Ingersoll Rand Inc. (IR) Earnings Call Transcript & Summary

Good afternoon, everyone. This is Markus Mittermaier. I'm the UBS electrical equipment and multi-industry analyst. We're here on the home stretch on day 2 of our Virtual Global Industrials and Transportation Conference, and I'm delighted to welcome the team from Ingersoll Rand to this fireside chat. With us today are Vicente Reynal and Vikram Kini, VP of Investor Relations. Vicente, Vikram, thanks so much for taking time for us and joining us today. For those in the audience, the format is very similar to what we've done now for 1.5 days. So we'll have 40 minutes, and you can submit your questions on your screen on the new chat window. With that, I'll hand it over to Vicente for a few opening remarks, and then we'll go into Q&A. Thanks so much.

Yes. Thank you, Markus. Thank you, everyone, for joining and listening, and thank you for the interest. Clearly, Markus, I appreciate you inviting us to the conference. Great to be speaking to you. Great to be here. It's amazing that it's been now 3 months into the new company. And I think what is more amazing is that, I would say, really excited how our teams continue to operate and execute even in a very challenging and unprecedented times. And so I just want to start by saying -- putting out a big thank you to all of our teammates and employees, which they tend to listen to a lot of our calls because they have this kind of ownership mindset and they want to make sure that they continue to learn how our company is doing. So again, excited to be here. We're looking forward to our conversation here, Markus.

Great. Excellent. So maybe we can start it off with the near term here, sort of like trading update and what are the trends that you're seeing as we get through Q2 here following the earnings call and selected -- because of the outlook call you guys had, obviously, post the transaction. Let's start here, the key end markets, key geographies kind of trends. Where are we?

Sure, Markus. As we said on the call not too long ago, we mentioned that orders in April were down about 20%, but obviously positive in the sense that book-to-bill being greater than 1. So continue to build some good backlog. If I break it down by each of the respective segments, our largest segment, the industrial technology, very compelling how China and Asia Pacific continue to demonstrate some really strong rebound, very positive. We spoke before about whether some of that was pent-up demand versus sustaining, and we continue to watch that pretty carefully. But I'll say that our teams in China and Asia Pacific continue to execute kind of quite well. And in the U.S. and Europe, we expect to continue to see some continued improvement here just as China saw it. As we kind of saw this COVID-19 go through the world, started in China, then Europe and then the U.S., and we're kind of seeing the progressive improvement throughout the regions, similarly to kind of what we saw in China. The Precision and Scientific (sic) [ Precision and Science Technologies ] performing continues to -- in April, performed better than the down 20%. Some of that is due -- driven to the dynamic of the Medical business that is very nicely exposed to a lot of the uptick in demand based on medical devices for COVID. Specialty Vehicles, at the beginning of April, we spoke about that being down but in line with the overall company, but one that has continued to see some positive sequential improvement here through the month of April. And High Pressure Solutions down to -- a couple of reasons. Obviously, the market, where we believe that April is kind of that trough where a number of fleets out in the market is going to be the lowest point and hopefully see a better improvement from here. And when we look at May, May has been very consistent with our expectations. And as we look beyond second quarter, I would say, just like everyone here, we have limited visibility and kind of what -- the way, approach we're taking is we're planning for market conditions to be comparable to what we're seeing now. But we feel that the Ingersoll brand execution process, the IRX is the right tool helping our teams execute on their all economic conditions. Very happy to say that over the past 3 months, we added roughly 55 new impact daily management rooms, and these are kind of rooms where teams are executing the integration results in a virtual fashion. So we have not stopped any of this. And I think on the other hand, we found new ways and methods on how we can increase that efficiency on how we do things. So again, we're very focused on what we can -- with what we can control, which is integration, which is a lot of the key items that we're doing internally, while at the same time get very aggressive on demand generation, innovation with our R&D and some of the kind of enhanced commercial execution.

That's great as an overview. And so it sounds like the trend, if I may paraphrase, hopefully correctly, made sort of similar trajectory to April, but hopefully largely not so much restocking driven. But probably too early to tell in the sense of if that's real demand or classic sort of like swing back on restocking. Would that be a fair summary?

Yes. A fair summary with the only correction, I wouldn't call it restocking because we don't -- typically, our customers, they don't really kind of stock to the inventory. Call it more like pent-up demand, basically, but yes, exactly. Yes, that's right.

