Inwido AB (publ) (INWI) Earnings Call Transcript & Summary

Good morning, everyone, and welcome to the Capital Markets Day 2021 with Inwido. My name is Olof Engvall, I'm the moderator of the event and I'm also the Investor Relations and the Public Relations Manager with Inwido. We're happy, delighted and pleased to have you all onboard on this journey for our Capital Markets Day, both here in this very room in Stockholm and on the webcast broadcasted by Financial Hearings today. Today's agenda takes us on an Inwido journey, describing our evolution as the leading group within windows and doors of Europe, would take you on a long journey on the progress up until this very day. We will explain our strategies for continued growth, and most importantly, open up the books on where we aim to go in the future and how. The agenda takes us on a 3-hour journey up until the Q&A and the lunch. And for you, lovely guests in this very room, you have the opportunity to ask questions in the Q&A [Operator Instructions]. And please do so starting now and I will do my very and utmost best to relay them to the speakers when we get to the Q&A. It is now my sincere pleasure to present the first speaker of today's agenda. However, he will present himself in a short video in which she also takes you on a super-quick tour of the Inwido world. [Presentation]

So now please welcome Mr. Henrik Hjalmarsson.

Thank you very much. It's a true pleasure for me also to welcome all of you to the event. We look forward to take you on a journey through the Inwido world, and I will actually start by talking through a bit of an introduction for those of you who might be new to us, going through some of our strategies, talking about updated long-term targets, our new structure and a few words about the development going into next year. So short intro, a few words on the achievements, talking about our strategy, our targets and our structure and looking into next year. If we start then just for those who are new to us, a brief introduction. So we're the leading window group in Europe with a -- and a clear market leader in the Nordic region as well as a strong position in the U.K. SEK 7.3 billion of sales rolling 12 months ending quarter 3 with an operating EBITA margin of 12.2%. And we have roughly 4,600 employees in all the countries you see marked in dark blue. And all the white dots you see on this slide highlight the production locations that we have across Northern Europe. And we are very proud of all the fantastic brands that you see on the bottom part of this slide, which we market and sell in these geographies. A few words then on the foundation of our strategy. These are the 4 cornerstones for sustainable and profitable growth and they are, in effect, the pillars for the operating model that we've set up. I sometimes express them as they are some fundamental beliefs for how we operate as a business. So number one, we fundamentally believe that a decentralized structure drives customer focus and results focus. I'll come back a lot more to this in a little bit, actually. Secondly, we believe, and we've shown over time, that focus on the consumer-driven market helps to drive profitable growth over time. Thirdly, we believe in sustainable growth driven also through acquisitions, which we'll obviously talk a lot more about in a bit. And lastly, we strive for synergies to drive structural improvements across the group in many different areas, and I'll come back to that as well. How does this then take form in reality and when we take it into action? Well, we've launched -- to try to illustrate this a little bit better, we've launched and we work based on our value-creation model. which we think over time has built what Inwido is today. And we should remember that Inwido today is the result of 50-plus acquisitions over the past 25-or-so years. And these are 5 elements that are the basis for the value-creation model that we drive. They make sure that we drive long-term and cost efficient, both customer and employee value, in a sustainable way, and I'll come back to that. The core of this picture being sustainability, and hence, drive shareholder value over time. It's based on our proven ability to improve businesses to drive profit. And we acquire businesses, and we plug them into this value-creation model, obviously being sensitive to the start point to make sure that we maximize value over the short term as well as over the long term. I'll come back to all of these 5 elements, actually, but I think it's important to note, which I'll talk a lot more about today and which Lena will also come back to, that sustainable business for a sustainable future is at the heart of the model in terms of what we're trying to achieve. So one of the overarching ambitions, which you've also seen in the press release that we released yesterday, is we believe that we have -- we are uniquely positioned to contribute to a sustainable future and we clearly want to step change our focused efforts in that direction. So looking at the first bit then, efficiency synergies from sourcing and technology. So fundamentally, by buying things together as a group when we acquire new businesses around Europe, we know that we deliver savings on materials, which immediately props up margins in these businesses. But very importantly, we can also push the suppliers that we collaborate around to drive innovation, but also actually increasingly in this world, today's world, to drive efforts on sustainability. And we have -- are working on several initiatives in that direction that I hope we'll be able to talk about in some time. And secondly, best practice in areas such as technology, leadership, but also systems and approaches. So customer relationship management, for example, is a clear way to drive improvements in the businesses that we operate, which improve profitability over time. Secondly then, well, we believe that the decentralized accountability with business-focused leadership and drive, drives better results. So by making decisions closer to the customers and closer to the markets, we can be more agile, we can be faster and we can be more relevant, both in terms of defining cost-efficient models to service those customers, but also continuously improving the customer value that we deliver. And quite frankly, we strongly believe in the fact that a strong local business ownership with clear accountability for the results that you achieve together with the local leadership teams strengthens the results focus and drives better results over time. The third one then, performance management and KPI structures that drive the right behaviors. This is a -- we pride ourselves in being a very results-focused and results-driven business, and I think that's a culture that we've built and achieved over time. So we -- by having many local P&Ls with a strong follow-up, with strong focus on the results that you generate and by having rapid response to deviations, we see improvements over time. And we've also -- sorry, we've also developed what we think is a unique set of KPIs and parameters and focus areas, which we refer to internally as the Inwido scorecard, which we've shown over time drives value out of the businesses that are actually part of the group. The fourth one, capital efficiency and allocation. Well, very clearly being the type of business that we are, making sure that we drive strong cash generation allows continuous investments both for improvements and continuous growth -- organic growth in the businesses we have, but also very importantly, continued acquisitions for future growth. And lastly then, an integral part of the value-creation model that we have, making sure that we continuously invest in the businesses we have for growth and for efficiency. But also very importantly, allowing us to acquire new businesses and then being very focused on cash generation in the businesses that we acquire creates a virtuous cycle of cash generation that allows us to buy new businesses that we can generate cash from and continue that cycle going forward. And I'll come back to that in a little bit. So how has this model then served us in the past? Well, if we look at our development since the IPO in 2014 and if we take the start point from 2013, the year before the IPO, so far, I think we're proud of the journey that we've achieved. We've achieved a CAGR since then of 6% top line growth, and we've taken our earnings per share from around the SEK 3 mark around the IPO up and almost quadrupled that to a run rate of almost -- or around SEK 12 per share. So I think this model has served us well so far and created a stable base. And if we look at that in terms of the 2021 achievements then, I think 2021 so far has actually validated that hypothesis. So if we look at what we've achieved so far in this year, the third quarter was the 10th consecutive quarter of strengthened margins and the sixth quarter in a row with organic growth. We have obviously seen some positive markets, particularly some positive consumer markets in Scandinavia, through the pandemic period and I think we've done a really good job on capitalizing on those markets. And I'm actually happy to see that we've also been able in that period to continuously strengthen our market position and take market shares in all the core geographies in this period. So we've capitalized on a good market, and we've strengthened our position in those markets. We have seen, obviously, even more so lately, continuous price pressure on input materials forcing us to continuously work with price increases to the market. In the first 9 months, we saw 14% growth to SEK 5.55 billion, that's an organic growth of 15%; and a strengthened operating EBITA margin to 11.9%, up from 10.2% last year. And I think overall, we've done a good job throughout this period, managing the COVID-19 pandemic, both responsibly but also actively, and we've been very focused through the entire period on 3 things. So number one, to protect our employees; number two, to contribute to limiting the spread in society; and number three, to maintain operations in our businesses as important pillars in their local communities as far as possible. And I think with very few exceptions, we've been -- we've achieved all of those 3 things actually and we've done it in an overall responsible way. Obviously, now we're in the midst of a potential fourth wave in some geographies, but I feel confident that we've demonstrated our ability to manage this situation, however difficult it will be for society as a whole and for the impacted individuals. So I think we've achieved, over time since the IPO and we've demonstrated it in the last year, a stable platform. So from that platform, it's actually time for us to take the next step for growth with a growth -- more growth-focused strategy going forward. So what does that mean in practice? Yes, we're accelerating our growth ambitions with 3 quite pragmatic elements in our strategy going forward. So the first one being to invest for growth, and I'll come back a little bit more to the details on this. The second one is focus on operational excellence to drive efficiency in the businesses that we run. And the third one is then value-creating M&A, an integral part of the value-creation model for Inwido. And we can do so leveraging the strong base that we have. And in effect, it means maintaining the organic growth and profit momentum that we have and complementing that with M&A-driven growth. So if we start with the first one then, to invest for growth. What does this mean? Well, fundamentally, it's about allowing ourselves to dedicate resources that we generate to fuel future organic growth in the businesses. The first area here is quite obvious, given the growth trajectory we're in our e-commerce business, it is to continue the investments for growth in the e-commerce space. And clearly, because we see a continued considerable growth potential, partly in the geographies where we're already active, which is mainly in the Nordics, in the U.K., Ireland and in Germany, but also taking this unique concept because it is truly a unique e-commerce concept that we have into new geographies where we think we can drive equal growth going forward. So it's about investing in marketing, in resources, in supply chain capacities to continue to drive that growth. Secondly, which is becoming even more importantly, actually, in today's world, is securing assortment relevance. We clearly see that consumer preferences are becoming more polarized and also requiring more tailor-ized solutions. But it creates an opportunity for us as the leading window business to really step change the performance of the products to meet these preferences going forward. So one area, which is very clearly coming up more and more is the area of safety. So the bigger the world becomes, the more important the small safe haven of your home becomes for people around us in our markets. And for us to be able to deliver on those requirements and expectations creates an opportunity for us. But another very, very obvious area given our sustainability ambitions, obviously, to continue to invest in the energy efficiency of our products to make sure that we contribute to reducing the carbon footprint of the buildings in the EU. And then the third one is actually to allow ourselves to continue to cement and protect the strong positions we have. This industry really rewards strong segment/niche/geographic positions rather than overall market-leading positions. And to make sure that we continue to invest behind those strong positions that we've built, allocating resources in that direction, and in effect, not taking anything for granted is a very important part of the future trajectory. So it means investments in supply chains and marketing initiatives, but also actually in leadership and capability continuously in the businesses that we run. The second then, operational excellence to drive efficiency and margins. Well, fundamentally, we -- this is an operations-heavy industry that we're in. And it's an industry that really rewards well-executed businesses almost more than any other aspect of it. And I think we've demonstrated over time that we are actually one of the best ones in this aspect across the European market. So here are a number of sub-initiatives. The first one is we have a few business, as would any business, I would argue, that are lagging in margin below what we think is the potential in those businesses. And to clearly identify and hold ourselves accountable for that performance and go after that with investments and initiatives is one part of this. And we particularly have 1 or 2 bigger units that could actually contribute considerably to organic growth performance by executing these plans in the right way. And it's particularly about both elaborating and clarifying customer propositions, but also having crystal clear footprint or supply chain strategy to support it. Secondly is allowing ourselves to actually leverage the growth that we have achieved to drive efficiencies and also to expand margins. So we have achieved some growth. We think that we can leverage that to continue to grow -- I'm sorry, to continue to become more efficient. But it's about exploiting Lean by Inwido, for example. That's a concept that we're rolling out as part of our best practice system across the group. We continuously, and this comes very strongly in our culture, scrutinize overheads and make sure that we stay efficient from that perspective, but also CapEx for automation and sharing best practices around machinery, et cetera. And then the last