Alleima AB (publ) (ALLEI) Earnings Call Transcript & Summary

Hi, everyone, and welcome to the presentation of the first quarter results for Alleima. My name is Emelie Alm, and I am Head of Investor Relations. I'm joined here in the room today by Göran Björkman, President and CEO; and also by Olof Bengtsson, CFO. Göran and Olof will take you through our results, and we will then have a Q&A session. So you can ask your questions through the conference call, and you can also write them in the field below the webcast, and you can also download the presentation from alleima.com. As always, safety is a top priority for us, and I trust that you are safe now and that you know the safety routines of where you are located. So with that, I would like to hand over to you, Göran.

Thank you, Emelie, and also from my side, welcome to this presentation of Alleima quarter 1. Well, I think we have a solid start of the year, and I'm pleased with our performance, so let me take you through the quarter 1 highlights. We have an order intake growth of 6% if I exclude major orders and our backlog continued to grow in the quarter, where we continue positive oil and gas momentum and demand across the board. Other contributors are chemical and petrochemical, industrial heating, to name a few. Slightly positive sequential development of low refined products. This is something we talked about in Q4 that they were down. They are down year-over-year, but sequentially improved. I think that is important. We see weakened demand for consumer segment in Strip, we'll come back to that. Revenues grew 12% with a positive mix. And again, supported by oil and gas, chemical, petrochemical, industrial heating and also medical. We also improved our earnings. Adjusted EBIT margin of 10.5% versus 9.1% last year. This comes through high revenues and improved product mix. And also this quarter, we have successfully increased our prices to offset the cost inflation, and we have the solid cash flow. Also to make -- to give a few comments on our strategy where I think we continue to execute on the strategy today. Kanthal announced a strategic partnership to expand the heating offering. We also have had several orders to capitalize on the green transition. And now, in April, we announced the acquisition of the production facility, Söderfors Steel, and that is to support growth in medical and aerospace. Looking at sustainability, and I'll start with the one that I'm not pleased with, and that is the safety development. It is -- we see a negative trend. But if I look on a more long-term perspective, I think the problem is that we don't -- I mean, we've been flattish for a number of years, and that is not good enough. And we are now taking actions to improve. Looking at recycled steel, it improved for the 12-month rolling period but declined slightly from last quarter, but that is due to product mix, where we -- I mean we had to have a higher share of virgin materials for the mix. We were also continuing to implement buyback programs for -- with the customers. Greenhouse gases emissions are -- we are in the low range compared to our peers. And despite already one of the lowest metrics in the industry, we can always improve. And you can see we have a nice trend on that. Share of female manager increased if I compare versus quarter 1 last year, and we're now on 22.4%. It declined slightly compared to previous quarter as a consequence of total number of managers. Sustainability is not only about our own operations, it's a lot to do with how we act on the market. We continue to contribute to the sustainability of our customers and other stakeholders through our product offering. Control is targeting growth in segments where Industrial heating solutions are contributing to customers' reduction of CO2 emissions, and that enables the green transition. And we have received several orders for the industrial heating solutions. And that is in applications like solar, lithium-ion battery manufacturing and also downstream steel. And this is, of course, crucial components for their ability to drive the green transition in that part of the industry. Gerling, that's an acquisition that was made last year. They are targeting the fast developing hydrogen market. And we have secured yet another frame agreement for high-pressure tubes that will be used to support the build-out of vital infrastructure for hydrogen gas refueling stations in Europe. Surface technology. That business continued its positive development and deliveries for pre-coated strip to be used for stationary power projects ramped up during the quarter. And this is growing in line with the commercialization of that industry. So I mentioned at the beginning, a couple of activities to deliver on the strategy. We acquired Söderfors. The acquisition is to support our plans to grow the medical and aerospace business. And for that, we need the capability of making small-sized bars. And we have been looking at different alternatives to do that and now come to