Sdiptech AB (publ) (SDIPB) Earnings Call Transcript & Summary

Welcome to Sdiptech Q4 2023 Report Presentation. [Operator Instructions] Now, I will hand the conference over to CEO Bengt Lejdstrom and Head of Sustainability and Investor Relations, My Lundberg. Please go ahead.

Thank you, and welcome all listeners to this year-end report conference. And yes, it's me Bengt Lejdstrom and my colleague, My Lundberg will guide you through this. And we will actually jump right into the highlights of our report. Most of you know very well what we are doing and what our ambitions and focus is, but we will come back to that a little bit when we talk about the business areas. But jumping into the outcome of the last quarter and the year and starting with the summary of the full year. We are very proud and happy to present that we had a very strong organic sales throughout, were above 15%, between 15%, 20%, all quarters. So 18%, all in all, excluding currency effects. Then adding the acquisitions, it was a 37% sales increase. Looking at the profits that was actually exactly the same increase, 37% all in all, and of which 13% was organic. That said then that some of our organic companies had a little bit lower EBIT margin, and we will come back to that. But all in all, the same margin of 19.1% as last year. We were also happy to see that we had a recovery of the cash flow towards the second half of the year with a cash conversion in total for the full year of slightly below 70%. Our goal and normal ratio is 80%, and it was 90% the last quarters in total. So we have been working closely with all the companies to really bring down the working capital, and that's always a challenge when you have increasing sales. But we think we have reached a balance and we'll continue to work together in the group. We did only, may I say, two acquisitions during 2023, and we will come back to those and also added a new company here just a few weeks ago in January, but we will come back to those as well. As a result of the bit lower acquisition activities, we have been able to reduce our debt ratios and that's, of course, also with the intention that we have seen increased interest rates through the year, and that affects our results before and after tax. So it's thinking a good idea to reduce the debt. And it's also an effect on that we're doing a little bit less acquisitions, but the increased interest rates lead to lower price tags that we are willing to pay for the acquisitions. So that extends the dialogues we have with entrepreneurs. But still, we have a very solid pipeline of that. We'll come back to that as well during this presentation. And just as a reminder, looking at the right side of the slide where we are present in the Nordics. We're in the U.K., we're in the Netherlands. We have companies in Italy and Central Europe through our Croatian company. So that's our base. A few words about the quarter itself. We had a very strong organic sales with 20% growth compared to last year, excluding currency effects. All in all, 35%. Some could argue that, well, you have a company, the one we have for EV charger equipment, Rolec had a very -- had some challenges in a weak second half year last year, so that should be easy comparables. But actually, if we just remove Rolec from the comparison, we still had an 18% organic growth, meaning that mainly all our units had a very good performance. So among most of our companies, they had a very strong sales and a strong underlying demand. So it's a very solid development. On the profit side, it was a little bit less organically, 9%. And if we would remove Rolec, again, it was 5% organic growth. So, but all in all, a 29% increase of adjusted EBITDA profits, where we will come back a little bit also on the margin discussion around that. But Earnings per share were affected, as I said, by higher interest rates, and we also had some currency losses at the end of the year in the quarter. So that affects the results before tax, but still, we had an increased profit compared to last year. But then also adding the taxes and bringing it down to earnings per share. The earnings per share were affected by higher tax rates than previous year. And that based on that, we have more of our turnover coming and profit coming from countries with a higher tax rate than our previous average. But we also have more shares now than we had a year ago because of the new issue we did towards the end of 2022. The cash conversion in the quarter was 86%, and that then considering that we increased sales from previous quarter with SEK 160 million. We think that's a quite decent figure to still be able to get most of that cash into our pockets. Then looking a bit closer on the sales and the margins. The increase then of the 35% for the quarter was split between 20% organic, 10% coming from acquisitions or required companies and 5% from currency. The EBITDA margin was a bit weaker than it has been, 18.5%, but that's not because any company really is a tough situation. It's because that we have had stronger growth in units that are below the average in the group and the companies with the very high profit margins still made an increase but not as high increase as the other ones. That brings down the profit margin temporarily for this quarter. And we also had two units with exposure to construction that had some challenges in the quarter, but that should also be temporary. So even though it's a little bit lower than last year, we think still a very good performance from the whole group and the profit development all in all, was 29%. Looking at the sales split a little bit closer. We can see that as it has been for some time now, we have about 60% of our sales coming from product sales and then roughly 20% each from installation and service business. And most of that installation and service business is on our own products. Previously, back in the history of Sdiptech, we had more focus on service companies in general, but we divested most of those companies, but we still think service on own products is very good because that gives us some customer stickiness and recurring revenues and also installation of our own profit is a good split, and we're looking for companies that actually have this combination of offerings. On the geographical distribution, has also been quite stable now for some time that Sweden is about 20% and U.K. a little bit more than 40%. And then we have a split among different geographies. And as I mentioned here with the tax situation, as you can see that most of our turnover is coming from countries where the tax rates are higher than in Sweden at least, than our previous average. So that brings up the overall tax rate for the group. So for the coming year, we expect more or less the same tax rate as for the full year 2023 plus/minus % or so. But that's a higher tax rate in total