one, an important part of the concept of Inwido, which I talked about before, sharing best practices across the market and pulling out as much pragmatic synergies as we can. And there are more opportunities there in leveraging these areas. So the third one then, value-creating M&A. Well, I've talked a lot about the M&A flower previously. I'm not going to go through it in detail. But I think we've been very clear about the opportunity for us with a stable platform that we've built and with a strong balance sheet that we have to accelerate the activities in this area. So to go after businesses that fit in our target model within windows and doors with profitable businesses, with good leadership, with strong positions, et cetera, is a good opportunity for us not just in our current markets, but also going into new markets. And we always strive for positive multiple arbitrage, and we try also to leverage actually a 2-step acquisition model. So effectively acquiring a majority in the first step, working jointly with the previous owners to improve the business and then buying the majority or the full share pool after some time when we've achieved this together. Just a few words on that then. So we talk a lot about the M&A, but what is the opportunity? And this is just an attempt to put a few words on the opportunity that we see out there in the landscape. I mean if we look at the European windows and doors industry, we've done our best to consolidate parts of it. But in all honesty, we've only consolidated a very, very small part of this industry. We see that the top 4 windows and doors groups across Europe, including ourselves, actually has less than 10% market share of the entire European market. There are thousands and more thousands windows and doors businesses out there. Arguably, a lot of them very small, potentially too small actually to be in scope for our efforts. But there are a lot of businesses out there that are in scope for the type of acquisition work that we're doing. And we also increasingly see with a lot of family-owned businesses, with leaders that are born in the '50s or in the '60s and are approaching effectively retirement and a generational shift will create over the coming 5- to 10-year period a lot of opportunities actually on the acquisition front. So it's really core for us to drive focused efforts to leverage our proven M&A model to continue this acquisition journey going forward. So with this strategy in place then, I think it's fair for us to raise the bar in terms of our ambitions and what we're trying to achieve as a business. So hence, we're as late as then last night launching some new long-term targets, reflecting these ambitions and where we want to take this business over the coming period. A few words on the background of this. I mean the present -- the financial targets that we've had up until now, they've been in place since the IPO, so a bit more than 7 years. And over that 7 years, the business, our strategy and as well our performance, as you saw from the chart earlier, has actually developed in a very positive way. In the updated strategy that we just looked at a very brief summary of, we clearly highlight our desire to grow at a much higher pace and we see a considerable opportunity for further consolidation and acquiring growth in the market. And we really want to raise, as I mentioned before, we really want to raise the bar in terms of our contribution to a more sustainable society. We think we're uniquely positioned. We want to hold ourselves accountable to that, and we want to show you how we think we can make that transit going forward. So with that as a background, we are now setting a much more ambitious growth target for the group with an ambition to grow to SEK 20 billion of revenue in 2030 as a combination of organic growth and acquired growth, as I've talked a lot about. We want to maintain, over a business cycle, a profitability target that is above 15% of return on operating capital. Peter will come back a bit more on our history and where we're trending at the moment later. But we think this is a good target that reflects a good overall return on the capital base and also shows that we're committed to really drive value from the acquisitions that we make over time. We want to maintain a net debt in relation to operating EBITDA of less than 2.5 and aim to pay a dividend of roughly 50% of net profit, obviously, depending a little bit on the outlook of the business, the structure of the balance sheet, et cetera. But at the same time, we're also more clearly in our targets highlight our desire to contribute to sustainable development. So it means that we have recently committed to the Science Based Targets for reduction of greenhouse gas emissions. Lena will come back to this in a little while a little bit more. But we're now in the process of setting ambitious targets to do our part to contribute to the 1.5-degree target of the Paris Treaty. And we are really gearing the entire organization to make sure that we deliver on those targets. And secondly, we have an ambition to make sure that 75% of our windows and doors sales are EU taxonomy aligned by 2030. So with new targets and a new strategy, we also have to make sure that we now have an organization and a structure that reflects our ambition and desire but also allows us to drive in the direction of these targets and the strategy. And this means that we're also launching a new structure, a new reporting structure as well as a new organization. And this is -- fundamentals of this is to increase the transparency of the business, but also to show a stronger growth focus and to clearly highlight the areas of potential growth that we see. So we're increasing the granularity of reporting to be overall, frankly, to be more transparent in terms of the business performance and to allow all of you also to understand a bit more about the business performance. We've clearly highlighted some growth segments, I'll come back to that, to signal the intent to grow. We will -- as a part of this, we will report our e-commerce business separately, which will clearly show you the growth trajectory of that business as well as the value creation that it contributes to in the overall business. Part of this is actually also to relieve me as previous head of the biggest business area of some of the day-to-day operations of that part of the business to really focus more on the growth agenda out in -- both obviously, in our current geographies, but particularly also on the acquisition-driven agenda in Western Europe and the rest of Europe for that matter. And I think overall, it also achieves a better structure that makes it easier for you actually to understand and analyze the business. So what does this mean? Well, it means that we go from the previous 4 business areas, which was North and South, to a structure with 4 business areas reflecting the current business. The biggest one will be Scandinavia, which gathers the businesses in Sweden, Norway and Denmark. This is a bit more than SEK 4 billion of revenue on a rolling basis and operating EBITA margin of 13.8%. This gather some of our biggest and most mature businesses in these geographies. And we have a very, very stable base to contribute with cash generation to fuel the growth in other parts of the business. The second part is Eastern Europe, which gathers the businesses in Finland and Poland. A bit smaller, but with a very mature and strong position in Finland with effectively the same ability to continue the drive for growth, but also fuel with cash generation, continued growth in other areas. So this is a bit more than SEK 1.7 billion with an operating EBITA margin of 8%. Then the third week is one the size of which has been known before because we normally talk about the size of e-commerce is running at SEK 940 million. So we're approaching SEK 1 billion mark with considerable growth we've achieved over the past 18 months a considerable growth trajectory in the business, and also at the high running profitability level of 17.6%. And then we have Western Europe, which is also, together with e-commerce, where we obviously see both acquisition-driven growth potential, as well as organic growth potential, Western Europe, we see a considerable acquired growth potential, as I've talked about before, not only in the U.K., but also in other parts of Western Europe. This currently gathers the businesses that we run in the U.K. and Ireland. And as you can see, the smallest one of the areas with SEK 570 million and 7.9% of margins. I think this -- overall, this allows us to achieve the increased transparency that we want to. It allows us to highlight e-commerce in Western Europe, but also to some extent parts of Eastern Europe as a potential acquisition-driven growth candidates. And it also commits ourselves to continuing the good improvements in all of these areas. This also means then with a new strategy, some new targets and a new structure that we need new management, but management isn't really new. It's actually -- we've actually been around for a while, but we're structuring ourselves in a little bit different way. And we will -- I pride actually, I take pride in the fact that we are a very, how should I say, we are a very lean and business-minded business -- or sorry, management focusing on continuously improving business by business the performance that we have and driving value out of that. And what we're doing now is we're holding ourselves to a higher level of accountability in terms of achieving growth as well as in terms of achieving sustainable development. In this structure that we're going to run from the 1st of January, I should have said, as well as the reporting then, is I myself will actually take responsibility for the businesses in -- for the Business Area Western Europe. And in practice, that also means that I will be much more involved in driving the acquisition-driven growth of the group going forward. We will continue -- Peter will obviously continue as CFO and -- but will also take responsibility for the internal businesses that we'll actually report it under other, and Peter will come back to that a little bit. There are 3 business units there. Lena will continue in a role as Head of Human Resources, Organization and Sustainability, but continuously tweaking actually to not because the people agenda is not important because it's incredibly important for us, but continuing to invest more and more actually behind driving the sustainability agenda, which we'll come back to. Antti, which you'll see a little bit later, will run the business in Eastern Europe -- responsibility for Eastern Europe and day-to-day all the businesses in Finland. We're creating a subcluster on the mandate of the business area heads, focusing actually on driving some value out of our premium businesses. So in addition to the overall responsibility for communications, Jonna will also run a premium cluster of businesses that are actually spread across the geographies, and as I said, on the mandate of the business area heads. There is some very, very strong positions, actually some very, very strong brands and we see a potential to continue the growth and profitability development of those businesses. I'm really happy to say that we have a returnee as well actually being announced internally in the business today with Mads Storgaard Mehlsen joining the business again. He has a background as a Head of the Danish business as well as Head of Emerging Business Europe for Inwido, which included the e-commerce acquisitions at the time. And he will come back to run Scandinavia, joining us again latest the 1st of June. And then Bo Overgaard Christensen, who is already Managing Director of our e-commerce business, will now be part of group management to continue to contribute to the overall group's development in this area, but obviously continue to drive the fantastic growth trajectory that we have in the e-commerce business. So I think we'll continue with the mentality of a strong business focused, lean and agile leadership agenda and leadership team. But as I said, we will now hold ourselves to bit higher targets and accountability and ambitions in terms of growth and contributing to sustainability. So we have an updated strategy. We have new targets. We have a new/old group management, I would say. So what do we now think this means for the short term? And I guess that's the million dollar question at the moment. I think if we look at where we stand at the moment and look at where we closed quarter 3, we're obviously entering quarter 4 with a strong order backlog, which will support the near-term sales of the business. That's obvious. I think I'm really happy, and I mentioned this before, that we've also, in this period, strengthened the positions in almost all our core markets actually, which means that we're now entering 2022 with a stronger base share of the market. We see in the near term at least some healthy activity levels on both consumer and industry markets. However, obviously, with the development that we're seeing now very recently on COVID-19, let's see what happens. And I think overall, we also see that we stand with a strong order backlog. We still see some robust activity levels. But will there be an impact in the market from the, I would say, almost unprecedented inflation that we've seen on input materials and also actually restrictions that we've seen in the overall supply chain impacting the market in '22? Hard to say, I would say. But long term, we are really continue to be very optimistic about the demand for energy-efficient windows and doors, both to support an increasing desire to invest in your home, to improve your life at home, but also very importantly to contribute to the sustainability goals that we've collectively set through the Paris Treaty. That will absolutely require us to also improve the energy performance of homes and offices and other buildings, which in turn will need more efficient windows and doors to support that. And very importantly, we're obviously continuing to increase our activity level on M&A to drive and accelerate growth going forward. So if I summarize this then, we stand, as I talked about before, with a stable base. We've -- since the IPO, we've quadrupled our EPS. We've grown top line by a 6% CAGR. We have a strong balance sheet. And we have a robust underlying business performance. We're now in the place with where our new strategies, we're accelerating our growth ambitions, both organically but also very importantly through acquisitions. And as I talked about before, we see a considerable consolidation opportunity on the European market. Many -- low consolidation level in many markets and more and more businesses being ripe for an ownership change over the coming years, 5 to 10 years. To illustrate and raise the bar and hold ourselves accountable to this desire and in line with the strategy, we're now revising the long-term targets, highlighting clearer growth ambitions, but also clear ambitions in terms of sustainable development. To support that, we're then launching a new reporting structure that's in line with the strategy that creates more transparency, hopefully better predictability and more clearly shows the value creation that we achieve across the businesses. And lastly, we then have a new/old organization with a strong leadership team to guide us basically through this trajectory, which we're holding ourselves -- and we are all holding ourselves accountable to these new targets to deliver on them over the years to come. So with that, I thank you very much. Olof?

