Investor AB (publ) (INVEA) Earnings Call Transcript & Summary

Warm welcome to the Investor's Q4 and year-end webcast. As usual, CEO, Johan Forssell and CFO, Helena Saxon will take us through the quarter in their presentations, which will be followed then by a Q&A session, where you have the opportunity to ask questions either via the operator or via the web. But without further ado, over to you, Johan.

Thank you, Jacob, and warmly welcome to this conference call. Let me see if this is working. Put it on. Okay. Here we go. 2023 was a strong year for Investor. Our adjusted net asset value reached an all-new-time-high, and we passed the SEK 800 billion mark for the first time. We had a strong total shareholder return of 26%, and this was actually the 13th consecutive year where we beat the stock market. Also listed companies outperformed the stock market during the year and we saw strong sales and profit growth within Patricia Industries. And when it comes to EQT, despite the tough fundraising market, they reached the fund size target for EQT X to EUR 20 billion. And now when we enter 2024, we are doing that with a very strong financial position at the Investor. And that also gives the opportunity for us to continue our dividend policy to steadily -- with a steadily rising dividend with an increase for SEK 4.40 to SEK 4.80 per share. Moving then into the figures. In the fourth quarter, our net asset value was up 8%. The TSR was up 12%, which can be compared with the Swedish stock market being up 14%. For the full year, our net asset value was up 24%. Our TSR was up 26% compared to the stock market being up 19%. Moving then over to the different business areas and starting with the listed companies that represent close to 70% of our net asset value. Here, you can see that the TSR in the quarter was up 9% compared to the market, 14%. And in the Swedish stock market, we saw in the fourth quarter that it was mainly the interest rate sensitive stocks that had a rather like real estate. But for the full year, the listed companies had a very strong year being up 25% compared to the stock market of '19. A couple of highlights during the quarter. Epiroc announced the acquisition of Stanley Infrastructure. This is USD 760 million deal. This is a very attractive opportunity for Epiroc. It will give them a leading position within attachments. And it also gives Epiroc a very strong dealer network in the important U.S. market. And finally, the company also got a number of very strong brands globally, like the one you see on the picture, which is Levante, which is the leading player within cheers. Electrolux Professional announced acquisition of Tosei in Japan, mainly operating within the professional laundry, but also have some operations within food preparation. If you look on the professional laundry market, Japan is actually the second largest market in the world. And this will significantly improve the market position for Electrolux Professional. Also this for them, a very sizable acquisition, a little bit more than SEK 1.6 billion deal. And the company, the acquirer has revenues of about SEK 1 billion with profitability above the level in Electrolux Professional. Ericsson entered a very important contract with AT&T, Open RAN 5G contract. This is a contract of about USD 14 billion over a 5-year period. A great testimony of Ericsson's strong technology offerings to the customers. And finally, Mats Rahmström has decided to leave, as you know, Atlas Copco after 35 years, very successful 35 years, not the least the last 7 years as CEO. The Board has now appointed Vagner Rego to become the new CEO of Atlas Copco, and I think that's an excellent choice. He has a very strong track record in Compressor Technique, which has grown at a very good pace with high profitability, is a very strong people leader, also with very good technology knowledge. Moving then over to Patricia Industries, which is just about 20% of our net asset value. In the quarter, the TSR was down about 1%. As you can see here, actually, the earnings and cash flow was very strong. We had an earnings growth of just about 20%. And since we use the 4 quarters rolling, that will give call it another 5% value increase. In addition to that, the strong cash flow. Those combined gave a positive impact of about 6% to the value in the quarter. That increase has, however, been mitigated by the strengthening of the Swedish krona versus the U.S. dollar and the euro that took away 4%. And then we also had a multiple contraction of about 2% to 3%. So that gives the slightly less than minus 1% development in the quarter. As you can see, though, for the full year, the return was very strong at 24%, mainly driven by a very strong earnings increase. Given the stock market development in the fourth quarter, it might seem a little bit strange that we have a multiple contraction of 2% to 3%. So let me just give you the explanation for it. When we value our unlisted assets within Patricia, we take the 3 months rolling market values of their peers. And then we put the value of the companies in relation to last 12 months earnings. That's the method already we use. And as you can see here, we have exemplified it with the Swedish stock market that was a sharp rally not the least in the latter part of the fourth quarter. So this upturn in the stock market and also among our peer groups have not yet been reflected in the valuation of Patricia. That all else equal, should, of course, come back in the coming quarter. I should say when we look on all the different peer groups we have, we see a similar pattern as the Swedish stock market, even though the volatility is somewhat lower, but the pattern is the same. If we then move over to the more important part, which is the operational performance, the fourth quarter was very strong, with an organic sales growth of 8% for Patricia and a profit growth of 22%. And you can also see here that the full year result was very strong with a sales growth of 16%, of which 9% organic, and a profit growth of 26%. In the quarter, we closed a very important deal Urotronic, which we believe gives Laborie a very strong growth opportunity for the future. And also due to the strong cash flow generation in Molnlycke they actually have a cash conversion of close to 130% in the quarter. Molnlycke could distribute EUR 300 million to Patricia or about SEK 3.4 billion. And here, you can see the long-term development. Patricia is now running at close to SEK 63 billion in revenues and an EBITDA of SEK 15.2 billion. If I then go into the companies, as you can see