Nilfisk Holding A/S (NF1.F) Earnings Call Transcript & Summary

It's 3:00. Welcome all shareholders and guests and invitees and Board members and colleagues of Nilfisk. Glad to have you here, and welcome to this Annual Meeting 2023. My name is Peter Nilsson. It's my first time on the stage here. I was here as a guest and got elected last year, but this time, I will do some work as well, and I'm happy to that. I'm the Chairman of the Board of Directors at Nilfisk. And as I said, I'm very happy to see that some of you actually made it here. And we have also guess that we are broadcasting for on the Internet. So we are more than what we can see in the room. Next to me here at the podium, I have the CEO of the company, Torsten Turling, and you will actually hear more of him -- from him quite soon. So the CEO will present what has happened during the year. And we also have Marlene Plas from DLA Piper, who will share the meeting. In 2022, many of you have a lot of opinions about how that year was. It was bad in many aspects. But for Nilfisk, we continue the growth momentum. And before the formal meeting, the actual AGM starts, I would like to take this opportunity to send a warm thanks to the management of Nilfisk. And to the employees and colleagues that has fought successfully in fairly tough circumstances under fairly tough circumstances. Everybody has contributed and in an extraordinary effort during the entire year, and the outcome is quite solid. We delivered solid results. As you have already noticed, this meeting will be held in English. I was about to say, I tried to get it in Swedish, but that was not accepted. However, we have a translation service, meaning that if you're watching online, either in real-time or listening to the recorded version, you can choose the Danish language. And after the general meeting, you will be able to read the transcript of the presentations as well as the documents that we present today on the Nilfisk homepage. So as I already mentioned, according to the Articles of Association, the Board of Directors have elected Marlene Plas to be the share of the AGM. So Marlene, please.

Thank you, Peter. Thank you to the Board of Directors for appointing me as is here today for the Annual General Meeting of Nilfisk. As the chairperson, I have the duty to preside over the meeting and ensure that the meeting is conducted properly and according to the plan. And I will begin with some formalities. As you said, the meeting will be conducted in English. If you wish to take the floor, if you have any questions, any of you, please go over to Heidi sitting over here. give your name and your card and your admission card, and then I will present you and then you come up and speak from here. And it's very important that you speak from here because it's broadcasted and translate it. So thank you for that. [Operator Instructions]. The minutes will be prepared in Danish and in English and I will approve the minutes as a chair. [Operator Instructions]. So that was the first formalities. And now the next task is to conclude whether the general meeting has been lawfully convened and is competent in accordance with the agenda that you've seen. And the conclusion is that it is the general meeting today is lovely convened, and it is competent. And the reason for that is according to Article 6 of the Articles of Association of the company, that the meeting is held in the capital region, that the notice to the general meeting was sent out on 27th February this year, and it complies with the fact that the general meeting must be convened 5 weeks ahead of the date of the general meeting and at least 3 weeks before. The notice has been published on the company's website and through NASDAQ Copenhagen and the shareholders who have asked to have to receive a letter on e-mail about the general meeting have received a letter or e-mail. The required majority for the items and proposals on the agenda. The agenda has been stated in the notice. And for the majority is only Item 10A that requires a qualified majority for the rest, it is simple majority. And according to Section 68 in the Articles of Association, the following documents and information have been available on the company's website. It's the notice through the meeting today with an agenda. It's the audited general report for the company for 2022. It's a vote form for voting by a proxy. And on that basis, I will conclude again that the Annual General Meeting has been lawfully convened and is core. So has anybody a question or comment to that. It's not the case. So I conclude that we can continue. And then I will just note for you that we have received proxies constituting 67.76% of the share capital and votes represented at the general meeting, meaning that due to this very high number of proxies and postal votes, all proposals on the agenda will be approved with the required majority. So the agenda for today. I will just briefly go through the agenda that you have already seen. The first 4 items on the agenda are going to be presented collectively by Peter and Torsten, and they consist of the report of the Board of Directors, the presentation of the audited annual report, adoption of the audited annual report and proposal of the Board of Directors for distribution of profits. Item 5 is a resolution regarding discharge of management and Board of Directors from the liabilities. Item 6 is adoption of the remuneration report Seven is remuneration of Board of Directors, 8, election of board members; 9, election of Public Accountant, 10 proposal from the Board of Directors and shareholders and 11 is any other business. So that was the formalities. So Peter, I will -- and Torsten, I will leave the floor to you.

