Indutrade AB (publ) (INDT) Earnings Call Transcript & Summary

Welcome to the Indutrade Q4 presentation for 2024. [Operator Instructions] Now I will hand the conference over to CEO, Bo Annvik; and CFO, Patrik Johnson. Please go ahead.

Welcome, and good morning on our behalf as well. Let's start with a summary of 2024. We had a successful 2024 with solid financial performance, and we were able to strengthen our strategic platform, paving the way for continued, sustainable, profitable growth going forward. Our diversified structure is providing resilience in a weaker general business climate, a stable demand situation with plus 2% total growth in orders and net sales, respectively. Our EBITA margin is -- or came in above target, and we had a strong cash flow. 16 well-managed and profitable companies were acquired during the year with a total annual turnover of SEK 1.6 billion. And we had our climate targets validated by the Science Based Targets initiative. And the Board proposes a dividend of SEK 3 per share, which is a bit above the SEK 2.85 we had last year. If we then turn to the highlights of the fourth quarter, order intake in line with same period last year. Organically a decline of 5%, organic development mainly explained by strong references linked to a large order for pharma production in Denmark. However, the majority of the companies had organic order growth. Net sales increased 7% in total, were up 2% organically. The EBITA margin was stable and high at 14.6%. And if we exclude one-off, it was 14.3%. We continued our work with inventory reductions, and we had a record-high operational cash flow of SEK 1.6 billion. Four acquisitions completed in the last quarter and one so far in the beginning of 2025, and the pipeline is continued to be strong. If we then look a little bit more into order intake and sales, total order intake and net sales growth was 0% and 7%, respectively, supported by good contribution from acquisitions, which had an impact of plus 5%, respectively. The organic order intake decreased by 5%, mainly due to this strong reference linked to the larger order for pharma production in Denmark, as I mentioned earlier. And if we adjust for this, the organic order intake was basically in line with last year. The demand varied between companies, but in terms of customer segments, on an aggregated level, the MedTech and Pharma segments showed the strongest demand, excluding the impact of the large order last year. And for example, in the single-use area, which has been weaker for quite some time, and now we saw a bit of an uptake there. Also, the energy sector, engineering and a large part of the Scandinavian process industry were relatively stable. The Infrastructure & Construction Customer segment continue to be generally weaker. Organic net sales growth was plus 2% with strongest growth in business area Life Science and Process, Energy & Water. Also, half of the companies grew organically during the quarter despite many companies and customers being closed for a longer period than usual over the Christmas holidays. Now we turn to the geographic market-oriented sales. And we can here see that the Nordic countries aggregated presented strong numbers with the strongest sales growth in Denmark and Norway. However, Finland remains slightly weaker. In the U.K., Ireland, the Irish market stood out positively mainly due to strong sales within the Pharma segment. And in key countries like Switzerland and Germany and the Netherlands, overall development was weaker due to the general macroeconomic headwinds. However, still also many companies in these markets are having a good sales situation. Sales in Asia was higher than last year, driven by good development in, for example, valves for power generation and products within the Marine segment. Also, each year, we report the distribution of total sales across various customer segments. This year, the Medical Technology and Pharma segment remains our largest with the share increasing by 2 percentage points compared to last year. It's a great segment to be in, low cyclicality in general and high profitability in the customer base, so something we have deliberately invested in for some time now. On the other side, the share of sales to the Infrastructure & Construction and general Engineering sectors each decreased by 1 percentage point. And the other customer segments remained stable, except for the Marine segment, which declined by 1 percentage point. Now we turn to profitability and elaborate a little bit more on this. Our EBITA margin was stable and high at 14.6%, unchanged from the same period last year. As mentioned, the underlying EBITA margin, excluding some one-offs, was 14.3%. Organic sales development and slightly higher expenses are the main drivers of the underlying EBITA margin decline. The expense increase is linked to general cost inflation, but also some certain growth-related initiatives in some companies and also some restructuring costs which will become beneficial this year. And it's obviously so that, where you have growth opportunities, you need to invest before you can harvest, so that's why some of the expenses are a little bit higher. Continued good pricing efforts from our companies resulted in a strengthened gross margin. And I would say that our companies have managed gross margins really well over a longer time period. High-quality products, strong application knowledge and very good customer service levels deliver customer value and give our companies confidence in pricing. And acquisitions and divestments were also margin-accretive. All in all, EBITA increased within total plus 7% compared to last year, or minus 1% organically. Acquisitions did, however, have a positive effect of plus 7%. If we then turn to the business areas and the sales situation, on an aggregated level, half of the companies showed organic sales growth in the quarter. Business areas Life Science and Process, Energy & Water had the strongest development with plus 9% and plus 8% organic growth, respectively. Life Science was driven by sales of diabetes-related products in the Nordics and also production equipment to Novo Nordisk. And Process, Energy & Water had good development in the energy sector and the process industry in Scandinavia, but was partly offset by the weaker market situation in Finland. The slightly dampened market climate continues to impact business areas, Industrial & Engineering, Infrastructure & Construction and also Technology & Systems Solutions. In terms of EBITA margin for the business areas, there was improvement in business area Infrastructure & Construction and also Process, Energy & Water. The margin in Infrastructure & Construction was impacted positively by acquisitions, some divestments and also some restructuring activities. In Process, Energy & Water, the strong gross margin was the main driver. Industrial & Engineering had the weakest margin development because of the organic sales decline, but also partly due to some positive one-off items in the previous year reference. The lower EBITA margin in Life Science is mainly explained by the higher expense levels in some companies, primarily linked to a higher growth-oriented activity level, general inflation, but also some one-offs. Lastly, Technology & System Solutions did a good job in defending the EBITA margin despite the organic sales decline, mainly thanks to positive gross margin development in many companies as well as contributions from newly acquired companies. If we then turn to acquisitions, 2024 was a successful year in terms of acquisitions, 16 in total with an annual turnover of SEK 1 billion. We have, in a given year before, made 17, so 16 stands out to be a good number. It was a strong finish of the year with four acquisitions completed in Q4. And the majority of the acquisitions completed last year were generated internally and the new business segment structure will continue to strengthen our internal lead generation over time. There's been one acquisition so far in 2025, the German company, ECOROLL, who is specialized in tool technology for mechanical surface treatment. And the inflow of new acquisition candidates is on a good level. And if we look at acquisitions trending over time and how they deliver profitability to us, it's always important to repeat that the number of acquisitions will be followed over a longer period of time. As mentioned, high pace in 2024 and historically good contribution in Q4. Regarding the financial effects, the bridge effect from acquisitions over the last 12 months have added over SEK 80 million to the group's EBITA in the fourth quarter, a significant improvement from the previous quarters in 2024. Furthermore, we can also see that the acquisitions are margin accretive with an accumulated EBITA margin of over 16% for the full year and over 20% for the quarter. By that, I leave the word over to Patrik to comment more on the financials.

