at any one time through that gate system. And that's clearly accelerated our innovation in the past few years, certainly since I joined Tractel a few years ago. You see some of the examples of the products we've recently launched into the market. There's one or two examples next door as well. So we are running this innovation process thoroughly and constantly, which helps us, obviously, to fuel our marketing. And here again, we've gone pretty much fully digital, and we have with us our marketing or marketing man, [ Jori ] at the back end, who can tell you more afterwards. We were nondigital when I joined Tractel, no social media presence, no LinkedIn or nothing. We are currently very active both on social media and even more importantly, on LinkedIn, we have 14,000 followers. We have 1,000 leads coming from the web every month right, just because we're able to push that innovation to the right end users. So taking again this example of the confined space area, where we did not know anybody in the water and utility companies, right? Through LinkedIn, you're able to touch the right person because he's in the right company with the right title. And you push this digital marketing to him, he raises his finger and then we go and go and sell the products and the solutions to all these parties. So digital marketing for us is a key element of our growth today and in the future years. We obviously have supporting trends. Ole mentioned a lot of them, so I'm not going to go through them again. But clearly, safety regulations is always on the up. And our business is about making sure the technicians and the workers come home at night back to their families, but also that they don't get pains in their back and strained from physical efforts and providing them tools that are going to diminish those physical strains. I would say the sustainability part of our businesses are again, is our raison d'etre, right? We are in this business to make our clients' business sustainable, make sure those technicians and those workers and those engineers don't get hurt, are protected if they fall. But also that the last point, we have and that's reinforced by our market presence and our brands. We have engineered these products so that they last a long, long time. right? If you bring one of those winches or hoist back to one of our workshop and it's 25-year-old, there's a very high chance that we'll be able to repair it and give it back to you for a small, modest fee and you'll be able to use it for many years to come. And that's where the branding and the premium pricing comes from. We have those brands, but they are built on those very long-lasting tools and equipment we've put into the market for many decades. Our growth in coming years is going to come from 3 things. One is we're going to continue what we do well today. We can accelerate. We can always do better, but we're certainly delivering on growth results around and I always put the 3 together, innovation, marketing of that innovation and sales force effectiveness. Spending the right time, the right amount of time for our internal sales force and our external sales force with the right clients. Two is about synergies and of course, coming into the Alimak Group brings us new opportunities with our sister divisions, in particular, Facade Access, which I mentioned to some of you earlier today. So for sure, some of the products we have in HSPS can be sold through Facade Access. But also my other sister divisions where we can provide some tools and some solutions to their clients. And they are opening the doors for us to go and market these products and solutions to their client. There's obviously also some cost synergies. We are a bigger group so cost synergies on the procurement side, cost synergies on the offices. And it's a very fragmented marketplace. And it's a dual marketplace, right? We're present in the BP-type marketplace. We're also present in the lifting and handling type market. So a lot of acquisition opportunities in a very large pipeline of opportunities that we want to try and tap into in coming months and years. So as a concluding remark, I'll just say this has been a very good business for Tractel for a very long time. And we have all the intentions to continue that it continues being a very good business for Alimak for a very long time. Thank you very much.

Thank you, Philippe. Now we will hear about the strategy and recent product developments for the Construction and Industrial divisions from David Batson who is the Executive Vice President of the Construction division, and the Interim EVP of the Industrial division. And David, he has a solid experience from both divisions from his time as a country manager in Australia. Welcome David.

