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

Dear shareholders, dear guests, dear employees. Welcome, and good afternoon to the Annual General Meeting of Nilfisk 2025. My name is Peter Nilsson. Some of you might recognize me. It's not the first time. I'm the Chair of the Board of Directors here at Nilfisk, and we are happy again to be able to welcome you here today. In 2024, we have had a year with many challenges and changes. Most notably, I would argue the CEO change, which means that I'm sharing the stage here today with Mr. Jon Sintorn, who took over in June last year. Jon. And as I said, it has also been a year of challenges, not least in the Americas, but also some very strong results in other parts of the organization. Everyone has contributed and put in a lot of effort in order to make the entire year and build the solid results we can see. I will have Jon to give you more details on the progress and the results of 2024. But before we start the meeting, some practicalities, make sure your mobiles are switched off. You know exactly when you -- what you don't want to have, somebody calling you. Also, we will hold this meeting in English, but there will and there is availability for translation services either if you're watching online, but also in real time. And when we have the recorded version on the web, you can have it English also, if you choose that -- or Danish, sorry. I will have it in English. And after the meeting, you will actually have -- be able to read the transcript and the presentations presented here today, and they will all be available on the web page, Nilfisk's web page. To share the meeting itself, this year, as in previous years, Marlene Winther Plas, will be the Chair of the meeting. And I welcome you as well, and I'm pretty sure you will bring us into safe harbor. So Marlene, word is yours.

Thank you very much, Peter. Ladies and gentlemen, I would like to thank the Board of Directors for appointing me as the Chair in accordance with the Articles of Association, Article 9.1. As Chairperson for the Annual General Meeting, it's my duty to preside over the General Meeting and ensure that the meeting is conducted in a proper way. So some formalities to supplement you, Peter. If you want to say something, you can go to [ Heidi ] sitting over here and give your name tag or tell her your name and then I'll present you up here, and you can come up here and ask your questions or comment on whatever you want. The meeting is broadcasted live. And then for the minutes of the meetings, I will approve the minutes being the Chair of the meeting today. And if you want to leave the room, then please remember to deregister at Computershare desk outside. So my next task as the Chair is to conclude if the meeting has been lawfully convened and is competent in accordance with the agenda of today. And as the requirements of Article 7 of the company's Articles of Association have been complied with, I find that the general meeting has been lawfully convened. And it is because the meeting is held in the capital region, the notice of the General Meeting was sent out on 21 February, which is not earlier than 5 weeks ahead of the date of today, and at least 3 weeks before the date of today. And the notice was published on the website and through Nasdaq Copenhagen and it was sent out to the shareholders -- to the shareholders who requested so. The required majority for the respective items on the agenda that I will go through in a little while, have been stated in the notice and all the proposals today require simple majority. So according to the articles again, the following documents and information have been made available for everybody on the company's website. So that's first of all the notice to the General Meeting today with the agenda, the audited annual report for the company for the financial year '24. The vote form for voting via proxy or postal vote and information to the shareholders on how to participate in the General Meeting. Therefore, I conclude that the meeting today has been lawfully convened and is quorate. So I'll ask if anybody has any comments to that. It doesn't seem the case. So I conclude that it is -- the General Meeting has been lawfully convened and is quorate. And I can -- I will not give you the information that we have received proxies constituting 67.65% of the share capital and votes are represented at the meeting today. So due to the high number of proxies and postal votes that has been received, all proposal on the agenda will be approved -- can be approved by the required majority, which is simple majority. So I'm going to the agenda now. And I'll just go through it briefly. You have seen it before. So for the first 4 items, they're going to be presented collectively by Peter Nilsson and Jon Sintorn, and it consists of the report by the Board of Directors of the company's activities in '24. Presentation of the audited annual report. Adoption of the audited annual report. And proposal by the Board of Directors for distribution of profits. Then Item 5 is the resolution regarding discharge of liability for management and Board of Directors. Item 6 is the adoption of the remuneration report by advisory vote. Item 7 is remuneration of the Board of Directors for the current financial year. And after Item 7, we have 8, where members of the Board of Directors are elected. Item 9 is the election of one or more public accountants. And Item 10 is a proposal from the Board of Directors and shareholders, and we have only 1 proposal from the Board of Directors today, and it concerns an update on the remuneration policy. We come back to that. And then we have the last item on the agenda, which is Item 11, any other business. So Peter, I give the mic back to you to present item 1 to 4.

