Sandvik AB (publ) (SAND) Earnings Call Transcript & Summary

Hello, everyone. A warm welcome to Sandvik's Capital Markets Day. We are indeed delighted to see so many of you here that you have taken the time and effort to join us here in Tampere, Finland. And despite the early hour, we hope that you are awake and energized because we have a full packed agenda today. And we will start with the exciting stuff. We will start with the tours. At the tours, Sandvik will demonstrate our leading innovations, our leading offering in sustainability solutions, automation and digitalization. Between the tours and after the tours, we have breaks, so coffee breaks and lunch break. At that time, you have the possibility to visit the exhibition area. And I think you saw that when you came in. Here, you have the possibility to listen more and learn more about our solutions in the before mentioned fields, automation, digitalization and sustainable solutions. And even more so, you have the opportunity to ask all your questions to our great Sandvik experts. After -- in the afternoon, we will meet here again for presentations by our CEO, CFO, our business area heads and other Sandvik employees. So now let's get started. You all have received badges, I hope. Yes, start looking. And on the badges, you have a number, it's actually a capital letter and a number. And behind you, you have the tour guides waiting with a sign with a respective number. So now have fun, and we meet together again at lunch. Thank you.

Hello, everyone. Also from my side, a warm welcome to our underground test mine here in Tampere. It's really great to see so many of you here that you have made the effort and joined us here right now. It was a long journey for some of you. But we wanted to make this not just about PowerPoint presentations. We wanted you to see and experience our world-leading solutions. And I really hope you enjoyed the tour here in the first half of the day. I certainly did and I hope you learned a lot. You saw in the tour and you will see in the presentations coming up here, the future of mining and future of component manufacturing and what we at Sandvik are doing step by step to reach those visions. But again, a warm welcome. Looking ahead, there are a number of global trends that will impact our business, and they are in Sandvik's favor. We have a growing middle class with a rapid urbanization that will drive the need for more metals and minerals. It will drive the need for more infrastructure investments. I read the other day, and I haven't fact checked this, but that 75% of the infrastructure that we need in 2050 has not been built yet. It will drive the need for consumer goods and industrial goods, driving the need for industrial production and manufacturing. Then we have the green transition and the electrification of the world as we move away from fossil fuels. This will drive the need for an increased number of minerals -- electrification minerals. It provides us a business opportunity in our own journey of electrifying the mine, as you have seen here today. It also gives us new opportunities when it comes to, for example, machining of lightweight materials, which will increase as we go towards electrification. And then we have the perpetual demand for more productivity, more efficiency and more sustainability, that will be driven and enabled by new technologies, new innovation and automation. And this strikes at the very heart of Sandvik's purpose and our strategy. We launched our updated strategy in the beginning of 2021. It's built around our purpose -- our company purpose that we launched at the same time. We make the shift, advancing the world to engineering. I think it's a powerful purpose that speaks a lot to who we are as a company. It's also built around our 4 core values: customer focus, innovation, fair play and my personal favorite, a passion to win. We have 3 transformational strategic objectives: our shift to growth, our digital shift and our sustainability shift. And they are being supported by our 3 supporting objectives: being an employer of choice, to be our customers' first choice, and to be agile through the cycle. For each of these 6 strategic objectives, we have defined key results of where we want to be in 2025. Each year, we define where we want to be that year on the journey towards the 2025 targets, and we break it down by quarter. This is how we drive strategy execution to transform this strategy into action. And you will see throughout this day that we are delivering on our strategy and achieving our key results. We have at Sandvik today a strong platform to build on. We have market-leading positions and strong brands in the market segments where we operate. We have a winning culture where we are #1 or #2 in the market segments where we compete. We have innovation at the core of our culture and our strategy. Something we have had during our more than 160-year-old history. And today, we also have a leading digital and software platform, both in the manufacturing and the mining industry. We have, for decades, had a business model built around helping our customers become more productive, more efficient and more sustainable, both in manufacturing and in mining. So we really have sustainability embedded into our business model. Today, we also have strong financial strength. We have a strong balance sheet, good cash flow generation, a strong margin that is resilient throughout the economical cycles. And this is something that Cecilia will talk more about in our presentation. Sandvik is well positioned to capture the future growth opportunities. In manufacturing, we are, for example, leaders in CAM software, cutting tools and additive manufacturing powder. We are step-by-step working towards more optimization end-to-end for our customers -- optimization and automation. We have agnostic offerings through a portfolio of strong world-leading brands that can go to market independently to maximize the total market potential, but we are increasingly also working with them to create bundled offerings and synergies so we can leverage the combined strength of the group. And we work every day towards realizing what we believe is the vision of manufacturing, which is digitized and automated from design to finished products. And you saw some of it out in the factory today. Of course, this is something that Nadine and Mattias will talk more about as they present both the combined Manufacturing and Machining Solutions business as well as their Independent Machining and Manufacturing business segments. In mining, we also are equally well placed to capture growth opportunities. We are today, for example, world-leading in mine planning software, underground mining equipment and mine automation. And here, we are already working on offering to our customers full end-to-end solutions, digitizing, automating their full value chain. And you saw some of it here today in the demo of our digital mining solutions. We also have a leading technology when it comes to rock processing, a technology that will help solve one of the major challenges in mining, which is energy use and water consumption. And we work every day to realize the future of mining, which will be electrified, digitized and automated in a sustainable way. So how are we doing on strategy execution? Let's start talking about growth. We have today -- as you know, a baseline of 2019 for our key results. This is to make sure we don't have disturbance from the sort of COVID years in terms of compares. Starting from 2019, we have a CAGR of 9% total growth, excluding any currency effects up until Q3 of this year. This means that we are well ahead of our growth target, which is to grow a CAGR of 7%. We are also proud that we have an organic CAGR of 5%. And we are very proud that we can show 11 consecutive quarter of organic growth. We have also added SEK 19 billion of inorganic growth during this period. As those companies have come in, the first year, as you know, it's reported that structural growth, after year 1, they go into the organic growth as well. And what we can see is that the average organic growth of these companies are higher than the existing Sandvik business. So it shows that gradually, we are shifting the company to be more exposed to structured organic growth, which is part of the strategy. I mentioned innovation something we continue to focus a lot about. And today, 25% of our products that we sell have been launched in the past 5 years. This is what we call a new sales ratio, which is one of our key results. And our target for 2025 is to increase this number further. This is really important for us to be able to maintain our leadership positions to support our organic growth. And as we have seen, especially in the past years, this is how we make sure we can work with value-based pricing, ensuring that we get the price we deserve for our productivity and sustainability improvements that we deliver to our customers. And also here, we have made a shift. You can see on this graph how we have accelerated our investments into R&D and innovation in the past couple of years. And this is also why I always highlight one innovation during the interim report because this is so important for our long-term future. We have highlighted innovations such as our electric jaw crusher, a new generation of batteries for our BEV equipment, new grades or products within our cutting tools and of course, continuous release of new digital solutions. And today, we are a Sandvik leading in digital in our businesses. We -- we have today SEK 4.8 billion of sales coming from software and digital solutions. We are on track to reach our target of having SEK 6.5 billion of sales coming from software and digital by 2025. In manufacturing, we are one of the leaders with over 400,000 installed seats using our software solutions. In underground mining automation, we have our AutoMine solution that you have seen demonstrated here today with over 50% market share. And when it comes to mine planning software, I know I have to update this number, I said we have 600 connected sites. I saw today that we had 900. So we will update this. We also have, of course, a market share, which is clearly ahead of the closest competitor. Then, of course, we also work with making our business more sustainable to have a sustainable business. Our sustainability targets are approved by the science-based target initiative. They include a net zero commitment for 2050, including all scopes. By 2040, we will reduce greenhouse gas emissions by 90% by 2030 by 50% and by 2025 by 25%. And I'm happy to say that we are already well ahead of that target. But it's not only about that. It's also about, for example, circularity, where we have a target in 2030 to have 90% waste circularity from our operations. We also work with a responsible business, of course, trade compliance, anti-bribery and corruption, something that is really important in today's world. We work with people and communities, making sure that we create local jobs where we are operating. And we have a focus also now on ecosystems, which is really important in mining, especially when it comes to water stewardship, which is one of the key challenges that the mining industry face. But what I am the most excited about is our sustainable solutions. This is where we help our customers become more sustainable and solve their challenges. Of course, here, we have our electrified mining equipment, where we today are leading in the world. We were far ahead of the industry when it comes to recycling. We have a buyback program within our cutting tool business, that today means that more than 50% of the material in the products we sell, cutting tools and drill bits are made out of material that we have recycled ourselves and we buy back our products as well as competitor products. And then as I mentioned already, we have a leading technology in rock process when it comes to solving the energy and water consumption challenge in that part of the industry. And this is something that the processing team will talk more about in their presentation. So what we're showing here is that we have a solid execution on our strategy. We are delivering strong organic growth and good inorganic growth. We're leading in digital, we are making the sustainability shifts ourselves and for our customers. We have also increased the sales from software services and consumables in a material way. This creates more top line resilience for us, helping us through the economical cycles. And we have delivered a strong margin that is also proven and resilient through the cycles. So I'm really proud about the transformation that Sandvik has gone through in the past couple of years. And this is a massive team effort from a lot of the people that you will see here on stage today and of course, throughout the whole organization. We put -- we completed the portfolio optimization last year with the spin-out of Alleima. We have evolved our management culture, we work even more with performance management, and we have set a high bar for what we consider to be great performance. We work with our agility, taking more calculated risks when called for to speed up our decision-making and allow us to take more opportunities when they arise. And we have also worked with the how. It's not only about what we achieve, it's also how we achieve it. I believe that a modern and sound leadership culture is key to attract and retain the best talent in the future. We have strengthened the Sandvik platform. We have strengthened, for example, our round tools offering, but we have also added new strong positions within, for example, ground support, mining screens and our digital solutions. And today, we are an enabler in our customers' journey with our leading digital and sustainable solutions. We have done this transformation through a strong strategy execution where we have delivered strong growth and high strong resilient margins each and every quarter. And this is something that we at Sandvik are really proud about. When it comes to our financial performance, Cecilia will talk more about that. So I will now invite Cecilia up on stage, and I will, of course, be back for Q&A later. Welcome Cecilia.

All right. Thank you, Stefan. So what we'll do now is to have a look at our financial targets that we announced last year and how we have delivered on those. And as you know, it's been challenging times with high inflation, spike in interest rates, supply chain and logistics challenges, et cetera. But we have delivered well on our targets. So let's have a look at that together. But first, a recap of our targets. As Stefan mentioned, we have a total growth target of 7% through our business cycle and that's both organic growth and inorganic growth, but excluding any effects from currency. We also have a target margin corridor of 20% to 22%. And this is not an absolute peak to trough margin corridor. This is where we are happy with our performance. And that means that if we fall below 20%, we will activate our contingency plans and take action to get back into range again. And if we're above 22%, it should not be seen as sustainable in the long run. We then also have a balance sheet target, financial net debt over EBITDA below 1.5x and a dividend payout ratio of 50%. So how have we performed then? Let's start with looking at the growth execution and Stefan already mentioned some of the highlights here. But if you look in the graph, you can see that we came from a period of growth back in 2018. Then halfway through 2019, we saw a softening in demand in our short-cycle segments. And then the downturn was further accelerated with the outbreak of COVID. We then launched our shift to growth strategy towards the end of 2020. And as Stefan mentioned, we have since then had 11 quarters of growth. But we have also had double-digit growth for 9 consecutive quarters. During the period, we also made 24 acquisitions and in total, they bring SEK 19 billion of revenue to the group. And all in all, our total growth CAGR versus 2019 then currently sits at 9%. And this number is, of course, impacted by the higher than normal inflation rates that we have faced over the last couple of years. But during this time, we have also exited Russia. So here, we are very pleased with our performance. Over the last couple of years, we've also worked hard with building a more agile and flexible business model. And as you all know, this starts with having a more resilient top line. And we now have a higher share of aftermarket and software revenue in the group. We've also demonstrated good pricing power, and we've been able to mitigate the inflationary pressure that we face with price. We also took a conscious decision when ramping up after the COVID downturn to do so with a higher share of flexible costs. And we are continuously working with improving and optimizing our footprint. And as you know, our current structural savings program is expected to generate SEK 785 million of run rate synergies. And during the afternoon today, you will hear from the BA presidents a lot more details around the focused work and efforts that they have made in this area. And also the impact that, that work has had on their leverage. But to summarize, we demonstrated good margin resilience, both during the COVID-19 downturn and also in the third quarter of this year. And both last year and year-to-date 2023, we are within our margin corridor. We also have a strong balance sheet for growth. Financial net debt over EBITDA is currently at SEK 1.3 billion and we have an A- rating with a negative outlook. And here, we plan to maintain a strong investment-grade rating. And as you can see in the graph, if you go back to 2020, back then, we were in a net cash position. But then we kicked off our shift to growth strategy. We have invested the excess cash that we had on our balance sheet. And we've also taken on some debt, as you can see here. And what that means now is that we have quite a limited headroom to our balance sheet target. And so going forward, we will fund future investments, both organic and inorganic with the cash flow that we generate as opposed to taking on additional debt. If we then look at capital allocation in a bit more detail. You can see here that during the stabilization period leading up to 2020, we focused a lot on stability and profitability. And during this time, most of the capital or cash that we generated was allocated to debt repayments, dividend and CapEx. And only quite a small proportion was allocated to acquisitions. But then from 2021 onwards, once we launched the shift strategy, you can see that we've allocated a much larger portion to acquisitions and M&A activities. And you can also see that it's a fairly even split in terms of capital allocated to the SMR and SRP business areas and the SMM business area. And as Stefan mentioned, we have a strong cash flow generation that will support future growth initiatives across the group. And in terms of capital allocation priorities, we give organic growth the highest priority, so CapEx investments. We need to invest and maintain in the businesses that we have. It's typically also a cheaper and less risk way of growing your business. We then have the dividend payment that we need to adhere to our balance sheet targets. And after that, we see how much capital that we can allocate to either M&A activities or any potential share buyback programs. And finally, EPS and dividend development. Over the last 5 years, adjusted EPS has grown by 20%. And during the same time period, our dividend payout ratio has been 39%, a bit lower than our target of 50%, impacted by the fact that we did not have a dividend during COVID. But as you know, we have also distributed Alleima as a dividend during this time period of last year, providing good shareholder return. So to summarize, we are delivering well on our targets. We are exceeding our current growth target. We are delivering on our margin corridor. We are managing our balance sheet targets, and we have a dividend payout ratio of 39%. So we are proud of how we have delivered on our financial targets and also how we have executed on our shift strategy over the last couple of years. And with that, I will invite Louise back to the stage.