Thanks, Bo. Yes, let's dive into the details some more then. Total orders were in line with last year, as Bo commented, in the quarter and up 2% for the full year. Total sales grew 7% in the quarter and 2% for the full year. Book-to-bill in the quarter was 96% and 98% for the full year. As also mentioned previously, gross margin improved again, up to 35.7%. And for the full year, the gross margin came in at 35% compared to 34.6% last year. EBITA in absolute value increased 7% in the quarter, driven mainly by effects from acquisitions and divestments. While the organic side, organic sales and also slightly higher expenses created some headwind. And for the full year, EBITA decreased by 2%. The margin in the quarter, EBITA margin, was 14.6%. That's in line with last year. However, we had some one-offs in the quarter primarily connected to earn-outs, revaluations, which had a net effect of plus SEK 26 million. If you exclude this, the margin was 14.3%. Full year EBITA margin was 14.4% versus 15% last year. Looking at the finance, net, that decreased with 4% in the quarter, but was, on a full year basis, up 8%. Tax cost increased by 29% for the quarter, resulting in a tax rate of 22%. And that's a normal tax rate for us, I would say. Last year, the tax rate was exceptionally low in the quarter 4, so not really a fair reference. For the full year, tax cost decreased by 6%, corresponding to a tax rate of 22%. Earnings per share increased in the quarter by 3%, but it's down on with 4% on a full year basis. And we will look more into that on the coming slides. Return on capital employed came in at 19%, slightly lower than our target due to the slightly lower earnings the last year, but maintained high acquisition pace. Cash flow-wise, quarter 4 came in really, really strong. It's normally a seasonally strong quarter, but this was exceptionally high, a record high level actually of SEK 1.6 billion. And for the full year, operational cash was SEK 4.1 billion. That's also a high level, but slightly down versus last year. And lastly, the net debt to EBITDA ratio was stable at a low level of 1.4 at the end of the year, and that's the same level that we had last year. Then looking some more at the cash flow, that was, as I said, a record high, SEK 1.6 billion for the quarter. And the improvement comes mainly because of a slightly higher result and that we also managed to reduce the working capital in line with what we did last year. If you look specifically at the inventory levels, the organic inventory levels continued to decline sequentially in the quarter. And the organic inventory-to-sales ratio is now coming closer to the pre-inflation level, which is encouraging to see. As we have mentioned before, our companies are relatively capital light, and there's continuously a strong underlying operational cash flow coming from our companies. Normally, we have a good cash conversion. You can see that also in the slide, right now trending on a rolling four-quarter basis at more than 130%. So that's good. Working capital efficiency improved also compared to both the last quarter, quarter 3, and also the same period last year. Earnings per share then, as I commented earlier, increased in the quarter with 3% from SEK 1.95 to SEK 2.01 per share. On a full year basis, it was 5% lower than last year, SEK 7.86. And the quarter -- the quarterly change, the increase in the quarter, is mainly, of course, then related to the EBITDA change, the EBITDA increase, somewhat offset by the increased tax cost I spoke about. If you look on a more longer-term basis then, the average increase in EPS over the last three and five years have been 9% and 13%, respectively. And by that, I conclude then with the financial position. And the interest-bearing debt decreased sequentially. It was slightly higher than last year, but decreased sequentially. And it is due to that we had a relatively high acquisition pace during the year and then a slightly lower full year operational cash flow. If you look at the debt ratios, we are at relatively historically low ratios, net debt to equity ratio of 49% versus 53% last year. And then the net debt to EBITDA, I mentioned earlier, then 1.4x, the same as last year. If you exclude earn-outs, 1.3x, and that was on 1.2x last year. Worth noting maybe then is that part of the short-term debt was successfully refinanced during the quarter through a new seven-year loan, term loan, of EUR 75 million from [ Swedish Export Credit ]. And then we also issued a new five-year bond of SEK 1 billion, all at, I think, competitive conditions. To summarize, despite high acquisition pace, our debt ratios are low. And I think also the debt maturity profile is well-balanced, and we have a strong financial position. Thanks from me, and then I leave back over to Bo.

