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

Hello, and welcome to today's webcast with Inwido, where President and CEO, Fredrik Meuller; and CFO and Deputy CEO, Peter Welin, will present the report for the second quarter of 2025. [Operator Instructions] And with that said, I hand over the word to you guys.

Thank you very much. Good morning, everyone, and welcome to this Inwido webcast. Today, we congratulate Sweden's Crown Princess, Victoria on her birthday, and what better way to celebrate that then to go through Inwido's second quarter report of 2025. My name is Fredrik Meuller. I'm the President and CEO of Inwido. And right next to me here in Malmo today is Peter Welin, our Group CFO and Deputy CEO. We will, as usual, go through some group highlights and then the detailed group financials, followed by a BA run-through, and finish off with summary and outlook and a Q&A. And as usual, this material is also available on Inwido's website. Yes, you're all very well familiar with Inwido already, of course, so there's no need to dwell upon this. What I would like to say, though, is that although Inwido is leading in Europe's window and door market, we are actually only in 1 out of the top 10 markets ranked by size in this industry, and that is the U.K. market. And my point with this is, of course, that there is still huge growth potential for Inwido to expand, both organically and through mergers and acquisitions. If we then look at the quarter, I guess, it's best summarized in the word of interesting, lots of things happening in the world around us, and that has resulted in a bit of an amber, please wait button where the expected and much needed rebound has been pushed forward yet again. It's very much a volume and a timing game. Worth noting, though, is that the fundamentals remain the same and the fundamentals remain rather strong. Inwido has strengthened its positions. We assess that we have gained share throughout the quarter. I'm overall pleased with the performance of the group and still rather optimistic about what's around the corner. Our sales are up a bit. Our order intake is down. Have in mind though that in Q2 last year, we did post a record order from Carlson, our entity in Ireland, so that has an impact in comparison now quarter-on-quarter. Having said that, we must not forget that the order book was up by 9% now in the quarter and it's actually at an all-time high for Inwido. We did a good job in keeping margins up despite price pressure and a less favorable mix. And for the absolute operating EBITDA number, we must not forget the fact that it's being hampered by a Swedish krona that has been strengthened, and the impact is SEK 9 million. There's no cigar on M&A yet. It's close, but no cigar. It's not for lack of activity. You can see that if you go into our notes for the EPS that we have taken some transaction-related costs and charges in this quarter. It will take time. Processes are a bit lengthy, partly because of the surrounding market turmoil because -- but also because of the fact that many of our discussions are related to families selling off their second or third-generation company or baby, and that's, of course, an emotional process. It simply takes time. If we look at the snapshot of our Q2 key financials relative to the same quarter last year, again, we're lacking volume, meaning that some costs remain under absorbed. Again, the profit has been hurt by the FX impact, the SEK 9 million in translation from our international entities. And at the same time, the margins remain the same as last year's Q2. The main positive drive is coming in this quarter from our BA Scandinavia and Eastern Europe. And I think it's worth mentioning that we continue to reduce our gearing, which of course, first of all, offers comfort in turbulent times like these, but also provides us with healthy firepower for the mergers and acquisitions spree that we are on. And if we look at the full 6 months year-to-date, adding also Q1, the pattern is relatively similar across geographies and business areas. I guess one main difference is that we do see an uptick in Sweden, partly boosted by the government stimulus and lower interest rates. And so that's an important market for us that's performing better and better. Overall, I'm quite pleased with the performance given our circumstances where both top and bottom line is up, of course. And lack of volume is really a common theme across all markets with household consumption, not really taking off despite some stimulus and thicker wallets. And if we look at the Swedish market, for example, it's well illustrated by the fact that the real estate market is showing still rather few transactions and still relatively stable prices. So that's an indicator in itself. Generally, though, we outperformed the market. We are still perceived as a flight to safety with also our very high delivery position across many of our entities, which is important. And again, Scandinavia and Eastern Europe performing a bit better in both absolute and relative terms, while e-commerce and Western Europe are not bad in any way, they're just facing a little bit more headwind. Worth noting is that several of our peers are struggling, I guess, most notably in the U.K., but also in other markets. We did see some 2024 figures for some of our e-commerce peers the other day and they are performing much worse than Inwido. We could also note on Friday last week that Eko-Okna, a large Poland-based window player is laying off thousands of workers at the moment. So a sign of the times, but if we look at sustainability, green is not necessarily my favorite color. I'm a true blue. But in this case, green is definitely good. And it's yet another quarter of really strong KPI development, which is super pleasing. And again, a sign of us doing the right things. It's a small and big things that add up to the positive totality. Good news is also that this is continued to be recognized also externally with, for example, The Financial Times, putting us high on their list of European climate leaders and CDP ranking us higher now with an A minus ranking in their supplier engagement assessment. We continue to be candid about the vital few priorities that are key for us in order to achieve our 2030 road map. And I have to say, we're gradually getting there. If we start with M&A, again, active and positive level of activities. I think the outlook is rather promising based on the almost record broad and record deep funnel that we have and the ongoing discussions that we have. Needless to say, the market uncertainty has been a bit of a wet blanket on M&A processes. And as I said, the emotional family ties means that some of these discussions are simply taking a bit more time. Moving on, the green transformation is definitely happening. Everyone is talking about energy efficiency. And of course, we are eagerly awaiting some more clarity on the implementation of the EPBD directive, the Energy Performance for Buildings Directive, that will come now in the second half of the year, with implementation in the early part of 2026. Worth mentioning is, of course, that we have a great add-on to our already strong group management team. Malin Cullin will become our new EVP for People and Culture, and are really looking forward to having her on board. Pleasing to see also the interest we've had in applications for that role, meaning that Inwido enjoys a rather favorable employer brand situation, which is great. Great -- it's also great to see that -- it's a bit of a cultural revolution still continuing with Inwido in terms of collaborative -- yes, much more collaboration across the entities, meaning that we have also started to exploit synergies even further. And last but not least, the technology development is something that we are very close to, primarily so far within marketing and within software to our machine investments. Now for a little bit more flavor on Inwido's consolidated Q2 financials, I will hand over to you, Peter, please.