Thank you very much. I will start this presentation, that I will do together with Jon, by describing the work that we have done in the Board during 2024. And as you can see on the screen here, we have the Board meetings and the different committees and the number of meetings and actually who sits in each. So you have a full picture of it. This is -- this is -- were conducted out of a fixed plan that we have throughout the year, a meeting wheel, if you want, for both the Board and for the individual committees. And what you see in the number of meetings here is the scheduled meetings that we had during 2024. And in addition to this, there has been -- because it has been an intense year and a year of change, there has been a lot of impromptu, informal meetings in the committees as well as in the Board, interactions between Board members and management. So indeed, there has been high activity. We have also in 2024 conducted as we do every year, a Board assessment. But intermittently, every third year, I believe it is, we do a deeper Board assessment, which entails also guidance and help from an external consultant. So not only do we do -- fill in a questionnaire and rank our performance in different dimensions, we have also had deep interviews with each individual Board member from the specialist and benchmarked ourselves compared to Board work in other companies. After that, we have had a presentation from the consultants on the results, and we have had in the Board a discussion about what can be improved? Is there any blind spots, et cetera. On an overall level, I can disclose to you that we are functioning well as a Board for Nilfisk, we can conclude that we have the necessary and relevant competencies and skills in the boardroom. But we can also see that, and I'm a clear example of that, that we could benefit from more diversity in the Board. If I'm looking at the focus areas for improvement in the Board, it's not so much about interaction. It's not so much about ability to discuss the right items and respect all different perspective. It's probably more around topics that you will probably nod and say, yes, that's probably -- it's about the regulatory burden on CSR items, directives in different context that comes out of Brussels and in national legislation that in a very short period of time, has actually increased the burden or responsibility at Board level. And it's my duty as the Chair of the Board to ensure that the complete Board is aware of the changes that occur and that we have the necessary, call it, education on those topics so that we can take decision based on facts and insights. Another area that is definitely for us to watch out on is the very fast development of AI. AI can change the way a company like Nilfisk operates, not only from how our products can operate, but also how we can gather information and data in order to drive better decision-making in our organization. So those are 2 examples of what we have topically discussed in the Board. On the next slide, although this point is actually -- the Board members will be done under Agenda Item 8, I wanted to show the current members and candidates for the Board of Directors, and I want to take the opportunity at this point in time to thank Rene Svendsen-Tune. You see him on the lower. Unfortunately, he cannot be here today, he has a conflict, another Board, at this exact same time. So -- but I still want to take the opportunity on a personal and on behalf of the Board and the company to direct a big thanks for the service that Rene has done to Nilfisk during the year he has been sitting on the Board. And not only in the Board, he has actually -- during the difficult times of a speedy transition of CEO, while we were searching for Jon, the successor, he volunteered to step down from the Board and become the interim CEO. So Rene, as shareholders, as Board colleagues, we should thank Rene a lot. With that, I want to hand over to Jon, the CEO, the new CEO for the first time, you will hear him talk about the business and the financial results for 2024 and the priorities for 2025. So Jon, the floor is yours.