Thank you, Cecilia. Just a reminder that we do have the Q&A session at the end. If you missed that on the agenda. So note down your most crucial questions, so you can ask that to management later. Now we will move on to the business areas. And the first one we will welcome is our President of Sandvik Mining and Rock Solutions, Mats Eriksson.

What do you think about Sandvik? I'll tell you. We are a worldwide leader in Mining Solutions. So it's quite easy to explain things when you have seen what we already have during your tours here. But let me tell you a bit more about Mining Solutions. I will start with the market that we are in. As already mentioned by Stefan, we are having a growing middle class. That is very good for us because they consume more and what do they consume? They buy a lot of electric stuff, for example. So electrification is a must to serve the consumers in the middle class. But naturally, there are a lot of other things as well. The electrification metals, as you can see from the chart, it's growing a lot and most -- it's the most growing -- or best growing commodities in the mining industry. Gold is another one that is pretty high on the list and is also growing well. At the same time, the mining industry is having an issue. There are lower ore grades. There is a growing demand and you have lower ore grades. You need a solution. If you look at copper, for example, you can see from the graph to the right, or to the left actually -- sorry, to the left. You can see that the copper demand is growing and the existing mines will not be able to support that growth. There will be need for more mines, more productivity, more efficient ways of getting the copper out from the mines. The black line tells the predicted demand. And you can see already by 2025, we are starting -- we get issues of having enough copper for the demand. In the gray area, you'll see possible projects, it could be an extension, but it's a lot of greenfields as well. The lead time to establish a new mine is growing as well. There are several reasons for that. But a lot is coming from regulations, a lot is coming from being more sustainable. There is a lot of demands on how to establish a mine today. And the mining companies, they need solutions that are sustainable and fulfilling the requirements in the market. Naturally, there are technologies evolving because of these demands. And some of the key ones that you have here is automation, you can actually go deeper and you can get ore from areas that was not possible before. You need to be very efficient when you plan your mine because you don't want to add more cost when you need the -- to get the commodities out or the ore body well mined. So you are very cautious about doing the right things all the time. So the software importance is growing clearly through the mine planning. And then to be sustainable. And again, when you go into areas that are difficult to arrange for example, ventilation or it's too hot or is difficult because of security or safety and others. You are using automation with battery electric equipment. So the battery electric is actually providing you a possibility to get into areas that wasn't possible before. If you then look at how we are positioned. First, if you look at the market, this is divided now into underground and surface. And you can first see that if you take electrification and gold, they are both growing a bit more than what you see on the right-hand side, the 2% that is the general growth of mining. Electrification and gold is growing more and they are growing more especially underground where we are placed. So if you look at the Sandvik, the commodities that we are exposed to is electrification commodities as well as gold. That stands for 70% of our sales today. Those are the ones growing faster than the mining industry in general and they are growing underground where we are really strong and the main player. So we're very well positioned for the growth. I told you already that the ore level is a problem and there is a problem that the mine industry need to take care of. They need solutions. We have those solutions. You can see here the value chain that we are offering. We have the solutions, which is matching the problems the mining industry is facing today. We have what we could call a standard, the test week for mine planning is very well adopted in the underground, but it's also on surface. We are drilling and blasting. We are not doing blasting, but we do drill optimization for the blasting. Very important when you go into the mine underground is the ground support. We have a world-leading position there as well, and we are very, very strong in load and haul. And as a natural continues to what we do underground in the mine is, of course, crushing and screening that you will hear about later on from us. But I think optimization here is one of the key words. So if I shortly show a picture of the future of mining, I maybe smiling when I say future of mining because I think we are there already in Sandvik. We are already having the solutions for what the future of mining is going to be. Electrification, of course, very important. As said, you can go to areas that was not possible before, and it makes more productivity and efficiency to the mine operation. Automation is, of course, we have had that for 2 decades. It's not a new thing to us. And we are continuing to serve our customers on the automation side. We have unique solutions there that nobody else has. Data analytics, well, mine planning is one area. But of course, you also heard today about remote monitoring services and so on and we have a lot of AI in that area. I think AI is important for the future in general, but we have that already implemented in our solutions. And it's clear that the future of mining is net zero, circular and efficient. So we are providing the solutions for the mining industry to get towards the future and they are all investing in that. We will talk now about electrification, automation and digitalization, which are all 3 areas crucial to be successful in mining. And now I'm talking about the mining companies, they need all of these areas to be successful and they need somebody to provide them to them, and we are doing that. But let's start with the electrification. And for that, I'm inviting Vice President for New Technologies, Mr. Brian Huff. Welcome, Brian.

Thank you, Mats. I think it's kind of interesting. My title is New Technologies. But in talking about electrification, this really isn't anything new. We've now been operating battery electric equipment underground for the last 12 years. That's 12 years of learning and development and improvement of the product. And we've really got solutions that are working for our customers. So this is no longer a really new technology. Well, what is new how we provide these solutions to our customers, bringing it from just a product, just the equipment to a full package from preparation of the sites using our transfer mine team to understand the application value to understand the business case and to get these feasibility studies over the hump to get them funded. For simulations using our mine game software to strategically locate charge base and swap base locations within the mine to optimize the operation and then providing other case study benefits, helping contractors and helping consultants to really understand what the value proposition is. And then on the support, we are making sure we've got good site readiness, right, making sure that our customers know what technicians they need, what spare parts they need, providing assistance to service people through digital solutions that give them the technology and all the information they need for troubleshooting right in the palm of their hand rather than having to spend so much time in training to learn the troubleshooting procedures and then enabling these diagnostics and troubleshooting through remote monitoring. That really kind of brings the aftermarket side to the equation. And then circularity. We've now had batteries in service for over 12 years. They've reached end of life. We've had to deal with the recycling of batteries, and we've got partners that help us to accomplish that. And another kind of key element of our products is that because they're modular, because of the same modules that work in our trucks, also work in our loaders, you can repurpose batteries that are aging out from a truck application, which has higher power and energy demands and reuse them in a loader operation, where there isn't as much energy requirement. And all of this together has really led to quite a bit of success that we're finally seeing in this year. We've now seen that we've won 75% of the BEV tenders that we've been a part of. And that's a really kind of remarkable stat. And it really comes not just from our sales process. It comes from what our product is. And it's pretty compelling. The lack of infrastructure requirement, you saw downstairs underground at the demonstration that we can swap batteries almost anywhere. We don't need cranes. We have -- we offer flexible solutions that don't require such a massive investment in infrastructure to accomplish. And beyond that, our equipment does more than its diesel counterpart. Battery and electrification isn't just about sustainability. You got to provide more value to multiple parts of the operation in order to win these deals. And our equipment provides value to the operator, value to the service person and value to the site management in terms of productivity. And then it also provides value on the environmental social side of things and the decarbonization aspect. And you can also see this in kind of share of revenue. Our new share of order intake so far this year for load and haul has been more than 15%. And you can see how that's starting to become a real significant part of the business as a whole. And then how are we kind of expanding to supply that new need. The chart on the right shows our production capability in BEV space. We've been making battery-operated drills here in Tampere since 2016. With the acquisition of Artisan in Camarillo, California since 2019. We're making batteries and battery-operated equipment there. We also expanded into Winnipeg, Canada to meet the needs of the Canadian market, making our 50-ton trucks. And now in Turku, Finland, we've increased the capacity of the site there to manufacture the loader that you saw today. And then we're also expanding now into Seremban, Malaysia with a factory building battery-operated equipment and batteries. And so we're really kind of expanding to meet this increase in demand. And not only are we expanding our production capability, but we're expanding our product offering. We're taking the technology of our battery-operated drills, loaders and trucks and expanding that with diesel electric using the same motors, inverters, componentry and a modular approach that allows us to offer diesel solutions with the same electrified driveline from our battery-operated equipment. And then beyond that, we have an entirely revenue stream in the form of batteries, chargers and coolers. And this is really a rare opportunity to have a business that is good for our customers as well as good for us. We're able to increase our revenue, earn more from our customers but they actually spend less. And the way we do that is we're taking the money from the oil companies. And the way this works is if you look at the chart on the left, the operating and capital expenditures for a piece of battery equipment is pretty comparable. There's a little higher capital expenditure for battery equipment, but less on the operating expense. But above that, to gold lines there is the other expenses. There's carbon taxes, cost of ventilation, cost of cooling, all of these other expenses that end up with a decrease in cost for the customer. Whereas on our side, the chart on the right shows how much more Sandvik makes for each machine sale, a win-win. But enough about hearing it from me. I've got a video where you can hear our customers talk about the value they see in Sandvik BEV. [Presentation]