Yes. Okay. Great. So if I think about sort of the other side here on your supply chain, I mean -- I think you're kind of in a unique situation at the moment given that you're in the process of integrating the 2 supply chains from legacy Ingersoll Rand and Gardner Denver here. Does that help you in any way in the current environment? I mean, number one, in terms of, obviously, supply security or our supply chain is back to normal, and it's -- the focus here has maybe then shifted to really sort of like downsizing the number of suppliers. Is that an advantage at the moment that you're seeing from that front?

Yes, Markus. We believe so. I mean we believe that we have a pretty unique opportunity here, where we're able to leverage both supply chains to be very selective, not only on just purely some of the price savings that we can achieve, but really very -- be very focused on total cost of ownership. So basically include the price that we get, the freight, the payment terms, the lead times and really take some very good strategic partners in these times. So this has been very positive here during this pandemic from that perspective because we have seen -- like most of the companies, we have seen parts in the supply chain impacted over the last few months. And having a broader supply chain has allowed us to leverage other sources that each of the legacy companies would not have previously had access to. So I think it's a good positive outcome for us.

Okay. Great. Maybe one last one on sort of like current dynamics. I mean there's sort of like this debate around sort of like -- obviously, is April, May sort of like the worst quarter for some of the more short-cycle exposures? And at the same time, people are starting to wonder how does the second half look like with some of the longer backlog businesses. I mean you mentioned kind of book-to-bill still greater than one. But how would you think about the kind of health of that slightly longer cycle business that might sort of execute at some point in the second half or into 2021? How should we think about that at the moment, given people can't travel, can't sort of close deals? Is that a hindrance? Or how do you kind of run that part of the business?

Sure. Sure, Markus. What we saw here in the first quarter, comparatively, it was actually a bit more stable. We always have seen that, historically, we need to book these projects typically in Q1 and Q2 in order to be able to get them shipped here in the second half. And so far, it has been actually quite consistent to our expectations. If you remember, when we were at the end of 2019, we were seeing a lot of projects getting pushed out from kind of the later half of '19 into early 2020. And that's exactly what we saw. Just here, most recently, as we were kind of having the business reviews with the teams and in particular, in this business, the team, they don't talk about cancellations. I think in many cases, it's just more about retweaking of the projects that some of the customers are doing. We'll still have here another month for the second quarter to see where we finish with our expectations. But so far, the teams continue to do fairly well in terms of expectations of what we need to get booked in order to be able to realize the second half.

Okay. Great. Can I maybe bubble up a bit to the sort of like competitive landscape, sort of 30,000-foot perspective for a moment? If I look at the new combined entity now, right, so you're sort of like a $4.1 billion ITS business and probably around, call it, $2.5 billion on the compression side. So obviously, this is starting to become quite meaningful global platform in terms of product range, sizes that you offer and I think with your more sort of region-for-region approach versus some of your peers. I'm just wondering, have you seen a reaction from competitors and/or customers that's different to what you've seen before in Gardner Denver times? I'll start there and then have a couple of follow-up questions on that whole sort of change in that landscape, if I may.

Sure. Sure. I'll say, Markus, I mean nothing of note that we will point out at this time. I think it's important to know that in areas like the U.S., for example, where we have meaningful presence from both legacy companies, we're being incredibly and very mindful on keeping our go-to-market approach, which at this time we don't want to disrupt channel or market dynamics. And that is one where I think our strategy of multichannel, multibrand is working very well. I mean we continue to do some fine-tuning and fine-tweaking to make sure that we continue to increase the coverage. But from a competitive dynamic, nothing that -- of note that we should -- that we would like to -- that we will point at this time in terms of reaction based on what we have acquired here of the combined company.

Okay. Great. And maybe as a follow-up here, I know that you just had your sort of product summits in both North America and in Europe in recent weeks. So can you give us a sense for where you see the combined product offering sort of strengths, maybe areas of focus for innovation going forward? And then specifically on the compression side, how do you think about your positioning here versus the larger European peers in terms of both that product range and also efficiencies in the products that you have?

