Relais Group Oyj (DS9.F) Earnings Call Transcript & Summary

Good morning, everyone. Warmly welcome to follow the webcast presentation for the Relais Group Half Year Financial Report live from Helsinki, Finland. My name is Arni Ekholm. As most of you know, I'm the Group CEO, and I have the pleasure, together with Thomas Ekstrom, our Group CFO, to walk you through the first half-year results and the quarter two results today. A solid performance. All-in-all, I'm not only referring to the quarter, but also to the first half year and even the strategic period that is about to end this year. Today, we will go through the short details of the quarter. Although in my review, I'm taking more of a perspective from a strategy point of view, what have we achieved during this strategy period, and what are the, let's say, the basis for the coming period? It was a very stable quarter. Hence, there is not too much need to go through the commercial details. But maybe on the balance sheet side, there are some movements, which Thomas will explain in more detail in his financial review. So I want to save some time for him. And then, of course, to have a lot of questions at the end. And then a short summary of the events after the review period, and then a summary of the presentation, what is Relais Group as an investment.   I really love this slide. I mean, it tells the growth story of Relais Group, founded in 2010, having a very modest turnover, just presence in Finland, EUR 24 million turnover and then gradually growing organically and then more actively starting the, let's say, the strategy based on buy and build and compounding when we were introduced in the stock market in 2019, when the IPO was carried through. And you can really see the acceleration of the growth pace after 2019. I joined the company 10 years ago, more or less bang on in mid-September 2015. And the company has grown since turnover-wise, the track at the moment runs rate, over EUR 400 million turnover, approaching the EUR 50 million strategic target on the comparable EBITDA. We have bought well over 20 companies during the last six years. So we are really delivering what we have promised to you as shareholders. And I'm really proud of my teams, and I want to also here thank everybody who has been part of this journey and will continue being part of this journey, and also welcome the new members in the family. As you can see, there are a lot of flags, mostly Nordic flags, but also some new members from the Benelux countries, which I'm really happy that we have been able to open this bridgehead in Europe. So all-in-all, a very convincing growth story, profitable at all times. So I'm really super happy for this development. And again, really proud of you, my team members.   How does the group look like today? I mean, it's an evolving story. As you will see from Thomas' presentation as well, this is, in a way, a kind of breaking point where we have made a lot of strategic acquisitions, which are not yet reflected in the profit and loss statement, but are reflected in the balance sheet. Similarly, the newly acquired companies are not yet fully reflected in this percentage-wise split of sales. So that will change towards a more, let's say, weight on the commercial vehicle side.   Based on the first half-year numbers, you can see that the heavy commercial vehicle repair and maintenance business is approaching 40% and the rest is 60%. And then the 60% can be divided into two. And those of you who have seen this presentation before will have noticed that there are quite a lot of new logo types that have appeared on the spare parts side. You can see Lastvagnsdelar in Norway, a really well-established specialist wholesaler for heavy commercial vehicles joining. So welcome team, [Evli D]. And then on lighting and equipment, the bridgehead that I mentioned in the Benelux and German markets and Central European markets, Matro has actually three companies in the Benelux countries. So again, welcome for the Matro Group people as well.   AutoMateriell and Nordic Lift, which we already acquired a year ago, in a way, are still newcomers. So I want to still maybe extend my welcome to them as well, and the team Bergstrand people, of course, in Norway and Sweden. So that was a big strategic move we made. A lot of good companies are joining, which bodes well for the future of this company. So commercial vehicle repair and maintenance, we have companies with different concepts and different logos. Of course, we are looking at synergies from that perspective as well, not only functional synergies, but maybe even marketing-type and identity-type synergies, but more of that later. So all-in-all, 60%-40%, that's maybe a good thing to remember, and then also how the 60% is split between spare parts and lighting, and equipment, each having a different type of market. And I also think that this is a good way to derisk the company. It's fairly diversified. And also, as I've said, as we are focusing on the aftermarket, it's a more defensive market, and more of that later.   Just to summarize, what did the acquisition of Team Verkstad in Norway actually mean? It means that now we have gone in five years from 0 to 61 workshops. And actually, the two workshops that we have announced, having been acquired in Finland, Eastern Finland, will make that grow to 63 workshops. So, according to our estimate and the data that is publicly available about the number of fully owned workshops, we consider ourselves to be the biggest operator of independent commercial vehicle workshops in the Nordics. So we have a very, very strategic coverage, and we are not stopping there. So if you think about our acquisition strategy on the previous slide, maybe I just jump back there, you can see the technical wholesale and products, and then the commercial vehicle repair and maintenance. So, from an acquisition point of view, you could say that on the technical wholesale and products, we are a selective acquirer. We are trying to find the exact right puzzle pieces that will complete the picture. And on the commercial vehicle repair and maintenance, we are equally as picky, but it's more like a roll-up case. So we can still roll up and find new workshops in the Nordic countries to make the company grow. So there's still a lot of runway for the company to grow.   