Lamor Corporation Oyj (GB9.F) Q3 FY2025 Earnings Call Transcript & Summary

Good morning, and welcome to Lamor's Q3 Webinar. My name is Tapio Pesola. And with me today, I have, as usual, our CEO, Johan Gron; and our CFO, Nalle Stenman. Next, I will be going through the key takeaways from our quarter results, and then Johan will also give an update on the strategy execution and then the Kilpilahti project. And we'll top it off with a Q&A as usual. So, without further ado, Johan. There you go.

Thank you, Tapio. And welcome to the Q3 results webinar also from my point of view. And I would like first to start off with giving the Q3 situation in brief. And starting then with the first one that is then focusing on solid profitability and improved cash flow in Q3. This has been one of the items that we have been working on since second half of last year. And now it's showing also that we are progressing quite well in respect to the profitability part. This is, of course, supported by the quite strong equipment delivery and accelerated efficiency initiatives in the company. And showing up off then with our year-to-date adjusted EBIT that this has improved quite significantly year-on-year. The efficiency initiatives, they include, as we talked about last time that we are looking through the whole organization and streamlining and making sure that we have the right type of resources in the different areas. And that has been going on since the beginning of this year, and is part of the initiatives that we will then start -- continue to push through during this year and then also throughout next year. Then also, other savings is in, for example, external services and general cost efficiency improvements. But this is a total review of the, let's say, the cost structure and the efficiency throughout the organization that has been our focus. Then, a continued important area that I'm quite proud of that what we've done during this year and also during last year is the cash flow, a focus on the cash flow. We have continued to improve the cash flow situation in the company by reducing them to the working capital. This is continuing, but this is something that is now on top of our minds in going forward. Then the strategy implementation. The circular oil concept plant that we have been working on in Kilpilahti, the first concept plant and the first phase of that concept plant. That is the ramp-up of the -- aiming for the ramp-up of the first line as a proof-of-concept. And there we are now happy to say that we are in -- you could say that, we are in the installation phase at the moment. And the commissioning is expected to be completed during -- around the year-end, with then starting off with the ramp-up during Q2 -- Q1 in 2026. So, a great achievement compared to the early stages of this year. And happy to say that we are now in a very good situation, but we will come back to that later on in the presentation. Then Middle East expansion. It continues. And here, the Service Center is one of the steps that we are taking in the Middle East. And happy to say that, for example, the Saudi Energy Company that acquired equipment from us to support their water intake around both the energy production plants, around the coast of Saudi Arabia, but also the desalination plants are also impacted by this part. And here, we have now proven that we have localized technology that will be a large share of the, let's say, the delivery to SEC in Saudi Arabia. And this is something that is -- the importance of the localized technologies is increasing in, especially in, Middle East and in Saudi Arabia as an example. And this is a good example how we have progressed with the strategy. So, step by step, and the Service Center is one of those steps. Then and also, we will come back to that later on, too, especially happy about the, let's say, the port protection with the MARPOL certified treatment facilities and activities around those in larger ports. And here, we have now completed the Bangladesh Mongla Port project, which is, again, a landmark reference for us and why not also for the industry. And that is -- that has led to the situation that we are now being invited to do pre-studies for customers in respect to similar type of projects around, let's say, in the Middle East and also in other areas. So, there are two significant pre-studies that at least that we have been involved in at the moment. And this is a big step forward for us that we are in the very early stage, discussing with the customer, specking the port protection for the ports. And that means that we -- our technology, of course, will be in the focus for the -- when the bidding phase is starting. Then, the environmental protection market remains strong. We do have delays in the, let's say, the larger service orders. And in the larger service orders, let's say, the decision making is impacted by the volatility in the global economy at the moment. And that has caused uncertainties. But again, a good example is that we are involved in the pre-feasibility studies for many customers. That means that we are specking in our technology. But the final decision is -- has been delaying. And as an example there, we have South America with, let's say, restlessness in several countries that has also impacted our business on, especially when we are talking about larger orders. But then, the demand and also our, let's say, execution in respect to equipment orders and especially then in environmental protection has remained strong, historically strong. And that's something that we pointed out also in the beginning of the year that we'll focus on making sure that we have an efficient sales approach, especially then on the equipment side to make sure that we maintain and can build on the strong reputation that Lamor has in this area. And here, the elevated political risks is also playing in our favor that countries, organizations and why not the interest around certain areas. And a recent example of that is the Caspian Sea where Kazakhstan is taking a large role in protecting the water bodies in the Caspian Sea. And that's why we signed the MOU. That's why we are involved in making sure that the equipment side is a starting point of starting to build up that capability. And there are other examples, but just a recent example of how we have been progressing in this area. Then just to give you a, let's say, a refresher of what are the cornerstones on the profitable growth that we are aiming for, with underlining the profitability in our growth. The first area, the environmental protection business. It's been progressing well in sense of the equipment sales. We are on a historical level with respect to the sales in this area. The larger service orders, we are in discussions with several countries. We have a strong reference base, and then the most recent one is Saudi Arabia. That is spilling over to many other countries and countries are taking and organizations are taking this as an example. So, this is a reference business that we are talking about a service side and in the environmental protection side. Then if you're taking the remediation material recycling. We don't have the 30 years, let's say, the knowledge and competence in this area. But now we built up very strong references that are world-leading references. They're talking about sold remediation and also in material recycling where the MARPOL is and also the, let's say, drill cut references that we have in the company. Very important topics