Thank you so much, Fredrik. And we start with the income statement. On this page, you can see the income statement for Q2 to the left, year-to-date in the middle and to the right, latest 12 months as well as last year. Starting with the quarter, net sales was on the same level as last year. Organically, it's a growth of 3%. The gross margin was also the same as last year at 25.6%. Operating EBITDA was plus 1% compared to last year, and the operating EBITA was SEK 1 million above last year, SEK 264 million compared to SEK 263 million last year. Thereby, the margin was on the same level as last year, 11.3%. As Fredrik mentioned before, the operating EBITA has a negative impact from the stronger Swedish krona when translating into SEK, the non-Swedish daughter companies, and that has a negative impact of SEK 9 million compared to last year. Sales declined by SEK 76 million due to currency and the operating EBITA by SEK 9 million due to the currency. The margin has also a negative impact when looking at the mix. In the quarter, the consumer sales declined by 5%, whereas project sales had an increase of 9%, and those who are following Inwido some time knows that we have a higher profitability in consumer compared to projects. And thereby, the underlying margin was improved in the quarter when compared to last year. Between operating EBITDA and EBITA, we have SEK 16 million of costs mainly related to acquisition projects in the quarter. Further down the income statement, we can see that profit after tax is up 8%, and the earnings per share is up 7% compared to last year. Looking at year-to-date, January to June, sales is 5% above last year, organically is plus 6%. Operating EBITDA is plus 6% compared to last year and also the operating EBITA is also plus 6% compared to last year. And profit after tax is up 15% compared to last year and earnings per share is up 16%, from SEK 2.89 to SEK 3.34. And thereby, rolling 12 months, Inwido has a sales of SEK 9.34 billion, with an operating EBITA of SEK 975 million, equal to a margin of 10.8%, and earnings per share is 9.74 rolling 12 months. On this page, we can see the development in the quarter. And to the left, you can see the development on sales, Q2 last year until Q2 this year. And to the right, you can see the development on the operating EBITA. We have improved resource as well as margins in Scandinavia and in Eastern Europe. E-trade is still challenging, with lower sales as well as lower profitability. However, the order intake in the quarter for e-commerce was plus 7%. Western Europe is lower sales as well as lower profit compared to last year. Ireland and social housing in Scotland is still doing okay, where the deviation is mainly within England and the consumer sales in England. Looking at a more long-term perspective. This page is showing sales as well as operating EBITA for Q2 2019 until 2025. During 2020 and 2022, Inwido had a positive pandemic impact, mainly due to higher consumer sales during this quarter -- during this year in the second quarter. And then in 2022, we had also a volume increase when comparing to this year. The margin for this year is the same level as last year. And once again, the underlying margin is improved when seeing that we have a negative mix impact with lower consumer sales of 5% and higher project sales of 9%. And the margin this year is above the pre-pandemic, the margin 2019 of 10.9%. Look at the cash flows. This page is showing the cash flow development in Q2. Cash flow from operating activities is up compared to last year from SEK 275 million to SEK 289.9 million, an improvement of 14.9%. We have negative changes in working capital, mainly related to operating receivables due to 2 things. One is, of course, the mix with higher project sales compared to consumer sales. And the second thing was also the sales during the quarter, with higher growth end of the quarter compared to the beginning of the quarter, and that has a negative impact looking at operating receivables. The cash flows from investments is slightly down compared to last year, both in the quarter as well as year-to-date, as you can see to the right on the table to the right or the graph to the right, and we foresee increased activities level during second half of this year. With that cash flow, we can see that the net debt is more or less on the same level in June as it was in end of March, even though we have paid a dividend in May of SEK 319 million. So the net debt end of June equals to SEK 1.517 billion, that is SEK 230 million lower compared to last year, and the net debt includes IFRS 16 debt of SEK 486 million as well as acquisition debt. Looking at net debt versus EBITDA and it's now on 1.2, including IFRS 16, compared to 1.4 last year. And excluding IFRS 16, we are 0.9 compared to 1.1 last year, below the target of maximum 2.5, meaning Inwido has still a headroom for further growth. One of our financial target is return on operating capital. The target is to be above 15%, and this graph is showing the development and return on operating capital since Q2 2021 up until Q2 2025. Return on operating capital is defined as EBITA rolling 12 months as percentage of average operating capital and that is calculated average latest 4 quarters. We were above the target up until Q4 in 2023. Since then, we have been below the target. However, in the latest 2 quarters, we have seen improvement in return on operating capital, and we are today on 13.4%. This page is showing the order backlog to the left -- development order backlog the left and the order intake to the right. The order backlog is on the highest level ever, SEK 2.829 billion, that is plus 7% compared to last year. Projects is plus 12% compared to last year, and consumer is down by 5% compared to last year. All segments have higher backlog end of June this year compared to end of June last year. Looking at the order intake, the total order intake is down by 7%, adjusted for FX, organically is down by 8%. And the main reason is actually the high order we took in Ireland, Carlson, last year of SEK 9 million. So about half of the decline of 7% is explained by the large order we took at Carlson Ireland last year. Consumer is down by 3% compared to last year and adjust for FX, down by 4% organically, and the project is down by 15% compared to last year just for FX and organically down by 16%. We have a positive order intake development in Scandinavia and within e-commerce, one respectively 7%. And then we have a negative decline of East of 5% and Western Europe of 34% mainly due to the order to Carlson of SEK 9 million last year. I'll now hand over back to Fredrik.