Good. Then a short look at the quarter two and the first half year, a solid performance. All-in-all, as I said, it is continuing and not only the quarter, but the first half year. There was a tough comparison, of course, in quarter one was very strong back in '24, and also quarter two was strong. So with that in the back of our heads, I have to say that I'm really, again, proud of the teams and the performance they have done together. And as I mentioned briefly, we are predominantly focused on the commercial vehicle aftermarket. And by nature, it is more defensive and less sensitive to cyclical movements in the economy than many other vehicle and mobility-related businesses. So why is that? I mean, if you think about commercial vehicles, that's usually the main source of income for the owner of the vehicle or the fleet. And they need to be running even during weaker economic times. And there's a lot of transport going on. Construction is picking up, and critical repair and maintenance, you just can't postpone it too far. I mean, otherwise, you stop making money with your vehicle. So it's a difference between commercial vehicles and the passenger car, where people can choose maybe to ignore the warning light on the instrument panel, but here, you can't. I mean, you have to fix them.   On top of the defensive nature of the business and the market, we can also do targeted and successful acquisitions, as we have done, and we can accelerate the growth of the company over a business cycle. So there's a good amount of workshops that we are talking with and owners at the moment, and a good pipeline also on that side. So we are not stopping here.   A short look at the numbers, plus 12% growth. Thomas will comment in more detail later, and you can find all the details in our published report, mostly coming from the acquisitions. Comparable EBITDA grew by 3% on a quarterly basis. So we are tracking a little bit behind on the first half year because of the heavy quarter one comparison. Okay. What happened with the EPS, mostly relating to financing costs and actually mostly to currency rate changes, which do not have a big cash flow effect from that perspective. So Thomas will dig deeper into those. But if you look at the first half year, we are tracking plus 5% on the earnings per share, which is very good. ROCE, 12.7% return on capital employed, which is an important metric for a compounder. And of course, we aim higher. So constantly, then, of course, we are focusing on getting this number higher, but it's good. And return on equity, 12.3%.   I mentioned the strategic acquisitions we have made. And if you think about the strategic period that is actually ending now at the end of this year, I think we, as a competent compounder, are sector-focused, and it's very important for us. Of course, we would not be a compounder if we don't manage to buy companies And to manage to buy the companies, you have to have a good pipeline at all times. Hence, we are contacting a lot of companies and owners. You need to have a good pipeline of companies. Otherwise, the strategy doesn't work. But perhaps more importantly than that, I mean, you can collect data and you can have a theoretical pipeline, but you really need to keep these people warm and the discussions alive. But also, we need to be able to execute.  And I think we have a very good process. We have increased resources on our acquisition teams, and also the operational teams are in charge of producing targets for the pipeline and negotiating with the support of the central team. So I think we have managed to find companies that have a strong strategic fit and good value creation potential for the group. And the execution, the power to execute, is really crucial for a compounder.   We are determined, we are disciplined. And what do I mean by disciplined efforts? It means that we aim to be very precise in the valuation of the company. So that is very important from, let's say, the logic -- earnings logic of the company and value creation point of view for the return on capital employed. We are allocating capital. That's our job, and we are trying to find targets that fit strategically well into the company, are in good shape, and can add something to the party. But we should never overpay. We should pay the market price. And that is the secret sauce, I would say, to find the right balance of the price where the seller is happy and we are happy.   What are the strategic acquisitions we have made in a disciplined and determined way? I mentioned the Matro Group. Why is that important? I mean, it gives direct access to the European truck accessories business, which is growing. I mean, we have just scratched the surface. It also gives us a distribution channel for our existing products.   Then, a huge strategic leap on the commercial vehicle and repair and maintenance business, Team Verkstad in Norway, and the wholesale company, Lasmangstellar, really increased our footprint in the Norwegian business. And we already have, Thomas needs to help me out here, but we have, let's say, hundreds of people employed already, I think, approaching 400 in Norway. And really, a remarkable part of our business is coming from Norway. So, having also lived a couple of years in Norway and worked there. So I'm really happy to have that part. So it's only Denmark missing from our map at the moment.   Then, further on the commercial vehicle repair and maintenance business, we made a deal with Vettery Group to buy a couple of strategically located authorized workshops in Eastern Finland, and we are expecting to be able to close that deal during the third quarter of this year. And again, I'm really happy to have new members joining the team. increasing our coverage, both from a brand point of view for the vehicles, and then also geographically.   