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

So dear shareholders, dear invitees and dear employees. Welcome to the 2024 Annual General Meeting of Nilfisk. My name is Peter Nilsson. I'm the Chair of the Board of Nilfisk. And I'm very happy to see so many coming here today. So welcome to you all. In 2023, Nilfisk continued laying the foundation for the strong execution of the business plan 2026. And before the formal meeting starts, I would like to use this opportunity to send a warm thanks to the management of Nilfisk and to all employees and colleagues. Everybody has contributed in each their way and put in an extraordinary effort during the entire year, helping to strengthen our foundation. On a more practical note, the annual meeting is held in English. However, we have a translation service, meaning that if you are watching online, either in real time, or listening to the recorded version, you can choose the Danish language. After the general meeting, you will be able to read the transcript and the presentation as well as all the documents that we are presenting today at the web page of Nilfisk. This year, as in previous year, Marlene Winther Plas will be the Chair of the meeting. So welcome to you -- and by that, I give the word to Marlene.

Thank you very much. Thank you for electing me again this year, as a Chair for the Annual Meeting of Nilfisk. As the Chair of the general meeting, it's my duty to preside over the general meeting and ensure that the general meeting is conducted properly and in accordance with the agenda. A couple of more formalities. As you can see, the general meeting is conducted as a physical meeting. If you want to say something, if you want to ask a question, have a comment or something, please go over to Heidi sitting over there and give your name. And then I'll give the floor to you and you come up and talk from here. And that's very important because as you said, Peter said, we need that everybody can hear what you're saying. So yes, the meeting is broadcasted live. And if you haven't done it already, please turn off your mobile devices. The minutes from the meeting today will be prepared in Danish and in English. And I, as the Chair, I will approve the minutes. And if anybody is leaving the meeting today, please remember to deregister at Computershare desk outside. So my next task as a Chair of this meeting today is to conclude whether the meeting has been lawfully convened and is competent according to the agenda. So it's in accordance with the notice that you have all received, the company's Articles of Association and the Danish Companies Act. As I can see that the requirements in the Article 7 of the Articles of Association have been complied with. I find that the general meeting has been lawfully convened. The general meeting is held in the capital region, as set out in 7.2 of the company's Articles of Association. The notice of the general meeting was sent out on 20 February, which is not earlier than 5 weeks ahead of today and at least 3 weeks before today, which is set out in 7.3, Article 7.3 of the Articles of Association. The notice has been published with -- on the company's website and through Nasdaq Copenhagen. And the notice has also been sent to the shareholders who have requested so on the shareholders' portal. The required majority for the respective items and proposals of the agenda are stated in the notice that you have all received. And as such, the proposals require simple majority only. According to Section 7.8 of the Articles of Association and also confirm by the management, the following documents have been on the company's website. One is the notice of the general meeting with an agenda. Two, the audited annual report and three, the vote form for voting by a proxy or postal vote. So on that note, I can conclude that the general meeting has been lawfully convened and is core. And therefore, I would like to ask if anybody has a comment on that or would like the word. There are no comments or questions, then I can conclude that the general meeting has been lawfully convened and is cored. I can also tell you that the company has received proxies constituting 75.41% of the share capital and the votes represented at the general meeting today. And due to this very high number of proxies and postal votes, all proposals on the agenda will be approved with the required majority. So now I'll go to the agenda. And I will just go briefly through the agenda. And the agenda I say, is complying with Article 8.1 of the company's Articles of Association. So the first 4 items on the agenda will be presented collectively by the Chairman of the Board, Peter Nilsson; and the company's CEO, Rene Svendsen-Tune. And they consist of the report by the Board of Directors on the company's activities in 2023. A presentation of the audited annual report containing the annual and consolidated accounts, the statement of the management and Board of Directors, the auditor's report and reviews for the year. Also the adoption of the audited annual report and the proposal by the Board of Directors for the distribution of profits. So that's the first 4 items. Then the fifth item is the resolution regarding discharge of liability for management and Board. Item 6 is about the adoption of the remuneration report by advisory vote. Item 7 is the remuneration of the Board of Directors for the current financial year. And then after item 7, we have item 8, which where members of the Board of Directors are elected and item 9 is the election of one or more public accountants. And with respect to item 10, there's only 1 proposal, as you have seen, and that's a proposal from the Board of Directors. And it is with respect and we'll come back to that, the election of an auditor for sustainability purposes and which I'm going to present. And then the last item on the agenda is item 11 and that's any other business. So that's the agenda. And I give the floor back to you, Peter.