Thanks, Matilda. Obviously, I'm extremely proud to present on behalf of the entire construction division. I'd like to take this opportunity to thank them all for their contribution to the group. Before I move through the presentation, I'd just like to remind some people that may have been at the Capital Markets Day in 2021 when we presented our strategy. And what you'll see going forward is the implementation of a lot of actions related to that strategy. I'm excited to show that to you today. The division is represented in four key areas, and it's related to temporary access solutions versus permanent access solutions, which is industrial. So it's all related to temporary access solutions. Construction product sales, which includes hoists, mast climbing work platforms, which was enhanced by the Tractel acquisition and the Scanclimber portfolio that's coming to the division. Transport platforms, of course, as well as logistics solutions, which Ole mentioned before, such as common towers and scaffolding transportation systems, the STS 300, which some of you are seeing next door. We have rental service operations covering Australia, Benelux, Germany, as well as France and Canada through our recent acquisition of Tall Crane in Vancouver in British Columbia on the West Coast. With the rental business and core sales offering, we also have used equipment. And that used equipment, we see opportunities in this space moving forward, especially and helps our sustainability model. Through the acquisition of Tractel, we also enjoy a wider product portfolio. and broader customer base with a temporary suspended access business, which is prominent in the U.S. and Canada. Temporary suspended access. I'll take a little bit of time to explain this is top-down access. So actually top-down access from the building that's installed and removed versus Facade Access, which is a permanent BMU on the building. And it actually complements our mast climbing work platform business, which is from the ground up. Our services and parts business is also a core focus for the division, and you'll see further in the presentation, how we advanced our digital solutions related to this important growth opportunity. Let's talk a little bit about our hoist offering. Actually, it's a broad offering to many subsegments within construction, which we've heard about today. We participate in bridge building and maintenance areas as well as tunnels for infrastructure developments such as rail and water. And this certainly has assisted us growth and diversity in our offerings across the whole construction market. Our expanded mass climbing work platform offering, which now includes Scanclimber, offers safe and ergonomic access in multiple market segments, including industrial and refurbishment subsegments. The mass climbing business is about providing ergonomic access at the face of the construction site versus traditional scaffolding, where you're bending down and reaching. So this is a really significant opportunity, and we see growth in that market for us. As mentioned previously, we see growth potential in the temporary suspended access business. This is complementary to our existing sales network, both owned and for our distributors. As we communicated in '21, our strategic intent was to broaden the product portfolio, and we are pleased to present the new generation of construction hoist, the Scando 650a Series. It's manufactured with 100% renewable energy therefore, a really low carbon footprint. It comes with 28% lower energy operating consumption, and we used 97.5% of recyclable materials. It's designed to reduce the total cost of ownership, again, supporting our sustainability plans. The unit has a maximum 3,000 kilograms payload, and it's digitally connected and accessible by the My Alimak portal, which you'll see shortly. We also expressed in 2021, our strategic intent to focus on markets and opportunities in the lighter range of products, and we're really pleased to present Medius 350 as Ole mentioned before, it's a 900-kilogram unit, able to take 11 people to the height of 100 meters and fits most standard projects, simple and robust design upon the TPL platform, which was mentioned, the transport platform, which was mentioned, and it's a high-quality manufactured unit out of Zaragoza in Spain. Unit is compact with basin ground enclosure. And what that means is that we can actually transport this on a standard conventional truck improving the logistics of this product in the marketplace. It's adaptable. It lifts -- has quick and easy installation. It uses the triangle mass versus the square mask. And therefore, owners of our TPL product in the marketplace can get greater utilization of their assets. It's a really important fact that they can use this product on their existing mass sections. And it has a big advantage for them. It's versatile and can be configured in A, B and C doors. And what I mean A door is the front door, B door is the back door, and we can get a C door in there as well, so giving complete access to the product. And it also comes with access to the Scando machines, full height landing doors. So as you can see, we've built this product to be able to be utilized in the marketplace, which is great for our customers. We'd like to highlight some key facts about Scanclimber and the portfolio that came with the Tractel acquisition. It positions division strongly in two product portfolios. As you can see, Alimak was strongest in the hoist sales and Scanclimber strongest in mast climbing work platforms, making it a complete complementary addition to the business. We obtained a large geographical footprint in Canada, complementing the West Coast acquisition, which I mentioned, which was tool crane. So now we are in the West Coast and the East Coast of Canada at Toronto, along with a strong organizational structure that came with it in the U.S.. The factor of Scanclimber is in Poland, and this gives us great access to the European markets, but also the supply chains of those markets, which Ole mentioned about the regionalization of the supply chains as well. And we also get a wholly owned Finnish sales company, which complements our Scandinavian footprint. Again, the temporary access previously mentioned, our offer today is predominantly in North America through sales to existing new and valued customers. We also have rental operations in France, complementing our existing rental offering of Alimak and Scanclimber. The units are wire rope access, temporarily installed, as I mentioned, and used high-quality Tractel Tirak hoist, which we heard from Philippe and the Facade and the Height Safety group. So the opportunities of cross wide diverse range of subsegments, especially in the refurbishment area of construction. We are focused on new, used and rental opportunities and part sales, of course, to this market, to new and existing customers, and we will do that where it makes sense and positive contribution to EBITDA. We're delivering synergies commercially through the widening of our customer base, which is also opening up cross-selling opportunities. For height safety products specifically, existing construction and