NNIT A/S (NNIT) Earnings Call Transcript & Summary

Hello, and welcome to the NNIT Q3 Interim Report for 2021. [Operator Instructions] Today, I am pleased to present CEO, Par Fors; and CFO, Pernille Fabricius. Please begin your meeting.

Good morning, and welcome to this call on NNIT's financial performance for Q3 and the first 9 months of 2021. Turn to Slide 2, please. My name is Pernille Fabricius, CFO of NNIT. With me today is our CEO, Par Fors. I will briefly walk you through the practicalities for today's meeting before giving the word to Par. Today's Q3 release as well as the slides being used for this presentation will be available on our website nnit.com. The conference call is scheduled to last approximately 45 minutes, depending on the level of questions. The presentation is expected to last around 30 minutes. Today's agenda can be found on Slide #3. Please note that this call is being livecast and that a replay will be made available on NNIT's website after the call. Turning to Slide #4. Please be advised that this call will contain forward-looking statements. Forward-looking statements are subject to risks and uncertainties that could cause the actual results to deviate considerably from the outlook set forth. Furthermore, some of these expectations are based on assumptions regarding future events, which may prove incorrect. With these words of introduction, I'll give the word to Par Fors, and turn to Slide #5.

Thank you, Pernille. And let me start with extending a warm welcome to all participants in today's meeting. And then please turn to Slide #6. Today, I would like to highlight that NNIT's revenue for the quarter increased by 6.1% compared with the same period last year. At the same time, we continue to be challenged on our profit margin. Impressively, revenue for Life Sciences increased with 36% in total and with an impressive 53% internationally. Facing the more negative aspects, we continue to work on the organizational level, gathering our infrastructure and private activities into one unit to increase the financial transparency and identify opportunities for optimization. Let's have a look on these business highlights and go to Slide #7. To further support the international growth NNIT acquired as SL Controls on July 5. SL Controls is headquartered in Ireland and is internationally recognized as an industry leader in equipment systems, integration and system support. I've personally visited this company during the fall, and I'm really and truly impressed by their operation. The acquisition will expand the NNIT portfolio services, competencies and manpower to the international Life Sciences market, specifically with the strategic Production IT winning solution. In addition, SL Control's production equipment integration services are complementary to NNIT's offering. Now we are providing a full end-to-end service model. Another area of growth was our Winning Solution that now constitutes 54% of the NNIT revenue, which is up from 46% in Q3 in 2020. Tailwind, most notably within the solution areas, Dynamics 365, hybrid cloud, cybersecurity and also within Veeva Powerhouse and production IT, which is for Life Sciences. In Q3, NNIT secured a large number of contracts with both new and existing customers. For some time, the market trend has been many smaller transactions related to shorter engagement rather than big lump transaction related to long-term engagement. And that is very much the case for Q3. The improvement of visibility to accelerate tangible cost reductions is key to the business. To facilitate this, the process of gathering all NNIT infrastructure activities into a dedicated business units was initiated in July '21, and the execution has continued in Q3. Please turn to Slide 8, where I will elaborate a bit more on the acquisition of SL Controls. I would like to dwell a bit more on our active M&A strategy to make a point. The acquisition of SL Control is yet another important strategic milestone towards a market of growing NNIT's Life Sciences internationally. And we are looking to make more acquisition, preferably at an accelerated rate. So far, on average, we have made one Life Science acquisition per year since 2018, but we see no impedement to accelerate this rate provided, we're able to find the eligible matches in the market. Please turn to Slide 9. I would like to end my part of the presentation with addressing some of our challenges. We are optimistic that we can solve the challenges we have identified in our business, but let me be a bit more concrete. Regarding the decline in revenue within Private & Public and Private, we are more discerning about the projects we bid on, and our pipeline now contains more of projects and contracts we want. We are not interested to a top line that doesn't provide a positive bottom line. The cloud market provides great opportunities for profitable development projects, and NNIT is at an advantage because we can also offer hybrid solutions. Now let's dive into the numbers. So over to you, Pernille, and please turn to the next slide.