Thank you, Marlene. It's time for me to present and inform you about the work of the Board of Directors during 2023. It was indeed an intense year for us. And as you probably know, we have a fixed plan for the number of meetings and what the meeting should contain during the year and the different individual committees. And on the screen now, you can see the overview of the number of meetings for the Board and the committees during 2023. And in addition to the meetings listed here, there has been many informal meetings, update calls and telephone conferences to deal with matters of urgency. And at the same time, we have had close cooperations with the management of Nilfisk. We also, as in every year, we have conducted a self-assessment of the Board's work and we did that in the last quarter of 2023 and it was conducted in the form of an online survey managed by the Nomination Committee of the company. These results were discussed at the Board meeting and we all reviewed and discussed the self-assessment between ourselves and the Board. The survey concluded that the Board has the necessary and relevant competencies and experiences, but could benefit from additional diversity. And also that with the new sustainability requirement coming into force, the Board will benefit from additional training, education and potentially also competencies in this area. Focus areas for improvements or cooperation with management, tracking of key initiatives and retention of sea level employees. On this slide, you can see the Board and what is pending for the election of Board members, and it will be done under agenda item #8 at this meeting. This overview shows the current members and candidates for the Board of Directors. In this connection, I would like to thank Jutta Rosenborg for her work and contribution on the Board and in the Audit Committee. You have served with dedication for many years being one of the longest-standing Board members in the company. It has been a pleasure to work with you and get to know you. So on behalf of myself, the Board and the employees, thank you very much for your service. Thank you, Jutta. I will now hand over to our CEO, Rene Svendsen-Tune and Rene will take you through the financial results for strategic direction of Nilfisk. Rene, welcome.