Thank you. So agenda point 1 to 4, I will cover point 1 and describe to you how we have worked in the Board and then Torsten would actually, in one go to 2 to 4 you can follow it. So the Board worked during 2022. As you can see on the slide here, you can see some of it. But most -- very importantly is that we have a fixed calendar for the year, where we ensure that relevant points of our governance model is actually covered in a Board meeting and probably handled. So that Board calendar is fixed. And then we have committees that actually helps us support the Board in special areas that needs even more attention from a governance point. So here, you can see the overview of meetings held in 2022. The total amount of Board meetings were 9 scheduled full-day meetings. And the total amount of Board and committee meetings were 22. And in addition to these meetings, we have in the Board telephone calls -- telephone conferences and informal meetings covering areas that we felt needed to be further developed and reviewed, not necessarily then with the protocol attached to them. So -- and alongside this, we have had close cooperation with the senior part of the management team on Nilfisk. So it has been quite an intensive year. And to ensure that the Board has the right competencies and to ensure the right progress for Nilfisk and to support management, the management team in executing on the plans and promises. The Board has conducted a self assessment, and we did that in the last quarter of 2022. We did it by means of an online survey that was managed by the Nomination Committee. And it was mandatory to replies. We had 100% reply frequency on this. Then we collectively in the Board review these results, and we discussed the assessment. Also, as the Chairman, I had discussions with on areas like how we can further improve the support to management in executing on their plans, how we can, if at all, add competencies and ensure that governance of the company was top-notch. So all of that together and collectively led us to develop a plan. The survey concluded that the Board has the necessary and relevant competencies and experience, but could benefit from additional industrial competencies, in particular, when it comes to value chain optimization, digital transformation and service and aftermarket. It was also concluded that Board meetings could be scheduled further ahead to ensure participation. On a personal note, I've seen this in other boards also. Also in Board world, we're coming out of the pandemic, going from Zoom meetings digital meetings into physical meetings has stressed the availability of the Board members. So we have collectively decided that we will plan further ahead, and we will improve participation. Not that, that is at all at a low level, but it needs to be addressed. Also, the length of the Board meetings should be considered when scheduling the meetings to facilitate that we have enough time to discuss business matters and to deepen the Board's understanding of the business. So all discussions that we conduct are based on shared knowledge and a common starting point. On the next slide now, you see the Board of Directors. You see the proposed reelections, you see the 2 individuals that can, for different reasons, not stand for reelection. And the proposed new elections. And then they elected members by the employees. So as a result of the just addressed additional industrial. The need for registered industrial competencies, we are proposing to add 3 individuals, 3 new members to the Board of Directors this year. Point 8 will cover the actual election of the Board. So we will come back to this point. I will now hand over to the CEO, Torsten, who will take us through, as I said, Point 2 to 4 and describe how we will have executed on the business plan '26 and the strategy for Nilfisk. Torsten, take it on.

