Kitron ASA (KIT) Earnings Call Transcript & Summary

Good morning. Welcome to Kitron Capital Markets Presentation update. I'm Peter Nilsson, President and CEO of Kitron. Together with my team, we're here to give you an update on the company's operations and progress towards our strategic ambitions and financial targets presented at last year's Capital Markets Day. Since we started planning this event, circumstances have changed. The COVID-19 virus has spread throughout the world, disrupting lives, plans, short-term operations and strategic initiatives. This presentation will, therefore, provide a shorter recap, an update on strategy and focus more on the situation now before us, before moving into a more extended Q&A session. If you have registered beforehand, you can ask questions during the Q&A. In any case, you can submit questions online during the presentation. Slide 2, please. As usual, there's a substantial disclaimer. I underline that this presentation contains forward-looking statements, and as always, there are uncertainties, and you should keep that in mind. Slide 3. Looking at the agenda. I'd like to introduce today's speakers. First, I'll give an overview of Kitron and our strategy. Israel will cover our sales strategy and operations. Followed by Cathrin, discussing M&A and presenting financials. Finally, I will close with a recap of the COVID-19, activities from Kitron and the summary. So Slide 4. Now let's get going. I'll start with an overview of our strategy. Some of you know us well. But for those of you who don't, I'd like to spend a few short minutes describing who we are and what Kitron does, which takes us to Slide 5, the essence of Kitron. Kitron is an Electronic Manufacturing Services company. You will see this abbreviated to EMS throughout the presentation. An EMS company is an outsourcing partner, which provides various production processes and services involved in making products containing electronics. This has grown to be the normal way to produce electronics. At the bottom of the slide, you will see what we typically do for customers. For some customers, we do it all. For others, we cover part of this chain. So moving to Slide 6 and taking a look at strategic positioning. So in order to get a feel for our strategic position, we have made this illustration. Kitron is positioned towards the top of the chart. Meaning, we focus on complex, high-margin products with special requirements. In terms of volume, we would say we're in the medium volume business. Within the Defense and Aerospace and Medical sectors, Kitron is recognized as a strategic and critical supplier. It's important to note that this figure is simplified. For instance, we sometimes do low volume products. However, it gives you a general picture of Kitron's typical position. Moving on to Slide 7. Kitron on 3 continents. To complete the brief introduction on what Kitron is, these are our units: Our corporate headquarters is in Billingstad outside Oslo, Norway; in Scandinavia, we have 2 production units with heavy focus on Defence/Aerospace as well as Medical devices, Arendal in Norway and Jönköping in Sweden; in Central and Eastern Europe, we have 2 production sites. Kaunas in Lithuania and Grudziadz in Poland. A German sales office rounds out our European presence; in Asia, we have a factory in China located in Ningbo outside of Shanghai; and in Pennsylvania, we have a production unit in Johnstown, Pennsylvania. So moving on to strategy. Slide 8, strategic horizon towards 2025. During 2015, we worked out a new strategy for Kitron. This was described at the company's first Capital Markets Day in February 2016. We set a strategic agenda with 3 main points: organic growth, for which we set a target of 10% per year; increased customer satisfaction by improving our operations, resulting in increased profitability; and finally, accelerating our growth with targeted M&A activities. Now we're closing in on 2020 and starting to look forward to 2025. The period from 2020 to 2025 will be more about refining what we've done. We will continue on the path we're on. We'll expand our capacity, we'll tweak our operations further. We will keep investing in our people and technology to further improve efficiency and quality. In terms of how we run our business, we've done some overall changes. Supported by a well-thought out investment plan, we have gradually changed our workforce with a larger proportion in lower cost countries and higher education and general higher skill level overall. We have expanded our IT level, and we have moved group services to lower cost countries when appropriate. Slide 9. So what have we achieved so far? Well, in 2015, we set our revenue target of NOK 3 billion and an EBIT target of 7% or NOK 210 million for 2020. In 2019, we achieved the revenue target and actually surpassed it at NOK 3.3 billion, and we reached NOK 202 million of the EBIT. I think this demonstrates that we're on track. And on track for our financial ambitions, Slide 10. Our overall strategic agenda supports financial ambitions of 7% EBIT margin and 25% return on operating capital. For 2020, our revenue target is between NOK 3.3 billion and NOK 3.7 billion. This calculates to about a growth of 6%, so very moderate. Our EBIT margin target is 6.4% to 7%. Our new strategic ambition has been defined for 2025, where the revenue target is NOK 5 billion achieved through organic growth, and M&A should bring an upside. As always, our EBIT margin target is 7%. Now Israel will bring us up-to-date on sales strategy and operations. Go ahead, Israel.