Thank you, Peter. Good afternoon to all of you. It's my pleasure now to walk you through the progress we have made in 2023. So in 2023, we dedicated our focus to developing Nilfisk according to the business plan 2026 that we launched around 2 years back. We have invested in our growth platforms and we improved on our financial business metrics, which have shown solid progress during the year [indiscernible]. So let's start with a review of the financial results of 2023. As I said, the year was a year of steady progress with our financial business metrics and with implementing the business plan 2026. We delivered a set of results that we consider acceptable in a challenging climate. This was achieved by pursuing growth pockets or pockets of growth in a market that was impacted by muted demand. Revenue landed at EUR 1.34 billion and EBITDA before special items was EUR 132 million. This allowed us to deliver flattish organic growth was minus 0.3% and an EBITDA margin before special items was 12.8%. These were both in line with the outlook for the year. The gross margin increased through dedicated actions, most importantly, price management, structural efficiency measures and savings on material spend. The gross margin reached 40.9% compared to 39.5% in '22. So let's take a closer look at the relevant by business segment. And looking at the business segments, our business segments, services delivered a solid organic growth of 5.5%. Professional and specialty businesses declined 1.8% and 2.6% respectively. Our consumer business declined by 8.9% and negatively impacted the overall organic growth for the full year. It should, however, be noted that the consumer business returned to solid or strong growth in the latter part of the year. Let's take a regional view now. So revenue in our largest region, EMEA, was EUR 586 million, corresponding to a negative growth of 2.5%. Demand across the region was muted, but price management partly mitigated the declining volume. Central and Northern Europe saw volume decline whereas South Europe remained relatively flat. In Americas, revenue was EUR 366 million and the region delivered organic growth of 1.4%. The growth was mainly driven by strong performance in Latin American markets throughout the year. And Latin American markets benefited from both higher volume and price management. U.S. was flattish at 0.1% organic growth, while Canada observed negative growth. Demand weakened in the second half of the year as the business climate in general became more challenging and this resulted in lower volumes across the board compared to last year. In APAC, 2023 revenue reached EUR 82 million, which corresponds to a strong organic growth of 8.3%. The growth was partly driven by continued strong demand in Australia and New Zealand, but also China contributed significantly with double-digit organic growth and as they benefited from the reopening after the COVID-19, let's call it, lockdown incidents. So let's have a look at the earnings then. An EBITDA before special items amounted to EUR 132 million in '23 compared to EUR 141 million in 2022. The soft demand impacted EBITDA negatively, but this was mostly offset by strong gross margin expansion and cost management. Consequently, we realized an EBITDA margin before special items of 12.8% compared to 13.2% in 2022. And then a quick look at the cash flow related metrics. So free cash flow increased by EUR 60.7 million compared to EUR 22 million and amounted to EUR 115.2 million in 2023. CapEx ratio increased to 3% compared to 2.5% in '22 as the CapEx spend was increased in line with the business plan 2026. Net interest-bearing debt was lowered to EUR 252 million, a decline of EUR 73 million from '22. The decline was primarily driven by initiatives to lower the working capital. As a result, the gearing declined to 1.9x versus 2.3x a year back. And the gearing is now within the business plan 2026 target range of 1.5x to 2x. So that would speak to the financial metrics, let's have a look then at the strategy execution and the activities as such. So along with delivering acceptable financial results, we did take important steps during the year to build a strong foundation that will act as a catalyst for the acceleration towards business plan 2026 now and in the years to come. And let me briefly run you through some of these. Starting with strategic priorities, let's have a look at service as a business. In '23, progress continued developing our service organization. We invested in digital solutions and we established a global program for parts, accessories and consumables, the so-called PAC. We did this to drive more growth and better profitability in our services business. This take me then to the strategic priority of growing in large markets. And during '23, U.S. activities were addressing multiple focus areas. And despite the muted demand in second half, we delivered, you can say, a flattish or growth of 0.1%. We made investments in developing our U.S. services business and we did put a lot of focus on reaching new customer segments in the U.S. Another strategic priority is product development where we continue to increase investments. For the full year of '23, the R&D ratio was 3.2%, which was up from 2.9% the year before. We launched new products and several best-selling products were upgraded and I'll give a bit more detail to this a bit later in this presentation. Then moving on to progress on what we call optimization opportunities. Here, we established the EMEA and APAC regions. And at year-end '23, the EMEA operating model was finalized. This model introduces a new market structure with 6 similarly scaled markets and clusters leading all commercial activities