Yes. So Markus -- and I will add as well that most recently here, actually 1.5 weeks ago, I had the product summit review with the Asia Pacific team. So we now completed product reviews, the product summit virtually across the entire world. And I tell you, it's really exciting what the teams have been able to accomplish and do even in these times all virtually. And so again, great results. In terms of the compressor, I'll break it down by -- in the 2 big buckets, right, the oil lubricated and then the oil free. And when you think about the compressors in the oil lubricated, kind of the core compressor business, it's a great platform. It's one that we now have the full subset of the entire range. And when you think about it too as well, Gardner Denver, we were very focused on what I call the small to medium horsepower compressors while Ingersoll Rand focus on the entire spectrum, but more focused around the high and large compressors. And obviously, when I say focus, in terms of innovation, when I joined Gardner Denver in 2015, one of the big focus that we did was around efficiencies improvements and energy efficiency improvement. And what you see -- what the team at Ingersoll Rand has done also over the past 4, 5 years has also been very focused around efficiency. So when you -- one of the things that our team was doing during the product summit is kind of replotting, obviously, the full spectrum of products in what we call the isentropic efficiency range, which basically plugs the efficiency ranges across different horsepowers. And I think what is exciting to see is that on the kind of more larger horsepower compressors, which is particularly where customers really care about energy efficiency because obviously large horsepower compressor is the one that uses the more efficiency, I mean we have some pretty good competitive advantage across the spectrum of the large horsepower side of compressor. So I think it speaks very clearly in terms of what the teams have been able to do and very focused on what customers want, which is increased efficiency for certain ranges of horsepower compressors. And then obviously, I'll say, in the kind of medium range, very similar when you see the isentropic efficiency ranges of the compressors. On the oil free, this is also one that I'll say really exciting. When we were on the Gardner Denver, we spoke a lot about entering the market, one market which is a market that we were not kind of that big of an entrant. We did the same strategy. We entered more into kind of the small to medium oil-free compressors by launching kind of radically new technologies. We launched the Ultima oil-free compressor, which was basically the first oilless compressor. It doesn't have any gearbox. It's like direct drive from the motor to the air end, really small footprint and one that also increase the energy efficiency for that range of horsepower compressor amongst any other compressor that could be comparable in that type of space. We also launched a new line of scroll compressors. So again, very focused on small to medium. While now with the acquisition and integration of Ingersoll Rand, we get access -- together as both companies, we both get access to the large range of centrifugal oil-free compressors in addition to also the oil-free screw compressors that Ingersoll Rand has. So I think it's exciting that now we have a really well-positioned portfolio of oil-free across a range of horsepowers and kilowatts that we feel is really strong, where we're now, again, leveraging the multibrand, multichannel strategy to find ways on how do we capture a better market coverage in the market.

That's quite interesting. Thanks for the detail here. On the -- can I just -- on the high horsepower compressors where you said that you have that high efficiency offering, what are some of the sort of end market applications here for that? And what proportion of the overall business is that, maybe roughly?

Yes. So for the high horsepower in the oil lubricated, I mean it's -- I mean the beauty of the compressor market is that it is pretty wide range in terms of it's very diverse. I mean mostly it's kind of what we call generally industrial, and that has just a very wide spectrum of sub-end market applications. I think one of the things that -- so I mean it could be -- it ranges anywhere between -- I mean there's a lot of food and beverage applications as well. I mean although that is -- that will be kind of more moving towards the oil-free. But on the oil-lubricated large horsepower, on the oil-lubricated, it is most kind of this general industrial end market that is very broad, as you can imagine.

So we said innovation and sort of like that high-efficiency product. Does that also display those in pricing sort of now through the pandemic and the new contracts you're signing? Or is there -- how should we think about price pressure? Can you hold pricing or even expand it given that sort of increased efficiency? Or how should we think about that?

I mean we believe so. I think we -- one of the things that we even, here very recently, spoke about in the first quarter is how we're very focused on the quality of earnings. And you saw that, that industrial technology segment, which as you pointed out, out of the $4 billion, $2.5 billion is kind of the compressor side, we were still able to have a very low kind of decremental margin. And that in part is because when you look at the pricing power, we're still able to get pricing in the market. And as we continue to create differentiation, it is definitely something that we believe we can continue to get good pricing dynamics in the market. So yes, I mean -- I think we're -- we've always said that we will continue to be very focused on the quality of earnings. I think it's an area that we have great opportunity and one that we believe that as long as we're driving that differentiation, we should be able to drive a better price point.

Yes. Yes, interesting. So it's a great segue actually to my next question around sort of like IT&S and thinking through currently kind of just north of 20% adjusted EBITDA margins here. I mean where could this go sort of like on a -- dare I say, sort of like normalized margin level if you see growth again and if some of the cost actions that you've taken and the synergies are coming through here? So twofold question. One, obviously, a large part of the synergy seems to be coming out of IT&S. And then on top of that, it seems to me, from the outside at least, that the OE aftermarket split now is sort of like 60-40. If I look at old Ingersoll Rand or some of your peers, sort of like that was kind of 50 across the board for the compression business in terms of aftermarket. So how should I think about like where could these margins sort of through the cycle go, ballpark wise, assuming that maybe there's potentially an aftermarket and obviously, as we layer these synergies in?