than in the history. Perhaps decisions, mainly in the United Kingdom to increase tax rate from 19% to 25%, not so much we can do about that then to be as tax-efficient as possible. Looking on the profit then, we have had a very steady average compounded growth since 2017 of 40%. For the year, it was 37%. For the quarter, as I said, 29%. But as you can see, it has been very, yes, very even distribution of increase year-by-year. And we're happy also to say that the acquired units that we have in the results here, they have been performing in line or above the expectations. Being a little bit -- more closer look at the business areas, starting with Resource Efficiency. And when it comes to what type of companies we're looking for, we're looking for companies that contributes to more sustainable, efficient and safe society, that has strong niche market position and also have underlying drivers for steady solid demand growth over time. And in Resource Efficiency, we have the companies that focus on, yes, our natural resources and be as efficient as possible with those. So water and sanitation, power and energy, and also by economy of waste management or the segments of this business area. And in total, for the quarter, this business area increased our sales with almost 50%, and that was the contributions from both comparable units and also some acquisitions done during the year. As mentioned, our EV charger business, Rolec, the increased sales and not the least profit compared to last year. So that's supported, but also the other business units within this business area, but a strong and good performance. So the adjusted EBITDA and adjusted EBITDA nowadays is the same as our previous KPI called EBITDA Star. But since that was a bit strange to what other companies call the same number. We have changed that to adjusted EBITDA, meaning that it does not include this IFRS type of adjustments for costs for acquisitions. That's the traditional adjustments that you do in an acquisition-driven company. So that profit increased by 80% from SEK 58 million to SEK 101 million in the quarter. And also then the margin increased up to 22.6% and also based on the same underlying strong performances. Then looking at Special Infrastructure Solutions, also had a good development in percentages, not as high as Resource Efficiency, but still, sales increased by 28%, and it came from more or less all companies, not the least the big ones. And in our year-end report, we comment on five of our biggest companies from a profit perspective to give you a little bit more flavor on how these companies, what they are, and what they do, and how they have been performing. And the four of those five belong to this business area. And we had a good performant in the quarter from all of those. The profit increased a little bit less. And as I said, because of that, some of these good performing units is on average, having a little bit less profit margin than the other, a bit lower profit margin but still a very strong profit providers and also that we had some units then again, in the construction business. Post to that, that had some challenges. We do have some other units that, in some ways, have a connection to construction business, but they have had a good development through the quarter. And this business area, all in all are focusing on some segments. You can see that to the left in this slide, it's Aaron Climate Solutions, safety and security and transport and logistics. So that's the way we buy the units we have within this business area. But they also have the same type of strong underlying demand and sales development as within the Resource Efficiency. And there are many great opportunities to do further acquisitions in both these two business areas. Talking then about acquisitions. As I said, we only did two acquisitions last year to Nordic companies, one called HeatWork and the other Kemi-tech. So, and that was also a result that we decided to slow down a bit the pace because of the increased interest rates and the overall situation. But anyhow, our pipeline work to screen and source for new exciting companies to acquire continues. So it's more a matter of how we execute the possibilities that we have. And we're then very happy to welcoming a new company. Then also in the start of the new year, in January, we acquired the JR industries in the U.K. which is a rather big company with an annual profit of GBP 4.5 million, about SEK 60 million. And they are really the one that manufacturers and provides roller shutter doors for commercial vehicles in the U.K., but also have a presence in the whole Europe. That is a very stable underlying demand for their business, both driven by that you have to develop your fleet of small to midsized trucks and vans, diversification of those, but also that the pattern and the behavior of transportation, logistics requires smaller vehicles and also vehicles that you very quickly can unload and offload. And that's where the rolling shutter doors come into play. So they have had a very steady development. They have been around for more than 50 years. So we are very happy to welcome them into the group. They also, as all acquisitions we do, contribute to at least one of the UN's sustainability development goals in this case to have a more safer working environment. This is much safer for the driver, not to have been walking around the truck and opening these traditional bond doors, but instead can just maneuver the shutter door in an easier better way and avoid both traffic incidents or other types of accidents. So again, it will be exciting to see how they will perform within the group, but we think it's a very good acquisition. So the total acquisitions last year, the two I mentioned, they brought SEK 50 million of run rate Swedish profits into the group and they are now above SEK 60 million. And as you can see from this slide, it's quite below what we did in 2021 and 2022, but this has been it's not that we don't have the opportunities in the pipeline. So it's our decision to have a lower pace. And in that way, we will bring down the profit level. So the debt levels, the debt ratios, which also makes the interest rate cost becoming a smaller part of the total picture of the group. And so that's -- we think it's good. Now in the short run, we expect perhaps interest rates to go down sometime in the future. And depending on all other circumstances, it's ready to ease off the brakes and continue to acquire in the normal pace, which should be SEK 120 million to SEK 150 million of profit per year. So this year, if things are as they are today, we will probably be at the lower end of that range or even slightly below. But that's temporary. We have a very good financial position to increase those activities when we see that drives shareholder value. So with that said, I will hand over to My.