in many parts of the world at the moment and especially for our industry. And references are built. And now the, let's say, strengthening our organization to focus on these areas, too, that we can proceed and living up to the, let's say, when we are building up the expectations around the pre-feasibility studies in this area that we are sure that we can, let's say, execute on the activities when we are going into the next stage of the projects. The last area is the chemical recycling plants, scaling up of that. We are now in the stage where we are doing the final installations in the plant. We are getting ready for the, let's say, hot commissioning -- cold commissioning and hot commissioning and by the year-end, first drops of oil out of the plant and then getting ready for the ramp-up of the production. This is for the first proof-of-concept line in Kilpilahti. And then we can make a decision regarding the next steps with three additional lines. And then, going forward towards developing the market and looking for two additional plants together with partners. And as a basis for all of this is the efficiency, let's say, enhancing the efficiency throughout the company. That during the growth phase of the company has not perhaps been in the focus, and that's why we are now looking through the whole organization, the whole let's say, cost structure of the company and making sure that we are efficient in going forward. An example, when I was talking about the environmental protection, this is really happy about what we've now been able to achieve in India. Together with the Indian Coast Guard, we have entered into equipment sales, but it's not only the equipment sales. We will be close to the Indian Coast Guard for the next 10 years and means that we will make sure that this equipment and why should they do that kind of a service agreement just for a certain equipment. So, we are continuing to developing this close relationship and it will be covering most of the Coast Guard stations around the coastline of India. So, we will be present at all the Coast Guard stations around the Indian coastline, not constantly, but we will have access to those and be able to evaluate, be close by the customer and making sure that we are the one that is supporting them in oil spill response equipment and also expertise going forward. And this is driven by the high geopolitical risk along the coastline of India. This is something that is still accelerating. And this would not have been possible without, let's say, the sales efforts and also strong partners building up these kind of strong partners in respect to customers. it's partnership. It's not just a one-off sale, and we have gone. No, we stay, we develop it together with the customer. And Woodside Energy a unique offshore deep sea drilling operation on the, let's say, outside the coast of Mexico, and where we are close to the customer and building up the similar type of relationship and staying with them for a long time and making sure that they are ready to attack if there are emergencies elevating in their operations. Then the Saudi Service Center. It's not just a service center. We are making sure that we are supporting the kingdom of Saudi Arabia and by not also the GCC countries with locally made equipment. So, we are part of the infrastructure in the country, and we are there to stay. And that's an important signal to the customers and to the organizations and to the Kingdom itself. And that is something that has been a lagging thing for us in -- at the moment. We had the opening ceremony of the Saudi Service Center with all of the most important customers, organizations and also government representatives taking part in the service -- in the technical seminar afterwards, together with the Ambassador of Finland that were supporting us. And in that event, we gave an overview of the full offering that Lamor can provide to the country. And there were representatives from the other GCC countries also in the audience. So, a very important event, not only opening of the Service Center, an event where we cemented our presence in the region and closeness to the customers. I mentioned about Mongla Port. This is a landmark -- international global landmark in respect to port protection that we built in Bangladesh. This will serve as an example for international operators of large ports. The MARPOL certification of the ports with a number of points that are lifted out as -- that need to be dealt with that in the port. This is something that the logistical companies are requesting for when utilizing the port. So, we built up the treatment facility together with our strategic partner, GreenFlow. And again, an example of how we are building up our path forward that we are partnering up with a strategic partner, building up a long-term relationship where we can together build up a solution that is not just covering one specific part. It's a total solution for protecting the port with the treatment facility where we collect, with the vessels go out and collect liquid and solid type of base that are oil based, that are taken care of in this treatment facility. Again, one of the MARPOL requirements are tackled. Another thing is that we are also providing vessels, oil spill response vessels that are equipped, fit-for-purpose vessels. And again, these are designs -- vessel designs that are proprietary of Lamor, that are built to serve oil spill response in this respect then in the harbor area. And then there is a station with other equipment personnel that are trained to take care of the treatment facility and also doing the oil spill response. So, a total solution around the port protection. This has led -- this reference has led to the point that we can do pre-engineering and consultancy around projects. And this is now ongoing in two paid projects, and there are severals that we are looking into. So, targeting new deliveries of port protection projects that are aiming at dealing with the MARPOL certification for the ports, a landmark reference. Now I would like to give you an insight into the plastic recycling -- chemical recycling of plastics and our concept plant. And this is an animation that will show you the, let's say, the flow through the -- let's say, from the resource, the feedstock that comes into the plant, give you a view of what the market looks like. And then, going into the treatment facility and towards having the oil that is going out of the plant. And then, what does the market look like for the offtake, also the oil itself. And it gives you a vision of how we want to expand this when we have started up the first proof-of-concept plant and we have verified the capacity and also the, let's say, the quality of the oil in full scale. And you have to remember that we have done this exercise in lab scale. Now we are starting up the pilot plant. Today, that will give us the opportunity to test different raw material mixes together with chemicals required, so the catalysts. And then, we are doing the start-up recipe for the first plant, and that's ongoing right now. So, with no further words, I would like to give you an opportunity to see this animation and give you a sense of what is happening in the throughout the process. The -- let's say, the process parts are not real, let's say, technology itself, but it gives you a view -- it gives you an idea of the process. That's the idea with the animation that we are showing you right now. So, let's take a look at it. [Presentation]