Thank you, Brian. It's easy to smile when you see videos like this. Seeing happy customers that have adopted our new technology is key for our future success. A good customer telling another how well our equipment is working, how much more productivity and efficiency they achieved by using it helps us. You could see that from the sales features that we have had a great order intake on BEVs this year. And that, of course, generates revenue. So I'm really pleased to follow this and see how the revenue will grow, thanks to good customers adopting our technologies. I will jump into automation next. Another success story of ours. We have the largest autonomous fleet underground in the world. And we didn't put up the numbers that are average from what we get from the customers in general or what we think about when we do our own calculation, we put kind of testimonies up there. It's what the customer has told us. How well the autonomous fleet has helped them in their productivity goals. So 55% productivity increase is fantastic or as we have Boliden almost 100% of the production goes fully autonomous. Great numbers, great things. To me, what this shows is, of course, that the technology works, naturally. But the other thing is that we have 2 decades of knowledge, which our customers are now benefiting from. Similar thing as we talk about the BEVs, more than 10 years of knowledge in that area as well. You cannot really shortcut the learnings that you need with new technologies. You need the experience, you need to know how. We have that. And we are pretty unique with our automation. And this is not something that you can jump into overnight, it's something that is an evolution. You have to start somewhere. And we started as well as what we call Level 1 with tele-remote. You actually, on a distance, you remotely steer the equipment. It's still a human interface. A human makes these decisions and control what is happening with the equipment. So we don't really call that automation. When we get to level 2 that we here, say, mid-scale, autonomous systems, 3 to 5 units, then we already are into something where the machines and the system has to decide on its own, how to operate, not to collide with each other or we cannot have a human interface actually controlling all of that at the same time. And large scale then is impossible. Then you have to have superior navigation system, and that is what we are having. We are having a really good navigation system in our automation, which can direct and help the units. Also the traffic management is crucial. Easy if you have one isolated area and one machine moving back and forth. What about take a simple thing, you have a tunnel, you have 2 trucks meeting each other, and they're all automated and no operators there. They have to decide which one goes aside, which one passes, and then the other one comes back on track. Those are things that we have in our system and those are unique. Another thing is that our equipment, talking about loaders and trucks and drill rigs, they are from the start optimized for automation. So they are designed to work for automation. So the full benefit our customers get with automation is by using our equipment. And you see the values, the deal size and what we have on a rolling 12 received as orders. Those are bigger values than selling only automation system because they include the equipment as the customers see that then they get the most out of it. They don't have a reason to buy another brand for their loader if they can buy the same loader from us. And they know that it's fit for the purpose, automation. So when we talk about automation deals, they are usually bigger scale, more valued than our competitors' deals. Then moving into what I already mentioned, AI or software in general. When you find a new ore body, you need to plan how to extract it. Deswik has that capability. So already when we see a greenfield, Deswik is getting involved. So from the start, we are there. Then, of course, you need to do a project around it, how you're going to extract it, when, what, how and so on. And when you get into the real operations, you need to plan it, continuous monitor what you are doing there, adjust it a bit and so on, and of course, execute through different means. In monitoring, we have NEWTRAX. In execution, we can use AutoMine automation as examples. And we have the whole chain. Then we have it all up and running. And remember, we started already with a greenfield ore body, and we have had the software and we have system solutions all the way through when it's operate -- in operation. You need to optimize it. You need to continue to optimize it. A Mine is not a static environment. If you start thinking about the factory and optimizing a factory, I'm not claiming it's easier, but I'm claiming it's different because the factory is having walls and ceiling and it's a static place. You can change the flow and things you need, I understand. But a mine, it's expanding. So it's a continuous changing environment, and you need to optimize that continuously. We can do that. With the acquisition of Polymathian, we added a lot of optimization, simulation at AI to the solutions. So it suggests, when something goes wrong or something needs to be changed, the systems suggests, should we do it this way or that way. And then it has analyzed all the options. A human being has done it before and a human can still be the one making the final decision but getting a lot of help from the software. So with these treating solidification, automation and digitization, where are we? We're #1. What do you say about future mining? These are the things that are needed. We are there already. We have a great growth potential in these areas as we already have the references and knowledge. We will grow in these areas. We have no intention to let go. We will continue to grow where we are strong, and this is where you need to be strong. I talked about a couple of acquisitions. And let's not forget key acquisitions like the DSI Underground, ground support, a world-leading ground support that is needed in all underground mines, tunnels in general. You need to support it to make it safe, even though human beings are not there, the equipment still need to move around there so you have to be sure that the environment is safe and no hazard. We have a very stable revenue growth that comes from combining the customer relationships we have in Sandvik with the customer relationship that DSI had. We are helping each other, expanding our sales in both areas, both what Sandvik has and what DSI has. So it's a good combination. It's fulfilling one part of the value chain. Then we have Deswik and Polymathian. You heard already Deswik is kind of a standard in the market, industry standard, 900 sites, it's big and it's agnostic. So it's really a key element for our growth. And combining then the AI from Polymathian, a lot of knowledge about how to optimize things. It really has all the values that the mining companies are looking for to make their production more optimized, more efficient, more productive. And that's what they have to do to stay competitive in the market. It has grown -- the revenue has grown above our business case that we saw when we looked at it. And it gives a continuous revenue stream through the subscription trends. So it's what Stefan said, we are moving to the software business as well, very important for us and it gives a stable flow of revenue. Then I got the question a few times. What about surface then, you talk about underground, you show a lot of good things there, and we have, of course, surface 2. One example is we have been saying that we are focusing on surface, I think that was 3, 4 years back. And in 2019, until 2022, we have doubled the order intake on rotary drills, which shows that we are really growing in this area. We have doubled it. What that means is that we are also tripling the possibility of aftermarket in surface because, as you see here, one rotary cost a certain amount of money, but its life span is much longer than an underground equipment. It has up to 15 years lifespan. And during those 15 years, it consumes 3x the CapEx of a rotary drill in aftermarket. So it's very important for us to have these rotary deals in the market, and we get a stable flow of aftermarket. And today, you saw a new era, the first of its kind. The first surface [indiscernible] drill in its size class, battery electric. We will, by 2030, of course, have a full set of surface to drill rigs also electrified, and we are working on that. But this one you saw already, it was out there in the yard. Battery electric, also cable connected when needed. It's really showing that what technology can do today. And as I said, we are taking the technology and know-how that we have underground to the surface. So we are bringing a lot of expertise that we have in-house already to the surface. That's why, with confidence, can say that at 2030, you have the machines electrified on surface as well. Then what could be a thing that you have been wondering about with Sandvik that, how do we take downturns? And how do we really manage changes in the market? Well, one way of managing it is, of course, having a strong aftermarket. The typical thing is that if you have a bit of a slowdown in the mining industry is that the customer might not buy a new equipment, but they continue to use the old ones. I mean, they continue to use old the ones, they need aftermarket, they need the spare parts, they need the service, they need to keep them up and running. So aftermarket is always there. And your aftermarket is also in different areas. You have the ground support, it's still continuing to be there. The rock tools, they're still consumables, kind of, they are still there. And we have the software with subscriptions, they're all there. So when we have a growth of 17%, as you can see on the chart, the 2023 number, by the way, is rolling 12 months up to end of third quarter. So it's not the full year. But this is how we see that we can be more resilient during the different cycles of the market. We also know that with aftermarket, we have more loyal customers, and we keep on to the customers with remote monitoring service and so on. So when we have a upturn, the customer turns to us easily to continue the business. And naturally, we have built our capacity in our factories very agile. We have a lot of it outsourced, so we can adjust the capacity and not be stuck with excess capacity if something happens in the market. If you look at the profitable journey of SMR, Sandvik Mining and Rock Solutions, we have been quite stable. The ground support DSI acquisition diluted our EBITDA a little bit, as you can see from the text. But we are on a stable level. And with the increased portion of aftermarket, it will continue to be stable. We have a leverage target of about 30% on incremental volume, and that is where we need to be. So I think we have already proven that we can handle the mining cycles in a very good way. And of course, we are staying on top of our toes to continue to monitor what is happening and react in time if something happens. But we are fortunate also to be a very big player in the mining industry. So we have a lot of information and knowledge and a lot of things that will -- that helps us not to be surprised about the development. But there are growth areas always. The mines still need to optimize. You remember, the ore grade is a problem. So we are going to optimize it for the customer. We have targets going forward as well. Revenue CAGR, 10%. BV share of underground, more than 50%. And the surface revenue by 2028, we are doubling it again or more. To summarize very fast what I have been talking about. We are in a strong, nice market, I like the mining industry, it's good. It's still growing. We need electrification metals. We need gold. We are making the shift. We are making the possibilities for the customers to move into the future of mine. And we have a long-term growth, and it's coming from sustainability, from electrification, from all the elements that we have, all the trends. And just to show a little bit about how mining sustainability joins together as a good combination, I'm showing you the next video. [Presentation]

Thank you, Mats and Brian. I think they deserve a warm applaud. Indeed, a lot of interesting things happening in the mining space. And clearly so, that Sandvik has a very strong position with our digital solutions and BEVs to capture the demand trends that we are seeing. We will now move on further down the customer value chain, listen to a bit more on the mining trends, but also the infrastructure and sustainability trends in our favor. We will also listen to fantastic opportunities that Sandvik has to address the challenges with energy and water consumption. Please welcome me -- please join me in welcoming Richard Harris, President of Sandvik Rock Processing Solutions.

Thank you, Louise. And we will share with you today our growth journey in ecoefficient rock processing. I'll start with describing what drives our business and our offer where we're located, that will be helped by my colleagues, Martin Nyström, Head of Stationery Crushing and Screening, to describe how we are leveraging growth in mining. And then Jonas Olsson, who is Head of Strategy for Stationary Crushing and Screening, will share us how we are expanding downstream in mining. We have 2 verticals that drive our business. First of all, mining and the demand for minerals. As Mats said, growing middle class has an impact, and it makes an opportunity for us, the demand in goods that link back to gold, copper and iron ore. We also have a growth in the middle class -- sorry, growth in electrification and energy. And here, of course, gold and copper are very high on the agenda when it comes to growth. Extremely importantly for us is the deterioration in ore grades. And there were questions when we walked around about this. And I don't think it's anything new, but it is very important, and it will drive the need for productivity, optimization, automization, digitalization and also a great aftermarket support, which is extremely important for our business. And last but not least, we then see that we will have much more demand for equipment as well as ore grades deteriorate going forward. Our second vertical is infrastructure, which includes aggregates, demolition and recycling, and this is around 50% of our business. Growing urbanization will mean that we will need to invest more in renewing existing infrastructure. And also, we will need specialized equipment because where we act in those environments mean we need to be quieter, we need to be smaller, agile and so on. And we also see that, going forward, the construction segment will start to grow again after a softer period, and that will be backed very much by a stabilization in GDP, also after a dip. Sustainability, of course, is at the heart of everything that we do, the green transition towards electrification and renewable energy. In all the operations that we serve, the need to reduce the amount of water consumed, the energy consumed, and CO2 produced will certainly drive the need for technology, automation and digitalization. And this is how we will deliver an ecoefficient future in rock processing. So today, you have the chance to walk around and we showcased our offer. And you saw outside, in the wonderful weather there, our range of attachments. We have market-leading offer there for breaking and also recycling applications. You also may have seen in our booth down to the bottom left there, where we talk about our mobile offer, very powerful, agile, safe in operation. And here, we will be electrifying our offer up to 90% by 2025. We have, for a long time, been at the forefront when it comes to crushing technology. But recently, with the acquisitions of Kwatani and Schenck, and high-capacity screening into our portfolio, now we can pretty much size and categorize within any challenge we now receive. And you'll hear a little bit more from Martin about that, how we are leveraging our great position in mining. So as we have grown, we have increased our geographic reach quite significantly. You'll see in black, the legacy operations we had around the world. And before the acquisitions, we're very much focused on the Northern Hemisphere. With the acquisitions, now we are global. We have 50% to 50% Northern to Southern Hemisphere in our business split. We are much more even when it comes to mining and construction also. And importantly, and you don't see it here, we have a fantastic network of sales and service all around the world. In other words, maintaining, replacing, repairing equipment for our customers, either through our own employees or through a great network of dealers, which is more applicable to the infrastructure segment. So in the end then, it's not just about the great offer that we have, where we are located and what we can offer we have to share our know-how and create value with customers. And I think then it's better for Martin Nyström to explain actually how we achieve that. Martin?

All right. Thank you, Richard. I thought we're in [indiscernible] today, and it's pretty cold. So we'll start with a very sunny picture from Australia. And in this site, we are processing 10,000 tonnes an hour, which is the reality of our customers. And, of course, also a reality for us. And I think this underlines very much the shift, along the lines, so we make the shift that we have across the group and also the shift that we're making in our business. The way we do that is by expanding and leveraging on our strength and position in mining, I'll come back to that. That's really about existing customers growing with them, but also with the wider offering, bringing in new customers into our revenue base. The second part of driving profitable growth is really about growing the aftermarket business. We have been growing the aftermarket business organically. We have also acquired more aftermarket business. This is key for us when it comes to driving profitable growth, and it's equally important to be resilient through the cycle. Thirdly, we are going to drive the shift towards more sustainable rock processing. And Jonas, who will come after me will go through into that in more detail. But we have an unique opportunity to work with our superior crushing technology, expanding the application window. It's not only good for us, but it's certainly also good for the planet. More to come in a few minutes. We started or we looked a few years back at what we are, where we are and also what and where we want to be. And we used to be a crushing specialist, specifically focusing on cone crushing, very strong in crushing, roughly 1/3 of our revenues came from mining and almost half of our business with aftermarket. And we're looked at, okay, is this the positioning we want to have? No, we want to drive more mining, more mining. Why so? Well, mining is growing faster, generally than infrastructure. The equipment in mining runs more hours, consumes more aftermarket parts, which generally speaking, a good business to be in growing faster at over average profitability. So as Richard mentioned, in 2021, we acquired the African leader, Kwatani, which is the leader in Africa for screening solutions. And in 2022, we acquired Schenck Process Mining, headquartered in Australia. And these 2 form a really strong foundation to build screening leadership to complement the position we have in crushing. This has also made us more of a mining player. So going from 33%, we're almost close to 60% by now. And we have also added aftermarket to our portfolio, making us more resilient and more profitable. This also makes us a lot more relevant together with our customers, and I'll come back to that in the next page. But having crushing and screening tightly combined makes us a lot more relevant for our customers. That being said, being the recognized leader, already today, 100% of our stationary equipment is electrified, and they're all supported and powered by digital solutions, such as the one you looked at and we showcased in our booth. So being more relevant and having a more -- having a broader, wider portfolio, what does that mean in the context of our customers? So we will look at this picture, which is a very high-level conceptual picture, what happens in our part of the value chain. It starts to the left, where the material from the mining process comes in. So after it's been -- we have done the drilling, the blasting and the loading and holding, it comes into the process. Here, the material is. There are large rocks, small rocks and it's all mixed. And step-by-step, we're bringing that size down through crushing, screening, grinding, in some cases, separation, and then we get to the final product. Products we know as iron ore or copper, gold, et cetera. Before the acquisitions and what we used to be, we used to be very strong in the primary crushing and the secondary crushing stages. But those were really the key touch points that we have had with the customers. If we then look at where we are now after these 2 acquisitions, we've added large screens or high-capacity screens. We've added a lot -- a big chunk of aftermarket. But more importantly, we've also added a lot more touch points with the customers, making us more relevant in the value chain. That's great because we can optimize this for the customer. But it's -- and we can also optimize, not only the equipment itself, but really the whole process. And of course, that gives us a lot of opportunity for sales synergies as well. So becoming more relevant having a wider offering, what does that mean? And how do we drive growth from that? Well, already in the acquisition processes, we looked at prior experience for how do we make this a success. And we've developed 3 different principles for how we do this. The first essential area is about one face to the customer. So all around the globe, we have now combined our sales and service teams. They are there to drive the customer experience. They're there to drive service and support for our customers. And they're there to look after all the sales opportunities that we have naturally in the process. We have done very good progress with this since we acquired both companies. Secondly, it's about strengthening the portfolio. In other words, make the most out of the combined offering. So here, we have started to standardize and harmonize the offering to maximize customer value but we have also started to do a couple of new development projects in areas where there is big potential, but we have white spots from a sales point of view. This will naturally take a few years before it's finalized. But in a few years' time, we'll certainly have the absolutely most competitive, compelling offer in this area. Last but not least is what we call eyes on the ball, making these acquisitions, bringing people and bringing companies together is all about making people, bringing people together to work on the execution plan. Focus on the most important things, don't try to fix what's not broken and be very quick, quick on our feet, getting things done in a quick and efficient manner. And I think, also here, we have done great progress in the last year. So that all sounds fantastic. What does that mean in terms of driving profitable growth? Well, first of all, we have made -- we have acquired revenue at non-dilutive profit level, in itself really good and not that easy to do in our business. Secondly, we now have more organic growth opportunities in line with our long-term plan. Here, I'd say we are targeting between 2019 and 2025 to fourfold the revenues from screening. So it's a big shift in itself. Thirdly, we have identified to date more than EUR 150 million of sales synergies that our frontline teams have started to identify. This is not something that will materialize next month or next quarter. This is a multiyear journey. But really good work done by the teams. And when we look for synergies, we talk about them in 3 different buckets. The first bucket is where we have a relationship with the crushing customer where we can sell screens. Roughly 40% of the synergies come from this. The second area is around selling crushing equipment to existing screening customers. So coming back to the value chain. And the third bucket, roughly also 30%, is we now have a combined offer, which means that we can compete in more deals and be more relevant in more deals, deals that we couldn't make before. So we're very, very, very happy and very pleased with the great opportunity. We've done a good start, and there is certainly more to come in the next years from this journey. And speaking about the future journey, I'd like to invite Jonas up on stage here to tell you a little bit more about how we see the development of sustainable rock processing going forward.