Thank you. Hello, everyone. I am Jon Sintorn, and it's my pleasure to be here, and thank you all for coming to this event. Let's start looking at some 2024 numbers. 2024 was a year of variation in regional performance. The year began with good momentum with growth tracking according to plans through the first half of 2024. However, a slowdown in demand in the Americas during the third quarter affected our Professional Business, prompting an adjustment for our full year guidance in October. After a thorough review and assessment of the trajectory against the targets, we decided to withdraw long-term targets and adjust our outlook for the year. Revenue landed last year at EUR 1.028 billion and EBITDA before special items was at EUR 135.8 million. This allowed us to deliver an organic growth of 1.2%, an EBITDA margin before special items of 13.2%, and these were both in line with our adjusted outlook for the year. The gross margin increased driven by price management and operational efficiencies. The gross margin reached 42.2% compared to 40.9% in 2023. So let's have a closer look at the development of our business segments. Looking at them, the Professional Business faced headwinds in Americas and APAC and declined 0.9%. The Service Business delivered organic growth of 0.6%. The Specialty Business delivered organic growth of 4.9%. And then the highlight, the Consumer Business experienced a very strong growth throughout all of 2024 as most markets experienced high demand and increased volumes, and that was clearly supported also by our new product innovation, resulting in organic growth of 19.7%. 2024 revealed notable regional differences also in performance. In EMEA, we saw strong performance with growth across all segments, and key drivers included robust demand in several of our large and most important segments. Revenue in EMEA reached EUR 612.4 million, corresponding to a strong growth of 5.9%. So it was a strong year for EMEA with good momentum. However, the Americas encountered a slowdown in demand, leading to volume declines and the revenue was EUR 341 million and delivered a negative organic growth of 4.3%. In APAC, as many, we experienced market headwinds like many other industrial companies, driven by macroeconomic challenges and the geopolitical disruptions. On the back of that, our performance was lower than expected for '24 with a revenue of EUR 74.3 million, and that corresponds to negative organic growth of 8%. EBITDA before special items amounted to EUR 136 million compared to EUR 132 million in 2023. The increase in gross margin, offset by the impact from the decline in revenue and the higher overhead costs. Consequently, we realized a margin before special items of 13.2% compared to 12.8% in '23. So a slight increase. To the cash-related metrics, free cash flow was EUR 7.7 million and cash flow was negatively impacted by changes in working capital as inventory grew on support of the launch of new products. The CapEx ratio increased to 4.5% from 3% in 2023 as CapEx spend increased. The increase was a combination of investments into strategic R&D projects alongside the continued rollout of the ERP system, SAP. NIBD, net interest-bearing debt reached EUR 270 million, and that is an increase of EUR 17.9 million, driven by an expansion in working capital. And the gearing increased to 2x and remained within the target range of 1.5x and 2x. So that was financial numbers. Then moving on to ESG, sustainability targets, which were on track, 2024. And the progress with reducing Scope 1, 2 and Scope 3 greenhouse gas emissions took a solid leap forward last year, and we are on track to meet our 2030 Science Based Targets. We achieved a 22% reduction in Scope 1 and 2 emissions compared to the base year, and we reached a 39% reduction in Scope 3 relating to the use of sold product -- the use of sold products in '24 compared to the base year. And for '24, we reached 31% women in top management, which is an increase from 30% the year before. Finally, Nilfisk was awarded the EcoVadis Gold Medal, scoring 80 out of the 100 points, which is 9 points better than we did the previous year. And we are among the top 5% of global companies rated gold by EcoVadis last year, so quite an achievement in this area. So let's look at some key priorities for 2025. Our top priority in the near term is strengthening our competitive position in North America. As you have seen in our results, our '24 performance in this region fell significantly below our expectations. Adding to the challenge, geopolitical uncertainties such as the potential tariffs create additional -- potentially additional headwinds in 2025. To secure revenue in the U.S., we will focus on increasing our sales density, refreshing our core product portfolio, improving product and parts deliveries and implementing targeted organizational changes. These changes will address clear improvement areas that we are committed to turning around. And with our new head in Americas, [indiscernible], which is now, as of Monday, in place, I'm confident that he will, and the team will guide us through these challenges successfully. Another key priority is decentralizing our operating model. By shifting decision-making closer to our customers, we will strengthen our commercial focus and create more responsive business. Today, too much responsibility sits with centralized functions that do not have the same direct feel for the customer needs and the proximity of the business. By empowering more of the local and regional business leaders with greater accountability, we will be able to improve execution and ensure that we are delivering the right value propositions across the various customer segments and verticals. This transition will also drive efficiency improvements as we reduce support functions overhead, we will reinvest savings into commercial activities in key markets. Some of the steps are already in motion, including optimizing production and distribution, example, consolidating our Hungarian production sites, 2 into 1, streamlining our sales entities in the APAC and initiating a strategic review of our U.S. high pressure washer business. Another key priority is continuing to drive growth in EMEA and continue on the positive momentum that we have there. This region has been a strong performer, and we are committed to sustaining that momentum. That will require a sharp focus and ongoing investments to expand our market share. And our operating model, the new one, will further support this -- enhancing this execution across the region. Finally, a very important driver for 2025 across the regions is our continued product launches. And with that, let's have a look at those products. Yes, this is good stuff. Last year already, we started to launch several vital products, including the SC550 scrubber dryer, and that was our first, what we call next-generation product launch, setting new standards in the industry for ergonomics, sustainability and usability. Additionally, we introduced a compact autonomous scrubber, the SC25. And the Nilfisk Dryft micro-scrubber which fills significant market gaps. So those were introduced already during last year and predominantly at the end of last year. So we will see some real cool effects coming this year with these products. And the first quarter of 2025, we launched our new -- 4 next-generation products for the Professional segment. We introduced our first stick vacuum for professionals and 2 new compact canister vacuums as well that is now out in the market. And then just a few weeks ago, we launched our biggest project in years, the CS7500. A new combination sweeper-scrubber, designed based on extensive customer research. And it is easier for operators to use and maintain, not least, comes with water and energy saving features as a standard and has excellent maneuverability, and this is the first launch in our new range for large industrial machines. We have high expectations for this machine and already received very positive feedback and orders at the launch event, several from our customers. So very positive feedback from the customers who have tried these machines out. All of these products are really, really cool stuff now coming out the door, and there's more to come. So step-by-step, we are rejuvenating and improving our assortment in our core segment for our core usability, which is fantastic. Now let's look at the outlook for 2025. For organic revenue growth, we expect the range from 1% to 3% and the EBITDA margin before special items is expected to range from 13% to 14%. And key elements for this year to come, the 2025 are, as I said, to improve the situation in North America, to continue to drive the momentum, the good momentum we have in EMEA, to ensure that we put our operating model in place to be more business-driven and connected to our -- customer-centric, connected to our customers, and to successfully launch these new products that will help drive our business forward and supply customers with a lot of joy. And also, obviously, then to fulfill the guidance for the year. But this -- and this financial outlook for '25 is based on several assumptions, and that includes stable market conditions in EMEA and neutral development in the U.S. versus 2024, that the APAC region returns to moderate growth and that we have a limited impact from tariffs, which is now a big thing, talked about a lot. And with that, thank you very much for your attention, and I will hand back to Marlene. Looking forward to '25.