Thank you, Henrik, for this sincerely newsworthy introduction and start of the Capital Markets Day 2021 at Inwido. Thank you on the webcast for following our journey today up until 11:30 and where we have the Q&A. And I know that you already started to write in questions in the platform, and we will do a full Q&A around 11:05 or something that, 11:00. Before we enter the next journey on the journey, actually, where Lena Wessner will talk much deeper on the sustainability work that Inwido is propelling and accelerating, we will watch yet another video with Henrik, actually. This time with a very special focus for the Inwido Group, namely our promise. [Presentation]

So thank you. I trust you also that football pass and you're probably all thinking now why is it not in Barcelona, that matter was settled many years ago. Anyway, now you've most definitely seen too much of me. So it gives me great pleasure to welcome up Lena Wessner who's going to talk you through the sustainability journey. Lena?

Thank you, Henrik, and thank you, all of you sitting here and coming to meet us and also you on the webcast. So my name is Lena Wessner, and I'm the Senior Vice President for Human Resources Organization and Sustainability for the Inwido group. When I joined Inwido 2010, sustainability was on the agenda, but not as today where you can hear and see it everywhere. I think for all of us sitting in this room but also on our webcast, it's obvious that if you are not investing in your sustainability ambition and your agenda, it will in the end harm you, which means that we need to invest in the environment, in our people, in their working environment and in the society as a whole. And this will, in the end, contribute to our business. Personally, as a mother of 2 sons, I've increasingly realized the importance of handing over a promising future for many coming generations. At Inwido, we live by the following motto in my daily work: we give more than we take because sustainable business drives sustainable value today and for future generations. So why is sustainability so important for us in Inwido? Because sustainability is the heart of our business model by supplying high-quality windows and doors to improve the energy efficiency of buildings. And we also see an increasing expectation on sustainability both on our products, but also the impact of our business. And our sustainability compass supports our ambition as a responsible corporate citizen and help us prioritize, highlight sustainability efforts. So how can we make this happen? And how can we meet our own expectations, but also the expectations from the world around us? Last year, we launched our long-term sustainability ambition, our carbon footprint. We will reduce 50% of carbon dioxide emissions by 2030 and be carbon neutral by 2050. This will require a lot from us. We must reduce our energy consumption, use renewable energy in all our factories, use of wood waste to heat our production facilities, invest in energy-efficient machines and tools and put demands on our suppliers. And we also need to have ambitious KPIs to follow. And our sustainability compass helps us to monitor our sustainability work and strive for a long-term ambition. Our sustainability compass consists of 3 pillars: be an environmental friend because we need natural resources to do responsible business, be a good place to work because empowered colleagues make a difference and be a responsible business because aligning with society creates more opportunities. Let me then start with our first pillar, be an environmental friend. How can we make this happen? We provide products that drive energy efficiency and savings with decreased climate and environmental impact from our operations and from our suppliers. We use wood from sustainable forestry and we reuse, recycle and choose sustainable materials while reducing waste. So we develop, we produce, we sell highly energy-efficient windows and doors. We are using wood from sustainable forestry, reduce our energy consumption and reduce our waste and decrease our carbon emission. Just to give you some example from our business unit. Elitfönster, our biggest business unit in Sweden, has, together with other companies in the building industry joined the Färdplan 2045. Here, we have an ambition to be carbon dioxide neutral already 2045 and it's called and joined the so-called Fossilfritt Sverige. Here, we have an ambition to be carbon dioxide emission neutral already 2045. The Elitfönster windows has proven to have the lowest climate impact related to the product's life cycle, so called EPD, environmental project declaration in -- on the Swedish market. This, of course, is very, very good and also a big business advantage. For Hajom and SnickarPer, some of our smaller business units, we have a dream of becoming self-sustaining in the future, a very high ambition that we will follow very closely. Let me then turn to our second pillar: be a good place to work, what will that demand from us as a company but also as a group. We develop our employees and make them feel involved and valued. We invest in health and safety. We strive for equal opportunities. And we actively work to improve employee satisfaction. Of course, we need to have a safe place to work and well-being has to be a natural part of our culture. Our health and safety work is a very important part of how to run your business. And we are following it very closely through our lean assessment for our quarterly sustainability meetings, safety works and also on our business unit works that we are having in all our business units. But we also need to develop our employees together with our leaders and our managing directors for our business units. We are monitoring training and development, both on a local base but also on a central base as the managing director training that we will train our managing director in strategic leadership, sustainability, finance, customer and end market capability, among other things. But we also need to develop ourselves, of course. So we are also training us in the management team. When it comes to our marketing and customer capability, this is, of course, very important for our managing director to actually train and develop. Every year, we are conducting an employee satisfaction survey. This year, it will be the 11th time we are doing the survey. And I'm very happy to say that we -- if we keep following the development from 2010, when we started to last year 2020, we can see an increase of 23%, which is a huge improvement. In the employee satisfaction survey, we are measuring the trust and leadership index for all our leaders in Inwido. But to see the 23% increase in the trust and leadership index is also quite difficult for a company like Inwido with many different entities, different cultures, different histories and among 70% blue collar employees. And now we are very curious around the 2021 survey and we will get the result within the coming weeks, hopefully, before Christmas. Let me then turn to our third pillar: be a responsible business, how can we secure that. We have 0 tolerance regarding corruption and unethical business behavior. We demand responsible behavior from all suppliers and partners. We comply with strict code of conduct and will support our local communities. A code of conduct for our business partners and for our employees is the guiding light for how you should behave and act as a leader and as an employee and as a business partner. We train all our employees in the code of conduct and high ethical standards and behavior is, of course, a very important part of a leadership program on all levels. But we also need to contribute to our local communities. At Pihla Group entity, our biggest business unit in Finland, we are participating in the easy steps toward working life project. This is the project to help people with different types of disabilities coming back to work, which sometimes can be very, very difficult. Our goal is to employ people with partial workability in all factories in Finland. Here, we can see the advantage of knowledge sharing in our group, for instance, by our sustainability meetings, where now Pihla Group is following our Danish business unit outline has made the same type of activity during many years and has been very successful. This is to be a responsible business. Okay. This is big ambitions and many words, but how are we actually doing? Looking at our sustainability KPIs 2020 -- oh, sorry. We can see a very positive trend in almost all our KPIs, and we have highlighted one from each pillar. Our carbon dioxide emission per wing has decreased with 7.1%, which is a great improvement. Another thing to mention is that we are using renewable energy in waste majority of our production facilities. These are steps in the right direction to becoming carbon dioxide neutral by 2050. Accident and near misses, together with our health and safety work is, of course, of high importance. Our mantra is that you should leave work in the same shape as when you arrived. We are measuring both our lost time accident and our near misses, and near misses meaning things that can be an accident in the future. And as you can see, we can see a very positive trend, but there are still a lot to do. And of course, we have a high ambition to get to 0 accidents. Our code of conduct for our business partners and for our employees are 2 very important steering documents and with very, very strict rules. For our suppliers' direct material spend, we can see an improvement and have reached 96.5% 2020, and we are hoping for 100% in a very soon coming future. So how can we even further challenge ourselves? We are now raising our bar on our sustainability journey. In our 2021 sustainability package, meaning our KPIs, we will add 2 very important KPIs: waste, meaning hazardous waste and nonhazardous waste; and the second one is number of discrimination and harassment cases. And here, we have our whistleblower system that is according to the new EU regulations. These are 2 KPIs that will strengthen our sustainability work even further. But we also want to validate that our long-term sustainability ambition, our carbon footprint, are in line what was science required to limit warning and also avoid the worst case scenarios. We have now committed to set goals according to the science-based target to meet the Paris Agreement 2050 of reaching the 1.5-degree target. Another thing is the EU taxonomy that is relating to our products and to our turnover. The EU taxonomy will have a big impact on many businesses, both in their sustainability ambition but also in their sustainability agenda. And that also goes for us in Inwido. We are happy to say that our taxonomy-aligned products, meaning windows and door sales, having a U-value for windows of 1.0 and for doors of 1.2 were 45% 2020. And we will now strive to have an alignment of 75% 2030, an ambitious target.

So how do we then summarize the improvements and the efforts on the sustainability area? Well, first of all, we have a good trend on the KPIs, which we want to hold on to and we want to take that -- accelerate that even further going forward. And we're adding 2 new KPIs to further signal that ambition. Secondly, we have our long-term ambition that Lena talked about. So we aim to reduce carbon dioxide emissions by 50% by 2030 and to be carbon-neutral by 2050. Now we're actually exacerbating that further by also committing to the Science Based Target initiative, where we plan to set ambitious targets that are in -- allows us to be in line with supporting the 1.5-degree target as the Paris Treaty. And we're working very hard with the taxonomy alignment to increase the number of aligned products -- the share of aligned products to 75% by 2030. But before going in, actually, just a couple of things to actually throw into this that struck me when Lena was presenting. I think first of all, to -- and I guess they're linked, to explain to you why this is not just a sort of talking, but actually we're walking the talk. So we run -- the way we operate our business today is we effectively operate the business through 29 business units, all with their own P&Ls and responsibilities. Most of them with factories and they all have customers and products and whatever it is that we in group management are responsible to lead and support. In all of these 29 business units, with no exception, we have sustainability plans. So we expect them to develop, refine elaborate, measure and track progress on their individual sustainability plans every year. And all of those obviously need to add up to support the ambitions that we have for the group. And I think, secondly, we are also, I think, actually one of the few bigger European groups that have on both the group management level, but also for all the 29 business units, we have sustainability targets as part of the short-term incentive program for the leaders. So we have it in group management. We have part of our financial compensation based on our progress on sustainability targets. If we don't deliver that progress on sustainability, there will be, in fact, less compensation to us. But we also have imposed it -- or it's probably the wrong word because there's actually a desire to have it, so we've also implemented it on all the managing directors of the businesses. They all have sustainability targets that they need to deliver in order to get their maximum possible compensation basically. So it's about setting ambitious targets. It's about us as a group driving initiatives. But fundamentally, it's also making sure that those initiatives and those targets are supported with bottom-up plans in all the businesses.

Yes. This is Inwido. This is our promise. Thank you.

This is our promise. Thank you very much.

Thank you so much, Lena Wessner and Henrik Hjalmarsson, for this sincerely newsworthy start of the Inwido Capital Markets Day 2021. I just want to mention again that the presentation that we're watching is -- or again, I didn't say it, but it's out there, it's on the website. This presentation, you can find it and download it on the website if you already did not do that. We are now on the final stretch before the landing -- for the break. And the break will be a little sooner than we anticipated because you are always so efficient, which is lovely. We have a high pace in our organization. So we will have a break very shortly. After the break, we will come back to the program. And next segment of the show is actually a panel discussion on the, let's call it, the secret sauce or the secret recipe of Inwido, how we run and develop very small business units to very large business units. It's a great variety out there in the 29 business units, and Jonna Opitz and Antti Vuonokari will debate this and talk about this together with myself up here. And secondly and probably we saved the best till the last, excuse me for that, but we always have -- this is a tradition with the CMD or Capital Markets Day at Inwido. We save Mr. Peter Welin, our Financial Director, a long timer in the group, till the last, with all the goodness and the deeper divings into the financial targets and the more detailed presentations of that. So I think we have discussed this behind the scenes that we will have a break now for 25 minutes. That means that we are back in this room and on the webcast 0-9-5-0, 09:50, 10 minutes to 10 we are back in the broadcast and in this room. Now enjoy the coffee break, and have a good moment. See you soon. [Break]

Welcome back to the 2021 Inwido Capital Markets Day. We are honored truly to have you onboard the Inwido journey. Apart from some very tangible news presented earlier by Lena and Henrik, this is an opportunity, of course, this day to learn more about the decentralized world of Inwido. Our Capital Markets Day 2021 will now change format for a little while. We will skip the PowerPoint presentations in favor of a panel discussion and talk. And the topic is actually quite important when trying to understand the secret recipe of Inwido and our world to really cut through the chase, what are the most common questions that Peter and Henrik and myself get from you guys, the analysts, the owners, the shareholders and the interest group is phrased something like this: Why doesn't Inwido consolidate itself, build one huge factory and then source all 29 business units with pretty much the same windows and doors? Why do you choose to run 29 different business units with all the hassle? To give us the answer to that question and many more, I welcome Jonna Opitz, my boss and Senior Vice President, Communications and Multi-brand; and Antti Vuonokari Finland, the land of Santa Claus, your -- the Senior Vice President of Inwido Northeast and the Managing Director of Pihla Group. You will introduce yourself briefly, and what has your journey with Inwido been like, Jonna? Tell me a little bit about that -- or the audience rather.

Yes. Thank you, Olof. Yes, as Olof said, my name is Jonna Opitz and I've been with Inwido for 12 years. What originally attracted me to the company was the opportunity to be part of an IPO, which you all know we did in 2014, otherwise, we'd hardly be here today. After -- when I started, I was responsible for communication and branding. A few years into the job, I also got the task to handle our international retail agreements, perhaps not the funniest task I've had at Inwido, but it really gave me the opportunity to dig into the details of what makes you successful in the windows business. So with that, I got more interested in the business and doing business. So I went and did an MBA. And after that, I got the task to develop our business unit in Lithuania. And now almost 3 years ago, when our new structure was put in place, I also got involved in developing our business units, Elitfönster, Diplomat, Hajom and SnickarPer, while at the same time being Olof's boss and heading communications.

