Lamor Corporation Oyj (LAMOR) Earnings Call Transcript & Summary

Good afternoon, and welcome to Lamor's Q4 webinar. My name is Tapio Pesola. And with me today, I have a -- sorry for the slight mistake. So let's start again. So my name is Tapio Pesola. And with me today, I have our CEO, Johan Gron; as well as our CFO, Mikko Forsell. And next, we will be going through the key takeaways from Q4. Johan will also give a recap of the full year and then also actually recap the strategy update we announced in December. Finally, we'll take a deep dive into chemical recycling of plastics, so give a progress update on the Kilpilahti project. And then we'll top it off with the main focuses in H1 as well as questions, obviously, from the audience. With that, go ahead, Johan. The floor is yours.

Thank you, Tapio. So, also welcome on my behalf to our presentation, and I would like to give you a brief snapshot of the Q4 and also the full year major events. So, first of all, strong cash flow during the Q4 and also for the -- that is also reflecting on the full year. But we promised during last year that we will focus on increasing the cash flow inside the company and also making sure that we -- and this is relating to a certain project in Kuwait that we put a process in place to be able to make sure that we will decrease the working capital and that we did by almost EUR 30 million from the end of Q3, and that was done in a successful cooperation together with the customer and also together with our partner in this project. And I'm really happy that we -- as a whole organization, we're really focusing on this and delivered on our promises in respect to this part of the business. Revenue and profitability increased from Q3. Really happy to see that, for example, the environment or especially the environmental protection business, the equipment part of the business continued to develop positively from -- throughout the year, but also in respect to the comparing period of last year. However, we could not compensate for the lower revenue recognition throughout the year that was then mainly a part of the large service projects in respect to the comparison period. And that means that the level of revenue was -- the lower level of revenue was then reflected also in respect to the profitability of the company in -- throughout the entire year and the last quarter. However, if we're talking about the strategy update that we did, we confirmed ambitious targets in the new strategy. We also said that sales and operations and efficiency of these will be in our focus throughout this strategy period. We already started during last year that we could then see in respect to a positive outcome on -- especially in the last quarter of the year, but this is something that we will continue to focus on. In respect to investments, we already today gave some updates in respect to the circular oil business that we are now ramping up in -- or getting close to the start-up of the plant and then being able to ramp up during the later part of this year. And that is then one of the significant long term, both the potential and also investments that we are doing in ramping up this part. We'll come back to that later on in the presentation. A couple of snapshots in respect to Q4. The environmental protection business, that is a very global business that we said we have had positive examples then, for example, in Peru and Ecuador that we've done, where we won cleanup projects that then also contributed to the success of the later part of the year and also equipment deliveries, both in Europe and Asia. So again, a good example of how global and also that -- this is something that we are focusing on to make sure that both our -- we have a strong reputation globally in respect to environmental protection and also that this is something that we are focusing on and making sure that we can grow and thrive in and serve our customers. Then, as I mentioned or something that we need to also to talk about is, of course, the NEOM company agreement that we had to renegotiate. It was, let's say, something that we eventually went into and that we are not very happy about. But on the other hand, if you look on the deal overall and the impact that it has on our presence in the Saudi market and the Middle East that now we have an installed base in the region that is extremely strong. If you're thinking about the modernization and also service type of businesses that this can generate that we're looking into at the moment, this has a big impact on that part. Then, in addition to the service -- to the equipment sales, there's also service businesses. And a good example of that is the OSR service contract, that 3-year service contract that we won for in Colombia, and that has a huge importance. And then, a good example during Q4 is then that we now ramped up our service center or technology center for the rental business in the Netherlands with an extremely good location in respect to logistics, and that is now up running, and we will talk more about the success around that later on this year. Remediation & restoration. We've now -- if you think about the revenue part of this type -- of this product line, then it's slightly decreased during last year. But however, now we have considerable operations in Kuwait ongoing, world-class operations in extremely large scale. That is a reference that we are using to be able to win similar type of deals across the globe in respect to soil remediation and also that we have in other areas. So, now we are represented in South America, Middle East and next will be then the third market area as we go on. In respect to material recycling, the portfolio being -- we are serving drill cutting customers, we are serving tank cleaning customers and also important area here is the MARPOL that I will talk about little bit more later on. And then, of course, the circular oil business that we have -- that we will talk about later on also in the presentation, but it's a really important strategic piece in our business going forward. In respect to MARPOL, this is something that really need to be explained in a little bit more in detail that basically all ports around the world that are taking large ships or logistical nodes, they need to be MARPOL certified to take care of base that is generated then, for example onboard on the ships, oil wastes. And then when we are talking about oil spill protection of the ports. And this is something that we now have -- are building up in Bangladesh, starting up the -- or completing the project in Bangladesh in Q2 this year. And then another thing that we are venturing into is the Middle East project where we are now doing a pre-study that will then be the, let's say, the stage where we are scoping in the technology for the larger project that then will be tendered later on in -- and that we, for sure, will be taking part of. So, good progress in each of the product lines during Q4 and also looking at the long-term strategy that we have put in place will support that very, very strongly. So, Mikko?