Thank you very much, Peter. And welcome to the AGM. I'm very pleased to present to you the progress that we have made in the last financial year 2022. The year 2022 exposed us to several real severe challenges. We're going to cover them briefly. Nevertheless, our resilient strategy execution enabled the second year of substantial revenue growth. So first of all, I'd like to update you on the business plan and its execution in 2022. Our business plan '26 was designed after a thorough strategy review in 2021. After several years of sales contraction before, we returned to growth in 2021. And Business Plan '26 is focusing on achieving long-term sustainable growth and value creation. In 2022, we continued our growth journey and revenue grew by 7.5%, reached EUR 1.695 billion. This is well in line with our target laid out in the Business Plan '26 to achieve revenue of EUR 1.2 billion to EUR 1.3 billion by the year 2026. EBITDA before special items reached EUR 140.8 million or 13.2%. After the record year in 2021, this is the second highest EBITDA performance since the IPO in 2017. By the end of 2026, we aim to achieve EBITDA margin above 16%. Since the launch of the business plan, we have implemented rather bold actions. We have reconfigured the Nilfisk leadership team. We have implemented new ways of working in order to secure reliable delivery of the business plan. We have launched service as a business as a new business model, representing a significant opportunity for value creation. And finally, we have achieved substantially higher scores across a variety of sustainability ratings. Let's have a brief look at the core elements of our Business Plan 2026. It's focused on long-term sustainable growth and value creation. To achieve this, and this is the first element of the business plan, we have anchored Nilfisk and a distinct value proposition, consisting of life cycle services, customer-centric innovation, and an ambitious sustainability commitment. All of this creates value for our customers, our people, our shareholders and our broader communities. These pillars represent guidepost for all of our activities in the business plan. I will comment later on the specific progress we made in the different growth platforms that we have identified as part of the business plan. Strategic priorities and optimization opportunities that serve as a growth platform to achieve our 2026 target commitments. The third and most critical building block of the business plan it's new ways of working. Mobilizing the entire organization, building new capabilities, empowering people that carry a front-end execution secure successful execution of the business plan, a fundamental layer of our business plan. Coming back to the year '22. And rather severe unexpected challenges that we were faced with going through the year. Like all businesses, the invasion of Russia into Ukraine created, first of all, a humanitarian catastrophe. But furthermore, it had severe implications on the economy and most companies' business. As we shared with you in the last year's general assembly, Nile [indiscernible] decided already in March '22 to discontinue business in Russia. This represented around a EUR 10 million discontinued revenue. Meanwhile, the legal entity is its final stage of liquidation. The war also caused an energy crisis and further fueled inflation. Cost inflation levels reached an all-time high, not seen before in 40 years. As a consequence, central banks count and inflation with rapidly increasing interest rates. And overall, in this context, this led to an economic slowdown, in particular, in our consumer and private label business in Europe. Another significant internal challenge in the year 2022 was caused by our tornado event wiping out our U.S. distribution center in March 2022. Fortunately, none of our employees got injured. This disruptive incident cost, however, shipment delays to our customers. nonavailability of parts for months as well as temporarily higher cost while resuming operations and the new distribution center. Even by year-end, process stability and efficiency was not fully restored. So pretty severe challenges as we went through the year. Despite those outline challenges and helped by the clear guidance of our business plan, we delivered in 2022, the second consecutive year of substantial revenue growth. Revenue grew by 7.5% to EUR 1.695 billion. Organic revenue go graded at 4.9%. The key driver of our growth is our branded professional business, which grew organically by 8.6% in the year. All regions around the world contributed to that growth. The Americas region stood out as the strongest growth driver, where organic growth came in double digit at 12.5%. In Europe, organic growth for branded professional reached 6.7%, and in the Asia Pacific region, it came in at 4.6%. On the other hand, our consumer and private label business declined due to declines in the respective end markets with revenue reduction of 15.2% and 15.7%, respectively. EBITDA margin before special items, which in 408 million, corresponding to an EBITDA margin of 13.2%, the second best year since the IPO. Looking at revenue contribution by region the U.S. region, the Americas growth stands out, contributing EUR 76 million additional revenue compared to 21%. Europe achieved growth in its professional branded business by EUR 15 million despite the withdrawal from Russia and the economic slowdown in the second half, determined pricing to mitigate the impact from inflation supported the growth. Also, Asia Pacific delivered EUR 6.7 million growth to the year, supported by a strong business in Southeast Asia and Australia, whereas China has continued to suffer from COVID lockdowns. All in all, the professional branded business contributed almost EUR 