conclusions that the best alternative is to buy Sodefors Steel. And it is the production capability that made us decide to make this acquisition. Today, Kanthal announced that they started up a strategic partnership with the company Rath, and I think we complement each other. Kanthal leading in heating and Rath leading in insultation. So together, we will bring sort of the broadest range of sustainable industry heating solutions to the market. So let's look at the market development and go through all our segments. I think demand during the quarter -- I mean, it noted the sequential improvement in most customer segments, while it declined compared to last year for parts of the business. In total, we are well positioned, and long-term trends and underlying tailwinds are offsetting uncertainties in the market environment, and we have a positive mix in our growing backlog. Demand in Europe was positive. North America was flat. And if we exclude major orders, while Asia was down, mainly explained by higher comparables mainly in the energy segment. Quarter 1 last year was a strong order intake quarter, so overall high comparables. So I think from that sense, a solid performance. Quarter 2 last year was the best quarter ever in terms of order intake. So looking ahead, we are meeting even higher comparables. Let's start to look at the short cycle, low refined products. They were down year-on-year, but slightly up sequentially for the group. And if we look at Industrial, it is a decrease in Asia and North America, but up sequentially and still positive in Europe. It's Kanthal and Tube that is driving the development in this segment. Consumer, negative, especially in white goods and for compressor valve steel, which is hurting the Strip mostly. And we have a sharp decline in Strip. While we can see, for instance, in application wiring Kanthal, that is also in the consumer segment, they were down year-on-year, but slightly positive quarter-over-quarter. Oil and gas, I mean the investments continue to materialize. We have both OCTG and umbilical orders, and we have a continued solid project list. Chemical and petrochemical business application tubing is positive in all regions, but mainly driven by Europe and Asia. Industrial heating, we see solid development with strong underlying momentum in any customer segments like semicon, metal, solar, glass, steel, many, many subsegments needing through electrification. Transportation, strong aerospace, particularly titanium tubing for hydraulic systems. Medical, we have a strong positive underlying development. However, timing effects in the quarter somewhat related to the major order we received in quarter 4 last year. Hydrogen renewables, they have a small segment where they have a strong order intake growth in the quarter. Positive trend, and we are finding new opportunities all the time. The positive development was mainly related to hydrogen in the quarter. So again, we have a diverse customer segment exposure, and that is clearly one of our strength, and we have a good momentum and sequentially improvements. But remember, the high comparables we will meet in the next quarter. Let's look into order intake revenue a little bit more in detail. And the order intake is strong. We have an order intake growth of 6% if we look at the rolling 12-month period. In the quarter, we had a positive organic order intake of 6% when we exclude major orders. It was SEK 1.3 billion last year related to both power generation and oil and gas. And this quarter, we had 2 major OCTG orders with a total value of about SEK 882 million. And the total order intake was SEK 6.4 billion. Organic revenue grew 12%, total revenue approximately SEK 5.4 billion. And book-to-bill, 119% in quarter 1 and 115% rolling 12 months. So well above 100% and our backlog remains solid and it's growing. Even more in detail than looking at the components of the top line, rolling 12 months order intake trend is upwards, that's the orange line. This means that we are growing our backlog. Year-on-year bars for order intake are getting smaller, but that is, of course, because we're meeting higher comparables, slightly lower volumes compared to the core spending period last year, but that is supported by pricing, alloy surcharges and also positive product mix. We also see tailwind from currency. Olof will get into more of the details later on. But overall, organically, strong development, both for orders and for revenue. So some more details on earnings. Adjusted EBIT increased by 48% to SEK 567 million. Margins on 10.5%, it was 9.1% last year, and it's supported by higher revenues, favorable product mix. Currency had a positive impact of about SEK 80 million. But alloy is also diluting. So it's diluted by roughly 0.9%. Price increases are offsetting cost inflation. We continue to have a positive effect from that. Even though now energy prices are more in control, we see a result of passing on less energy surcharges to our customers, and then of course. However, general