Nexam Chemical Holding AB (publ) (NEXAM) Earnings Call Transcript & Summary

Welcome! Cleantech Company Nexam Chemical Holding have opened the books for the first quarter of 2025. To present, I'm happy to welcome CEO, Ronnie Tornqvist; and CFO, Marcus Nyberg. After the presentation, there will be a Q&A. So welcome, Ronnie.

Thank you, Martin.

First, before you present, how would you describe the first quarter of 2025?

In very short words, it started a bit slow, ended quite strong, had a lot of events in it, and it's looking better and better for the future.

Okay. Thank you so much. I'll be back for the Q&A, but please go ahead with your presentation.

Okay. Thank you so much. Okay. Presenting here the quarter 1 of Nexam Chemical together with my colleague, Marcus Nyberg, who will join in soon into the presentation. Nexam Chemical is working on the future of plastics. We provide additives to the plastics industry to make plastics better and more sustainable. And we have a lot of unique solutions of which many are patented. Pictures here of recycled plastics and advanced composite materials, which is 2 of the areas where we are very active. One of the highlights of the first quarter is that the sales into Reactive Recycling increased by 50% to last quarter, and I will get back to more details around that during the presentation. Summary for the people that don't really know about Nexam, our additives that we manufacture, develop and sell are applied, are based on a few technical components, which relates to Reactive processes in some plastic materials and other active substances that are put into master batches that are then used as additives into plastics. The application field of these quite similar chemical and technical ideas become very wide. We do anything from, involved in anything from microelectronics, small plastic components, fairly ordinary plastic components, all the way up to high-temperature composites for very advanced jet engines, for example; but also lands into quite important fields for sustainability, such as renewable energy, in particular, wind energy and more and more into the recycling of plastics where we increase the value of recycled materials. And many of these areas are driven by global megatrends. Our commercial strategy is based on the value that we bring to our customers. So, we have decided to divide our different areas of activity into the properties that our customers achieve by adding our materials and the added value that, that gives. And they are these 4; Light Weighting, which is additives to enable manufacturing of structural foams that are used, for example, in windmills, but they are also used in transportation of cold goods, for example, and building industry, et cetera, et cetera. There, we have a very unique and strong position to the foam manufacturers. We're also active in the High Temperature segment in which our additives increase the temperature resistance of the most temperature-resistant plastics that you can get hold of. And that's used in airplane engines, and it's also used in varnishes for microelectronics, which can become very hot, et cetera. We have a big area where we work with the Aesthetics and how plastics look like and also giving the plastics a strong sustainable life function. And we are more and more providing colors to tune in the color of recycled plastics, which is quite difficult and also providing very special, unique and forceful additives that are used in the recycling of plastics, which I will dive a bit deeper into. But before I go in deeper into the Recycling solutions and the significance of those, I want to touch a few words on the High Temperature segment. As I mentioned already, our additives increase the temperature resistance of the most temperature-resistant plastics. Composite materials are based on carbon fiber with the plastic matrix. So, and are used in many different applications. And the reason for the popularity is that they have the highest strength to weight ratio of most construction materials that you can find. But in high-temperature applications, their use is limited by the temperature sensitivity. So, for example, in the jet engine, the application area of composites is limited to cooler parts. But by using our additives, you can use more and more components in composites. We have worked a lot on development in this over, since Nexam was founded, but also in the last years, we have increased our engineering work in this field in order to grow the application field of it. And with the current reinforced direction of more European defense investments and so on. We see a very strongly increased interest for our high-temperature solutions also in Europe, where the main market has mainly been for microelectronics in Asia and for advanced composite applications in North America. But now we see an increased interest here in Europe also. But let me develop a little bit into the field of Recycling. It is not our largest business segment, but it's the one that is growing the fastest and where we see a lot of potential. So, Recycling in general in the plastics industry is a very important topic. We have, at Nexam, developed a portfolio of tailored additives that suit a really wide range of applications, and it goes from very simple products to quite advanced ones. In every case, when we are successful in building a business in this field, it is based on 2 factors. One is that there is a sustainability factor to it that we lower CO2 emissions really and reduce scrap, but also that there is a positive business case for our customer. So, the use of plastics today is approximately 400 million tonnes on the earth and about 10% of that is being recycled, 10% to 15%, different by region. But there are initiatives everywhere and a lot of investments into recycling capacity all over the world. And that means that there is an increased volume coming in of recycled materials, and that needs to be taken care of and you can no longer rely on very simple applications. The, what you use the recycled plastics for, must become more advanced. And we are providing solutions to make that recycled plastic up to spec to meet those high requirements. One example that we have done a press release about is our collaboration with a local company, Kullaplast located also in the south of Sweden as we are. They are a leading packaging materials producer. They use our additives together with recycled plastics, post-consumer materials to produce blown film. Our additive is adding properties to the recycled plastics so that you can run the process much more stable and you get a better product using more recycled materials. So, it's both an economical and an ecological case for Kullaplast, and we provide a solution. And a few investors have asked me why we lift this relatively small business, and that's because this is very significant because there are many, many, many, many, many film producers out there that