HMS Networks AB (publ) (4H3A.F) Earnings Call Transcript & Summary

Good morning, everyone, and a warm welcome to HMS Networks Capital Markets Day here in Stockholm. My name is Thomas Carlsson, Director of Communications at HMS Networks in Halmstad usually. Very happy to be here in Stockholm. And I have the honor of being your host and moderator for the next 3 hours or so as we look into the HMS Networks Capital Markets Day and our current situation, plans for the future and financial prospects. So luckily for you, you won't be listening to me -- much of me today. Instead, you will be listening to 4 eminent presenters. I can assure you they have some good slides for you. I listened to their rehearsal yesterday. So a lot of good stuff coming up for you. Before we get going, just some housekeeping issues here. So we will take questions at the end. So we have ample time for that, about 40 minutes at the end, but we'll run through the presentations and take questions from the room here at the end. And if you're joining via the webcast, a warm welcome to you as well. Feel free to ask any questions using the chat function, and I will take that with the presenters at the end. So a warm welcome to everyone. So the agenda for today. So we will start with Staffan, our CEO, looking into the corporate strategy for the next 5 years. And then we'll take a deeper dive into the different divisions where the magic actually happens. We'll have a short break at 10:20. We will have a chance to chat with the presenters and ask some more questions as well. And then we'll go into the financial details with our CFO, Joakim. And then ample time for questions at the end there at 11:20. Sounds good? Good. We have no plan B, so happy to do that. Okay. So with that, I'd like to hand over to our first presenter for today, our CEO, Staffan Dahlstrom, who will also introduce the rest of the presenters.

Thank you, Thomas. Good morning, everybody. Really nice to see you here, and welcome on the webcast as well. I'm Staffan Dahlstrom, CEO of this company, but running a company is a team sport. So I would like to get my team on stage here just to quickly introduce all of them. And you see at the same time, the organization chart we're having here. What a team. So Joakim Nideborn, CFO, will present a bit later coming with the financial update. Alexander Hess running our IDS division. He will come after me in a moment. Bartek Candell is running our INT division, also presenter. And then Mira, she's our Chief HR Officer, will not present today, but will join us on the Q&A. And Richard, running our operations and IT and sustainability will not present today, but will also join us on the Q&A. So welcome back on stage a bit later. Look forward to it. All right. Let's just start with a short -- where are we today? As a company, we work with industrial ICT, information and communication technology, well connected in our industry. Our original products with Anybus, we have over 10 million devices installed around the world, which in our industry is a quite high number. So we've been doing this for many years. We also have over 600,000 machines connected to our cloud solution for remote access and diagnostics. So this is also well established since years. And since our acquisition of Red Lion, we have more than 0.5 million machines using our visualization of data. So we're well connected. We're also working with new technologies as 5G and IoT. But as many of you know, we work in a quite conservative industry. So when we talk about new product, it normally takes years before they start ramping up. So things like 5G and things are still waiting for the commercial success to be more visible in our numbers. Today, we are around 1,100 employees in 21 countries where we have subsidiaries, 1/3 in R&D, 1/3 in sales and marketing, and this is a balance we try to keep. It's one thing to develop products that are great, you also need to make sure you can sell them and having that mix has been very important for us. Headquartered in beautiful Halmstad, been nice summer there. Many of you have been there. And please, if you have time to stop by, please let us know. Revenue-wise, we are approaching SEK 3.5 billion. We make an adjusted EBIT of SEK 800 million, and we have been growing the last 5 years around 18%, a combination of organic growth and acquisitions. So this is where we are today. One thing we are not changing is our mission. We at HMS -- HMS is hardware meets software, where we enable valuable data from industrial applications, so our customers can improve their productivity and their sustainability, 2 really key aspects for our customers. So this is working well, and we maintain that. But HMS is not only hardware and meat software, it's also heart, mind and soul. This is the internal company culture where we put our heart, our mind and soul in the things we do. And this is a good combination of hardware meet software and heart, mind and soul that really build the company. And when we see -- we've been fairly successful, and there are a couple of success factors on this hardware meet software side that we've really been seeing is something that make us successful in the past. We've been doing this for decades, and we build long-lasting customer relationships. In our industry, it takes years to build trust with customers, and you need to maintain and really deliver good products, good quality to make sure you can keep that trust over years. And that's something we have done very successfully. So very few customers is leaving us. And of course, bringing on new customers, make them loyal, that adds over time. We've been fairly successful in doing acquisitions. What we hear from other companies that the majority of acquisitions fails. And when we buy companies, we integrate them, we want to have synergies. And we've done a few maybe not great acquisitions, but the majority of things has been really good for us. So we stayed out of trouble. We made good acquisitions, and that's been part of our success as well. And we focus on markets where we can -- on smaller markets with limited competition, where we don't really compete with the big guys. So finding these kind of blue ocean, smaller pockets of interesting markets where we can be #1 or #2, #3. That's really what we look for. And we are a product and engineering and tech company. So we love our products. We invest heavily in product development and engineering. So product and product excellence have always been something very important for us. So this is more on the product side. But on the software side, we also really try to preserve the fact that, okay, now we've been doing this business for over 30 years, but we started up as a start-up garage company, maybe we're not a garage company anymore, but we want to keep this attitude in the company, feeling that we take decision, we go forward, we have high ambition, that kind of entrepreneurial and business mindset is really strong in our management team and in all our managing the company. And this is also part of our culture. We call it heart, mind and soul, where we put our heart, our mind and our soul in this. So this is important internally to build something that people really care about the growth of the company and how we take this forward. We changed our organization from 1st of January this year. One key driver was that we want to come back to have decision-making close to our customers. It used to be like that. But we built a matrix organization, and we felt, wait a minute, we need to get back to our origins where our people are closer to customers and take away a lot of middle functions. This has been really successful, and we're seeing that this new organization works. And maybe the most important thing for us is quality. It costs a fortune if our customers cannot manufacture. So we have a business that is built on trust, and we have a history of 200 parts per million. We don't talk about percent. We talk about parts per million, we talk about quality. So our customers, they trust our products and our softwares, and this is really making sure that they come back as loyal customers. And also sustainability is part of this long-term commitment to our customers. Many of our customers, especially in Europe, are investing heavily in sustainability, and this is the future. In U.S., we have more of a mixed picture. So these success factors have been important for us for the last 15, 20 years, but they will also remain as important for the coming 5 years. So it's important to understand what made us successful and making sure that we really nurture and keep these success factors for the future. Products, we've done some acquisitions over the year. The Anybus, that was where we started originally, first product back in 1994, quite some time ago. Other brands have been acquisitions. And what we do with this is to integrate them, get synergies in sales, in supply and product development, but we normally keep the well-known brand because in these small pockets of markets, they are quite well known. So we want to make sure that we take -- we don't throw everything out and change. So we really want to make this to be part of the same family. So we normally change the font and we have the brand by HMS Networks to illustrate that HMS is a company, but the brand is still intact and maintained. And the new ones here from N-Tron and Red Lion are the 2 latest additions to this strategy. Great products, both hardware and software product, and we're really proud about this strong portfolio we have. [Presentation]

So a snapshot of what we're doing and you see the environment. This is industrial, high demand and customer -- reliability of products is key for our customers. From 1st of January this year, we organized ourselves in 3 divisions. A consequence of acquisition, organic growth, we really felt that we need to have another way of organizing ourselves to make sure that we have more transparency in the organization, more accountability and making sure that sales and R&D are collaborating with the right products in a good way. So Industrial Data Solutions, IDS, 46% of revenue. Alex will talk a lot more about this in a few minutes, working with OEMs, system integrators, end users within Industrial Automation. INT, Industrial Network Technology, 30% of our business today, where Bartek will tell more about this, where we will also work with OEMs, but a different kind of OEMs also within Industrial Automation. And then we have New industries that is new initiatives, smaller units we have, faster-growing ambition. And there, we have building automation, vehicle communication, special products, and I will be talking about that in a few minutes. 24% of our revenue. So we think that this is an organization that is now working well. We think this also works well for the coming 5 years. So this is established, and we think that this has the potential to be the foundation when we are growing in the coming years. But before talking about the coming years, I would like to take the opportunity to look back on the last 5 years. We made a plan back in 2019. And at that time, we were slightly smaller. We still had a lot of devices connected, but only 300,000 connected machines. Now we have doubled that. 600 employees. So we also added a lot of new members. And we had a few more -- we were in 16 countries, 1.5 billion, and operating margin goal of 20%. Actually, we didn't reach in 2019, but that was an ambition. So this was where we were some 5 years ago. And then we set a plan that for 2020, we would like to focus on environment, staff and customers, growth and profitability. We talked a lot about how to divide our market into control-centric, information-centric and infrastructure. And this was a way for us to describe the sweet spots and how we can organically be more focused in our organization to use the full -- where we saw the full potential to really penetrate these areas. We couldn't agree on if it should be SEK 3 billion or SEK 3.5 billion, so we said SEK 5 billion, and that worked well for us. And we had originally a target of 20% EBIT margin. 2023, we raised that to 25%, so this was the focus areas. And when we look on this today, we see also that the reality came. It's good with the plan. But you remember COVID, 2021, we had semiconductor shortage that was a big hit in our industry because we normally work with -- we never work with the latest version of semiconductor. In automotive and industrial, we normally have one generation back, but this was a big issue with lead times and allocations and stuff like that. So that was a big thing. High inflation during these years and recently also the tariff discussion. So it's good to make a plan, but reality is not always as you thought it was in 2020. However, we executed on our plans. We went to some new markets with new subsidiaries in Dubai, Vietnam and Australia. We did acquisitions of Procentec in Diagnostics. We became the majority owner of the Spanish Owasys business, where we today hold 80% of the shares together with founders. A lot of new products. This picture show Ewon Edge, but also a lot of new products have been released over the years here. And we made the big acquisition of Red Lion last year. That's really been a change for us. And at the same time or slightly after, we got a fantastic opportunity to also acquire German PEAK-System, a really good match with us, and we're happy we did that as well. That's been a busy year. And that's why we started this new organization. So I think we've been executing on the plan. And even it's been a bit bumpy in the world around us, it's -- the power of the plan is quite clear for us. Let's make a plan, execute, adopt on the way, but really keep our eyes on the long-term goals here. So we look back, and we can see that we more or less managed to fulfill many of these goals. For sustainability, we are now top 6% of EcoVadis. We want to be even better. We are silver. We want to be gold. We have this -- we'll talk more about this. We have committed to science-based targets, working with that. We had a plan to increase the number of female managers because we know that if we have more female managers, we can also attract more female employees. And we believe that this mix of female, male in R&D teams and sales teams generate so much good performance. So we really want to focus on female managers. From 15% to 27%, we've done good acquisitions in what we call control centric that is now rolled up under Alex IDS team. We also made good development of our sweet spot. Organic growth have been good. And financially, we over-performed on our targets, and Joakim will talk more about this in his session with the details there. We're quite happy with that. And I think that's also important to look back and see what we have done have been working well. That gives us good self-confidence when we also move on to the next 5 years. All right. Let's look at the market and some trends. The market we're operating in is industrial and the dark blue areas here on the map, this is where we have subsidiaries and own HMS staff. We believe that it's important to have our own staff on markets to really stay close to customers and understand each market. What we see for the future, we don't really expect that there will be a lot of geographical new expansion for us. We are talking about dig where we are, improve our business in U.S., in Europe, in Asia, but it's not that we have new geographical markets that we need to penetrate. So we're quite happy with the setup we're having, and we will develop this further. There can always be countries like maybe Poland, maybe Turkey. Let's see how it develops. But right now, we dig where we are, and we are in the right places. So if you look on our business, we are -- where we have it today, we used to be factory automation, process automation. That is still 50% of our business, very important. But within industrial automation, that is now 77% of our revenue. We also work with infrastructure like data centers, material handling, warehouse management. We work with power and energy, oil and gas, renewable energy, energy distribution. So we also widened our scope with this industrial automation business. Then we have our small but very successful piece of building automation, a subset of building automation, HVAC: heating, ventilation and air conditioning. And then we have our vehicle communication with a strong center in Europe, 16% of our revenue. So we feel that we have -- all these are industrial markets, some differences, but all of them require super high quality, reliability and stable markets. Customers are quite -- they like to talk about new things, but they love to buy the existing things because that's what they trust. So we think this is good for us, and we're happy that we've been expanding the last couple of years in this. If you look at the customer types, we have 3 types of customers. We started with what we call OEMs. For OEMs, it's either machine builders where we want to be part of the bill of materials. So when they build the machines, they add our things for certain functions. Or device manufacturers, where we have the design win that we are deeply integrated into their microprocessor boards and computer boards. That is a very nice business, but it's also a long time to success, but very, very sticky. So the OEM business we do take time to win, but it's a lot of good revenue for years when you win something there. 52%, these are the drives, the robot, the machine builders of the world. But we've also been saying that when we work with this, we are quite far away from the real applications. We want to come closer to the end users. If we know the end users, we know what is their pain points. So we work more and more with end users, larger end users to understand what is their demands, what do they need for the future. And in many cases, some end users rely on system integrators that are higher to do this kind of integration. So almost half of our business today is with end users and system integrators. And we're very happy to have this mix of customer types. OEMs drives volumes and long-term stability, projects and this kind of newer things becomes onetime projects, quite high values in some of them. So it's nice orders, but then we need to find new customers and -- after each installation, so it's a good combination for us. And we have strategies that is different for these customer groups because they are quite different. If we look on the markets for Industrial Automation, that is our large part today. We estimate that the market growth is 7% to 9% CAGR in the coming 5 years. We see on the IDS market share, where Alex will show more about this. We think that we have a market share of about 13%. It's always difficult when we talk about market share because it's competition, head-on competition, is it substitute and there's a gray zone. But we believe that the addressable market right now is EUR 1.2 billion. INT and Bartek's team, they have an 8% market share. The other 92% is occupied by competitors, but it's also substitutes, where people have taking microprocessors, adding their own software and things like this. So we believe that that's a EUR 1 billion addressable market for the future. Building automation also growing a little bit faster, but maybe up to double-digit percent here. And here, we see -- since we are in HVAC, we see a lot of activities in especially cooling, unfortunately, and we see this all over the world that heating has become more of a problem. And it's not only for convenience, it's really if you have a shopping mall, you need to have 20 degrees. Otherwise, customers will not come to you. So of course, these kind of things is more and more common also in cold countries such as Sweden here. And then vehicle communication, slower moving market at the moment. We know about the German vehicle business is not great, but we also see that there's a lot of things going on in technology and things like that. And I'll be talking more about this. And we think we have a 16% market share here where we have a few really strong competitors in -- mainly in Germany here. So all in all, we see that we have an addressable market of some EUR 3 billion. We believe that this is growing some 7%, 8%, 9% in general. So we have a quite good stable market. It's not fantastic growth, but it's stable growth. And we think that this is a relevant picture, and we keep investing in this growth potential. If you look on the trends, we focus on 5 trends: deglobalization, need of automation, digitalization, cybersecurity and artificial intelligence, and how they affect us with the globalization. We see that we can be a winner. A lot of our customers are segmenting or changing their manufacturing processes from being one global supply chain to have much more regional supply chain, and this also drives investments. We are still waiting to see the big boom like in U.S. for more regional investments, more people talk about it. But I think we've seen more of these investments in Mexico in the past years, but we expect that this will also come in U.S. This comes also together with increased need of automation. We have a factory in U.S., and we are not super impressed about the level of automation and the level of competence and workforce competence. Rich and his team is doing a lot of investments and changes there. So we are on the right way. But in U.S., they are behind in automation, in manufacturing technology. So we also believe the next couple of 5 years, U.S. will be a good market for us, and they need to invest more. And honestly, I don't really know who they will hire. This Apple's $600 billion US factories, something like that. Numbers I can't even understand, but there are not people in U.S. who can take these jobs. They don't have the competence or the will to take these jobs. So we see a lot of automation is the future. We see more and more of digitalization. This is an industry that is a little bit second mover compared to IT because this is a huge investment. If you own a steel plant or a paper mill, you may not be at the front of technology. You are a little bit conservative by nature. And we see more of digitalization on the factory floor. We see with our IDS products that we collect data. We take this data in the cloud and then the customer apply their AI and other algorithms in the data in the cloud, but we are enabling the valuable data for them. Cybersecurity, we have a lot of attacks coming in our industry. We have a lot of concerns there and a lot of new regulation coming up and have a separate slide to show what we are doing there. But it's still a quite early market. We expect a lot of opportunities in this, but we also need to nail it. We need to find what HMS as a company can do in products, in services, and I have a few slides on this further on. And then AI, as we said, AI need data and the data is coming from the machines and sensors and most AI is not applied on the factory floor. It's applied in the cloud. What we do is to gather the data, we filter the data and we bring it up to customers' application in the cloud. So we feel that there's a lot more need for data, and we also see that AI is coming into the products going forward. I'll talk more about this. So these are trends we are seeing. And we think that these 5 trends are good for us. We are in a good place in this market. I'm sure there comes some faster and slower moving trends here, but I think we are well positioned for these trends here. So based on this, we've been working for 6 months to figure out what we can do, and here is the result. [Presentation]