Thank you, Martin. Did you know that 6% of the world's energy is consumed in the mining industry. And in absolute numbers, this will grow over time with the fundamentals that we've heard here earlier. It's the green transition, acquiring more minerals, and the larger population and the urbanization, and then the decline of ore grades. Looking at the distribution of the total energy in mining from a rock extraction through rock processing and the separation of the minerals, we see a large chunk being consumed in the materials handling section, dominantly diesel-powered, load and haul equipment. And this is being addressed by SMR, where the innovative electrified offering that we're just seeing. But the larger chunk is the consumption of energy in grinding operations, 40%, and that is 2.4% of the world's energy. So a huge number. And to get some perspective of that, that is -- the aviation consumed 2% of the world's energy in 2022, 2.4% of world's energy is consumed in the grinding operations. It's a big number. Unfortunately, most of the volume is processed in conventional tumbling mills with very low energy efficiency, less than 5%. That means 95% is not contributing to the size reduction that we want. Crushing, on the other hand, consumes only 4%, but has a significantly higher energy efficiency, 50%. So Sandvik, we're committed to reduce the energy in mining and by shifting from less grinding into more crushing. Making that shift, we can save substantial amounts of energy in our industry. And knowing also that crushing is a dry process. So at the same time, we are saving water. This is a very common flow sheet in the mining industry, where the ore is processed through 3 stages of crushing and screening, followed by conventional tumbling mills in several stages. Most of the time, we see the mill feed coming from the crushers to the mills being quite course, 12.5 millimeters, what's in the industry called as 0.5 inch, 0.5 inch can be larger than 0.5 inch sometimes, I can tell you. An optimized Sandvik crushing and screening circuit can provide continuously 6 millimeters mill feed. This enables the shift to crush more and grind less. And when doing so, we can also increase the downstream throughput through the mill circuits. We increased the energy efficiency per produced tonne. And very linked to that, the operations cost is also reduced. A great example of this is our plan to upgrade then at Agnew Gold, Goldfields in Western Australia. The operation was set up like you saw just before, the 3-stage crushing and screening circuit, providing a coarser feed to the grinding circuit, and then there was gravity concentration for the gold thereafter. In 2020, there was an upgrade of the crushing operations. This was enabled by Sandvik primary crusher, second and tertiary CH-800i Cone crushers, followed by the Schenck Screening solutions. Following the upgrade, the final mill feed of 6 millimeters increased the throughput by roughly 10%, and the energy saving between 10% and 15%, again, very linked to the operational savings of USD 1.5 million per year, giving them a 3-year return on investment. So not only did the upgrade eliminate the earlier challenges. It also made Agnew an effective and profitable operation. So Agnew is a great example of what we can provide to our customers today. And the efficiency upgrades can be applied to over 600 mines around the world with installed inefficiency and low-efficiency grinding mills. But our ambition goes beyond that. SOP is pending, research and innovation is extending our application window downstream, with the ambition to replace ineffective grinding with ecoefficient rock processing. Over to you, Richard.

So I think you can hear that we are extremely strongly committed to addressing this energy challenge within the mining industry, and it's very much in focus for us. Another area where we see great opportunities is in the demolition and recycling. Much of the material generated today is not recycled. Society and regulation in general views in the world will drive us more and more to recycle more. I think this is very clear. And we have a very well-developed offer for this space. To put this into context, 4 billion tonnes of aggregates used in Europe, and only 7%, a staggeringly small amount form part of the circular economy. If we turn to our biggest market, which is the U.S., 600 million tonnes of construction-related debris, 85% of that is concrete-based, and we have a great offer to recycle concrete-based material, which not only reduces landfill, which is environmentally sound, but also in using recycled material, the cost can go down, and it can be very effective for use in urban areas. We're very well positioned for this. We have a great mobile offer. Our offer was designed for quarrying also with recycling in mind. So we have the right-sized units for the right-sized application. I said earlier that we will be electrifying that offer to 90% by 2025. That's also really important, so we can connect to grid in the right location, and we're not using noisy diesel engines as well in those kind of applications. What's also great for us is we have a one-stop shop for attachments. So you saw the attachments outside, that's the best in quality, the best in performance and the best in overall cost of ownership for our customers. And we will seek also to expand that portfolio through strategic merger and acquisition plans going forward. If I then take a look at our profitability journey, we have grown significantly since 2017, and more steeply recently. Our EBIT margin has grown from 11% in 2017 to an average of 16% from 2019 to 2022. Going forward, we need to demonstrate and will demonstrate resilience in our margins. And there are many levers that we could pull to make that happen, the biggest of which is recurring revenue in the form of aftermarket. That's significantly grown from 50% to around 60% in the first 3 quarters of this year, which, of course, helps a lot. The second thing is supply chain. We have the ability to in-source and outsource depending on cycles and dual sourcing more and more on major components and assemblies in our operations. And thirdly, we have more and more made use of flexible hours and flexible contracts within our factories and operations. And I said many more levers we can pull there. And we expect a normalized leverage going forward on incremental volume of around 25%. Looking forward then, we have targets for growth, aftermarket penetration and for electrification and how we're doing. Well, on the first one, on growth, we're slightly ahead of where we thought we would be. In aftermarket penetration, we're around 75% there already. And we are 2/3 of the way there when it comes to electrifying our offer. So we are showing good progress on our strategy and execution to put us into our future position. So then, if I summarize then, first of all, we -- our journey is very much customer-centric. We're very much focused on the value we can add to our customers. And we are leveraging and we'll continue to leverage the acquisitions we made in screening. We will continue to electrify our offer and deliver on that, and that commitment that will allow our customers to make their transition as they are able to connect to green energy sources as they transition away from fossil fuels. We will continue to capture a larger proportion of aftermarket as we focus in that area, particularly in the mining space. and we will continue to expand downstream with a great technology we have, which is not only sustainable, but of course, very attractive for our customers because into the bargain, we save them money and make them more efficient. Productivity and performance will continue to be supported by digital solutions and earlier on. I hope you got the chance to see our booth showcasing SAM, where we bring information and people together as a basis for a seamless controlled future in rock processing. And in the end, driving sustainability in every way we do our business is our way to deliver an eco-efficient future in rock processing. And if you don't remember anything other than one thing that was said today, crush more and grind less. Thank you.

Welcome back. Now it's time to listen to how Sandvik has strengthened its positions and abilities towards the manufacturing industry. Please welcome Nadine Crauwels and Mattias Nilsson, President of Sandvik Machining Solutions and Manufacturing Solutions.

This is our view on the future of manufacturing. Come on. Now it comes, perfect. So let's start over. Manufacturing of the future is digitalized and automated, from design to finish product, supporting the transition to a sustainable world. We think this is a really inspiring world to be in. And through these presentations we have for you this afternoon, we will show you how we progress towards it.

Already today, we have a strong position in this value chain of our customers. And this leading to a broad offering that we can provide them from delivering efficiency and sustainability. Our position is strong in every single part of this value chain. But to really connect everything together, it will take time. And we will take it in a step-wise approach by connecting the different parts in a stepwise manner. Another part that is really important to look at is that we will look at portfolios, strong brands, a lot of product names that are forming multi-brand opportunities. At the same time, remaining agnostic. So it will also increase our ability and enable further growth. Sandvik Manufacturing Solutions will address the customer value chain from the design to the verification in an overarching solution manner, but also in very concrete point solutions. Sandvik Machining Solutions will focus on the machining part of the value chain through strong positions, knowledge, but also the strong brand names. At the same time, we know that those phases, just prior to machining, are so much linked and impacted by machining and the right choices, we also are engaged in the shop floor solutions and the product engineering.

Since the establishment of our 2 business area segments, SMS and SMF, we have captured a lot of opportunities, sometimes delivering separately, sometimes together, towards our different parts of the customer value chain in discrete manufacturing. We have started to realize synergies such as product integrations or aligning on priorities for joint development. And with our combined know-how that we have across our organization about customer needs, about how we can improve products, about feasible go-to-market models, synergies, opportunities and capabilities either. It's time to build further on this to add more customer value together. Since the recent years, Sandvik has acquired a number of companies that are leading in computer-aided manufacturing and industrial metrology. Now we have also moved CGTech and ICAM into the SMF portfolio, where they can leverage synergies from being together with other software brands, in terms of common business models, product integrations, new technology development. But in SMF, they are also able to leverage cross-selling opportunities that we have explored with other divisions in -- within SMS and also to maintain their brand neutrality towards other cutting tool suppliers.

Another area that is important is, for instance, tool management. Tool Management is part of this shop floor solutions and logistics and is a great business opportunity to growth in the coming years. TDM Systems and CRIBWISE being part of this have very established positions. At the same time, are the strategic gateways into this market. Continuously, these 2 brands have been working on increasing customer experience, either to make it easier to adapt, have access to a much stronger and more quality tool data and the connection, the possibility to link to the strong tooling divisions and brands gives, of course, extra synergies from a customer perspective on efficiency and, of course, a business perspective towards Sandvik. Here, we also need to say that we continue to invest, and the investment is really focusing on taking another level with a new operating model, and at the same time, working on an end-to-end solution that is modular and scalable on a cloud-based solution. All of these together make it very natural that both the CRIBWISE and TDM Systems has a strong link to the tooling divisions, adding value synergies also from a customer perspective. So from that point, both of them have been moving under the tool flow solution umbrella from Sandvik manufacturing solutions to Sandvik machining solutions. Another review we have been doing is around additive manufacturing. Adding manufacturing is focusing on powder. Powder but at the same time, also giving strategic guidance. Here, when we have already Wolfram with the powder in Sandvic Machining Solutions, the links and closeness and synergies and opportunity to take both of them to the next growth level is bigger being part of Sandvic Machining Solutions than the Sandvic Manufacturing Solutions that is more focusing on software solutions. So from 1st of October, Additive Manufacturing belongs to Sandvic Machining Solutions and from the 1st of January, we will create a new division that we will call powder solutions. These powder solutions will contain the 3 elements, the existing Wolfram together with additive manufacturing and also Buffalo Tungsten. And Buffalo Tungsten is an acquisition that has been signed recently and according to the legal procedures planning closing before end of Q4.

So we have strengthened our portfolio and our position through a combination of in-house development and acquisitions. And with these assets, we have taken yet another step towards closing the loop of manufacturing. In component design, we have SigmaNEST and SigmaTron with CAD capabilities. And through DCS, we have also expanded into tolerance simulation and quality data management. In computer-aided manufacturing, we have a leading position in terms of number of installed seats in the market, and we did a bolt-on acquisition to Mastercam when acquiring Postability earlier this year. TDM systems and CRIBWISE, they are key assets for us to digitalize the tool room for our customer, automating it, but also leveraging the sales channels and the customer relations on the shop floor that we have across the different tooling divisions in SMS. And of course, in machining and additive manufacturing, we have leading positions with our cutting tools, our powder and the machining and printing knowledge. Then in verification, our 3 companies are really enabling the automation of industrial metrology moving that more in line into the production. So we have a portfolio of strong brands with leading point solutions, while now also combining our joint knowledge identifying new use cases where we can use these capabilities to create additional customer value.