Thank you, Patrik. Then we turn to sustainability. It was really satisfying that we received the validation from the Science Based Targets initiative of our climate targets during quarter 4. We have quite high ambitions here and our targets, in terms of Scope 1 and 2 emissions, we should reduce by 50% and Scope 3 by 25% by 2030, and we use 2023 as the base year. In the longer term, we actually aim for a Net Zero by 2050. And our companies continue to show good development in the sustainability area with clear progress on the group-wide KPIs we have set. And we see sustainability improvements primarily linked to reducing our CO2 footprint as a clear business opportunity, and we see that this is appreciated by the customer base in a good way. Some key takeaways, the Indutrade model, based on decentralization and balanced diversification, shows its strength and is reinforced with a new segment-oriented group structure. We have been in the new structure for one year now, and it's well received. And we see step-by-step that, that new structure will develop, both in terms of organic and acquisition growth, in a good way. There was a stable demand situation in general, and continued sales increase and good profit levels. We had all-time high operational cash flow for a single quarter. There is some market uncertainty remaining for the upcoming quarters, and we have a slightly lower order backlog, but not sort of very low in a sort of broader perspective. However, I would say that the macroeconomics are trending in a favorable direction and in combination with the underlying investment needs in several sectors, with our entrepreneurial companies as balancing the risk. 16 acquisitions completed in 2024, 1 so far this year, and the pipeline remains strong. Good progress in terms of sustainability, and we have the validation from the Science Based Targets initiative. And all in all, we have strengthened the platform for long-term sustainable, profitable growth for Indutrade. By that, we end the official presentation. Thank you for listening in, and we open up for potential questions.

[Operator Instructions] The next question comes from Carl Ragnerstam from Nordea.

It's Carl here from Nordea. A couple of questions, firstly, in terms of Life Science, your organic orders were down quite a bit, as you mentioned, of course, owing to tough comps. But you also said that single-use is starting to show growth. So I'm a little bit curious to have -- hear more about the underlying demand if you strip out the big orders in the comp and at what pace you're seeing single-use growing, if it's related to any inventory adjustments. And also on that note, if you foresee that you could potentially get continued big orders from Novo projects in '25 or whether you see it's done here?