Thank you very much, Peter. Let's now look into our 4 business areas, and let's start with Scandinavia. Good performance versus last year, really from top to bottom, with an operating EBITA margin of 14.5%. Our assessment is that we have gained share in the Swedish market, and we overall see a somewhat better sentiment across Sweden and Norway, with the Denmark still being stable. In Sweden, of course, the ROT incentive, the government stimulus and lower interest rates have helped improve demand. Bear in mind, though, that in terms of sales mix, we have had a higher share of project business, meaning a little bit of a dent on margins. Moving on to Eastern Europe. It's really a mixed bag between the larger entity of Pihla Group that is performing better versus some of the smaller entities that are facing still a very, very tough market situation. We have a higher backlog and profitability is higher again, and we really see that those cost efficiency enhancing measures are kicking in. So a good job by Antti and the team. Sentiment, I guess, in Finland is a little bit better, nothing dramatic though, neither upwards or downwards. E-commerce, as you recall, they faced a challenging start already in Q1 this year. They took some correcting measures already then. I think they managed the situation very well. And the full impact has yet to be seen from these measures, but they were necessary and it's been well executed, I think. E-trade, as such is lower. We can see that from industry data, for example, Sweden, where the households are not as active yet on e-commerce as they were 1 year ago. Having said that, order intake now in the quarter actually edged higher for our e-commerce. It's really purely volume game for our friends here, both profit and margin lower, but they do have a nice, efficient operational setup. So when they do get the volume back, and that can, of course, happen quite quickly, then they're making more money. Last but not least, looking at Western Europe. There is really no real sight of England improving. It's a very tough market from a macro point of view with very little consumer confidence, unfortunately. It's fiercely competitive. We do a good job with it, though. And I'm pleased to note that we have, in some cases, decided to walk away from projects that have been facing some silly pricing from our peers. Ireland is more stable than England. And again, as Peter said, and as we've said several times already, do note the all-time high order that we took with our Carlson entity in Q2 last year that is hampering the order intake comparison. So largely a volume game here as well. We have some unabsorbed fixed costs, although they are being adjusted, which is painful, but necessary. And relatively speaking, I'd say we do a better job than many of our peers here. So to conclude today's key messages from our Q2 report that I think is rather solid. The anticipated and well-needed bounce back in demand has been yet again deferred a bit out in time. We are managing the situation really well. We're maintaining our profit despite a less favorable mix and despite an FX impact, and we're maintaining our profit margin. Worth bearing in mind, I think, is that the fundamentals remain rather strong here. We still face pent-up demand in both renovation and new build and we face more and more discussions on energy efficiency and waiting for the EPBD to be implemented. So the tide can, of course, turn quite quickly here. And Inwido is standing firm. We have comfort from our all-time high backlog, comfort from our #1 and #2 positions in the market and comfort from a very strong balance sheet. So we keep our eyes still on the ball and the 2030 road map. M&A, relatively speaking, is more important in the near to medium term for us, but I'm optimistic also on that front. And again, to further help us in our strategy execution going from A to B, Malin Cullin will join us after the summer and help us even further with the talent management, which is key. As usual, please pencil in these days into your calendars already now. And with that said, Peter and I would now be delighted to answer any of the questions that you may have, please.