So all in all, if you think about our EUR 50 million target, these will add, looking at their historical numbers, about EUR 11 million to the EBITDA of the group on an annual level.   So the EUR 50 million target, originally, if we rewind a bit, when we were introducing the stock market, our first target was to double the turnover from EUR 120 million to EUR 240 million in 5 years. We managed to do it in a couple of years. We changed the target into a turnover target of EUR 500 million by the end of '26. Then we felt that it's more accurate, maybe to give a profit target. Hence, we changed it to EUR 50 million by the end of '26. And then we changed it a couple of years ago to EUR 50 million by the end of '25. And I bet many of you in the audience maybe thought that you're crazy, it's way too ambitious, and you're not going to be able to make it. But here we are.   Of course, I mean, you have to think that the acquisition pace, when you do bigger acquisitions, you can't always predict them. I mean, they come when they mature. I mean, with Team Versted, the owner group, and we started the negotiation 3 years ago. So you can't really plan that, but we have a solid belief that we have a good pipeline, and our ability to execute is strong. And looking at the track record and looking at the pace now, the run rate, this is fully reachable with, of course, some organic growth required for the back half of the year.   What about the next strategy period? As I mentioned, the current strategy period ends by the end of this year, and there will be a new 5-year plan. We are actually next month already starting to review the objectives and targets, and strategy, and we'll make a solid plan for the next strategy period, which starts January '26.   Now it's not yet the time to communicate anything about the targets. We will do it in due course once we have gone through the strategy process because it goes hand-in-hand with setting the targets. So more to come later. How does the outlook for the rest of the year look like? I mentioned that the markets were fairly soft or even weak in, I think, April, May, especially where there was a lot of uncertainty in the market. June started to pick up. And now I think July is already quite encouraging.   I usually avoid talking about macro indicators, but basically, Finland has been the market that's been suffering the most from the economic environment, and that's actually quite puzzling because many of the macro indicators are very positive. People have money, but it's in their bank accounts, and the inflation is low.   So we have some positive signals that we are getting from our customers. The wheels are rolling, but let's see how it pans out. But anyhow, I mean, it doesn't seem to get darker than it has been. And as I mentioned, bear in mind, commercial vehicles are not as discretionary as passenger cars. They need to be up and running. And we have a large geographical coverage, both with our workshops and with our wholesale operations. So we can really support our customers when their fleets are back in business and running efficiently in the back half of the year.   We have also seen some positive signs for the demand for spare parts and equipment, both in the Nordic and the European markets. And now we have, as I said, direct access to Central European customers, which gives us a much wider area to sell our products to. So with that in mind, we feel that we have all the possibilities to successfully pursue the strategic objectives also during the second half of this year.   So with these words, not yet going to Thomas, so bear with me for 1 minute. I just want to recap what we announced during the first half year.   Firstly, I decided to use the option to retire next year, which we have announced. And having said that, of course, I will support the company as long as it takes in the transition period. So you do not need to be worried. We will find a new good CEO, and I will support and then move on to more advisory and Board-type of positions later in my career.   What I wanted to take here, not to talk about myself, but more to recap that we did make some changes to the allocation of responsibilities. So Johan, who is in charge of Strands, is now in charge of the development of what we call the products and brands business. So the work he has done on Strands is remarkable. And we, of course, see that he has all the possibilities to do the same with other brands in the company. So he will be in charge of the Matro Group and possibly other business areas or businesses in branding in the future.   Thomas continues as CFO. Juan, who is solid as a rock, has done a super job in the wholesale and is Mister wholesale and spare parts. He is having a more focus on the technical wholesale in the future and also having responsibility across geographies. This is all across geographies. So he's heavily involved in the Finnish spare part business at the moment as well.   Jan, who has really done a terrific job on the development of the repair workshops with the workshop excellence program and really made a huge lift for Raskone, is now doing the same for the rest of the commercial vehicle repair maintenance companies, and he is in charge of developing that business.   Sebastian successfully made a lot of M&A this year. So thanks for that, Sebastian, is continuing on that role. And Juri has also really, really shaped up our processes and, let's say, governance and compliance part. He's done a good job also on the HR side. So we have a good roster. And not to forget anybody, there are other people in the management team as well who are supporting us.   So this is really one point I still want to make. Juhan, Juan, and Jan are also in charge of demanding the pipeline to feed the pipeline and also to negotiate with acquisition targets with the support of Sebastian and myself and Thomas.   So, finally, Thomas, the stage is yours.