here, it was a broad-based growth in the quarter, 8 out of 9 subsidiaries actually had organic growth. The one exception is Atlas Antibodies, which is, as you know, our smallest subsidiary that was down 18% in the quarter. And the reason is it continues to be negatively affected by small biotech companies at the moment have some challenges when it comes to financing, especially in the U.S. market. And the dramatic drop in top line for Atlas Antibodies, of course, have affected the profitability. But as you can see, even after the significant drops in the top line, they are still running at a profit margin of close to 30%. And of course, one of the reasons for it is that the company has taken quite some cost initiatives to adjust to the lower demand level. Mölnlycke, I will come back to later. If I then make 2 comments on this slide. Starting with Advanced Instruments, it's very good to see that this is actually the second consecutive quarter with double-digit organic growth. In the quarter, as you see, they grew 14% organically, and we had a very good margin expansion in the quarter. The reason for the strong margin development, of course, is operating leverage. Second, the cost efficiency measures that they have taken during the quarter and also in the previous quarter, actually. And then finally, in the quarter, we saw that the instrument sales were more or less flat. While we saw a very sharp increase in consumables and service, and they have higher margins. You also had a positive mix effect in the quarter. Then my second comment I want to make is Laborie. Laborie is developing really good, organic growth of 7%, broad-based growth in the quarter. You can see that the profit margin is down quite a lot in the quarter. The main reason is just transaction costs related to the acquisition of Urotronic, as you know, we fully load our P&Ls with these kind of costs. But even if we adjust for the transaction costs for Urotronic, you can see that the margin is down some 3%, 4% compared to last year. And the reason for that is that we are investing heavily now behind the Optilume BPH product and we are investing in the commercial organization, both marketing and sales and also supporting physician when it comes to reimbursement questions. So we are investing. And this will continue going into the first quarter. So we will continue now to invest heavily behind this product. And gradually, of course, when revenues take off, we will see the positive impact coming through. I should say that when we look on the Optilume urethral strictures product that we bought earlier that is having a really strong development. And actually, the development is above our investment case when we bought it. So we are very optimistic and positive to these acquisitions. Moving then over to Molnlycke. In the quarter, the organic growth was 9%, and the profit margin increased significantly compared to last year. But as you know, last year's fourth quarter was a weak margin quarter based mainly for 2 reasons. First of all, there were production disturbances in the U.S. plant for Wound Care in Maine, and secondly, there was a customer care organization, reorganization in Europe. If we look more on the underlying margin, it was supported by volume growth and also lower logistic costs but mitigated by a slight negative currency impact in the quarter. As I mentioned before, the cash conversion was super strong and Molnlycke thereby distributed EUR 300 million. If we look on the development within Wound Care, it was, as I said, a broad-based growth of 9%. Many regions had really strong growth. If you look on Europe, you had a strong growth in France, Germany, Latin America had high growth. China had high growth. All these regions actually grew about 10% in the quarter. If we look on the ORS business, the organic growth was strong at 11%, driven by growth both with volume, price and mix. And once again, it was the Trays category, that was the main driver. When it comes to Gloves, we now turn to slight positive growth in the quarter, and that is a mix of 2 things. First of all, the distributor inventory situation has now normalized, which, of course, is a positive. On the other hand, the U.S. market remains soft for these products. And finally, we have a strong growth of antiseptics, more than 30%, as you can see. And the key reason is that we now have a much better supply situation. Moving then over to EQT. EQT had a total return of 16% in the quarter, and that was driven by EQT AB, as you can see. The net cash flow was SEK 1.2 billion. And if we take the corresponding figure for the full year, you can see a similar picture with a total return of 17%, mainly driven then by EQT AB and for the full year, the cash flow was close to 0. What are then the priorities going into this year? First of all, of course, navigate the current market environment. There has been a number of improvements during last year. For example, the supply chain, clearly eased in '23 compared to '22. We are seeing inflation coming down, which has led to lower market interest rates. But of course, there are also a number of challenges out there. We know all about the unfortunate wars, both in the Middle East and Ukraine, we have the geopolitical situation, not the least between China and the U.S. And we have 2 large economies in the world, China and Germany that currently have a quite tough development. And finally, of course, as we have seen, the consumer is still under pressure. So we are prepared. I think the good part is that we are entering 2024 from a position of strength into it, and we are ready to act. Of course, we don't have a crystal ball what will happen with the macroeconomy, but we are ready, I hope to be able to navigate in this environment. What is important is that we will continue to invest and future-proof our companies to drive long-term growth. And I talked about Laborie before, and I think that's an excellent example where you invest for the future. And our financial strength is we have a super strong balance sheet entering this year. So last slide then, we will continue our relentless focus on driving value creation. We have a proven business model and a clear strategic direction. I think we have an excellent portfolio of industry leaders with strong profitability and high cash flow generation that are exposed to many good secular growth trends, as you saw within the presentation of Patricia Industries, for example. And finally, a strong balance sheet and good cash flow. So that is a good starting point entering 2024. And with that, I hand over to Helena.