Okay. I hope that this gave you a better insight into the, let's say, the different steps that are involved in the chemical recycling of plastics with a slow pyrolysis process. And that word, the slow pyrolysis process is one thing that is very essential for this process. And there are several plants operating with this kind of technology throughout, let's say, mostly in Europe and then in North America at the moment. But where we are at the moment? We are -- the installation, the final installations of the, let's say, the oil processing technology has now started. We are in the final phase of receiving the major technologies to the site. Monday, Tuesday, we will have the major technologies on the site and then, let's say, the installation work will continue, towards the first oil around the year-end. That will allow us to start the production ramp-up in Q1 '26 and deliveries to the customer start. And this is very important to point out that the ramp-up means that we are, let's say, this is a continuous process. So, when we start the ramp up, the process will not be, let's say, going starting, stopping, starting, stopping it. It's a continuous work from that one. And that means that we are optimizing the full production line during that phase towards reaching the highest possible efficiency and the yield of the -- throughout the process. And this is something that is now ongoing to get the first proof-of-concept line in Kilpilahti to full production and with a certified circular oil. We've also done some -- revised the investment estimate for the complete plant with four production lines. So when we ramped up the first production line, then we can make the decision about going ahead and investing in the remaining three production lines. And that estimate is now corrected with to be around EUR 60 million to EUR 70 million instead of the EUR 50 million to EUR 60 million that we've had in our reports earlier. And that is due to improvements in -- related to the final quality of the oil safeguarding that the quality will be the highest possible for our offtake that is according to the requirements of our offtake customer shell. And then, there is also due to, let's say, environmental and other requirements for this in Finland first of its kind type of this scale of our production unit has also some requirements for additional things that we have tackled. So, that is -- that is the situation at the moment regarding the first proof-of-concept line and where we are. And we are happy to see that now the cooperation together with the technology supplier is at its peak, and it's one team that is working with making sure that we are with a common goal of having this plant producing certified circular oil for Shell in this case. So, with these different examples, I would like to point out that the portfolio that we have now with the environmental protection, remediation, restoration, material recycling. Environmental protection or in all cases, it's a question about the reference business. We have a strong brand in all these areas at the moment, since we have the references, and we have shown the proof of the concept and that we are a reliable supplier. So, that is an important step for us that we can rely on the portfolio that we have here and then continue to build up the capabilities around -- global capabilities around the remediation and restoration and also the material recycling part. The efficiency initiatives to support this, a couple of let's say, points that I would like to mean, that the target by end of 2026 is to save EUR 8 million annual savings by end of 2026 compared to the '24 level. We keep the profitability guidance for 2025 unchanged. That's an important thing that -- an important point that we want to make. And we are focusing on reducing the use of external services. And then again, this is looking through the whole, let's say, operations of Lamor at the moment. We have not done that before. That's something that is now very important. Sourcing delivery efficiencies. That's an interesting area for us to now streamline and make sure that it's taken into account in a professional way. And then optimizing the organization. We have seen that there are certain areas where we are still weak to be able to make sure that we are driving sales, for example, in the new areas and getting income paper in those areas and support the customers that even in this, let's say, restless geopolitical situations that they can trust us and also make their own plans and go forward. So, overall improvements in the cost efficiency is also in a major, major focus also in this path forward in respect to enhancing the efficiency inside of the company. Now, I would like to invite Nalle to give us an update on the financials.