[Operator Instructions] The first question here we got here is Sofia Sörling from Carnegie.

Sofia here from DNB Carnegie. Can you hear me?

Yes, we can hear you.

Okay. First question, a little bit on pricing and volumes. You mentioned that volumes are quite dampening all the business areas. But can you say anything about prices? Have you lowered your prices and also in each of the divisions?

We have typically actually raised our prices primarily to counteract some slight upward changes on the raw material front and of course, on direct labor as well. But overall, margins have been kept, yes, obviously, quite stable, so no dramatic changes in a way. There is a lot of price pressure in the market because of the competition and because of lack of volume still, but otherwise, relatively stable, I'd say. We are, of course, monitoring the raw material situation rather closely. We always do that, but particularly now and with an extra focus on glass, both in terms of availability and pricing. And so we are ready, if need be, to, of course, adjust prices even further. And pricing is generally a topic very high on our agenda. Because again, the glass situation is a little bit tricky because many of the glass suppliers have reduced their capacity over the last year or so, meaning that when demand does bounce back, there may be a little bit of an effect that we saw during the pandemic with an impact on both availability and price, but so far, so good.

All right. Okay. And if you go to Scandinavia, you mentioned that the project market, especially in Sweden, is quite strong. Could you say which type of customer segments is driving this demand, would you say?

In terms of sales, we have more project sales in the mix this particular quarter. I wouldn't say that newbuild as such, if we look at that, is strong in Sweden, although there is increased activity, of course, and everyone is watching the interest rates from the Riksbank and whether it will continue down, which would have a positive impact. Although today's inflation figure was a bit on the high side compared to estimates. But otherwise, I think it's a matter of building new buildings in the larger cities. In Sweden, in particular, some of the smaller to medium-sized cities see less activity and are struggling a bit with demographics. So we'll see more in Gothenburg, Stockholm and Malmo going forward. And to some extent, less of what we are, at the same time, not really in any way, but less of schools and hospitals, perhaps.

Okay. Yes. And I noticed that the EBITA margin in Scandinavia is very strong during the quarter, and it's an improvement year-over-year with about 30 bps. Do you think it's sustainable into the second half of 2025 to keep this increase -- improved margin year-over-year if I...

Of course, depends on the markets and the volumes coming in. In the quarter this year, as we can see that, in general, Norway is still challenging. Denmark is still stable and improvement comes from the Swedish markets.