Thank you, Arni. Good morning, everyone. All right. As is already evident, the quarter was pretty much flavored by acquisition-based growth, impacting both net sales and EBITDA. But other than that, we also had a stable development in sales in Technical Wholesale and Products, and had a bit of lower sales in repair and maintenance. So in that sense, all in all, organically quite a stable quarter, net sales-wise, and big support from acquisitions.  EBITDA, as Arni said, was really stable, added by and supported by acquired companies, both acquired in '24 and also acquired now in June '25. And in addition to that, we are always facing the issue that we have a lot of non-Euro-denominated companies. We have a lot of exposure in Swedish krona and now also in the Norwegian kroner. And now in this quarter, we have had a EUR 200,000 support translation-wise from the currencies. But in the big picture, it was quite a stable quarter.   Also, the stability shows in gross profit and gross margin. We, of course, added gross profit due to the acquisitions. But when you take out the acquisitions, the organic development in gross margin was fairly stable all in all. But then, of course, now when we add more and more weight from the repair and maintenance business due to the acquisitions, which have a higher gross margin, which also then gradually will improve the group's average gross margin. But that will kind of swim in during the coming year. Expenses, the same thing here. The increase was driven by acquisitions. Otherwise, OpEx as a relation to sales was stable, excluding acquisitions. So no surprises here either.  And then we go a bit outside the income statement, looking at the net working capital. And here, of course, we had a big, increasing impact from the numerous acquired companies. On the net working capital level, we added about EUR 14 million from predominantly Norway due to the Verksted Holding acquisition.   But also, as you know from the first quarter, we had slower spare part sales in Q1, and that has still impacted the Q2 inventory levels, keeping the overall net working capital at a higher level than last year. And then also one component not to forget, at the moment, we don't have any dividend payable that we had at the end of last quarter.  As last year, the AGM also decided on the second tranche of the dividend for the fall. Now that is subject to a separate decision. So we don't have that payable now included in the payables. So inventory turnover-wise, network turnover-wise, a bit slower development here also, of course, also mathematically impacted by the acquisitions as we added the full asset load on these measures, but the impact of net sales is only 1 month.  Then, going into cash flow and cash conversion. And here, we also see that EBITDA, of course, was stable. No impact on the cash flow from that. But then the development in net working capital, as it was negative, then it impacted negatively on the overall cash flow from operations. Then one thing to highlight here that also impacting the cash flow is that the change in net financial items.   And as mentioned, the FX differences are caused by our krona-denominated external loans and then the internal krona-denominated higher receivables. And when the krona fluctuates, we always have an impact on that on the P&L. But now also, as we paid off a big chunk of the krona loans in Q1 and then refinanced that with the new SEK loan, that caused the exchange rate to realize as a loss in the first half, but that came from Q1.   So basically, we have a lot of these other impacts that only affect sales and profitability. Here, in the big picture of the cash flow statement, you see that the investing activities on a net level were about EUR 22 million due to the acquired companies. And then we raised a bit more through the financing activities that we had. And the difference here also, we used the remaining funds that you see here for the acquisition and the payment of the Matro Group in July. So that hence, the difference between net financing raised and investing activities cash flow out.   A bit more digging into the changes in the financing agreements. As we mentioned in the Q1 report, we refinanced all existing term loans and renewed our financing agreement at the end of March. And then we also had to finance the Verkstad acquisition, so we implemented a bridge loan. We signed it in April, but the facilities were used in June to acquire Verkstad.  And to add on to this, we see that here are the funds flows that you see that as I said, we raised EUR 110 million, divided in about EUR 35 million in krona loans and then EUR 76 million euro loans, and we used that then to pay off the old SEK euro-denominated loans, adding about EUR 18 million then to firepower for future acquisitions, and that was then used for the Matro acquisition in July.   And then we have here also details on the bridge loan. And then you can also find more on this in the interim report. And to highlight also that related to the AB Verkstad acquisition, we also paid off NOK 190 million of existing loans that were part of the transaction. So we paid about EUR 20 million for the shares, and then an additional EUR 16.5 million we paid off existing loans. But more on this, of course, will also be in the interim report.  Here, you see a picture. And this graph basically tells how big a jump and change this has been now these latest acquisitions to the group's funding position. We see that we have added about EUR 40 million in lease liabilities now coming mostly from repair and maintenance workshops, and we have really a lot of locations in key strategic places. So that's really a big change here. And then, of course, the added interest-bearing loans that you see on the blue line here.