Thank you. All right. Hello, also from my side. So Mikko Forsell is my name. I'm CFO of the company. So, let's have a brief look on this morning's report in terms of the financial performance. So, as Johan already mentioned, so in respect of the -- in respect of the revenue development, so we have reported 6.6% lower revenue than in the previous year. It is mainly driven by the big project that we had during the 2023, which are not on the same magnitude on our numbers in 2024. For the last quarter also the kind of EUR 2 million less revenue recognized than in the previous year. On the other hand, if we look at the year itself, so from quarter-to-quarter, we have been able to improve the revenue, which, in a way, is a positive signal. also for us. In terms of the profitability, we are not satisfied with the level that we ended up for the year itself. So EUR 6.4 million adjusted EBIT for the full year. For the last quarter, although we had kind of the highest revenue of the year, still kind of the profitability being on the level of 7% is not on a satisfactory level. For the last quarter, we had some of the closure costs that we have been recognizing for some service projects that were ending during the last quarter. So mainly that is the reason for the profitability driver for the last year. So, in short, if we look at then what are from the overall perspective, the profit drivers for the last year, it is driven by the lower sales revenue as well as then this some additional one-time costs that we were recognizing during the last quarter. Johan already mentioned about this product portfolio development. So, if we look at then in respect of the services and the equipment sales, so we have had also the strong focus on kind of getting the equipment sales up, which is then visible in the last year numbers already. And then on the other hand the kind of -- in the market area side. So, the share of the big project in-- especially in the Middle East are having now the lower overall portion of our revenue. Then, if we take some of the more positive things out of the report, I think one thing where we can say that we have had turned the trend around is in terms of the order intake. So, for the last year, even having the kind of NEOM corrected numbers in last quarter, the overall order intake for the full year was exceeding EUR 80 million, and it was almost doubled from the previous year. So, all the hard work that we have been doing in the last year in order to kind of get the business kind of order intake to be turned around, there, we have had good success. And if we then combine this with the disclosed information that we had from January as well, so we had some [ 2 ] bigger orders also disclosed that I think combining those ones, we are definitely kind of heading in the right direction, all in all. Then, as Johan mentioned, one of the clearly positive highlights out of the report itself, we have been working hard in order to kind of make sure and secure that the working capital as well as the cash flow will be improved during the last quarter. And these are then the results. So, overall, almost EUR 30 million less working capital tied by year-end, mainly driven by the kind of the invoicing process, kind of the corrections or getting the things working in -- with our customers in Kuwait being the main driver. If we look at then overall kind of the working capital, I think it is still good to notice that we have big share of this working capital tied to these big service contracts, which is then the -- kind of the key of having that to be released for other purposes is to have the kind of good cooperation with the customers to secure that we are able to collect the money back. All in all, so the -- throughout the whole year, if we look at the net cash flow versus the previous year, we can say that we are on the positive side. And then other thing, Johan will be then discussing bit closer towards the end of the presentation, the investment. So, to be noted that, of course, this Kilpilahti is big part of our investments for last year. So, Johan, would you like to come up and sum the full year?