Sure. Yes. I mean I think if you think about it, maybe a good way to look at it is kind of going back in history. Back in 2015, the industrial segment of Gardner Denver was in kind of that mid-teen EBITDA margin. And most recently, in 2019, we were able to expand that by 500 to 600 basis points. And we always said that even though we were kind of that low 20s, we still saw room to get to that. We had to target ourselves on the legacy Gardner Denver industrial segment to be in the mid-20s. So that's how much we saw that potential expansion close to almost 1,000 basis points that we could see of expansion. So now looking at the entire new piece, are we aspiring to get to that level? Absolutely. I think synergies is definitely one. As you pointed out, aftermarket is definitely another avenue here. If you think about that industrial segment on the Gardner Denver and how we expanded margins, we were still having 35% of aftermarket of the total segment, whereas here now, we have a much better blend of being already 40% and the legacy kind of Ingersoll Rand side has 50% aftermarket. So again, great mix of aftermarket now. And clearly, you also kind of wonder about the things that we're doing to improve that aftermarket margin, right, because now if we have a higher blend of aftermarket, how do we get that to be a much better margin? So I think we have multiple levers for margin expansion here. Synergies being one, aftermarket being the other one. Our prudency and focus that we have on the quality of earnings, I will say that -- I'll tell you also that innovation and how we're leveraging these Innovate 2 Value or I2V, which is really focused on gross margin expansion, should be another lever. So I think we have multiple levers for growth on our margin expansion here. And we aspire to see -- to kind of get that line of sight to the mid-20s for sure. And even once we get closer to that, we'll raise that target again. So I think it's just one of those that we see a very good continued momentum based on what we have done in the past and based on what we see in terms of similarities of this business now combined to what we did in the past.

Great. No, that's helpful, the direction of travel here. Great. And if I come back to the synergies, what I think -- what you've said on the earnings call is $250 million was the original target, obviously, on 2019 volumes. And you increased that funnel on the upside sort of like to $350 million, right, on -- I guess probably a lot in procurement would be my guess. How are you managing this now like in that largely remote work environment, right, sort of both on the suppliers and the overall integration to make sure that, that stays on track? And then if we assume that at some point, I mean dare I say growth comes back, right, and we get back to sort of like that '19 volume, what's your level of confidence on that incremental $100 million upside here?

Yes. First of all, on the remoteness, I mean this is -- I think that our IRX and, in particular, this impact daily management tool that we have has been incredible help. Every week, we have a very good rhythm that every week, for 40 minutes I review with the team, with the procurement team in this case, on how they're doing against the RFQs and RFPs that we've launched on day 1. And the progress has just been outstanding by that team, not only on executing the RFPs but also on the selection of the suppliers and also obtaining the quick wins. And so I think that process is working really well. And even though we do it on a remote basis, still the sample of the product goes to the factory, and. Then we have a team in the factory that kind of does inspection points and all that. So I think that, that process is working really well. On the $100 million incremental, I mean that is where we have built the funnel, and we see a lot of opportunities to execute. We're being prudent right now in terms of saying the $250 million, still sticking to the $250 million. And primarily based on what you just said there that the original $250 million was based on 2019 volumes, volumes are lower now. But still with that, we're saying we're still going to hold to that $250 million by doing more structural cost actions as we just executed the acceleration of that. And I think as we kind of move forward here in the second half, and we see that better volume stability and also potential increases, then we'll probably get more confident on raising that funnel -- sorry, the total target.

The total target, okay. Okay. Great. Okay. So a couple of questions that I get here are your thoughts sort of like on M&A, inorganic growth, sort of where priorities here. And then maybe let me make that question a bit broader and say, okay, overall capital allocation, right? So it's between different sources, add-ons, sort of more internal investment in R&D. Sort of where do you see R&D budgets go through the cycle? I think that would be great if you can elaborate on that.