including service operations. Then let's go to the work about enhancing our supply chain robustness. This is about combating and accompanying the challenges seen in the recent years where the global supply chain saw, you can say, limitations and here, we have seen a lot of progress. During '23, we worked on supply chain initiatives across the board to ensure capacity for growth, but also to reduce the risk of nondelivery. Within specialty, just one comment and this is a business of its own, and we invested significantly in specialized sales force in North America. So all in all, we saw a steady progress on all growth platforms and we have a solid platform to execute from now in '24 and years to come. Then a few words about an area, an important area that developed faster than we had planned for '23, and this is sustainability. Here, we accelerated our efforts to reduce emissions and the progress with reducing Scope 1 and 2, and Scope 3, greenhouse gas emissions took a solid leap forward in '23. We are now on track to meet our 2030 science-based targets. And if we look into some of the numbers, then we achieved 16% reduction in Scope 1 and 2 greenhouse gas emissions in '23 compared to the base year. We reached 25% reduction in Scope 3 greenhouse gas emissions relating to the use of sold products in '23 compared to the base year. And if swift to another dimension, we reached 30% women in top management, an increase from 26% in 2022. And finally, Nilfisk was awarded Ecovadis Silver Medal with scoring 65 out of 100 points. This is 3 points lower than we scored in '22, the 68% but it is 20 points above the average of our industry. So very good progress. So much about 2023, and perhaps a bit now on this year and looking forward. So when we turn the view towards the future, we will operate with a solid foundation and some very clear near-term and long-term objectives to deliver on. And if we sort of take a close look to '24 now in order to accelerate the execution this year, we have particular focus on 4 major priorities from the business plan 2026. Number one is to increase the growth momentum in North America, U.S. Here, we will continue to focus on growth in our -- in the industry segment. We will increase our service coverage and we will execute well launches of new products. Second is about accelerating service as a business. This is a continuation of driving the packed strategy accessories and so forth and really strong focus on service contract attachment rate. We want everybody who buys a machine to buy a service contract. Thirdly, we will continue to strengthen our innovation and execution muscle, deliver on impactful launches, kickstart new solution projects, drive profitable growth and create capacity through portfolio rationalization. And finally, we will continue our operations transformation through capacity optimization, strengthening indirect sourcing and continuing the supply optimization that is ongoing. So when that said, let me move to one of the growth drivers of '24. As said, over the recent years, we stepped up our investments into innovation pipeline and in 2023, we saw the first results with a handful of product launches. Within our largest product category, Floorcare, we relaunched our first autonomous machine, SC50, in a version 1.5, an upgrade -- significant upgrade. We also relaunched the popular SC650 work behind. We upgraded one of our best-selling products to professional VP92 vacuum cleaner and we launched the first in the consumer segment, stick back S1 with SPC received very well by the market out there. And then in Q1 this year, we relaunched our professional vacuum cleaner VP300 in a new and more sustainable version. This is the first machine in the market based on recycled consumer plastics. And you will say, why is that important? It's important because it's tougher and there is more of that out there. We also relaunched a new -- we launched a new, it's a long name, so you don't need a high-pressure washer. And as part of our dual source or dual manufacturing process, we have launched a CS7020 produced now in China for Asian markets. And I understand with all these numbers and product categories that may be a little bit hard to understand exactly what I said. But trust me, this is a real important and significant step forward in the portfolio out there. So with these launches, we offer a strong start. We're off to a strong start for 2024 with the road map where we will see a significant higher number of launches in the year to come. So with that review of last year and going into this year, let me round off with the outlook for 2024. So looking into 2024, we expect that both demand and supply will pick up. We expect that this will lead to volume growth across both products and services. We do note that muted demand in North America specifically has -- may affect this year as it did in the second half of last year and brings some uncertainty to the top line. So for the organic revenue growth, we expect a range from 3% to 6% growth in 2024. This is supported by new demand in combination with increasing output and a solid order backlog. We note that we only expect minor effects on the top line from pricing actions this year. The EBITDA margin before special items is expected in the range from 13% to 15%. The margin is expected to be supported by increased revenue, continued gross margin expansion and effects from the structural efficiency improvements that we realized last year. And finally, to CapEx, we expect CapEx spend of around 4% in 2024, 4% of revenue, with more than half of that directed towards product investments. And with that, thank you for your attention. And I will hand back to Marlene.