inflation has increased. And to match this, we have been increasing our base prices, and we've done that in a successful way. And this is something I am very pleased with. Maybe it will be a little more difficult, but we're still managing this, and we have, of course, a good pricing in our order backlog. As everyone else, we are also affected by higher cost, and we are dependent on the cost inflation, but we're still positive. Let's see. I think we could have a slight impact on margins short term. The reported EBIT of SEK 1 billion, including metal prices, effects of SEK 479 million, and we had a free operating cash flow of SEK 404 million. Tube is performing well. It shows good momentum. Organic order intake of plus 16%, excluding major orders, that's strong across the board. Strong oil and gas momentum for OCTG and umbilicals and where we booked 2 major OCTG orders totaled SEK 882 million. Also high order intake in the chemical and petrochemical and in aerospace. Year-over-year decline from Mining Construction & Industrial, but we can see a positive sequential development for the lower refined products, which is good to see. Organic revenue, 14%, mainly driven by oil and gas and chemical and petrochemical segments. Adjusted margin of 10.7% despite some margin dilution from alloys. And this is supported by higher revenues, positive product mix, price increases compensate the cost inflation and currency had a positive effect on roughly SEK 61 million year-over-year. And to comment there, strategy execution, as I said before, then in April now, we have signed an agreement to acquire a production facility, and that will be organized in the Tube division. We also received orders for high pressure tubing to support out a bit of hydrogen gas refueling stations in Europe. And we also, during the quarter, has inaugurated a new application tubing factory on our Mehsana site in India. Kanthal. Kanthal continued to see a strong development. They are clearly benefiting from both electrification and the medical trends. Organic order intake of minus 2% in the quarter. This is impacted by timing of orders in the Medical segment, but overall, a solid demand. Major orders of SEK 350 million in Q4, impacting the quarter. But we will -- which will also impact comparables going forward. Positive development for industrial heating segment related to heating elements for, as I said before, semiconductor, solar, glass and other subsegments. Organic order intake declined for heating materials due to lower demand for appliance wire for white goods and boiler igniters for the consumer segment, but was up sequentially. Organic revenue growth of 11%, broad-based positive development across division in all regions. Strong adjusted EBIT on 16.4% increased revenues and strong product mix supporting also price increases to compensate for inflation, and Kanthal had a positive currency effect of roughly SEK 18 million year-over-year. And they -- as I said before, they have announced today that they expand their offering with industrial heating through strategic partnerships with the company, Rath. Strip have had challenges in the quarter. They have seen a continued weakening demand for stainless compressor valve steel and consumer-related goods. The decline was sharper than we expected, and we noted a decline in all regions, but it's mainly visible in Asia, where we have a large part of the compressor valve steel business. It is a decline from high comparables, but orders are on lower volumes, so nothing that we can neglect. And we are taking it seriously, and we're acting with mitigating actions to which I will come back to soon. Organic revenue growth of 1%. We are delivering from the backlog with positive contribution from razorblades and knife steel to the consumer segment. Also precoated strip steel for stationary power projects in the hydrogen and renewable energy segment performed well. Adjusted EBIT margin of 9.7%. That's a decline from last year, and we are noticing underabsorption effects from lower volumes. When we are producing, there was a higher cost due to inflation and how to manage in the short term. We have price increases, which is part of the mitigating the other problems, but we are not getting any re-leverage from this now. So even though this decline of volumes -- I mean, it's not having a significant impact on the group. We need to protect the division's profitability going forward. So we are now taking actions to adjust capacity and reduce cost, and we're doing that by using flexibility. Strip has already reduced their temp workers and now we are utilizing the flexibility we have on the [indiscernible]. So what I mean with that is that the Tube division is now supporting Strip division. I think that's an excellent operation. Looking at the some new launches, we have launched the first large-scale manufacturer of the mascot steel. Samples are now with several potential customers, and we are working on commercialization of this product. Leave over to you, Olof.