Thank you, Johan. Then let's move to my part of the presentation and looking at growth of net asset value over a few years here, we can see that we landed the quarter at an all-time high, SEK 818 billion, which is the first time we are over SEK 800 billion. So that's, of course, very satisfying. And if you look at the annual growth over the last 5 years, it's 19% with dividend added back comparing to 15% of 6 [ rx ]. Looking into the total return by business area, we can see that in the quarter, it was a mixed picture where listed companies was up 9%, Patricia rather flat, minus 1%, and investments in EQT up 16%, which gives a total of 8% for Investor in the fourth quarter. If you look at the full year on the right-hand side here, you can see that all business areas developed better. So listed companies was up as much as 25%, Patricia 24%; investments in EQT, 17%. And for Investor as a whole, for the full year, this equals 24%. Looking more closely at the listed portfolio here by company, we can see that the total shareholder return was positive for almost all of the companies in the portfolio, Wärtsilä and Saab developing the best over the full year. And looking on the right-hand side, we can see the total contribution in absolute terms. And we can see here that the largest companies, Atlas Copco and ABB, of course contributed the most, but SEB, Saab, Sobi and Wärtsilä also added to -- or contributed to the net asset value in the year. Moving over to Patricia Industries market development -- market value development in the quarter, Johan also already mentioned a flat development, but it's actually a combination of 2 different forces. You see EBITDA and cash flow developing really well for the portfolio, while currency and multiple contraction had a negative impact ending the quarter at SEK 183.6 billion. Breaking this sequential market value development down by company. We can see that Molnlycke and Piab contributed positively to the development while the other subsidiaries had headwinds from FX and multiples, and we can see that Molnlycke distributed SEK 3.4 billion to Patricia in the quarter and Laborie received the capital injection of SEK 2.5 billion to support the acquisition of the remaining 91% of Urotronic in the quarter. Moving over to the financials. Johan mentioned the strong balance sheet. And here, we can see that our leverage is at the lower end of our target range below 2% of 1.7%. And in addition to our strong balance sheet, we also have a very strong cash flow generation. On this slide, we have shown before, not the least at the Capital Markets Day, but now updated with 2023. We can see that since 2015 when Patricia was established, our companies and our platforms have generated as much as SEK 165 billion. And a lot of that, of course, a majority comes from the listed portfolio in terms of dividends, but we've also had significant contribution to the cash flow generation from Patricia Industries and our investments in EQT. So then, what have we used this capital for? Well, we have distributed half of it to our shareholders. We have invested in 6 subsidiaries in Patricia Industries, and we've also invested in selected listed names. During this period, our leverage has decreased from 7% to 2%. Talking about dividends, it was today announced that the Investor Board proposes a dividend of SEK 4.8 to the shareholders, and this will be paid in 2 installments; SEK 3.6 per share in May and SEK 1.2 per share in November. And this equals a 4% increase in dividend from SEK 4.40 last year to SEK 4.80 -- 9%. Did I say something else? Sorry. So 9% is the increase from SEK 4.40 to SEK 4.80, but it's also the average annual growth on this page. And the final graph here shows our return over the short and the long term. And we can see that we have not only beaten our own internal return requirement, which is the dotted line on this page, but we've also managed to beat the stock market for all of these periods. And let me then end this presentation with our purpose. We create value for people and society by building strong and sustainable businesses. Over to you, Jacob.