Thank you. Some of the lovely brands you mentioned are some of the premium brands, I'm sure you all know that. But Antti Vuonokari, over the water in Finland, tell us about your journey with Inwido. You're the Managing Director of Pihla Group.

Thank you, Olof, and hello, everyone. Really nice to be here today. I have worked in window and door business for 15 years now in different position. I started my journey in sales, where I was responsible for renovation market. Then after that I took over Managing Director position in Pihla company. And after a couple of year's integration that we had a company called Inwido Finland, and at that time, I was responsible for operation. Then I have also some experience in purchasing and other business function. I have also been a Board member in many external companies related to construction business like kitchen cabinets, roofing and house factories. And today, I'm also a member of the Board of Finnish carpentry industry.

Why is that important to be part of that Board? That's a big Board.

Well, I think first off, we do a collective labor agreement for entire carpentry industry. So that is important. And second, I think through a common organization, we can influence legislation in this area. And third, I think it's good to keep up network with other players in the market.

Thank you, Antti and Jonna. Please, if you can change the picture, Jonna, on the little clicker there. So we have the lovely -- one more, please.

One more.

One more and then we're off. So this is sort of the theme for the talk. We have 3 short themes. We'll talk about the Inwido world of big and small. There are some really tiny business units, tiny is maybe not the right word, but anyway and there are some very big ones, and how to manage and run these different sizes. We'll talk about the Inwido model. In the model, we trust, in the steering model that is, we'll debate on that. And then we'll touch briefly at the end on the possibility of an evolving business model, who knows. But to give you the picture, Elitfönster, Inwido group's largest business unit, turns over about SEK 2 billion a year, plus 1,000 employees. That's the big one. Down here, Sydänpuu in Finland and SnickarPer in Sweden, SEK 30 million a year. ERA Fönster in Halmstad has 6 staff. It's one of your companies, Jonna. So great variety in the Inwido family between businesses. So Jonna, opening question for you to set the scene. The world of Inwido is very different depending on what business unit you visit. Why is it so?

Shortly, because there's many different ways to become successful in the windows industry. And since our business units are the fruit of what 1 or 2 entrepreneurs -- hard-working entrepreneurs, I would say, once founded and made profitable, the solutions to becoming successful have seldom been the same. So whether you've decided to go for the big volumes for the many; for a premium position, which some of the smaller units have done; or something in between, the paths have been very different. However, one thing that they all have in common is that they have become successful and what we try to do is to make them even more successful. And I would say that we have a pretty good track record by now in doing that.

It's good to be.

Yes. A bit self-glorifying perhaps, but yes.

Or humble sometimes, joking. We'll get back to your side of the story. But overseas with Antti, please paint a picture for us from your life over there in Finland, where some of the biggest business units we have -- you have and some of the smallest as well. Please paint a picture.

Yes, yes. Our picture is very colorful like this. Our smallest unit, Sydänpuu, is making wooden windows and doors for historic buildings. When you walk down the street in Helsinki and you see some really nice old buildings like Embassy of Sweden, there are Sydänpuu windows. Then we have one small factory in Lapland, in the land of Santa Claus, Klas1, with only 20 employees. And then if I compare that to our biggest units and factories, we have 3 big factories located more in central part of Finland and they are producing wood, aluminum windows and doors. The output for production of those factories combined is something like 2,000 units per day. Means in practice, 20 truckloads per day. And if I compare that to our smaller units, the annual output, those smaller units are 6,000 units per year. So that is same as 3 days production of those big factories.

So this is really describing the differences of the Inwido world. It's a great variety and you spearheaded all. What are the challenges running such different companies in the daily life? What challenges do you meet and face?

Well, I guess in this audience are people who have done renovation job sometimes. And I think in company side, the question is that how to make some good processes that you have the right product with right measurement in the right place that your installer can do jobs well. The fact is that we are operating quite a complex industry. And the more complexity you have in your business, the more difficult it is to make good and clear processes. And I mean complex, especially those different product portfolio, different sales channels and different customer type. But in general, I think both small and large companies, they need a good strategy and good action plan. And my personal experience is that in small companies often we have a really good profit responsibility. But in bigger companies, we have to work with this and we really have to ensure that operational and profitability responsibility is really clear.

It's important to have that clear model. Jonna, obviously, there is no one size fits all. But are there sizes in the Inwido family that are still more successful than others? Or is there a dream size in the company? Where do we have the greatest success?

As with most questions that we get about the Inwido business, there's no single answer to this question, either. But of course, I mean, our Danish units have been greatly successful over the last 6 to 7 years. What they have in common is that they're all around SEK 0.5 billion in size. They have one channel, they have one brand strategy and they all source from one factory each. On the other hand, we have our e-commerce business that has been hugely successful over the last few years and they are as far from single branded and single sourcing as you can get. And the third I would mention to this is then, again, the smaller businesses that we talked about. SEK 100 million, or less than that in turnover, that are making really profitable businesses. To be honest, I mean, we see some of our best profit margins in our smaller businesses. So I mean, to put it short, it's good business for Inwido to run small businesses.

Peter used to say 29 different ways of running things. I mean there we have -- but we have one model in which we trust by the way. So if Antti is the big -- sort of big business unit example, you are on, sorry to say, the small business unit example with your companies in Sweden, for instance. Tell us about your business units briefly and why they are exceptionally valuable to Inwido.

Well, of course, the smaller business units don't have the resources that the larger business units have. So what's really important for them is to keep focus. What I talked about earlier, customer value, knowing your place and knowing what you should deliver to your customers. So -- and they really need to focus in very hard on delivering customer value. And that might sound easy, but at least in the world of windows and doors, there's a tendency that when times get tougher, everybody wants to sell everything to everyone. And if you do that, then you quite soon become replaceable for your customers because you divert your focus. And as a small company, that's a road you should never go down. So I would say that one of the parts where we give the biggest support but also the biggest challenge to our smaller units is to make sure that they keep their strategic focus. And as I said earlier, I think they're doing a pretty good job. We see good margins in these businesses, and it's yes.

So talking about the big and the small business units in this family of companies. What can the small learn from the big? What can the big learn from the small? Do you want to go there, Jonna, and help us with that? Because I guess it is not exactly the same. If you're plus 1,000 people in Elitfonster and your 30 staff in SnickarPer, it's not exactly the same thing. But what can they learn from each other, if anything?

I mean they, of course, the smaller units can learn a lot. I would say especially on the efficiency part in production, also organizational-wise, there's lots of things to learn from their larger brother, so to say. Also on a leadership level, I mean they're, used to having this one entrepreneurs leading things and has -- I mean, leadership training has not really been part of developing these small companies. So when they come into this group, first of all, they can benchmark against, of course, their other -- the other business units, but also they get other leaders to benchmark their own leadership with, which is extremely important. And also, of course, we can give them insights into technical issues. IT, which is exploding with the digitalization, et cetera. And there's knowledge that the small units would never ever be able to handle on their own.

So on the flip side, Antti, what can the big business units learn from the small, if anything?

Well, if I take one practical example that -- cross-selling, that is one we had over 10 common products so far this year, with Sydanpuu provide those main faster windows and the rest comes from Pihla side. Then what Jonna said that learning each other in products, and we can learn always from each other. That's really important. And then a kind of positive competition internally as well. That is -- last week, we had a meeting when our production manager, they presented the best improvement ideas as well as challenges. And in that way, I think they can learn from each other.

And before we go into the next theme, here's one of those questions we never practice. So we'll see what happens. I'm thinking, well, you guys might be thinking, well, if they have some shortage of product in one plant in one country, why doesn't Sydanpuu's windows Elitfonster or Elitfonster shoot windows to Sydanpuu or whatever. That question arises. Can you help me here, Jonna? Could that happen? Could Sydanpuu all by a sudden start sending windows to Denmark, for instance?

I mean, that would definitely increase the complexity that Antti just talked about. I mean, of course, in theory, it would be possible. But in reality, I mean, we have saw different building standards, for example. I mean, a finished window in Denmark, I think nobody really wants, to be honest. Sorry, Antti. But they are going for the slim things, both in depth and when it comes to the whole image of it. I mean, they want the slim, modern look usually in Denmark. And what you have are as far from that as possible. I would say.

I know.

They like it strong in Finland. Okay. So Peter can explain everything about this in his section in a while. Okay, let's go to the second theme. We named it In the Inwido Model We Trust.

And we do.

We do, and meaning model -- steering model. And to backtrack a tad, about 3-ish years ago, Inwido launched the simplified steering model with a full decentralization and the autonomy out to the business units. Jonna, to open up the scene again on this question, can you explain what the Inwido business and steering model is really all about?

Well, it's about what I said to start off with, to make good businesses even better. Because as Henrik said earlier, I mean, we acquire good businesses, and our ambition is to make them even better. So that's, I would say, at the core of our business model. And we do that by using our size and our strength, especially within sourcing and financing. But then we also add the skills that Lena talked about earlier on leadership, sustainability, organization, digitalization and other trends. And then, of course, like we talked about earlier, the benchmark itself is really, really good. Because it's quite competitive people that we have in our businesses. They like winning. So that's a really good part to benchmark them against each other because that way you get this self improvement also. So what we do and what we have is yearly schedule, and we have boards for each business units. We are a Chairman in a few of them, and we have board meetings every 2 to 4 times per year. And then we have follow-up meetings on a monthly and sometimes on a weekly basis. We also have the KPI scorecard that Henrik earlier talked about where we follow, of course, sales and profits, but also employee and customer satisfaction, operational efficiency, health and safety and, of course, environmental and sustainability KPIs. We also have, of course, like all businesses, a business plan every year. Activity is connected to that business plan, and we follow up on them. And I would say that we work very closely to the MDs in particular, but also the management teams of the different business units.

Effectively, you travel a lot for some periods of the year and you go out to all the business units, and you are the Chairman of the Board and the all companies, the management team that Henrik earlier described. So during some periods of the year, you are very busy out there in the companies, in the boonies, in the back country.

Yes. At least before COVID.

Yes, and then it's all digital like this one, in a way. So talking about the steering model, Antti, apart from being the Managing Director of Pihla Group, one of our largest business units and groups, you also act as the Chairman of your many companies in Finland. How does that work in daily life?

Of course, I hope it works well with Henrik. But I think I have a very good management team at Pihla, I think that is the key. But of course, due to the fact that it's our biggest unit, it takes up most of my time. But we are still, however, our -- Pihla is still divided in the 3 different business units. And each business unit, they have their own profit/loss responsibilities. So I feel that my job is really must -- same as support the kind of smaller business unit heads. And then -- and I have only 10 people who report directly to me, and I think that's quite normal amount of people.

So what tools do you have in your toolbox in your daily life running this decentralized model?

I think our manage is more or less quite simple. As Jonna said, we have our board meetings, we prepare our strategy, we have an action plan really based on those strategy. And then we hold monthly meetings with our subsidiaries and try to support them. Until we use our indicators packet, which shows our trends and development. And despite the fact that we are making pieces so many different channels and customer type, we can still use a lot of the same KPIs, especially in the financial side.

So a lot of numbers, a lot of keeping track of numbers. And also, I mean, you are on the floor of the plans. So you go all the way from the top down to the floor, to the blue collar staff and employees. So you work everywhere in between, one could say. And then talking about the steering model and the strength of the steering model, if we may. Something happens in the world, crisis arises, something like COVID, said with great respect. COVID comes along and throws everyone off their feet. How steady, how resilient is our steering model for that challenge? It's a crisis. It is a crisis. It was a crisis. How did we cope with that?