Three divisions. We think we have the right organization, double revenue, that's #2, and one company in culture and how we drive the business. So this is our growth ambition. And the wheel in the middle here is very important that this really shows the 6 strategic areas that we focus on for the coming 5 years. We start with Win, Grow, Keep. We and many other companies were hit by COVID. The hunters became farmers, and we really need to change this that we love to keep our existing customers, but we also have customers where we reach the full potential. So it's -- whatever we do, they will keep on buying our products. That's good. But we need to have much more emphasis on winning new customers and focus on the accounts where we have not yet reached the full potential. And we need sales force and our marketing team to rethink about how can we become -- back to becoming hunters again. So Win, Grow, Keep is a very important strategy internally to make sure that we are more forward leaning in the business, more aggressive to win new customers and build new loyalties with them. Of course, we also focus on keeping our existing customers. But if we have a design win or machine win, of course, we are quite -- it's quite sticky already. We need to be more forward-leaning in sales to this. So Win, Grow, Keep, very important. Product evolution, we are very proud of our product, but we also see that there are a lot of new ideas in the company. We would like to do more investments and making sure that we continue the path of innovation and, at the same time, we also see that things are changing, slowly changing in the industry. More things are going to software. People are more and more accepting subscription. We talk about annual recurring revenue in IDS, and we're doing more of these things here. So this is an area where we focus quite much on. Mergers and acquisitions, we stayed out of trouble, have been quite successful with this. And we look on a plan. There are -- we have some good candidates. We also try to balance this to make sure we can use our own balance sheet to do these acquisitions, even if we have some other tools as well. But this plan with acquisition is also based that we can finance the acquisitions based on our current and future balance sheet and what we can do there. And I think also the divisional setup with the team you meet here is also enabling more M&A discussions further out in the organization, closer to customers, closer to product competition and things like this. So I think we have a good path there. And then we have our operational efficiency. We feel we are pretty good, but we would like to be great. There are so many more things we can do in this area, and we see we can improve our efficiency, we can improve our gross margin, we think, and this will -- we have more things to do. And of course, AI and other tools is also elements that will help us here. Around these 4 key areas, we also have our Planet strategy. We believe that sustainability is really important. Science Based Target is our way to address CO2 emission, but we're also taking broader scope with this to include also social governance and quite much also -- very much also our sustainable procurement. One of our biggest footprint we have today is not how we do things, it's our suppliers and our supplier suppliers. So we are very actively in working with our supplier base and trying to help and push them to become more green, and that's a big part of this as well. And then as we said for years now, happy and high-performing employees generate loyal customers. So we also have a strong focus on our people program and making sure that we build a company with really engaged employees here. So the new targets for 2030, it's Planet, People and Growth. On the Planet side, we talk about our Paris Agreement, net CO2 emissions. We want to be top 5 on EcoVadis. EcoVadis is an international body that we believe is taking a bigger than just environmental. It's more about compliance and governance and procurement and things like that. That fits very good to us. And many companies in our industry is following EcoVadis as the guideline. Happy customers. We want to keep Net Promoter Score with customers to be more than 50, ambitious target. We've been there. We have been a bit dipping in the last couple of years with long lead times and inflation and price increases and stuff like that. We want to come back there. We are moving away from employee NPS because NPS, it's 1 to 10. If you're 9 and 10, you're a promoter. If you are 7 or 8, you are neutral, Otherwise, you're detractor. But we see that month by month, we measure this, it's a roller coaster. We want to have some that is more predictable and we selected employee engagement index. We want to be what we believe is world-class, more than 80. And we want to make sure that we beat our target with female manager beyond 30%. And then for this group, quite interesting, I think, we want to be more than SEK 7.5 billion in revenue 2030. We want to have a 25% EBITDA, and Joakim will explain a little bit more. We are there in the corner, EBITDA there. And we keep also our dividend policy of 30% to 50% of adjusted EPS. So some news here, especially on the revenue side, where we feel that the market is okay, and we see that we have a good position and both organically and by M&A, we believe that we can grow significantly here. If we move into these key elements for us, Win, Grow, Keep. This is -- we focus on winning new direct customers. We would like to have more than 6% of the revenue for really new customers. And that's a number that is difficult for you to relate on. We are 3% at the moment now, so we want to double the number of new customers on a yearly basis. We want to have, and this is maybe obvious for everybody, everybody in the company that work with the sales have individual targets for Win, for Growth and for Keep to really make sure that it's not only a team effort, every individual will really focus on this to make sure that we do the best out of this. And we will also move into -- today, we have a mix of distribution and direct business. We will grow both, but the direct business will be even faster growing. And we believe that with the product we have, we would like to address more of larger companies with longer sales cycle, more international presence, which is difficult to do with -- when you work with distributors. So distributors are good, they will grow, but we move to a larger share of direct business more than -- moving from 53% to more than 55% in 2030. That's also an important strategy for us. Mergers and acquisitions, we believe that we can continue this. We need to have a balance of finding the right opportunities. We also calculate this on the cash flow. We do dividends and we use cash flow for M&As. And this plan is also to self-finance the M&As without any issue of new shares or anything like that. If we need to do it, we can do it, but the plan right now is to not do it for the coming 5 years. And as I said, the divisions will be responsible for this, and we see more opportunities to bolt on certain acquisitions inside our divisions. And we maintain our target of, over time, not have a debt level that is more than 2.5x net debt versus EBITDA. We are slightly over that at the moment, and I'm sure Joakim will talk about that a bit later. Product evolution. We have a lot of new ideas, and we believe that most of the -- more than half of the organic growth in the next couple of years will come from new products. So we have some exciting things that we are working on and we would like to release quite soon, so we're quite bold here. We would like to focus more also on annual recurring revenue. This is on subscriptions. We do that on IDS today. Can it be 3% of our revenue today, and we want to move that to 10%. And this may not be a big change. But for us, it's a sign that the customers are moving in this direction. 5 years ago, it was impossible to have the discussion. They had a CapEx budget and they could not talk about AR. We see a trend change there, and we see more opportunities. So more than 10% of revenues will come from our AR. And we also believe that we'll have more AI functionality inside our product. I will be back on that in a moment. For operational efficiency, there's a lot of more things we can do. But keep in mind, compared to 5 years ago, we know so much more when it comes to resilience, flexibility. 5 years ago, we and many others had just a global view of this. Make where it's cheap, more or less. Now we have completely different strategies. You need to be resilient and high flexibility. So I think both we and our customers focus a lot on this. And we think that we have more things to do there. So we think that we can grow sales faster than OpEx, which is, of course, always good for margins. But also from an efficiency point of view, we just released in U.S. now our new ERP system, and we have a common system now for many businesses, and we see quite good synergies that it's becoming more efficient and we can do more synergy out of this. So we also believe that sales growth will be faster than OpEx growth due to these efficiency gains. And we have an ambition to grow our gross margins to beyond 65%. We see that, of course, the software content, AR is one element, but we also see that we can do more of smarter pricing and smarter ways how we do things in manufacturing. So we have high ambitions for the gross margins. On people side, Mira and her team is focusing a lot of this, happy and high-performing employees generate loyal customers. You may not get Nobel prize for that, but it's really important we talk about this. Our team, we need to be happy that we need to be high performing as well. That's the combination we look for. Happy nonperformers, go somewhere else and high-performing idiots, go somewhere else. We need to be happy and high performing. That's the mix of great people we really want to find. Female managers, we think that's an important element. We're doing good steps in that direction. We need great leaders. We have some great leaders. We have some good leaders, but we really need to lift this for the coming 5 years. We spend a lot of time to help our leaders to become even better than our. So we measure our leadership index to be greater than 85%, which we believe is world-class. And we want to make sure we have the industry's most engaged employees in our company. So these are people targets. And then on the sustainability and the planet, we look on the environmental. Here, we are quite good. We've done a lot of stuff. So our own footprint is quite low. So we don't see a lot of other things we can do here. But we see that this sustainable procurement, how we work with our suppliers and how they do their things and further down in that value chain, there are more things to do. We work also with labor and human rights, strictly connected to this, but also the governance and ethics. We are European, Scandinavian companies. We have ethics that we want to deploy around the world, not always easy in India or in U.S. and things where we have a different culture, but we are quite strict on this. On our ethics and how we do business, that's more the Scandinavian way of how we do this. So we keep our targets with Science Based Target. EcoVadis to become a gold rating during this period, and we have a quite busy schedule here. But this is not something we do as a nice sticker. This is important for us, and it's important for our customers. We need to keep focus on this even if in some markets, it's questioned at the moment. Manufacturing, I just want to take a few seconds to describe our strategy. We have -- if this is complexity of products and this is volume, over the last, I think, 15 years, we've been saying we want to invest and have the competence in manufacturing, but we don't have the capacity and maybe the cost level to really work with high volume. So lower volume, high complex partner, we work with our own factories and some local partners. For higher volume, more stable product, we outsource them with our strong EMS partners that we have both in Lithuania, in U.S., in Romania, in China, Germany, around the world. So we're quite well covered here, Canada as well. And the idea is that we do in-house manufacturing for prototyping new products, high flexibility, high complexity, things that is actually quite difficult to outsource because the volume of complexity is actually too high. We keep on doing that. But for higher volume standardized product, we work with suppliers that have capacity and have the scale to drive the cost down. But we have the capacity and the competence to be a good buyer. And I think the mix here has really proven to be a solid way of driving margins to be this combination. And we also want to be close to our customers. We have our own logistics hubs in U.S., in China, in Germany and in Sweden to be closer to customers. Most of the value-add is done here, but we will see a future where we can do more value-add configurations and software downloads and things like that on our local logistics hubs, which is also one tool we can use to manage tariffs and things like that. All right. Last slide for me is about AI. And I just want to show -- we are just in the starting of this, but we divide our AI initiatives in 2 different buckets. Here, we talk about how to use AI inside our product. We are not there yet, but we see a lot of ideas and things how to use AI on the edge in our product to do data analysis and really operate as a machine learning algorithm inside this, also to improve user experience and configuration. And as I said before, we see already today quite much a business where we collect the data, we package the data and then bring it to the cloud and then customer deploy their AI tools. So we just enable the data for them. So this is on product evolution. And then on operational efficiency, we see a lot of activities to do efficient coding, efficient accounting, efficient forecasting, we're deploying this. And primarily, we work mainly with the Microsoft tools here, but we can do a lot more things here. But also customer-facing things, the front end, the web page support tools, we start to use more AI in this. But this is a different thing. That's for operational efficiency. And I think for us, it's been important to segment AI activities in these 2 different buckets. So we think this is also ways for us to have better products, but also improve our operational efficiency going forward. All right. That was a very quick review of our targets. And Thomas, Time for next person.