industrial markets, we're implementing operational synergies through centers of excellence in product development and technical support as well as capitalizing on those procurement synergies I mentioned with a wider supply chain. So let's talk about those profitable growth initiatives that I mentioned at the start of the presentation. We see great opportunity to expand and strengthen our sales company and the distribution footprint we have. We see white spots still in Africa, Eastern Europe and Latin America, those emerging markets. And we continue to focus on markets where it only contributes positively to EBITDA. We will continue to advance our research and development and bring new solutions to our customers. This includes our digitalization strategy, which I'll show you, and also broadening our parts and service offerings through that. To conclude, we're delivering on our strategic plan and continue to implement the profitable growth initiatives as you've seen today. So as I switch to industrial, a back-to-back presentation, but I'd like to take this opportunity again to say it's a real privilege to look after this important portfolio. On behalf of the entire industrial team, you'll see shortly the great work that has been occurring in this division. The division communicated in '21 the need to expand its product portfolio and broaden the sales network focusing on the subsegments within the industrial market. And you'll see a bit of that work as I move forward. Industrial can be best described again as [ rack opinion ] but also traction lift permanently installed throughout the world. It's a strong performing business. Where our focus is not only on the installation of the new products, but the service, maintenance, repair, refurbishment of the population, and it's really important to note that 60% of the revenue comes from parts and service which was mentioned from one of the audience members before. The Industrial division enjoys a wide diverse customer base. As you can see, we work across industries from power, logistics, ports as well as mining, cement, and marine. We also have experience and focus on permanent installations in infrastructure, as we mentioned, rails and tunnels, so permanent installation. So we're building -- we're part of the building process of rails and tunnel and water but we also have permanent installations that come afterwards. Our offerings are as equally wide and diverse. I just want to spend some time sharing what's been going on. So on the left, you see the silo lift. It's a SE240L, it's an entry-level lift that complements our existing product portfolio. It's designed for the mature markets to attack new and refurbishment opportunities and retrofit, primarily for silos and gantry cranes, but also we see opportunities in heavy industry and growth in new segments such as agriculture and food production. The PL warehouse lift, it's a simple goods lift only suitable for warehousing and workshops and storage. It complements what Ole said about the emerging trends in the marketplace, distribution facilities, and comes from 500 to 2,000 kilograms and it's complemented the existing customer sites, but also new warehouse developments. The SL-Ex from China, it's an explosion protected lift suitable for hazardous gas environments and it's designed as a competitive offering. It can go into the developing emerging regions. The lift is suitable for a range of industries, including gas storage refineries, industrial manufacturing and some chemical plants. I particularly want to draw your attention to the last one here on the right, the ME Gangway lift. It's a bespoke lifting system design to compensate for offshore even pitch conditions. It actually works from the vessel to the offshore wind tower. We've recently become the first company in the world to have this as a marine gangway lift certified under the new DNV rules. The DNV rules and standards are standards and rules related to offshore shipping and permanent offshore facilities. In less than 3 years, our solution has been adopted as the industry standard for gangways. The product enables us to increase exposure to this vast offshore wind sector. A great story. The Industrial division has delivered profitable growth over time. And this, of course, with headwinds during the pandemic, and previously commuted supply chain challenges in our quarterly updates, a strong performing business. So let's look at our profitable growth initiatives. They relate to 3 key areas: continue to expand the product portfolio, increase the population and harvest those parts and services, expand the sales organization to be able to grow our segment revenue, clear focus on the subsegments within the Industrial segment and create what the customers need and the portfolio related to that and continue to drive service contract penetration on new and existing store base. This includes implementing digital field service, management systems and tools, which we heard about before and adding value to owners in the field through visibility and availability to my Alimak. It's important to note that my Alimak is not just a construction portal. It's a customer portal for both construction and industrial customers. I'm proud to announce today that my Alimak was awarded Best Digital Development Award at the International Awards for powered access held in Berlin in April. It's a customer portal that makes doing business with us easy. It's designed to provide a consistent experience, those Alimak moments we like to call them and allow our customers to access a range of products and services electronically. improving productivity, efficiency, sustainability and ultimately, shareholder value. When building the digital offering, we actually tested and utilize customer focus groups. This is what our customers were asking of us. and we created that foundation moving forward. You may recall communicated in 2021, we wanted to digitalize the customer value proposition. I'm so pleased to be able to present this today and we fulfilled that first stage in that journey and that commitment. And let's have a look at a short video, which will provide some more insight. [Presentation] Hello. My name is Cameron Reed, and I'm the Sales Director of Alimak Construction Division. Let's take a look at my Alimak through the QR code. Our ambition is that this portal should consist of a wide range of valuable features, which support the physical product and provide important data to drive sustainability throughout the machine's life cycle. Amongst other benefits, understanding better the characteristics of how the Alimak equipment is used during the construction phase with help of IoT data will allow planning and logistics to be optimized and ensure the machine is being used safely. Based on the IoT data, Alimak can also support information and knowledge about how best to utilize Alimak products to both increase productivity and lower your carbon footprint. We will continue to review what additional features we can add to my Alimak based upon customer feedback and new product development. With my Alimak, we will take a more active role in the construction ecosystem in the future.