Thank you very much. Yes, just for the sake of good order, I would say that and note that the company's auditor does not have any qualifications in the auditor's report, and you can review that on Page 126 of the annual report. So now I'll just open for comments and questions to the first 4 items of the agenda. And I know that Karsten Kristiansen from the Danish Shareholders Association [indiscernible] wishes to take the floor. So Karsten, please.

Thank you for your time. My name is Karsten Kristiansen and I represent the Danish Shareholder Association as well I'm a shareholder in Nilfisk too. First of all, I will thank the Chairman or the CEO for the group reporting. When I look at the revenue for 2023, it was EUR 1,033.6 million and compared to the revenue 10 years ago at EUR 880.7 million in 2013. We see a growth of 17.4% over 10 years. It's a little bit less that the inflation we have in that period. Did Nilfisk have a revenue grew at just 3.5% over the last 10 years, which has been the target we have in 2017. The revenue here in this year will have [indiscernible] EUR 1.2 billion, instead of this EUR 1,033 million we have in the annual report. The older targets I have found in our annual report, that was 3% to 4% in annual grow from the annual report in 2017. In the annual report, I could also see the sale in Nilfisk a spread over that more than 100 countries and I thought it's good because it gives a good spread of the risk. But outside the top 10 countries, we have a revenue at EUR 257.5 million. And a spread over this 90 countries, it's not many million euro per country. Our strategy is to create sales growth on our main markets with U.S. as the largest markets were. And in 2023, Nilfisk see a declining sale in all these top 10 markets, were about 5%. But outside this top 10 market, we see a sales growth of approximately 2%. Therefore, I wonder why Nilfisk don't have these smaller markets in focus in the strategy plan. When it looked like we are better to create sales growth in this smaller market compared to the top 10 markets. I really like that sales growth are high priority in Nilfisk with ambition to create revenue growth of 3% to 6% per year. Therefore, I will ask the Chairman to put some more words on how Nilfisk could create more revenue growth on both top 10 markets as well as the smaller markets. Finally, I find the earning in Nilfisk on a good level with a profit margin of 12.8% in EBITDA with ambitions for fuel improvement in the coming years. At the annual meeting here 5 years ago in 2019, one of the point of the agenda was the digitalizations of cleaning machines. With the newly introduced Nilfisk Liberty SC50 as one of the big news this year as well as more new products and services will be introduced on the market in the following years. At that time, I asked how much digital products and services will be able to contribute to revenue from 2019 and forwards. And here in 2024, I would like to ask again how higher sale of digital products and services has gone side 2019. Therefore, I would like to ask the Chairman to put some words on how the sale of digital products and services has performed side 2019. With this question and comments. I will thank you for your time.

Thank you, Karsten. I will now give the floor to you, Rene for the responses. Yes. Also, Peter, first you, Peter.

Okay. Thank you, Karsten, for your questions, and thank you for the review over the history here. In light of the fact that Rene presented so much of where we are in the different markets and where we are going and the outlook and also a significant portion of the presentation was spent on the new product generations. I will actually give the word to Rene back and he can fill in on the blanks.

Yes. Thank you, Karsten, for the kind words, I would almost say here. So and I appreciate, of course, that you realize as we do that solid profitability is a key requirement for driving the company forward. So we are in a good spot there. So let's start with that. The profitability is solid. The balance sheet has improved. This is exactly what we need to drive investments in the next phase. Then of course, I cannot disagree with you that we would like to grow faster. And this is basically what is inside the business plan 2026 that we talk about all the time. It was launched by management and the Board together 2 plus years ago. It has sort of these cornerstone of where this growth will come from. It's not like a magic trick because it will have to be driven by best product execution in the market and we are investing in that. And we have seen launches in that direction, and I'm very hopeful that actually these will drive volume growth first and then with the right price and commercial execution also topline growth. We need to grow a much better services business as we are working on. There are a lot of services we can bring to these business so it becomes solutions and it's a service to deliver more than a product. And there's a lot of growth hidden in that space that are pure market share battles out there we have to take. That's a matter of, you can say, product execution as we talk about here, but also commercial execution and the customer alignment in terms of services and so forth. So if we can get the right products out there, the right services along with that and the right commercial and partner execution with our customers in the field, we will be better at doing what you're asking for in a sense and that's what we are working. Then you had sort of the end question, what about the autonomous and the robots and the digital execution. We are investing in that. We launched years back, the 2 first products I just mentioned here. We are launching an upgrade to one of them, and we just did. And so this is a key element and more will happen for sure, but it hasn't taken over. So the productivity gain from robots in this field is not at the level yet where you somehow just wipe out all the mechanics and then put these machines in. But you need to have share in the space, you need to make progress, and we are doing that. So we're investing, but it is not the account of the rest, so to speak, right? So that balance needs to stay. Slowly, slowly, you will see a higher share of autonomous machineries out there. We hear you. We're working on it and we will get there.