Yes. Thank you, Bengt. So the cash flow activities after changes in working capital during 2023 was SEK 618.6 million, which is corresponding to a cash conversion of 67%. This is slightly below our average, as you can see in the graph to the left. Cash flow was affected by increased sales in terms of increased accounts receivables but also a buildup of inventory for continued growth. This was particularly evident during the first 6 months, but we have been working hard to reduce our stocks while we are also growing. And the inventory buildup was SEK 20.1 million. The inventory value actually decreased during the last quarter and generated SEK 39 million in positive cash flow. So we feel good about that. In terms of cash flow for the quarter, it amounted to SEK 197.4 million, which is corresponding to a cash conversion of 86%. And we feel good about being able to deliver that with our strong organic sales increase, which increased our accounts receivables as well. Moving on to tax, which increased to SEK 138.4 million despite higher interest rates and currency loss towards the end of the year. However, our EPS or earnings per share were affected by a couple of things. Firstly, we had more shares on average during the quarter than last year. And secondly, our profits were, to a larger extent, generated in countries where the tax rate has been raised or is higher than the group previous average. So for example, as Bengt mentioned before, the tax in the U.K. has increased from 19% to 25%. We have also a greater proportion of our profit coming from, for example, Italy and the Netherlands, where the tax rate is higher than our previous average. So that also affected profits after tax in the EPS. Then we move on to our debt levels and ratios and I should start mentioning that we have to facilitate compare, updated the definitions of our key ratio regarding net debt to be based on the liability date instead of rolling 12 months. And we also include lease liabilities, which are based on the liability at the balance sheet date in the financial net debt definition. So with that said, our strong growth, good cash conversion and a slower acquisition pace have resulted in a lower debt ratio. So if we start with our financial net debt in relation to adjusted EBITDA, it amounted to 2.02 in comparison to 2.35 and the total net debt in relation to adjusted EBITDA was 3.07 in comparison to 3.89 last year. I should repeat that it is including future earn-out payments. And again, we remind you that research provided for earn-out debts are based on future profits that exceeds today's levels. And this means that if process don't increase as expected, part of the debt will not be paid out. And to put this into perspective, this means that profits remain at -- if the profit remain at this year's levels, the book liabilities for earn-outs will be reduced by around 30% to 40%. This is not because the companies are not going as planned, but because significant growth is included in these earnouts. So we just wanted to repeat that. So these earnouts, which we do not pay any actual interest rates on are an important part of our financial model. Finally, we also wanted to highlight our return on capital employed as this is an important performance indicator for us, since it demonstrates the profitability and capital efficiency of our business units. And our average return on capital employed on our operating units was 65%, which is an increase from 57% last year as acquisitions lead to an increased share of goodwill and intangible assets on the balance sheet. The key ratio is lower at the OpEx level, but we are also happy to see that it is continuing to increase. So for 2023, it was 13% compared to 2022 when it was 12.2%. Then I'm going to hand over to Bengt again.