Thank you very much, Jon. So this will cover the first 4 items on the agenda. And I just have to mention that the company's auditor does not have any qualifications in the auditor's report. So I've been informed that the Danish Shareholders Association, Dansk [ Aktionaerforening, ] will take the floor now and present the speech. So I'll leave the word to you, Jens [indiscernible], the floor is yours. And you will speak in Danish, and we have accepted that. So that's fine.

[Interpreted] Thank you for the floor and I will be speaking in Danish. As said, my name is Jens [indiscernible], I represent the Danish Shareholders Association. And also represent a number of international companies that are Nilfisk shareholders. By way of introduction, I would like to thank the Chairman for a good and comprehensive report. It's always a pleasure to attend a General Meeting in one of Denmark's old and illustrious companies. When we look at Nilfisk, there's still a poor development in sales. It has decreased for the second year in a row. However, earnings are improving with an EBITDA margin of 13.2%, which is a considerable improvement on last year, and on the same level as Tennant delivered also in 2024. Previously, the EBITDA margin has been higher for Tennant, around 16%. And this level has, as you know, also been our target in Business Plan 2026. Therefore, we also see that there is room for improvement when it comes to the EBITDA margin. As you all know, in the summer of 2024, we got a new CEO, Jon Sintorn, and we would like to welcome you. And as you also know, Business Plan 2026 has been part of the Nilfisk's strategy in recent years. Late last year, around November, it was announced that Nilfisk canceled the financial targets including the organic growth target in the Business Plan 2026. We in the shareholders association were somewhat surprised and disappointed. We are of the opinion that it's not appropriate to have a business plan without financial targets for EBITDA and organic sales growth, et cetera. There are also other key figures that you could address. Therefore, we believe that Nilfisk should urgently reestablish and update the financial targets as a measure for organic growth and EBITDA margin, et cetera. And I have in that connection -- in conclusion, 2 questions, I would like to ask the Chairman of the Board, if he can talk a little bit about when Nilfisk will have a new business plan with concrete long-term financial targets. We also have Nilfisk versus Tennant. When we look at the Nilfisk business, we're doing well in Europe, while Nilfisk is still challenged in the U.S. If we, on the other hand, look at our American competitor, Tennant, they are strong in the U.S. market, while the European market, as far as they are concerned, is of less importance. As we live in a time of a potentially seriously escalating trade war and tariff threats from the American President Trump, it is perhaps worth considering whether Nilfisk should concentrate more on the European market. And then, of course, hope that Tennant primarily would focus on the American market, maybe that's wishful thinking. And this leads me to my next question. I would like to ask the Chairman of the Board, if he could talk a little bit about how strong Nilfisk is compared to Tennant in connection with a potential trade war between the U.S. and the EU? On both the U.S. and European markets with mutual high tariffs on cleaning machines and the other product range, any potential trade war could be of a longer duration. Nobody knows tomorrow. And how well equipped are we really for such a challenge? Have you done the maths of various scenarios regarding the extent and duration of seriously increasing creating tariffs? Obviously, I hope for the same for our company. Thank you so much for the floor.