Thank you, Johan. And good morning to everybody, and welcome to our Q3 financial update section. We start by talking a little bit about our revenue and our profitability. So, revenue in the Q3 was EUR 22.1 million. And in the first 9 months, EUR 62.2 million. This was a little bit less than last year, but we are happy to say that we were still able to keep our adjusted EBIT level on a level of a EUR 4.4 million compared to the last year's EUR 3.9 million, which is good in a situation where we have turnover is EUR 20 million. And this left us with 7.0% margin for the first three quarters and the last quarter, 7.4% margin. So, as we said, profitability remains solid on our three 1st quarters, but our turnover was a little bit lower. Then how we like to show you the split of our turnover. So, if we look at the different product portfolio, so our environmental protection and OSR is up compared to last year. Our remediation, restoration was a little bit down because of not new orders yet as Johan was telling during this year and material recycling has diminished a little bit because of two things: our Bangladesh project, the Mongla that Johan was mentioning was finalized in the beginning of the year, and our recycling plant has not yet started. So, that's the reason why that is so low or low portion of the business. From the equipment and the services side, the equipment has been going quite well and going -- increasing its share of our product portfolio, whereas the services, especially from the bigger contracts has gone down a little bit since we are waiting for new orders in that area. And if you look at the areas we split them into our Americas, our Europe, Asia and now Middle East and Africa. So here, the Americas and Europe and Asia has increased its part and Middle East and Asia decreased a little bit of its share, mainly because of the big service agreements that we are still negotiating and hoping to get in the coming months. So, the order intake for us was on the same level as last year for the full 9 months. But for the last quarter, the orders was EUR 17.3 million. And this was also the reason why we adjusted our guidance for the full year turnover. Because, we didn't reach what we were hoping for Q3, and they will move to Q4 and forward. So the big orders. So that's why it was necessary to change the guidance. Our order backlog was in the end of the quarter, EUR 82.6 million. It is much less than in the previous Q3, but it's in a similar level than the end of the year or the beginning of the year. And we are, of course, then expecting to have a strong Q4 in this or at least hoping that. Now to maybe one of the most important slides of this financial update, our focus on working capital and cash flow. So, compared to the last Q3 last year, we have been able to release about 45% of the working capital, which is on the left side of the slide, which is, of course, a big effort. And that main part of it happened in during Q4 last year, mainly because of increased focus on our Kuwait and our Bangladesh projects. But we have also been able to continue this year, especially in Q3 this year to release some additional -- and here, we have much work still to be done. But because we have been able to do this, happy to tell that in the Q3, we were able to get net cash flow from operations, EUR 6.2 million. And from the whole year, EUR 2 million, whereas last year, we had a minus figures in both Q3 and the first three quarters. Our financial position is quite solid. So, equity ratio is 35.7%, a little bit better than the last year's corresponding period. Net gearing was 86.8%, which is considerably lower than last year's Q3. Our investments on this last quarter was on the same level as last year. For the first three quarters, we have invested quite much more than -- more than last year. Of course, these investments are mainly going to our Kilpilahti factory. And -- then I think, I'd hand back to Johan, for the outlook and key focus is for the Q4.