Thank you. Thank you very much, Staffan. Lots of interesting stuff indeed. Okay. So before the break here with some coffee, we're going to have a look at -- a closer look at our divisions and where the magic actually happens. So as Staffan mentioned, we have 3 divisions. We have the Industrial Data Solutions, which take the data from the industrial floor, lift this and make this available to different systems. So Alex will talk about that. We have Industrial Network Technology, which is more the real-time communication on factory floors between robots, making them able to move a robot arm, for example. And then we have New Industries, which Staffan will talk about industrial communication for niche applications in vehicles or in buildings. So that's what we're going to have a closer look at now until 10:20 around that. So with that, I'd like to hand over to our next presenter, Alexander Hess, Senior Vice President of IDS, Industrial Data Solutions. Alex, over to you.

Thank you, Thomas. So a warm welcome also from my side. Really happy to give you some insights of the IDS business. So in IDS, we do solutions to Connect, Secure, Diagnose, Visualize data in industrial applications, and I will explain a little bit more what's behind that. If we look to our customer base, Staffan already presented the few of HMS, where we have a big portion of OEMs. If we look a little bit deeper into the IDS organization, we have around about 30% of our business directly with OEMs, which is mainly machine builders. So the product is used in the cabinet and then shipped to an end user. We do around about 10% of our business with system integrators where they put our products together. They provide a solution which goes to the end user. and we do around about 60% directly with end users. So it's a little bit different picture in IDS than for the whole group. And if we look to the market, we already mentioned a growth between 7% to 9% for IDS, what we expect in the market growth. And also there's a difference. So we have different markets, which we serve in IDS. We have the IIoT market, for example, where we see a higher growth, where we have also markets which are more conservative, for example, on the panel meter side, where we expect a lower growth rate. But if we combine all this together, we see a market growth of 7% to 9% for the next 5 years. The distribution in the company. So 46% of the sales of whole HMS is going through the IDS division. And on the contribution, it will be 40% of the adjusted EBIT year-to-date. And then a little bit different picture when we come to our customers. So you see we do 2/3 of our business in U.S. That's very specific for the division. It's mainly driven by our big acquisition we took -- we did with Red Lion in U.S., where we have our strong brands, Red Lion and N-Tron. And then we have 27% of our revenue in EMEA, where we also have a strong brand and a strong recognition with Ewon, and we do 7% in APAC. So it's a real, real big part U.S. and EMEA and also a lot of potential for APAC in the future. If we look into the value proposition, so what is IDS about? And what are the products and the value proposition inside that. So we decided to go into 5 pillars to segment our portfolio. And from the left to the right, we have products to access the machine. You have seen it in the video. So if you have a machine remotely, you want to access, you want to do some maintenance, for example. We have products there with the Cosy with our Talk2M Cloud and also now with the new Ewon Edge, Ewon Cloud to access these machines. Then in addition to the access, we have the insights. So data is really important. So 23% of our revenue comes from products, which are called in the Insights category, where we can use, for example, the remote access already and having an addition -- yes, data, which we get out of the machine. And therefore, we have products like the Flexy. We have also products which are not using a cloud like the FlexEdge. And then we have the Netbiter as a product and also Ewon Edge, Ewon Cloud, where we can, let's say, get all the data out of the machines, and that's 23% of the revenue. And then if we get the data out of the machine, we need to visualize it as well. And there we have our visualize pillar. We have the HMIs where we can do a visualization. We have panel meters to visualize, and that's our biggest portion of the IDS revenue with 30%. And then we have our fourth pillar, which is Connect, so these are switches. So we have unmanaged switches in the portfolio, managed switches, power over Ethernet and also media converters in this category. And last but not least, diagnose. So if you have a network, there are also errors occurs, and we have the right products to do some, yes, permanent monitoring that the errors will not occur or if you don't have a permanent monitoring, we have the diagnose tools to find out where the error is. So that's how we move on for the next 5 years in our segmentation. So we don't -- we really focus on these 5 pillars in our offering, and we also will develop our products under these 5 categories. Where we are now? So if we look back, Staffan already mentioned, it was a bumpy road. So 2020, COVID hit us. And we had a lot of supply chain disruptions and a double effect in our business, especially in Access and Insights, where we saw that our -- where we sell most of our products through distribution and where we saw the demand is going up and up and up. And this was caused by the end users on the one side. They had a need of, let's say, 5 devices. They put an order of 7 or 8 because just to get the devices. And then the distributor collect all the numbers together and said, I have a demand of 500, let's order 700, so it was a double effect. So we got a lot of stocking orders, especially as I said, in Access and Insights business. And then '23 onwards, this destocking started, so we had this huge backlog to work off. And yes, we have a recovery. We are now back on a normalization, I would say. So book and turn looks more normal. And we also saw that '23 onwards, there's started to getting higher demands on cybersecurity regulations, and I will talk more about that when it comes to NIS2 CRA, for example. If you look today and onwards, '25, we see generally a positive market outlook, still with some uncertainties with the U.S. tariffs. But overall, if you look into the market, it looks positive for IDS. On the product side, yes, as we had to ensure supply chain at the beginning of the strategic period, we had to focus on redesigns and this cost us some time to develop new products at the beginning. But besides that, after we were able to start our new developments for, yes, a next-generation product offering where we launched our Ewon Edge, Ewon Cloud, for example, beginning of this year, where we're really proud of. And for the future, we have a big, big opportunity and potential to leverage our portfolio and technology synergies to create a new, let's say, technology platform and offering for the market. And I will talk more about that in a second. Last but not least, organization. Since January 1, we are in a divisional setup. So we have a global division with IDS. So my management team is in 5 different countries. So we are over -- operating in over 17 countries with the division. And this is in place. This is running now and really happy to see also the first positive effects there. If you talk about Win, Grow, Keep, that's really important for us. So this we established for sure in sales, and I will talk more about that. But also for us, it's important to focus our R&D efforts to spend the time on new products to win new customers and to grow customers and not to only maintain our existing portfolio. And we also do a focus on 5 key vertical markets, which I will explain to you here. So we say in the new strategic period, we want to -- for sure, we want to have our offer brought to all markets, but we want to focus on 5 markets where we want to dig in on the sales marketing side more in detail and also then having the right products behind that. So it starts from the left with food and beverage. And here, we have our target customer base, which are OEMs. So we mainly sell our products directly to the OEMs. And there we have the Access and the Insights product portfolio fitting very well. We also, in the past, we were quite successful in food and beverage, and we really want to expand this and become even more important in that market. Second, logistics, warehouses are growing. It's a nice growing market. Here, we want to establish a close collaboration with system integrators. So having our products in there, yes, with for Connect and for Diagnose. Then third, Energy. In the energy market, we want to go directly to the end customers, end users with our Insight and Visualize portfolio. And then there's a big portion of water and wastewater for us where we can bring in our full IDS portfolio, where we can also do really good cross-selling across all our product offering. And the same counts for oil and gas, where we have already a really strong footprint where we want to continue to focus on the system integrators also with the full portfolio. Trends, Staffan already mentioned the trends for the group. If we look into a little bit more in depth for IDS, what does this mean for us? So the deglobalization, we have the big advantage that we have our production, for example, in New York and in Halmstad, so we can use this, and we will use this, having also the strategic partners, which is important for us. And we also have a big advantage that we have a global footprint when it comes to our sales and technical support capabilities. And this is very important to speak the local language to be there, be in the local markets, and that's an opportunity for us, which we want to use. Increased need of automation. So I think there's a lot of talks about dark factories, so having no humans in the factory anymore. So this is a growing -- that's a big trend. And for sure, we have a perfect offering there. And with our approach of Win, Grow, we want to go directly to the customers, establish the relationship and also do cross-selling for that -- for the automation companies. Digitalization. So we see a big potential here with our new platform, which I will explain in a second, and also the transfer and the transformation in the market towards more acceptance when it comes to annual recurring revenue. So there are new business models we can attract with. Cybersecurity in OT, so CRA compliance, we are already a forerunner with our products when it comes to have secure products. For sure, we want to use that. And we also want to leverage our ISO 27001 knowledge on that and become the first choice of Secure products within this market. AI, when we do data, we have the data. We want to have the application interfaces towards the cloud systems to enable the use of AI and investigate in new business models around AI as well. With this said, we have 3 strategic initiatives for the next 5 years where we want to focus on. And the first initiative is our platform. So we really see a huge advantage combining the knowledge we have with our, let's say, Ewon knowledge together with the Red Lion knowledge to bring this together and develop one hardware platform, one embedded software platform with a lot of common features like device management, user management, which is always the same with one cloud infrastructure. And to do this, we will be able to sell products for all our 3, let's say, for 3 out of the 5 pillars. So Access products, Insights products and new Visualize products will be all based on this new platform. And that's really exciting. So we see that we don't need to do double developments. We can combine a core development and we can become much faster when it comes to innovation and new product sales in the future. Second, improved service offer and capitalize on ARR. So we see already a trend in the market. So we have customers like, yes, genset companies, they sell or they rent out gensets. And they ask already why I need to invest in your devices upfront as a CapEx investment. Can I get this as a, let's say, as a rental? And for sure, that's very interesting for us. We want to help our customers on that. And for them, they already run an ARR model with their customers, and we also can use this and can, yes, have an ARR model with them. And in addition to that, with the new platform where we have one cloud solution, device management, user management, we will be able to enable a lot of interesting features for the future, which allows us to have additional services, which are interesting for our customers, which we can then use in a way of recurrent revenue and sell in a way of recurrent revenue. And this is also then giving the customer the choice of a CapEx or OpEx model. And also if you want to have additional services, you can opt in towards the services. Last but not least, we want to grow our key account sales and also use and enable cross-selling. So we see a huge potential already above USD 2 million in cross-selling opportunities when we have the direct access. And as Staffan said, we want to grow our distribution for sure, but we want to focus in the strategic period to even get closer to our customers, to our large customers, having a direct connection there, direct approach and be able to cross-sell towards the customers. So the share will increase in the IDS offering where we do a lot of distribution today, and we see a huge opportunity to grow that. With this said, thank you very much. Handing over to Bartek.