Thank you very much, Helena. Thank you, Johan. I think it's now time to open up for questions through our operator, Sandra, over to you.

[Operator Instructions] We will now take the first question coming from the line of David Johansson from Nordea Markets.

I have 2. I may have some problems with the line here. But starting off with a question on Mölnlycke. It's good to see organic growth coming in strong here. But to me, the margin still looks a bit on the software side. So other than currency, would you say this is also a mix factor with the stronger performance in Operating Room Solutions? And also on materials and sourcing, would you say costs have stabilized now at a higher level? Or do you see this more as coming down as we enter 2024? That would be the first one.

If I start from the latter part, we have clearly seen the logistics cost coming down. Going forward, I can actually not comment on that because there are so many different factors that could affect that. When it comes to the profit margin in the quarter, as I said, one part, of course, is a slight negative currency impact. But more importantly is that we are investing heavily behind a number of the important products in the company. Of course, we are growing strongly with 9% and to achieve that we are investing in the company. So the biggest value creation we see is to continue to try to grow as fast as possible and the profitability is very good. Then, of course, there is a fact that ORS grew a little bit higher than Wound Care and of course, the margin is much lower in ORS compared to Wound Care. But the main reason I would say is that we are investing.

Very clear. And then my second question then, looking at Advanced Instruments, you still mentioned flat instrument sales, but obviously, very strong delivery, looking at consumable sales. Could you comment a bit on the underlying drivers in the quarter? And would you say this is primarily driven by the B Pharma bioprocessing division or more on the clinical and food and beverage side?

If you look on the instrument sales, that was actually quite flat also if you look on the biopharma side. So the biggest difference we see in the quarter is instrument sales versus consumables and service. And just to remind you that roughly in Advanced Instruments out of the total sales, about 30% of the revenue are instruments and about 70% of the business is consumables and services. So I think those are the comments to make on that.

Okay. And then also, if I may, on the Urotronic acquisition in Laborie’ and maybe you mentioned this previously in the call, but if you could say a bit on the -- comment a bit on the organic growth and maybe the margin profile for this business in relation to Laborie’, that would be helpful. That's all.

If you look on the quarter, we -- Laborie’ had an organic growth of 7%. And if we look on -- if I start, if we look on the urology business, the GI business, and the obstetrics business, they were more or less the same, very close to the 7%. So there was no big difference in that dimension. If we then digest the urology business, Optilume for urethral stricture was growing dramatically, had a very strong, of course, from a low base, but it's having a really good takeoff. On the negative side, we have capital equipment within the Urodynamics that were down in the quarter. And then, you have the consumer business service within Urodynamics that was up somewhat in the quarter. So that is the mix. If you look on the profitability for Optilume, it is a product with very high gross margins, but we are investing heavily to grow it. So once we are up and running on this, this should be a highly profitable product.

That was all for me.

We will now take the next question coming from the line of Linus Sigurdson from DNB Markets.

Okay. Thank you. So would you say that you're still more searching for a new industrial subsidiary for Patricia or more sort of inclined to do more bolt-ons? Like has there been any change in how you view that trade-off?

No, there is no change in that. We are looking for -- we continue to have a very strong pipeline on add-on acquisitions. And hopefully, some of this will be closed this year. And in addition to that, we are looking to new platforms in industrial technology, but also in Medtech area.

Okay. And then my second and last question. You raised your dividend perhaps a little bit more than the market expected, at least. And sort of in the light of your conservative leverage profile could the market expect a higher baseline for dividends going forward?

I think, we are highly committed to our dividend policy to pay a steadily rising dividend. And we have delivered on that for many years. Of course, the exception is when the pandemic broke out, but that was a very special situation, as we all know. The exact amount of the dividend will be a judgment from year-to-year. So -- but we are very committed to continue the steadily rising dividend. And we have the cash free generation that supports it.

We will now take the next question coming from the line of Derek Laliberte from ABG Sundal Collier.

I want to say first, apologies if my questions have already been answered in before here, but having some fairly big problems with the telephone connection here. So first off, I'd like to ask on Laborie, excluding the transaction costs there, looking at the margin decline, would you say is this basically only because of the commercial investments relating to Optilume or can you share some thoughts on that?