Yes. Just wanting to highlight for people who are not familiar with IFRS, how it handles the lease agreements. So the blue part here is the lease liabilities. And of course, since we have over 60 locations, it will have jumped and it has jumped up. But also bear in mind, this is an asset and hence, it is of course handled as that in the IFRS. We are dependent on having strategic locations with long lease periods to be able to serve our customers. So we consider this a strategic asset. But of course, the optics, according to IFRS, I mean, you can see the big jump, but it's strategic as well. So bear that in mind.

Exactly. So that was basically a bit more deep dive into the funding part. And you also see here that at the end of Q2, we had approximately EUR 20 million in cash. And of course, about EUR 15 million, EUR 16 million of that was then used for Matro at the beginning of July. Additionally, we have uncommitted facilities of EUR 20 million. So all in all, we have about EUR 44 million in liquid funds and unused credit facilities. And then we then go back to the P&L and then the net financial items.  And as we all know, overall reference interest rates have come down for a long time. That has, of course, reduced our interest expenses on loans. But then, on the other hand, now that we have added new businesses and new leases, we have again increased interest expenses on lease liabilities.?  But these have been fairly predictable. But then we have the FX change impact, and I explained that before. But now there are 2 components basically in the first half of the year. We have the normal fluctuation of the krona and the imbalance between external SEK loans and internal receivables, and then, of course, the second one was the, as I mentioned, we paid off the old SEK loans, and there we had realized EUR 1 million extra impact. But that is now a one-time impact, not coming.?  So in that sense, we had overall net financial expenses in Q2 of EUR 4.4 million, negative against EUR 1.7 million last year. But these came predominantly and all from the change in these FX impacts. So important to keep in mind. And then when you look at the cumulative level, it was quite flat, but a lot of movements within the components.  Balance sheet items overall. Here, we see the big jump in total assets, a EUR 100 million increase there. And of course, then also a bit less increase in interest-bearing net debt. Gearing also impacted the equity ratio.?  And then also what is key to look at is perhaps a bit longer-term targets and measures. Our return on net working capital came down a bit, and that was pretty much impacted again by adding net working capital from the acquired companies all at once. But in the turnover component and in the return component, we added only 1 month of, for example, Norway Verstad. So this will gradually then be more comparable as we go forward.?