could do the same thing. And we are working with some and they are more in the R&D process. Kullaplast were quite rapid. But when it was released, it has provided a lot of international interest from many customers around the world because there is a need for this type of solution everywhere. And the blown film business is a huge one. There is about USD 10 billion of production value in blown film in the world. And if you look at it from that perspective, there is about 4 million or 5 million tonnes of blown film produced in the world, and it's growing steadily. And the estimated share of recycled material in this field is approximately 10%, but steadily increasing. And the potential value of additives in this blown film business alone is approximately USD 30 million per year for the little recycled portion of 10%. And while that increases, that potential volume increases. So, it is not only us in Kullaplast, there is a world of opportunity in this field that I think is significant to think about when you think about the potential in this field. And we are working really hard market development, trying to work together with more customers to find this kind of solution, and it's going well, but the projects take time. So, they are not quite into production yet. But it is very often this type of value proposition that we work with that the customer is working with some solution. This is an example from the field of PET, where a customer is using an expensive recycled bottle grade PET to produce trays for food packaging. They can only add about 10% of low-cost recycled food tray material, and they need to add 10% of virgin material. But by using our additives to a small percentage, they can increase the use of the low-cost grade and reduce the use of the expensive grade, but they need to keep the virgin for a surface layer. But in total, this allows the customer to reduce the raw material cost by 30% in this case. They add some cost, approximately 6% to buy our additive. but the resulting cost saving is about 25% for them. So, this is the type of calculation that motivates our customer to work together with us in the field of recycling, and it's a similar calculation for the blown film market as well. And why is it working? As plastic materials are recycled, the materials are degraded, and you can measure that by various parameters. One of them is viscosity. The material becomes running when it's molten, but it also becomes fragile in its natural state, so to say, at room temperature. So, there is a certain number of recycling loops and then the material is, so to say, not good enough anymore. After 9 recycling cycle, the material is quite degraded. This is, by the way, from a study from the University of Torino in Italy who have done this study using our materials, but not funded by us. And they see that after this quite degraded material after 9 recycling cycles, it can be brought back to the same properties as after only 4 cycles. And if you were to introduce the material after in the first or second or third cycle, you would come back to near virgin properties of the material. So, it is really key to make the number of possible recycling loops unending more or less. And the material is obviously recyclable again when you have used our additive into it. If you look at the global plastic production, it's about 400 million tonnes, and it's divided into different material classes. 10% of it all is more or less recycled mechanically. There is a little portion of biomaterials and chemically recycled plastics, but it's very, very small compared to the mechanical recycling field where we are mostly active. But the big material classes are polypropylene as used in, for example, ice cream trays, LDPE, blown film applications to a large extent, such as plastic bags, et cetera, HDPE canisters, PET drinking bottles, PVC flooring, et cetera, et cetera. And our work with Reactive Recycling, we are focusing on the biggest material classes, polypropylene (PP), LDPE, HDPE and PET. So, our patented and our developed solutions cover more than 50% of all plastic materials out there on the market and much more than 50% of the actually recycled plastics. And if you look at our sales into this segment, we had an all-time high in Quarter 1 of SEK 3.5 million, which was then 50% higher than we had in quarter 4. And we have been at lower numbers before. So, it's a high percentage growth, but it's still fairly small numbers. But we feel that this has an explosive potential in the future. We could do much, much more here. Coming back to overall business situation, short update on the Quarter 1 then. As I mentioned in the start, we had a slow start in January, February and a strong ending in March. It's still the same story that we had in Quarter 3 and Quarter 4 that the PET foam market shows significant weakness, a little bit everywhere around the world, and that leads to lower sales into that segment, but it's compensated by quite a strong growth in all the other segments. So, SEK 49 million compared to SEK 53 million last year. The gross margin has continued to increase. It was 48% compared to 45% 1 year ago. EBITDA was SEK 1.3 million, obviously impacted by the lower volume. But the financial stability continues to be maintained. We were funded by self-generated cash flows, and we have an unused credit facility of SEK 25 million that we can grab to if we need. So, we're in a very nice and stable financial situation. Some comments about important events during and after the quarter. The Kullaplast collaboration has attracted substantial international interest. We're getting overwhelmed with requests and collaboration partners to start to work in this field. We continue to have a really good inflow of new potential customers, especially within recycling. We did a presentation or had a stand and the presentations met a lot of customers at the Recycling show in Amsterdam, which is the biggest event in this field in Europe. And also, from there, we have a lot of customer interest for our solutions, and we're preparing now for more of these type of fairs in both Sweden and India in the coming weeks. We have also hired 5 new machine operators in Sweden, Hungary and Poland in total, 5 people to handle the increasing volumes that we are seeing right now, started in March. But with the current increase of manpower, we're able to maintain our delivery times and serve our customers well. Also, during the quarter, we finalized this increased credit facility with the support from EKN, the Swedish Export Credit Agency. We also completed the more than 1 yearlong project in the U.K. to work on high-temperature tapes for composite materials, and we're now looking for ways to continue those initiatives, and there is a huge interest to collaborate with us on that. So with that kind of current update of the current business, so to say, I would like to hand over to Marcus to give you some more details. Marcus?