Thank you, Jens. It's good that you continue to have interest in our company. And I guess I -- especially on the trade tariffs and Trump question, I have to personally thank you for having an assessment for the future as everybody else is trying to figure out what is happening. But let me start on question number one, which was basically when will we have the new business plan and long-term financial targets. There is a short and a long answer to it. The short answer is that this year, we are focused on delivering results within our financial outlook that we just heard from Jon for 2025, and to make further improvements to our business, building a strong momentum for the future. And we believe that we remain well positioned to do so and we'll revisit and establish long-term financial targets when we have greater visibility and acceptable resets of results behind us from 2025. So you can call it a reset. The longer answer is that there is so many significant changes in the world but also internally in Nilfisk since the Business Plan '26 was launched in '22, I believe it was. And for many parts of the Business Plan '26, we managed to deliver good results and -- both strategically and the financial progress that is also notable. And that despite what I just said, the macroeconomic changes and some business interruptions that we have experienced. And in our optimization opportunities, supply chain robustness has been substantially improved, supporting an expansion of our gross margin. Also, which we seldom talk about, we have delivered over EUR 240 million of free cash flow since the beginning of '21. And that has led to a meaningful reduction on net debt. And that we have done while simultaneously significantly improved or increased our spending in new product innovation, which Jon actually talked about, some coming to market as we speak. And we have also expanded our production capacity. But as I said, we came to a conclusion that we cannot be bound by something that to an increasing degree became not meaningful us to steer towards. But we -- the only thing we gave up on was the long-term financial guidance. And I just mentioned, we are resetting that. The strategic pillars to a large extent in the Business Plan '26, growing a Service Business, getting operational -- more operational efficiency out of the organization. All of that remains intact, and we continue to do daily progress on it. So where I stand today, I believe that Business Plan '26 was good. It delivered good results for us, but we now need to develop a new set of operational improvements and a strategy. That will not -- from a strategic point of view, probably not fundamentally divert from what you have seen. We are a global business. We are dependent on the EMEA region and the Americas regions, and we have a smaller foothold in APAC, but still, we are global. And that leads me into question number 2. It's an extremely different question to answer. What I can say is trust me. We are working on it. With the changes that happens, and you follow it on the news, we follow it in the news. We tried to assess what is actually happening in the real world when it comes to trade tariffs and classification of what type of products, what type of materials, et cetera, et cetera, will be impacted. Is it an American play only? Or will there be retaliation? And how would that look like? I mean it's the same that you every evening see some national news. It's all over the place. So what do we do about it? Well, we have made sure that the company is very well aware of what is the potential exposures and where would that be? If we have an exposure, how can we mitigate the effects of it? Do we have dual source for certain? Or are we highly dependent on a single-source setup? The fact is that Nilfisk as many other companies, typically in the world, have after 20, 30 years of global trade, we have an international supply chain. And we are selling our products in many parts of the world. So if there is trade wars, which you alluded to, this will impact how we do business. But we also have our supply chains in every part of the world. So given time and giving effort we can adjust to all potential scenarios. Then you also asked about the relative gain with Tennant. Well, they also have a global sales footprint. They are bigger than us in the U.S., and we are bigger than them in Europe, simplified. They will also be impacted too. If it's absolutely equal extent, question mark. But they probably address the questions pretty much in the same way as we do, trying to find ways to mitigate potential effects in different scenarios. This is just a widespread answering to a question that I think no company, no Board and no management team have clear answers to because we simply don't know what will happen. We have just raised significant level of alertness to be able to act with agility when things are implemented. Is that a fair answer to that question, yes? Yes. So thank you very much for the questions. Thank you.