Thank you, David. We have now reached our final presentation for today. And this division has delivered solid margin improvements over the last quarters. So I would like to welcome up on stage, Jose Maria Nevot presenting the Wind division.

Thank you, Matilda. So let's go for the Wind division update. Okay? So first of all, the Wind division at a glance, considering the rolling 12 months, up to first quarter 2023, we reached the level of SEK 560 million with adjusted EBITDA result about -- just above 14%. It's something that we are very proud because it's the result of smart work as I will go in a minute. It's important to say that relevant and resilient part of our sales is the services, which represents 1/3 of the total. In terms of products, we remain with the service lead for wind turbines with the 3 technologies that means ladder guide, guide with wires and companion. We have the ladders for climbing, but as well for guiding the cables and other elements like the fan platform so external stores for the wind turbines. In safety, here, we have the PPE. So harnesses, linear positioners, but as well the safety lines and the associated sliders. And last but not least, the service and parts and in service, we do installation, inspection, repairs and dismantle when is the case. And in training, we're doing all the ways, so face-to-face, remotely or by e-learning. About our customer base, it remains highly dominated by the OEMs. So in that sense, we are working with Vestas, Siemens Gamesa, Nordex and GE, but as well in China, where we are working with the big ones like Ambition, Mingyang and Goldwind and the small ones like China Rail, United Power, Shanghai Electric and so on. Okay. So you heard about the new heights plan, and this slide is basically about the two 1st phases of this plan. What we did, which was establishing the base, and securing margin improvements. So what we did, it was basically to go back to our core competence in safe vertical access. Therefore, we develop a portfolio, which was new, and it was made hand-on-hand with our customers. We understood what was the pain, the gain and what was the level of investment that they could afford. Working with our first-class engineering. I would say we were able to bring solutions and products that fit for purpose. In this area as well, as it was mentioned as well, we have to -- we took the conscious decision to exit on the sales of internals that has not added value as is the platforms in the turbine. And that decision was taken in 2020 and has been affected in the last few years, but now it's over. And then we focus as well on the service side. So we only focus on the added value services that we could provide to the customers in the areas that they value them and we create the structures and the organizations that were suitable for this kind of activity. And finally, but very important is the price management. We have been able through a very strict cost of running activities at the supply chain and with the lean operations, with the existing formulas to manage the pricing along this time that has been very, very effective. As a result, you can see that in the last part of the right-hand side, our order intake has been increasing. As you know, from the first quarter where we have 50% increase organically compared with the previous year. And we have a steady but constant growing of the EBITDA margin. Then before we go to the first -- third phase of the plan, which was the profitable growth, I would like to explain a little bit about the wind market for the complete understanding of everyone. So okay, there are global trends. It's true. The electrification, the security on energy supply, the -- which is all of that pushing in the right direction. So what we can see in terms of gigawatts for wind is an increased average of -- compound average growth rate of 15% in the next 5 years, okay? But -- and this is coming basically from onshore, which is growing at the level of 12%, which is the biggest part, and then from offshore, which is growing at the level of 32%. Offshore is growing more because -- well, being smaller, but as well because there are these huge cost reduction of the wind power offshore, that is the new floating structures, and there is this power tweaks projects that are supporting this trend. Anyway, the gigawatts of megawatts is not helping us in any manner. The question for us is the number of towers, okay? So it is true that there is an increase of power ratio per tower. So what it was last year, 4 megawatts in onshore in 2027, it will be at the level of 6, 6.5. What it was in offshore last year, 7, it will be 16 in 2027, okay? So that makes it a steady market of a number of towers around 20,000 worldwide, good. But for our addressable market, there are 2 factors, very important as well. One of them is the lift penetration. There are 2 markets, major markets where the lift penetration is not complete. One of them is China because they find other kind of solutions or