I will give you some more details about the figures. As Ronnie has mentioned, we just came short of SEK 50 million in sales for the quarter. We had a new record for the margin, 48% and our EBITDA was SEK 1.3 million. And also, as Ronnie mentioned, we have a stable financial situation. We have in total SEK 26 million as our available cash. I will then also give you some more details about the margin and our improved margin. We have now improved it for 9 quarters, and we're up to 48%. And we are still having more initiatives to actually increase it even further. So of course, we're aiming for the 50%, but we will at least be between the range of, like say, 45% to 50% or something like that even in the future. And with this slide, we would like to show to you that our business has actually changed. Meaning that even if Light Weight has gone down in terms of sales, we have actually increased the number of customers. A couple of years ago, we only had 3 customers. Now we're up to 9 customers. And we're also seeing that Recycling, as Ronnie has mentioned, it is gaining a bigger and bigger portion of our sales. And what you also can see in this is also that our Masterbatch Nordics has gone down during the last 2 years. And that is mainly a result of us phasing out a little bit the low-margin additives. So, and to focus really on the ones that are profitable. And on the next slide, this is a little bit on the, more of the same, but more details. And here is a number of customers. And what you can see here that in Light Weight and High Temperature, they're relatively stable, but Recycling is really where you can see this big increase. And what is also happening now is that in Recycling is that the customers, they're recurring and that the order volumes start to increase. And then the final slide in this subject will be that our business is really scalable. We can also see that even now we expect a future growth; we don't really need to invest more in terms of machine and machine capacity. We have a very stable breakeven of EBITDA of roughly SEK 45 million. And to give this a very easy calculation is that everything that is above SEK 45 million, 1/3 of it will go to the bottom line. And also, another thing is also that more than 90% of our sales is actually come from recurring customers. And then I will actually hand over and hand back to Ronnie again.