Thank you, Göran. Yes, if we go to the financial summary then and start in the upper right-hand corner of the slide, we see the breakdown of the total growth. Order intake grown by 7% and revenues by a good 27%. And splitting it up, organic growth of minus 5% on the order intake. But as Göran just mentioned, if we take out the major orders in the 2 periods we're comparing, we arrived at a good 6% plus. And also on a rolling 12-month basis, which is our preferred way of viewing order intake, we are also at good 6%. While revenues growing by organically 12%, obviously, having a good and growing backlog structure, a small acquisition in Germany contributing currency, good tailwind from a weaker krona, and alloys, high metal prices during the quarter. Molybdenum and nickel is behind this. And so 7% and 10%, respectively, on impact on the growth. And if we -- just to comment on the alloy surcharge, if we look ahead into the next quarter. If you remember, last year in Q2 2022, we had very high metal prices, especially nickel prices. So looking ahead, we think that this surcharge will turn neutral or even slightly negative incoming into that quarter. Going further down the income statement, we see a 10.5% adjusted EBIT versus 9.1% last year. In absolute terms, we are increasing by 48%, a very high positive metal price effect in the quarter, takes our reported EBIT to just above SEK 1 billion. That corresponds to a margin of 19.4%, also an increase from last year. Net financial items very close to 0. We have, as I will come back to no debt at the moment. Further down, normalized tax rate of close to 23%, a little bit below the guidance. NWC, I will also come back to that, 32% of revenues, a good free operating cash flow in the quarter, some seasonal buildup of stock, but a lot less than last year, and also good collections made in the divisions. ROCE. If we look at the capital employed and if we take out the cash, we are seeing a return of just above 16%. And finally, looking at the earnings per share and the adjusted earnings per share is SEK 1.75, and that's an increase by 28% from last year. So just then go to the bridge on the next slide, that takes us from the SEK 384 million in adjusted EBIT last year to SEK 567 million this year, SEK 102 million of that is what we call organic coming mainly from price and mix, also some help from currencies, as I mentioned before, around SEK 80 million. A tiny contribution from an acquisition, it's a net number. So actually, the gross contribution is 2 million, 3 million higher. We are also absorbing some M&A costs in the period. So this takes the leverage of the operating leverage to 20%, which we think is good. Going then to capital efficiency. The net working capital, SEK 7.2 billion end of the quarter, very much impacted by high metal prices in our inventories. Inventories stood at SEK 8.3 billion at the end of the quarter. There is, as I mentioned, some seasonal buildup as we are normally building stocks for the summer stocks starting in late Q1 and then go into Q2. But we have a very focused work in the divisions on keeping the volumes and tons down as much as possible, but it's masked by the higher metal prices in this quarter. I mentioned the accounts receivables, good job done there by the divisions, good control. The DSOs are going down and overdues are also going down. If we then take a look at the capital employed and we take out the cash and focus more on the operating assets and liabilities, we see a good 16% return and we have about SEK 10 billion of fixed assets on our books. Cash flow, next slide. If we focus this, we can say that we generate around -- focus on the table, around SEK 1.3 billion in EBITDA, including the metal effects, and we absorbed about SEK 700 million in inventories, most of that is then the metal prices. And then good performance of the receivables then spend around SEK 116 million on CapEx, up from last year, back to a more normalized level this year. We arrived at around SEK 400 million in free cash flow. And that's -- if you just take it out of the box around 32% cash conversion simplified. But we think that, that is okay, given the high metal prices and the seasonal buildup that we normally have this time of the year. And if we were to look further down the cash flow statement, you will see tax payments of SEK 189 million coming mainly from Sweden. And then we have some minor financial items, adding roughly plus SEK 20 million. So that takes our net debt change to SEK 277 million. And that takes me to the next slide, which is the net debt. And here, you see the split of the net debt, starting from the left then, we have a net pension liability of SEK 461 million, that comes mainly from Sweden. Leasing liabilities of close to SEK 400 million, that's capitalized according to IFRS 16. And then a cash position of SEK 1.1 billion, takes the net debt to SEK 256 million, which is a cash position. So we have no debt. So all the gearing ratios are, of course, very close to 0. And this is obviously far below our capital structure target. If we look at the guidance, how well did we succeed with the guidance last quarter for this quarter. CapEx, we -- the outcome in the first quarter was SEK 116 million. The guidance is still SEK 800 million for the full year. We -- it can vary quite a lot between the different quarters, but we stick to beat the guidance. The currency effects are net SEK 80 million. We guided for SEK 100 million for the translation and transaction, so fairly close, I would say. Metal price effect, a bit above the SEK 300 million that we guided for. And this comes mainly from the fact that the price of actually both nickel and molybdenum was quite volatile in the quarter. And if you look at the moly price, it actually doubled during the quarter from around -- it's normally around between $15 to $20 per pound, and it went up to, I think, $36 per pound. The nickel price went from around year-end around $25,000 per tonne up to more than $30,000 per tonne. Both metals have come down in price at the end of the quarter. Tax rates, 22.9% and versus our guidance, a bit below the guidance. And if we then go to the Q2 guidance, CapEx, as I just mentioned, we stick to our forecast of SEK 800 million. Based on the currency rates at the end of March, we think that the -- we estimate that the transaction and translation currency effects will be around plus SEK 100 million in the second quarter. Metal prices, almost difficult to predict, but based on the prices we've seen at the end of the quarter, we believe that -- and remembering that we had very high metal prices coming into the quarter, we think that we are at minus SEK 200 million impact for the second quarter. Again, normalized tax rate, we stick to our prediction there as well. I think that's all for me, back to you, Göran.