Thank you. Yes. So, a summary of the last year, 2024. First of all, order intake increased or doubled compared to 2023. And I'm really proud of the work that our team has done in being able to improve this and -- both in respect to the operations itself and also the sales efforts throughout the company. And we already promised that we would put efforts on the sales during the last part of 2024 or throughout 2024, but especially then towards the end of the year and this really paid out in an improvement all over our operations and our sales activities. And then also, we put, let's say, you could say that we did the groundwork for profitable growth during last year that will then also continue during this year. But there are internal efficiency activities that are important for us and this is something that we will be continuing to put efforts on. And then another thing, a third thing here in this slide is really the, let's say, the focus on safety. And I believe that this is really the basis for a successful business that we take care of our employees. If you think about the areas where we work and the conditions where we work in -- you could say, in respect to environmental crisis situations or then, let's say, you could say, also legacy war regions. I'm really proud of what we were able to do during the year with 3.5 million working hours and 1 accident leading to absence. So great success in that respect. Then our updated strategy and long-term financial targets. Let's take a look at this and try to put us on the map in this respect. Globally, I mean, we are working really globally. And if you look at the geopolitical risks that continue to materialize, this has not gone away. And we see that there is an increased effort on preparedness around the globe. I'll be talking about at sea, onshore or at on land. This is something that is really being put high on the agenda to be able to react fast and then address the environmental risks that could materialize in different areas. So, an important part of what we do, and these are just good examples of where we have been supporting then the Saudi government in putting in preparedness plans and in other countries to the similar type. You could say that during last year in respect to preparedness, we did more than 100 training sessions around the globe with customers in respect to making sure that people are prepared for environmental challenges. Then -- a second part is then governments and corporations that are also looking at, let's say, legacy environmental challenges, whether we talk about remediation or contamination of water or land areas. And this is something that we also -- with our product portfolio, where we can do a large impact and support governments and organization and especially in these times of -- that we are living in with increasing risks all around the globe. And then the third area that must not be forgotten and where we are now putting quite some efforts into is the recycling of plastics, where there is a global effort, and especially in Europe, a large effort on further increasing the reuse or the recycling rate of plastics. We know that in respect to mechanical recycling, that is, I mean, a given type of approach to recycle plastics with a lot of restrictions in respect to where it can be used. Then the chemical recycling is an additive to this increased recycling rate where the product, the oil can then be used in more demanding applications for plastic products, food grade type of packages or then plastic types with larger requirements in respect to the functionality. So these are the 3 different areas that we are with our product portfolio where we can be at help. What we've also done during -- in this strategy period is really or in this strategy definition is that we want to make sure that our sales funnel is balanced. So, not only focusing on one of the legs in the funnel, we want to have a balanced one with equipment sales and small service projects, medium-sized type of service projects. And then, of course, not to forget the large service projects, but a balanced funnel, balanced efforts on winning the projects that are in each of these buckets. Then, if you are looking on the profitable growth and you could say the main window in respect to the strategy that we are putting in place. Protection and recovery, that's close to our heart and where we've grown up in tackling hydrocarbon-based pollution environmental challenges. And this is a truly global effort that we are pushing forward. And we are a global company, and we're also working very close to our partners in each country to make sure that we have the cultural activity or the cultural aspects also taken into account. When looking at the financial targets then during this strategic period, we have cemented that our growth towards EUR 170 million as revenue -- annual revenue and the profitability level that we truly believe that is achievable during this strategy period of 14%. And of course, we aim to distribute dividends considering, of course, the business development. And this is something that is now in the heart of our activities moving forward in this strategic planning period. What are then the cornerstones of the strategy? Efficiency, enhancing efficiency. That is something that is the ground of the cornerstones in our strategy. We already last year started to focus on efficiency, and this is something that will take us through this year also, and making sure that we are through our operations and sales offerings, operations, this is something that will have a big importance. In respect to the businesses, continue to develop the environmental protection business where we have a long history. We are trusted. We have a strong brand, and we are close to the customers globally. This is something that we want to make sure that is even more efficient and also that we are growing this business in the right direction. Then where we have now cemented our position with strong references, remediation, world -scale type of remediation projects, and also smaller, more focused projects in certain areas. We have a huge operational experience, and now also you could say that the possibility to adapt these projects to the right level and making sure that the efficiency -- cost efficiency in the projects are on the right level. Material recycling with the new initiatives that we are building up now, that is being driven by the market demands. For example, the MARPOL and the changes in the maritime legislations, forcing the logistical companies to take the MARPOL thoughts also into account and when using certain ports. We are there. We have references, and this