Well, I think actually that our model is ideal, if you can use a word like that, for handling crisis. I mean, if you go into a situation like the one we've now lived in for almost 2 years, you need to be really, really close to the business to be able to take the decisions and take them timely and then change, because that's what it's all about. You need to be very, very agile and you need also to have your ears to the ground. And since we have a model where the decisions lays out in the businesses, I think we have been able to adapt in a way that is much, much more difficult for centralized organization or a centralized business model. I think, of course, we in group management support and try to help. But still, it's in the businesses that decisions are taken and everything is managed. I can take an example from now. I mean, you all know that we got new recommendations only 2 days ago. And then, of course, a lot of Christmas parties was planned. Yes. When I talk to my management -- managing directors yesterday, they all canceled them. And that's a process that is something that you need to be close, and it's not a central decision. I know this is a very small thing. But to be honest, for the people in the factories who has been longing to go to Christmas parties for 2 years, this could be quite desensitive decision. But when you're out there and when you can talk to people and you can make them understand, it's a completely different thing, because we want them to be onboard and continue working with the things that matter for our business. So both from a people -- human perspective and from a business perspective, I would say that our model is very fit for handling crisis.

Because it gives us flexibility, agility and speed in a sense. And almost paranoia sometimes, actually, we use that word as well, paranoia, to be close to the topic really fast to act. So let's talk about leadership for a while. Antti, apart from all the synergies that this model can provide your company's cash pool for investments, purchase benefits, et cetera, et cetera, leadership is yet another. We talked about and that touched on that, and Lena talked a lot about leadership because she's the Queen of leadership in this group. How do you assist your companies in the leadership sector?

Well, if I take some practical examples, again. Our Sydanpuu Managing Director is our former sales manager. So of course, we try to always look inside the companies for people who can carry out new task and start out a little bit more smaller responsibilities and then can promote the upper and kind of bigger challenges. That is the way how we work, and I think that works quite well.

So you prefer to recruit internally rather than externally?

Yes.

Sometimes.

Yes, if I had to say like this. But of course, we have a part of our long-term plan. We have a successor planning in place, but of course, we have to make external recruitments as well sometimes.

So we're coming towards the end of this chat. The final question to the 2 of you, or one of the final question. It's perhaps a bit silly, but I'll put it anyway. Is there a better model than the one we run at this time?

I think I pointed out pretty clearly that I feel that no, there is no other model that is better. At least not in the windows industry in Europe as it looks today. I feel that we have a very good model.

Yes. I say like this. When Inwido simplified model was launched and I got one advice from our Board, and I think that was very wise. And that was that keep always your structure so clear that all the problems will become visible, and then you have to trust that good people will solve those problems. And if I look our journey now, we have now 10 quarters, improved profitability in row and our employee satisfaction is highest level. So I really believe our model now, that is -- and I'm really committed to continue with this.

So keep your structure so clear so your problems will always be visible. That was the tip from [indiscernible] I believe. Okay. So the final stretch. We're at the end -- very end of this, and we will not dwell on it for a long time. I mean, Inwido's world has changed. You say that the steering model is perfect, or very good anyways. But you remember, guys that 3 years ago, we launched a simplified steering model for the full decentralization and autonomy. Do you think will it always be the same? Or is it anticipated in a sense that it will evolve yet in the future?

I mean everything, I hope, develops. Everything evolves. And when it does, I mean, we have a model. Again, a good model, which makes us keep our ears to the ground. So we will evolve and we will develop. So I don't think anything -- I mean, that's what we've learned over the years, but also in the last couple of years, definitely, that we need to be flexible and agile, and we have a model that allows for that.

Yes, hard to predict, but I must have -- I believe this model.

In the model we trust. Thank you so much Antti Vuonokari and Jonna Opitz for this chat. And thank you for deepening the understanding of the Inwido world in this talk. No PowerPoint slides. We managed we believe, and a few things maybe came across to build some further value and understanding and trust for the Inwido Group. Thank you so much, guys.

Thank you.

Okay. We are now at the fourth segment or the fourth scene seen in the 2 act play. And we stick to the capital markets tradition here at Inwido, and we saved the best til the very last. The deeper financial presentation on the numbers that matters. And talking about numbers. The next speaker has been in the in Inwido family for most of his adult life, 23 years and counting. Please welcome our CFO and Deputy CEO, Mr. Peter Welin.