Thank you. And then concluding with some highlights for the future then and outlook. As you know, we don't give any forecast on the actual results or margins or anything. But still, this is our outlook that we see as still a solid demand in our Industrial Infrastructure segments as we saw last year because our solutions are important for our customers, and we're a small share of wallet, and it's driven by these long-term drivers that will strive to the more efficient and sustainable and safe societies. Together with that, we already have a quite aging or under-dimension infrastructure, all in all, that needs to be replaced and modernized them. All of the time, we get more and more technical -- better technical solutions to the challenges. So we have that as a driver. And in addition, of course, we consume more and more of our assets resources as well, more water, more energy, et cetera. Yes, electrification of society brings a lot of demand for new solutions and better solutions in many dimensions. So we have a positive outlook for our segments going forward. And also to remind, repeat that our goal for organic profit growth is 5% to 10% per year. I know it was much higher last year, 13%. Perhaps you cannot expect that every year, but it's still, we try to be within our range of 5% to 10%, and have been so for many years now. In addition, as I said, we will continue to have a little bit lower pace in the acquisition closing activities, but still the sourcing and screening and all the contacts and discussions with the potential sellers. They are still at a very high level and a very solid level. So that means that when we feel that it's the right situation, we can accelerate the closing part of these processes. So we will most probably be back to normal acquisition levels in the future. So, and we also had some changes in the leadership towards the end of last year. Even though I don't see myself perhaps as a new team member, I've been around for 6 years almost, but stepped up as the CEO in December after Jakob Holm, previous CEO left the company. And my successor there as the CFO, Susanna Zethelius will start here during the second quarter. But again, the team here with me and all the others at the head office, we have been together for a long time, and we are not changing our strategy or vision or mission just because of this. So we will continue the journey as before. So with that said, I think we conclude our presentation and open up for questions.

[Operator Instructions] The next question comes from Karl Bokvist from ABG Sundal Collier.

My first one is just to start off, but I appreciate the added commentary on some of your larger units, that's very helpful. And if I may then first on Rolec now that, let's say, the situation has normalized, but you do mention the kind of indication that EV car sales in the U.K. has trended down and you're monitoring the situation. So just how should we think about Rolec's position and sensitivity to changes in car sales and the growth and profitability potential in turn then for Rolec?.