they put basically the other -- and then the other one, which is U.S., where it's neglectable, the penetration of lifts at the moment. But it is expected a big growth in the coming years. The reason, because the towers are getting bigger. If the market there, it was about [indiscernible] meters tall towers. Now it's going to be [indiscernible] and so on, so it's not acceptable any solution there. Therefore, that is the penetration of leads in one hand, but the other as well, the direct effect of the taller towers. So the ladder systems [indiscernible] will be longer and the lift solutions will be more complex as well because it will be taller with more platforms and with more [indiscernible]. So the investment per tower will be higher. Okay. So having this mind on the market will go in how we say the market, what we are going to do in order to have this profitable growth in the Phase 3. And it is basically 3 things: increase market share on lifts, on safety and aftersales. In the -- how we are going to increase the market share of the lifts is we have to differentiate China market and the rest of the world. So in China market, as it was explained 2 years back, we started -- yes, different way. So we decided that China for China. Therefore, nowadays, all the engineering is made there. All the supply chain is over there, the fabrication of course, and we are releasing products, which are exclusively for the Chinese according to their expectations and standards, okay? And that remains in that way, which is being great so far. The second is the rest of the world, I would say. Here, there are different areas. But I would say one of them is heavily influenced by the digitalization, not because of the beauty to be digital, but having smart controls and some sensation. We are able to get data from that big data. We are having already activities in machine learning in order to get this algorithm that will give us this predictive maintenance, which is absolutely key in our sector, and that has a direct impact in the TCO and the total cost of ownership, which is a key measure for the OEMs. On the second safety. We will complete our portfolio with a wire-based protection system, according to certification in Europe and in U.S. But we will -- as has been already mentioned several times, we will leverage in the [indiscernible]. And then, obviously, they have a huge and beautiful catalog of 320 pages, but we have been selecting some of the items, and I'm happy to say that, for example, in the short term, we are dealing with the claim assistance for different regions from Tractel which is a very nice product. And in the more in the medium, long term, we have the agreement to create a platform for the blade maintenance, okay, so that it will be releasing a couple of years from now. And finally, about the after sales, we are going to increase -- we are already increasing our offering with these safety upgrades and the lifetime extension under the customer requirement. And we are looking at the Avanti footprint, not only the countries where there is a potential, but as well in countries where we have existing setup from a technical point of view to include additional added value services in order to support this profitable growth. And as I would like to finalize with some words about sustainability. So of course, we are fully engaging the targets of the group. And we are having works in all the scope in scope 1. So we are reducing our energy consumption. We are going more -- much more efficient. The scope 2, for example, we are having happy to say that more than 80% of our facilities worldwide have already green certificates, international ratifies. And in Scope 3, we are working in lower traveling as well, but we are having this life cycle assessment. And here, I'm showing one example, okay? It is one of the most sold products. Probably, there are more than 30,000 shark units lifts worldwide. So -- but let's say that it is made in Spain, for a turbine of 3.7 megawatts and had a lifetime originally of 20 years. If you are looking at the CO2 footprint, it's not coming from transport, manufacturing, raw material, no. It's coming at 86% of the maintenance. This is and you will say how it comes. No, it's not coming basically even for the -- yes, the technicians that they have to go every year to the turbine, but it's basically count because the time that the turbine is stop, this energy, which is not produced is considered that is coming from a nonrenewal source, okay? So we understand clearly where we have to assess and that is linked with what is I said previously digitalization. So we came with a new optimized maintenance plan. We increased the lifetime of the products, 25, 30, even yes, we are looking even more. And the new range of products, automatically, we are bringing down 35% of the CO2 footprint, which is very much in line with our expectations. And nowadays, we are evaluating the possibilities in net zero for 2040. And that's all. Thank you. Matilda?