Yes. The transaction cost affected the margin by about 7% in the quarter. And the remaining drop of 3%, 4% is mainly related to the investments we are doing behind Optilume.

Okay. And I'd like to ask on Molnlycke also on a more general basis, if you could share some color on what your thoughts are on the sort of addressable market for the Advanced Wound Care products and from your view, what is Molnlycke's market share? And in addition to that, also I wonder if you could share your thoughts on the -- we saw this acquisition a while ago now by Coloplast and the -- of Kerecis and what are your thoughts around the sort of biological ingredients and how important sort of we're getting into that area more for Molnlycke will be for -- to continue to compete in the most advanced segment of the Wound Care market?

If I start from the bottom here, of course, that was a niche product and Molnlycke is continuously looking for opportunities in the areas that they believe fit with them. And more than that, of course, it should be a question for Stratco and the team. When it comes to the addressable market, I don't want to give market share figures. I can just conclude that if we look on the development over the last 3-year period, Molnlycke Wound Care have taken market share compared to the other players. When you talk about the addressable market, we should also recognize that it's always the case that there are different definitions of that. So I think the important part for us is to make sure that we develop the products within the company, that we are in the forefront of innovation and that we have a commercial organization that can continue to grab market share from the ones we are competing, with that is the focus.

Okay. Great. I agree on the definition is a bit tricky and come up with different figures. And finally, on Advanced Instruments, a follow-up and that you mentioned the 70% of sales being that was at services and consumables. When I look at, there are some figures out there pointing to 4% roughly market growth. I suppose that relates to only the market for osmometers, et cetera. But what's your view on the growth potential for the company, what's sustainable in the coming years?

Advanced Instruments, I can only say that our medium- and long-term expectation when it comes to growth is higher than the 4% you mentioned.

[Operator Instructions] We will now take the next question coming from the line of Oskar Lindstrom from Danske Bank.

Yes. Two questions from my side left. The first one is on Molnlycke organic growth. And I think maybe you've touched a little bit on it in your answers here earlier. It was a little bit difficult to hear. You've had quite sort of -- in general, you've had a higher organic growth since the end of the pandemic compared to what you had before the pandemic. Is this a structural shift? Or is there -- is it just sort of catch up to lost sales during the pandemic? That's my first question.

I think there are so many different moving pieces into this. It's a very difficult Oskar to answer your question, to be honest. And as I said before, we will try to develop these companies in the best way we can, and we are working intensively of bringing for our new products, the whole time and building the commercial organization, and we have a high focus on growth from our side, because that's the best way to create value in this company, of course, with continued efficiency. So I cannot actually give you an answer to the different pieces because it's complex, and it depends on what regions we talk about also and products.

All right. And then my second question is on FX exposure. I mean, we can pretty much figure out what the translation exposure is. But what about the transaction exposure? Is that a number that you can give us for Patricia.

I don't have that in the whole Patricia. But of course, many of the -- if you look on the bridges in terms of value this quarter, you will see that most of the U.S. companies have done more and I think if you compare the U.S. dollar rate from the end of September to the end of December, I think the U.S. dollar was down some 7% or so and we ended the year at a SEK, U.S. dollar rate of just above 10%. So it's clear that it is a translation effect. If you look on that part, if you look on many of the medtech companies in the U.S. that we have the majority of the sales even though they are global, of course, but the majority of the sales in many of them like the Labories, Advanced Instruments and BraunAbility, the majority of the sales are in the U.S. So that is, of course, a transaction, but the majority is translation here. If you look on a company like Molnlycke, they have a plant in the U.S. on the Wound Care side. But the -- so that is, of course, extremely important than that they have that plant in Maine, but they are also exporting from the plant in Finland in Mikkeli to the U.S. that is one example where you have the transaction effect. And then you have companies like Piab, global industrial company that also have an exposure, of course, selling around the world. So it's a mixed picture.

We will now take the next question from the line of Johan Sjoberg from Kepler.

And my question is also around Molnlycke. Sorry to bore you to bet on that one. But so I would like to hear a little bit more about the Wound Care business also, the 9%. It's -- 2022 year is a bit of a tricky year in sort of to interpret organic growth, a lot of volume, but especially a lot of price in that. I'd just like to hear I'm sure I'm not going to get a figure on how much is price, but I would like to hear a little bit about the price component in 2024. How you see that? Do you see that sort of fading now or are we still going to see some impact from that in that? My second question is also here a little bit upon the sort of the untapped possibilities for Wound Care to grow especially in Asia, which I know has been sort of the new facility in Malaysia and hear a little bit about your thoughts here and how that is going to drive business?