So I'll ask the General Meeting if anybody else wants to make a comment on the first 4 items on the agenda or have any questions? Doesn't seem to be the matter. So I'll just ask if there's anyone who wants to vote on this? It doesn't seem to be the case either. So I'll record in the minutes that the report on the company's activities in '24 and the presentation of the annual report has been noted by the General Meeting, that the General Meeting has adopted the audited annual report for the financial year '24 and that the General Meeting has approved the proposal from the Board of Directors regarding distribution of profits. So I'll go -- I'll continue to item #5 of the agenda. And it is a proposal to adopt a resolution regarding discharge of liability for the management and Board of Directors, and I want to ask if anybody wants to say something, comment or vote on this? Doesn't seem the case. So I am certain that there was a -- discharge of liability has been approved by the General Meeting. Item #6, it's adoption of the remuneration report. Each year, the company must prepare a report, a remuneration report and present it for advisory vote at the General Meeting. The report must present an overview of the remuneration of the members of the management that has been earned during the preceding year. The vote on this proposal is not binding for the company, but it is advisory. So I give the floor to you, Peter, and you will comment on the remuneration report. Yes.

So the remuneration report of the Board becomes more extensive by the regulations. You have probably read it. We are in -- we believe we are in full compliance to all the guidelines issued about how a remuneration report should look like. So let me then review some of the key elements of it and you actually have them on the screen. First point, the interim CEO, Rene Svendsen-Tune, he was hired on a fixed base salary in 2023 and for half year of '24. And since it was an interim solution, he had no severance or terms associated with leaving this position at all. So it was just a monthly salary that was received, and you can see the numbers in the report. And then when it comes to the onboarded CEO, Jon Sintorn, he started June 17. So the compensation elements that you see in the report is actually for basically a half year. And the package that was offered and what we have for Jon is in full compliance and very similar to what we have had when it comes to different types of elements in the remuneration package, it's the same as we have had before for the previous years. And it's also according to practices and benchmarks on the Danish market/Nordic market. When it comes to the CEO position, we have an STI target at 50%. STI target is where we expect the payout levels to be over time. The max target is 100%. So that -- I mean, we talk about the STI, the target level compared to base salary. And for '24, we have prorated that based on the base salary. And the same principle goes for the performance share program, the PSP program, and that was awarded to the CEO in 2024. And also finally, on the long-term incentive programs, the CEO is awarded a fair value at 35% compared to annual prorated base salary. Despite a growth across revenue and margin for '24, the pro forma was lower than expectations, and that is reflected by that the payout level was 14.1% out of the 100% that is his max allowance. If we look at the CFO, even in '20 -- I believe it was in '23, we actually lifted the bonus potential for the CFO and the target level now is at 40% from previously 35%. Despite that we did that and the fact that there was low payout, the salary remuneration for the CFO was lower in '24 than in '23. And this is full year effects. And that was, as I said, because of the lower payout of bonuses. What else do I have here? Yes. Finally, on the MIP. For those that were here last year, we have a onetime extra incentive to very -- that was decided by this AGM last year. And we have, during '24 enrolled a couple of new members to that program because of changes in senior management. But that followed the same principle exactly like what the original program instituted. So I believe with this, I actually have summarized the key elements of the report. And if there is need for further details, the full report is among the material that you have received. Yes. Thank you.