I think, Sofia, just to add to that, I think it's -- from our end, worth stating that -- because we are working from a portfolio management point of view, quite a lot with our lower-performing entities, and that is beginning to bear fruit. And of course, that's something that we're overall pleased about. But it also means that in the short to medium term, we have a negative mix effect from that as they gain more ground faster than some of the other entities. It overall raises the profitability of -- and the performance of the Inwido portfolio, which is definitely something that we want to achieve, but there is a slight negative mix effect in there as well.

All right. Let's move on to e-commerce. You mentioned that you have implemented some structural measures. Is that something you expect will continue into the second half of 2025? Or is it something that you have already implemented and we can already see this reflected in the financials?

Yes. I would say it's more the latter, Sofia. We -- I mean, if you recall from Q1, we were geared up to meet what we anticipated to be higher demand level already early in Q1. The reality turned out to be quite the opposite, meaning that we had to take a step back and go through a bit of a strategic assessment of the whole BA, meaning that we also took some measures in January, February. They started to kick in, in March, and we have seen more of that payback during the second quarter. I don't expect more of that in the second half of this year and more measures to be taken that being. It's worth noting, though, that this business is -- I mean it's a volume game. It requires that you have a very lean operational setup at the back end and that you have a rather lean sales and marketing setup also in the front end. We do that really well. And I think that some of those measures that we took in Q1 actually put us in a better strategic position for the medium to long term with this business. And at the moment, we're just "lacking" volume. And again, if you look at -- as I mentioned earlier, if you look at e-trade, for example, Sweden in April, May, it was down by some 24% or something. So it's more of a consumer pattern right here, right now. But again, history shows that it can very quickly bounce back up again. But we are ready for that capacity-wise.

Okay. Yes, a lot of questions here, but a final one from my side. So we mentioned this Energy Performance for Buildings Directive and that it might -- that it will be implemented next year. But do you see any risk that this directive is already reflected in your volumes during 2025? Or do you expect more of an acceleration in volumes into or during 2026?

Again, it will be more of the latter. And we do think that this will still happen because energy efficiency, first of all, is very high on the EU's agenda. Secondly, they have come very far in preparing for all of this. And it's -- I mean, again, take Sweden as an example. You know that [ Bürkert ] and others are right in the middle of getting proposals out that will, in turn, become legislation in each EU member country latest early next year. And thirdly, the upside potential is, in terms of savings, is huge, of course. And thankfully, windows and doors are very well placed to benefit from that. So good news is that we're beginning to see a lot of healthy and quite informed discussions with many of our customers already now. We did launch a low CO2 window in Finland in Q4 already last year, and that has gained a lot of excitement and interest from the market already. And we have a couple of positive case examples already to point towards, and that's beginning to spill over also into other markets as well. So we -- we run the same type of discussions with some of our Sweden-based customers at the moment. And in Finland, of course, this window is still on an exclusive basis. So we're the only one in the market that can provide it.

We will now move on with the next question here. Ad he's the person that has the number that ends with 6-9-0. You're welcome, you have the word.

Hello. Can you hear me?

Yes.

It's Jonny from SEB here. I just want to start a little bit on the sales and the conversion ratio here in the quarter. I want to understand that a little bit better. So I mean if you're looking at the conversion ratio compared to your backlog, you ended in Q1, it seems to be around 88% during the quarter. And this seems to be a little bit low in a historical context. But then I also know that you have more project business in the mix now as you have highlighted. But I mean even compared to last year, it's still low. And if I recall correctly, you also said that some sales rolled over from Q1 into Q2 due to some weather conditions here in Western Europe. So my question is really, did something special happen here during the quarter that affected deliveries? Or how should we think about the conversion ratios here going forward, given your change in the mix? That's my first question.

Jonny, this is Fredrik. Yes, it's a relevant question, of course. It's really -- there's really no drama around this. As you correctly pointed out already in Q1, we communicated that, particularly in our Western Europe, BA and more specifically Sidey, they did see some deferrals, not cancellations or anything like that. It's more deferrals due to weather and other non-site accesses given. So that -- it's more of a rollover and not everything could happen in Q2. So more of that will come also in Q3 and Q4. So it's primarily related to the project business.