Good relevant questions. And we are quite optimistic in terms of the Life Science area. And it's obviously -- this big order is distorting the overall perspective quite a lot. So if we exclude that order, there was really, really good underlying and organic order intake in that business area, I think well above 5%. And it's coming from several areas. And it's not so that orders from Novo Nordisk is completely over, rather the opposite. I think there will be a strong business opportunity for our companies, not only for 2025 but also further years after that. But the order last year was exceptionally big, sort of as a one-timer. But spread out over the years, it will still be a continued good business situation for some companies. And single-use, I think the customer base have more -- they have normalized their inventory levels now. And step-by-step, the order intake will start to increase, and it did increase actually in Q4, so we are quite optimistic for that segment. And also in an acquisition perspective, we have an interesting pipeline there, so overall good.

That's very good. And if you see that the single-use will start to be fueling organic sales growth as well, not just orders, would you say that we'll see a -- I mean, the margin drop we've seen in the quarter, for instance, in Life Science, do you think that we'll see a positive mix effect that might offset it? Or how should we look at the margin trajectory with -- bearing in mind the single-use?

I think it will directionally trend upwards. We had some quarters previously which had perhaps an exceptionally high EBITA margin in Life Science, but we can definitely trend above where we were in quarter 4.

And looking at the gross margin, quite impressive, around 36%. But as you also mentioned, the selling expense is up 120 basis points that's really in relation to sales. You mentioned cost inflation, other parts as well. When I look at it, you had problems in Q1 last year, right, with the cost. And then we came into Q2 and Q3, we're seemingly improving sort of cost inflation, but now we seem to be back at it again. So is it a restructuring, or what is really happening underlying there on the cost side?

Yes. I would say, and Patrik, you can comment also, but I think our -- you can view our underlying expense level increase at around 3% or so.

Yes, I think it's slightly higher than 3% plus.

And then there are some -- we have a category of really growth-oriented companies, which -- where it's strategically right for them to increase resources, activity levels. So we support that. And then we have made some restructurings in some companies where there's more of a flat situation or declining situation, and we will see benefits, cost-wise, from that in this year. I don't know if is there anything more you want to elaborate on.

No, no, there are several driving forces, of course. I mean, inflation, which was still relatively high at the beginning of last year. And we have at least more than 50% of the companies are still growing. And we think, of course, it's value-creating for them to push on with their activities. So that's definitely part of the equation. And then also then we have had some costs also for reducing costs. So I think all these play in and make the cost levels higher than last year.

There are some situations also where our companies start to project a better demand situation, maybe from the summertime or so and going forward. And even if they have had a negative book-to-bill for some time, now they feel that it's not the right time to decrease headcount or so, and it's difficult to recruit really good people. So let's keep the base and try to manage Q1, Q2 and hopefully be part of an uptake in a good way later on in the year.

And the final one from my side is, if we look at Infra & Construction, the orders obviously worsened a bit there organically versus what we saw, for instance, in Q2 and Q3, I think. And historically, you've said that infra is the majority of the segment, but you also say that infra developed quite nicely in the quarter, if I read your comments here. So that must imply that construction must have been quite bad, right? So what do you see in construction? Was it a miss of orders in the quarter? And yes, how should we look at that market?

It's a bit of a frustrating situation, to be honest. You have a lot of the data points, so you can follow sort of on a sector basis in terms of how many projects are started in different countries, in different subsegments in that sector. And it's obviously been a lot lower activity level than previously. And unfortunately, we hear about uptakes potentially coming. We see interest rates are coming down, but it's not materializing in orders just yet. And we probably need to be patient up until the summertime in order to really see a more significant improvement, I think, unfortunately. But I would say that our companies are ready. And I think the business area are making a lot of progress in terms of pruning and trimming the companies, making them more efficient. So 2025 will be a much more profitable year for that business area than 2024.

And a short comment from my side. If you look at the Infra order intake -- Infrastructure & Construction, that business area's order intake in the quarter, it stands out as a very negative with minus 9%, but we had a couple of bigger orders in late '23, which impacts. We had actually a positive book-to-bill in quarter 4 '23. So it's a bit of a sort of unfair reference for them.

The next question comes from Zino Engdalen Riccuiti from Handelsbanken.

Just a follow-up on the Infra & Construction, you said, of course, that a lot of the improvement in the margin was due to acquisitions and divestments. I'm just wondering if -- I know that you have higher ambitions for the group, of course. But given the environment they're in now, do you say that this is sort of a normalized margin?

No. I definitely think, in a more normalized market situation, they should be at the target of the group at 14%. So this is well [indiscernible].

Sorry, I mean the environment that we are in now, that the margin they have now is sort of fair.