Thank you, Peter. Anyone else to comment or any questions? Anyone who wants to vote on this? Doesn't seem to be the case. So I can conclude that the remuneration report has been approved by the General Meeting by advisory vote. So we go to Item #7, of the agenda, which is the remuneration of the Board of Directors. The remuneration of the Board of Directors has not been changed since the 2022 Annual General Meeting, and to ensure that the company can continue to attract and retain qualified candidates for the Board of Directors, the Board has proposed to increase its base fee from DKK 320,000 to DKK 375,000. It is also proposed that the Chair shall continue to receive 3x the base fee and the Deputy Chair shall continue to receive 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. The other members of the Audit Committee receives 1/3 of the base fee. The Chairs of the Remuneration Committee and the Nomination Committee each receive 1/3 of the base fee. And the other members of the Remuneration Committee and Nomination Committee each received DKK 100,000. So I'm asking if anybody wants to comment on this or have any questions? It doesn't seem to be the case. So the proposal regarding remuneration of the Board of Directors has been approved by the General Meeting today. We go to Item #8, which is election of Board members. According to the Articles of Association of the company, Article 11, the members of the Board of Directors appointed by the General Meeting must consist of minimum 5 members and maximum 8 members. Members of the Board appointed by the General Meeting must stand for election every year, and reelection is possible. Rene Svendsen-Tune, as mentioned by Peter, is stepping down from the Board of Directors at the General Meeting, and he will not be up for reelection. The Board of Directors proposes reelection of the following Board members, which were elected by the General Meeting last year. So it's Peter Nilsson, Bengt Thorsson, Are Dragesund, Franck Falezan, Viveka Ekberg and Ole Kristian Jodahl. And I'll ask if there are any other candidates for the Board of Directors? It doesn't seem to be the case. So I'll conclude that the Board of Directors will consist for the following year of Peter Nilsson, Bengt Thorsson, Are Dragesund, Franck Falezan, Viveka Ekberg, and Ole Kristian Jodahl. So congratulations to you with the election. We go to Item #9, and that is election of one or more public accountants. The Board of Directors proposes that Deloitte is reelected in accordance with the Audit Committee's recommendation. And the Board also proposes that Deloitte is reelected as the company's auditor for sustainability purposes, which is also in accordance with the Audit Committee's recommendation. This auditor for sustainability purposes was elected the first time last year at the General Meeting. Anybody has any comments to this or wants to suggest somebody else as an auditor? No, it doesn't seem the case. So Deloitte has been reelected. Congratulations to Deloitte. So we go to Item #10 on the agenda which is proposals from the Board of Directors and shareholders. And as I mentioned in the beginning, we only have 1 proposal from the Board of Directors, regarding the approval of an updated remuneration policy in order to include an option to award stay-on bonuses in line with market practice as well as a general update on minor corrections. So Peter, I'll give the floor back to you for this.

Yes. Thank you. Well, I guess there is not much to have to be said on this point. You've mentioned it. We have reviewed the policy, and we have also made sure that it is in line with the regulatory and compliance items. So there is minor updates to the report, but formally, I need to bring it to your attention. We have modernized some language. But as you said, Marlene, we have a section to make sure that we are gender neutral in remuneration, enforcing equality in that respect. And we're also including an option for stay on bonuses, including a cap. So we have some kind of control over it. And that is in line with what has developed and become the market practice in particular, Denmark. So -- and for Danish-headquartered companies. And that is in order for us to be able to attract high-caliber talents in the company. So with those 2 changes, I ask you to adopt this policy.

So any comments or questions to this? Any requirements to vote? Doesn't seem to be the case. So I'll conclude that this proposal has been adopted by the General Meeting. And then we go to Item 11, which is any other business. And as you know from previous years, it is possible for you to express your opinion and provide advice or guidance to the company's management, but we cannot vote on anything here or decide anything. So anybody wants the word? Yes. Can you maybe go over to [ Heidi ] and give your name to her. She's sitting over here. Yes, you can up here. Okay. [indiscernible] wants to take the word.

Yes, just a comment rather. I just came to say maybe you could throw a couple of words about AI. Concerning the helpfulness, and so to speak like a nice dog they're letting it into the family, taking care and only barking when necessary.