Yes. So on the M&A, first of all, Markus, yes. I mean our main focus is continuing to build in the funnel in terms of finding very strong niche businesses, which we will characterize as bolt-on. Our main priority is on the Precision and Science Technologies segment where kind of when you think about it, I mean we have now a segment that is more than $800 million of specialty pump platform with some pretty good, high EBITDA margin that we see a lot of areas for future growth, particularly on this bolt-on side that we have done quite well even when GD, Gardner Denver became public. In terms of the internal, I mean R&D, even in this downturn, this is the time that -- again, if I go back to the '15, '16 playbook, that was the time that we basically kept the same investment and then reprioritized and doubled down on those critical improvement priorities or improvement innovation. And then the cadence of our innovation just accelerated. And that's why every quarter on the earnings call, we can talk about a new product that we have launched and also executed and the wins that we have on that. And so the same thing we're -- the same thing here we're doing now. I mean R&D, same as historic levels but in a more efficient manner, like the way we did it back on the Gardner Denver side back in the last downturn. And the balance of the capital allocation, very comparable to what we have historically done. Internal investments, M&A, some debt payment down. And I think we're going to be very prudent to follow the same playbook.

Great. So it's more sort of like keeping the R&D dollars constant rather than sort of like managing just specific sort of R&D to sales ratio? Is -- would that be fair? Or...

Yes, exactly. Exactly, yes. So keep the absolute dollars the same, even with revenue down, so that we can then reprioritize and then focus on high-return investments. It's something that we do internally really well that -- we had some pretty good processes that we implemented across ensuring that we get these good ROIC on the investments that we're making internally.

Yes, yes, yes. Okay. Okay. Another one I got here is sort of like around Club Car. What do you think the profitability is here in the long term? And how do you view that strategically? I mean I guess I'm not the first one who asked that question, but how do you think about that one?

Yes. I think Club Car, our Specialty Vehicle, what we see there is that we see that it can continue to be that normalized rate of 14% EBITDA, which is kind of what you saw -- what you see on the performance back in '18 and '19. We can easily get there. And I think what the team has done really well is really make some good investments for accelerating the growth. And what is really good here is that the growth and the new initiatives is really diversifying the gross margin profile. So obviously, the team has been very focused on consumer applications, on connectivity, which is really software as well as accessories, which -- these 3 are a much higher gross margin by a lot compared to what the historically golf business has been on that side of the business. So I think as we continue to get the team very focused on executing, the team is doing a fantastic job, leveraging already the IRX tools to be very focused on key critical priorities. I think it's going to continue to improve the margin from here. But in terms of the long-term strategic question, I think, Markus -- I mean this is one that I think right now, we're very focused on integration. We're very focused on creating the culture. The team has been -- in the Specialty Vehicles has been very, very receptive to the simplicity on how we drive the business. The team in Augusta, Georgia is very, very unique. And I think it's one that will definitely perform really well, and we're excited to have them part of the family. And I think as time progresses, and we'll just contemplate if there's a better way to accelerate the strategic path of that business.

Can I come back to the specialty pumps business that you flagged earlier as one that's definitely interesting here to grow? Medical obviously is a big, big part of this. How has that done? I mean I guess that's probably a near-term sort of like growth segment. Can you size that for us? And is that sort of like within the end markets, the key one that you're looking at? Or what are the attractive areas here in particular?

Yes. I mean I think in general, the market -- the Medical business within the Precision and Science is the most resilient business that we have in the portfolio. It's generally -- and that is generally what you have seen in the first quarter and into April. Clearly, the nature of the pandemic is leading to some outsized order growth due to the need of the product that we sell to support applications like respirators, medical diagnostic equipment, life and life science-oriented devices. But we're seeing the larger frame orders that is building the backlog that we think we'll carry here into the second half of the year. It is about 1/3 of the total revenue of the Precision and Science segment. So it's kind of good, meaningful there. We were just confidentially doing a review of -- with the team this morning. And I think it's just exciting that even though they've seen some very good, solid momentum, they're already focused on the next niche end markets that they believe they can actually utilize some of the technology that they have. So I think it's just that continuous flywheel that once the team is going, it just generates more and more momentum. And not only on the growth, but you have seen historically how this business improved the margin profitability. And in 2019, they finished the Medical business, it was like a 30% EBITDA margin compared to back in 2015, it was probably in the low to kind of mid-20s.

Interesting. Okay. I'm just watching the time here a little bit, but I have one sort of more topic area here that comes up in terms of questions. On your footprint, right, so if we think about that, on the one hand, I guess you're sort of more spread out production footprint versus maybe some of your peers, right? You could see that as a source of potential cost out on the one hand. But on the other hand, this debate around reshoring, local for local, where do you come out at the moment on this debate? I mean is this whole reshoring theme really having legs in your view and in also your customer conversations, quite frankly, downstream? And then how do you think about sort of that potential for, on the one hand, maybe rationalization potential but on the other hand, being really local in that production footprint?