Indeed, a very, very strong product portfolio. However, to really close the loop in the manufacturing industry in component manufacturing, we also need to secure we can truly deliver on this end-to-end closing the loop. This end-to-end closing loop will demand from us that we continue to work hard on further automation and also to digitalize further the full value chain. As you can see on this picture, there are many data flows, data flows between each part of this sequence, and we are identifying new data flows almost every day because the richness of everything delivered through each different step is huge, and we need to capture that in a good way. First of all, on the quality and then how to really work with it and give synergies and added value. These parts are very critical to us, and we identified a few very concrete one already. This means, for instance, that we know that the computer-aided design and the computer-aided manufacturing need to be fully integrated to bring fully leverage. On the other hand, we also know that all tool information, and then I don't only mean the nominal data needs to be part of the CAM systems. Then if we think around this verification, the quality data management is critical, and the inspection or the computer-aided inspection needs to be very close to the monitoring in the machine, as you have also seen this morning on the demonstration. And these are examples that connect one point to the next in this very logical order. But as you can see also on this picture, there are other arrows that are looking like jumping different stages. But these are, of course, these extra flows that, for instance, if we monitor the machining parts, we learn a lot on what to optimize and how to improve the CAM part. At the same time, those monitoring on the machining can also give us a lot of information on how does this component need to look in the next-generation design. At the end, it is all about capturing that knowledge and data to be able to be proactive -- proactive, preventive and ultimately create sell-off learning systems. With that said, we also see that we are having a strong position, and we are positioned very well among our peers to succeed in disclosing the loop in component manufacturing. Together with Sandvic Manufacturing Solutions, we have 400,000 installed seeds and Sandvic Machining Solutions with a reach of more than 100,000 customers, we can create truly many synergies to enable cross-selling. And not only that, you can see on this slide on the bottom, the wealth we have on brands, brands with strong products and strong positioning and in a multi-brand setup. So we offer our customers the choice to combine those things that bring added value what they need for their value chain.

And our product integrations, for instance, the recent integrations we have done with the tool library from Sandvik Coromant into our different CAM software, that gives the user of the software full access to a lot of the different product data models that they use from our different tooling divisions, helping us also to sell more cutting tools. So the combinations of our offering and what that delivers really creates customer loyalty and stickiness. And we will hear more about that now because now it's time to invite colleagues from Sandvik Coromant, Mastercam and CGTech. I would like to invite Helen Blomqvist, Shin Voeks and Alexander Moffat, together with Louise up on stage.

Hello. Welcome. One of many acquisitions that Sandvik has done throughout this shift to growth strategy period is CGTech, a market leader in software for numerical control, simulation, verification and optimization. Helen, can you tell us a bit how CGTech has supported Sandvik Coromant.

Absolutely, in many different ways. And I think Mattias mentioned it already. Actually, CGTech helps Sandvik Coromant to sell more tools as we are exposed earlier in the manufacturing value chain where the decisions on which tool to use is actually made. And then also, our tooling data is fully integrated into the CGTech softwares, so VERICUT and VERICUT Force. And that is also helping us to jointly also improve the performance and efficiency with our customers. Then of course, for our yellow coats and our sales force at Sandvik Coromant to have CGTech software in their portfolio that is a true benefit because they can realize values and they can also prove efficiencies and return on investments at the customer side. But then last but not least, we are also a happy customer, of course, of CGTech as we use the VERICUT software and the VERICUT Force in our own production. And together, we work on improving both ways then to deliver more value to our customers.

A lot of interesting things going on. Let's see the take. Shin, can you tell us a little bit what's in the works in terms of the technology road map and how that could benefit other Sandvik businesses?

Sure, Absolutely. So really center to CGTech is optimization and performance for us. We actually feel that with our VERICUT platform and its modules, we can make our customers over 30% more efficient by verifying and simulating our customers' data for regardless of whatever type of industry or application and machining strategies that they may have. So what we're embarking on right now with our VERICUT platform is very transformative for us in taking the VERICUT platform and building a SaaS offering on top of it, so we can extend our reach to a variety of different industries and customer sizes. And we also feel like we can work very, very closely with the other Sandvik's sister businesses and executing on that commercial reality.

And even though the CGTech and the VERICUT platform is product agnostic and an open offering, what are some of the benefits to be part of Sandvik? Sure. Yes, that's true. So today, we work with over 60 machine tool manufacturers. We work with over 20 CAM providers, including MasterCam, GibbsCAM and Cimatron and over 15 tooling partners, as you heard, Sandvik Coromant, Walter, Seco, and TDM are have all been longtime partners of CGTech. But I think one of the things that's very unique for us is we can share our technology road maps, we can share integration opportunities, new value-add solutions for our customers. But really what might be the most exciting opportunity is being able to share the opportunities on customers and cross-selling and synergies. Just within this last month, we've been involved at CGTech with a few different customer events with some of those sister businesses that I just mentioned, where we've been able to interact with a much higher level of leadership from those customers, and that's a really unique and new thing for us at CGTech. We're very excited about that.

Another acquisition that Sandvik has done during 2021 is Mastercam, actually the most widely used CAM brand in the manufacturing industry. Sandi, tell us a little bit about how the strategy has evolved since acquired by Sandvik?

Okay, yes. We've seen a couple of sort of strategic developments. The first is that we've now actually started work on developing the next generation of Mastercam's machining algorithms, which is obviously very exciting for us and very important for our future. The second thing is that we're now able to look to grow inorganically. And this year, we've seen our very first acquisition, a company called Postability. This company manufactures post processors, exclusively for the Mastercam customer base.

One thing I think the audience is curious about this performance. Can you tell us a little bit about that? And how has Mastercam performed?

Well, Mastercam has got a very long history of consistently strong growth. And that's carried over really into a post-acquisition period. And in 2022, I think, which was our very first full year with Sandvik, we once again recorded record results. We're very pleased with that.

Finally, [ Liam ]. CGTech Mastercam is just a few examples of the acquisitions that Sandvik has done, but we have quite some value-add software assets in-house now. How has Sandvik Coromant in general taken advantage of this broad-based software asset?

Well, the basics of the Sandvik Coromant offering in general is very much about high-end knowledge, it's about solution and it's also about our tools, of course. And we really see a huge benefit, of course, with this really broad portfolio of softwares that we have now and combining that technology that we have in SMS, but also in Sandvik Coromant in that sense. And our customers, they are navigating in a quite complex ecosystem. And we hope to guide them, of course, by this combination of the software and the hardware. And I think today, during the tour, you have seen some fantastic examples, of course, about this integration. You probably saw CRIBWISE, very close to the machining station when you were working around. So that's one example. But also TDM Systems and Metrologic is a very good example where we combine our technology. But then for Sandvik Coromant, of course, to have access to the 400,000 seats that are installed, that gives us a great exposure. And as we have integrated the Sandvik Coromant CoroPlus Tool Library into the CAM software. And today, you saw an example of GibbsCAM integration, but we have also integrated into Mastercam and also Cimatron. And this is -- it's a truly value add for our customers and also for some Sandvik Coromant, of course.

Indeed. Great stuff and exciting times ahead. All right. Thank you, Sandi, Shin and Helen, and we will welcome back Nadine to the stage.