is something that we are going to push forward close with the ports around the world. And here, we are also doing this together with a partner that is well recognized in this sector. So, just a couple of examples of how to do the focused growth in respect to remediation and material recycling. The third area is then the chemical recycling of plastics to produce circular oil. And this will be an important area with investment focus and making us ready to ramp up the production during the later part of this year, second part of this year. So these are the cornerstones in a broad sense where we -- that we are going to work on towards the profitable or during the profitable growth. A couple of words about the circular oil part that is then the -- what we've been earlier talking about the Kilpilahti project, what is the reasoning behind and then opening up a little bit more about the project itself. There is ambitious targets that have been put in place in increasing the recycling rate of plastics. That will not happen without taking into -- taking the chemical recycling into account. That is then bringing forward a circular oil that is then blend in, compatible with virgin fossil oils and also a certified type of oil that then allows the whole value chain from raw material till the circular oil product is applied in plastics is then in place. There is currently limited volume of circular oil that is being produced, but there is a great demand from the oil refiners to be able to get access to this kind of oil. And there is a lot of investments going on in Europe. And we, for sure, with our approach will be one of the successful ones in this activity to provide circular oil for the plastic producers. Where are we at this stage? In respect to our own approach that this is part of the strategy. This is now -- we are putting the first production plant now and starting up that in the third quarter of this year. And that will then have a capacity -- annual capacity of 10,000 tonnes of plastics into that production line. The first stage is really the first production line in the Kilpilahti plant, the concept plant. And that plant will then be expanded with 3 additional production lines, making it to a concept plant of taking in 40,000 tonnes of plastics to be recycled into circular oil. And then the longer-term target for Lamor is then to expand into reaching 100,000 tonnes of recycling capacity. So, this is our approach, how we want to scale up the production. I mentioned that what is very important here is that there is no circular oil without a full value chain being certified. So from the collection to the monomers going into the plastic production. And here, our part is the thermochemical processing in the middle, together with our partners; Remeo for the raw material, Shell for the offtaking of the oil. And we are working very closely through our partners here, making sure that we have the full value chain optimized to reach the targets that have been set together. And that's why also that we are taking the step today to acquire -- fully acquire the ownership of the Lamor Recycling Oy that will then be a part of the Lamor Group. And we are then -- we have been until now working with our minority shareholder Resiclo, that will now exit the activities together with us. So now, we are taking the full responsibility and then together with our partners in the value chain, making sure that this will be a success together. What are then the steps in -- from initiating this project? We had the groundbreaking ceremony in Q3 2023 and then started the construction of the plant and bringing in certain process parts, the oil storage tanks. So now we are at that stage that it's only the processing equipment that is missing from the production plant. As we speak the equipments are -- the final tuning to the equipment is being done in Italy and the delivery of the equipment, the tested equipment will be done in Q1, Q2 and then delivered to Kilpilahti and then starts the installation commissioning. And then in Q3, we will have the first circular oil production line up running and then continues the production ramp-up throughout the year. And what we do, we have been talking about modular. We've been talking about the portfolio. We've been talking about the concept plant. So, what we wanted to do to ensure that we are controlling the risks is really -- and we are not talking about the risks of the technology itself. It's the full value chain from raw material to the final oil that is being delivered to the oil refiner. So, now we are starting up the first line that we are talking about at the moment, and that will be a part of the full concept plant that we are building up, producing 24 to 28 kilotons per year of circular oil. So, that's the full plant, concept plant with then the first line being the proof of concept for the full value chain. And that will then -- that concept plant will be copy pasted into plant 2 and 3 according to the similar type of a setup from the building to the process itself. So this is the, let's say, how we are tackling the scale-up risks and also how we are working with the modularity of the plants. And as I said, that there is a high demand for this type of high-quality circular oil, but there is no market pricing at the moment for it. So it's really the availability of the oil that is driving the pricing. And here, we see what our colleagues in this type of business is also doing, and there is certainly, let's say, a push for increased pricing also in respect to the final product. And that's due to the availability of the oil at the moment. And we expect, otherwise, we wouldn't have gone into this, is that it will contribute significantly to continued profitable growth of both revenue and also contribute to cash flow in Lamor going forward. The first line, 6,000 to 7,000 tonnes of circular oil will be the output of this line in a year. And as I said, about the start-up in 2025 and then the revenue impact will be limited in '25, but the full year will be 2026 then, going forward. Once we reached full capacity with the first concept plant, it will generate around EUR 35 million to EUR 45 million in revenue. That is based on our calculations and partly assumptions so far. The total investment for the concept plant, the whole plant with the 4 lines will be in the range of EUR 50 million to EUR 60 million. So, this is the full picture now of how we are building up the first concept plant and then not going into detail regarding the full portfolio, but the first concept plant as one example. So, Mikko, let's take a look at the outlook and the key focuses for H1 -- for the full year.