Thank you, Peter. We are now on Slide 11. My name is Israel Losada, and since I am both the Sales Director and the Chief Operating Officer, I will be talking to you first about how we plan to grow our sales, and second, about our operations. Slide 12, please. So first, growth. Let's start off with a look at the market we operate in. As most of our businesses is in Europe, we focus here on the European EMS market. As you can see in this market, there are a few big players and a long tail of small local firms. The industry is undergoing consolidation, and this is especially apparent in groups 2 and 3, where companies are seeking economies of scope and scale. Kitron belongs to Group 2. Group 4 is characterized by smaller and weaker firms. Another trend observed in the past years is an increase of Chinese entrants in the European EMS arena. It is worth mentioning that the sectors we target have very high entry barriers, driven by Defense, Aerospace and Medical. These barriers spread to other sectors. Our customers and prospects focus on certified quality standards, cybersecurity, contingency plan, conflict minerals and others. EMS companies wanting to operate in our sectors must comply with regulatory requirements like never before. Let's now talk about sectors and customers we work with. Slide 13, please. Having our revenue distributed over 5 different but very demanding sectors provide us with 5 legs to stand on. This has helped us to remain profitable over the long history of the company. If we talk about Energy and Telecom, in this sector, we focus on energy transmission as well as advanced power supplies. Within Telecom, we build our expertise within optical transmission. For Defense and Aerospace, our main priority is to look further into the future. We have some truly large customers in these sectors, and we want to leverage this even more. Marine and Offshore is our smaller -- smallest market sector. Demand is project-driven by its investment in Offshore, oil and gas. For Medical Devices, we focus on the Nordic region, and we want to take advantage of our application expertise. We have been working for years with Ultrasound and Cardiology Systems, Respiratory Medical Devices and in vitro diagnostics equipment, making us an ideal industrial partner for any OEM working in these fields. And last industry. This is our largest segment. We expect it to remain so in 2025. Here, we focus on selling more services. This segment is heavily represented in our facilities in Central and Eastern Europe. Now let's talk about our growth opportunities moving forward. Slide 14, please. What are the growth drivers moving forward? Well, we have 3: Outsourcing trends; move to electrification; and product connectivity. If we start with the long-term outsourcing trend, we can say that a significant part of Kitron's growth in 2019 came from new customers outsourcing their operations to Kitron. This trend continues as existing customers are choosing to outsource more high-level assembly and integration work. The outsourcing growth is further supported by new companies choosing to partner with an EMS company from the very beginning. When it comes to the broad-based move to electrification, we can say that several of our customers and prospects are moving from petrol and pneumatic platforms to electrify systems. For example, we are getting more and more nimble with charging stations for equipment and tools. Lastly, Kitron will focus on the Internet of Things devices in industrial and professional settings. Many new customers that traditionally have not used electronics are now changing technology platforms and are contacting Kitron. Slide 15, please. Now that you have heard about our growth strategy. Let's talk a bit more about our operations. Slide 16, please. As you know, we completed major investment cycles in Norway, Sweden and Lithuania over the first -- last few years. But 2019 has also been a rather busy year on that front. In U.S., we established a credible presence through the acquisition of a plant in Pennsylvania. The integration of this factory is underway, and we will reenter our refurbished facility in May. This plant has a substantial capacity for growth. In Poland, we built a new factory in Grudziadz, an hour from Gdansk. We opened in October, and we already have a staff of about 150 employees. This plant focused on higher volume and efficient production. The combination of Poland and Lithuania has capacity to handle revenues in excess of NOK 2 billion. In China, we expanded our capacity by taking over the building beside ours, effectively doubling our shop floor. So all in all, entering 2020 Kitron has a global footprint with 6 manufacturing facilities in 3 continents. We have over 1,700 highly committed and competent employees ready to support our customers through the whole life cycle of their products from concept to scale. Kitron has invested in common systems, equipment, processes and culture. We have ensured that our customers will receive the same professional service anywhere in the world. On top of that, we will consider additional sites towards the end of the strategic period. So let's talk a little bit more about this. Slide 17, please. When it comes to potential M&As, Kitron is actively evaluating opportunities. We look for companies with revenues ranging between EUR 10 million and EUR 100 million. In closing, I would like to say that we have enough capacity to reach our 2025 ambition of NOK 5 billion revenue. So potential M&As would provide an upside. With that, I would like to hand over to my colleague, Cathrin Nylander, who will give you more details about our finances. Cathrin?