Thank you. Yes. Let's take a look at the outlook and key focuses for the remaining part of this year. We updated the guidance for 2025 on 19th of September in respect to the revenue. We keep, let's say, the adjusted operating profit target at the same level as earlier in that update. And the main reason here is that the revenue for the final quarter will be at or above the comparison period. And a couple of things to notice here is that, let's say, the revenue for the large service project in Kuwait is expected to be at a lower level than the previous year and then the growth of the other revenue outside of the large service project is expected to continue. And then the plastic recycling will not produce any revenue during the during 2025. So, the revenue is on -- at or above the comparison period of last year. Then, if we, let's say, what I also pointed out earlier in the presentation is that, we are continuing to be strong in respect to the sales of the equipment part or small service projects that is continuing quite well. And this has an impact of the, let's say, the total business in this year. And then, if we're talking about the medium-sized service projects, and then the large -- especially the larger service projects, where I said that the reference base is very strong. We are involved in pre-feasibility studies in several areas in the business lines that we have, and that is then something that we have not been earlier and this is then strengthening our possibility in the competition about these projects that we are showing the knowledge and also the strength of Lamor as a supplier into these cases. And that is something that will now -- will not give an impact in this year. But this is something that we see as a huge possibility then for 2026 and 2027. Focus is for the remaining part of the year sales and efficient delivery. This is something that we have now been focusing for the -- since the summer to make sure that we get the throughput and can recognize the revenue in this year and also at a strong profitability level. So, this is a focus on finalizing the tenders that we are out in at the moment and also the negotiations to be able to start deliveries. We will accelerate the efficiency initiatives and continue focus on the cash flow. That is something that will be -- or is in place, and that is something that will continue throughout the year. And it will, of course, be a focus also for next year. And then the circular oil production, we are now progressing fast track towards a production phase. And that, of course, is something that we are putting all hands on the deck to make sure that this will happen with the organization that has been built up around the project together with our partners in the value chain. So, then we go to the next step, the questions and answers.

Thank you, Johan. And I'd like to welcome Nalle here as well with us to join us for the Q&A. You've sent a lot of questions, so we'll try to -- I'll try to summarize them a bit, because there's some questions from the same topics. I suppose we could start off with the Kilpilahti project actually because that's probably one of the things that the investors are interested about. So, first of all, there are questions about starting the production ramp-up. So, maybe Johan can comment on this. So, when do you expect deliveries to customers start now? And then, maybe you could also comment on the length of the ramp-up process from start to then full production. So, what can we say about it at this stage?