Thank you, Alex. Good presentation. And now it's time to move on with INT. Industrial Network Technology. I will just grab my water. A great pleasure to be here and tell you a little bit about what we have been doing in the last years, but as well where we are heading ahead, of course. And within INT, we are focusing on real-time communication, control and security, forming the backbone of industrial automation systems. We operate in similar market as IDS, the industrial automation market, but we have different target customers and different go-to-market. We work primarily with original equipment manufacturers, more specifically the device makers, where our solutions get tightly integrated into their devices. And from a go-to-market perspective, we have pretty long time to money. It's pure direct sales and the business we win today start to generate revenue in 2 years when the customer release their product to the market. So looking at our customers, 85% is device makers, pure direct sales. We have pockets of products that goes towards system integrators and end users. Here, we do collaborate with IDS in the go-to-market since they have these channels established while we're working primarily on direct sales activities. If we look on the expected market growth, it's similar to IDS, around 8%. There are some geographical variances where we see that APAC and North America will have higher growth of approximately 10% within Industrial Communication, and we're going to see a slightly lower growth in the EMEA region. From a net sales perspective, we contribute 30% to HMS Group. If we look at the adjusted EBITDA, it's slightly higher, 37%. And from a market breakdown is EMEA, our largest market, 56%; followed by APAC, more specifically, Japan and China, 27%; and the smallest market is Americas. If we look into INT's 4 main offerings, it consists of embedded gateway, safety and wireless. Embedded represents majority of our business. And here, we enable real-time communication solutions that shorten customers' time to market and R&D efforts. As Staffan said, this is what we are born out of. We do believe that we understand this business really well, and we are seen as market leaders when it comes to embedded connectivity in the market. This follows with our gateway offerings, approximately 20% of our total portfolio, a problem solver on the factory floor, enabling industrial communication, field bus connectivity and IT connectivity, primarily targeting device makers, machine builders and system integrators. Followed by a smaller offer, safety, only 5%, pre-certified hardware and software that enables a safe communication of our bus system. This has been a really hot technology for 5, 6 years as people have been speaking about. Finally, we see this business taking off, actually driven by some regulations, safe regulations falling into force. And lastly, wireless, still a small area within our business, 5% solving complex cable installations, which replace with wireless or enabled mobility needs. And if we are -- we think we understand this business really well, I must say, wireless is probably where we are struggling. HMS was announced as market leader within 5G and factory automation 2 years ago. It's a really hot topic. Everybody loves to speak about wireless. But when it comes to finally actually defining the solution that you will implement in your factory floor, you go for cable because that has been working for 20 years. And that probably shows how conservative our market is to adapt to new technologies. But of course, we have some more work to do here as well. If we move ahead and check on where we are now from a market perspective, pretty similar as IDS. We stepped into COVID and supply bottlenecks. We increased our lead times to 1 year on some products. That was, of course, creating a really high order intake. Then we moved into post-COVID recovery where the demand surged and are since '24 in something, which we call a normalization. I think still during quarter 1, '24, we shipped out the huge orders that customers placed back in '22. That was the last quarter we did that. I think it's more important now to look on the order intake for INT for 3 consecutive quarters, we have a small uptick in the order intake. The market is normalizing. Customer stocks has emptied out. And what we see now is the actual consumption driven by North America, APAC, where we still see that EMEA is a little bit slow on this recovery, but of course, with a positive outlook. From a product perspective, well as well, innovation lost. The challenge we had was that our products are really tightly integrated into customer devices. So when redesigning the products due to supply issues of components or components being placed end of life was pretty challenging to actually avoid the fact that our customers would need to recertify our products. Fantastic work done by R&D here, but the effect no time for working on new products. Despite this, we managed to release a new generation of gateways to the market, received very successfully during COVID. And even more important, right now, are we working on a new embedded offering. This is a new platform we're going to use in our future products, which is hardware and software decouple. This will give us the opportunity to offer our communication solutions on several hardwares, fulfilling customer needs of resilience, which is on every customer's agenda post-COVID, but it will also give us opportunity to deliver industrial communication solution as a software for the future. And from an organizational perspective, it's really nice to have this divisional structure in place and have an organization that focus on device makers, which is slightly different than hunting for a quarterly quota. We have this design win process with pretty long time to money. We have a new management team in place, understand this business where we create a focus. Of course, as Alex said, we can grow, keep in sales, but equally important in R&D. We have really heavy product road maps ahead of us, and we need to make sure that we allocate the right time for the products for the future. And lastly, we are restarting in this division structure our operations in Americas, and I will come back to that shortly. Staffan presented a couple of trends. They have an impact or opportunities for IDS and some different opportunities for INT as well. Let me walk you through on those. When it comes to the globalization, we have historically in China been very successful in targeting customers in China that target the Western world with their products. Now it's time to expand this strategy with an in China for China strategy for some selected vertical pockets. Resilience is on everybody's agenda as well, of course, our new hardware software decoupled platform will open up several opportunities here. If we look at increased need of automation, of course, more and more devices are getting connected on the factory floor. We're going to expand our embedded offering here towards large and excel customers, which I will come back to shortly as well. But even more important, the networks are now getting quite complex. Today, you don't only have the control data on the network, you have IT security features that need to run on the network in parallel. On top of that, there is a third layer coming in with security regulations, security certification on the network. This is getting complex, and we start to see a behavior on the customer side that they prefer to buy an industrial communication solution instead of building it on their own. Moving on to digitalization. This drives the hardware/software decoupling trend, opening up opportunities for software offers, but as well for us, the capabilities to upgrade customers' products with features upgrades by upselling software upgrades to them. Cybersecurity and OT, that will -- we have touched that quite much. That will become a hygiene factor. I mean we need to be compliant to all regulations. And of course, AI will be very important ahead. We need to make sure that we have capabilities in our products where customers can execute their AI engines or machine learning softwares. But we will also try to take advantage of the great AI tools on the market and reduce the complexity we have in our in-design journey when the customer integrates their product into their devices by creating a no-code environment, meeting the needs of modern engineers on the factory floor. But wrapping this up, I think there are 3 elements here. Customers are facing resource constraints, networks are getting really complex, and there is a regulatory uncertainty in the market. These 3 elements together open up great opportunities for INT for the future 5 years ahead. With that said, let's look into our top 3 strategic initiatives ahead. First of all, new embedded offering to expand the addressable market. And what you see in the screen here is some matrix how we, on a high level, segment the industrial communication device maker market. We have small, medium, large and XL customers. This is not in terms of how big the companies are. It's in terms of how many devices with industrial communication solutions they bring to the market annually. And on the Y-axis, you see how expensive these devices are that the customers bring to the market. So the small and medium customers, they tend to be pretty niche players in the factory automation market, which is a little bit more expensive devices, while large and XL customers, they tend to be the mainstream factory automation players. They have devices that cost probably less than EUR 100, which are networked to more expensive medium voltage drives that cost above EUR 20,000. There is, of course, a price sensitivity for industrial communication solution across this matrix as well. And the green area you see in front of you now, this is where we are playing and winning really well with our existing offering. Already next year, during quarter 1, we aim to release an offering targeting the large customer segment. This customer has a little bit specific needs with a mandatory onboard communications interface on board, which we have in our road map. And what I didn't mention for you as well is that this pocket here with large, XL customers covers approximately 40% of annual amount of nodes that is deployed to the market annually. This is typically a little bit cheaper devices, but these devices has today capabilities to run communication as a software without any hardware. And here, we do also plan to release a new embedded software offering, tapping into new customer segment we are not doing business with today. Very interesting initiative in the coming 5 years or several strategic initiatives in this slide, the coming 5 years. Second one is to restart and expand Americas. Unfortunately, due to historical lost focus in the previous HMS context, we are restarting from scratch in Americas in this new divisional structure with a focus on device makers. So 2026 will be a lot about reestablishing sales management, building up a sales structure, ensure that we have great Win, Grow, Keep strategy in place, identify the different pockets of opportunities that are available in this huge market and execute our go-to-market agenda properly. Of course, are we as well on the side looking for M&A candidates to expand our geographical presence faster in that region. And lastly, slightly different initiative, retrofitting of installed automation systems. And imagine there are millions of devices today running in existing automation systems that holds tons of valuable data that the factory owners cannot get access to, to optimize their equipment. We aim to bring a product to the market that we target these customers, device owners, factory owners to enable connectivity of these legacy devices that are installed on the factory floor, allow the customers to give them access to the IT information to extract it to their IT environment and improve the efficiency of the factory or simply make that old device secure to comply with security regulations or just enable an OT network connectivity of that old device. We're going to launch this concept under something we call connected, plug and play upon arrival, sold through e-commerce only, and we plan -- which will open up a new pocket of revenue streams for us with pretty fast time to money versus the long time to money business we're doing today with our design wins. With that said, that's all what I had for you. And I will hand it over to Staffan, who will talk about New Industries.

Thank you, Bartek. Very exciting. All right. Hello again. So I'm back on stage talking about our smallest division, New Industries. And the reason I'm up here is that this is a collection of smaller businesses we have with the ambition to find this niche application with higher growth, higher potential, and we today have a couple of different activities. The customer base is primarily OEMs, but also system integrators and end users, and it's different for different activities here. We see a quite different type of growth here. On average, it's 8%. The vehicle communication is slower. The building automation is faster. And today, it's 24% of revenue on the 3 different activities, also 23% of our group EBIT and the majority of the business here is in Europe. So these are businesses we have acquired, and we now try to form different synergies in this, and we have this under the umbrella in new industries. And each of these segments are run by 3 entrepreneurs. So being head of this is just a small hobby project for me. We have a German guy, Thomas running this; Spanish guy, David running this; and a Swedish business development running the OT cybersecurity. So vehicle communication consists of our Ixxat business and our PEAK business and our Owasys business, focusing on vehicle communication. That's the largest part, but still not big enough to become its own division within HMS. Then we have our smallest business with building automation, where we see this HVAC, nice market and a little bit different. And now under the wings under New Industries, we really can focus on helping them in acquisitions and organic growth. And finally, we talk about OT cybersecurity. This is more a special project in business development, and let me talk about all these 3 activities. So 3 strategic ambitions, and let's start with vehicle communication. And this is a bit crowded. But here in vehicle communication, we aim to be the best friend of the engineers developing systems for the vehicles. The majority of products we have is not onboard the vehicle itself. It's the tools when you develop the vehicle, when you have the aftermarket coming in for airbag crash testing and things like this. That's the communication tools around the vehicle. And there, we need to make sure that we are the best friends of the development engineer. We should be the first choice in their mind. We also have products that is onboard the vehicle, but then it's more special applications like excavator and lower volume kind of things. And honestly, we don't want to be onboard in a personal car. It's a completely different market with a lot of different demands, and there are other companies who can serve that market. But since the market for in-vehicle networks is developing both with CAN XL and Automotive Ethernet, it's not only -- it used to be much of the control in the car with the braking and engine system and stuff like that. Now it's also the infotainment system and the networking and there's a mix of different Ethernet and CAN system in the cars. So we put a lot of effort here on the development, on the product and making sure we have innovation and comply to this new trends we are seeing this with the ambition to create the #1 portfolio for vehicle communication engineers, quite exciting, and we see a lot of opportunity in this, even if that market is kind of especially in Germany, a little bit on the negative side at the moment, but the engineers are still there. The engineers still think about the next-generation vehicles and how to make sure they are competitive in the future. Second initiative is about building automation. With building automation, we are coming from mainly the AC side. And AC, as you probably know, is that a lot of Asian and Japanese and now also Chinese suppliers have been really strong on this. And cooling is one of the most expensive thing for a building owner. And therefore, we see a lot of opportunities to make smarter networks that control the cooling. So we've been really successful there, a good market presence in Europe, but we're now expanding in Middle East. It's very hot, and they invest a lot in cooling. We also in U.S., we have been under-penetrated in U.S., so geographical expansion will be around Saudi and the Gulf states, and also in U.S. And we're also seeing more of hybrid applications that there's also -- in Germany, it used to be a gas market for heating. Now this cooling and heating, heat pumps is coming in, and we're also working with some of the companies to go into more of this heat pump. And it's not more -- it's not for private homes, it's much more for commercial systems where you have buildings like this. That's where you want a system to make sure that you manage different rooms if there are people in the room and things like that. So we think that we have a good market here, and we also see opportunities for acquisitions here. We are quite small, and there's others quite small local players, and we think there's an opportunity to do more things here in the coming years. And finally, cybersecurity. In OT, operational technology, we see that 86% is the increase of cyberattacks in manufacturing. And this used to be just having different system, and it was so obscure the systems that were used in manufacturing, so it was difficult to hack. Now it's much more Ethernet and WiFi and the kind of system are used since the last 10, 15 years. So it's also more vulnerable. And we see that a lot of our customers are really focusing on this, but also regulation is coming in, CRA, Cyber Resilience Act European, NIS2 is coming and some other specific regulations that machine builders and factory owners need to comply to. And we've done some test projects. We have a special team here working on talking to customers what they need. We have like firewalls for segmenting your OT networks on the factory floor and things like this that we haven't fully got it yet. So we have a small team working with this. We have some good products. But when we meet customers, say, okay, we can buy your product, but we have a bigger problem. Can't you just hold our hand because we need to do something big about analyzing, we need consultants and these kind of things. And we are -- we sell a product, and we need to have a better strategy. So we're working hard now to see what is the future here. The market is there. Our customers have a need, but we need to find the right match because the product we have today, nothing wrong with them, but we need to take something bigger to really make sure that we are successful here. So this is -- we see this more as a business development project for the next 1, 2 years before we can scale it up, but we think this is a market for the future. So this is shortly about New Industries. It's quite small for us, but also a greenhouse for some new innovation, and we also see some potential acquisitions to bring in some small activities here. So this is done in a little bit different way when the structured way of this great 2 large divisions we have with INT and IDS. All right, Thomas. This is my last slide for this moment. So over to you.