All right. Yes, Yes, I think. Thank you, Johan. Yes, I think in terms of the kind of the guidance and bit of a background of the guidance, I think those are the ones that we would like to also open up. So, as we have had kind of good start for this year already in terms of kind of order intake, that will be kind of clearly the focus for the first half of the year, making sure that, that revenue will be then available for us for the second half of the year. So, really kind of closing the deals, there are in all market areas, in all different size of the kind of the tenders ongoing, where we currently have a good understanding on what are the ones that we are able to close or believe that we will be able to close during the first half of the year, that is where we have the focus on, which will be then converted to kind of the revenue for the second half. So, we believe that the second half of the revenue will be clearly higher than it has been for the this -- last year. But we also recognize that in terms of the first half of the year with the current backlogs that we are working that the revenue for the first half will be lower than it was for 2024. At the same time, we see that the kind of the big service contracts that we have ongoing in Kuwait will remain on the same level as it was for 2024. And the plastics, where Johan already gave kind of the overview on the project itself, the plastic recycling will be having limited impact on the revenue. In terms of the strategy, we have been kind of clearly saying that the focus will be the thing that will be high on our agenda, and it also kind of goes with the profitable growth. And with these actions that we have in plans for 2025, we kind of foresee that the kind of this guidance of kind of higher revenue as well as the higher profitability in terms of adjusted EBIT will be achieved. So that was Johan's outlay to kind of the guidance. And then regarding the focuses for -- at least for the first half of the year 2025, sales and efficient delivery, that will be in our focus. And that's something that we also said in respect to the strategy for our strategy period going until 2027 is that a more focused approach where we have certain markets where we've been already for some time and that we want to make sure that we have our full portfolio also available throughout the market area and in the specific countries that we've taken as a focus. And we wanted to get closer to the customers, and that's why we did certain changes during last year to make sure that also the leadership will have strong insight into the markets that they are responsible for. Then in respect to order intake, strong order intake and especially then H1 2025, that will be one of the focuses, making sure that we execute and also are close to the customers and then can make it into order intake. And then the full balanced, let's say, portfolio that we want to make -- put in place, and where we have good examples from January this year, where we already set -- announced 2 quite significant equipment deals that we -- in different market areas. So that's a very important part. And then continue to execute on current deliveries in a very efficient and cash flow focused way. And then, regarding the profitability improvements and focus on cash flow, that will continue. That is something that where we are working closely with the partners, the customers and where we now put a process in place that we will then make sure that is available throughout the company and really focusing on making sure that the payments are closely followed up. And then continuous cost awareness, operational efficiency development and margin management. That is the foundation of the full profitable growth strategy that we've put in place. Circular oil production preparations, we will put quite considerable amount of resources now in making sure that we will have a very aligned, efficient team and also resourcing around this, working together with the partners in this value chain and making sure that we are -- the awareness about the, let's say, expectations are clear, and -- so we can go towards initiating the production in Q3 2025. So these are the 3 different building blocks that will be important, in the focus throughout H1 and going into Q3 also. So, that concludes the official presentation.