Thank you, Par. Let's have a look into our financial performance of Q3 and the first month of 2021. Please turn to Slide 11. NNIT, realized a Q3 revenue of DKK 698 million, corresponding to a 6.1% increase compared to Q3 '20. The organic growth was a minus 1.5%. Our Winning Solution's share of revenue increased to 54% or DKK 377 million. Operating profit before special items landed at DKK 21 million, constituting a margin of 3% in Q3. The investment level was kept at DKK 24 million in Q3, corresponding to 3.4% of total revenue. The first 9 months of '21, consequently, NNIT realized revenue of DKK 2,139,000,000 corresponding to a 2.8% increase compared to the 9 months of '20. The organic growth was minus 1.7%. Revenues from Winning Solutions was DKK 1.112 million corresponding to a 52% share of the first 9 months total revenue. Operating profit before special items for the first 9 months of '21 was DKK 105 million, constituting a margin of 4.9%. Lastly, investments were kept at DKK 77 million, corresponding to 3.6% of total '21 revenues. Now please turn to Slide 12, where I will elaborate on the NNIT Group performance for Q3 '21. The total Q3 '21 revenue growth of 6.1% compared to Q3 '20, whilst particularly, and as seen in previous quarters, impacted by Life Sciences International, excluding Novo Nordisk Group, which grew 36% compared to Q3 '20. Q3 '21 revenues from the Novo Nordisk Group, on the other hand, declined 13% compared to Q3 '20, also corresponding to the development seen in previous quarters, partly driven by the new terms in the SLA agreement announced earlier in the year. Revenues from Private & Public declined 1.3% compared to Q3 '20, mainly driven by development of the revenue from the Public segment in this quarter. Operating profit before special items was DKK 21 million, corresponding to an operating profit margin before special items of 3% compared to 3.8% in Q3 '20. The decline was mainly driven by reductions in revenues within the before-mentioned segments of the business with the inability to match the cost capacity base on short notice. Special items is DKK 23 million, mainly related to restructuring costs in relation to the before-mentioned initiatives on separating the infrastructure operations from the rest of the business. As a result, NNIT realized a total net loss in Q3 of DKK 10 million compared with a profit of DKK 9 million in Q3 '20. As can be derived from the above, the result was impacted by special items in Q3 '21. Now let's have a look into the financials of the Customer segment, and turning to Slide 13. Life sciences within NNIT consists, as you know, of 3 areas: Life Sciences International; Life Sciences, Denmark; and the specific business within the Novo Nordisk Group. In Q3 '21, total Life Sciences grew 13% compared to Q3 '20 with a very varied growth pattern within the individual segments, as mentioned. In Q3, Life Sciences International revenue increased to DKK 187 million corresponding to a 53% growth, of which 20% organic compared to Q3 '20. The growth was mainly driven by a strong organic growth in Europe and the U.S., helped by inorganic growth relating to Excellis and SL Controls. Main growth drivers respond within the Winning Solutions area, quality management and production IT. Also, technologies, including Veeva and TraceLink, supported this growth. In Q3 '21, revenues from Life Sciences, Denmark ended at DKK 59 million, which was the same level as Q3 '20. Turning to the business with the Novo Nordisk Group, Q3 '21 revenues ended at DKK 142 million, a reduction of business with Novo Nordisk of 13% compared to Q3 '20. Novo Nordisk group at the first 9 months of '21 in revenues term constitutes 39% of total Life Sciences revenue against 50% of the first 9 months of '20. Turning to the share of total NNIT revenue, Novo Nordisk Group as of the first 9 months constituted 21% against 25% in the first 9 months of '20. In Q3 '21, operating profit margin before special items stemming from total Life Sciences ended at DKK 20 million, resulting in a total operating profit margin of 5.2% compared to 6.1% in 2020, impacted by the reduced margins from the Novo Nordisk Group. Please turn to Slide 14, where I'll elaborate on Private & Public. The Private & Public business within NNIT consists, again of 3 areas: Enterprise, Public and Finance. The total P&P revenue decreased to DKK 310 million, down 1.3% from Q3 '20. The Enterprise segment, including scales, saw a revenue increase to DKK 179 million, up 9.1% from Q3 '20. The increase was partly due to the contract with new customers, amongst others, Saint-Gobain, and much driven by the growth within the SCALES business. Within the Public segment, Q3 '21 revenue decreased to DKK 68 million, down 25% from Q3 '20. The decrease was driven by both reduced project activity as well as service labor agreements in the quarter with projects being moved to later date. Within the Finance segment, revenue increased to DKK 63 million, up 6.8% from Q3 '20, stemming from increased project business. Overall, operating profit before special items ended at DKK 1 million constituting an operating profit margin before special items of 0.3% compared with 1.2% in Q3 '20. This sums up the trading performance. Please turn to Slide 15, turning to the balance sheet on Slide 16. Total assets on September 30, '21 increased to DKK 2.881 million, up DKK 427 million from DKK 2.454 until September 30, '20. The increase related to intangibles following the acquisitions of both Excellis and SL Controls, partly countered by decreases intangibles and impairment of leased assets. Net cash and cash equivalents amounted to a negative DKK 332 million, down DKK 232 million from September '20. The decrease was mainly driven by payments relating to acquisitions, payments of ordinary dividends, partly counted by cash flows from the operating activities. Equity on September '21 amounted to DKK 1.135 million, up DKK 1 million from September '20. Now let's move on to the cash flows. Please turn to the Slide 17. Free cash flow for Q3 was minus DKK 145 million, and DKK 152 million below 2020 in the third quarter. The working capital was negatively impacted by payments to Care Fund compensated by COVID-19 loans. And in addition, free cash flows, of course, is impacted by the before-mentioned acquisitions of subsidiaries. Now let's move to the backlog development and full year outlook, turning to Slide 18, and moving to Slide 19. At the beginning of Q4 '21 NNIT's order entry backlog for '21 amounted to DKK 2.79 million, up 3.7% from last year. The backlog from Life Sciences, excluding Novo Nordisk, increased by 40%, driven by Life Sciences international and positively impacted by the acquisition of Excellis and SL Controls, while Novo Nordisk Group declined by 14%. The backlog from P&P decreased by 5.3% when comparing to last year. Now let's move to our outlook for '21, turning to Slide 20. The overall '21 guidance that the NNIT Group is maintained, leading to no adjustment to full year guidance of 1% to 4% revenue growth. The '21 guidance in relation to operating profit margin before special items remain around 5%. Finally, the '21 guidance on CapEx investment level is kept at 5% to 7% of full year revenues. Turning to Slide '21, please. Please turn to the closing remarks. As stated earlier, we are happy to see that we continue to see strong growth within Life Sciences' steady growth within our Winning Solutions. And we are optimistic that we can solve the challenges we are facing, particularly within the Public segment and our infrastructure operations. Finally, we maintain our financial guidance, as mentioned, to '21. Operator, we are now ready to turn to the next slide and take the questions. Please turn to Slide 23.