Thank you, Olof. So outlook for the second quarter. I mean we have a positive momentum in most of our customer segments. And I think the underlying trends are expected to mitigate the impact from other uncertainties in the macroeconomic environment, however, with continued caution regarding the impact from cost inflation. Demand is expected to remain subdued for both the industrial and the consumer segments in the near term. So going into the second quarter, we do that with the high comparables from the corresponding quarter in the preceding year. Product mix is expected to be similar compared to the first quarter. And also, as you know, cash flow is normally lower in the first half of the year compared with the second half of the year. So we should make a total summary then. I'm very pleased with our performance in the quarter. We are executing on our strategy, and I think we are clearly heading in the right direction. We saw improved market sentiments. We have a growing backlog. We continue to have a successful price execution, of course, then continued high inflation as well. We have a strong financial position and a net cash position, and sustainability continue to generate business for us. And I think we are consistent in strategy execution.

Thank you, Göran and Olof. So it's now time to start the Q&A session. [Operator Instructions] So operator, do we have any questions from the call?

[Operator Instructions] The first question comes from Patrick Mann from Bank of America.

I've got a couple of questions. Maybe I'll just take them one by one. The first one is your margin improved, the adjusted EBIT margin improved year-on-year, but kind of flattish versus the fourth quarter. How should we think about this 10.5%? How does it progress from here over the rest of the year, given what visibility you have at this point? That's the first question.

I mean I think what has improved versus last year is product mix, price versus inflation. And as I just said, looking at quarter 2, we foresee that the product mix will be the same. Referring to fourth quarter, fourth quarter was also a good product mix. I don't see a big change in product mix we do in the fourth and the first quarter. I hope that answers the question.

Yes. I suppose I'm thinking more about how does that 10.5% adjusted EBIT margin progress from here? So is it all product mix? Should we assume 10.5% is a good margin level for your level of activity going forward? Or you -- do you think you could see some margin expansion over the balance of -- or into the second quarter?

Normally, we don't speculate for the full year, and we don't give forecasts. I mean the market is still positive for us. It's more price and mix than it's volume. So I think -- I mean, the improvement versus quarter 1 last year, is probably sustainable. However, inflation will start to be a larger problem going forward, I think even though we've been successful with price increases so far.

Okay. Got it. And I suppose it also depends on each division. And then the other question is, I mean, just looking -- you have seen a very strong financial position from a balance sheet side net cash. I think your gross cash is now SEK 1.1 billion. How are you planning to allocate this capital going forward? Just remind us of your capital allocation policy?

Yes. But we have a growth strategy. I think we've been clear on segments where we prioritize growth. That is in medical. It's in chemical and petrochemical. It is in industrial heating and it's in renewable and hydrogen. And of course, we're going to use capital mainly for organic growth, so growth investments. I mean I mentioned one, inauguration of a new production line in India, that's a CapEx investment. But also, of course, doing complementary acquisitions. If you look last year, we made -- one was buying out a JV partner. But the other 2 acquisitions last year was one in medical, one in renewable. This year, we've done, soon it needs to be closed as well, the Söderfors acquisition where it's focusing both the medical business and the aerospace business. So that is how we will act. But of course, yes, the balance sheet is strong, and I think that's good.

The next question comes from Fredrik Agardh from SEB.

I have a question continuing on the margin. Looking at the Tube division, I get an operating leverage where it drops to 14%, which looks to be quite low given the 14% organic top line growth. Could you give us an explanation of this? Is this driven by the fact that it's mainly price in that? Or is there any other good explanation? And also then how should we look upon leverage on that on the incremental volumes that you're getting now going forward?

What's the leverage? Can you repeat that, please?

Yes. Well, when I look at the organic drop-through, I get 14% approximately in the Tube division, which, given the fact that you had 14% organic revenue increase. It seems quite low, and it's low -- I mean, in my calculations, it's significantly lower than you've shown in the past quarters. So is there any reason to why you didn't get more margin through or more earnings through given the rising top line?

[indiscernible].

I mean the one part -- because this is comparing this quarter with last quarter or the quarter last year. And we see in one part of the business, which is Power Gen, where we had really, really good project orders delivered last year with good pricing. And this year, it's lower. So part of that is a mix change within one segment, that is Power Gen, that is the main explanation because I agree with you, 14% is in the lower range. You could expect higher on 2 division.

Okay. So if we just -- I don't want to -- I'm saying you don't want to call on the margins, but if we just look at the dynamics and taking the adjusted EBIT that we have in this quarter and roll that forward, you say that we have good sequential demand or at least it's not falling, so we should have a slightly higher FX impact, and then that means you should make a bit more in EBIT in the second quarter adjusted, all else equal, unless we see some sort of a decline in volume that we see -- we do not see today. Is that a fair assumption?

You know that I don't say yes or no to that. I think -- I mean, it's not such a wrong assumption. I think we continue with a positive mix. I think there is one negative part in the mix, and that is the business that is down in -- compressor steel is a very sort of high-margin product. And we have good pricing and order stock, so I think a lot has to do with how inflation is developing.