Thank you. Thanks to all the presenters for the divisions. So we're going to have a short break, some coffee for you here and take the chance to talk to the presenters during the break. We will meet back here at 10:40. So see you back soon. [Break]

Okay, everyone. Welcome back, and welcome back to you guys joining on the webcast as well. So we've listened to the business side, our divisions and what they do. So now it's time to look into the financials. And we have our CFO, Joakim Nideborn with us here to talk us through that. So welcome, Joakim.

All right. Thanks a lot, Thomas. Great to be back here. I think, we were 2 years ago, last time we here presented 2023 target update and now we're evaluating the strategic period, 2020 to 2025. I will talk about 3 things. I will have a short trading update. I think everybody is curious to hear that. And then I will look into the last 5 years, what happened between 2020 and 2025. And then finally, I will also wrap up this whole thing with going through the financial targets once more and also summarize what my colleagues just said before. But let's look at the trading update first from September, and we're now 2 months into the third quarter, so 1 month remaining. And I can start by saying that what we said in the Q2 report in the outlook for the rest of the year, seems to be developing pretty much in that way. Starting to talk a little bit about the order intake, how the market has been performing. Our 2 main markets, U.S. and Germany, slightly improving. And it's maybe not a big surprise to the U.S. market. It's been a good momentum throughout the year. For Germany, we're quite happy to see an improvement, not a lot, but moving in the right direction, and we're getting some more comfort underway with some macro numbers that this seems to be on the right track. A little bit surprising where the rest of the European Union is slightly down in terms of orders. It could also be that we're now in the middle of the vacation period in August, so that's normally a little bit weaker for us. So in comparison with what we saw in Q1, Q2 slightly down. Japan, also an important market, especially within INT. Here, we are also seeing a small decline, and we have a couple of big customers in Japan that tend to place pretty big orders. When that happens, you tend to have a good month and also could be a good quarter even with those bigger orders. We haven't received any of those yet in the third quarter. So that could be part of the explanation why we're seeing a little bit weaker development in Japan. China has been developing very well for us over the last 12, 18 months, and we continue to see a solid development and pretty much in line with what we've seen over the last period. Let me then mention a couple of things more on the operations side, what we are seeing. We reported in Q2 that we have a backlog -- or we had a backlog of SEK 15 million from the ERP go-live in the U.S. So we're now finally in the same ERP system with the big Red Lion acquisition and the rest of the company. That backlog, we have now more or less managed to push out the whole thing in Q3. There might be a little bit remaining that we're going to probably handle in September. So that's positive. We also reported on price increases that we needed to get through the price increases to cover the tariff impact. We were suffering a bit on the gross margin in Q2 from tariff impact. And now we can see that those price increases that we pushed out in the second quarter are actually getting effect. So this is positive for the gross margin. And we should -- if our calculations are right, for the remaining of the year, we should be covering the tariff impact fully with these price increases. That's positive to see. But all in all, the market is -- even if it's slightly improving in the main markets, it's still not a supermarket that we're seeing at the moment. So we're continuing to be careful on the OpEx side as we have been for the last 1.5 years or so. So we continue to keep OpEx under control. I also wanted to mention our debt situation, our leverage. And I'm here showing the net debt to EBITDA adjusted for IFRS 16, so on pre-IFRS 16 basis. That's normally how we internally follow this, and I think that makes the most sense. We were high in Q4 after both the Red Lion and the PEAK acquisition within a couple of months. We've been working down from the 3.37 at year-end to 2.92 when we closed the second quarter. And for the rest of the year, we believe that we will be able to exit around 2.5 or maybe below 2.5 towards the end of the year. So I think it is very important and positive for us to see that we have a good cash flow and we managed to amortize our debt to pretty rapidly come down in leverage. So that was it for the trading update. And even if I understand that there are probably a lot of questions around this, we would prefer to discuss the strategy going forward and the financial targets and so on. We will be back within a month with a full Q3 report, and then we can, of course, discuss all the details. So then let's have a look on 2020 to 2025. My colleagues explained what we've been up to, and let's see what that materialized in terms of results and so on. Before we look at the numbers, I have 3 assumptions that I would like to share so you understand what we are evaluating. For sales and profitability over this period, '20 to 2025, since '25 is not yet closed, we're looking at 2025, Q2, the last 12 months, but pro forma for the PEAK-System acquisition that we made in November last year. I think this makes the most sense to have somewhat comparable what we could maybe exit the year in 2025 with. In terms of profitability on the EBIT side, when we started making these big acquisitions, we've been showing adjusted EBIT instead of reported EBIT as the main metric that we're following. And then we have also adjusted backwards through the period -- the whole period, so we're looking at adjusted EBIT every year. So it's not a reported figure that you're seeing in these numbers. In terms of outlook, and now I'm probably tying a rope around my neck and could be hang up here. But what we see in the market is that the second half of 2025 will probably be better than the second half of 2024. We see a better momentum. So the numbers that you're seeing, it's likely that we will come in a little bit better than that. And please don't ask me more details on that statement. So let's start with the net sales. You can see the CAGR of 18% through the period. And maybe let me first also explain what it is exactly you see in the graph. You see the dark blue, that's the organic business. The light blue is the acquisition impact of that specific year. So you have the reported figures on the top in this graph. And it also means that if we did, let's say, take 2020 when we made the acquisition of Procentec, we made at 1st of October, so we have 1 quarter in 2020 and the rest of the full year effect, you see the light blue in 2021, the remaining 3 quarters. That's how we've been segmenting this. And again, in 2025, we also added a pro forma 2025 Q2 last 12 months, also had the pro forma. So 18% CAGR. We've been through a round of 6 -- sorry, too much, 6 acquisitions. Procentec in 2020 that is now integrated in the IDS division; we had Owasys in 2021, now part of the New Industries division; 2 small acquisitions in 2022, Global M2M, which is now our sales organization in Australia; and CSL, which is a bolt-on to the Procentec business also in the IDS division. And last year, PEAK-System into the New Industries and Red Lion being part of the IDS division. My colleagues talked before about what's been happening throughout this period. And just to summarize what they said, in 2021 and '22, we had this pretty big boost in order intake from the component shortage, people were stocking up. That then led to sort of a boost in net sales during '22 and '23, with '23 being a fantastic year for us at over SEK 3 billion in sales. But then you saw pretty quickly in 2024, a big reduction, as you see in the dark blue here down to SEK 2.2 billion, where we saw this destocking coming into effect pretty rapidly. And I mean, the whole industry has been through this. I think we saw it in a larger amplitude than some of our competitors and peers in the industry. We've been through this many times before, but I wanted you to have the full story. Sometimes when you look in the -- just look at the quarter-by-quarter, you don't really see the full picture, and I think it makes sense to reflect back what's actually happened. So destocking in 2024, Bartek and Alex talked about, we see now the market coming back more to normal in 2025, and we can grow from where we were. We said that we will grow half of the top line with M&A. We've done it for sure even more, SEK 1.6 billion in total acquired net sales looking at the time of the acquisition. I would like to come back to the organic growth at the end of the year when we've seen how everything has fully played out. It's a bit difficult at the moment to make the right analysis on this. FX has been -- it was a big part of the growth during a period, and now it's come down. So it's still something, but it's not super material. But we'll come back to organic growth when we present the Q4 report, and we can see exactly how this has played out. Then over to my own favorite KPI, gross margin, which I think is super important. And I'm going to take you through the story of what's happened also throughout the period. And before we start looking at what happened, I just want to say that before this strategic period, we were around 60%, 61% for a pretty long time, and we struggled to improve it. In 2020, we did some really good things during COVID. We managed to consolidate some suppliers, consolidate some EMSs make some selective price increases here and there to become a better business. And we saw in 2020, we're up to 62%. In 2021, we saw a great first year. We're doing more than 64% in gross margin. But then like midyear, something happened. It was a major increase in costs from our semi suppliers. So we saw a 10% price increase more or less overnight. We were sitting with a huge backlog, much larger than normal, given the boosted orders, and it took quite a long time to get the price increases through to the market, which we saw during the second half of 2022. We're starting to see the effect of the price increases. We're coming back to the 64%. And then in 2023, we had sort of a perfect year. FX was with us, volume was with us. The mix was good, price increases were through, and we managed to get to 65% gross margin. Maybe a little bit boosted with all those conditions, but we saw that it was moving in the right direction. And then it looks dramatic again for 2024 with a big drop. And it's pretty easy to explain. We made the acquisition of Red Lion coming in beginning of Q2 with margins of 57% at the time when we acquired it. So of course, this diluted, with such a big acquisition, 1/3 of the total business, of course, this had an impact. And then we made the PEAK acquisition in November and also with slightly lower margins, just below 60%, also further diluted this a little bit. So the 62.6% in 2024 is not that we have made something very much differently. It's the mix that is of the companies that have come to this. And now we are, of course, determined to improve the margins in Red Lion and in PEAK, and we're seeing that journey starting now in 2025 or in this 12-month period. There's only 2 quarters that are new, but we're seeing the development in the right pace. And I will also talk a bit more what we've been doing in those acquisitions shortly. But all in all, you can say when you look at this, yes, well, it's been a bit of a bumpy road where the macro situation has been changing. And I think we've been doing a pretty good job to improve this. Staffan mentioned before that we are going towards a target to reach 65% over time in gross margin, the ARR transfer of the business model will be one important thing to get there. All right. Let's look at the profitability. So here, I show an adjusted EBIT throughout this whole period. We can first see that we had a CAGR of 21%, so growing a little bit faster than the revenues. We had -- 2 years ago when we were here, we set first a target of 20% EBIT back in 2020. And that was also a higher level than what we had been on before. And in 2023 with 2 really good years with 27% and 26% margin, we figured we probably should increase this, and we set a new target to '25. And of course, then the next year miss it. I don't think it's very strange that we missed it in 2024. You saw before when we looked at the sales was a pretty massive drop in sales. So all in all, to be able to stay at 22% with that drop, we think was a pretty good job at with those conditions. You can also see that we have grown about SEK 500 million in terms of money in this period, out of which, 70% comes from M&A. So it's been a good journey not only when we made acquisitions. It's been a good journey afterwards that I will show you on also in the next slide. And I think a big part to why we have managed also to improve is that we managed to improve the acquisitions. So I've been getting a lot of questions before this session. Will we get an update on Red Lion, what's happening with Red Lion. How you've been developing that. And as you know, Red Lion is an integrated part of IDS. So first of all, it's not super easy for me to get the numbers out, what is Red Lion actually stand-alone. And also, we don't necessarily follow it that way. So I'm going to give you a onetime analysis what happened with Red Lion for the first 15 months, what have we done? If we start with net sales, it looks pretty bad. What we look at here is the last 12 months from Q2 2025 compared to the last 12 months in the period before. So we're down 17% reported. If I take away FX, we're down to 11%. So why is that? Some of you might remember that when we announced the acquisition, we said that the numbers that you see for Red Lion is boosted by probably SEK 100 million. It was SEK 1.2 billion, if I talk in SEK in revenue at the time of the acquisition, out of which SEK 100 million was boosted. I think for short; it was SEK 100 million, maybe a little bit more in retrospect. And then we also have the currency effects on top, which you also have been impacting this. So was it then a bad business that we bought to do by that at the wrong time? I think what kind of proves what I said is if you look at order intake, which has been moving in completely a different direction, where we're up 12% reported or 15%, if I take away the FX effect. So the situation here was really the second half of 2023, Red Lion was delivering out a lot from the backlog orders they received just as HMS before received during '21, '22. And obviously, then the order intake was pretty bad since the orders were already in the book. So I think these 2 figures together, cash show that this is how it's really been and not a lot of things that we can do about, but these dynamics. If we then have a look on the gross margin, we've actually managed to do a couple of things. We have been through the whole distributor setup, reviewing different discounts. The distributor who has been investing in us, have maintained a good margin or a good discount, the ones who have not have been put in a different category with a lower margin or lower discount. And then if they want to get back to a good discount, they need to show that they are investing. We've been doing the first phase of investments in manufacturing facility, looking over some sourcing contracts, and we managed to improve this gross margin from 57% when we acquired it. And then I've adjusted this 57%. So it's per HMS accounting principles and have taken away all spot