[Operator instructions] Our first question comes from Poul Jessen with Danske Bank.

First question goes to you, Par. I know that you have been the 4, 5, 6 months now, a month, what you see and the challenge you trigger? Do you see that larger as expected or better-than-expected when you started and what you see now?

I would say that the net is definitely positive. I mean, I detected quite early based on activation, there were opportunities, and there were some challenges. And I would say that the opportunities are definitely larger and more promising than I saw from the beginning. I mean -- and of course, it goes mainly into our International Life Sciences business. I've been now out traveling in Europe, meeting clients, seeing operation, meeting the people. And I mean -- and then you really get a sense of what we are really -- what the value is really provided to the client and what persistence we really have with the clients because it, first, when you meet the client and discuss with them and really understand our position with them. And I'm really optimistic about where we are today, but also about the potential within that business because I think we have a great potential to actually do -- increase our cross-selling of different services among clients, and to improve that. And then, of course, we also need to even do better on gluing together our delivery model because we are now really a full-service house within IT services for the Life Sciences industry. On the other hand, there are challenges which is very obvious, looking at our numbers. And those -- I mean, it's quite obvious that we need to address those, and we have actually -- there was actions ongoing before I started here. And -- but what I've done is I've actually strengthened some of those actions because products address challenges. And part of that, you see, for instance, in special items that we've done the restructuring program during the quarter to actually address the production cost. And I think we have a very clear plan going forward, what we need to do. So I would say what looks good from the beginning looks even better, and the challenges are pretty much in line with what I expected.

And coming to the restructuring cost of the DKK 23 million. Can you put some more color on what actually -- what actions has been taken in the quarter and what they cover?

Yes, it's a very good question. I mean, we are a people company. So when we take restructuring, it's a very large degree. We're talking about people that, unfortunately, need to leave the company. And that, of course, I regret. But looking from the kind of composition of that restructuring, it's a mixed bag, both from a geographical perspective, we have been addressing the issues here in Denmark, but also in some other geographies like China. But if there's anything I could add in flavor to that, that it's been mostly focused on our infrastructure operation.

And what kind of functions have you been reduction -- reducing?