Okay. Thank you, Olof, for that introduction. Yes, 23 years. Normally, I just say 20-plus, I stopped counting up 20. Same with my age, normally, I say 40-plus instead of 48. So of course, you can ask the questions, how could you stay in this business for so many years? Is the window and door business really that exciting? And the simple question -- the simple answer to that question is, yes, it is. This business is really exciting, and especially this company has been and is and will be very exciting. We have a very exciting future ahead of us, and I hope you will join us with this future. So my name is Peter Welin, I'm the CFO and Deputy CEO for Inwido and I have some history of this company. So let's start with the history. This graph is showing from development from 2008 up until today, not from 1998 when I started, because when I started this company was much smaller. I started at the late of youngster, that time the sales are about SEK 400 million, SEK 500 million. But in 2008 was actually the start of Inwido, you can say. Between 2006 and 2007, we made about 25 to 30 acquisitions, so we build up this group that we call Inwido. Then in 2008, the financial crisis started. And between 2008 and 2013, we lost 24% of sales. We sold one business, and we closed several business and we also closed down some factories because the business environmental was quite hard at that time. However, we kept our profitability on a quite stable level. Even though we lost 24% of sales, we could keep our operating EBITDA margin on a quite high level, because we took actions, we reduced costs, we improve efficiency and we also extracted all the synergies from being a group instead of being single companies. Then in 2013, even though sales declined also in 2013, you can see the margins started to improve already in 2013 with lower sales because we have taken all the actions previous years, cut down cost, reduced the overheads and improved efficiency. And then in 2014, when the market start to grow again, we could improve our profitability. We made IPO 2014, September 2014, and our development continued in '15, '16. The market start to grow. We had a better cost control, we had a better efficiency. We have extracting the synergies. We worked as one group, and could prove the results. The market was growing especially on the consumer market. We divide our sales between consumer and industry. Consumer means that consumer is either renovating his or her home or they're building a new home. The industry market is more business-to-business concepts, multi-dwellings. We have higher profitability on consumer markets compared to the industry markets. Today, about 75% of our sales is on the consumer market, and 25% of our sales is on the industry market. So in 2015, '16, the consumer market was growing and we can then improve our operating EBITDA, and we reached close to 12% in operating EBITDA margin in 2016. And then in 2017 -- beginning of 2017, we faced some sourcing problems. We have problems with sourcing from some of our suppliers, and that cost us quite much, especially in Sweden but also somewhat in Finland. And then end of 2017, the consumer markets start to decline, and the industry market started to grow. So in '18 -- end of '17 and '18 and also beginning of '19, the consumer market decline whereas the industry market grew, and that's also a negative impact of our profitability. Because, as I said, we have much higher profitability within the consumer market compared to industry markets. Then end of '18, beginning of '19, we launched the Simplify model with a decentralized organization structures, and we have improved the results 10 quarters in a row. Today, we are on a 12% -- 12.2% operating EBITDA margin. Our growth from 2013 has been 21% or 7% in CAGR. If we then look the performance of this year, this year has been the best year ever. This graph is showing the performance January to September, that's the gray staples and then the blue staples that are the performance in Q4. We don't have a Q4 yet for this year, we have to wait some more weeks until we can launch the Q4 report. Look at the sales development. We have done higher sales ever for this year compared to previous years, and we have been growing sales by 6% since the IPO or since 2014. Our operating EBITDA has also improved this year. It's also highest level ever for this year, and we have a CAGR of 9% since the IPO. Operating EBITDA, once again, the highest level ever. We have -- today on end of September, we reached SEK 663 million in operating EBITDA compared to SEK 498 million last year, also a CAGR of 9% since the IPO. And then the net result, which also Henrik showed before, has also had a strong development and with a CAGR of 21%. The net results January to September, it's more or less the same as the full year last year. So we have had a good performance in our sales since the IPO and also more on the EBITDA -- and EBITDA at a result level. So we have improved the margins during these years. If we look at the latest 10 quarters, we have improved the margin 10 quarters in a row. This page is showing the operating EBITDA margin for one quarter compared to the same quarter previous year, starting from Q2 2019. In Q2 2019 it was the first quarter we started to improved EBITDA margin. And as we said before, we launched a Simplify model end of 2018, beginning of 2019. So we actually see quite soon that we have an impact on our profitability after we launched a Simplify model. So in Q2 2019, we improved EBITDA margin by 0.3%, even though sales was minus 4%. So we had a negative organic growth, but we could improve the results, thanks to improved efficiency and lower costs. The next coming quarters we had lower sales. Our sales declined 4 quarters -- the first 4 quarters with a Simplify model, but we improved the margin every quarter. Then from Q2 2020, we have improved sales. It was only plus 1% in Q2 2020 and then it was plus 4%. And then again, plus 1%, then plus 18%, plus 19%, and last quarter is plus 10% in organic growth. So we have been growing the business the latest 6 quarters, and we have improved the margin also every quarter. The biggest improvement was in Q3 2020, where we improved the margin by 2.2% units when sale was plus 4%. And then there was also a big improvement beginning of this year, where there are sales growth of 18% in Q1 and the margin was improved by 4% -- 4% units. However, the last 2 quarters, we have improved the results, but the margin has not been that much improved, especially not the latest quarters in Q3. Q3, we improved sales by 10% organically but the margin was only plus 0.1%. Why? Because the material price increases. As we said in the beginning, I've been here for 23 years, but never ever experienced this high material inflations as we have this year. The problem we have with material price inflation is it comes quicker into our business, then we can increase our sales prices out from the business. So it takes time for us to compensate higher material prices. Normally, we talk about one quarter. It takes one quarter for us to implement a sales price increase and before we can see the full effect or the full impact of our sales price increase. However, this year, it has taken a longer time because of our backlog. We have quotations out, and sometimes, the quotations are valid for 30 days can also be for 45, 50 days of quotations that they are valid. And then we have order backlog. Normally, the order backlog is 6 to 7 weeks. This year has been much longer, meaning it takes longer time for us to implement the price increase. So the Q3 results was improved, but only by 0.1% units despite the higher sales growth of 10%. So we could compensate the material price increases with higher sales prices, but not fully, but they could compensate with higher volume in Q3. So 10 quarters in a row with improved margins. You can also see on this page that we have a seasonality in the business. Q1 is always the lowest quarter for us. Because once again, 75% of our sales is on the consumer market, and the consumer market has much higher seasonality compared to the industry market. Higher seasonality but better profitability. The good thing with the industry markets are 2; less seasonality of a year, less seasonalities and more stable over the year. And secondly, is that most of the new development, the demands of new development, comes from the industry market. And by being in there, we can utilize that knowledge into consumer markets. As Henrik said before, we have today or yesterday evening, the Board took decision regarding our new financial targets. And we have updated the first 2 targets, capital and dividends, are the same as before. So the revenue or the sales target is that we should reach SEK 20 billion in 2030. We are today on SEK 7.3 billion, we have been growing last 10 quarters by 10%, and we should then reach SEK 30 million -- sorry, SEK 20 million in 2013. Meaning, we have to grow organically and through acquisitions to reach that target. Return on operating capital shall be above 15%. This target has been changed. Previous target on profitability was EBITDA margin, this has now been changed to return operating capital instead. I will come back later to that. Capital, net debt compared to operating EBITDA should not exceed 2.5%. We are today on 1.0%, including IFRS 16. If we exclude IFRS 16, we are 0.7%. And then the dividend shall be 50% of net profit, but have not set any dividend yet for this year. It's going to be set beginning of next year. If we then look at the sales development, we have a CAGR of 6% since the IPO. And we are today on this SEK 7.3 billion, and we have been growing quite much during the last 2 quarters. Also the last 3 quarters, we have been growing the business quite much. Still, we are -- we have something to do to reach a target. And to reach a target of SEK 20 billion, we have to do it through acquisition and organic growth. If we look at the return on operating capital, the profitability target has been changed from EBITDA margins to return on operating capital. When we set the return on operating capital, we are talking about EBITDA in relation to operating capital. Not operating EBITDA, but EBITDA in relation to operating capital. Operating capital for us is the total balance sheet, minus cash or financial assets, minus non-interest bearing debts and liabilities or provisions, minus taxes or -- when I talk about this internally, and I educate the people within our group, I normally turn around. I say it's net debt plus the equity. We shall improve the net debt and we shall improve the net equity. Looking at our development since the IPO, we had a really strong development in the beginning. And then we had a little bit set back in 2015, so -- and now you can't see perhaps on the webcast, but I'm showing here that a little bit set back because we took some costs -- we launched a cost program. And we took some extraordinary costs during that time because we've cut down our costs, and that costs us some restructuring costs. Then we reach the target, which is a new target at 50%. And then we had a negative slope, and we have been then improving during the last 10 quarters. We have been improving the return on operating capital by improving our profits. EBITDA has been improved, especially this year, as I said before, but we also reduced operating capital. Since the peak, end of 2019 and the beginning of 2020, we have taken down the average operating capital by SEK 630 million. Two things, working capital and also CapEx. We launched, together with the Simplify model, we launched a program for our working capital. Because of Simplify, we now could set targets on each local business units. So every 28 and now 29 business, but every 28 business units which we had before, they have a target on their working capital. On the inventory, accounts receivables, accounts payable, and we have actions on all 28 business units how to reduce the working capital, and this has really paid off. It has also been including in their incentive program. So by launching the Simplify model, we could actually go down deeper in the companies and identify targets and actions for each local company, each local factory, how to improve the working capital, and this has really paid off. So by doing that, we have then reduced the net debt, and thereby, the return on operating capital has been improved. However, we have also lower CapEx during the last 2 years. The CapEx has been lower than the depreciation. And that has, of course, a meaning that return -- operating capital has been reduced during these 2 years. In was '20, when the COVID started, we didn't really know what to believe or how to react. So we took a very quick decisions and postponed several of our investments CapEx. We stopped and postponed, and that meant that in 2020, we had lower CapEx compared to previous years. During this year, we said -- or I said 1 year ago on the last -- the Capital Market Day 1 year ago, I said we're going to increase the CapEx during 2021. This has not been the case. We have all the machines. We have taken decisions to increase our CapEx during this year. However, there are long lead times on machines today. So it's not only we that have longer lead times for our products, and the machine suppliers have also longer lead times, and meaning, that the CapEx has been postponed. Now we'll come back a little bit to that, so you can see more details on that. So with lower operating capital and with approved profitability, we have improved return on operating capital, and we are today at above 60% and the target will be 15% or above 15%. If we look at net debt versus EBITDA, this has not been changed, same as previous years, we should not exceed 2.5. We have been above 2.5 in 2018 because we took some decisions when it came to acquisitions. We had opportunities to acquire companies in 2018, and we have to decide either we say no to these acquisitions or we go above the 2.5 mark. And we took decision -- we took the decision to make those acquisitions. And I'm very glad we made those acquisitions because one of these acquisitions was within the e-commerce business. And the e-commerce business has been really profitable since that, so it was a good decision. However, we were then in the short term above the 2.5 mark. And we have then been working with our net debt. We have improved the profitability, we have generated cash flows through the working capital, and the net debt has been reduced from this more than SEK 2.5 billion down to SEK 1 billion. However, we have also now included IFRS 16 in our calculations. Today, we have IFRS 16 debts of about SEK 343 million, which were not in the balance sheet in 2018. So including IFRS 16, our net debt versus EBITDA is 1.0. Excluding IFRS 16, we are 0.7. So we have generated cash during this year, so we are a cash-generated company. We can reduce our net debt, and we have been reducing our net debt, and we are today on 1.0, including IFRS 16. This graph then showing what I said before regarding CapEx. We have lower CapEx during 2020 and also during the first 9 months this year. Normally, we are on around 3% of sales when it comes to CapEx, but last year, we were below the 3% level, we were shortly above 2.5%. These figures are also excluding IFRS 16. So last year, we were this 2.5%-ish, a little bit higher, because we postponed some of the decisions when the COVID started. And this year, it is longer lead times on our machines, so it takes time to get them into our factories and thereby it takes time to get them into our books. So it means that next coming period will be higher to compensate the lower CapEx level in 2020 and also lower capital level of this year. And that will then, of course, have slightly negative impact on return on operating capital. The dividend is also unchanged. 50% of our net results, looking at the performance during the last year, and we have paid out a dividend since the IPO SEK 18 and 50% in total. We didn't pay out net dividend on the income -- on the balance sheet for 2019, so we didn't pay out anything in 2020 because of the COVID. Otherwise, we have been around this 50% except for 2018. So the payout of 2019 -- of the balance sheet of 2018 was a little bit below the 50% mark because we made a little bit haircut due to the fact that net debt versus EBITDA was above the 2.5 target. So when we have higher net debt in relation to EBITDA, we also made the haircut on the dividend. Otherwise, we have been on this 50% mark during the period since the IPO. And now we have a new segment. Now, we're going to launch new segments. It's going to be from the first of January 2022, meaning the Q4 report and the annual report is going to be according to old segments. So the first time we report with the new segment is from Q1 2022. We're going to change from previous north and south from 2 segments now to 4 segments: Scandinavia, Eastern Europe, e-commerce, Western Europe, and then we have Other. We have 3 internal companies, and they are producing hinges and fittings is one, and 2 companies are painting aluminum for internal use as well as external use. And they are placed on the other and they account for about 3% of the external sales. Looking at external sales. The biggest one is Scandinavia. 54% of our sales is connected to Scandinavia, Eastern Europe, 23% of our sales. Western Europe, 8%; and then e-commerce stands for 12% of our external sales. And I'm going to go through each business units by business units -- or sorry, segment by segment. If we start with the third segment, Scandinavia. It counts for Sweden, Denmark and Norway. In total, 13 business units, so Elitfonster and Pihla Group, as I talked about before, they are including in Scandinavia. Sorry -- Scandinavia. Sorry, my bad. it's [indiscernible], sorry, not Pihla Group. So Sweden -- Sweden, Denmark and Norway. Sorry for that. Sales are of about SEK 4 billion, EBITDA margin of 13.8%, 13 business units. Consumer share of about 72%. In Sweden, we have rather high industry sales. We have quite low industry sales in Denmark and also quite low in Norway. The CAGR since 2018 is 5% and have been growing, and you can also see the profitability has been very stable '18, '19, '20 and then has been improved during this year rolling 12 months and are today on 13.8%. The improvement comes from more or less all business units within Scandinavia. We have 14 brands within Scandinavia, and this is our biggest segment within the group for the future. Eastern Europe, and now we have Pihla. Eastern Europe, that is Finland and Poland and also future acquisitions that will come from Eastern Europe. So if we will make acquisitions in Baltic or Eastern Europe, they will then be included in Eastern Europe for the future. Today, at sales of SEK 1.7 billion, EBITDA margin of 8%, we have 7 business units as of today and a consumer share of 63%. Eastern Europe had a negative decline in 2019, mainly due to consumer sales in Finland. In Finland, we have a direct sales model, and that was challenged in 2019 and also beginning of 2020, with the challenge when COVID started. So we had a challenge with sales. You can see that sales was dropping in 2020, mainly due to the COVID situation because we were not able to have this direct sales model as we had before. We're not able to go out and knock on doors and make sales and installation due to the COVID situation. So we lost sales in 2020, but we could improve the EBITDA margins because we took actions and reduced costs, and we're very fast to adjust to the new situation. So since 2019, up until today, the margin has been improved, and that comes from most business units within Eastern Europe. We also have Sokolka included in Eastern Europe, and Sokolka means there are sales in Poland. So negative CAGR, if we compare to 2018, minus 3%. What has increased now during the rolling 12 months and the margin has also been improved during the latest 12 months. E-commerce. E-commerce is our third -- largest segment has, in total, SEK 940 million. The SEK 940 million that is external sales plus internal sales. E-commerce has 3 factories supplying to e-commerce. 2 factories are excluding for e-commerce and 1 factory are selling to e-commerce as well as internal customers within the group. So our production unit in Poland is selling to e-commerce, but it's also selling to Sokolka in Poland and also sliding doors to Norway. So the SEK 940 million is external sales plus internal sales. And of course, the main part of the SEK 940 million is external sales. EBITDA margin of 17.6%. They had a huge improvement last year when it came to profitability because of good cost control, improved efficiency and, of course, also because of higher sales. 2 years ago, when we had a capital markets year -- capital markets day, 2 years ago, we presented e-commerce. We showed a figure of e-commerce. And we said at that time, we are going to double the business of e-commerce. And today, we are ahead of that plan because it goes faster than we expected. Of course, one driver has been the COVID situation. The COVID has mean that we have sold more through e-commerce or the growth will be more through e-commerce compared to other channels. When we talk about e-commerce, we are talking direct sales to the end user, where we own the platform. In other businesses, we are selling to customers, and they have an e-commerce platform, but that is not defined as e-commerce in our business. So when we talk about e-commerce, it means it's our web platform, it's our productions. And we are in control of the direct sales, the contact with customers, we are in control with the web platform. We have control of the logistics. We are control of the productions. We control the whole value chain. That differ us compared to many of our competitors within the e-commerce. We can control the whole value chain. The margin has declined during this year due to, one, of course, the material price increases. This has been one impact, but also due to investments for the future. We would like to expand this business, we would like to grow this business. We would like to enter new markets. So we have built our organizations, and we are also invested for future growth. Of course, that has cost us profitability during this year, but it will give us something in the future, higher sales growth in the future. Today, we have sales in Denmark, Sweden, Norway, Germany, and also in Finland, U.K. and Ireland, but the main part comes from Denmark, Sweden, Norway and Germany. The good thing with e-commerce is that we can grow quite fast. We can enter a market much faster compared to a greenfield. For instance, I can give an example. Many years ago, we decided to enter Austria. We decided to go -- to make a greenfield in Austria, not to build a factory, but should enter sales into Austria. So we organized on our organizations, we hired organizations. We set up a showroom, we took out the products, they find the products, what products need to be used, and we started to sell. And it took us time. It took us 1.5 year from decision until we had a first order. When we entered Germany with e-commerce, it took us a couple of months before we had a first order. So we can grow faster into new markets with e-commerce. However, as Jonna and Antti explained before, each market is different. So we have to set up new products for each local market. We cannot use the same product on all markets. The business has been growing. CAGR of 18%, including internal sales. If only calculate external sales, the CAGR has been more than 20% during this period. And one segment, one business unit. For us, the e-commerce is one business unit with many brands. And then we have Western Europe. Western Europe, that is U.K. and Ireland. And in the future, all acquisitions we do in Western Europe will be included in this segment. Today, sales of SEK 570 million, operating EBITDA margin, slightly below 8%, 7.9% rolling 12 months. And here, you can also see we have improved the results or the margins during this period. It was not an improvement in 2020. Sales went down to 2020 due to COVID situation. Many of you know that U.K. and Ireland have tougher regulations when it comes to COVID compared to the Scandinavia. We had a complete lockdown in U.K. for a couple of months -- a couple of weeks. And we also had a lockdown end of -- beginning of 2021 in Ireland. And that has impacted sales and also, of course, the profitability of the business. But this year, the profitability has been growing. We also made a turnaround of one company. We had a company in U.K., Allan Brothers, where we have been struggling for several, several years. We have changed the management several times. And now we have a new management internally from the group. [ Dan ] went over to U.K., and we have now made a turnaround of that company, and that was one of the contribution behind the improved results. So a CAGR of 0%, so we are more or less the same size today compared to 2018 and a consumer share of 81%. So quite a rather high consumer share. And then we also had one other, but I don't have a slide of other 3 business units selling internally to the company. So how to reach our targets? To reach our target of SEK 20 billion in sales, we have to do acquisitions. We have to grow organically, and we have to do it through acquisitions. Today, or end of September, we had liquidity of SEK 2.4 billion within the group. And this -- if these are going to be used as acquisitions, we can acquire sales of around SEK 4 billion. SEK 3 point-something billion to SEK 4 point-something billion. Of course, it depends on the profitability of the company acquired. It also depends on the multiple we pay for the company. But around SEK 4 billion, we can acquire with the balance sheet we have today. So SEK 2.4 billion in liquidity, we acquired SEK 4 billion, and then we need more liquidity to make more investment and more acquisitions to reach the SEK 20 billion. And as you have seen in these presentations, we are a cash-generating company. We generate profit, we generate cash and we can utilize that cash, of course, to pay the dividend, 50% of dividend and the rest can be used for investments. Internally in CapEx, but of course, and also with acquisitions. So we -- with our cash flow, can and will generate the cash flow needed to make the acquisitions for us to be able to reach the SEK 20 billion target in 2030. And with that, I open up for questions.