Yes. And as I said, that really happy to see that we are in this stage now, and we have a clear plan for finalizing the installation, going into hot commissioning, having the first oil by the year-end. That means that we can -- that we have completed the testing and producing the first drops of oil by the end of the year. Then we go into the ramp-up phase, where we are optimizing different stages throughout the whole process from receiving material with a certain mix then being put into the production line and then optimizing everything from automation to -- for the process to run it efficiently and get up and stage by stage getting up in production efficiency, yield and then also to improve the quality of the oil. We have a staged, let's say, contract structure also with the offtake that is taking into account that there will be a start-up quality. There will be an improved quality step, and then there will be the target level that we will reach at a certain point. And this is something that we have tested in lab scale, how to reach the, let's say, the -- from the, let's say, the start-up quality till the final quality level. And now we are optimizing then with the help of the pilot unit. We are optimizing the start-up recipe that what will be the, let's say, the process parameters to be able to reach the level that we are targeting. So, with the wrong mix put into the process, you will not get the right quality out. And that is now what we are. But we are optimizing. And then in the ramp-up stage, we will then start to feed that recipe into the process, and then we are adjusting the process parameters throughout the process and then reaching the level that we can, let's say, deliver the start-up quality to the customer and then improving the quality and getting up to the level. And the ramp-up period within Q1, this will stage-wise then go forward. And it's in a controlled way, planned way that we are testing and making sure that we are reaching the next level and the next level.

Okay. That hopefully clarifies that. And obviously, we are waiting for the next step there. Then about the investments, so there's a couple of questions about those. Obviously, we in our report, updated the overall cost estimate for the full production plant with four lines. And now we are concentrating on the first production line first phase. So, what are the investments now, could you talk about what are the investments now required for this first phase to be completed? And then Thomas is asking about, are you going to wait and see how the first production line performs and then may commit to further investments with further production lines. So, requirements for this first phase and then decisions about the future.

I think that the -- if you take the second question first regarding the first production line, this has been the plan all the time that we start up the proof-of-concept of the first line to make sure that we reach -- we know that process parameters and the input to the process to reach the target level and also quality before we make investment decisions about the following lines. So, that's the point of the ramp-up period also. And then regarding the -- do you want to take that?

It was about the full line.

Yes, the first line. So obviously, we mentioned in the report what kind of things we are investing in.

As Johan mentioned, we are investing first and ramping up the first line. But it doesn't mean that we haven't built the facilities for -- mainly for the all four lines. So basically, now we are building -- built the facilities and making the first production line when it's working, like Johan said, we will then decide on the three following lines. And from that amount that you said that we had updated a little bit the range that, of course, considers the full facility and the four lines. But we get part of the full facility is already done. And the first line is, as Johan said, in the next half year, hopefully, up and running.

Yes. The final question about the Kilpilahti, and maybe more operationally was then or that do we have anything not that we want to comment on the or can comment on the expected cash flows and earnings next year. Obviously, we haven't given any guidance for next year overall, but any comment?

This is the first line, and it has the whole facility there, but we are hoping that it will bring some profit already next year.

Yes. Thank you. We'll obviously get back to that one. Or Johan, do you have something about to tell.

I think it's very important to point out here that we are not talking about unique technology in that sense. We've looked through reference out there. And here also, our -- let's say, when we are talking about the oil production part where we have Promeco as the process supplier with connections throughout the industry, what is happening there. So, we've looked through a long list of investments that are ongoing. In the construction phase, in the commissioning phase and have been operating for years with the slow pyrolysis process. That means that you are -- you can change, let's say, temperature, let's say, the retention time and also the use of catalyst. That is not possible in the fast pyrolysis process. So that should be forgotten if you're talking about the Kilpilahti case. So, it's quite rigid the process itself. And that means that if you are designing for a certain raw material with certain process parameters, you will for sure get the quality out that is required. And in that sense, that this is wrong to say, but compared to many other petrochemical processes, this is quite, I would say, a rigid process. And there are references around.

Yes. Thank you. Then actually, I think we could pivot to -- they were couple of questions about financing. So, maybe they are for Nalle as well. Can you comment on the financing needs and plans for Kilpilahti. I think there's a couple of angles here that are mentioned, obviously. Kilpilahti if the financing, then there's the green bond mentioned. So obviously, that's something that we have. And then -- yes, well, let's take -- there was a question also on covenants. We mentioned that in our report as well. So, what was the situation in Q3? And how do you see them developing in Q4? So, Kilpilahti investments, green bond and then covenants.