Yes. And their market position is mainly towards business to business. So even though we sell charging equipment to consumers, that's about 25%. And most of their turnover. And that, of course, that sale is more or less straight on correlated to the number of vehicles registered. But the other part, the main part of our sales is to companies. It could be both companies that want to provide charges for the employees or for their customers or they use that in their own operations. So there are many different aspects whether when they take and how they take their investment decisions. So, but all in all -- and that's not for U.K. only, that's for whole Europe. I would say that we see increased prices for EV vehicles and a little bit lower demand. So that can change very quickly as well with positions for governments to subsidize our support to this change in transfer to an electrified transportation fleet. So it's a little bit difficult for us to say. The market position of Rolec is very good, and it's as strong as ever, not the least in the B2B sector. So that's why the comment is that we monitor this, of course, carefully and are ready to take any decisions if needed. But so far, not any strong signs of that. It's still our largest profit provider.

Understood. And then just on some of the companies there. When it comes to Agder and the insurance claims, I understand maybe that's a bit more kind of working against an order book, so perhaps less sensitive to sudden changes in demand. But then the forklift business, what's that company's sensitivity to new sales since you say you focus on service and support at the moment?

Yes. The market for forklifts haven't really increased so much the last year. So it has been quite flat type of market, but ELM has taken market shares and really made a good introduction in different geographies. So for their part, it's more to go even more on exports and new type of customers in a mature steady market. And they have been very successful with that last year, and we hope to see that they will do that also this year.

Understood. And then just two more, if I may then. Just the two construction units. You said temporary now, if we just do some kind of comparison to when you said that Rolec had temporary challenges, that was for about 2 to 3 quarters. So how should we think about the temporary headwinds in these two construction units? Or was there anything particular solely related to this quarter?

No, you could perhaps think of about the same. And we have had that for some time now for the full last quarter and perhaps a little bit earlier than that. So we're working closely with these companies to adjust to market situation and demand situation. So it may continue also this quarter, but still they are a pretty small part of the group. So they perhaps not will have a great impact on that. But for this quarter, it was an impact.

All right. And my final question. After your Q3 report, you did have some outlook comments when you said you saw no signs of weakening demand and that order intake was strong. How would you assess that situation now after Q4?

It's more or less the same. We don't see having any signs that we should revisit that outlook. So we still see a good order intake and a strong demand. So yes, we continue with that view of the future.

The next question comes from Niklas Sävås from Redeye.

Yes, so I'm a bit curious to know more about the acquisition of JR Industries that you concluded after the close of the quarter. So looking at the results between 2020 and 2022, it looks like the company had a really strong EBIT development in 2023, as you reported, GBP 4.5 million, which seems to be an increase of 15%. I mean, do you believe the current level is sustainable?

Yes. And has been around for 50 years. And if you look at that, well, 20 years at least, history of the development, it has been a very solid 5%, 6% profit growth. During 2020, during the pandemic, big parts of U.K. were in a lockdown. You couldn't -- you weren't even allowed to go to work. And of course, you couldn't manufacture or install rolling shutter doors in trucks during a big part of the year 2020. So that affected, of course, many companies in the U.K. and not the least, JR. But as soon as those lockdowns were eased, the people could go back to work and we could start to deliver, they picked up that had a backlog then that has been going on for at least '21 and '22, but you could see the level of 2023 is not affected by that. So they have more or less caught up on the long. So the level we indicated here, the run rate level at the time of acquisition is not affected by that. So that's where they are right now, and we see a steady growth. It's not a rocket, so to say, but a steady growing company that will help us reach our 5% to 10% organic growth year-by-year.

Okay. That sounds really promising. And I know that you don't acquire businesses with the objective of harvesting synergies. But I mean, do you expect the company to improve from being part of the group, I mean, the same groups such as GAH Refrigeration? And if so, how?