Thank you, Israel. Slide 18. My name is Cathrin Nylander, and I am the CFO of Kitron. As we have made clear, this presentation was planned as an update on our progress toward ambitions for 2025 that we announced at last year's Capital Markets Day. And while we understand that the short-term situation is highly unusual, our strategy is maintained. And so far, we have made good progress. Slide 19. First, looking back 4 years ago, in February 2016, we announced an ambition to reach revenues of NOK 3 billion in 2020 through organic growth. This was achieved in 2019 and M&A added even more to the top line. Last year, we outlined the new ambition, NOK 5 billion top line in 2025 through organic growth with M&A potentially an upside. The first goalpost in 2020, as we've given guidance for, is NOK 3.3 billion to NOK 3.7 billion for this year, a growth of 6%. Slide 20. Now moving on to the second key figure for us, EBIT and EBIT margin. 4 years ago, we outlined an ambition to reach an EBIT margin of 7% in 2020. We are moving towards this target, and our outlook for 2020 is an EBIT margin between 6.4% and 7%. While the ramp-up of our new factory in Poland and the integration of the company we acquired in the U.S. last year, is boosting top line, they put a temporary drag on the EBIT margin. However, moving forward, we stick to our 7% ambition. And towards 2025, we believe there is an upside to this figure. Moving forward, we should note that the company's required or new facilities may temporarily be below our margin ambition. But even though we work to increase our EBIT margin somewhat, the biggest contribution to increased EBIT in absolute numbers is expected to come from an increasing top line rather than margin expansion. Slide 21. A third area that we have continuously stressed is capital efficiency. A company like Kitron has a lot of parts moving through the logistics chain, making this as efficient as possible, frees up capital and has enabled us to pay out competitive dividends over the past years. It is a clear ambition to reduce net working capital as a percentage of revenue, and we have started to move in that direction of the material allocations in '18 and '19. Strategically, we will definitely continue to push down net working capital to a level about 20% of revenue. An accompanying measure is the cash conversion cycle. In other words, the time it takes to convert this cash payment for resources into cash payment from a sale. We had a temporary setback here relating to the material allocation, but our ambition remains 50 days. Slide 22. Another basic measurement for us is return on operating capital. This metric too was affected on the material allocation. While we increased EBIT, the ROOC was pulled down by an increase in the balance sheet. However, moving forward, we expect this key metric to improve through a combination of higher EBIT and better capital efficiency. And our long-term target remains the same. Slide 23. In general, our business has a strong operating cash generation, but there are fluctuations. In '18, operating cash flow was temporarily pulled down by the increase in inventory due to the component situation. Moving on to CapEx. We have, as you see, singled out 2 items in '19. Our new facility in Poland and our acquisition in the U.S. now Kitron Technologies. If you smooth out our major investments, we expect normal CapEx to be about 2% to 3% of revenue. But given the current situation, we will hold back as much as needed in 2020 until we see how the business situation develops. Slide 24. Moving forward, Kitron stands on a solid financial platform. While the introduction of IFRS 16 make comparison with previous years decomplicated, we have a debt structure that we are comfortable with. We have targeted net interest-bearing debt to be less than 2.5x EBITDA and adjusted for IFRS 16 effect, it's 2.4. Given the current situation and for ease of understanding, we have split up our net interest-bearing debt in -- as at the end of '19. I should add that net interest-bearing debt is reduced in 2020. Slide 25. Over the past years, Kitron has turned around the business, making it grow while also generating better profits and maintaining better capital discipline. A while back, we also modified our dividend policy. This all points to very clear ambition and ability to pay competitive dividends. As you see, our dividend have been growing over the years, and we're strongly committed to dividends. On February 12, the Board proposed a dividend of NOK 0.50. The company and the Board, of course, follows closely the development on business and its environment, and there is a need for the company and the Board are prepared to act also with respect to the dividend proposal. The next Board meeting is end of March. Slide 26. Now this slide illustrates in short that we come quite a long way over a 5-year period. I will note that these figures are by December 31, and the market cap and enterprise value will look different today. So moving from the long-term strategy to the situation here. And now here is Peter back again to address the COVID-19 situation. Peter.