Thank you. Efficiency, sustainability, growth and resilience, all words that I will come back to now in this presentation around results and plans when we talk about Sandvik Machining Solutions. But let's start with some trends that we see that is happening in the market that is impacting our industry and also Sandvik Machining Solutions. These megatrends, they don't change overnight. So we have seen them also on the previous Capital Markets Day. We have presented a similar slide, but there are some kind of small changes that I would like to highlight and also how it affects us today. The first one, for instance, it's mentioning clearly now slowing globalization or we can also rephrase that and talk about increased regionalization. This, of course, partly due to the trade and regulatory restrictions or also the supply chain disruptions we have seen. We see that there is a much stronger focus on how to secure the business and the industries in a more regional approach. Then the second part around urbanization and growing wealth. Here, it is clear that quality infrastructure, transportation, energy, it is boosted. It will get by growing wealth, more demands and also, of course, more goods and more component manufacturing. This growth are not the same in all areas. And here, Asia is sticking out and especially from Asia, we can say 50% of that market or region size is on China. At the same time, an opportunity, on the other hand, of course, comes with challenges. Then we talk about the changing demography. We all know that we have an aging work population and workforce. At the same time, we work hard on upskilling more of talent. So we at Sandvic also have a very important task to be the employer of choice. At the same time, it gives us the opportunity in the industry through automation and also digitalization to increase productivity and also get tasks more automated. The last 2 ones you see here on the screen, sustainability and digitalization, they both have been accelerating in the past period. Sustainability more from a demand from all our customers as they see the need and first of all, the push towards us as a supplier to be on top of what we need to deliver to them. On the other hand, they also are on the journey to become themselves in their operations more sustainable. And as we are part of the industry we serve, we are in a good position to show and we will come back to that later as well. And the main thing in their focus is, of course, net 0. Digitalization, here, we have been talking a while already around Industry 4.0. That remains, of course. But here, there is a slightly shift on not anymore talking why is it important or what, but it's a lot on the how. There is a lot more focus on new technologies and how to apply them like how to work with big data, how to work really with artificial intelligence. And that, of course, is also a benefit for us as in part of manufacturing industry, we have access to a lot of data and the better the quality, the more benefit we can get out of that. Bringing these trends now a bit closer to our industry and to our machining industry, we always talk about slicing it in a few different ways. So let's start with segments. The segment on this slide, you see the 4 biggest segments we have in the machining part. And you see clearly the size of them in the number, in the circle, you see our market share and then the bars, they are reflecting the growth rates in the coming years. Here, you can see that all big 4 segments are growing. So there is all a growth but in different rates. When you take automotive, automotive has the slowest CAGR in the coming years up to 2028, 2.4%. Even though that the amount of vehicles in production on the light vehicles will increase from 85 million to 101 million pieces still. Also electrification is ongoing, and we will come back to that. On the other hand, aerospace is sticking out very clearly. They have a huge CAGR, 8.4% in the coming period. Here, of course, we know that until now, aerospace has not reached back the level of 2019. So it's still recovering from pre-pandemic period. That said, there is also an enormous pull effect and growth in Asia increasing on the fleet. Not only the big segments are important. We also concentrate in Sandvic Machining Solutions on a very smaller but faster growing and also very attractive segments, like for instance, you see here on the screen with medical, electronics, die and mold. And under the other umbrella, a few ones to highlight is, of course, machine tool builders is one; chip and railway or others that are part of that other box where you see a very good market share and also growth opportunity. Here on these ones, Medical is an area with above-market growth rates, you can clearly see for the coming years, and we have a great opportunity to gain market share. We have been adding acquisitions in the past years around that so that we can build on a more organic growth in the future. And that, of course, is also part of our plans moving ahead. Leaving the segments a little bit behind and now moving into the regions, the other way, how we often slice our business. Especially with this growing regionalization, it is really important to take a bit closer look on how these are positioned to each other. All of them growing even though you can see that Europe is still on this picture here and now the biggest region but has the slowest CAGR for the coming period, 1.9% versus Americas and Asia who have above 5% CAGR for the coming period with a strong growth opportunity. Here, Asia, you can see in size with that CAGR by 2028, will be the biggest region. And knowing that, 50% of that region is related also to China, again, a very important market. When we summarize this picture and we take all the segments together and the regions together, then we come to SEK 210 billion total cutting tool potential in the world. You can see that by end of 2022, we have been really catching up from a cutting tool potentially in the market back to the 2019 levels, a 0% CAGR on the cutting tool potential where SMS has been growing 1.1%, so we have been outperforming the market during this year period. On the other hand, we all know that volume growth has been affected in the past years, really through all these different phases and happening in the different segments and the different regions. So it has been a challenging period from 2019 until 2022. When we look then ahead, we can clearly see that the upcoming period has a higher growth pace now than the past years we have behind us, up to a 4% CAGR with really opportunities in the different regions and in the different segments I highlighted. And on top of that, as I didn't show those numbers, but it is still the same trend that the round tools are developing faster than the inserts. But both of them have growth opportunities, both on volume and on total growth. If we then go back now to us and Sandvic Machining Solutions, how well are we prepared? And how is our foundation to really capture these growth opportunities moving ahead? We can clearly say Sandvic Machining Solution is the global market leader. So we have a very strong position in the market, but also a very high degree of innovation. That high degree of innovation is very visible in these numbers you see up here. We have a lot of patent families at the same time as continuously introducing new products that improve the productivity for our customers. During the past few years, we have seen that it's not only product and new innovation that is really driving the potential to grow, but also the fact of having a really efficient logistics system. During the whole supply disruptive period, we could really differentiate ourselves with a strong delivery opportunity wherever in the world. And the other part, what is a differentiator is how many touch points and how quality touch points we have with our customers in the world. We have around 5,000 sales engineers physically meeting customers and really taking the value-added level up for them in their shop floors. But not only there physically, we also are increasing all the digital touch points what, of course, is an added value to have those combined. We are continuously investing in research and development, so we can secure that this high degree of innovation, and this really great opportunities to capture this added value for the future is remaining on a strong level. If we talk about global leadership, we're also in the context of what I previously said with increasing regionalization, it's important to say, yes, global leadership over all umbrella, but also a very strong position in each region separately. Europe is our home market. So here, we are really strong, both in sales, in production footprint, R&D centers, logistics and also powder supply. Everything that we need to secure our own production and our deliveries to our customers, but also the service to create added value towards them. In both areas, America and Asia, we have also a leading position and continue to work to strengthen our presence in these markets, both in sales and in footprint and also in our powder supply as we will come back to in the presentation. So we are well positioned to capture the growth. And last time, we also in the same strategic context of Sandvik. We have the 3 shifts. We have to shift the growth, the digital and sustainability shift. The last Capital Markets Day, we emphasized the fact that for us, it is important in a slower growing market to focus really where to gain market share and where to capture the growth momentum. Those 6 areas that we highlighted last time, they are still valid. Taking in consideration though all the trends I've been talking about, we can say that the first 2 related to the insert position and the round tools. We have been refocusing them as well on saying like, yes, these are valid in the regions, in the premium segment. We are really going to take market share in certain growth segments like medical, aerospace is growing fast. So here we are really taking a combination of the products, strength and, of course, the growing segments. The third and the fourth when we are looking into strengthening with market and growing outside of Europe, those are really fitting well in the context of this global presence in all regions, supporting and capturing the regionalization growth in the different areas, but also the local premium positions we can have in the different parts of the world. And I will come back to where we are on the automotive shift as well as explaining how much we are as a Sandvic Machining Solutions also having on our radar regarding digital products and services. So starting first with these innovations and new products. Let's start with giving a few highlights on our new inserts and new round tools we introduced in the last period. On the top left corner, you see a milling cutter introduced by Seco. This milling cutter has increased efficiency for our customers, less energy consumption. And at the same time, you see when you look very carefully to the insert, it has 4 cutting edges instead of 2. So a lot of added value and also, our innovation is also here secured as it is with 2 patents on the design and one more on the ornament for the diamond pattern you can see on the milling cutter. On the bottom right, you see CoroCut 2. Those are the versatile parting and grooving inserts. The most important portfolio was from Sandvik Coromant. This is the next generation of parting and grooving inserts that are more versatile, more secure, more reliable and usable in a broad segment in automotive, aerospace and general engineering. These inserts are around 10% of the Sandvik Coromant turnover. So this is a really great contributor and it is introduced as we speak and growing in sales and a great added value for our customers as well as a market share gain for us. On the top right corner, you see milling cutters that has been introduced with Walter and those end mills are -- have at least in the last past years have been doubling their turnover. These milling cutters are also not only increasing the possibility of using higher speeds and feeds, but also, again, focusing on sustainability and less energy consumption. The very specific thing with these ones as well is time to market. The trends are changing fast, new materials, new demand from customers. It's all about the reaction time we can bring innovations to the market. And this has been working in a new agile way of working, so we can answer those needs in a faster way. And that brings me to the topic of round tools. At Last Capital Markets Day, we talked about leading position in round tools. Where are we? Well, we said we want to become top 3. We are top 3. End of 2022, we reached the third position in the round tool ranking on the global -- of the global market. That has resulted out of growth that is over 4x market growth and has been giving us the opportunity or the possibility to increase our market share with more than 2 percentage points. This has been part of a growth journey that is built on own organic growth through the innovations you just saw on the previous page. But on top of that, very good additional acquisitions we have done in all different regions in Americas with GWS, with Sphinx in Europe, but also different segments. Sphinx for instance, in medical, remember the fast-growing segment as well, microtools. So the combination of acquisition, organic innovations has been brought us to this third position. At current, we are trading more into a second position. So we are even surpassing this third in line. Shifting from those 2 that I saw on the growth side, like inserts and round tools, we also talked about regionalization and really take a global position and taking growth momentum of what I showed Americas and Asia previously on the slides. We have regional plans because we cannot really use the same plans for all regions. If we think around Americas, we are focusing a lot on the U.S. We have a very strong market share and position with all our premium brands, but they are working majority-wise towards the standard inserts and standard products. We have acquired GWS, what is a complement on really working towards specials and customized solutions, and they have been acquiring additional elements to grow into their footprint in the U.S. We also work in a more fast-growing market, Mexico. There is a lot of near shoring in Mexico. We're well positioned there with sales organizations, but also production of footprint. When we think around Europe, it needs a different approach. With again, a good market share in Europe and a strong position, we are increasing share of wallet through added value and also working on these combinations that we will talk around, and we have seen with SMF and SMS. Here on top, we are focusing on really growth markets, medical, automotive, aluminum and also aerospace. When we look at Asia, Asia is growing fast and we split it again. In China, we are also working on 2 roads. We are working and increasing and continue to work on an international brand. So all our premium brands in China, focusing on the right adding value segments there. At the same time, we also acquired Yangpu, a local premium brand so that we can really complement and gain from that combination. In the rest of Asia, we have a strong footprint and business in India, in Japan and are working as well within Vietnam, Indonesia and Thailand as great market and growing opportunities. Looking a little bit more deeply on what was then the results and change we have done in North America. And you can see here in 2019, we have had 20% market share. Now we are at 25% market share. And that's through organic growth again with our premium and our good market position, but we added on this complementary business with GWS and then as well, Balax and Peterson to have a full portfolio of customized solutions together with standard solutions in the U.S. market. At the same time, the regionalization also brings for us an opportunity and a strength to have our full offer there in the sense of a full supply so that we can secure that our products can be continuously delivered to our customers. So we have signed for an acquisition with Buffalo Tungsten, what gives us also a powder footprint into the North America and the U.S. market. Moving on then to the fifth area that we talked about, and that was automotive shift. Electrification is continuing. And we know it has been accelerating each time that we talk and ever meet. It is an acceleration of the move to electric vehicles. Here, we have been doing a deep dive and that deep dive really emphasizes the fact that for us, the total cutting tool potential is remaining stable in the long run, and I will explain why. When we see here on these numbers, you see the different categories of vehicles. You have the light vehicles and you have the medium heavy vehicles. You can see that the medium heavy vehicles are growing with a CAGR of 3%, so it's higher than the 2% of the light vehicles. On the other hand, with a higher growth on the medium heavy vehicles, they have a slower electrification, only 13% versus the 47% of the light vehicles. So a slower electrification but a higher growth rate. One important factor to take in consideration is the machine intensity. How many inserts and tools we need to produce 1 medium or heavy vehicle is 5x as high as a light vehicle. So even if it's only 4% of the total production volume, that makes it almost 20% of the cutting tool potential. Knowing that and knowing how we in SMS are having our sales and our business, 60% comes from the light vehicles and 40% comes from the medium and heavy vehicles, where we have a 25% market share and a strong position. If we take all that data and put it maybe in a more clear overview, I would like to introduce you to this graph. Here, you can see the journey from 2022 to 2030, where you can see the full cutting tool potential and also the mix change of vehicles. And this here, you can see that the mix of the vehicles in 2022 looks totally different when you look in 2030 because, of course, combustion goes down, electric goes up, hybrid goes up and all these machine intensity factors in consideration, you can see that by 2022, first of all, it will be a growth on the cutting tool potential until 2025 as we have more vehicles in the growth rates and also supporting from the hybrid, as you know. But then, of course, further down to 2030, it will slightly decrease, but at 2030, we are still at a 0.2 percentage CAGR, so slightly above the level of 2022. So the market, in this case, developing from a cutting tool potential in a flat way. It creates though a really good opportunity in the area of aluminum. Aluminum is a material that within the electrification gets a lot more attention because the weight is so lower and for that reason, also very much wanted and needed in these electric vehicles and not only in the electric motors, but also in the battery housings, but also in the carrying surrounding components to reduce the weight. So overall, it is a strong growth, as you can see that within the cutting tool area, related to aluminum, we see a growth from 19% to 28%. So this gives a great opportunity for us to grow as SMS organically, but also through acquisitions as we have been showing like with [indiscernible]. If we put that all together, what does it mean then for us in Sandvic Machining Solutions regarding the automotive segment. Here in the Automotive segment, we see that we are going to grow based on this flat market share our aluminum opportunity, the strength in the heavy vehicles and our position potential in the light vehicles. We see that we will reach here by 2030, almost SEK 9 billion line. And you can see that 90% of that growth and that achievement in 2030 is based on organic growth and only 10% on acquisitive additional bolt-on that we will do to grow in that market. Moving into the last part then of the growth, the sixth area, we talked about digital products and services. There is an increasing demand for our customers that comes and ask us to support them on their journey to productivity, sustainability and also profitability. Here, we work a lot within Sandvik Machining Solutions to offer them through projects and consulting services, additional knowledge and additional abilities to improve their work shop floors and their work procedures. And that can go when you start from the left, it can go from the right tool recommendations, the tool path you have seen also in the demonstration earlier this morning, it can go through the tool management, also like the CRIBWISE vending machines you could see on the demonstration, but also on new business models and machine monitoring in the later phase of this chain. Through the move of the TDM systems and also CRIBWISE that we highlighted earlier in the presentation, we create an opportunity to really address strong pain points from the customer that they are facing on the shop floor. And on the shop floor with all these very expensive machines that need to be utilized in the most optimal way, we at customers, they don't like to see failure of tools because it is idle time on the machine. It is not efficiently use of the total productivity opportunity. Also, the inventory can be much more optimized if we have the right data available. And that we can do when we work with TDM systems and CRIBWISE and link that together with the tooling divisions. We can work around a much more optimum setup and do that, as you can see on this picture, in the phase before you get activity on the machines. So you can use really your machine time and your machine park in the most optimal way. But instead of me talking more around this, it is great to listen here a bit to a customer who has this example running. [Presentation]

So this was a great way on seeing how everything can be combined in one offer that really provides productivity in the full solutions. With this, I will end the presentation around the 6 focus areas that we have been talking about before. And I just want to highlight that these growth areas are really build on 2 legs: one is the organic growth and the other one is the acquisitive part. And here, you see a really total picture on how this total acquisitive part has been contributing to our overall results. And this overview doesn't only highlight the overall contribution, both on a growth momentum, but also on EBITDA. As the growth of these acquisitions that we have recently done has been having a higher growth level than SMS overall, and the EBITDA improvement has been higher than the revenue improvement. So here, a really truly value creation. But as we said, we also work with these acquisitions in a very focused way. So all of them, if you see them on this map, all 12 of these acquisitions have been really focusing on all the 6 areas we explained, and that is around growing outside of Europe, supporting the round tools, but also when we think and look at the European part, it is a lot around the growing segments like Medical or also in the Automotive Aluminum shift. Here also on Asia, and we also want to get into this local premium, we have Miranda tools in India and Yangpu in China. So highlighting and supporting overall growth journey is very visible in this total overview and picture. When we are then moving away from the growth shift, we talked about 2 other transitions like the digital shift and also sustainability shift. And the digital shift, we highlighted just in our presentation before with the digital products and services, and I want now to have a short attention as well to the sustainability shift. As we said, sustainability is high on the agenda from our customers and really focusing on Net Zero. It's all about reduce, reuse, recycle, really on how can we help to create circularity, reduction of CO2 emission and energy efficiency. As we are part of the industry we serve, of course, here, we have a really great opportunity to show the way and also invite customers to see how we work with it ourselves. We are introducing new products that continuously innovate, but also become more productive and less energy consumption. At the same time, we also have more reconditioning of tools in our round tool offer. And we recycle, as we heard already from Stefan as well in the introduction this morning, more than 50% of the tools is recycled. Here, we have, of course, a continued ambition to add other services to this portfolio. And here, we put it under the umbrella of sustainability services, but I would like to invite Helen Blomqvist again from Sandvik Coromant on stage, to let you listen first as well to a customer who has been working with round tools in this context as well, but then also to really dive into one of the services that we call sustainability analyzer. [Presentation]

Well, it's always fantastic to listen to the customer voice. And I would really like to build further on the sustainability shift. We would like to be part of the solution. And I would like to introduce a new sales tool that we are introducing now to our sales force and that's the sustainability analyzer, where we can minimize emissions and also the climate impact. And Sandvik Coromant has been helping customers to unlock potential in CNC machining for many, many, many years and it's really part of our core. And we have been proving productivity increases and also been able to dollarize them also for many, many years. But what we are doing now is to really enhancing our value message to our customers where we can also quantify and also identify energy savings. And this will help us to support our customers, not only with cost savings and efficiency gains but also at the same time, decreasing the environmental impact. Our customers are on the same journey as we are towards Net Zero. And we also know through studies that it's only 20% to 25% of the energy that is consumed by the machine that is in actual value-adding operations, meaning metal cutting. With the sustainability analyzer module, we can support the customers through a data-driven approach where we use our product data, our tooling information and also how we are running the tools and how the tool is performing. We are doing that through a data-driven approach and increasing the tool efficiency. We can reduce the wastes and also save energy. And the sustainability analyzer, it's not something that we have developed solely by ourselves. We have been developing that together with some of our key customers. And so far, the response has been very, very positive. And we have many success cases that we could share today. But I would really like to share 2 of them. And the first one is where we have introduced our new steel turning grade, the GC4415. And through optimizing the tool performance and also the machining settings, we have with a customer then, producing more than 215,000 components every year. We have been able to save energy, corresponding to 20% of the total consumption with that customer. And another example is how we have been optimizing the milling operation through a new tool path and also the machine settings. And this with a customer producing more than 80,000 components every year. Here, we were able to save energy then corresponding to 23% of the total consumption. And in this case, we didn't only identify the energy savings but here also additional cost savings as we always do. But in this case, we could also help the customer to avoid investing in additional machines. And as I said, this is a sales tool that we are rolling out. We have been piloting until now but now we will roll it out completely. And we are now looking forward to continue supporting our customers and also practice manufacturing wellness. Thank you. And then I will invite Nadine back on stage.