100 million incremental revenue. Some of this revenue growth, however, got offset by private label and Consumer business will decline EUR 13.3 million or EUR 10.6 million, respectively. Both declined in line with their respective end markets as an impact of reduced consumer confidence. Overall, however, a solid growth of 75% in our revenue to EUR 1.695 billion. When it comes to the EBITDA contribution in absolute terms, a similar picture, a significant contribution from the growth of the Americas region, even though margins somewhat suffered from the inflationary pressures, pretty flat on the European region and margin also here suffered from inflationary pressures. APAC contributed EUR 2.8 million to the incremental EBITDA. And the nonallocated cost representing investments we had in functions like IT and R&D. Finally, what took the EBITDA what took the EBITDA performance down was the decline in our consumer as well as in our private label business. So moving on to our cash flow performance and gearing levels -- can we move up, please? No, no, the other direction, the other duration. Thank you. Wonderful Okay. Great. So on cash flow performance, we delivered in 2022, 50.4 -- EUR 54.5 million of free cash flow, down versus prior year by EUR 4 million. The moderate decline in operating profit was offset by cash inflow from working capital positively impacted by the nonrecourse factoring program that reached EUR 21.2 million at the end of '22. In 2022, CapEx increased by EUR 8.9 million, driven by investments into capacity expansion, IT and R&D projects. Total net interest-bearing debt declined by EUR 13.8 million compared to prior year and came down to EUR 324.7 million. This led the Leer gearing land unchanged and 2.3x compared to prior the same. As part of our Business Plan '26, we are targeting a gearing between 1.5 to 2x. When the gearing is sustainably within that target and only then distributions of dividends are expected. A brief commentary and update on the different levers of the business plan to continue to report out on 2022 activities. When it comes to the implementation status of the growth platforms of the business plan, we are broadly in line with the targets of our business plan. We kicked off service business, service as a business with a new leadership team and rejuvenated momentum. We continued double-digit organic revenue growth in the large-scale market of the U.S. We stepped up our investment in R&D to drive the innovation agenda, representing now 2.9% of our revenue. When it comes to our Optimize Europe initiative, we had fantastic delivery of pricing performance. However, we were suffered from decline in consumer and private label. The most significant challenge we had in enhancing our supply chain robustness continuing to suffer from high cost inflation and lack of parts that we are investing into capacity and the material cost reduction program to address those challenges. Finally, we're successful in reigniting growth in our specialty business by achieving 9.3% growth last year following the recreation of a specialty business unit. As part of our integral part of our strategy, we have formulated highly ambitious carbon emission reduction targets by 2023 -- 2030, sorry. Those targets have been validated and approved by science-based target organization. We made solid progress in the year '22 on those carbon emission targets with 10% reduction in the scope 1 and 2 emissions and 11% reduction in the Scope 3 ambition well on the path of 35% reduction by 2030 and 48% reduction for Scope 3. Overall, we made good progress in Scope 1, 2 and 3 reduction in improving our gender diversity with the proportion of female senior leaders from 14% to 19%, a high engagement score above industry average, and the increase of our EcoVadis rating from silver to gold and the kickoff or human rights commitment policies. And with this, I come to the new ways of working, which are the foundation of our business plan. Here, we really mobilized the entire organization towards building an execution culture. To build the execution culture, we have started to implement the Nilfisk operating system, NOS. We held multiple training sessions and overall had trained more than 600 of our colleagues throughout the year. To further drive digitalization of our processes and digitally enable our people, we have stepped up our investments in IT. One of the work streams is to broaden the SAP coverage to North America following the project kickoff in 2022, we marked the first major milestone with the go-live in Mexico early 2023. In 2022, we have also reconfigured our Nilfisk leadership team around the strategic priorities of the business plan. We clearly anchored responsibility for developing service as a business and driving innovation, driving growth in our business region, strengthening our operations and further enhancing our usability performance as well as developing a critically important people strategy. We have implemented a more customer-focused operating model, allocating more end-to-end responsibility to our people and leadership teams close to the customer. All of this has helped us already in 2022 to weather the challenges of the year and continue our journey towards long-term sustainable growth. After those comments, referring to the business year 2022, I'd like to share a perspective for the current year 2023. Despite last year's and the current macroeconomic challenges, we continue to see professional cleaning technology as a long-term growth market. The inflation further drives labor cost increases, and post-COVID labor shortage is even more severe while the importance of clean has increased substantially. The need for labor productivity, digitalization and sustainability compliance is higher than ever