Thanks, Thomas. Then, over to just a short summary of the events after the review period. We also did a small acquisition, which I didn't mention in connection with the strategic acquisition, Autodial Sweden AB, a very well-established local distributor of spare parts and equipment. So also warmly welcome Rodelar people to Relais. Then the Matro Group finalization of the 70% shares, and also announced the acquisition of 2 heavy commercial vehicle workshops from Vetter Auto, which we announced after the review period.?  Then soon coming to an end in this presentation, Relais Group as an investment, what are the main characteristics of Relais as an investment target? As I have explained, we are a competent compounder. We know this business. We have a lot of contacts, we know what's there in the market to acquire. And we have a clear focus on the commercial vehicle aftermarket. It's a choice. It's a strategic choice we have made. And I guess we'll see more and more of that focus being realized due to a stack of reasons, not only the defensiveness of that market.?  I think we have proven our ability to make successful M&A in a highly fragmented industry with significant acquisition opportunities. I mean, it's as well a fragmented market. There's still a lot of runway, as I said. And when it comes to brands and products, we are not only looking at Nordic, we're also looking at other geographic areas. The markets are growing. The number of vehicles is growing at all times. So it's like, there is really no end to the potential on the market. So this is exactly the right choice to focus on.?  The business areas, the platforms are scalable. We will get the economies of scale. As I said, we know this business. There's competence. There's knowledge about the business. We can do sharing of best practices, and it's not only empty words. We can prove that. We have the recipe to run excellent workshops and a wholesale business. There's a strong growth potential in each of these, and also, the branding companies will have a very bright future.?  We have been able to produce a constant and consistent strong growth, also organically, of course, over a business cycle, which may vary. And it has a cash-generating effect. I mean, we have a good cash generation historically and continue to do so over time. And then the way we do business is decentralized. We give a lot of power to the operational units of the companies. This is really important for us to have this entrepreneurial culture and values in the company. Again, this is not empty words. We require a lot, but we give a lot of power to the companies that are part of the Relais Group.?  Relais as an investment, this is based on yesterday's closing share price. Had you invested EUR 1, this is illustrative, of course, when the company was introduced on the stock market. The total shareholder return since IPO is 154%. And also bear in mind, we are beating the Helsinki OMX index with almost 3x, and looking at the amount of money that we have given to you, dear shareholders, about EUR 35 million since the IPO. So it's not an insignificant amount of money. And we still have a lot of runway. As I said, there's still potential to grow. We haven't seen yet the full potential for the future.?  So now with these words, I think Heikki will help us with collating the questions, which I hope from the audience are tough and many.

Yes, they are. There are quite a many, and I believe we have plenty of time to go through all of them.?

Yes, we are here for you.?