Thank you, Jose Maria. So that was the last presentation for today, and it's now time for the second Q&A session. So I would like to welcome up on stage, Ole, Philippe, Jose Maria and David. And just a reminder, if you want to ask a question, you simply raise your hand or if you are on the live stream, you can submit the questions through the browser. So let's see, do we have any questions?

Yes. So a question on the wind side. The wind turbine manufacturers are not doing very well. They're losing a lot of money and trying to improve their operation and cut costs and so on. So how have you managed to improve your profitability to those customers? Is it in the original sales? Or is it more on the service side? .

Well, the OEMs, they are struggling and according to what they say is because they had the disruption in the supply chain, they couldn't carry the inflation effects to their customers. And then they have huge warranty issues that they have to make some provisions. What we have been working is in -- yes, as I explained in a very hand-on-hand with the customers in order to provide the portfolio at the right degree of investment. And then there is an extremely important element for them, which is the quality, the delivery performance, on-time delivery in a global scale with the same commitment anywhere in the world. So I would like to call it a symbiosis relationship that allows us to work in such a way that we are not penalized for their situation.

So I have a question on the industrial and the construction side. It would be really interesting to hear anything on what you're seeing right now in terms of current trading or what trends you're seeing in the market, given that there is a lot of uncertainty out there, but -- the latest Q1 results showed a strong development.

Yes. Thanks for your question. Look, we're not naive to the fact that there's inflationary pressures, interest rate pressures globally. And therefore, that has put pressure on some development work in certainly the residential sector. But what I tried to reflect today is that we're not reliant totally on one subsegment of the construction industry, such as residential. We're so much more wide and diverse. Our customers -- we sell our products. I think Ole mentioned earlier today, we sell our products to our customers. And those products go to work in a large subsection of construction. So pleasingly, we're global. So where there's swings and roundabouts in certain regions, we've been able to weather that storm and I think our Q1 results and certainly past couple of years has reflected our resilience.

Okay. And then I have a question regarding the industrial statements. Because in Europe, I think we're seeing a lot of greenfield investments when this I would say, the near-shoring trend, et cetera. I guess that should be quite -- is that positive for the Industrial segment? Or are you seeing any signs of that?

Yes, absolutely. Absolutely. We're seeing evolving subsegments within industrial that probably wasn't communicated but things like nuclear, whether it's nuclear decommissioning or construction. So we signed nondisclosure agreements, and I can't explain too much detail about that, but there is -- it is a wide marketplace with great opportunities in greenfield opportunities, warehousing and distribution, logistics. So it's a really positive environment for us.

And David, if I may add, it's also a very positive nuclear environment for the facile access division because we provide equipment into permanent equipment into that market as well as for the ASPS division, where we sell equipment to the nuclear industry. So nuclear for us as a group and for our divisions, in particular with David is a key segment that we're developing.

And overall, this is reassuring. As I talked about that, it's not globalization so much anymore. It's more due to the geopolitical situation. You see more investments into local and regional perspective. That is, of course, feeding growth in this area, which is a market for us. So absolutely positive for the group.

Yes. And then just the last one on Tractel. I mean you showed a long graph before on very stable margins. But in some years, you didn't really see any growth. Could you just maybe explain a bit why Tractel maybe not has grown a lot historically and why that has maybe changed now?