Thank you, Cathrin. Slide 27. As I said in the very beginning of this presentation, since we started planning this event, circumstances have changed. Spread of COVID-19 disrupts short-term plans and operations, and it affects our strategic activities. Let me summarize what Kitron has been doing to mitigate the disruptions. Slide 28, please. Kitron's core business assets are our manufacturing facilities. It is extremely important to protect the employees that work directly in operations. Without them, no product is built. Our actions to protect our manufacturing assets are based on following international and national advice from health organizations and authorities. To date, we have no knowledge of any Kitron employees worldwide being infected. We're asking all of our employees, to take appropriate preventive measures. This includes keeping safe distance between people, regular and consistent hand hygiene and the use of hand sanitizer, disinfectant spray and wipes, and increased cleaning and sanitizing for all of company facilities. In order to minimize exposure to employees that have to be at our factories, all employees that can do their work from home are doing so. Visitors will not be allowed to access Kitron facilities. And finally, any employee who does not feel well is to stay at home, get well, and avoid interacting with other people. This work started towards the end of February. Slide 29, please. So what's the status of our capacity? All of our factories are up and running without any constraints to capacity. We have been closely working with our suppliers to avoid any major disruption to our operations. All Tier 1 suppliers in China have restarted operations, and they're gradually increasing capacity. So far, no major disruption to supply chain outside of China. Kitron is preparing for some component allocations going forward. Customer demand remains strong and supports the current guiding. Our demand analysis consists of all firm orders and the coming 12 months forecast from our suppliers. And it was updated during the first and second week of March. Slide 30, going forward. Demand fluctuations. Kitron sees no demand reductions currently compared to what we see many other industries where the effects have already materialized. So currently, no demand reductions. We continuously make capacity adjustments based on demand fluctuations. But now we're preparing contingency plans for significantly larger fluctuations if they should occur. In order to prioritize potential supply chain constraints correctly, customers are asked to convert forecasts to fixed and firm orders. We see a strengthening within the demand of the Medical Devices sector. In regards to our upstream supply chain, customers are again asked to place firm orders for immediate purchase of any allocated materials, and we continuously monitor our upward supply chain. Slide 31, summary. So in summary, Slide 32. We maintain our strategy and financial ambitions for 2025. We have identified several growth opportunities, and we're actively working them. Currently, all our facilities are operating as normal. Based on what we currently know, we seem to be on track for our moderate growth of 6% in our 2020 outlook. However, uncertainty may give higher volatility in the months to come. So far, demand remains strong and stable and reinforced by stronger growth in Medical Devices. Slide 33. This concludes the presentation part of our Capital Markets Presentation. We'll now open up for questions, starting with any online submissions during the presentation. [ Oris Latan ], can you please lead us through?

Yes. We have a few questions that have already come in. And one of them being, will you maintain the dividend?

I believe Cathrin addressed this in her -- part of her presentation, and you're welcome to reiterate your response, Cathrin.

Will do so. The Board decided and proposed a dividend at 12th of February, earlier this year. The company and the Board, of course, follows the close development of the business and its environment. And if there's a need for the company to act, they will do so. The next Board meeting is at the end of March.

There is a question about the effect of the weak Norwegian currency. Is that positive or negative for Kitron?

Again, I'll let you address this, Cathrin.

I would say, in general, the -- it's a positive effect on the growth for the group. Of course, we will have a growth on the top line, but also our material expense will grow accordingly. And that means that we will need to discuss prices with our customers going forward.

It's important to also to recognize that our sales prices in many different currencies. So not just Norwegian kroner, where we would have to do price adjustments. We'd also sell in dollars and we sell in euros and so forth. So there's -- it's not quite as straightforward as translating that everything has to be raised on prices. Go ahead, [ Oris ].

There is a question about the Offshore segment. How do you see your Offshore segment, given the recent downturn in the oil price?

We have only a few Offshore customers. The volume has been growing substantially over the past few years from an almost nonexistent level. And I believe, currently, in the current budget numbers, the Marine/Offshore, driven by oil and gas is maybe 5%, 6% of our entire top line for this year. So we currently, we feel pretty stable on what we have in our budget, on which we've based our forecast. Earlier on, we had some significant upsides. I think we put them aside so far and come back to that later in the year and see if they're still there. So I feel pretty comfortable on where we are in that segment right now.

Then there is a question about the competitive landscape. Have you seen any significant changes in your competitive landscape during the first months of 2020? If you have seen some, have these changes been driven by M&A activities or by organic operations?

I think I'll throw this question over to Israel and see what he has to say on it.

No, I wouldn't say that we have seen a dramatic change over the last period of 3 to 6 months, we are still meeting the same players in the market. There is still -- or there is a consolidation in the market. There are some players that are being acquired, smaller ones, some midsizes. But for the region where we compete and the sectors that we are present in, there hasn't really been a big difference so far.