Kimmo has 4 questions. I'll take them one by one. How does your cash flow look after the recent acquisitions? Do you still have some dividends to distribute if the Board says so??

I think Thomas can, of course, let's say, talk more about the cash flow. Of course, that's a kind of measure that we follow with each company on a regular basis and forecast. Whether or not the dividend is a discussion and a decision by the Board that will be communicated later. I don't know if you want to comment on the cash flow.?

Yes. But overall, I mean, we usually have the good seasons for the lighting sales in the fall. And we also have add-on inventories and working capital after the summer to prepare for the season in the fall. So in that sense, that will have a positive impact on last year. And then adding on that when we add now new repair and maintenance businesses, they are fairly net working capital neutral or negative. So that should also be taken into account.?

What are your thoughts around the net debt EBITDA...?

Well, of course, from the optical point of view, it looks high at the moment, no going around it because there's this, as I said, a kind of a discontinuity or breaking point when, firstly, you buy a lot of companies, you borrow money and then you have it all on the balance sheet, but the results are not there yet. So give us a few months, and you will see how the result evolves. As we have said, we intend to refinance the existing bridge loan. Bridge by definition, is always a bridge from something to something. And as we have said, we aim to fully or partially replace that with equity or equity-like financing, but more of that later when the decisions have been made.?

How are you going to raise your return on equity percentage closer to 20%...?

That's certainly my hope that we will get there. When we are going to get there, it's impossible to say. But I have used the benchmark of, let's say, the established Swedish compounders, having historically, I mean, you can't really compare because they have a history of tens of years or even 100 years. But we certainly have that as an internal performance bar. It will be great to get to 20%, but I can't say when it's going to happen.?

And then the last one from Kimmo. Are we going to see Capital Markets Day on the last part of '25??

Remains to be seen, and thanks, Kimmo, for your questions.?

Then Joni Anwal from Nordea. You mentioned cautious positive signals in the demand for H2. Can you give any more color on these? And are there differences between markets??

Yes. I think I can add color. It's getting from bits and pieces when I'm talking with my people in the countries of how the business is going, the projects that we are winning, how the customers are reacting, and how they are looking at the rest of the year. It's really a combination of small signals from here and there, might be customers who are moving, giving their fleet to us to serve, might be that we are taking market share, but also the kind of buzz that's going on in the market. I mean, how many questions do we get, and how many preorders? So I wouldn't call it it's not a bonanza or boom, but I mean, we are getting these cautious signals that they are positive.

Joni continues inventories are elevated following the warm winter. How much additional cost are you incurring from warehousing? When could we expect more normalized inventory levels? And is there a risk of obsolete inventories?

I don't really think there is a really cost from a cost or expense point of view, whether we have EUR 90 million or EUR 80 million in the stock, it's still mostly the same amount of persons we have in the stock and the same square meters we have. Of course, we are binding more capital. But as Thomas pointed out, we have about EUR 10 million additional inventory coming with this acquisition. So we still do not yet see the EBITDA or net sales of that. I expect the inventory levels to go down, as Thomas also related to the high season of lighting. We have taken some deliveries earlier this year for the lighting, which is not yet fully reflected in the June numbers. But we had some logistical challenges last year with deliveries, and I think we even missed out on some sales in Finland. Now we have the goods. So I'm expecting the inventory level to come down, and also the net working capital. Let's say we are increasingly focusing on that one. I don't see a big question with the obsolescence. I mean, these types of products are very seldom becoming obsolete, but we follow the depreciation policy that we have, but no surprises are expected there as we see it at the moment.

Do you see any risk of the competition authority stopping your acquisition from Vetri?

No.

And then a follow-up, are you able to comment on more detail when in Q3, you expect to close this deal and see the workshops in your numbers?

Yes. It's hard to really say. There are still some small formalities open, but I should certainly hope that at least at the latest November, we can consolidate. But I mean, it's still a bit open, but the earlier, the earlier, of course.