Well, first of all, it has changed now, as you've seen the recent quarter 1 comparisons between the last 2 years. I guess the main reason is some of those actions we took back in 2018 and '19 bore fruit more recently. I mean it's not just because you put in a new CRM in place or you decide that you're going to have a new process for innovation that suddenly everything is bright and everything is there and you're producing all these new products and introducing them to the market or that your sales force is exactly doing what they should, right? Everything takes a bit of time. So I guess it's a combination that we are now pushing all these new products, and we are doing it effectively in terms of marketing and digital in particular. And we are using our internal sales forces more effectively that's generating this growth. It's a combination of these factors. So I don't have an exact answer to your question, but I'm clearly seeing the net positive effects of all this work we've been doing, and we're carrying on doing.

My observation, if I may, that would also be this thing that it was very much product focused. I think also in the old days with Tractel like we saw in legacy [indiscernible], when Philippe came on board now 5, 6 years ago, you changed that focus to much more market-driven spending resources and efforts on marketing and product development. And that's really what we are seeing now, start to see real effect from. And then in the meantime, you also had the pandemic or maybe some delay in some of these effects, but it's coming.

And then just one more on the wind division, when you acquired Avant, you had quite -- had some turbulent years you can to say the least. But now we're seeing gradual improvement in both order intake sales and margin improvements. So I'm just wondering, you're already doing 14% now on a quite low revenue base. If the revenue starts to pick up again in the coming years, where can that margin be in 3 to 5 years?

Yes. Maybe you want to say first.

Well, what we can say is that, first of all, the market conditions are clearly positive in all the regions. So in the U.S., we are having this inflation reduction act. Here, we are waiting for this electricity market conditions to avoid the uncertainty of the investors and this net zero industrial plan that will relieve a lot of constraints. So the market in the major areas will go as well. It is improving conditions in China and in general, in Asia Pacific. In the other hand, we have been -- what I tried to explain is that in the activities that we have been performing in being closed with the customers, developing a new portfolio, focusing only on the services that are having a clear added value and price management that brought us to this level that our view that will continue. Then going forward, we believe that this will -- we believe that we did the things in the right way, and we will continue doing them in that way. So I would say that there is no reason to develop this. And even with growing the turbine use to improve the situation.

Yes. And this -- the market we cannot change, and the market has been very, very tough in addition to the fact that we took out tower internals. And that was really about refocusing and Jose Maria and the team have done a fantastic job during this time frame to take down cost, which is also an important part of why we are able to make good margins. It's not only about pricing, it's also about your cost level, of course. And having something which is attractive to these customers. But it is a tough market out there. The biggest issue for this business now is to get back into growth because the growth has been going down for 2, 3 years, as you know. Now we are there. We see market improving. And we expect that to continue to be. And we will continue also to work on the margins. We don't see a really limit to what that can be today. And there will be, of course, some sort of drop-through when volumes are also coming on this. So our ambition is to drive volume, first of all, but I think also that will lead to good margins going forward.

On construction. You talked about product development lately. My question is about to what extent do you control your own destiny in terms of how relevant is the market share potential in certain niches vis-a-vis the risks on the market. To what extent do you have enough potential out there with the product lineup to really grow even if markets are choppy in the years to come, if that was the case.

Look, it's a great question. And the way I'd like to answer that is I think the STS 300 is a great example, which is the scaffolding transportation system, is a great example of opportunities to improve the construction industry. So it's a logistics horizontal and vertical tool used to help scaffolders install scaffold. There was no product before that. So we see opportunities to improve and develop products that our customers and markets need. We see -- it's a very diverse market as well. We've got a lot of competitors in a lot of regions, and we see growth opportunities in all the subsegments within our product portfolio. So not only our existing core products, but the improvement of those products but also new innovation and R&D. And you will see in our annual reports and R&D investments. So I'm quite optimistic and positive about that.

Yes. Anders Jafs, Kepler Cheuvreux. I just have a question regarding the interest exposure to the long-term loan you took in combination with the acquisition of Tractel. I noted in your annual report that it was unhedged or it was a risk which you had sort of noted and I was just -- yes. Maybe a question for you, but...

Yes, maybe you want to answer.

Yes. I mean it -- that's correct. Absolutely, we've decided not to hedge the term loan, which we have. That's a EUR 300 million loan. We -- yes, it's a risk, but we assume that risk, it's still a relatively low level of debt compared to the balance sheet we have and the cash flow generation. So we feel confident with that.

Any more questions? We have -- yes.