Well, actually, it is 2 things. It's firstly, production costs, which is one thing, was obviously, and mainly in infrastructure, but it's also addressing all our SG&A costs because, I mean, when we have part of our business that are shrinking, we also need to shrink our administration costs. So part of the reduction has been actually in Finance and in sales, marketing and all those function as well. And that is, of course, is always painful, but we always need to make sure that we have a good composition also of our support costs.

And what kind of color annual cost savings plus the DKK 23 million end up in? And when will they be fully implemented?

So it was -- these restructurings happened at the end of the quarter. So you don't see them in this -- and the program is also slightly ongoing. So it's not only this amount that you can rely on for the going forward as we are looking to separate the businesses with the infrastructure.

Do you have an indication of the quarterly run rate we are talking about when implemented?

I have to tell you that it's under development at the moment this. So it's something we will come back with in terms of run rate.

And the ones you announced in Q2, the DKK 63 million, part of that was rent. How much is that impacting the third quarter?

So that's a little bit up and down because we both had -- we have definitely had, give or take, approximately DKK 10 million of savings in the quarter following all of that work. But at the same time, we have had an impact by the price decrease from the Novo Nordisk Group, basically evening that out. So you don't see a lot of it. It's not very obvious in the Q3 accounts.

Final question for now about Winning Solutions. You have a growth of 25%. Do you have a number for the organic growth in Winning Solutions?

Can I come back to you with that?

Our next question comes from Mads Quistgaard with Carnegie.

I have a few questions as well, and I will take them one by one. So the first on the Public sector, which declined 25%. What is sort of the moving parts here? Is it a postponement of tender activities in Denmark? Or is it based on the lower win rate in the Public sector?

I can maybe put some flesh on that one. I think what was done early this year, actually, that we -- the Company became a bit more cautious about some of the ongoing bids, at least in the Public sector, meaning that we did not win or did not want to win some of those deals, which has translated in a lower revenue in that sector. So it's at least, partly a conscious decision not to participate in some tenders because we are not interested in the bottom -- top line that doesn't produce the bottom line. So that is one reason. But I cannot resist mentioning going forward, I mean, the pipeline and the opportunities looks better going forward also with these where we foresee opportunity to actually produce a good bottom line as well. So going forward, I think the market looks better. But historically, we have largely chosen not to bid for some opportunities because we didn't see the opportunity to bring profitable business.

All right. And then on desperation of the infrastructure business, can you say more about timing today?

Yes, I can say so much that this is a process that started already last quarter, actually in the summer, where we detected the need that -- that was actually one of my first observations that we really need to take -- make that more obvious, and out of 2 reasons. Firstly, internally, to make sure we have that fully transparent in internal privatization, so we can really see how that business is developing. Of course, already before, we had pretty good IT, but we needed to have -- provide more clarity and transparency to that. But also for you, investors and the outside world, we wanted to provide more transparency about how the business is going. And from a timing perspective, we expect that in 2022, we will provide that visibility into the performance of the infrastructure operations. So it will continue during the fourth quarter, and we will be concluded until year-end.

And then you're talking about sort of a higher appetite for M&A activities within your International Life Sciences. So what should we sort of expect in the future? Would it be 2 acquisitions per year within ILS? What is sort of the ambitions here?

Well, it is the kind of -- I noticed one thing that it has been during the last 5 years, we made one acquisition per year. And I think that's more like a coincidence that it has just been one per year. And what I've been saying is, we don't have any rule of law that it should be one per year. So we are constantly looking for acquisitions. And I think you can foresee in some years, maybe more than one, but in some years, maybe none. So we are constantly looking for new M&A opportunities, and I have personally spent quite a lot of time on that topic. Pernille?

Yes. And just to add, there, it is not only in terms of -- I think, even more importantly than the number is the size. So what we would like acquisitions to be is a bit more sort of game-changing so that we can move slightly more over to International Life Sciences quicker. So that's what we are looking at in our process.

All right. And then my final question here is to Pernille, I guess. Your CapEx to sales ratio, excluding acquisitions, you keep it unchanged for the year. But based on the 9-month performance, which was quite low, I guess you should intensify investments into quarter 4. Is that a fair assumption?

Well, it's a completely fair question, as usual, coming from you. So it is -- the investments are slightly lumpy. And there are some investments that we foresee that we are going to have to do in the fourth quarter. And that's the reason why we have kept it at that level.

Next up, we have this follow-up from Poul Jessen, Danske Bank.