I tend to agree.

Then moving back to the financial side. How is the liquidity position moving forward? And what about credit facilities?

Cathrin?

So we have a long-standing bank agreement with DNB, I have to add in the beginning. And we have -- if you look into our credit situation, you will find that we have long-term loans that we have taken up most of them last year to acquire the American units with about NOK 166 million. We have a lease liability in IFRS 16, about NOK 116 million in total with short, it's slightly over NOK 135 million. And then we have long-term debt, which is regular finance lease, which -- so we have a long-term part of 335 -- NOK 331 million. Then on the short-term part of our financing, so we have an overdraft, which is at currently NOK 323 million, and we have a factoring debt of NOK 249 million. So for the units in Norway and Sweden, we have a factoring agreement where we have a factoring for 85% of their invoicing, basically. And then we have a short-term part of long-term debt and the lease liabilities. And currently, Kitron is running at a positive cash flow. As I said, I mentioned, that have a positive cash flow going forward. Of course, cash flow will be affected, whether or not our customers will pay on time, et cetera, and how the demand situation will be monitored. So if everything goes to plan, we have a regular cash flow situation according to plan. However, if the market situation changes, the cash situation is obviously the thing to monitor because you can have a good top line and earn a good revenue, but you can lack cash based on, for instance, customers not paying. We have no reason to believe that they won't, but that might affect.

There is another question concerning the same topic. Please, could you give some color on discussions with your banks? Have there been in touch? Any concerns from them on your debt levels?

They have been in touch because they are experiencing some other clients increasing their inventory levels and hoarding inventory. And based on our recent experience with the material allocation, we have given them a clear message that we will only buy inventory, which is necessary to produce. And if we need to buy something, which Peter explained earlier, the companies need to buy it themselves in our books and put it as consigned inventory. So we have no plans. So that was the major discussion. Apart from that, they were comfortable with the situation. Again, I have to say we have a long-standing relationship with DNB. They have been our bank for the last 20 years. And those, remember, Kitron know that, Kitron has been in dire straits for many, many years ago, and DNB has stood by us all that time.

Moving on to a different topic, M&A. Question is, can you comment on how the COVID-19 situation will impact your M&A agenda?

Well, that's pretty easy, right? As the form of -- yes, we continue looking at presentations that are sent to us and/or opportunities that we identify. However, we do not proceed into any sort of due diligence, meeting, traveling to sites and so forth. So from that aspect, there'll be low M&A activity going forward, other than continuing to analyze and put interesting objects onto our prospect sheet. When it comes to the publicly traded companies, you may -- well, why aren't you just -- now is a buying opportunity, right? I think the evaluations now are extremely difficult based on any publicly traded valuation at this time. So we continue sort of at a lower level, but don't expect to see any big M&A announcement over the next 3 months.

All right. Then I suggest that we move on to the conference call. So conference call moderator, could you please take over?

[Operator Instructions] Okay. We see no questions at this time. [Operator Instructions]

And you're welcome to post your questions in either Norwegian or Swedish as well.

There appear to be no questions over the phone.

We can take a couple of more questions that have come in online, and one of them is concerning the supplier situation. In light of the COVID-19 situation, have you been -- have you changed the supplier purchases composition, for instance, moving away from Asian suppliers to increasingly more American or European suppliers?

I'd say it's a longer process to change suppliers because most of our products tend to be some pretty high restriction on. We're talking about the Defense, Aerospace or Medical products, they are qualified with the entire supply chain being qualified. So the strategy from -- in the past few months now has been, let's qualify additional suppliers and have multiple sources in more regions. So if we're looking at Europe right now, Asia is up and running, China is up and running, pretty much every manufacturing facility we're in touch with, we're getting parts from as we should. So Asia and China specifically, is currently not a problem. We're not seeing problems in Europe, but I would be surprised if that remained unchanged in regards to how virus is spreading in Europe and how quickly things are changing on the market with potential shutdowns. So I think it's important even though we -- our strategy has been regional supply for the regional market. I think from an upstream supply chain perspective, we're changing our thinking and discussing much more with our customers that we need to qualify multiple sources in different regions as a business contingency plan. So that's where we are on that issue.

Okay. We'll do one more question. This concerns the cost side. You mentioned maybe needing to make some cost adjustments. Please, could you give some color here, what would you do?