purchases that we had. So it was actually lower but adjusted 57% and now it's more 60%. So that, we're very happy with that work, and we think that there is a little bit more to do here as well. On the OpEx side, we have managed to reduce this by 6%. And then it's, of course, a salary revision in this. So without that, it would have been a higher number. What we've done here is to consolidate some back-office functions, HR, finance, IT, integrated, sales, we've been doing a pretty big job to get the sales organizations together. I'll come back to that shortly. We've also taken away more or less a whole layer of management and really trying to find the individuals that contribute most in right positions. The adjusted EBIT margin has improved by 4 percentage points. So when we started the period, we were around 19%, 20%. We're now around 23%, in line with more or less the rest of the business, not yet at a 25% target. I think we also said that over time, we want to get this company also to 25% is for the rest of the group. And I think we're on a good track, a little bit more work to be done, and we look forward to discuss that next time and see if we get it the whole way. Alex mentioned that we have SEK 2 million now of cross-selling opportunities. So we set the new ERP and CRM system live in June this year. So now you can say that the sales organization is fully integrated, working in the sales tools, working with the same customer base, and now we can actually measure what's happening. So difficult for us to mention exactly what has happened in the past, but now we have full control of this, and we can see is that we have this SEK 2 million since June, we have consolidated this SEK 2 million in opportunities. A little bit, we already managed to convert, no super big money, but this will also be something that will be interesting to evaluate a year or 2 from now. So what have we done? I think I mentioned most of it. Integration is more or less finalized. Sales organization has been maybe the biggest part. Alex presented also the common product platform that we're going to have for the future to develop our products that will gain us some time to market for sure. So that's very positive that we take the knowledge from the different parts of the business. This is, of course, quite difficult, and it will take some time to get this fully fixed, but it's a good initiative. We've done the first phase of investments in the manufacturing. The second phase will be in place during the second half of 2025. And if we just look on the integration cost follow-up, I want to be transparent with this as well. We said when we announced the acquisition that we would spend SEK 100 million on the integration. We said SEK 30 million in OpEx, SEK 70 million on CapEx. So far, we've spent SEK 50 million on OpEx and only SEK 10 million on CapEx. So why is that? The main thing why we have our overspending in OpEx is that we -- when we made a plan, we were planning to take the CRM project as a CapEx investment. Now we didn't do that. We've been taking that over the P&L, which pretty much makes up the difference. So if I take that away and put it back into CapEx, we would be pretty much spot on here. And remaining, we say we have 40% in CapEx. So we actually expect to end up at 100% as we said. And what we're doing, I think we're getting a bit more for the money here than what we had expected to. In the remaining investments, we are also giving the tariff situation, building out capacity in the manufacturing facility in the U.S. to be able to move some of the products over that is now manufactured in Europe to have a better tariff situation simply. So we're taking that -- building that buffer as well when we do this change. And the investments we've been taking, setting up the same ERP using the same equipment is making that possible. So I think all in all, we are not going to give another update like this. But I think now you've seen that what we've done so far seems to have been working out somewhat. And going forward, we expect to see the top line become even better, and we hope that there is a little bit to do on the margin side as well. Let's also take our other big acquisition PEAK-System that we made 8 months ago. Of course, a little bit less time to work with this, completely different journey in terms of how the market has been. Here, we had a pretty good development with a 7% reported growth actually 10%, if you were to adjust with constant currencies and order intake in a similar manner. So the business is performing quite well, even if I think we were, and I know some of you were a bit worried that this was pretty heavy towards the automotive industry, which hasn't been the best also with a big Europe focus. But it's been tracking on quite well. We have managed also to improve gross margin by 2 percentage points. Same reasoning here that we have restated for our own accounting principles at the -- at the time of the acquisition. What we have been doing is that we've been outsourcing some of the high runners for global EMS contracts to gain a little bit cost advantage. And also, we've been looking into the pricing. We believe that PEAK was maybe a bit defensive on pricing to previous years when there was a market where it could actually increase the prices. So we're pushing some price increases. And even in a short period of time, we see a little bit of effect of this. In terms of OpEx, it's been growing roughly with sales. We have salary increases in. We have a few selective investments in management positions to continue to invest in the business. This was a pretty small organization to start with. So not a lot of things that we could take away, we've been investing slightly. And then the EBIT margin has improved. This was on a very high level before almost at the 30% level. So always difficult to continue to increase the margins on those levels. But we're super happy with the development so far within PEAK. We have now cross-selling opportunities of EUR 0.5 million. Some of that has already materialized, and we're quite positive that we'll manage to materialize the rest of this during next year. So whatever -- we are we in the process? Well, integration is progressing pretty much as planned. We're not through everything. We're through a big part of it. We've been having common partner days, and collaborate in sales, trying to cross-list products with our different partners. And the big thing here is also the portfolio harmonization between the previous Ixxat brand and the PEAK brand, the vehicle division, main pieces to have one common road map going forward. And we're in the middle of that work as we speak. Yes. So pretty much as planned, and we have to be happy with it. Then we have -- if we continue the profitability earnings per share. Here, you have a growth of 16%. The reason it's a little bit lower than on the EBIT side is that we had this dilution from the Red Lion acquisition, 7% dilution on this. And here, we also have adjusted the figures backwards. So it's all adjusted in this graph. The reason why we're looking at adjusted, maybe it's given, but I'm going to say it anyway, so with the big acquisitions, we have a lot of amortization of excess values, and we think it gives the wrong impression to not adjust for those excess values on the amortization of excess value. So that's why we've been doing this to give a fair dividend to our owners. I've also wanted to speak a little bit about cash conversion. The same story as we've been discussing before, it goes through the cash conversion as well. So here you see the cash flow from operations in the bars and then the line shows the cash conversion versus EBITDA. So in the beginning of this period, you saw that we were around 92%, 93%, and this was -- when we had this really high demand, rapid order intake increase, a lot of deliveries that our customers wanted to get out. So we're really decreasing safety stocks. And everybody was paying us very well on time. So very good for the cash conversion. During '22, '23 kind of the opposite situation. We had a huge buildup of inventory. We also needed to stock up as everyone else to be able to deliver. And this, of course, impacted cash conversion to 57% to 59% in this period. And then we're starting to approach something that is a little bit more normal. We had 74% in 2024, when we started this inventory normalization. And this year, we had a really good cash conversion as well with 85% so far since we have managed -- the main thing is that we managed to decrease our inventory. So over time, when I do the math, I think that we will be around some 75% on cash conversion. I think that if you would look at the average for this period, that's pretty much what you would get. It will always be a little bit bumpy like this when things happen in the market, but 75% is pretty much what you can expect. And then we have, again, the story with the acquisitions, looking at the leverage. I talked a bit about it in the trading update. And now I actually show reported figures to be fair. And we saw then the big increase in 2024. The smaller acquisitions we made hasn't really put us in a tough spot at any point. And now we're at the SEK 3.4 billion in 2024. And as I said before, it was important for us that we show that we can continue to come down, and we're positive that we can get to this SEK 2.5 billion at the end of this year. So then we've been through the whole financial period. And my last slide on this is just how did it play out against the target then? So we started at just short of SEK 1.5 billion in 2020, and now the last 12 months from Q2, just about SEK 3.4 billion, so above the SEK 5 billion target, 114% growth so far and expect it to be a little bit better when we close the year. On the profitability side, we had a 20% target. So we're being nice to ourselves and evaluating towards the original target. And even if I would take the adjusted target, I think we will be doing quite well given the top line is performing so good. We're going to beat that as well with SEK 800-plus million versus SEK 628 million and more than 160% increase. So I think that -- that's good to when we now enter into new strategic period to see that, okay, we actually managed to do what we were set out to do in this period. And it's good to show you, it's also good to be able to show our organization that we managed to set targets and deliver on it. Before I hand over to Thomas to start the Q&A session, I just want to conclude what we have said. And starting with the targets. Staffan has already presented this. I'm going to stay on one specific topic here, and that's the profitability target, where we say 25% EBITDA before it was 25% of an adjusted EBIT. So what are we doing here? Are we trying to move up the P&L? I would say, no, that's not what we're trying to do. Actually, a little bit the opposite. What we would like to do is when we continue to make bigger acquisitions, we will have those amortization of the excess values, and we don't believe it's fair to evaluate the ongoing business on that metric. So that's why move to EBITDA, we take away the burden of the amortization, but we keep in the amortization of other intangibles. For us, is especially capitalized R&D, which is -- could be a big portion. So that we still need to own, and then just get rid of this other thing. What we're also doing is in the adjusted figure before, we've had integration costs, transaction costs, restructuring costs, I know that's not always easy to follow exactly what is what. So that is now gone from the EBITDA. This is clean. If we have integration costs, it will be included in the EBITDA. Then we might report to you what it is separately, so you know but we're excluding it from the target level. So all in all, I think we're making it easier, cleaner to follow. That's the ambition, and we're not trying to make it easier for ourselves. I think I commented already on why we have adjusted EPS is the same reason as a dividend interval between 30% to 50%. All right. Let's conclude the strategy then. So if you're going to remember something, I think these are the things to remember. First, we talk about the product offering and go-to-market business models, so portfolio evolution will be super important for the coming period. We heard Alex talking about it a bit of a lost time to do some retrofitting and adapting to new components for us and for our peers. It's been the same. So now we really want to improve the portfolio that we had, and you saw some of the plans, how we're going to do that. So our plan here is to more than 50% of the organic growth that we deliver in the strategic period should come from new products. Staffan talked about AI, how it's important to both integrate in our offering, but also to use to make our business more efficient and difficult to find a good metric to this, but the plan is that when we close this period in 2030, we believe that we will have several AI tools implemented in the strategy. And of course, we will keep you updated on the way how this is playing out. To move something as very concrete on the business model. Annual recurring revenue should be 10% of the sales, and we'll fill the offer with more value for more service offerings for our customers. And that should then enable this change from 2%, 3% that we have today. We've been talking about proximity to customers that we want to be as close to our customers as possible. And then, especially if we're going to now do business with some of the larger customers, we saw both in IDS and INT, we're working towards some of the larger customers as well. We need to have a direct relationship. So the business model shift and the relation to larger customers will also lead us to get to direct sales of 55% instead of 43% as we have today. And then finally, on this side, the M&A part, we believe that somewhere around 50-50 organic and M&A will be the recipe to reach the SEK 7.5 billion in 2020 -- 2030. Then let's look a bit more internally, how do we work in order to achieve this. Staffan talked a lot about company culture, how we would like our employees to be happy and high-performing employees, generate loyal customers, how we measure this is with employee engagement index. It's a new metric for us. And we're today somewhere around 70, 74 and the target is to get even better to 80. This is a really high priority for us and a key ingredient in recipe to achieve the growth targets. To enable our employees to be better, we need to invest -- continue to invest in our leaders that will show the way how this is going to be done. We run different programs and sessions with our leaders to make sure that this happens. And we've set in leadership index target of above 85 which is slightly higher than where we are today. You've heard win, grow, keep many times today, and it's because it's -- we think that is going to be such an important thing to really get the sales management super crisp to have focus on winning new customers to develop the customers that we can develop and cross-sell. And how we're going to measure this is with the amount of new customers in the last 24 months, how much did they generate in sales for the last 12 months. Target here is 6% of sales in the last 12 months. We're currently today at half of that. So it's going to be a big change and a key thing to get us there. And finally, we would, of course, like to be more efficient in the business as we have. We always strive to become better. And we're implementing various tools. Now we just invested a lot of money in the common ERP system, and we're looking for different AI tools as well to become better in all the things we do and how we'll measure this is, hopefully, we'll see an OpEx growing in a slower pace than what the top line is growing. Thomas, that was all for me and...