Okay. I'll put this way that we discussed already actually in Q2. We are actually discussing and negotiating with all the financial institutions about our full scope of loans as well as the required extra money, still further Kilpilahti first line. And I want to highlight first line, because we will do the first line first, and then we will do the second to fourth later. So, we are concentrating on Kilpilahti one getting it up and running. And then, we have the bond, of course, which is due in August next year. And then we have, of course, our existing loans and the need still to finalize. But as I said, the need to find our Kilpilahti for the first line, and we are in the, like Johan said, by end of the year or around end of the year, we are thinking that the first oil will come and then the ramp-up phases in Q1. And then it starts to generate also cash towards the end of the year. So, those are the -- so this is part of the full financial planning, which we are doing together with financial institution and negotiate. For the other part, for the covenants, yes, we had Q3, we had a little bit discussed with the bank, because of our investments that we will increase to 3.75. We were under it, so that's fine. And in the end of the year, it's back to the 3.5, which would be okay based on, as we said, the Q4 will be above or at the level or above in revenue for last -- for Q4 in 2024. Last year, if I remember correctly, it was about EUR 32 million plus. And we hope to keep our profitability, relative profitability as well. So to having a EUR 10 million higher turnover will certainly give us a better EBITDA or operating profit for the Q4 to help out there. So, we are we are confident with the covenants also in the end of the year. Of course, anything can happen. But as it looks now, we are quite confident.

Yes. Thank you, Nalle. Then I think there was a couple of questions here, still. Let's take the cost efficiency actually next. So, we announced obviously in Q2 that we were accelerating our cost efficiency initiatives. Mentioned the EUR 8 million overall cost savings target for -- until the end of next year or by the end of next year. So, what would you say about -- do you want to comment, Nalle, on the progress with those initiatives so far?

I'm quite happy with the progress so far. We've looked through the whole organization, as I said in the -- earlier in the presentation. And we have pinpointed certain areas where we are digging deeper. And this is a way to make sure that we take out inefficient parts of the organization. And with, let's say, a fast growth that we've gone through during the years and let's say, since 2021 till today. That is required. So, it's nothing extraordinary in that sense. You want to add something, Nalle.

No, I think, that is -- that's good. And like Johan said that, that we are underway, only one quarter, basically, one effective quarter we have been able to do this. But we have -- if we look at towards the end of the year, we're looking that we are going to reach probably the target set for this year. And we are well under way then to keep this and implement more initiatives and more actions to reach the EUR 8 million then on the full year level of 2026. So, this is a step by step. You cannot implement EUR 8 million in savings in a quarter. But you can lay the foundation for it in two quarters and then start realizing in the next year. So, I said that I agree with Johan that we are on a good way to reaching them. We haven't done it yet, but we are in a way.

Yes. Okay. Certainly, that work also continues, and we look forward to telling you more about it in the upcoming quarterly reports as well. I think we are now approaching a time when we need to conclude this, but maybe there was obviously -- we discussed the Q4 expectations and also there was the profit pointing earlier in September. So, questions about -- and Johan also discussed the market and the uncertainties. So, maybe we could conclude with a question about orders have been shifting this year now from Q3 forward. So, how would -- you already discussed this a bit, but could you elaborate a bit on this these orders and which have been moving? So what are we talking about?

I'm really happy with what has happened in respect to the equipment sales. That is then mostly in the oil spill response. But if you're talking about the larger scope type of orders that are requiring, let's say, the pre-feasibility going into feasibility. And then it's a process that is quite different and requires decisions throughout this process. We are very aligned with the customers, but with the situation, the global situation at the moment, there is a tendency towards moving the decision point in this process. And that is something that we've experienced. And that's why we also did, let's say, the way we revised the guidance regarding the revenue for this year. And that's why we also see that this will push into next year. But there is some -- as I said, the market overall is very interested in all the different areas, but the decision-making if talking about larger orders, that's challenge at the moment.

Okay. And we obviously will continue working with our customers on that.

Yes.

At this time, I think we've almost used the hour that we had. So I would conclude this Q&A. Thank you for joining us today, and look forward to talking to you again.

Yes. Thank you.

Thank you.