So there's a lot of discussions right now that the Chinese government is about to help the Chinese property sector maybe and with more finances as a way to get the Chinese economy going. Would that affect your business, anything at all or...

Opportunistic, maybe yes, but we hardly sell anything in China to the construction market. So it doesn't affect -- it has not been negative to us that they have struggled and it's a difficult market. It's not part of our strategic focus to really move in there, but opportunistic, we can do business there. So maybe. David, do you want to...

Yes, absolutely. We have a manufacturing facility in China that develops products locally, but also for emerging markets. I feel that -- I mentioned in 2021 that we would only enter China opportunities where it made sense and contributed positively to EBITDA. And we understand the challenges in that market to do that. So we'll continue to monitor the opportunities and move where it makes sense.

And that manufacturing facility is mostly -- it's [indiscernible] -- so it's mostly for industrial today. That's the product that we are really making and selling out of there to the greatest sales.

Good. We also have some questions coming in live stream. So we have one around the cross-selling opportunities. So can you comment on the cross-selling opportunities between ASPS division and the other divisions. Have you already started to see effects from that? I think it's maybe for you.

Sure. As I mentioned during my presentation, we have 2/3 of our products that are going through distribution, right? So we are really focusing on that other 1/3 of products that we sell currently to end users. And we are promoting those products to all our sister divisions with some early successes. But obviously, it's a journey. And the idea is that we go out and reach out to those end clients that are my sister division's clients and introduce our products and solutions to them. And we are doing this effectively and we're doing this around the world. So today, results -- a starting point, but clearly, I'm expecting quite a lot of commercial synergies out of that through my sister divisions. I hope you would have agreed to that, right?

Great. Do we have any more questions from the audience here? Okay. Then I think it's time to start wrapping up as this day is coming to an end. If you would have any follow-up questions, please feel free to reach out to us directly or ask -- or you can also take the opportunity to ask some questions at the mingle after the session. And just before I hand over the floor to Ole for some final remarks. I would just like to thank the audience for today. It's been a pleasure being your host. Ole, the stage is yours.

Yes. Thank you. It should be a slide coming up, but -- there, I see it there, but I don't see it there. But yes, here it comes. So first of all, and thank you, Matilda, for taking us through this day in such an excellent way. Thank you. I hope that you sit back with some sort of a good understanding and comfortness that we know what we are doing and that we are on the journey. We have a solid program behind us, that we are delivering upon what we are saying and also that we have a way to reach this level. . We have a strong organization. So what I talk about is the vehicle, which I think is utmost importance to actually make things happen. That is there. And that organization is empowered and I think also now it's proven. And you have seen here something I'm very proud of team members in the central team and you meet also other people here, it's more than 3,000 people working and driving the same type of agenda every day. So that is in place. We have also a leading market position, which is important to us. We are global, and we have this very solid installed base, which, of course, also gives us a nice service opportunity, global organization, and we can be close to our customers basically everywhere. We have the global trends supporting our business, which is also securing some sort of fundamental growth to actually what we are in. We are fixing which has been very important, the historic issues, and that was related to these 2 acquisitions. I would say we have fixed wind and we are fixing still now, and we have found the medicine and the team and the processes that what needs to be done on facade access. So that we feel very comfortable around. And we are delivering solid operational performance in our -- all our businesses, I would say, today. We have also integrated Tractel well -- and as I was talking about in the beginning, how you integrate and to understand the business and how you actually do that, it's a [indiscernible] and I will not promise that I always do that correct because that you cannot do. But what we have done, I think, with Tractel has mostly been right. And now we have 7 months in the bag. I feel also relatively comfortable that we will continue to do that in the right way. We have said that these synergies should now start to come, which will be an important part of that journey. But the first and foremost is that you are together and you're kept -- and you have that team working. And that we have. So now is the next step, and that's the synergy generation. And we talk about the commercial side, of course, the sales, we talk about the cost. But it's also about this product development, working together on the R&D making new type of solutions, which the market have not seen yet, which we can do as a team combining this. So we will continue on this journey, and we will deliver accelerated profitable growth going forward. Thank you for attending here today. Very happy to see you all, and I also want to give a big hand to all the 3,100 Alimak employees, which makes this a fun place to work and are behind all the great results. So thank you all.