Yes. This is the sales funnel from a Nexam Chemical perspective. We work in projects together with our customers. Whenever we do something, a new additive to a customer, there is a development process involved. This can go anywhere from 1 month to many years. Our work, daily work and our ambition is to have a very smooth and reliable and speedy process, so to say, but it's always dictated by the givens in the various projects, and that's very different. High-temperature projects tend to have a very, very long time and it's related to product approval in very sensitive industries. Some of the ordinary industry color initiatives can go quite rapidly, and there are many stages between that. But in general, you can say that we always harvest customer interest and try to find the high potential projects to work on and go quite broad on that by both direct customer contacts, but also through internet-based connections and trade fairs, et cetera. And then we filter out the ones with highest potential and start to work on them and develop these processes and do proof of concepts, et cetera. And then we land into a scale-up industrialization phase. And there is always in these steps, some kind of filtration that some of the projects continue and some are stopped and some are delayed depending on how the world looks like and the industrial prerequisites for our customers, et cetera. But we usually don't speak about specific customer projects when they are in the early phases. It's when they approach production that we talk about it. So, coming back to the example of blown film, for example, we have commercial deliveries to Kullaplast that I mentioned, but be sure that the funnel is full all the way up to customer interest in this field. And we work according to this, and we're getting better and better at running this process and getting better and better at filtrating which projects to bet on, so to say. Another aspect of Nexam Chemical is that we have 3 parts of our business. This is for quarter 1 here. 55% is going into Aesthetics. It's a base business. It's a very healthy one. We are innovative, really close to our customers and strong in that field, and we do put a lot of development and thought into this, and we're gaining both better contribution margins, happier customers and some growth from it. But it's a base industrial business with competitors in our local markets in the Nordic countries and Eastern Europe. And then we have the Light Weight and High Temperature, which is about 41% of the sales. It is somewhat of a growth engine, hampered but temporarily in the field of Light Weight. But there, we have unique solutions, very often patented worldwide market. And then we have the Recycling, which is going from, you can say, an internal start-up to an internal scale-up as we speak right now. So, these different business logics can be interpreted in 3 different ways from a kind of valuation perspective that the Aesthetics is more like a standard industry. The High Temperature and Light Weight is, let's say, high-growth specialty market with worldwide market and the Recycling is more of a start-up/scaleup with huge potential over the whole world. Coming back now to our outlook, a little bit how we're seeing the future. We see that we return to growth in key segments with increasing profitability and a broader customer base. It's true for all areas. Also, the lightweighting segment that is currently weak, as I've said several times. But there, we are gaining strength in that field, and that business area will grow in the future. They will come back, I'm sure. But also, the other areas, Recycling, Aesthetics, High Temperature and so on, we're always growing, working on growth. The past cost saving programs that we don't speak so much about anymore have been executed, but it has really helped us a lot that we have this lower breakeven level. So, we're more safe from a cash perspective also in poor quarters and gives us a balanced cash flow and it gives us a kind of strength as we grow now. The focused commercial strategy and the recycling innovations drive our market differentiation a lot in all segments, not only in the pure Reactive Recycling segment, but also in the other areas where people turn to us also for ordinary solutions because they know that we are strong in Recycling and Recycling is center of interest in the whole plastics industry. We're expanding our position in the PET foam, as I mentioned, despite currently a little bit lower sales on the end markets. And we have several and more and more, and this has been quite visible in the quarter, a huge interest for future High Temperature segment solutions. My thought about this is that we will probably see engineering sales this year in that area, but the production volumes will be further down the line. But Recycling breakthrough is happening every day. You can feel it when you are in the factory and you see what we are producing and speaking to customers and so on. There's a lot going on there. So, we feel quite positive. It was, all in all, not the strongest of quarters compared to especially last year, which was a strong quarter to compare to, but we feel really confident about the future. So why invest in Nexam Chemical? First of all, we have a strong growth potential and a business that would benefit from growth. We have a very focused strategy. We work hard on the line that we have decided, and we are in line with the global trends happening around the world. We have a huge untapped potential in Recycling, huge, but it's difficult to put numbers on it, of course. Enhanced innovation capacity and a diverse portfolio of patented solutions. So really strong R&D company. There is no medium-sized additives company in the plastics industry with the same strength in R&D that I know about. We have an improving profitability and a solid financial position. And we have an organization that is scalable, as Marcus mentioned, to double sales from what was SEK 200 million last year to SEK 400 million somewhere in the future. We don't need to do any major investments, and we have a team that can handle it. And beyond that, there are obviously opportunities to grow further through M&A activities. So that's maybe the most important point why someone should do like me and invest in Nexam Chemical. So that was all for today, future plastics patented. Ready for question and answers.