Yes. Thank you, Helen. Continuing with one last subject that I talked about, the word resilience in the beginning of the presentation. So I would like to show you on where we are in our trajectory over the last few years. You can here see that we have had a growth journey above market when we look on the past few years. But of course, with all the pandemic COVID-19 and other disruptions, of course, has been a turbulent period in the growth journey. But above market is a really strong performance that we are not only proud of on the top line but especially on how we have been changing our flexibility and our agility on the way. You can see here on the EBITDA, it has been a very strong performance and a very stable performance through this whole period. And this is, of course, from an SMS perspective, a strong performance to be able to say that it also contributed to a very stable leverage of around 40% for Sandvik Machining Solutions. And that in the contradictionary to what maybe in the past, you could see that sometimes in the really high-growth phases, we could deliver a leverage up to 60%. But then in the downturns, we were really negative. So here, we have increased our agility and we have increased our resilience. At the same time, as we also heard from Cecilia this morning, we are working for the mid- and the long term, of course, with some structural measures. These are more to secure that we are really ready on a long-term journey to be able to take also improvements there. But this flexibility and agility really in the context of what we show here, of course, needs a lot of effort and work. And here are a few examples on what we have been doing to secure that we are becoming more flexible and agile. First of all, short-cycle business means that, of course, we need to act fast and the trends and changes are happening fast. So what is really critical for us is to really have a good planning system. And here, we are using new technologies and based on also the support of artificial intelligence, we can capture a lot of data from the past and really predict and make our forecasts and planning in the best possible way. On the other hand, we are continuously working also on our fixed assets and our footprint optimization. We are also working continuously with our procurement optimization as well as workforce flexibility. Our workforce flexibility in the broader context, of course, understanding where do we need to have our own Sandvik employees and what to outsource and where to have third parties but also workforce flexibility in focusing on the right growth opportunities in the right regions. So have a flexible workforce also with the right changing focuses where opportunities are. And then, of course, also a journey into new revenue streams. We talk about this performance-based business models, what is really related to the projects, the consultancy and also relating to the work we are doing in the offers together from a Sandvik Machining Solutions and a Sandvik Manufacturing Solutions opportunity. So all of this is creating for us an opportunity in the last few years to demonstrate a stronger resilience. Then summarizing, this is the slide where we can say that we are reconfirming the targets that we have mentioned before, with a growth CAGR of 5% from '19 to 2025, with almost half of the growth coming from M&As. And organically, we are growing faster than the market. And by this, I want to conclude the Sandvik Machining Solutions presentation and invite Mattias Nilsson on stage for the Sandvik Manufacturing Solutions part.

By simplifying manufacturing, we will meet our targets. Let's talk about how. Sandvik Manufacturing Solutions is well set up to really leverage the industry trends and the customer needs that we see. We see changing customer behaviors and demands on components and assemblies, enabled by technology in an ever evolving industrial landscape. Ever since software was introduced to our industry, we have seen that decisions on how to machine a component in the most optimal way is moved up the value chain, sometimes as early as up in the design phase. We're also observing a skills gap in the market with an industry becoming more tech-centric where it's rather costly to upskill your existing workforce or find new talent. And with operators and machinists, being a bit older and about to retire, these skills gaps can be filled by applying digital manufacturing solutions. On the component and assembly side, we have also a higher degree of complexity and lighter materials, not the least as an effect from more and higher ambitions on the sustainability area, requiring less energy consumption in the workshop. On the technology side, machine tools are becoming more complex. And we see, as we saw earlier in the demo today, that metrology is moving into the production line but maybe the biggest change is yet ahead of us. With the evolution of generative AI and machine learning, that will be the key definer and what will drive the fully autonomous manufacturing process. With those changes, we will see that the point solutions that we have across the value chain today will become more developed into turnkey solutions, helping the customers in a more simple way to really leverage their digital shift and drive that. It will also drive consolidation in our market. So what is our response to this? Our response is to simplify manufacturing. We will offer software and it's enabling hardware to help our customers automate and optimize their manufacturing processes, closing the loop from design to finished component. We have a strong portfolio of leading brands with really strong point solutions where they invest continuously in developing new features for the customers but also becoming part of Sandvik, together find ways of how to leverage joint development, addressing new use cases and technologies at customers. With this strong portfolio of companies, we have moved to a portfolio of software companies generating 70% of our revenues coming from software business. This is an increase towards the target that we set before by 2025, which was 60%. The rest would be hardware related to automation and metrology. We have in our software business, 400,000 installed seats. And in the last 2 fiscal years, we had a growth of 7% per year from the software business. Out of these revenues, 60% were recurring and we delivered an EBITDA margin of 29% on average in software in the last year. And besides the software business, here, we do have a turnaround case in the hardware side. We have a bit of spend into governance, securing facilitation of synergy realization, exploration of new technologies and new products. And that is also one of the reasons why we have as many as 30% of our employees connected to R&D activities. So we have a strong position across the customers' workshop, addressing design, computer-aided manufacturing, verification, where the market potential only in computer manufacturing and verification is as much as SEK 50 billion, in markets that we expect to grow with 7% to 8% in the coming 5 years. And from there, we have the opportunity to venture into other verticals of discrete manufacturing. In production and operation engineering, we use CAM software to connect the digital world with the physical world, using digital twins for components, machine tools and for cutting tools to help the customers find the optimal tool path and the right tool to do the job. This is a real machine tool or machining booster, productivity booster. In verification, our solutions are not just helping customers to determine whether the specific area, the finished component meets the specification from the drawing, it's also manufacturing efficiency booster, giving shorter design cycles and shorter measurement cycles. And we can do that through an agnostic offering that connects to any software and hardware device across the customers' workshop. So indeed, we have a strong platform to build from. And our competitive advantage as we see it, is that by combining hardware and software, we can leverage from the legacy we have from being a leading cutting tool supplier, having deep knowledge about how to machine a component in the best way, adding software products into our portfolio that can make use of this knowledge, make our combined offering unique in the market. We're also part of the industry that we serve. We're having the same pain points and gain points in our own production units as our customers do. And by using these production units as pilot customers, we can make sure that we develop the products, having the right features that customers really need so we can scale. But we can also leverage the global footprint of Sandvik, opening new doors for new business opportunities for our newly acquired companies. Having agnostic solutions is a strategic choice. By being brand neutral, being able to connect into any hardware and software that the customer has, we provide flexibility and customization for the customer. It's the customer who decides which platform to use, we provide the solution for their daily tasks. By being new into Sandvik as a software or hardware business, we provide the opportunity to gain collective intelligence, where we gather people to learn throughout development from the idea to the release of our product to improve our total offer. With our internal tech community, we gather expertise from 18 different brands from SMS and SMF, where we benchmark best practices for software development, where we follow the industry trends and where we generate ideas together. Within our customer lighthouse program, we innovate together with a selected group of customers where we apply our recent software at an early stage, making sure we get direct feedback in the early stage of the launch, making us able to scale but also improvement of existing offerings. And I would like to invite our CTO, Magnus Malmström, who will tell you more about what we are doing in this area.

Thank you, Mattias. Yes, we are here to simplify manufacturing, as Mattias shared. The product teams in SMF are -- continuously to deliver value to our customers so they can achieve more. To bring industry from 0 to life, you first of all, need to harness data. Then you need to move from disconnected to connected user experience. And then you also need to empower the people. So let's see what the tech community have been up for the last year and what we continue to work on. So this map is very important for us because it represents some areas of focus areas for us. One is that in each area that is represented here, we can further optimize in a decentralized way of working in the product teams and the brands we have. But we can also add more simulation and we can also add more algorithm to verify the outcome. Then we also work with innovation. So for instance, Shin shared recently bought business model for CGTech. Alexander showed some examples of the new tool platform we are building that will enable a lot of new innovation, as well as on CAM automation. Then we also, in the metrology area are building something we call [ X5 ], which is a new metrology platform. So those 2 things are super important for us. But then thirdly, through the collective intelligence community, we meet up and have a customer-driven road map for the areas of integration between the products that we believe have the best business outcome for us. And that can bring this to life, what you saw in the factory demo. By building a digital thread and the combination of the products, as you saw, we can make this happen. And we'll go back to that soon. But I want to deep dive in this area. Here, we have GibbsCAM, which is a very advanced CAM software for Swiss machining and MTMs. You have [indiscernible] that is focused on die and mold, and you have [ MultiCAM ] that is for general engineering. But we also have a seamless experience with those 3 products with VERICUT that can perform simulation and also optimization. So that's moving more and more to a turnkey solution from Sandvik. But finally and very unique for us is that we added this year through collaboration with SMS and the engineering team there, Coromant's tool library and also tool path. And if you look at this component that you saw before, it's using a method from a tool path called prime turning. So you turn it like this. And that's a unique proprietary technology from Coromant that we embed in the CAM software. And then we're also moving from an offline situation to an online situation with all the cutting data and the tool information. So the SMS brands are very good to come out with new innovation, bringing more quality tools out that increase productivity. It can be hard sometimes for the customers to keep up with all that. But when in an online scenario, just with a few clicks away in the CAM software, you get access to all this information and that is updated constantly. So we feel that it's really making -- allow more creativity in the business and also improving for a customer experience. And it's also building on the reason why we exist as organization and we can simplify manufacturing. So to conclude, I want to show [indiscernible], which is a customer voice of us that have all this Mastercam, VERICUT and also the commands used thy will share it of their expectations and also how we have worked with them to create a seamless experience. [Presentation]

Thank you, Magnus, for sharing those examples. And now I would like to invite another colleague on the team to talk about verification. Laurent Monge, President, Metrologic Group. Welcome on stage.

Thank you, Mattias. So as mentioned by Mattias earlier, connecting our software solution from dimensional control system and Metrologic Group as well as integrating them into our [indiscernible] verification machine help our customers to simplify their manufacturing. They can now access to a full digital twin. Taking the example of an in-line application, they can really improve their manufacturing efficiency and sustainability with some automated programming and the ability to simulate their full verification setup so that they can further optimize and reach the best possible efficiency. And finally, also access to certain functionalities such as collision avoidance, also verification of continuous line of sight for measurement sensors because the verification machine sensors will move around the measured component. And all of this is happening without using the actual verification equipment so that it remains fully utilized for manufacturing. Finally and while the verification will happen on the shop floor, our software solutions are going to make the collected data available in the digital chain, this in order to enable an end-to-end automation and optimization. So these solutions are being increasingly adopted by a number of markets such as electrical vehicle manufacturing but also micromechanical applications. We also see adoption of these solutions in market using robot-based verification and this, thanks to the fact that our software platform are agnostic, meaning they can accommodate most of these existing verification hardware. So to illustrate this, I'd like to share a quote of a customer in the name of Figeac Aero, which is a leader in aeronautic subcontracting. And as you know, this market is quite demanding in term of quality assurance but not only, it's also a very demanding market in term of manufacturing efficiency. So here, one of their programming experts shares the value he sees for his company while using Silma. Silma being the verification, simulation and digital twin solution of Metrologic Group. So quoting this customer, "one advantage to highlight is the capability of virtually reproducing the old inspection environment, then programming from A to Z of highly complex parts with collision avoidance, brings us considerable machine time saving and allows to measure more exactly." And let me elaborate a bit more on machine time saving. For this particular customer, they are now able to have an 88% use rate of their verification equipment, this on the 24/7 market basis. We are so proud to enable that for these customers and for our customers. Back to you, Mattias.