Thank you so much, Peter Welin. I have 1 question at the very start. Are you going to be around in 23 years?

No, not in 23 years, but some yes, I can start because I really enjoy this business. But I don't think I was going to be 70 when I end here.

You never know, okay. So here we are at the end of the [ 2 x 4 seen ] show, the Inwido Capital Markets Day 2021. We open up for questions now and follow-up thoughts on what we've learned so far, and we will do that with Henrik and Peter. For starters, if Jonna, Lena or Antti are needed, they will step up on the stage to answer questions as well. We have 2 channels going. We will start with the room here in Stockholm with the lovely guests here that have questions. I'm sure that Victor will fire away shortly, for instance. And then we'll go to you guys and girls on the webcast. Thank you for being so many. Thank you for staying along for such a long stretch in this beautiful morning. So and you're typing your questions in the little machine, and I will relay them to Henrik and Peter and the rest of the gang after we do the room. So let's just fire away. Who -- hands up will suffice?

Thank you. So Victor Hansen, Nordea Equity Research. Thank you for the presentation. Peter and Henrik today. So to start things off on your profitability target, ROC? Isn't it a bit prudent as you reached way above this already LTM?

I think it's -- if we look at the target, we think 15% given our growth ambitions because we -- I think it's fair to take that into consideration. And given that we raise our ambitions in the growth area considerably, I think it's fair and also looking at this actually over a cycle. So this is a level that we want to reach over a cycle. I think it's a fair target actually. We think that we know that when we make acquisitions, it takes a little bit of time to get those acquisitions up to our level, if you will. And that will obviously impact that ongoing trajectory. And as I said, with a more aggressive growth agenda will also require us to acquire businesses, which will -- not all of them will be at our present profitability level. So I think it's a fair ambition to have over a cycle. And 16.4% where we're at, at the moment, I think it's -- for our type of business in our industry is a very good level. And I actually think 15% is also a good level. So.

Yes. Okay. So is it perhaps 50-50 in terms of margin down and capital build up?

We have not said exactly those of course -- then we also CapEx. The CapEx will increase in the next coming years compared to the level of 2020 and 2021, that will also have a negative impact on internal operating capital because operating capital will increase. So how the split will be between operations, ongoing performance compared to acquisitions is not set. But as Henrik said, 15% is quite -- we believe that is quite good level, and that means that we generate our cash flows, and we can have a decent profit -- a good profitability compared to other peers.

And just to add on that, I think we've had a -- we've had -- we've come off a very strong stretch from an organic growth perspective. I mean this industry over time doesn't normally see the type of growth numbers that we show. I said also, we've strengthened our position. So we -- to be clear, we've taken market share in this period. But we're also making conscious investments for continued growth. And obviously, that will take a little bit of cash to do that. So yes, it's a combination.

And a little bit on your Danish market. It's been performing very well with high margins, and we didn't touch much upon that today. So how much can -- can this continue? And then perhaps how much is driven -- has been driven by the underlying demand? And how much has been driven by the tougher regulations?

I think -- I mean, if you look at the fundamentals of the market, I think it's important to understand that although the Danish market is -- we have to say, it's an attractive window market. And as we've tried to explain before, there is a big variance in diversity in terms of the structure of the market in all geographies. But the fundamentals of it is that we have successfully built very strong positions in the Danish market over time. So in terms of -- how should I say, in terms of the outlook for the development of the Danish market, I think in the short term, it is, I mean, right here and now, it looks pretty okay, as I talked about before. In the short term, it is a bit difficult because now we have a fourth wave of COVID. We have immaterial inflation. Will that somehow impact demand, hard to say. But in the long run, we see the same optimistic view as we do in many other geographies. And you're very right. In the short run, it's also been, and we'll see that, I think, throughout '22 as well. It has been impacted by tougher energy regulations, which has actually helped -- which is exactly what we're talking about, by the way, on a European level will support our sales growth is the tougher energy regulation has indeed helped to drive value into the market. And there is some more spillover to see on that, I think, coming into '22 as well.

Yes. And if we switch over to North, if you could talk a bit about perhaps not the turnaround, but the potential margin accretive actions that you could take. Could you speak a bit about this? And I guess that Norway and Finland, which was also included there, they were performing a little bit more poorly below the average. If you could speak a bit about that and perhaps also walk us through the margin per country in Scandinavia because I know Denmark is very accretive.

Yes. So we're not going to report the margin by country in Scandinavia. But you are right in the sense that Denmark has a higher average margin than we do in Sweden and in Norway. However, if you look at the variations within the country, they are quite big as well, back to the diversification issue. So we have a 20% plus businesses in Sweden as we have businesses that are below average in profitability. I think there was one item in our strategy that I highlighted, which was actually around improving a step change in the profitability of some of the larger units. And we still have some opportunity to do on that. We will actually leverage. And if you pay attention in Peter's presentation, you saw that in Eastern Europe, we have seen an improvement in profitability coming through in the last year, last years. Part of the explanation for this is actually leveraging the decentralization model, not only on a group level, but actually also go -- I mean, Antti can talk a lot more about this over lunch and what we've done in Pihla Group, the biggest. But leveraging decentralization out into the business, and we're doing the same in our biggest Swedish unit at the moment as well in that process. And it's really about leveraging the strength of the model, taking it all the way out into the bigger units. But it's also about some footprint choices. It will require some CapEx, quite frankly, to get up to an efficiency level that allows us to be profitable enough and continuously working with the customer proposition and developing that.

Then in Norway-- you asked about -- but Norway, Norway, we have improved. Going back 5, 6 years ago, Norway was a negative for us less than 5 years ago, Norway was a negative figure for us. We made losses in Norway in 2014, '15 were quite large losses. But we made a turnaround in Norway. And today, the build is not the same level as in the rest of the group, but it's in decent level right now and it has been improving in the last 3 years in a row now. So Norway is not the black ship in -- within the group the group anymore.

Could you wrap up? We have many questions on the webcast, so we'll need to go to them as well.

Yes. I'll have a final question here. So Henrik, you have spend more time on M&A, as you've made clear today. Do you see any need to expand M&A team further quite ambitious targets?

Yes. I think at the moment, we are where we need to be in that sense, we have dedicated the [ impetus ] organization, dedicated M&A resources. But I wouldn't take anything off the table at the moment. Let's see what -- we want to try to come flying out of the gates on this one. But obviously, looking at the underlying organic sort of potential that we see in the market, we will have to do considerable M&A. So that might come down the line. Let's see.

One more question from the room, and then we'll go to the webcast and then we go back to the room.

Okay. This is [ Carsten ] from [indiscernible]. Talking about M&A. Could you talk a little bit about your pipeline right now on M&A? Secondly, another question that's relating to your margin targets, EBITDA margin. Looking at your business today, how much EBITDA margin do you think you can drive out of the business without acquisitions?

Okay. Yes. So if we start with the first one, the pipeline. We are -- we have increased activity considerably on the front, as we've talked about before. I might even have hoped that we could have brought some news today. We're not doing that. And there is always a certain, as you all know, a certain level of unpredictability in the processes. We have a -- we are now in ongoing dialogues with at least 2 handful of businesses. To be quite honest, we wouldn't have the capability to do all of those at once. But it means that I feel a lot more comfortable in the pipeline that we have now than we were in, let's say, 1.5 years ago in the midst of the COVID crisis. And we're looking -- we're looking at targets in current core geographies that we're in dialogue with, but also going into new geographies. That's on what we refer to internally as the short list. We have a long list with which is probably now at around 150. Is that fair, something like that target. And we have a short list, which is probably now around the 15 to 20 mark. And those are more sort of realistic and in discussion. When it comes to the second part, it's a little bit hard to answer the question, what's the organic EBITDA margin potential. I would say that to be -- we have some considerable potential in a couple of bigger units in what's presently business area North, which we can improve. But if you look at the development, for example, in our e-commerce business, the 17-plus percent margin that, that business is running at is a bit higher than we had in our original plan, and part of that was propped up by the fact that we had considerable price opportunity in the market, given how fast the e-commerce market grew late in '20 and early in '21. I mean we could actually -- we're very, very responsive at price setting in that business. Every minute basically, and we could jack up prices to a margin level, it's probably a little bit above it. But I think at the end of the day, there is some underlying margin potential left organically in the business, definitely. And we'll obviously work diligently to get that out as we add in acquisitions.

Okay. Well, you guys dwell on potential questions, I will shoot some -- fire some from the audience on the webcast. This is from Johan Dahl. And we talked about the margins in Denmark. He has -- if you can elaborate briefly on the performance in Sweden and especially Elitfönster market share, profitability, sales channels, performance, specific question about Elitfönster, the biggest, largest business unit.

Yes. Yes, I can -- I mean, without going into, obviously, too much detail on the business, given the reporting structure. But fundamentally, we've seen -- the Swedish market has gone through what I would call a bit of a rough patch with -- As Peter talked about before, we saw quite a dramatic shift in '16, '17 with consumer sales going down, industry sales going up. We've seen increase in complexity. And we've also talked about before that we've seen some increase in competition in the market with a quite rough market entry in that space as well, '16, '17. If we look at the ongoing development, -- Also in Sweden, including elite fund store, we're actually on the trajectory from a market perspective, where we started to take regain market share. So it's quite -- actually quite a good rate restrengthening the position of the business. We are in the process of making some quite considerable investments into the business, improving the efficiency, and we're starting to see some emerging signs of that. And overall, actually, I'd say that we've revamped the leadership of the business over the past couple of years, which is also taken it in the right direction. And very, very, very importantly, and I'm actually quite glad I had a discussion with someone in the break about energy prices. And as much as -- I mean, obviously, as any business, parts -- we suffer from parts of this. I mean most of us suffer at home from this. But in our industry, it means that the understanding of what windows and doors can do to conserve energy increases; and secondly, actually puts focus on sustainability. And Elitfönster has done a really good job taking the clear leadership position on sustainability in the industry. I would say almost from a Scandinavian perspective. So I think that throws it in the right direction.

That's a perfect [ rogue ] over gone. It's a perfect bridge over to this next question from [ Andreas Nielsen ]. With the increasing focus on sustainability in many countries, how do you view Inwido's products versus competitors, I guess, in the energy part of it?

Yes. I mean that's a very, very hard question to answer. In reality, we have 29 business units. There are probably 29 different answers to the question. And it'd be hard even to draw an average. But what I'd say is being the leading player allows us to invest a little bit more resources and improving their products from an R&D perspective. And actually, allows us to take a position to maybe, with legitimacy, particularly internally, drive this question a lot harder. In fact, I talked about sustainability plans for all the individual businesses. So I couldn't give you any fact. If I were to give a feeling, I would say that on average, we are better than competition. But there -- with that said, we have competitors out there that are very, very good in this respect and that in some geographies are actually role models for us that we're striving to be.

And trying to cluster -- Thank you, Henrik. trying to cluster the questions here. Another sustainability question from [ Thomas Ramlilis ] is about the science-based target -- science-based target initiative, which we've talked about today earlier, is very inspiring that we commit to that. Could you elaborate if our targets are now officially validated? Or when will they be sort of?

Maybe you can answer that, Lena.