Yes, maybe that's more fair because it's been a very weak and bleak market situation. Maybe we have -- in terms of a portfolio perspective, we have divested something which didn't really fit in terms of our model. So maybe it's slightly below where it should be in a market situation like this.

And you also mentioned that you've done some restructuring. Is it anything you want to quantify or give an indication of?

No, I don't think we will do that. We'll pass on that one.

Okay. And then jumping to Industrial & Engineering, you highlight it coming back to the increased costs in Life Science, and you highlighted that you have higher costs due to higher activity, but you didn't talk so much on that in the Industrial & Engineering segment. Could you elaborate a bit on the cost side there?

Yes, there are also perhaps the same type of explanation is also valid there, but maybe not equally many high-growth category of companies as we have in the Life Science area. So the balance between inflation, growth initiatives and restructuring are a little bit different, I think, for that business area, perhaps a little bit more restructuring and perhaps a little bit more generally high costs linked to what I said. But there are companies who feel they have done certain things but could potentially do more right now, but still see a potential uptake now in just a few quarters and then rather keep it at this level and be ready for the uptake, rather than jeopardizing a potential readiness for uptake in a few quarters.

And lastly for me, on the new group structure, as you said, this completes the first year with it. And when you look back to when you start -- first implemented it, would you say that you have reached your expectations? Or was there something that you didn't think about that you -- that came up or something like that?

No, I think broadly, it definitely has reached our expectations and been extremely positively received within Indutrade. It's a fairly large sort of reorganization in a group perspective, but we have also tried to keep it impacting individual companies to sort of a low level. And step by step, we will definitely see benefits from this. And as I said, already this year, we saw actually that the pipeline in terms of acquisitions were generated more from internal leads than external leads. And that's extremely good actually, because, in internally generated leads, we basically have exclusivity by default, and we can have slightly longer acquisition processes, reducing the risk for both us and the seller. But the benefit this year will be -- or isn't obviously as high as it will be, I think, for the coming years. So there is more to come in terms of this, which is very good, but all in all, really in line with expectations or perhaps even better.

The next question comes from Karl Bokvist from ABG Sundal Collier.

I just wanted to get one question regarding a financial figure correctly. The nonrecurring items, plus SEK 26 million net, does that include the nonrecurring costs that you talk about within Life Science?

No, it doesn't. The net, which we talk about and mentioned as sort of onetime costs, those are booked centrally. We talk about nonrecurring items in a couple of business areas. Those are more operational, which you have every now and then connected to smaller layoffs, good inventory corrections, et cetera. Those are excluded from that. So those are more operational.

Understood. And those costs that you took in Life Science, should we -- I mean, I understand they do occur as a part of ongoing business. But in terms of magnitude, are they smaller than this plus SEK 26 million net that you did disclose?

Yes. That was a smaller magnitude, yes.

And then the structural efforts within Infrastructure & Construction here, also you wrote that you've made another divestment. Maybe not possible to talk about future divestments. But when it comes to the targeted general restructuring efforts that you have made, is there more work ongoing? Or that you are now simply fairly content with what you have done and that this should gradually continue to drive the upward trend in margin that we have seen now for a couple of quarters?

We are not completely fully done, I don't think, but you will definitely see a continued EBITA margin development positively from Q4 and onwards.

And then just when we look at the figures published here externally, it looks like the -- as you had on your slide too, but the margins of acquired companies continue to be very nice and high. But just looking at the kind of consideration paid for these companies, it looks like multiples have gone up a little bit compared to previous years. Is it anything in particular here that your multiples also imply a bit of higher growth in the companies you are now buying, or anything else?

Multiples have not really increased. You can't really sort of calculate exactly from the tables we have what multiples are. The profit that we disclosed for the newly acquired are, of course, are over a very small, short period of time and not really represent the real underlying profit they have. So I would say, to make the answer a bit shorter, no, I think the multiples are relatively similar to what we have had in the last few years.

The next question comes from Johan Dahl from Danske.

Just a bit on the same topic, but I just wanted to hear your view on the -- sort of we're seeing an increasing spread between your performance on the EBITA margins compared to the return on capital employed target. But obviously, it's a target, the capital employed target over the cycle. But obviously, it implies also that these high-margin, accretive acquisitions that you made that are driving group earnings and perhaps a bit softer development on the organic base. But I'm just thinking, is this a discussion in the Board and in management how those -- the EBITA margin target and the capital employed target will tally going forward? And are you driving any specific initiatives to sort of improve the return on capital metrics for the coming one, two years?