Yes, these two companies know about each other, and they're very happy now to belong to the same group. And they have the same customers more or less. So of course, they can get together now more actively and develop their offerings for the future in a very good way. As always, we don't see this as cost synergies. It's more on the top line on the sales synergy part and product development part. So yes, we're really excited about that, and let's see what that can give us a result.

Great. And the last question is more or less on the acquisition market. I mean, as you said and as we have seen, the tax rate has gone up in the U.K., and we have a higher interest rate, which I guess, impacts how you view, I mean, acquisitions of companies in the U.K. and also in other countries as well. But I mean, have you even though, I mean, you screen for your companies on your own. I mean, I guess you still keep an eye on the market as a whole. And you mentioned that sometimes sellers have had high, I mean, too high expectations. Are they coming down to the level you see? I mean, how are the discussions progressing?

Yes. From our -- as I said, we are not into this more auction type of processes or structured deals. But from our point of view, I think it's always a time lag between expectation reality and expectations. And now I think we have had a year where we're kind of getting closer to each other. And so I would say, yes, I think we have a better, call it, understanding now than perhaps 6, 8 months ago.

That's great. And yes, really last one is on the earnouts that you are going to -- I mean that you may pay or not pay. Can you say anything about how much of that will come in the coming year?

Yes. We have a split on that in our report. And if I now remember the numbers correctly, this year of 2024, it's somewhere between SEK 100 million, I think, that's expected to be paid out. And in the next coming 2 years, '25 and '26, I think we're on an average about SEK 350 million. So that's quite typical number, somewhere between SEK 250 million and SEK 350 million per year. Last year, 2023 was an exemption. You can say from that, with a bit lower just because the time period for the earnouts, et cetera, just resulted in that there was nothing specific otherwise. So, but you can find those details in the notes in the report. Thank you.

[Operator Instructions] There are no more questions at this time. So I hand the conference back to the speakers for any written questions and closing comments.