All right. I would like to hear if there's any more questions or comments to these 4 first items. So there's nobody. So I'll recall in a minutes that the report on the company's activities in 2023 and the presentation of the annual report have been noted by the general meeting. That the general meeting has adopted the audited annual report for the financial year 2023 and that the general meeting has approved the proposal from the Board of Directors regarding distribution of profits. Good. So I'll go to item #5. And it's a proposal to adopt a resolution regarding discharge of liability for the management and the Board of Directors. And I'll ask if there's any comments or questions to that or -- that's not the situation. So I'll conclude that the discharge of liability has been approved by the general meeting. Good. We go to the next item 6, which is the 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 Section 139 B4 in the Danish company site. The report must present an overview of the remuneration of the members of management earned during the preceding year. The vote is advisory, and it will contribute to compliance with the remuneration policy. And I will, on this point, give the floor to you, Peter, and you will comment on the report.

Thank you very much. As Marlene said, remuneration report is part of the annual package that we need to comply with and be transparent towards the shareholders on. So I will then concentrate and try to summarize the report for 2023 before the adoption of this year's report. I will focus on the remuneration to the executive management board. The former CEO, Torsten Türling ended employment on October 31, 2023. And he ended without any special severance terms and in accordance to his contract. In this connection, the sign-on bonus that he received at the start of his employment was clawed back of the amount of EUR 250,000. Interim CEO, Rene Svendsen-Tune was hired with a fixed base salary annualized to EUR 2.3 million. He started in August of 2023. The salary was determined based on the market benchmark and took into consideration the interim nature of the position. The base salary was deducted for fees received from the Nilfisk Board of Directors for the time of the year that it was not part of the Board work. And I again want to stress that it's a fixed salary. There is no variable incentive programs attached to Rene's position. Nilfisk, Chief Financial Officer, Reinhard Mayer, received a total compensation of EUR 1,466,000 in 2023, and it compares to EUR 1,074,700 in 2022. The increase is mainly due to increase in the variable part of this package. The STI or short-term incentives for 2023 saw an increase compared to 2022. The realization in '23 was 43.5%, and that compares to 33.6% in 2022. The targets for this annual bonus program is EBITDA margin, organic growth and they were below target. And net debt, the third parameter was above targeting performance. If we look at the long-term incentives or in short LTI, in 2023, we launched an MIP program, management incentive program. The program was offered to members of the Executive Board and LT and runs alongside the existing long-term incentive program, the performance share program. The MIP is not intended to roll out every year, but it's a program designed to strengthen the efforts to focus on the business plan 2026 achievement. In total, 165,332 warrants were issued in 2023 for this program. On the performance share program that rolls out every year. In 2023, a total of 151,456 performance shares units was awarded to executive management, the Nilfisk leadership team plus key employees. The targets for this program include a total shareholder return parameter, EBITDA and an ESG goal focusing on CO2 emission reduction. All targets covered the period from 2023 to 2025. And with this, I conclude my summary on the 2023 remuneration report. And the full details on these programs that we talked is in the remuneration report on Page 8 to 10 or you can read more about it. Thank you.