No, I wouldn't say, Johan, that that's a specific concern or specific topic within the Board or management. I think we are quite content that we will come back to the 20% level within -- when the market is improving a little bit. I think our [ EBITDA ] levels will help out. And then we are continuing to operationally try to be more and more capital efficient and then drive the progress forward. I don't know, Patrik, if you have anything else too.

I mean, we, of course, recognize that it's lower now. And I mean, again, make a long story short, I think it's still dampened organic development, I would say, in the last year mainly that make it like that. But we are relatively sort of confident that we will manage to push up the organic development over time. A single year is nothing from our long-term perspective. And when that comes back, it will also improve the return on capital employed. So we feel relatively comfortable around that.

The next question comes from Marcus Develius from DNB.

Firstly, congrats on the one year of the new structure. It's great to see that it's progressing well. And I guess I'm going to continue on the Infrastructure & Construction area. So we have seen contingent consideration remeasurements increase in the past quarters. Can you maybe talk about this increase? And if you could, could you give some color on how much of the Q4 remeasurements explains the stronger EBITA in Infrastructure & Construction?

Well, I don't know if I understood you correctly then, but the revaluation of earnout does not impact Infra & Construction. That's sort of an impact only on group level. Infrastructure & Construction improvement, it is connected. Mostly they did a couple of good acquisitions, which are contributing, and we did a larger divestment beginning of last year that impacts a lot. And then -- which was right in the report, we did a smaller divestment in quarter 4, which helped slightly. And they are pushing on with cost reduction in a good way, I think. And that's also noted in the report that we actually did an acquisition of -- divestment also, beginning of '25, which is also in the Infra & Construction area. So they are doing a lot, which, yes, give them this sort of increase in the EBITA margin.

Did we understand your question right?

Yes, yes. That's perfect. And then a quick follow-up, would you say that the weakness are similar across all countries in construction specifically?

Yes, there might be some smaller differences, but it's quite generic, I would say, and broad over Western Europe.

And when you're talking to your companies, would you say that they're more optimistic now versus Q3, or is it similar?

I think both they and their customers more look towards summertime as a turning point than Q1 or Q2, sort of. And it's been so for some time. So that's still the perspective.

If you look at the sort of dailies or order dailies and try to understand the trend, I think we have sequentially been relatively flat on a lower level, you could say, than any Infra & Construction area. And the order intake was minus 9%, as I commented on earlier, but that relates mostly to tough references, a couple of projects in the end of 2023. If you look at the sequential journey, it is rather flat, not declining further.

The next question comes from Mats Liss from Kepler Cheuvreux.

Well, just a quick one here. You mentioned that the pipeline there for acquisitions remains strong. And the question is sort of, well, first, that your ambitions are a bit higher than the number of acquisitions you accomplished during 2024. Should we expect, well, an increase in the number of acquisitions? Or is this long-term target more about presenting the ambitions you have?

Yes. I have spoken about the medium-, long-term potential that we should be able to make one acquisition per segment. And we have 30 segments, so that will not materialize this year or next year. But hopefully, we will make more acquisitions this year than last year. So it will be hopefully trending upwards step by step. But to reach that level, we need some more years on the journey.

And secondly, I mean, you have these verticals now. Are there any differences? Where do you see more opportunities? Could you give some flavor there?

As I said, Life Science looks promising for 2025. I think also Process, Energy & Water have several segments, which are still promising, riding on the energy sector and green transformation and certain parts of process industries, which are good. There are also parts in other areas, like the Industrial & Engineering sector have certain aftermarket-related segments, which have had a good situation for some time now. And in the Technology & System Solutions sector, there are also pockets of increasing use of measurement instruments and sensors and things like that. We see a little bit more of a homeshoring or that large industrial groups transfer production from Asia to Europe or North America, which leads to opportunities for these types of companies. And I think the macroeconomics are trending positively. There are also underinvested water, wastewater areas basically in all of Western Europe, which is promising. And some investments have been delayed, deferred. And now when interest rates are coming down one step more here, I think they will probably materialize to a larger extent coming forward here. So now it's -- there are things balancing the little bit of the negative sentiment, I think. And perhaps the best reason of all is that we have 200-plus eager entrepreneurial MDs who are opportunity-oriented, customer-centric and agile standing on their toes. So I think we are trending towards better times.

[Operator Instructions] There are no more questions at this time, so I hand the conference back to the speakers for any closing comments.

Then we say thank you from us. Thanks for listening in, great questions, and we wish you a continued good day.