before. So in our view, this is a very good industry to be in. When it comes to the priorities for the year 2023, of course, we continue to implement the next phase of our business plan. So the first focus point of the year will be to accelerate growth in our service business. Secondly, we target to overcome the global supply chain bottlenecks and counteract the margin dilution from inflation. And thirdly, in 2023, we target finalizing the development of our next generation of highly innovative products and solutions. And finally, on the people agenda, we'll continue to implement our new ways of working and fostering a growth mindset culture across the organization. This gets me to the concluding page and the outlook for 2023. When it comes to the financial outlook for 2023, we expect that the current macroeconomic uncertainty will continue, leading to some volume decline, particularly in the European market. As a result, we expect organic revenue growth in the range of minus 2% to plus 2% in the year. This is supported by the full year effect of pricing actions and a substantial order book from 2022. Negative organic growth would require worsening of current trading conditions. The range for the EBITDA margin before special items is expected to be within 12% to 14%. Given our ongoing initiatives and investments in structurally improving the business, our financial targets for 2026 are confirmed. We continue to expect revenue to be between EUR 1.2 billion to EUR 1.3 billion, an EBITDA margin above 16%. The gearing is targeted to be in the range between EUR 1.5 billion to 2x. With this, we are looking very much forward to continue our journey in 2023 and building towards our business plan '26 targets. This concludes my comments. And with this, back to you, Marlene.

Thank you very much. So this covers the first 4 items on the agenda. And just for the sake of good order, I note that the company's auditor, Deloitte does not have any qualifications in the report. So I will ask if the AGM. Anybody has any questions or comments to the 4 first items. It's not the case. So I'll record in the minutes that the report of the company's activities in 2022 and the presentation of the annual report have been noted by the AGM, that AGM has adopted the audited annual report for the financial year 2022, and that the general meeting has approved the proposal from the Board of Directors regarding distribution of profits. So we go to item #5 on the agenda, and that's resolution regarding discharge of management and Board of Directors from their liabilities. And I'll ask if anybody has any questions or comments to this item. Nobody has any questions or comments. So I'll conclude that the AGM has approved Item 5. Item 6 is adoption of the remuneration report. Each year, the company must prepare a remuneration report and present this for advisory vote at the general meeting, and this is in accordance with the Danish Companies Act Section 139 B4. The remuneration report must present an overview of the remuneration of the members of management that has been earned during the preceding years. And the vote on this proposal is not binding for the company, but it is an advisory vote that will contribute to the compliance with the remuneration policy and ensure that the company remunerates its management in accordance with the policy. So Peter, I give the floor to you on this point to comment on the report.

Thank you. So point number 6, remuneration report. And it's the report that is included in the annual report package. It looks like this. Based on the shareholder feedback last year at the AGM, I will summarize the remuneration report for 2022 before the adoption of this year's report. And 1 note then, as the next agenda point, Agenda Point #7 is focused on the remuneration to the Board of Directors, which will be handled by Marlene. I will focus on the remuneration aspects of the Executive Management Board CEO and CFO. To start with, CEO and CFO, base salary did not increase since they were both employed during 2021. Overall speaking, the CEO and the CFO, total pay decreased in 2022 comparing to 2021. This decrease was entirely due to a lower annual bonus, the STI, short-term incentive reward compared to 2021. If we zoom in to the annual bonus, the STI, that model was simplified in 2022 as the number of KPIs was reduced from 5 to 3, all measurable. The STI realization for the year was 33.6%, and all specifications on the STI parameters and what the payout of them, you can see on Page 8, actually in the remuneration report. The overall speaking, this is below target level, which is 50%. On the revenue target, though, the realization was above target level for 2020 to all the way up to almost 96%. Next part of the remuneration is the long-term incentives or in short LTI. In 2022, the total of 89,405 contingent performance shares was awarded to CEO, CFO and the Nilfisk leadership team and other key employees. The KPIs that we have defined for the 3-year performance period of the LTI, our total shareholder return with a weight of 50% EBITDA which carries a weight of 30% and the ESG target on carbon dioxide emissions, which has a weight of 20%. What we award in the LTI this year will vest in 2025. Other relevant elements of the report in 2022 is that the average pay for Nilfisk employees grew with 7% comparing to 2021. And finally, just one comment on the CEO pay ratio, which is something we measure, which compares the average pay of the Nilfisk employees with a total pay for the CEO -- and as a result of the decline in the CEO remuneration in combination with the increased average pay of Nilfisk employees, the CEO pay ratio actually declined by 6% compared to 2021. And with these comments, I conclude my summary of the 2022 report. Marlene?