Yes. Okay. Can you hear me? Well, you have a period where you are investing the already existing KPIs that we are having, and you have that period of 2 years. So we have, of course, already put estimation for the Scope 1 and 2 when it comes to the science-based target KPIs. But now we also need to include the Scope 3. And that is, of course, more difficult because it's out of our own business, I would say. So this is something that we now will drive and also validate it in the end. Then it could be that the science-based target say that, well, now we stick to only 1 year. So we are up and running with this to try to see how we can -- to put our target. So it will meet the expectations.

But we commit to set the ambitious targets that we still have to be -- we now basically have a grace period from science-based targets to validate this together with them. So we have a hypothesis around what they are, but we need to validate them. And it's only after they are validated that we're formally committed.

Thank you, Lena. Another financial or other inflation question, when talking about the inflation, you referred to potential impact on demand. Margin was not touched. Does that imply you can manage higher input prices through a better sourcing and price increase?

So it's -- Okay, so there were 2 questions. So number one, I think back to that question around will the material inflation impact demand? I think hard to say. Have we picked up notions that there are project developers out there that are evaluating pushing products around to wait for some lower prices? Yes. But on the other hand, I mean, if we look at the order book as we close the third quarter, it's still very strong. So it's hard to say. When it comes to the second bit, I think we -- as Peter talked, normally, we would have expected to see with all the underlying activity we have, we would have expected to see a better margin improvement in Q3 than we did, not the least with the higher volumes, we get better efficiencies. So the inflation has absolutely impacted our margin. We still were able to increase it, and we will continue to see that impact through in quarter 4 because inflation is continuing up, and we will always, to some extent, chase our tailwind that's happening. I would say, at the moment, we are now the main way we have leveraged our supply chain capability, but particularly then our sourcing advantage is to actually secure material supply. We have a lot of competitors out there, which have basically failed their customers because they haven't been able to get material. We have had many, many small disturbances, but no material impact, I would say, across the group on ability to deliver our customers, and I think we're fairly unique in that respect.

And a very specific question for Peter regarding the new segments. Will you break down historical quarter revenue and margins accordingly to the new segments? If yes, how many historical quarters back?

The first question is, yes, we will. How many quarters back, has not been set yet, but some years back, we will go. Yes, some years back. But yes, you will have more data in the Q1 report for 2022. That's the first time we're going to report according to the new segments.

Good to know. Before we go back to the room, do you think you have outperformed or underperformed in the online sales channel over the last couple of years?

Yes. I mean it's really hard to -- I think we have a certain level of -- so one thing I can do. It's really hard to find benchmarks in the online channel. We can look at some, in that part of the business, to some peers. So for example, people who sell who are online players, semi-retailers or merchants in the construction building material space, now are limited to quite few. If I compare the organic growth of those businesses to the organic growth of our e-commerce business, we have outperformed. But we also have to remember that there's been a shift in the market and ongoing. That's 1 of the reasons why we're making this investment is there is a shift in the market to go online, not for the entire market, but for a certain part of the market. I think we also have a very -- we have to remember, we have a very unique e-commerce model in our space in the sense that we own the entire value chain. So from lead generation, CSM optimization and basket conversion ratio optimization and closing the deal, all the way through to factories and nail pistols and glassing and sourcing of these materials. And there is no other player like -- well, yes -- there are -- but there are no player of magnitude of -- like this in Europe. There are a couple of other smaller players, but none of our magnitude. So we have a bit of a unique position in that sense. And I think that's helped us to, if I now call that outperform the market in that sense.

A question for Peter. What is your estimation for CapEx '21 and '22? And going forward, is it fair to assume CapEx will be in the range of 3.5% of sales. You spoke about this.

Yes. So this year, normally, we talk about 3% of sales. And this year, it's going to be below the 3% of sales. And so it means we have to compensate the next coming 1, 2 years. So it's going to be above the 3% mark. So if you then calculate an average 2020, 2021, '22, '23, There, it should be an average 3%. So above 3% in the next coming 2 years to compensate the last 2 years.

Thank you, Peter. [ Fredrik Roel ] asks how much additional revenue would you say comes from the COVID effect during the last 2 years? It's difficult to say, but you spoke about the COVID effect, both Peter and Henrik.

Yes. I think in all honesty, we've had a bit of a mix impact, a mixed impact, obviously. Peter talked about the negative impact that we've seen in the U.K. and Ireland, for example.

And Finland.

And definitely in Finland, we've seen a negative effect. On the other hand, we've seen that the Scandinavian markets have had a boost, I would say, particularly Denmark actually. And particularly on the consumer segment. And obviously, the e-commerce segment has had a considerable boost. So on average, my -- a balanced view is still that we've had a slight positive impact from the pandemic. And that's part of the reason why we achieved, I would say, above-average organic growth and above expectation organic growth during the period.

And here's another tricky question that perhaps Victor could have asked, but this was on the webcast. Thank you for that, [ Fredrik ]. When net debt raised due to acquisitions, how will you defend the 15% target in operating capital?

Peter can answer that.

No, it's going to be the [ standard ]. Of course, when we acquire companies, depending on their profitability, but if they have a lower profitability, the return operating capital -- The operating capital will not be increased that much because we're going to pay the multiple. So it's going to be based on the multiple we are paying for the new companies in combination with that we can then improve the companies. And looking at our performance, going back to 2008, you can see that we have been able to improve our profitability for the entire group by being in group, by working together, by extracting the synergies and work together as Antti and Jonna was talking about before. So by doing that, we will improve the profitability when we make acquisitions. We can reduce material costs through synergies, through our sourcing. We have our KPIs. We know what to do. We can identify deviations. We know what actions to take. We can work with working capital and acquire companies. Doing that altogether, we will then defend our return on operating capital target of 15%. So it's a combination of how much we pay and the performance we do after acquisitions.

And I think it's -- to add on that, I think it's actually -- that's one of the reasons why we think it's relative. I mean return on operating capital is quite tightly connected to shareholder value creation actually because how efficient are we managing our capital. And we think that we could acquire a 7% EBITDA business and take that to 10% at a good multiple, take that to 10% and that will be really good from a shareholder creation perspective -- shareholder value creation perspective. But if we had only a margin target to refer to, we might actually avoid doing that transaction. So that's part of the reason why we're committing to a generating high returns rather than just an absolute margin target.

One more question from the webcast. Thank you for many, many good questions. One more question before we go to the room and maybe summarize. What is your view regarding potential divestments in positioning the company going forward?

I mean, fundamentally, we are -- we have a growth mindset. So at the end of the day, we're here to grow. And we've made all of these acquisitions over time because we thought it was good businesses with an interesting position that we could develop. So divestments will not be a natural part of our strategy, even though I've noticed lately that it's quite popular to the divestments. But however, obviously, we're pragmatic and we analyze and set plans and strategies for all the businesses, depending on what best for our businesses. So will there be a scenario at some point in time where 1 business could thrive better outside of the -- of Inwido. I don't see that now, but it could happen. And if it does, we will divest the business. But it's not in the scope at the moment.

I said it was the last, but I have to finalize with it. Mr. [ Pietro's ] question, he's a nice guy, by the way. What is the interval of confidence around the SEK 20 billion sales target in '30. Is this a central scenario, what could go better and what are the risks in order to achieve this goal? It's a perfect finalizing question for a Q&A, isn't it?

So what's the level of confidence? Well, first of all, if I didn't believe the target, I wouldn't launch it and I wouldn't be here. So I think that's number one. Now does that mean that I can tell you exactly how we're going to get to that target 9 years from now on a detailed level? No, we have a pretty good hypothesis on an overall level. We validated that hypothesis. But we've also discovered not the least in the past 1.5 years that things tend to happen that we haven't really planned for. So it's difficult. And that ties back to the question. If you look at the underlying performance of the business, if you look at the capital structure that we have, this -- and this very much adds up. The scenario very much adds up. Now could we be in a situation where we do even better. I would like to think so. I would like to think, but at the same time is it tough target? Yes, it is, it is. I guess, let's -- we'll meet up in 2031, and we'll see how we did.

Excellent idea. Any last questions from the room here in Stockholm. Yes, in the back.

This is Pauline from [ Handelsbanken ]. We talked about the COVID effect. And how do you see the order bookings going forward to 2022 as the society reopens?

Yes. I mean if we look at -- I think the statements from earlier, basically, that says that the starting point is obviously good. The order backlog at the end of quarter 3 was strong. And the short-term activity looked robust. I think what we've seen is we've seen a slight -- we've seen some slight shifts in there. But still, the activity has remained fairly robust anyway. I would -- there were many possible scenarios going into '22, I would say. There are some underlying positives. So there is still good -- household savings ratios are high. House prices are high. That's normally good for us. A number of factors like that. But obviously, there are also concerns on what happens with the fourth COVID wave? What happens if societies open up fully and people travel like before, could that have an impact? Will prices have an impact? So it's actually -- I would say, from our perspective, we're really planning for -- we know we have a strong start point with a good order backlog, and then we're planning for several scenarios for '22. But then as I've said many times, the long term -- we have another positive, by the way, I talked about before energy prices. That's also good for us, to be quite honest.

Interest rates also.

Interest rates is also good for us. But in the longer perspective, the positive outlook in terms of this desire for investing at home and an efficient windows are still there. But '22, there are signs pointing in both directions. We know we'll start with a strong position, but where it goes, let's see.

Okay. And one more question. about the e-commerce? How do you see the growth will be in the following years? Do you have any expected numbers?

Yes. I mean we -- 2 years ago, as Peter said, we launched the ambition to double the business over -- we weren't crystal clear, but over a 5-year period, basically. We are considerably ahead of that curve. Do we think that we will beat that target also in a 5-year perspective? So from the basis when we launched it, yes, we do. Do we think that we can maintain the 40% plus organic growth momentum? No, that was boosted by COVID. That was a bit higher than we had expected. And quite honestly, also we've had to accelerate some quite considerable supply chain investment just to keep up with production. But we have a considerable organic growth agenda for that business also going forward. That includes growth in current markets but also entry into new markets at the right time, and we stand by that ambition. Which if we do things -- if we execute that plan to plan means that we will actually beat that doubling the business ambition that we launched.

Which will demand investments in our productions as well as in marketing and going to new markets.

And 1 last question, talking about entering new markets. Which markets do you see most potential looking forward?

Yes. I mean from an e-commerce perspective, it's a bit hard to -- there are many interesting ones. I mean, we still quite recently entered Germany that's growing very, very rapidly, but from a small base, but there is definite retention, and there are other interesting markets. If you look at it from a group perspective, effectively, we think that -- we still think that the U.K. and Ireland is an interesting market. There it's definitely underinvested. And at some point, that investment pace will go up. We think the DACH, we've highlighted that before, Austria, Switzerland and Germany are interesting geographies for us. But I mean, also, if we look at the ambitious targets that we set for growth now, I think that we'll think more and more the other way around. So which markets are -- rather than which are the most interesting ones, which markets are not interesting, where does our model not work? And that's why we're probably broadening the scope a bit in Western Europe in terms of what we're looking at investments or M&A-wise going forward. And I definitely see there are [ France ], that an interesting market particularly in Northern Italy, resembles a lot the Switzerland and Austrian market, but also Benelu has some interesting opportunities. So there is -- I mean, as I talked about before, there are many, many thousand interesting businesses out there, and I think that many of those geographies are actually ripe for a bit more consolidation. And we'll do our best to be at the forefront of that.

Any final questions? Or should we call it a day or half day anyways. So this concludes the 2021 Inwido Capital Markets Day. Thanks for taking part of this program. Thanks for being in this room, and thank you guys for staying along for lunch. And thank you on the webcast. Record amount of visitors on the webcast. We're very happy that you participated. We hope that this window of opportunity continues to be a successful journey for all of you and that you stay on board for a continued successful journey up until 2030 at least with Inwido. So stay tuned for what's to come, take good care of yourselves and your loved ones. And thanks for joining the Inwido journey.

Thank you very much.