Thank you very much, Laurent. Thank you for your examples. So as part of our strategic direction, we have established a leading position in key markets. I'm really proud to see how we have progressed and where we are and excited about the future. We simplify manufacturing, design, component -- or computer-aided manufacturing and verification. And by investing in new technology and by looking at further possible acquisitions in the current verticals where we are, we intend to strengthen our position even further. We are currently focusing a lot on accelerating growth on our current assets by both a combination of looking at geographical expansion to capture market share but also on bolt-on acquisitions. In addition to that, we are striving to generate synergies and creating value through integrating products, as you have heard but also to cross-sell our solutions between the different brands. And by being together and the collective intelligence we now have, we have also realized that we can address other pain points and use cases by combining the capabilities of the current offering with other offerings in other verticals of the discrete manufacturing industry, coming up with new solutions. This could, for instance, be in manufacturing execution systems or MES, or design automation or quality data management and expanding our offering into these areas would also increase the addressable market substantially, beyond the SEK 50 billion that we addressed today. So with this, we have increased our ambitions when it comes to driving our software business, setting a new target by 2025 at SEK 4 billion in software revenue and generating an EBITDA margin of 22% for the full SMF portfolio. And we can accomplish this by having a leading position in key markets already established, by progressing continuously with leveraging our synergies and by going into new verticals and looking for new opportunities together. So by simplifying manufacturing, we will meet our targets. With that said, I think it's time to summarize SMM. I would like to invite Nadine back up on stage. And I think Nadine we can say that by being together, we have an exciting road ahead. We have businesses in our different business area segment that has individual plans for how to grow organically, how to grow inorganically but also they find opportunities to collaborate and join forces on technology development and coming up with new use cases for product development. I think that is really a strength to build on. And additionally, we have seen that through an agnostic approach, we can both leverage quickly the internal ecosystem that we have but of course, also towards the external ecosystem partnering up with others in our industry.

And then we used the word product integration a lot during this presentation. And I think here, the 2 words are really important in the summary as well because products, we have been highlighting several times, the really broad portfolio that we talk about combining SMF and SMS with all these agnostic brands, multiple choices, multi-brand opportunities, linking to external vendors and so on. But the key to it, it's all about product integration, really connecting all the dots, starting with small steps, doing one step at a time but then really connecting all elements together. And that with the ultimate goal to really create a seamless experience for our customers. So if we summarize all of that, we really are looking forward and we are on the way of closing the loop in component manufacturing and we believe it is an extremely inspiring journey to take that step by step together with Sandvik Manufacturing Solutions and Sandvik Machining Solutions. So thank you for your attention.

Thank you very much. And with that, we invite Louise back up on stage.

Yes. Thank you. And not only me because we have the precious 15-minute Q&A now. So welcome Stefan, Cecilia, Mats and Richard up on stage.

Okay. I see eager hands raised already. And we can start with Andreas Koski here.

Andreas Koski from BNPP. A question on -- or 2 questions actually on SMM growth opportunities because today, we have heard a lot about productivity improvements. GibbsCAM, is it GibbsCAM? Talked about 50% productivity improvement. CGTech talked about 30% productivity improvements and then Helen mentioned the DC4415 (sic) [ GC4415 ] and I read that it increased the product lifetime by 25%. So it sounds like the productivity improvement is very strong but that also means that we need fewer cutting tools. So how are you thinking about that?

It is -- when I explained on the growth and the continued growth ahead of us, we have had a CAGR when we take on 2025 or 2028, either it's below 4% or above 4%, so around 4%. That has still a volume component and a price component in it. So even if we continue introducing more productive solutions, there is a growth, both on the inserts and on the round tools side. At the same time, the other productivity increases for us, it is mainly the tool, so to say, to gain market share. So from that perspective, we see still a growth overall, a growth on volume but as well taking market share moving ahead with the combination of opportunities.

And I guess my follow-up on that. So when we talked about the segments growth, automotive, general engineering, aerospace, et cetera, what have you assumed in terms of cutting volumes, productivity improvements and pricing?

We -- as we continue with our -- each time introducing new products, we always take in consideration that those products are increasing productivity. Of course, by increasing productivity, we also introduced our new products with a higher price as we talked as well that we are taking them, of course, our share of improvements in the market. When we talk about all the numbers you have seen here, it is totally volume and price numbers that you have seen on the increases.

Klas at Citi here. So my question is on the margin in SMF increasing from '20 to 2022. What is the overall margin today versus the 10% you talked about previously? You've given the software margin of 29% on 70% of revenues. I would assume that, that the hardware margin is still very low. But if we could get that. And then the further growth step-up up to SEK 6.5 billion from where we are today, I mean, obviously, the group is not going to focus on M&A that much going forward. But as you -- maybe there is some bolt-ons in that as well, if we could just get some clarification there.

Yes, I can start. I think if you look at the margin we have, we have, as I said, a turnaround case on the hardware side. And they are continuing to progress and showing improved EBITDA but we have still a long way to go. The journey has been more cumbersome than we thought. So that's a dilutor in that sense. I think also we have seen changes in the portfolio fairly recently, that is also meaning that the software share is now at 70%, which will pull up the SMF margin as well. So all in all, it's progressing in the right way, improving from last year. But we continue then, of course, to report in the way we do through SMM at this point.

And in terms of acquisitions, I mean, as Cecilia mentioned, we will continue to have an acquisitive agenda. The ambition level will be sort of aligned with the cash flow we generate, that should be definitely sufficient for us to reach our targets. And on the software side, it also means that we'll continue to do acquisitions. But I do think and as you have seen here today that we have really taken the positions we originally planned to take when we sort of started with this strategy. So we'll continue to do bolt-ons. Eventually, as Mattias mentioned, I think will come to expanding our positions in other areas as well but that's not the imminent focus. Now it's more bolt-ons, do the synergies, organic growth and then we'll come to the next steps a little bit more ahead.

Okay. My second one is on SMR and think about the dilution from DSI still, like -- is that -- is there a possibility for DSI to catch up, so to speak, so that dilution eventually goes away? Because if that happens, your margin becomes very comparable with some other peers.

Yes. All right. Well, naturally, I think that was communicated already during the acquisition of DSI that it will have a diluting effect. But if you look at how they have improved and how they have been growing, they have come closer to the other margins in the other divisions. So I think they have improved a lot. If they're really going to reach that stage, that is still not clear but they are improving and they are getting better. I think their business is a bit different from equipment business or software business. They are very, let's say, dependent on the steel price and how that develop. And they are getting -- they have already got a lot more smarter in how to purchase steel, how to react to steel price and so on. So I do see that they are going to still improve. How much? I don't know.

We can say that when we announced the acquisition, we said that midterm sort of target was to get them up to 15%. So I think that's the first milestone. And if you look at sort of rock tools, we have a peer that is reporting sort of rock tools in a separate segment. You can see where that margin is hovering around. I think personally, we should not expect them to be at the 20-plus margin because that's not really what that business is supporting. I might be wrong. I hope I'm wrong but that's not the ambition we have had for them. If we get there, that would be fantastic. But they have a strong position in the value chain for our customers. So we felt it has a good strategic value for us. Financially, from a returns point of view, it's been a fantastic acquisition. So we are sort of pleased with this sort of as it is. And for margins, I think we're getting close anyway. So.

Super quick final one for Nadine on the cutting tool index, in automotive. So obviously, the -- when I look back from last year, the HEVs, so the hybrid have come down, the combustion have come down for light vehicle, I think. But when you think about sort of the mix now, you're talking about electric on medium-duty trucks, for example, did you say that, that has a higher content and that is really sort of what is changing the overall tooling forecast because hybrids traditionally had a higher content and that is coming down. So I just wanted to sort of clarify the mix a little bit in that assumption.

Yes. So all the factors we have been using before are still valid. So we haven't changed. So the hybrid, the [ 1.1 ] versus the combustion even 1 and so on. So all the factors we kept, it's the same. And the hybrids are still increasing. And if you look to the graph, it is like a more steeper growth now the first year and that's why there is this increase by 2025 because that, of course, adds on. At the same time, it is the medium vehicles that has this really high level of intensity and that is growing because that pace was with a 3% CAGR. So if you add those elements up, that makes the bubble on 2025 and then still tapering out on a similar level by 2030.

And can I add also the reason we thought it was good to show this split is because I've said this in many investor meetings. We don't understand why some people are so scared about this because we don't see it ourselves. And I think one of the explanations is what you saw here, 40% of the business is medium-heavy trucks, completely different development. And you factor that in, it changes maybe if you do the modeling, thinking all is lightweight vehicles, you get to a different conclusion, maybe.

Yes. It's Sebastian Kuenne from RBC. My first question is for Mats and regarding the opportunity that you see for battery-powered mining vehicles. I recall that last year, you mentioned that battery powered gives you 60% more revenue opportunity than diesel powered. And at the time I thought that's quite a bold assumption. And now you say it could be 65%, so even higher. And it's all driven by this battery as a service portion. And I was wondering what your margin assumption would be. Is it more linked to equipment? Or would it be more comparable to aftermarket? That would be my first question.

Well, we see a strong growth in battery electric, as you saw on the chart. We have had a very strong order intake during the year. And -- we do see that we are still in the early phase, though. So the volumes are not there. So the margins are not there yet either. But if you look at BEV as a whole, we have not been in the business as explained, selling diesel fuels. Now we are selling the energy actually through the battery to the BEVs, which increases our revenue. At the same time, it makes it more profitable for us. So we are really seeing the aftermarket to take a big share in the BEV business. And it doesn't really matter if the customer do better as a service or buy the battery, we still see that portion to grow for us. So the revenue stream will be higher. And when the technology matures and we get into volume production, the margins will come. So we are getting there, naturally with both equipments and aftermarket. But of course, it will be aftermarket driven pretty much through the battery.

Okay. And then one question for Nadine and Mattias. And regarding your marketing approach, you mentioned that you want to grow in the mid-market segment. You want to become a leader there. And I was wondering what your marketing approach is because I recall 3 years ago, you were at the EMO trade fair and you had -- and Sandvik had 2 big stands, 1 for Coromant, 1 for the software, it was really amazing. When I went this year, Sandvik was not at that benchmark trade fair in Germany. And maybe it has to do with costs, sure. But at the same time, if you want to grow in the mid-segment, so I was just wondering what your marketing focus is, if you go to key accounts, if you go to the tool machine makers may be and try to get your software in there, maybe you can elaborate a bit on that.

Yes. I think here, when we talk about growing mid-market and also local premium, those are really sitting together because those are in a combined bucket, so to say. Yes, we are growing that market, we are growing with Dormer Pramet as the brand that we already have had in the mid-market and is growing in different countries and they are establishing and exploring more countries and markets than what they have today. So they are growing that. They also have been acquiring. So there have been, for instance, adding Miranda Tools on top of that. Then if you look on the local premium there, we have had a long list of additional acquisitions we have been doing. Then on how we market it exactly because of the reason that we see also local premium the way on how to reach customers is, they're different and that goes more on the one-to-one and the connections they have. On the premium side, it is more related to account management and machine tool builders. So there is a different way of -- on approaching those customers. And in the mid-market and local premium, there is also an increased usage of distribution in the middle. So we use much more channels there. And also that, of course, is getting another marketing needs. So for us, it is important to reach our customers in the best way and to be able to give them the offer and marketing or offer our new products and our new technologies in the best possible way and that's differentiating, depending where we are.

All right. We will take one last question actually.

Sure. Elliott from Bank of America here. It's actually a question for Mats, on the electric vehicles. So I was just wondering if you could give us a bit of information about how you see the adoption rate developing over the next few years. And then what factors do you think will impact that adoption rate?

Well, we have stated that 50% by 2030. So we are on that track. It's going fast. What is actually delaying the adoption a bit is that, first of all, we don't really have even competition. It sounds a bit funny. But I think -- if every OEM could offer a battery solution, it would be easier also for the market to adopt them because then everybody would talk about it a bit more than what they do today. But okay, put that aside. The capacity, order volumes, the manufacturing capacity is still limited. And that comes from all the pieces in the battery equipment. So we need -- the battery cells are not a limitation factor but we need a proven technology and we need the full portfolio of products with trucks and loaders in all size classes. They are not all there yet. And then the production capacity has to be there as well. So what you saw today is that a very strong order intake and more than 50% of order load and haul is already generated from BEVs. So that tells that there is a strong need for it but some customer can't wait a year on the equipment and some are ordering a bit earlier, just to be sure to get them. So there's nothing stopping the BEV actually. It's the question about having all the products, having the full product portfolio and having the capacity to build them all for the need in the market. It will come and fast.

All right. Time is out. Thank you very much and applaud for our executive management team.

So can we have the slides? There we go. We'd just like to wrap up before we send you off in the buses. Again, thanks for spending the day with us today. I hope you have learned a lot. I hope you have gained new insights onto what kind of company Sandvik is today. I am super proud of the transformation that we have done of the group in the past couple of years. As I said, it's been a massive team efforts and I'm super proud of the team for achieving that. We have completed the portfolio optimization. We have evolved our management culture. We have strengthened the Sandvik platform. We have taken new positions in the value chain. We are today an enabler in our customers' journey when it comes to digitalization and sustainable solutions. We're executing well on our strategy. We have delivered strong growth and strong margins each and every quarter. So we are super proud of the Sandvik we have today. Thanks again for coming here today and safe travels home.

Yes, my friends the day has come to an end. All fun things end at one point. Thank you all again from my side that you attended. Thank you also for listening in on demand. I hope you have enjoyed it.