Thank you, Ronnie and Marcus. So it's always very interesting, as usual, to listen to your progress and the scale up. And we will start the Q&A off by inviting Lara Mohtadi, equity analyst of ABG Sundal Collier.

My first question is on the performance chemicals segment. As you know, the second part of 2024 was weaker for performance chemicals, and this has now continued into Q1. This is due to weaker end markets within lightweight, as you stated. Could you please just elaborate on the specific strategies that are being implemented to drive broader growth across the whole business unit in 2025? And what is your outlook on the timing for overcoming the current market headwinds in key areas like wind power and so on?

Like this, the one thing you can do is to sit and wait for the PET foam business at our customers to become more successful. So, but that's not an active strategy. So, we're looking to do 2 major things there. One is to continue to work with them to find new solutions to improve their cost competitiveness and to improve their technical level in order to support their comeback, so to say. That is one thing we're doing. The other part is obviously to complement it with other products into other markets. And the main number of new business developments that have been carried out to compensate for that over the last year and looks like it will continue to become that is mainly the Recycling market. It's from a production and raw material perspective, quite, not quite, fairly similar to the additives that we make for PET foam. So, in that respect, it is a suitable replacement, so to say. But we are also looking forward to our customers in PET foam to gain strength again. But that is on top. We are actively working on what we can do, and that is to develop our markets into other segments also.

Very clear. And just as you mentioned, the demand for Recycling solutions is clearly picking up pace. And you mentioned in the report that one major customer is going to reach full scale in Q2. Could you maybe just give, you obviously touched on this, but can you give just a bit more detail on the ramp-up trajectory for this segment? And what is the expected contribution from your new customers versus the existing ones in the coming quarters?

Yes. That specific customer, which we made a press release about, I think it was in the end of last year, started to buy then. They have been ramping up during quarter one and are reached, you can say, ordinary production levels in March, and we'll have that over the full quarter of quarter 2. That's an important part of the growth in that segment for this quarter and will be in the next, in the coming quarters, too. We have other existing and new customers putting us into, our additives into broader application areas, and that will also support further growth into this segment. But they are in the industrialization scale, and it's quite difficult to predict whichever technical or other objects are in the road before we are there, so to say. And therefore, I cannot give any exact numbers on how much it will be in the coming quarters. But we can be quite confident that we will continue to grow that area with very high percentage numbers.

Understood. And as you mentioned, you strengthened your operator staffing in the quarter due to an increase in order volumes. What impact do you expect this to have on the production capacity and on your operating costs in Q2 and beyond?

So it's, we have 5 new people, one in Poland, one in Hungary and 3 in Sweden. Parts of that is ordinary employment and parts of that is temporary manpower coming in. And it will obviously have a cost impact. Marcus, maybe you can do some detail on it. And, but it is supported, obviously, by increasing order levels. We have been struggling actually a little bit in March, in the beginning of March, end of February, beginning of March with delivery, keeping delivery schedules and so on, and it was absolutely necessary to man up a little bit to be able to meet the ordinary flexible and fast delivery habits that we always have at Nexam Chemical. So, it's definitely backed up by need and thereby increased sales. But on the cost level, Marcus, how much will it add?