Thank you. and I'll ask if there's any questions or comments to the report or to Peter. And there's nobody. So I'll conclude that item 6 has been approved by the AGM and by advisory vote. And then we go to Item 7, which is remuneration of the Board of Directors. The Board of Directors proposes to maintain the same level for remuneration in 2023 as in 2022. That means that it is proposed that each ordinary member of the Board of Directors will receive a base fee of NOK 320,000. The Chair will receive 3x the base fee and the Deputy Chair will receive 2x the base fee. Further, working the Board committees shall be remunerated as follows. The Chair of the Audit Committee received 2/3 of the base fee. Other members of the Audit Committee will receive 1/3 of the base fee the chairs of the Remuneration Committee and Nomination Committee each received 1/3 of the base fee and the other members of the committees each will receive 1/6 of the base fee. So has anybody any questions or comments to this? There's no questions or comments, so I'll conclude that the AGM has approved Item 7. So we go to agenda item 8, which is the election of board members. According to the Articles of Association, the members of the Board of Directors appointed by the general meeting must consist of 5 to 8 members. And the members are elected for 1 year and can be reelected. The Board of Directors today proposes reelection as we saw in -- or we heard about in the beginning from Peter. So the person who are suggested to be reelected are Peter Nilsson, Rene Svendsen-Tune, Jutta Rosenborg, Are Dragesund and Franck Falezan. And further, the Board of Directors proposes that the following new candidates elected for the coming year, and that's Ole Kristian Jödahl, Bengt Thorsson and Viveka Ekberg. And then I give the floor back to you, Peter, to elaborate on the proposal.

Thank you, Marlene. First of all, I would like to actually thank Thomas Lau Leifer and Richard Bisson. He lives in the U.S. He is probably on the camera now. For the work and contribution to the Board over the years, you have chosen not to be reelected, and we will miss you. It has been a pleasure to work with you, and you have contributed well to what I would characterize as very effective Board work. So thank you very, very much. So then on behalf of the Board members, I would like to say a few words about the nomination of the 3 new candidates, Ole Kristian Jödahl, Bengt Thorsson and Viveka Ekberg. Viveka unfortunately cannot be here with us today, but Ole and Bengt are both here. So could I ask you to stand up so we can see who you are. And again, on behalf of all employees in Nilfisk and the fellow board members, welcome. As I already mentioned, under -- again that point number one, there were additional competences that we could see that would enhance the quality of the Board work and the support of the execution of the business plan in the company. So we have decided to nominate these 3 candidates to strengthen the Board of Directors' industrial competencies. And as you can see from the candidates resumes here on the slide, all 3 candidates have a solid industrial competency. They are experienced in international business, business transformation and shareholder value creation as well as specific competencies in value chain optimization, digital transformation and service and aftermarket. So that is extremely good for us and the Board. So I'll leave it back to you now, Marlene.

Thank you, Peter. And I want to ask if there are other candidates to the Board of Directors. And there's no other candidates. So I will conclude that we have -- can we go back to the nice picture that we had before? So there's no other candidates. So these people will be elected. So that would be Peter Nilsson, Rene Svendsen-Tune, Jutta Rosenborg, Are Dragesund, Franck Falezan, Ole Kristian Jödahl, Bengt Thorsson and Viveka Ekberg. So congratulations to you. And we go to agenda Item 9, election of one or more public accountants. The Board of Directors has proposed that Deloitte is reelected. And this is in accordance with the Audit Committee recommendation and I'll ask if there's any other proposal than Deloitte. There's no other proposals. So congratulations to Lloyd you've been reelected. So next item 10, and Item 10 is the proposal from the Board of Directors and the shareholders. And as we mentioned before, we have 2 proposals from the Board of Directors. The first proposal from the Board of Directors concerns of a proposal to update the company's remuneration policy, together with the proposal to authorize the Board of Directors to issue warrants. And Peter, I give the floor back to you to elaborate on the proposal.