So we have received some written comments here, written questions. The first one here regarding price renewals. And we have mentioned previously as well that much of our business is contract driven, long-term agreements. They could be 1, 2, 3, even all up to 10-year contracts. They all have different clauses for how we may change prices. We try, of course, to make sure that we have that flexibility. But it's a time lag, typically, and it was 6 to 9 months time lag when we saw the very fast and steep inflation taking place a year ago and more. But now, we are in line. So to say, we have increased prices during 2023. So we think we have a good balance between price levels and the supply, the cost of goods sold. And when it comes to future price adjustments, it's the same way that we will, according to our agreements, do as much as we can and when we can. So it's hard to say now if those, the organic development, how much that will come from price or volume, but I could say most of the 2023 increase in organic sales and profit was from the volume component, not so much from the price on the north. We try to read here also next question. Yes, a question was here regarding Rolec. The market has been increasing quite a lot, '21 to '23. And the question here was since it seems that the registration of the units have increased quite extensively, how come then that we are at the same level as 2021? Yes, that's, of course, a good question. There are the statistics you can look upon in different ways. It's registered vehicles, not always sold vehicles, for example. And also, again, mentioning that our main customers are within the B2B business, and they don't really follow the ups and downs of the car sales to consumers from time to time. It's more strategic decisions from the companies, and they are more long term. And already when we acquired the company Rolec, we said that the development and growth of that company will be probably less than the overall EV market, which has pulled through then. So it's difficult to find another KPI that are directly correlated to the main part of Rolec's business. But we're happy to see that Rolec developed very well during 2023 and are back in the numbers as before the year before, and then we had some issues with the product launches. Let's see, we have also one more question here. Yes, a question about how much our group is exposed to construction end markets. It's more or less now as we add more and more companies, that become less and less. We have had a rough estimate before of about 10%. But so I think I mentioned that we have had some companies in the group with challenges the last quarters, but also other companies have a very good development during '23 and Q4 also then exposed to this construction end market. So it's not all that bad. All in all, it's just in this very specific case to companies that were a bit challenging situation, but we have others that have been developing very well. But it's a market segment that we don't see as the most strategic going forward. So we are not looking so much into companies within that. So we focus on other industrial segments. Yes, and around JR, we don't mention as we don't do for any company really in detail their profit margins, but this as GAH, it's kind of for that typical industry itself. We are close to 20%. Typically, profit margin of these companies were a little bit less. So they would be around group average today for us. Regarding targets for our debt levels, we have since many years ago, a target of having the financial debt level at or below 2.5. When we set that target, we computed that KPI in a little bit different way. Now as My explained, how we compute it now, meaning that it was actually done increasing just because of we changed the definition. We don't change that target. So, and we are still well below the 2.5, it was 2.0 for the last year. So we keep that target for our financial debt level, meaning all the debt to banks, bondholders and leasing -- it's not leasing company, leasing debt, that's mainly rental of premises. But we don't have a target or a limit set on the total debt level, but it has been decreasing. And that's our ambition to decrease the total debt leverage. That was now 3.07. And then on the return on capital employed, yes, it's improving, but we are below our peers. You must then remember that we are a pretty young company. We took in major part of our equity 2017 and a few occasions after that. Otherwise, we have been built up with the debt and to finance our acquisitions. So we have acquired in a much faster pace than most other peers these years. So of course, that has been building goodwill and other immaterial assets without having the very long-term organic contribution to the balance sheet. As my previous employer log accounts said in a call a few days ago, they have been around for more than 100 years. So of course, that means you can build up cash flows coming in from all your organic companies and you don't need to finance or rather that the acquisition part of your balance sheet is not that big. When you acquire a new company, that added goodwill is not that big part of the total picture. For us, it still is. And also with these earnouts, we added quite a lot of these material assets. That means we mathematically are lagging, but we're still improving. So year-by-year, the return on capital employed we see will slowly but steadily as we come and older and bigger and bigger. But as My also explained, the return from our business units are very good. The 65% on average. We have companies much higher than that, which is a very good return on the total capital employed. Not only the working capital, but the total capital employment. Last question here. Comment on order intake. No, we cannot comment on that actually. We don't do that typically. So I cannot provide that other than what we said previously here that we still see a solid good demand and underlying growth for our companies. I think that was all. Now we have an oral question in the queue. I'm not really sure how that is handled.

The next question comes from Robert Redin from Carnegie.

I just had one follow-up. I read the slides about these two units that are exposed to construction. And it said, I think, that the results were negative. So I just wanted to ask you if, yes, if the results in those units were below 0 or if they were negatively impacted.

I must ask you then what you were referring to here. So we talked about the same thing. I will just jump backwards in the site. So we talked about the same thing. Yes, on the Special Infrastructure Solutions.

Yes. Negative results in the quarter, were they below 0 or were they --

Yes, exactly. They were at 0 or slightly below that for the quarter. And so that's true.

So that was a pretty large delta then year-over-year. That would explain quite a bit of the group's margin growth year-over-year, I would expect.

Yes. As I said, that's for the quarter. They had an impact on the growth, but the next quarter, but they still have some challenges that take some time to fix. So, yes.

And do they have similar type challenges in Q3? Or were they much tougher in Q4 than in Q3?

Yes. Each and our every business unit have their specifics. So it would be to go too much into detail here. But they still have -- the end markets are going through some transitions, so they need to adjust. So we're working as we do always, if a company is not performing as expected then and help them. We do all the necessary steps in order to get them back in business. So that's what we're doing with these companies now as well. So, but as I said, it was a temporary big effect on the group which lowered the EBIT margin. But still, even though they included, we had the 9% organic profit growth within the oil group. So not that too big effect.

There are no more questions at this time. So I hand the conference back to the speakers for any closing comments.

Yes. And we just want to say thank you all for listening in. And I hope we will see you back when we present our next report towards the end of April. But until then, we wish you all the best.