Yes. Thank you, Johan, and Mikko as well. So we are ready to start the Q&A session. We already have a number of questions actually waiting for us. But let's take the first question from Thomas Westerholm, analyst from Inderes, who is here with us as well.

Thank you, gentlemen, for the presentation. So, just to start off with your updated strategy. Now that you are focusing sales efforts more into markets with the strongest prospects for growth, are these also the most appealing markets in terms of profitability? Or are you sort of leaving profitability on the table while prioritizing growth here?

I would say that in all these markets that the decision has not been made on pushing, let's say, order intake or revenue development and putting the profitability on the side. We see that we can -- the profitability target that we put in place, that is very well aligned with the markets that we are focusing on. And it's important that the markets and the countries that we are focusing on, that's where we now want to leverage the whole portfolio and utilize then the partner network and also our presence in those markets in a new -- in a different way, more efficient way.

And thinking about the profitability target that you reiterated, how do you see yourself achieving that goal? Is the main driver for improved profitability operating leverage? Or do you have other sort of drivers in the mix here?

Of course, the -- let's say, looking at the margins for the projects that will order -- the sales that we are doing, that's one important part. But it's also the full operational approach of the company and how we are utilizing resources will be an important part of that achieving that profitability target too. So driving margins and also efficiency throughout the company.

Got it. And regarding Kilpilahti, now that you have acquired the whole facility for yourself, what's the reasoning behind this? What does this achieve for you now that you carry all the risks behind the plant by yourself?

I would say that it's very hard to talk on behalf of our former partner in the project, but especially for Lamor itself, it's important that we have the full control of the project going forward. There will be -- I mean, it will be a part of Lamor. And what we've also seen is that it's very important that it's part of the portfolio when we are talking to customers outside of Finland. Of course, the first plant now is really to build the concept plant with starting up the first line and then building the whole production capacity in the concept plant. But we want to take this concept also to the markets outside of Finland where we are existing and to leverage the portfolio there. And in those discussions, let's say, Lamor as an owner of the approach is very valuable.

Thank you, Thomas. Then let's take actually the next questions from Antti Koskivuori from Danske Bank. So there was first a Q4 related question. How much of the EUR 9 million worth technology delivery to NEOM was booked into the Q4 numbers. So, Mikko?

Yes, it's around something between EUR 6 million to EUR 7 million, was the revenue recognition.

Yes. And then the second question from Antti was related to CapEx levels. So, on what level do you expect Lamor's CapEx to be in the coming years? There's actually a couple of CapEx questions coming.

Yes. Of course, I think based on this announced kind of the Kilpilahti concept plant, that will be by far the kind of the biggest project throughout the whole company in the history as well as going forward for some time now. So I think this EUR 50 million to EUR 60 million plus then some other potential CapExes are kind of now in focus for coming years. Exact timing depends, of course, on the production and then the kind of investment decisions in terms of the next lines to come in Kilpilahti.