And then compared to previous years, we have this large order we took at Sidey and Walker in Scotland in Q4. So we have larger long-term contracts. Even also just look at project business, we have more long-term contracts this year compared to previous years. And that has a negative impact when you calculate your conversion rates.

Okay, I understand. So it's maybe fair to say that the conversion ratio in this quarter is normal and that this is the new normal here going forward as well? Is that fair to say, would you say?

Yes, fair to say for the next coming 1, 2 quarters, then when these large orders have been reduced, and we are back to normal until we get some new large orders. So it's more -- after acquisition of Sidey, the conversion rates looking at project sales will be more fluctuating compared to previous years, whereas the conversion rate of consumer is more stable because that is more or less 100% because that's the nature of the business. The order -- the order delivery time within the consumer business is 6 to 8 weeks, where the project depends on the large orders and the long lead times. So it will be more fluctuations, especially after the acquisition of Sidey.

Okay. Yes. That's clear. And then I just want to follow up on your comment around the uncertain macro conditions here. And you mentioned some postponed recovery. I mean how was the momentum during the quarter, would you say? Or were there any clear shifts? And I think, if I heard you correctly, you said that there were some stronger sales towards the end of the quarter, which affected the cash flow as well. So how is the momentum going into Q3 here? Is it -- have we seen a pickup, would you say? Or is it rather same?

From a sales perspective, we start with that, sales improved throughout the quarter, meaning that June was better than April. And then order intake-wise, relatively flat, I must say. But they're a little bit more positive, perhaps towards the end. So -- but again, if you look at the order intake, you need to take the record large order of Carlson in Ireland in Q2 last year into account when you do the comparison against last year's Q2.

Yes. Yes. Okay. That's fair. But I mean, I suppose you always have a little bit of seasonality here during the quarter. I mean if you compare the momentum year-over-year or so to speak, is it a clear shift or...

It varies a bit from market to market. It's definitely not worse in any way. I would say it's, if anything, a little bit more positive, particularly if you take a country like Sweden, that's been at very, very low levels and very dormant. It's beginning to pick up, not at the pace or magnitude that everyone had hoped for, but it's moving in the right direction. In Norway, we do -- we perform better than the market and the Norwegian entity is actually doing quite okay here in Q2. And Denmark, rather stable. Finland, as I said, we do quite well, but it varies a lot from the large entity to the smaller ones. We still have entities that lack 50% of their volume. And then England, very tough. But I have to say I'm quite impressed by our entity's performance over there. And then to conclude, Scotland and Ireland, quite stable, really. So it's really -- a lot of people are sidelined. Households don't open up their wallets yet. But it can -- the tide can turn quite quickly. And yes, it's -- the fundamentals remain the same.

Understand, understand. We'll see. But I also think that your comment around the project business in Sweden is rather interesting, especially tying that to your new and more efficient factory in Vetlanda now. So maybe could you maybe comment something around how is utilization rates in that factory at the moment? And given your new and more efficient plant in Vetlanda, as opposed to that you have also lifted your lowest level, if you know what I'm trying to say here. So are there more upside for the margin, would you say if we fill the factories in Vetlanda? And can you also maybe quantify that a little bit, the magnitude we can expect?

Yes, sure. Yes, the Vetlanda factory is about to conclude this large restructuring project called the One Factory project, which I'm quite impressed by as well. The full magnitude will come in the second half of the year, but there's not much left to be done, to be honest, which is great. And you're absolutely right. That -- it comes with an expectation that profitability goes up. In order to get to that profitability level, we need volume. And of course, Vetlanda is, of course, quite dependent on the industrial or the project side of things. But overall, our Sweden entities, which of course include Elitfönster, are performing better and better already now. I'm quite optimistic about not only Vetlanda as a site, but also the other, Elitfönster and the other Swedish entities as a whole.

Okay, enough clear. But I mean, if we're trying to -- the magnitude a little bit of that, I don't know it is in my head right now, but let's say that you did 10% margin in Vetlanda before, could you maybe do 11% now if you [ feel the factor is ] -- or is that fair, would you say?

So looking at Elitfönster, we did 10%, but that was some years ago. So the margin of Elitfönster is lower than that's running as of today. However, it has been improved. And looking at the quarter, Scandinavia has improved the margin from 11.3% to 11.8% and that's mainly related to Swedish -- the improvement in Sweden, where the Elitfönster is one of the main contributor.