Yes. It's quite easy. As level we are now, for every SEK 1 million that we add in sales, actually 35% will go all the way down. So that's actually included in these estimates. Then of course, there is like if you add 5 more people, you don't expect the volumes, then of course, we will take a hit, but that's not according to our internal forecasting and so on. So, we still have this 35% will go all the way down.

Okay. Great. And you mentioned in your presentation that you're aiming to reach a 50% gross profit margin. Could you just give some details on how you're working towards this target?

Yes. We do many, many things, but Marcus, please...

Yes. This is really like; this is not really a big structural thing. This is really well like you into every, in many other industries, you talk about booms, but we have recipes, meaning that we go into every single recipe and look at what can we make, what can we buy from someone else? Can we change the recipes and always negotiating. So, this is really like on the day-to-day work. So, the big things, we've done that, I think, 2 or 3 years ago. But I'm actually a bit surprised. There's actually always more to do. We had a workshop yesterday that we have, there are always coming up new and new initiatives. But this is really on a day-to-day basis.

But we, in addition to what you say on the, say, raw material cost structure, we're also working on the, so to say, 35% by increasing production output, working on continuous improvement in our factories to be more and more efficient in the processes and more and more efficient at our suppliers' processes and so on. So, there is a lot of detailed work and everybody is involved in this. And there are 2 ends to this. One is obviously to continue to increase our contribution margin. And the second one is to become more cost efficient and thereby reaching a larger market, improving the business cases for our customers.

Great. And maybe you could just elaborate a little bit on the increasing interest in High Temperature solutions. You mentioned defense-related applications in Europe. When might we see this interest translating into sales?

I think I mentioned it. I think this year; we will see engineering sales in that segment. The; if you want to do something high-tech with High Temperature composites, it's a long validation process, first of all, to get a new process and technology into place and get it to function, and then secondly, to start to make components and to approve those components. I don't think this will be materialized in a year or 2. It will take more than that in, let's say, bulk volume sales. But it will bring us engineering sales, which is in itself attractive, but not a huge business, but it also gives us the opportunity to maintain or even develop our strengths in R&D in this area and to continue to build on our unique position in it. Or how do you see it, Marcus? Anything to add on that?

No, no, absolutely. No, that's how we see it.

Okay. Thank you so much, Lara Mohtadi of ABG Sundal Collier. I will continue there. You had a breakthrough in novel High Temperature composites. What is the importance and how dependent are you in discoveries of your own R&D department?

This is, the technical importance of that job is that you can produce components using efficient processes that are usually used for thermoplastic materials. The problem with thermoplastic materials is that the temperature resistance is quite low. And with our kind of innovation or development in this field that we recently have done, you can actually cross-link as it's called very technical, but you can say you increase temperature resistance to the max level. So, you have the processing and component manufacturing opportunities of the flexible and lower-cost materials, but you can apply that with the maximum temperature resistance in the components. That is the basic idea behind it. So that's a bit of a game changer for how to design high-temperature composite components, giving more flexibility to both manufacturing and to the actual design of the components, I would say.

You mentioned the increase of gross margin for the ninth consecutive quarter, now from 45% to 48%. But you didn't really tell us how this was being made this time. Could you elaborate a bit on this?

This is really like we -- this is really much like going into every single recipes and looking into how can we make it in a cheaper way, how can we ensure that we change the recipes, but still get the same functionality of additives that we're selling. So, it's really like people we go in and actually question ourselves all the time and try to improve. So, there's no such like a big thing coming out of the blue. This is really what's in the nature of our ...

Continuous improvement and teamwork because this is a multidisciplinary thing because at the same time, we cannot lower the quality of what we make. We try to always step up the quality of what we make. But then when we make those changes, we make sure to do them in a cost-efficient manner also. And that's also coming with increasing volumes of new materials that have been developed over the last few years. And as they come into bigger and bigger production, we get a better base to work on the cost structure. And we are also working preparing for, we know that we will sell, for example, more of a certain material next year into the High Temperature segment. It's been going on forever. But the development has been going on forever next year, we'll have some more sales into it. And then already this year, we start to work on process improvement to lower the material cost for it, for example. So that's day-to-day teamwork and going into the nitty-gritty details to become better all the time.