Good timing.

Yes. Sometimes you make it...

Something in essence. Thank you very much. Okay. So we are going to open up for some questions and answers both from the room here, of course, and also from the online chat call. So if we could have all the presenters up on stage here, and we can -- we have Sandra here in the room taking any questions you may have. [Operator Instructions] So yes, we have a question straight ahead here.

Joachim Gunell from DNB Carnegie. So we've talked a bit about how behavioral and technological shifts that tend to take some time in your industry. And obviously, there's a lot to be excited about over the coming 5 years. But given the new, call it, the divisional focus and your venture into slightly new areas, do you envision any sort of transformational shifts when it comes to technology in either parts of your divisions?

Alex, Bartek, would you say?

Yes, maybe I can start for IDS. So when we look into these 5 pillars, which I presented, I think they will be relevant in 5 years as they are relevant today. Within the pillars, there is a shift, let's say, more the ability to use ARR, for example, AI plays a bigger role. There will be some elements which are changing but the, let's say, pillars of access insights, visualized connect and diagnosed, they will be relevant for the next 5 years.

And secondly, just to follow up, your ambition seems to be on an organic basis to essentially grow in line with the market across your different segments? And -- so perhaps if you can comment a bit about, okay, at the market share numbers you provided, which perhaps does not optically look that high. Do you still consider yourself the clear dominant market leader in a very fragmented market? Or who do you really see as the main competitors? And are there any shifts here in regards to where HMS was 5 years ago?

Yes. So also answering for IDS. There's not one competitor for whole IDS. So it's really in the segments. You have competitors for access. You have competitors for visualized, for panel meters, for example, the same for diagnosed, and they are totally different. So there's not one big competitor, which has the same offer than we have. That's a real advantage for us, which enables us to do cross-selling while the competitors are focused on that segment. So one competitor is doing remote access, for example, another is doing switches, and they are not doing both. And for sure, there in the niches. We want to keep our marketplace where we are. We want to do what I've presented this technology shift, which will enable us, especially during the strategic period in the long run to be much faster when it comes to new product releases, which will give us a really nice boost also 2030 onwards.

Right. Bartek, do you want to also elaborate on that?

My perspective I think the competitive landscape looks similar, but I think will change over the coming years as Staffan touched a bit, the INT landscape consists of few players competing with HMS or INT, then we have a bunch of fragmented technology providers, chip providers, where a customer build their industrial communication solutions on their own. So I would see a trend shift ahead, I believe, where we're going to grasp a bigger portion of this business with our other peers that offer buy solutions instead of allowing customers to build them on their own.

And talk for these new industries. I think in this vehicle communication, there's one clear leader called a German company called Vector, and they are super strong, and they are almost a default when it comes to the Volkswagen Group and everything. So fighting that competitor is really, really difficult because they are so in deep with their customers, and we try to find segments where we can complement them. But there's a market where there's a clear leader, and we are among the challengers in that which is unusual for us. But -- so here, it's different markets and different positions.

I'll come back later.

I can add one more thing, Joachim. I think if I take INT, you had a question around the market share. How that seems a bit low in some areas. I think it's important to say also that now we've been -- if you take maybe INT, where we said 8% market share, we have a larger market share on the embedded business. And then we have a smaller market share on the gateways. So when you combine that addressable market to EUR 1 billion, I believe it was, right? Then -- of course, it's difficult to get into the small details actually, where are we in the different segments of that. But largely on embedded, smaller on the gateway, but all in all, it comes down to the 8%.

I think we had a question in the back of the room there.

Yes. Jesper Stugemo from Handelsbanken here. I'm just curious, you're talking about some of deglobalization et cetera, we have seen, I know that you are kind of neutral to the protocols. But if we are looking at Ethernet and fieldbuses, et cetera, we've seen a rise from Ethernet, a decline in fieldbus. Do you see a volume play and the price play here as the nodes are more expensive when you're selling into the Ethernet protocols?

For you Bartek, maybe?

Yes. I mean it depends on the target customer. It depends on who that actually will integrate an industrial communication solution. The price range between fieldbuses and industrial Ethernet, that is not different. Ethernet is taking more and more market share in the market. I would rather say the price sensitivity depends on which volume segments of device makers that we are targeting and what the price acceptance for industrial communications solution are for that specific device.

Good. And another question from the room here.

Yes. Erik Larsson, SEB. On M&A, I have a couple of questions, and I think the answer might be different between the divisions here, but what's your ideal call it, target in terms of either geography or product that you're looking for?

Should I go first? We have basically 3 directions. Number one is expanding our portfolio within technologies where we are standing today, focusing on factory automation, but as well into process industry. The second is to expand geographically or that's basically those 2 that we are focusing on. And there are probably less players within the INT segment than in the IDS segment, I would say.

And IDS from geographical perspective, we focus on EMEA and Americas. That's our focus area. And when it comes to, let's say, targets, they are bolt-ons to our 5 pillars, and there are companies in which fits maybe to 1 or 2 of the pillars. Okay. And then more broadly for HMS. How would you describe the competition in terms of M&A? What's your, I guess, general value proposition to sellers, why they should go with HMS and not a competitor, except for price, of course.

I think in the acquisitions we have done, maybe Red Lion was an exception, but normally, we have no competition. We meet these companies early on. PEAK was a good example, I think, they want to sell to us, and we like each other, and we shake hands and we do the deal. With Red Lion, it was larger. That was more of a bidding scenario, but in most cases, we don't have a lot of competition. And to complement us, I think there are 3 things that we see as knows. We really want to invest in companies who are profitable, so the people who haven't made it themselves we will not buy them. They need to make money themselves. Secondly, I think it's important that they have an organization. If there's only one founder, an entrepreneur, these entrepreneurs, they are difficult to deal with. We need to have somebody that need to be more managers in that company as well. Otherwise, they are too small. And third, they need to have a culture that is relevant for us. So these are the 3 things we really look for. And if we don't feel that these 3 are okay, we walk away. That's very important for us because otherwise, we tried sometimes to buy companies cheap who don't make money. It's not for us. We have not been successful there. So I think this goes for the M&A strategy going forward as well.

Great. If I can squeeze in a question here from the live chat. I think I'll direct it to you, Staffan. We talked about the new industry section and that we reported 45% on OEMs, 30% on system integrators and 25% for end users. If you could elaborate a little bit on the difference between vehicle communication and building automation there what the differences are when these 2 target groups.

With building automation, there's a larger portion of system integrators because we want to target the system integrators because they know the real estate owners and their systems there with vehicle communication, it's primarily OEMs that we target there. And on cybersecurity, we have a mix of -- we think that the end user is most interesting, but we also see that the machine builders and the OEMs, they also face challenges because they are asked to guarantee up times with their machines. And in this world of cyber threats, it's not easy for them to give these guarantees. So we also believe that this OEM business could be potential in cyber. So it's a mix.

I'll take one more question then I'll hand it back to the room. I think this is for Bartek and Alex, which product categories do you see the greatest potential to expand into? And how do you approach finding synergies and technology development between your different business areas, both within the division and maybe also across the divisions.

I can start off on this one. Within INT, it's definitely our home turf. We are expanding towards additional customer segments. This is probably where we will enjoy highest growth ahead. In terms of finding technology synergies, I think if we look at INT, we focus strictly on core realtime communication technology stacks, if we move over to ideas, I think, Alex, you focus more on I/O connectors, edge connectors. This is a slightly different technology. If we look at the building, they have slightly different networks in the building industry, Beck, [ N-Tron ], DALI, high portion of proprietary protocols. I think this divisional structure also shows that there are not many synergies on technology between different divisions. But of course, within the division, we have tried to have a common technology base. Do you want to add something, Alex?

Yes, for IDS. I think biggest potential for sure data is really important. So the IoT field. So our insights fields and also connectivity. We expect a bigger growth from the technology. I showed you the platform, which will support later on access, insights and visualize. So there we see a real -- a lot of synergies when it comes to, let's say, yes, same functionalities, same core functionalities, which we can support.

Anything to add from new industries there when it comes to platform technology?

I think in general, we, as a management, I mean, we did this organization to drive accountability, responsibility for sales and R&D in the divisions. And it's easy for top management here to think about synergies between the division. Let's not do that. Let's focus on each division and make them accountable for that. Same for new industries. So we try to avoid that discussion. The synergies is mainly in supply and the global supply chain and sustainability and these kind of things there. We have common platforms, but between the divisions. You guys have a cooperation on some go to market, but that's -- we try to put that on your shareholders to figure out.

Good question here from Alexander von Wachenfeldt. And he also had one more question, which we touched upon the acquisition situation and how we deal with that. But an interesting part of that, do you prefer to make fewer larger acquisitions or many more smaller ones. Can we say anything about that?

I think we -- our sweet spot right now is maybe a company with a SEK 300 million revenue, why do I say that? Normally, you don't have this problem with one guy who is one founder is running a company. You typically have an organization; you have a management team with a certain competence. It's feasible to integrate that size is not too much of a target, but still, it will build something to us. So it's worth spending the time. So that would be, if I could wish the perfect target, SEK 300 million. With that said, of course, we will look at larger and smaller.

Okay. A question from the room here.

Viktor Högberg from Danske Bank. Some -- just thinking about the margin targets. What is the -- and this is a question for you, Joakim, maybe the organic margin potential until 2030, just thinking the split here of margin dilutive M&A which keeps the margin down. And what is explained by the increased R&D investments? And also what's the timing for those R&D investments? Are they going to be linear or gradual?

So yes, good question. And I don't have a perfect business plan to show you, but we will invest a lot for the coming 2 years to get a kick start of these things that Bartek and Alex showed. The organic potential is maybe slightly higher than the 25%. I believe that with the things that we talked about improving gross margin or so and with the move to ARR will also help that move then what we have seen in the past is if we look at the target pipeline, the majority of targets are not at a 25% margin. Some are even a bit below 20%. And then it is a bit of work. It takes a bit of time to improve these companies. And sometimes you can't do a whole lot to improve it. So I think you need to see that as a combined target with half of the growth still should be coming from M&A over this period of time. And that's why we're not increasing the target. But you're right, organically, yes, if we should say pure organic, we should probably have a slightly higher target than the 25%.

We have one more question here in front.

Simon Granath with ABG. And a question on China. I believe that I've asked about it before, but a lot have happened in the global automation market over the past 10 years. China has moved from a relatively low share of property installations to accounting for 50% of them right now, and you have the benefits of being a comparably agnostic company, not having to care too much about domestic competitors in China. What do you see about China going forward? Is it a priority to improve efforts there? Or what do you see?

If I start here, I think we mapped our business in China in first different industries. There are certain industries that is more government infused like power and energy, water, wastewater, and some other more machine building aviation for some reason, it's not so much -- it's more American planes and things like that European planes. So there are certain -- on this scale, it's how much the government is trying to control that through Chinese suppliers, and we try to find the pockets where it's further out from this government control. And then we have our attractiveness from a Chinese perspective where we have a few, especially in IDS. We have a few products where we see very high competition in China. We have some other products, mainly in INT, where we have very little competition like the safety and some of the embedded stuff, we are quite unique. So we try to map this on this to find this less government control and more attractive. That's where we have the new China strategy to find the pockets. So we try to be a little bit selective on where we play. And to be successful there, we also work with more of local supply chain and this -- maybe Bartek, you are the best to answer that in general.

Yes. And I think I touched it in my presentation, we are looking on some pockets of opportunities in China where we're going to enable an in-China for-China strategy. And that basically means that you remove all CE mark regulations you have in Europe, and you can really optimize the product in China for China, probably also sourced in China, targeting that specific vertical. While we will continue to focus on this segments in China where they -- these customers focus on the Western world where they want to have this high-quality certified according to all regulation approved products as well. So it's 2 different strategies ahead.

And a follow-up is on M&A. Of course, an interesting topic. And I had a question both on timing and in terms of multiples because you have now introduced a new KPI, focusing more on ARR and also talking a lot about software revenues. Does this mean that multiples could come up in future acquisitions? And also regarding timing, as Joakim mentioned, the gearing is elevated versus your targets and also versus historical terms, and you are also working with lots of integration. Where are we -- when could we see an accelerated M&A pace or not even accelerated, but...

Yes. So I'll try to cover that. If we start with the timing and pace, yes, obviously, this year, we will be working towards reducing the leverage to below the top 2.5. So maybe into next year, we could be looking at something. I mean the work is continuing to build the pipelines. And now, as we talked about also before, we're now letting the divisions run their own agenda, building their own pipelines. So that work is continuing as we speak. In terms of multiples, we -- if we -- let's say we buy a company that is partly selling recurring revenues, well, yes, the multiple will be higher. Some reason for us, it kind of -- it hurts to be up too much in double digits, we like to be 9, 10x. I think that's okay for us. It depends on the company and the growth, of course, it could also be a lower multiple, depending on what type of business we're targeting. But it can happen in cases that we will be probably mostly in IDS that will be on -- maybe into the teens in margins as well.

I think we got a question from back of the room.

Fredrik Lithell from Handelsbanken. And I have a few questions on the strategy you're working, you summarized it towards the end of your presentation, the ARR that's going to be more than 10% in 2030. Is that new -- totally new rev streams? Or is it going to be replacing traditional perpetual license revenue stream? So that is one question. The other one is more towards direct sales. Is that part of your ambition to increase your gross margin? Is that the driver there? Or what is that?

Yes. So I will take your first question on the ARR side. So it's both. So on the one side is like this example that I mentioned, where you have a customer buying right now the products, looking forward to buy it in a different way. So we want to convert it and want to enable that. And for sure, in addition, with the new platform, we will have much more services around it, which will be additional revenue. So it will be a combination of both. And to your second question, that was -- the question was around, sorry, i missed it.

Direct sales.

Direct sales. So there, the main focus in IDS is to enable cross-selling. So there, we see a huge advantage if we have our full portfolio. If we are direct, we can sell the full portfolio. If you have distributors, not all our distributors selling our full IDS portfolio, we have some distributors selling a part of and selling even competitive products towards the customer. So for us, it's important for the large customers to stay directly to enable this cross-selling opportunities.