Yes, I understand. I understand. Yes. It's a lot of moving parts and you have the efficiency gain and also have the change in mix. But I mean, if we would compare the same mix as before and now after the change in Vetlanda, I suppose that there should be a little bit more margin upside. Is that fair?

For Elitfönster, yes.

Okay. Yes, that's clear. And then just one final. I mean, I've been asking this repetitively. But I mean coming back to M&A a little bit, it's an important part of your strategy and your targets ahead. Maybe, I mean, could you shed some more elaborating comment on the update? How that is going? And if I recall you correctly, you said before that you are targeting some larger targets now on new markets. And I suppose the discussions are ongoing and can take some time. But if they come and once they come, the larger platform acquisitions, let's say, is it fair to assume that we can see an acceleration after that when you build on smaller acquisitions on that larger platform? Is that a fair assumption, would you say?

I mean, generally, I would say, yes, particularly if we go into a brand new market. But if we take half a step back and you put M&A in a relative perspective, it's of course so that I mentioned already today that to get to the 15% CAGR -- sales CAGR per annum, we, now, relatively speaking, need -- we're a little bit more dependent on M&A than what we were, yes, already last year, I would say. The good news is that we continue with a very structured effort in this field, and we have a very, very high activity level as you can see. And Peter mentioned the transaction-related costs that we've taken and the charges that we've taken in the quarter. So I think we concluded the other day here internally that we've never had this broad and deep funnel of targets. So a lot of high-quality cases in there and several ongoing rather positive discussions. I think one needs to pay respect to the time that it takes to get this done. First of all, it's all about relationships. I joined Inwido a little more than a year ago. And of course, I've been out there, planting seeds for what hopefully becomes a deal in either 5 months or 5 years. But that takes time, and we probably lost some momentum between my predecessor and myself. Add to that, the general market uncertainty, it certainly doesn't help people moving from A to B. And of course, it's not again about the multiples. It's more about what you apply the multiples to. Is it the last 2 years' performance? Is it the coming 2 years? Or is it the coming current prevailing pace, et cetera, et cetera. It's just tricky. And again, add to that, that we are really selective. I mentioned already as part of our Q1 reporting that we had left 1 or 2 processes because the risk was just deemed to be too high. And when I've been out meeting investors over the last few months, everyone keeps telling me that, yes, M&A is important, but you've got to do the right deals. So that is something I can subscribe to, of course. So the funnel at the moment is a healthy combination of, yes, small to primarily medium-sized and large ones. So everything from SEK 100 million to SEK 500 million to SEK 1.5 billion in turnover, but also a healthy combination of geographies, including the existing markets that we're in, but also a couple of totally new markets to Inwido. So as I mentioned at the very outset of this call, we are a leading player in Europe, but we're only literally in 1 out of the top 10 markets in this industry in Europe. So -- and that's the U.K. So we still have a lot of white spots on the map, and that's good news, I think.

Yes. Yes, we'll see. If we need to follow up on that, it is exciting. But if we would say -- I know timing is hard, but if you haven't closed 1 or 2 acquisitions before the end of this year, would you say that you would be disappointed then?

Yes, I would be disappointed then.

Okay. That's clear. We will follow up. Exciting.

And now we'll move on to the last question here that's been sent to us. What will the increase in Scandinavian project sales likely imply for profitability, given that it likely allows for better cost coverage in your facilities?

The margins on project sales is lower to compared to consumer sales. So with a higher increase on project sales compared to consumer, that have a negative impact on the margin. However, now we need more volume when it comes to project sales and also due to the implementation of the one factory we have at Elitfönster in Sweden. The project sales is mainly in Sweden. Denmark has more or less -- has a very low project sales and also [ Norway ] has low project sales. So the project sales in Scandinavia is mainly in Sweden. So with higher volume and with improved efficiency from that project, that will compensate the lower profitability in consumer compared to projects. So I will say slightly improvement.

Thank you so much. Those are all the questions we had. So I'll now hand over the word to Fredrik and Peter for some closing remarks.

Thank you very much, and thanks, everyone, for attending this call. Let me also take this opportunity to thank all the Inwido employees and our business partners for a job well done, and wish you all a wonderful summer. Thank you very much, and thank you, Peter.