Coming back to the previous question about the Public sector projects. And you said you had walked away potentially because you thought that profitability was too low. Was it the pricing of the projects? Or was it your cost base that were too high so that you couldn't make money on what somebody else actually were able to do?

I think...

Or challenge is you have is to lower your cost base?

Yes. No, I think it's a combination of the 2, to be honest. I mean, in some in the bids, we were actually in the bid until the finish line, but we lost on price. And I think the reason for it is actually a combination that we've had a too high price level in part of our operation, which has partly been addressed now during the quarters. And partly, it was that -- I mean, it's a competition out there. And sometimes, somebody is willing to take a high risk in some bids than we are. But partly, we need to fix that we can fix, which is both our production costs and make sure that our offering is appetizing for the client, and we are working on both activities.

It's partly the reason, Poul, for also separating the infrastructure out to be super clear on what the cost base is and what our service offering is and all of that, and therefore, being able to price better and in that process, we -- as Par says, we become quite clear on elements that we were not clear about previously and therefore, shy away for certain bids.

I guess that there is potential for further restructuring costs in the coming quarters. Do you have an indication of what level of numbers we should look at? When you're done by doing restructuring?

What I can say is that we are in this final quarter of the year, establishing the plan. So therefore -- and therefore, settling, as I said before, on both levels of benefit and levels of cost. And that, of course, we are then going to communicate and track on. It's just too early to do it now. There will be too much variation in it.

Then my final question comes to the balance sheet. If I try to calculate your net debt to EBITDA, including contingent liabilities and leasing, then I get to a net debt to EBITDA of about a little less than 2. And if I include your factoring, then you get to 2.5. And at the same time, you talk about doing acquisitions.

Yes.

So question one is, do you have the resources to do acquisitions right now seeing from a balance sheet point of view? And what kind of covenants, if any, are you looking into?

So the answer to that is we're not going in there without having checked out the funding. And at the moment, I'll say our multiples are, of course, also impacted by our current trading levels, which we don't expect to sit there all the time. So we have -- we definitely have free capacity to go and acquire and have that verified with our banks. But then, of course, we need to make sure that the whole picture will be right in terms of trading versus debt that we are fully clear upon. I don't know whether that was too rounded. But the answer is yes, we do have the funding.

That was the main question. If you had agreements in place to do it.

Yes, we do.

In the topic on Private were the profitability breakeven? And I guess that a company like SCALES is quite profitable. Then you are having a very decent loss in the Public & Private. Is that going to be solved mainly through cost cutting? Or does it also require that you start accelerating the top line?

It has to do -- this has quite a bit to do with the capacity usage, as you could imagine. So within part of our business, within, in particular, infrastructure, we need to make sure that we utilize our data centers and are manning in the right way. So it has partly to do with that and therefore, top line and getting the capacity filled, and partly to do with making sure that we are efficient, both in terms of service offerings and automating part of that business. So it's is several things, but quite planned.

Yes. And just to add to that, I would say, I mean, our strategy is not to shrink ourselves. That's not -- that's part of the solution, but it's also to lead new deals. And it starts with that you have an offering that provide value to the client. And I think one, [indiscernible] that you're on the right track and how is your pipeline looking? And without going into the detail of that, that if you see a positive development in the pipeline where the clients like our offering. But then, of course, it's about to close the deal. That's another story. But I think we are at least positive in that aspect.

[Operator Instructions] Our next question comes from Yiwei Zhou with SEB.

I have 2 here. Firstly, maybe a question to Par. On the acquisition strategy, could you maybe put a bit more color on sort of what challenge have you experienced? And what have you learned over the past in integrating the acquired companies? Yes. I'll do one at a time.

Yes. Very good question. Thank you for that. And I'd like to start with. I mean, I've been working a lot with M&A during most of my career actually. And coming to NNIT, that was one of the area I was very interested to see how the strategy is there in place. And it's definitely been an area where I have been impressed by the kind of strategy we have with cautiously integrated the companies and focusing on companies that really have core competencies around our clients' core business processes. So I think it's a focused strategy. We, of course, like to buy bigger companies but if in the choice between a large company, which is a mixed bag and a smaller country -- company that is really on target. We always choose the latter. So that's an important one. And the second one is the whole integration process where we cautiously integrate them into the company. There is not one size fits all process. It's depending on the content and the DNA of the acquired companies. We integrate them slowly into our company. So I think it's a work in process. I think we have -- we are prudent in the process to make sure we avoid the mistake. And I must say, just looking at the 5 last acquisition that has been made, I think it's been very successful. And I think it's -- the whole process is cost effective. And looking forward, I think we have a quite good portfolio of targets, where we hope to speed up the process in term of number acquisition, but we prefer to wait if we don't find the right one.