I mean it's not that difficult for us. We've been through multiple changes in demand over the past years from financial crisis, on through a very low oil price and then in 2012, 2013 and really a disappearing market in Norway when it comes to manufacturing for the oil and gas market, and so forth. So we continuously do adjustments to our manufacturing staff. In Lithuania, we're used to doing this due to seasonality, right? We -- our headcount in Lithuania over the past 5 -- 4, 5 years has varied seasonally from 500 employees to almost 1,000 employees, depending on where we are in the season. So we're used to working this way and doing this. We've also been through restructuring programs in Norway and Sweden. So we're pretty fairly acquainted on how to do that. What's different here, though, is right now, things look pretty good, even at some sites, we're actually bringing on more people because demand is high. Now that could be short term. We don't know. We don't know how the world will change. So in order to prepare ourselves and our organizations to be able to handle any radical change or dramatic change in demand that may come, it's good to prepare and think through what we need to be doing. So that's why we have now a business contingency plan, where we're looking at a site should be able to manage 30% to 40% reduction in demand and still provide a profit, still be able to run the business. And that's the scenario each site has to prepare for. Now I would be extremely surprised if the overall demand for Kitron were to be reduced that much. Especially since a significant portion of our demand is from Defense, Aerospace and Medical Devices, where we're actually seeing a strong trajectory on the demand for those.

We'll do a couple of more questions.

So I think that's the color we were looking for.

Yes, we'll do a couple of more questions before we wrap up. And continuing on the demand side, but within the Medical Devices, there's a question. You see increased demand in Medical Devices. Can you be a bit more specific what subsector you see increased demand from?

I think anyone who follows the news sees that what many countries and governments and -- are lacking is equipment to aid in respiratory illness. So anything that manages the respiratory. So ventilation equipment is what I -- we call it respiration, I think, in Swedish and Norwegian, and we call it ventilation type equipment in English. I hate to comment any more specifically on what customers this is. And then also other supporting type equipment that monitors patients that helps diagnose other side conditions from contracting this virus. Though -- that type of equipment, diagnostic equipment, ultrasound equipment, things like that.

Right. And then we'll do a final question.

Yes, go ahead.

And this concerns Kitron compared to other EMS suppliers. Is Kitron better set up to handle the COVID-19 situation versus key competitors and why?

I hate to comment on what key competitors are doing, and I really won't comment what activities they're doing because I'm not looking really at what they're doing. I'm focused on running Kitron and securing our operations. However, in general, if you're more geared towards consumer products or industry, business-to-business within the industry or you might be more vulnerable on the demand side. If you're more geared towards Medical Devices that are used in a situation like we are now, where there's a global demand increase for those types of products, and where governments are going in with money to acquire those types of products, I think you're in a better position. Just from -- basically from the get-go deciding what market sectors do you want to be active in and what type of products in those market sectors do you go after. So I think that, Kitron may have a leg up on some competitors there. But really, I don't want to comment on what competitors are doing or not doing.

I think we'll end the questions there. Peter, do you want to say a couple of final words?

No, I'd like to thank everybody for listening in and participating on today's call. We were initially, obviously looking to give you a deeper update on our strategy. But again, what's going on now, sort of hope some of our -- the activities that we do on -- towards our strategy. So it makes us rethink not in a bad way, you always take an opportunity to make the best of every situation. And we've always within Kitron sort of have it -- had it in the back of our head to have strong business contingency planning and training for those. This opportunity -- this is an opportunity that allows us to expand that even further. So I feel pretty confident on where we are and where we're heading. Now of course, anything, almost anything can happen in the market situation. But again, it's important to remember that whatever goes on will have an end. And it will tend to be shorter than longer term. So that's our thinking, and that's how we run our business. We see a quick question here. How much are you exposed to highly affected sectors such as airline, aviation and automotive? Not very much at all. I do -- I believe, we deliver some subcomponents to both Airbus and Boeing. But it's -- in the big picture, I'm not even sure that you can measure it as 1% or so. So that's the effect. We're not the big supplier. We hardly deliver anything directly to any of the big automotive manufacturers. We're more into the second-tier suppliers where we provide services and development and prototypes, which tend to be high margin and tend to continue on now, but not part of any volume reduction. I mean I saw yesterday also that -- or this morning that one of the major suppliers or manufacturers in Germany shutdown temporarily. So no effect on Kitron from that. So again, thank you so much for participating in our call. And please, if you have any follow-on questions, you know how to get in touch with us, and we'll be happy to respond to any questions you may have. Thank you so much, and talk to you soon on our Q1 presentation in late April. Thank you so much. Bye.