We have a question here in the live chat regarding sales. Do you predict higher sales in Q2 compared to Q1 in total?

I hope and think so, yes.

And if everything goes according to plan A, how much will Nexam sale increase approximately in 2025 versus 2024?

We don't like to speak about our budget for this year. But maybe say something.

Of course, we always aim to beat last year. That's, of course, and that's very obvious, I guess, for everyone. Besides that, we don't really make those kind of forecast that we present officially. But we have like ABG, I know that they are following us. So, they are -- so as you hear, I'm just talking a bit too much...

Yes. But indeed, our budget is based on growth. Thing is, right now, it is, I still believe we will grow in spite of a slower start than last year. I think the total will be higher or even quite a bit higher than last year for the full year. But we don't really know how the general trend, as Marcus earlier mentioned, 90% is recurring business. So, 90% of the sales are actually due to how the general economy will develop. And we know the trade wars going on and other insecurities in the world now, and that can, of course, affect our customers that produce components for the market, so to say. That's a difficult call to make. And that's also the main reason why we cannot really make a prediction and the projects, whatever obstacles or accelerations we will see there. So, it's difficult to tell, but there is definitely a clear positive trend going forward. That is for sure. Also like to mention that we don't have the question yet, but our ability to, on the short term to live through tariff wars and difficulties with this. Maybe Marcus, a couple of comments on that.

Yes. We don't really see any major issues with this with the customers that we are selling to the U.S. and then our delivery terms, meaning that they will need to pay for the custom. And this is really like material that is really specific. So, they can't just develop it locally in the U.S. and produce it. So, and on the other way, we don't really buy that much from the U.S. So that will be like the direct things that we can see. Then the other things that you're saying Ronnie like what will happen overall, that's a much harder question to.

But one thing that is interesting to raise is that we have good balance in inflow and outflow of both euros and U.S. dollars. For currencies, we... Currency, we are quite stable. So that we don't...

Okay, then I can check that question on my list here. We have another question from a viewer. Do you see increased interest from aerospace and defense?

Yes, we do. And it's both in Sweden, Europe, U.K., I would say, where we see an increased interest. But then there is continuing a good collaboration with, for example, the North American companies that work in this field. We have really, really good collaboration with them, and we continue to work together with them also in this field, of course.

Okay. At the end of the presentation, you brought up strategic M&A opportunities. Could you put some color to this statement?

Okay. That's longer term, obviously. In our current situation, we live well on our own generated cash flow, but it's not suitable for such activities. So that's more of a future and opportunity, you could say, with a longer perspective, definitely. But there is obviously; our business model would not be hurt if we would have more home markets than the Nordic countries in Eastern Europe, for example. And that could be a way, for example. Also, we have our very specialized technologies into 4 fields, and those could become 5 or 6 that could also be of interest in the future, and that would work well with our current business model, just giving more to it, so to say.

Okay. You also mentioned the market activities in India. We've discussed that a bit before. But what do you see? How is the development for you with India?

Like this, we have a couple of customers in India and Bangladesh in that area of Asia. There is a lot of recycling initiatives going on there. There's a huge interest in India to work on recycling of textiles. And we have, over the last year, actually another success, but more internal, we've managed to provide evidence that a certain number of unique additives that we have are extremely efficient in textile-to-textile recycling. And we believe that in India, this will be a very interesting product for the Indian recycling market. India is huge on recycling. They have very high recycling rates. But currently, they are down cycling, so to say, using it for lower-end applications. And the whole industry in India is feeling that they need to move up and do more advanced applications. So, I think that the opportunities in India will only grow with time. And that's the reason why we are putting a stand on the show there in India in May.

Okay. Thank you. That will be the final word where there are no more questions in the live chat, and I have no more questions. So, thank you so much, Marcus and Ronnie, for the presentation and all your answers.

Okay. Thank you, Matthias.

And thank you for watching this, and we will be back for the next interview in July. Welcome.