AI, I think you asked about AI. Well -- do you want a Chairman answer or a personal answer? AI is very hard to get our arms around. It's no doubt that for a company like Nilfisk, it can be of great help in speeding up our processes, our information gathering and our knowledge enhancement in the organization. It can help us develop products, that for the end user actually, can do things that previously was unthinkable. So we can embed it in our innovation part as well. At the same time, it can be viewed as a threat to a product-oriented company like ours. The time to have an advantage can diminish tremendously because competitors and other stakeholders will have access to the same tools. So it can have a tendency of speeding up the processes that are necessary for us in order to have time enough to earn money on what we are doing and what we are investing. The time to copy. I'm talking about copying instead of trying to lead in a marketplace. It is going to be at the end of the day, the agility of this organization that gives the answer to if we are a beneficiary or if we are a victim of AI development. That it will come, it's no doubt. But as I said, it's early days. I don't know if this answer gives you anything. Yes, it is a try. There will, within short, be an avatar based on AI, giving this answer to you in the Annual Shareholders Meeting. Thank you.

Any other questions or comments? Yes. [indiscernible] the floor is yours.

Two questions. Could you outline the worst-case scenario, as you see it regarding a focused U.S. tariff on our products. And second question, has it been considered to preemptively withdraw voluntarily from the U.S. market and focus elsewhere?

I start and you take over. We have a good grip on the worst-case scenario or at least the worst-case scenarios that we can calculate on a trade war. Yes, we have that. Do we want to disclose that? No, we don't. We deem that very sensitive information. But we have a good grip on what -- that being said, we also have good grip on what actions can we take to mitigate that. So I don't like that this is happening, but I don't feel overly stressed either, we need to act with agility and with decisiveness when this happen, if it happens. Then preemptive exiting of Americas because of what we tend to be -- and I shouldn't be political here, but I mean what we with European eyes view as increasingly difficult interpretation of what is going on in America. To just walk out -- Nilfisk has, what is it, a good 1/3 of its turnover and its activities in America. America is Nilfisk. We have commercial activity and supply chain activity that is optimized for the American market in the old days, but -- and we can make it optimized for the future. So there is -- to walk out of it, it's not good for shareholders just because of the trade war. To adjust and adopt and perhaps reprioritize could be options that we are looking into. So that is the answer to that. I don't think a scenario of just preemptively walk out of America based on economic fundamentals will ever be a case that can be counted on. So that's the answer I have there. Is there anything you want to add?

No. I think you answered well, if anything [indiscernible] no. I think you answered well. And we shall have the agility to adjust supply chains for whatever needs that are necessary going forward and so on. And we have -- we understand what needs to be done when this kind of settles. As of now, it's very flippy floppy, what is happening, what is not happening and if something is happening and from one day to the next, something else is happening, is not happening or happening, so we need to keep a steady course and understand and follow, obviously, and make decisions when things have settled down. What I was adding to Peter's comment was on the trade war, I think maybe this is not the worst-case scenario, but an additional scenario, which is being more and more talked about and we can see signs of across industries, obviously, not specifically for Nilfisk is this uncertainty that this situation with tariffs are creating puts the global economy on a very -- not only the U.S. economy but other economies slow down, which will push investments into the future and so on and so on, which is obviously not a good scenario for anyone. So that will be the addition to the specific tariff situation.

Thank you. Any more questions or comments? Thank you very much for your questions. Thank you very much for the answers. And thank you very much for today. I have no further to do now as Chair of the General Meeting. And thank you very much for attending. And I give the word back to you, Peter, for final remarks.

Thank you. Normally, I would end the shareholder meeting by looking forward to an even better year 2025. But for what we have seen in the start of this year, I mean it's -- even for a born optimist, like myself, it's hard to see that we are going in the right direction as a world economy and society. But let's make sure that what we can control within Nilfisk, we will improve compared to previous years. So with that, it's time for me to thank. Thank you, shareholders and the ones that have raised questions and challenged us here at the AGM, I thank you for your interest and continued support for Nilfisk. I want to also thank Marlene. As always, you navigate safely in this. I feel it's almost that you can relax for 2 seconds in between the questions. I want to thank the interpreters, the 2 in the box behind us, good work. The technicians, you have to have 1 more mic next year, you'll learn that, but thank you very much. And again, the employees of Nilfisk and everyone that has contributed to make this a good annual meeting. So again, thank you, and hope to see you next year. Bye. [Portions of this transcript that are marked [Interpreted] were spoken by an interpreter present on the live call.]