And my next question here is the -- regarding the lower margin in Life Sciences segment. So what I understand is, I mean, you're always negatively impacted by the loss of Novo Nordisk revenue, which now may carry a higher margin. But one, you have a high-growth in the International Life Sciences, which also carries a high margin. This should somehow sort of offset each other. But what has been sort of main reason for the margin decline in the quarter? Could you elaborate a bit on the dynamics here?

Yes, I can do that. The dynamics are -- there is the kind of quite significant dynamic in the fact that the Novo Nordisk agreement carries a lower margin. That does have quite an impact. And also an impact that isn't fully compensated by growth in the International Life Sciences business. In addition to this, this margin development has to do with the comment or the question that Poul also asked, namely the capacity usage within part of our business where there isn't a full use of capacity. And that impacts both the Life Sciences business and the P&P business. And year-on-year, the capacity usage is lower. So that is basically it.

Maybe can you confirm that the margin for International Life Science business has been stable year-on-year in this quarter?

So the International Life Sciences business, absolutely. That is going full steam ahead as it has.

And you have not had any dilution from the acquisition you made. Please confirm, also.

Yes, I will hereby confirm.

We have a follow-up question from Mads Quistgaard with Carnegie. Just one question from my side. So Par, you're talking about acquisitions comparing larger to smaller ones. So if you look at the pipeline today, what is of the multiple difference between a larger acquisition targets, which fits well into the core of NNIT, and then the smaller ones, you have already acquired some smaller ones where you can see the multiple differences, but what is sort of the difference between the 2 target groups here? And what is your overall definition of a larger company?

That's fine. I think I'm just going to step in and assist a little bit on this. So to us, a sort of a smaller -- well, not a smaller, but what we will target as a norm is up to DKK 200 million in revenue. And acquisitions above that are what we, in this little company, define as larger groups. In terms of a multiple differential between the below the DKK 200 million and the above, the interesting part is in this -- in this segment is that the differentiator is maybe not enormous. We are actually also seeing quite some multiples on the smaller acquisitions, as you can see in history. But if we go into quite some larger businesses that fit exactly within our space. Then the multiples do tend to be higher. But there's not sort of a specific formula in terms of multiple differentiator between -- below DKK 200 million and above.

And I think if you can add to the acquisitions we made, I mean, I think the owners and the present management has continued in the company. So that has been a kind of a sweet spot for us, so to speak, that we've acquired companies where the present management/owners want to scale up. They want to take the smaller company into larger context to win more deals and to develop the company, where they are able to maintain a quite high level of local authority while we work together on the larger bids. So I think that's an important one that when they are selling their company, they are not just going for the highest price. They want to really -- that the company is being good -- taken care of, and they want to continue to work themselves.

So that's a very important additional angle in it. But when doing your modeling as well, we are going to be very careful in terms of the multiples we are paying both when it comes to larger acquisitions and the sizes that you're currently looking at, but there will be some premium on size, as you know. We just can't sort of say exactly how that's going to impact.

We have a follow-up question from Yiwei Zhou with SEB.

A question regarding the labor market. I remember you mentioned previously, you have the challenges to hire IT consultants in the International Life Sciences segment. Have you seen an improvement in the labor market?

I would say it's fairly stable. I mean you need to have a good story to the market because the supply and demand is one thing, but your position as a company to be able to attract the shortage market, so to speak, there, we are improving. I think while we are growing our International Life Sciences business, we are considered to be an even more attractive as a company to work for. But I mean, if you're talking on the supply side, I would say, it is fairly stable. There is a shortage of competent people up there. But if you are sharpening your offering to them, you will be able to -- still be able to attract them. So yes, we would like to recruit even more people, but we see a constant inflow of high competent people. So we don't see that as an insurmountable obstacle, but yes, it is a challenge.

There are no further questions. I hand back over to our speakers.

Yes. Let's then move to the final slide, which is Slide 24. So this concludes our conference call. Please note the deadline on January 25 '22 for the NNIT shareholders to submit resolutions to be considered by the AGM. Besides of that, thank you all for participating in today's webcast. Feel free to reach out if you have further questions. Thank you.

Thank you.