Thank you, Peter. I'll ask the general meeting if you have any questions or comments to the report or to what Peter said. And there are no questions or comments. So I can conclude that the remuneration report has been approved by the general meeting today. Then we go to item 7, which is remuneration of the Board of Directors. And the Board of Directors proposes to maintain the same level as remuneration for this year, 2024 as in 2023. Consequently, it is proposed that each ordinary member of the Board will receive a base fee of DKK 325,000. The chair shall receive 3x the base fee and the debited share 2x the base fee. Further work in 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 receives 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 this committee -- these 2 committees each received 1/6 of the base fee. So I'll ask if there are any questions or comments to this. There are no questions or comments. Then I'll conclude that this has been approved by the general meeting today. Next item is item 8, election of Board members. According to Article 11 of the Articles of Association, the members of the Board of Directors appointed by the general meeting, consist of minimum 5 members and maximum 8 members. And members are standing for election each year, and they can be reelected. The Board of Directors proposes reelection of the following board members. And that is Peter Nilsson, Bengt Thorsson, Rene Svendsen-Tune, Are Dragesund, Franck Falezan, Viveka Ekberg and Ole Kristian Jodahl. As mentioned in the beginning of the general meeting, Jutta Rosenborg has decided to step down from the Board of Directors of today as her election period expires, and she will not be up for reelection. And then for the sake of good, I'll ask if anybody would like to candidate for the Board of Directors. There are no other candidates than the ones mentioned. So the Board of Directors for the next year will be, as mentioned, Peter, Bengt, Rene, Are, Franck, Viveka and Ole. So congratulations to all of you with the elections. Okay. Then we go to item #9 of the agenda, which is the election of one or more public accountants. There's a separate proposal, as I mentioned in the beginning about the suspense for the new election of an auditor for sustainability purposes but that will go -- we'll deal with that under item 10A of the agenda. So this is just the ordinary public accountant. And the Board of Directors, they propose that Deloitte is reelected. And I'll ask if there are any other suggestions. That's not the case. So Deloitte has been reelected as auditor and congratulations. So in item 10, that's the proposal that I mentioned also in the beginning, the only proposal that we have received for today. And the proposal is due to the new legal requirements expecting to be implemented in Danish law, where the company must elect an auditor for sustainability purposes. And this requirement follows from the EU directive on Corporate Sustainability Report is referred as CSRD directive. The bill has been -- since the notice to convene the general meeting of today, this bill has been presented to the Danish parliament, but the bill does not alter the assumptions stated in the notice to convene the meeting today. The audit surface sustainability purposes must be elected for Nilfisk and the auditor must be able to provide a statement on the company's sustainability reporting. And the requirements for Nilfisk to report on certain sustainability topics is expected to come into effect already this in the current financial year, this year. As stated in the notice to convene the meeting today, the Board of Directors expect that Deloitte to be approved for issuing such statements. And therefore, the Board proposes Deloitte to be elected for this purpose. So I'll ask if there's any other proposal. There's nobody else. So Deloitte will be elected to be in order for sustainability reasons as well. Congratulations. So we go to item 11, and that's any other business, as you know. There's no binding adoption of proposals. So that can be made under this item, but it's possible for all of you to express your opinion or comment. So I'll ask if there's anybody who would like to take the floor.Yes. [indiscernible] would like to take the floor to, welcome to [indiscernible].

Do we have any business with Russia?

Actually, if you looked carefully in Rene's presentation on that map of the global, everything was colored except Russia, meaning that Russia is not part of any region, and we don't conduct business there.

Thank you. Any other questions or comments? Fine. So there are no more comments, no more questions from the general meeting. So I would like to thank you all for participating in this general meeting and for this, I mean, good meeting. Thank you for the questions. And then I'll leave it up to you to finish off Peter. So the word is yours.

Thank you very much, Marlene. And I take the opportunity to conclude with a couple of words. And to all you shareholders both in the room and on the web, thank you for your time today. And thank you for the good and relevant questions and ideas that you put forward to us during the year in investor meetings and in meetings like this. We appreciate that interest and we take it with us. Also, thank you again, Marlene for navigating us through this. We feel extremely good in being in this safe hands. And for all you that made this possible, technicians, interpreters, employees of Nilfisk. Thank you for contributing to having a good meeting today. And with this, I would like to conclude the meeting and declare it closed, and I hope to see you again next year. So thank you very much. Have a great afternoon. Thank you.