If you look on the price component, I will not comment on how we develop going forward because it's a competitive landscape and there are many different questions that the management team will address in the best possible way. What I can say is that if you look on the development, the growth that we are reporting within Molnlycke, the by far biggest and most important part is volume growth. There is one exception to that, and that is within ORS, where you also have a sizable price component. And when it comes to Asia, Molnlycke is at the moment, investing in a new plant outside Shanghai. And China is a very important growth market for Molnlycke and if I look in the quarter, I think I mentioned it earlier, if you look on Wound Care alone, the growth in China in the quarter was about 20%.

That's fantastic. Also, I would like to hear a little bit also about the product innovation. I know that this is something which I have been talking a lot about not just Molnlycke, but in all companies over the years that you have been CEO, Johan. I would like to hear a little bit on especially in Molnlycke to sort of get some sort of KPI for that shadow revenues coming from products launched in the last year or 2 years or whatever, just to get a feeling for somehow what sort of product innovation pace you have in Molnlycke, if that's possible.

I think, I'm looking at Magnus here, and we will take that question with us. And in the coming year or here, we normally or normally sometimes we bring in the CEOs of our companies to participate in these quarterly calls. And next time, Stratco will participate, we will bring that question with us. I think it's more a question for him to go on to answer them.

Thank you. There are no further questions on the telephone. I would like to hand back over to Jacob for any webcast questions.

Thank you very much, Sandra. We'll turn to the question that has come in online and start with 1 from Samarth Agrawal from Citi. He has 2 questions. Do you see higher deployment potentially in 2024, given your strong financial position and a more constructive macroeconomic outlook? That's the first one.

I cannot give you an answer on that because we will hit the deals that we believe are value created and as I said, we are working on capital of them at the moment, but it takes [ two to tango. ] So let's see which ones that go through.

Secondly, a follow-up on the outlook comments. It would be great to understand your thoughts around investors' portfolio exposure in the context of the recent developments around supply chain for instance, Red Sea developments and exposure to China, which is slowing.

If we start with the logistics side and the unfortunate situation in the Red Sea, as I mentioned initially, I mean, it's clear that we have seen a significant easing of the challenges in the supply chains during '23 compared to the very tough year in 2022. What we see now in the Red Sea area, of course, means that some of the freight goes through the southern part of Africa, and that adds, of course, if it's 10 to 14 days or something and, of course, additional costs. At the moment, I will not say it's a super big impact. But of course, if these are spreading and becoming long lasting and have wider effects, it could get, but at the moment, not.

Then we have 2 questions from Michael Kilkins at Tresor. Congratulations on another excellent year. Could you perhaps provide a view on the development of the end markets for Atlas Antibodies, particularly if you have seen any recovery in the past few weeks, now that the capital market interest rates have declined?

If I start with Atlas Antibodies, I can give you some basic facts. It's down 18% in the quarter. The reason for the fall is related to the [ Vitro ] business where the Atlas Antibody is held that much better. When it comes to the customer groups, what we see is that the sale to pharma companies, which are more mature, is more stable. While on the other hand, if you talk of small biotech companies that in very early phases, we see a clear slowdown in the market. And finally, if you look on these customer groups in Europe, it's more -- funding is looking different. It's more public funding and so forth. If you compare on these biotech companies, the situation is toughest in the U.S. So that's what we see in the market.

And another one for Michael as well. Do you see M&A activity picking up in your portfolio and within the boards you're active? Blackstone CEO, Schwarzman, mentioned in Davos that he saw deal activity pick up again on the back of lower interest rates.

I mean, we have just reported. If you look on the fourth quarter, we have a number of our companies that have conducted important strategies. I mentioned it in my presentation with Epiroc almost an SEK 8 billion deal for Stanley Infrastructure, we have Electrolux Professional requiring to say, in Japan and so forth. So there is clearly a number of actions going on.

Then we have a question from Karan Pata, Canada Life Asset Management, and it goes as follows: EQT future commitments are about SEK 20 billion. Is this included in cash on the balance sheet? Or how is it accounted for, if not?

No, it's not accounted for in the cash position, but I know the rating agencies sometimes added both as an asset and the liability, but it's outside the balance sheet for us.

Thank you. And I can't see any more questions. So with that, I think it's good to wrap up the call. Many thanks to you, Helena. Many thanks to you Johan, and thanks to all of you on the call for joining us here today. Our next scheduled call will be Q1 on April 18 and until then, thank you, and goodbye.