Thank you, Marlene. So the next item on the agenda is a suggestion that we propose to support the rollout of the Business Plan '26 that you heard a lot about the progress on from Torsten's presentation. And in order to establish and enable a successful execution of that business plan, it is of essence that the remuneration of Nilfisk leadership team is effectively tied to the performance and growth of the company. We, the Board of Directors have, therefore, reviewed the remuneration policy, the remuneration and the remuneration practices at Nilfisk. And we saw an opportunity to further align leadership team's interests and the shareholders by introducing a matching warrant program. We therefore propose to introduce a matching warrant program in addition to Nilfisk performance share program. The purpose of the Matching warrant program is to reward performance that serves the purpose and sustainability of the company, the alignment with the interest of the shareholders and other stakeholders, delivery of the strategic priorities in the Nilfisk plants and the attraction, motivation and retention of Nilfisk leadership. Let me run through some of the overall program structure points for you. The matching warrant program requires participants to make a substantial self-investment in Nilfisk shares to be eligible to receive the matching warrants. Vesting an exercise of the warrant take place after 3 years from the date the participant is offered to participate in the program. The program is on an invite basis only. Vesting and exercise is conditional on the participants holding of a defined Nilfisk shares throughout the program period and on continued employment. And finally, vesting and exercise requires fulfillment of the warrant strike price level, this strike price is determined by the Board of Directors. And the Board of Directors can launch this matching warrant program, given that we get an AGM approval of: one, the adoption of the proposed updated remuneration policy; and two, the adoption of the amended Articles of Association, specifically Article 4 concerning the authority to issue warrants. So I give the word back to you, Marlene, to see if we have that.

Thank you. so as Peter said, the Board of Directors is proposing that the general meeting approves this updated remuneration policy. And as a consequence, and adoption of a new Article 42 in the Articles of Association. You can see the new article for up here, and it was also included in the material that was sent to you or publicized in the notice to convene the general meeting. So I will not read it out. And then I'll ask if there's any questions or comments to this item. And this proposal -- does anybody request a vote on this? So nobody request a vote or there's no comments or questions, I'll conclude that this item has also been adopted by the general meeting. and the Article 4 of the company's Articles of Association will be amended accordingly, meaning also that after the new Article 4, that would be, as you could see in the notice convening this general meeting, you could see that there would be a change in a number in the articles of association. Good. So I'll go further to the next proposal, which is Item 10 be. This is the second proportion from the Board of Directors, and it concerns an authorization to acquire risk shares, meaning the company's own shares. And this is the same proposal as the last, I think, 4, 5 years. so no surprises. The Board of Directors is requiring or questing and authorization to purchase treasury shares which will be up to an amount of DEK 54,252,720 on the condition that it will not exceed 10% of the company's issued share capital. The purchase price for these shares will not deviate by more than 10% from the price quoted on NASDAQ Copenhagen at the time of the purchase. So I will ask if there's any questions or comments to this. There's no questions or comments, so I can conclude that this proposal has been adopted by the AGM. And then we go to the last item on the agenda, Item 11, which is any other business. And this is, as you know, an item where we can discuss everything, but we can decide nothing. So does anybody want to say something or comment or something or ask some questions. So there's nobody. There's no questions. So I'll just finalize the general meeting by saying that there's no more items on the agenda, and I thank you all for participating in the general meeting and to contribute to a good general meeting. Thank you, and I leave the word to Peter.

Thank you, Marlene. Thank you very much for leading us through the AGM very safely and without surprises. It's time to close the meeting. I thank you all for showing the interest paying attention to the presentations and the reviews that we have done today. So thank you very much. For the people that has helped us prepare the meeting, on behalf of the Board and the shareholders, I reach out and say, thank you very much, flawless, good technical solutions, good environment. And for those that have not tried it yet, there is a very nice cake outside, so please help yourself. With these words, I close to meeting, and I hope to see you all back next year again. Thank you very much.