Yes. So I -- our strategy has always been to be in the region, for the region and that served -- has served us very well because we are very close to the customer. And obviously, as you see a lot of the geopolitical environment situations and whether buy more from the region or buy more from the country, I mean we're very well positioned from that perspective. I think in terms of -- even in some of the countries, I mean there's still opportunities for us to rationalize some footprint. I can tell you that when you look at the -- what we were able to achieve with the Gardner Denver margin expansion in the prior years, we did a lot of that with no major footprint rationalization. So we always saw that as the next lever of potential improvement here. And we see the same thing here. I mean, yes, there's some footprint that we can do, but not that we're going to do on a radical way to move away from our strategy because we still believe that in the region for the region, it's a long-term strategy that can be a competitive advantage for us and be very, very close to the customer, always trying to serve that customer with that kind of unique, local innovation that needs to be made and at the same time be able to improve that total cost of ownership to the customer, the same way that we view it with our suppliers, right? We want our suppliers to deliver that total cost of ownership, which is price, lead time, serviceability and so on. And we want to be able to provide that to our customers. And we find that a better way of doing that is being localized to the customer.

Okay. Okay. Not -- very helpful. I want to make sure that we also talk briefly about sort of like 2Q free cash flow and sort of like free cash flow for the remainder of the year. If I can just recap, so I think we have $100 million in stand-up costs that you talked about for the new company. We have onetime cost of $350 million to achieve the cost synergies. How should we layer this in here in Q2 and the rest of the year? I think in Q1, you already had $38 million between the 2 buckets that I've just mentioned in the numbers and an additional, I think, $25 million or thereabouts on transaction cost. But how would you guide us for free cash flow in Q2 and rest of the year and then layering in those costs here?

Yes. I think the way to think about it simplistically is that you're absolutely right. I mean I think in Q1, we saw about $60 million, roughly, cash out the door. What we see here between Q2, Q3 and Q4, it's a total of maybe another about $100 million between the Q2, Q3 and Q4. And that will be the combination of some stand-up as well as the restructuring. But that's kind of what we're seeing here. Yes.

Okay. Okay. So let's fast forward a year. If we meet again in a year's time, hopefully then in person, what do you hope to have accomplished, sort of like 1 year in running this -- or 1 year and 3 months it will be then basically, running this sort of like larger enterprise here?

Yes. So I think, clearly, a very big focus that we're driving is creating this kind of one company, one culture. And to be honest, the pandemic situation has actually accelerated a lot of the cohesiveness and the teams getting highly connected because if you think about it, I mean the sensitivity on how we communicate now has increased dramatically, at least in our company. So the touch points that we do -- that I do with employees, whether the weekly communication, the town hall meetings that we perform and all the touch points that we do with employees has really increased how we're touching our employees and not only just to communicate but also to reinforce and drive our vision, our values and our -- and the culture of execution that we want to be known for. And that is really working very well. So I think a year and 3 months from now, when we get it together again, in person as you say, Markus, I would love to talk about the exciting things that have continued to occur around the culture creation that we're driving. I think the second point will be around celebrating the synergy execution and obviously celebrating how the team has been able to outpace and achieve and meet and exceed the goals that were set out to be. And the third point that I think will be very exciting to talk about which, as we have spoken, we added this kind of strategic imperative around sustainability, which is a core element of our strategy now. So I think I would love to be able to talk, and I'm sure, based on how the teams are executing so far, we'll be able to talk about that we're very well on our way on this journey of being recognized as we have this aspirational goal as one of the top ESG companies in our segment. So I think those 3, kind of the one culture, one company, execution of synergies; and b, starting to get recognized as top quartile of ESG companies based on what we're doing and what we're executing on that regards around sustainability, I think those 3 will be great touch points to come back with.

Excellent. That was a great way to end the session. I wrote them down, and we'll be sure that we'll discuss them in a year's time.

Absolutely, Markus. We'll do.

Thank you both very much for taking the time. I know it's a busy, busy period here for you for many reasons. So I really appreciate you joining us. And I also thank everybody in the audience. Thank you very much.

Yes. Thank you. Thank you, Markus. Thank you for setting this up, this conference. Really, well done. Thank you.

Yes. Bye-bye.

Bye-bye.