Okay. And the -- and I guess the big orders you've been taking that are mix positive, the backlog you have, that's a sort of fairly back-end loaded story for this year in terms of...

Absolutely. If you look at the large orders, both in umbilicals and in OCTG, they are now into 2024.

Yes. Okay. That's fair. Just one last question before I leave. The -- do you think the downturn in Strip, is that inventory driven? Or does that reflect the actual underlying demand contraction?

I think it's a combination. I think -- if I stay on that note, a minute to make a little bit longer answer. I think we saw a decline -- I mean it was not strong in quarter 4, and it was also weak at the beginning of this year. And it was -- I mean, a lot of this business is in China, not China for China, but our customers are in China. So a little bit about the Chinese New Year. But later in the quarter, I would say that we were a little bit surprised that it didn't, that it continued so bad. And that is why we now are executing the changes that we need to do.

Okay. So it is a pretty poor underlying demand story, please?

Yes. I mean, all in all, I think -- I mean if you compare a year ago, with all the uncertainties and problems with transport, et cetera, I think some customers are more sort of home safe now from their own inventory point of view, lead times are shorter. I don't think they sort of overbooked as they maybe did a year ago to be on the safe side. So I think from that sense, it is some stock adjustments at the customer side.

The next question comes from Igor Tubic from Carnegie.

I just wanted to ask you because you mentioned a lot about the cost inflation. I just wanted to see, can you give some more flavor about what type of cost you are continuing to see increasing?

Yes. I mean if I compare a year ago, I think we were mostly nervous about energy and also transport costs. I think energy -- and I think many of us were nervous what's going to happen in Europe during the winter that came out better. Energy prices are still on the high side, but more in control. And what we can see is that -- I would say the more general inflation is now higher, direct or indirectly impacted by salary increases and so on. That is what we see.

Okay. But didn't you mention that you have energy surcharges now?

Yes. But we have energy surcharge. But if energy costs go down, those charges go down. We don't have general inflation surcharges, so to say, that when we need to work with our base prices. So I think the inflation has changed a little bit, less energy and more general inflation.

Okay. And I don't know you maybe mentioned it before, but can you give us some sort of outlook for the Q2 when it comes to the different regions, for the North America, Europe and Asia?

A little bit difficult to say, but I can comment a little bit how it looks now and I don't foresee any big changes. I think to some extent, little bit surprised how strong Europe came out in the quarter. And as always, we need to exclude major orders. But if I exclude major orders, Europe was actually double-digit order intake growth in the quarter. Asia, there, we have strong comparables, mainly in the energy segment, that brought them down. But if I look on the -- I should say, the normal regional business we're doing like application tube, for instance, that continued to be very strong. Then, of course, Strip has a negative impact on Asia and that is probably will continue then. North America, more flat. Oil and gas positive, chemical and petrochemical flattish, while industrial is negative. So -- and I think that is my best assumption also in the near term.

[Operator Instructions] We have a follow-up question from Mr. Patrick Mann from Bank of America.

I just wanted to go to working capital. So we obviously had quite a big build in the first quarter, and you said that the first half of the year is usually a seasonal working capital build and then unwind into the second half of the year. I'm just wondering, with some of the alloy prices having come down in the quarter, how do you see the second quarter? Should we -- does it partially reverse first quarter? Or do you still expect to build into the second quarter?

It's Olof here. I think you'll see some seasonal buildup. I mean, in general, of the stocks before the summer stop. I think we'll see that this year again, that's normal. Metal prices are coming down, but it takes a little bit of a while before it works through the inventories. But if prices come down, stocks should come out as well in value even though so to say, the tonnage goes up, of course, that has an opposite effect.

Sure. So probably still volume impact outweighing price in the second quarter?

Sorry, what did you say, again?

So probably volume impact will be higher than -- will add to working capital by more than price subtractive to working capital in the second quarter?

Yes, difficult -- I would say that's quite difficult to say, but probably less than last year. I mean, if you remember last year, the peak in prices in combination with the normal seasonal build up, so we should see less touch wood, of course, in metal prices, but we should see less of an impact this year. And also we have better controls over our inventories, I would say.

I think that was the last question from the conference call. So with that, thank you all for listening, and we are looking forward to meet some of you at our upcoming roadshow. So with that, thank you, and goodbye.

Thank you.

Thank you.