Maybe I can just add on the margin side, since that was part of the question as well. Obviously, the direct channel will come with a slightly better gross margin, but also with a higher OpEx. So you can see a bit of a shift between the lines.

Just a follow-up there. I mean, if you go more towards direct, what do the system integrators say then do they feel threatened by you? So is it a conflict in between those channels?

No, I would not say the system integrator. So we have a model today where we sell through distributors. If we go to a system integrator, we would call this as a direct sale as well. So having the system integrator as a direct customer. And we want to expand also our system integrator business. So you have seen in the vertical markets 3x the main customer type or the system integrator. And there, we want to do much more.

I think we have Joachim Gunell.

Yes. Just some follow-up questions here from Joachim Gunell at DNB Carnegie. So the step-up in product releases, can -- Viktor touched upon this, but -- just can you talk about the investment needs to realize this? Do we need to see like a modernization of your IT platforms? Or will there be a lot of, call it, CapEx investments quite earlier in this period to realize this? Or are you -- will you just reap the benefits from investments already made? If you can talk a bit about that?

I can maybe talk about the timing part. And then what we expect to see is, if you look in percentage, CapEx in percentage, yes, they will be a bit higher in '26 and '27, not necessarily in money since we'll be a bigger company towards the end. So my estimate at the moment is that we'll probably see a rather flat CapEx side on the R&D. And then I think the other question is maybe for someone else.

Just whether it's -- if you think they will require like a very comprehensive modernization of your IT platforms as such? Or do you have the, call it, setup to just...

I think we'd rather talk about an evolution or what we, of course, aiming for is to reuse the hundred, thousands of hours we already have spent in R&D and evolve these IPs into new generation platform. So it's not a restart we're talking about is rather evolution of offerings into new generation platforms from where we are today.

That's helpful. And just one final question. You've done a great job in showcasing the breadth of the organization and highlighting a lot of people from the organization as such. And perhaps if you, Staffan, would comment a bit about how hungry you are to realize this 5-year plan?

Yes, I'm sure if you note, but this is quite fun. I mean I've been here for quite many years now and another 5 years. I mean, this is not so with Union planning another 5 years. This is HMS. And I must say we have a lot of fun when we have done this process, but we also feel when we talk to customers that we have good access to customers. We are, on one hand, viewed as a small innovative company but also a trustworthy company. So we are at this size, where we're small enough to be faster and more agile, but large enough to be trustworthy and have power in our investments and do this. It's fun. So I'm ready for another 5-year here.

That's encouraging.

Great. Other question from Gustav.

Gustav here from Nordea. I thought maybe just build on the ARR question we got here. Is there a risk if you go from less or customers go less direct and you go more with, I don't know, rental, could that have a negative effect on your top line here in short term, is too small?

So if we would do a shift from today to tomorrow, just say everything we do on CapEx, we changed to ARR. For sure, we would see a drop, but this will not be a step approach. It's a continuous approach over the time. So in our growth. And there, we will see a conversion. And as I said, also additional services which will enable additional revenues on the ARR side.

Okay. Perfect. And then also on the retrofit market that you touched upon a little bit. Now sort of with the importance of data and AI, et cetera, are you seeing a shift in the retrofit market that customers are willing to upgrade old sort of production facilities to higher extent today? And also, if you can just elaborate a bit on the retrofit market in your different divisions?

Yes. I can start from an INT perspective or from a regulation perspective, security is becoming really important. CRA is coming in during 2027. This would put completely different demands on factory owners, suppliers to the factory automation industry where a certain level of security need to be reached and the industry will not really afford to redesign all the products that are out there in the industry or that still are supplied into the industry. So there -- I believe that there will be a need for retrofitting devices to upgrade existing installations to actually be compliant with the required industry standards.

Yes, I think it's the same for IDS. So we see if you take especially, let's say, the U.S. market where the factories are yes, a lot of investments are now ongoing, not only into new factories, also to upgrade the factories, and that's a huge potential for us.

Do you see that, sorry, to build on the market growth or -- do you see that sort of adding to that 8% as you see across the group? Or is that included as well?

No, it's included.

Great. I think we'll jump in with one question here from the chat. I think this is for you, Joakim. Given that your aim for long-term gross margin above 65%, do you see any potential in the EBITDA margin to surpass 25%, or is this more of an ambitious goal considering that the SEK 7.5 billion is a much larger revenue base.

I think it's a little bit -- a similar question that Viktor asked. We believe that if you were to just take away the M&A part there is maybe more potential than 25% in organic business. If we're going to continue to maintain this nice organic growth. But we believe, as we said, that it will even out with the acquisitions, will probably be in a slightly lower level, yes.

Yes. Another question here from Thomas Blikstad from Pareto Securities. The target implies an annual organic growth of around 8%, which is in line with the expected market growth. Are there any particular periods, where you see potential for stronger growth, for example, a rebound in 2026 or similar? Or is this target more an even growth target? Maybe you could touch upon that.

Yes. I wish I knew. I think it's -- the best we know for now is that it should be somewhat evenly distributed and 2026, yes. I think, yes, is any other year. It seems reasonable around that level, yes.

Okay. Correct. And we can just a comment there. The majority of our revenue is from keep customers. And of course, these are dependent on the industry cycles and stuff like that, but that's also why I want to emphasize a focus on win and grow. And we hear from Bartek, it takes 2 years from the win to make money on it. So of course, we are we need to look beyond the industry cycle sometimes to see where we're winning and growing. And then financial results will come as a consequence that maybe 1 or 2 years later. So it's important for us in the management team to work internally to see through the revenue only because we have other things to also measure that are early indicators.

Great. I'll squeeze in one more question here. I think this is for both Bartek and Alex on wireless. Could you please elaborate a bit on wireless solutions versus cable between your different business areas? Where do you see the highest demand for wireless solutions? And how do you think this will change in the coming 5 years? Maybe you could start Bartek.

Yes, that's a really good question. And as I said, this is probably also an area we are struggling. How -- what was the...

Yes. How do you see the wireless situation in the next 5 years?

In general, wireless is a great technology, and it reduce really complexity versus expensive and complex cable installations. And as far as in the cable breaks, you probably have a stop in a production cell that probably stops a large portion of the factory. So there are significant benefits of actually applying wireless replacing cables, cutting the cables, but as well, of course, in logistics where you need mobility needs. The question is then how fast will the market adapt? When will you be ready to actually remove the cable and trust the wireless technology that it will work? This is the question we don't really have figured out yet because then you probably see much higher revenue from the wireless offering. And I don't have a good question on that. What we, of course, see is that there are discussions that 5G will change the factory automation industry that every -- all communication will run a completely over 5G without any cables. But I cannot see that, that will happen during the next 5-year period in the conservative industry we are in.

But you're also often say that wireless is a door opener that starts with the conversation with wireless but then goes over to other products. Maybe you can elaborate on that as well.

Well, I think it's exactly what it is. It's everybody loves to speak about it. It takes a lot of time as well to speak about it. And at the end, you turn how to actually offer a wide solution.

Alex, anything you want to add there to the wireless?

I think Bartek already summarized it very well.

Perfect.

But one comment -- sorry, in IDS, we see some wireless application more on mobile application that there's a remote pump state and something like, of course, there, we have mainly 4G wireless and these kind of things. That's quite mature for that we kind of access. But inside the factory floor is quite slow. But for these remote assets, wireless been successfully deployed for 15 years, yes.

That's a good remark, isolated equipment outside of the factory, that's a different discussion inside factory that's where we have this slow movement.

Yes. And there is standard. So if you're outside like you said, Staffan, that's used since years.

Other question from Gustav.

Gustav from Nordea again. And sorry for bringing up. But the Red Lion margin, as you stated, Joakim, 23% today and you say that you aim up to 25%. Do you see that coming just from volumes rebounding? Or are you still looking to do any operational activities within?

I think we -- I also mentioned that we have done 1/3 of the investments in operations in the supply chain. And we were just a couple of weeks ago, we ordered a new SMT line, we replaced 3 very old ones that we have today. So I think the gross margin will help us apart on the way. And then with, yes, some operating leverage continue to grow the business, I think, will those things together should get us to the 25%. That's my thinking.

And then -- sorry, go ahead.

Yes. Then just one follow-up here. On the sort of data center order that you talked about in Q4, I think, Q1 and Q4, can you just elaborate a bit on your offering there and also the potential? You mentioned data centers on one slide, but it was included sort of in a group of accounting for 10%. I don't know how much does it account for today? And what's the potential?

Yes. The application we do in data centers is not the servers and the racks itself, it's the power into the data center. So for us, it's like any other industrial building more or less. And we do the network switching of the monitoring and stuff like for the power part of this. So it's related to data centers, but it's not on the floor inside, it's on the wall into the building more or less. And this is one of the applications we're seeing in IDS. Do you have any -- is that a big portion or we get some big orders, but it could be any type of building of power at small...

If you see these verticals, it's more the energy part. And then it can be a data center. It can be something else. So it's not like we said, not the data center itself. So it's the energy. And for sure, they consume a lot of energy. So that's the beauty of it.

Are you seeing this becoming sort of a standard here, a sort of a new market for you or?

Yes, we want to focus on this energy part. And there, for sure, energy for data centers is included in that.

Joachim had another question.

Yes. One just a follow-up from me. You showed in INT this matrix where you currently play in the more, call it, high-value niche applications and you want to -- with the new launches going to call it, all else equal, cheaper devices but larger volumes. So just help us understand if -- I mean, all else equal, I would assume that these customers have a very sophisticated procurement departments. And that being said, just -- I understand that you want to go after new customers, but could this in itself be a more competitive field with a different margin profile?

I don't think we are willing to trade the volume for margin. We are expanding into new growth areas, exactly what you say that the average sales price will probably be lower, but we don't expect to reduce our gross margins in this business. This is simply new pockets of opportunities and that we are playing with in today.

But the competitive dynamics, are they [indiscernible] different from where you currently are?

The competitive dynamic is probably -- these customers are probably doing quite much on their own today, but the complexity actually start to drive by behavior. I've already talked about a little bit earlier, where they see a benefit of actually buying an industrial communication solution instead.

And that's something that we've talked about ever since your IPO that the OEMs outsourcing a bit of due to increasing complexity. Can you say anything with regards to just a rough estimate how many of your OEM customers still in-source their solutions today?

It's really a fragmented market, and I don't think I will go into that discussion, okay? I will not give you a good answer on that.

But there's room to grow.

There is room to grow, yes.

Right. One question regarding ARR, that's hard to say. If you just speak in Swedish, it's even harder if Southern Sweden. ARR and if you could give an example that, I think we discussed that yesterday, Alex, with Netbiter and an example of an HMS products that can work with ARR.

Yes. I think I mentioned this with the gensets. So that's the Netbiter, for example, where you can have this as a, let's say, each genset is equipped with a Netbiter, and then they rent it out to their end users, and they charge on a monthly basis, and we will charge on a -- yes ARR base as well. That's one example. The other example where we do recurrent revenue is with our infrastructure right now. This we do already with Talk2m, where we charge for, let's say, getting the data out of the system, and doing some alarming for the system, and there are a lot of additional potentials with additional services, which we want to bring towards the market in the future where we can have a nice service offering to enable more ARR revenue.

Okay. That was all the questions from the chat. Any more questions from the room here? Yes.

Daniel Thorsson from ABG as well. On an AI-related topic, over the last 5 years, I think organic growth rate has been slightly lower than your target now for the next 5 years, you see an acceleration. But the products are hardware and also software developed in the hardware. And with AI, we will reduce cost of developing software. Is there a risk that they will emerge new competition that is causing a price headwind rather than the price tailwind we have seen in the last 5 years, which make it hard to accelerate organic growth versus the last 5 years?

Good question. I think we haven't really seen any new competitors in this field for the last 5 years, I would say -- so it seems to be quite -- but that's also dangerous when we say that. So I think we are on our lot to really monitor this. I assume that with this efficiency gains you can get with AI, maybe there are other industries that you want to break in first. So I think we are maybe not the first target, but we think that we need to stay on our focus to be more efficient ourselves to potentially meet that competition. But we also see that -- we saw this in a couple of years ago when there's a hype around IoT and these things 5 years ago. There were some newcomers, but it was really difficult for newcomers because the traditional customers, they want somebody they can trust. And so it's not easy to be a newcomer in this industry. And with AI, we should be careful because maybe that's something that is changing the game. But so far, we haven't seen it.

Great. Any more questions from the room? Perfect. Yes, we're in good time. So with that, thank you, everyone, for attending, and especially who on the call as well. And we'll stay around for a few more minutes, if you want to talk to the presenters. Have a coffee. We have to talk. Otherwise, thanks very much for joining. Bye-bye.

Thank you.