Yes, there was a specific question about Kilpilahti as well. So how is the project progressing compared to your original budget?

Yes. I think when we have been kind of building up this concept, not being part of the initial discussion early phase, I think in a way, it has been now -- at this point, we have kind of clear understanding what is then the CapEx needed for kind of completing the first line and what will be then the CapEx range at least to kind of complete the kind of whole Kilpilahti concept plant. So, not having exactly the understanding what -- where kind of the initial investments to be calculated are included. What is good to remember, of course, that when kind of building up the whole facility, now we have already space for the whole kind of the setup itself. So, many of the infrastructure kind of investments are then valid for the whole project.

Yes, that is clear. And then, actually a final question on CapEx. You mentioned the sort of overall investment levels for chemical recycling. But overall, can you give some guidance on CapEx levels specifically for 2025 this year?

Well, I think in order to kind of complete the project that we have currently ongoing in Kilpilahti, so we estimate still the kind of the CapEx to be somewhere between EUR 10 million to EUR 15 million.

This year?

This year.

Okay. then 2 other questions from Antti on Kilpilahti schedule. So, when do you expect to have the first 4 lines up and running, so the first concept plant in full?

I think that it's very important now that we need to get the first line up and running and that we can also prove the capacity of the first line. And I believe that, that will take us towards the end of the year when we are up at full capacity of the first line. Let's see. But we need to have that proven first, and then we can take the decision on the next lines.

You can get back to that question then in upcoming webinars this year.

Yes.

How many production lines do we need to have fully up and running to meet the targeted profitability levels per produced units? Those have not yet been communicated at all. So I wonder if you have some reflections on the profitability targets at that, maybe the first stage of the full plant.

Yes, I think let's revert back to that one then a bit later. So as said, kind of we have been building up the CapEx now for the whole kind of the plant itself. And then in terms of then the first line, it's clear for us that only having 1 line is not sufficient or doesn't make profitability-wise that much sense. So we need to have to kind of build up the whole plant then to be cash flow positive as well as -- or kind of strong cash flow as well as the profit.

And I think it's important also to underline that we are not talking about new technology. We're talking about proven technology, but maybe the application specifically towards the quality targets that we've set up together with Shell. That's something that we need to do. So that's very important.

Yes. And I'm sure that we will get back to, as mentioned, to this topics. This was our sort of -- we wanted to give you a bit of a broader overview on the status of the project and some of the key financial metrics in a way. So we'll definitely get back to the these topics going forward. Then there were other questions from Antti actually, how do you anticipate the working capital to develop in the coming quarters? Should we expect another meaningful decline in Q1? Or how do you see it?

Yes. I think the big jump came now during the Q4. Now when we have the Kuwait kind of the -- how would I say, the project in control in respect of the invoicing process. So I don't think we will be seeing that significant kind of the declines or changes now during the 2025 in respect of the Kuwait. In terms of the other components I think Kuwait is as long as the kind of project will continue, which is throughout the whole year, then I would expect that to remain on the same level.

Okay. And then how much of the -- this is regarding the order backlog? And then how much of it is for -- how much of the EUR 88 million order backlog is for the first half of this year and how much for the second half? I don't think we have split that number. But for the full year, what was the share of the order backlog?

So we currently have that EUR 88 million plus then what we have now in January been taking. So, of course, the majority is for 2025. Yes. And I think timing-wise as well, when we are now kind of closing the kind of the coming tenders as well as when it comes to kind of the time schedule with these items that we have on the backlog, it's kind of clearly important for us then to agree with the customers, what is then the timing of those and revenue to be recognized accordingly.

Yes. I believe that was the final question that we have. So, that concludes our webinar, and we thank you for joining us today and look forward to talking to you again soon. Thank you.

Thank you.

Thank you.