Storskogen Group AB (publ) (STORB) Earnings Call Transcript & Summary

Good morning, everyone. Good morning, everyone, and warm welcome to Storskogen's very first Capital Markets Day here in Stockholm in the lovely building of [indiscernible] in Stockholm. Also a warm welcome to you who participate and watch this online through the live stream, which is found on our home page. But probably you have found that link already since you're there. My name is Lena Glader, I'm the CFO of Storskogen, and I will be moderating this event, guiding you through this day today. I actually used to be an equity analyst a long, long time ago, in the beginning of the 2020, 2 years ago maybe. And I used to go to these kinds of events as an analyst. Back in the days, we got -- always got goody bags. I remember I was almost always the only woman. So I got silk scarves, I remember, from one Finnish company. I got jewelry from another. And not to mention nice stays at castles in the outskirts of Paris and other quite expensive events. But those days are gone now, I think. I actually asked our compliance if we're allowed to give you tiny, tiny shampoo bottles from our subsidiary, Baldacci here, but I was told that no. No gifts are allowed, unfortunately. But you do have notebooks, right? You got notebooks and you got a pen that we give it to you and branded with our logo, of course. So what I hope is that you can use that notebook and that pen to write down some notes from this day. And hopefully, maybe those will be more valuable than a silk scarf, who knows. Anyway, today's agenda is divided into 2 sessions. So in the first session will be about strategy. You will hear presentations from Daniel Kaplan, our CEO; from Alexander Bjargard, Head of M&A and Corporate Development; both of whom are cofounders of Storskogen as well. And then from a presentation by myself. And then after that, we have a Q&A session. And so those of you who are watching online, you should have a small box just right below me now, I guess, on the screen, where you can post your questions, and then we will collect them at this Q&A session at the end. And then we have a pause or launch for an hour, where you will have the chance to talk to our -- the management, of course, and especially to meet our subsidiaries, some of our subsidiaries who are outside here. So I really recommend that you take the chance to talk to them. You will meet -- here we have [ SoVent ] from business area services, roll-up of chimney sweepers, market leader in Sweden. We also have from services, we have Agio, an IT consultant in the Norrbotten of Sweden, but also in Stockholm, with a lot of state-owned customers and also active in the North of Sweden, where everything seems to be happening right now. We have from business area trade, we have [indiscernible] represented. They -- as you see there, they are distributors of work clothes, work wear, very noncyclical business to business. We also have Baldacci with the shampoo bottles, of course. SGD, flooring distributor, also within trade. And then finally, from industry, we are represented by Brenderup, both trailer producer and as well as PV system. A PV system is a company within automation, and they have this cool VR thing that I urge you to try out. I almost stumbled when I actually looked at it right now, just a couple of minutes ago. Very cool. So after lunch, we will then have another session which will be more operational. We will have -- listen to our 3 business area directors that sit right here, and they will talk about their business areas, more in detail, more hands on, how they work with operational excellence, efficiency, et cetera, within their business areas. And then, again, a combined Q&A at the end of that session. And I think most of the management team will stick around for a while even after the day, in case you want to ask us some questions or have some follow-up questions for us. Then, right, so the first presenter today is Daniel Kaplan, our CEO, and co-founder of Storskogen. Now he's got an impressive background as a serial entrepreneur. I believe you started your first business when you were a teenager. And then combining these start-ups and entrepreneurship with experience and work as senior adviser for -- as a strategic consultant and senior adviser for large global companies. And I think that, that combination of that strategic global thinking, if you will, and the entrepreneurship is actually pretty much explains what Storskogen is all about, I think. So we will hear from Daniel about the strategy, about short-term priorities, operational excellence and other things. The floor is yours.

Thank you, Lena. Hi, everybody. It's great to see you all. Fantastic actually to meet you face to face. Some of you, I have met physically for the last few years, but quite a lot of you, I have met only through the digital screen, where I talk to a camera and you see me. So this is a lot better. Well, Capital Markets Day, why do we have one even? I think, for us, in our perception, I think we've had a fantastic year actually. We did an IPO almost a year ago. We have launched into new countries. We have acquired great companies. We've had a tremendous growth. We're twice as big this year as we had -- as we were last year at this time, both with regard to EBITDA and profits. But that said, we're new to the market. And we do need to feel that we need to start from the beginning, explaining who we are and what and why and how much, so to say, that we need to do, and start from the beginning and talk to you and inform you of what we're doing. But also, of course, our share price has plummeted. And we can also understand that it's a new world out there, very different from the one we had a year ago. It's been a -- war has started close to us. Energy prices, a recession coming, up capital costs have increased tremendously with inflation and interest rates and how do we tackle those things. So those are a few of those questions that we want to answer today and give you some guidance on how we view those and how we want to act on those. So some of the things are -- so I'll be telling you a little bit about our -- both our strategy, what are we going to do? What are we all about? Why are we doing that with regard to the market opportunity. How, organization culture, key processes. And finally, regards to money. And then, of course, Lena, Alexander, our business area heads will dwell deeper into that and give you lots of flavor and the actual practicalities on that. And finally, the tactics on how we manage the short-term fluctuations in the market. Very briefly, we're currently 12,200 employees in 27 countries, divided into 4 market areas: the Nordics, DACH, U.K. and Asia. And 3.7% in rolling 12 months EBITDA. So it's a relatively big company. We've been around for more than a decade now. Three business areas, as I mentioned: Trade, Industry and Services. They will tell you a lot more about their business areas later during the day. But as you can see, divided into verticals, we have 14 verticals in total, where we group our companies with a vertical lead supported by a business investment manager as well. So we'll get into how we organize ourselves and how we lead this -- both the business areas and the verticals going forward. And all of these have very different traits. They have different types of risks. And together, they create a very diversified portfolio. And this is a core feature of Storskogen. I think, originally, we didn't have any intention to quote ourselves, we just wanted to build a portfolio of profitable great companies with strong cash flows that could be really resilient in a downturn and, of course, grow in an upturn. And I think that was a part of what we're all about, the diversified strategy. And of course, no single vertical bigger than 14%. Our biggest subsidiary in terms of turnover is 6% of the total turnover. And our ambition is to be not to be dependent on any 1 macro or micro trend to the extent that is possible. So anything that happens to society happens to our portfolio, but not to the same extent. And I think most of you, especially those from the analyst side, know the math's behind the portfolio. It simply is better returns at a lower risk. From a geographical diversification perspective, we're still not there. We're still a relatively Swedish-centric company. But our ambition, we'll get into that, is to gradually become more and more international, to reduce those types of risks that you have with the local politics, currencies, et cetera, et cetera, and the business cycle in each and every geography. So our ambition is, of course, to gradually become more and more diversified even from a geographical perspective. So what are we about? Well, I think we are uniquely positioned to identify, acquire and develop market leaders with sustainable business models of an infinite ownership horizon. So if we take this slowly. Alexander will tell you a little bit more on how we identify these companies, but we are active in lots of different verticals and industries and lots of different geographies, enabling us to have access to huge deal flow. Then we acquire them. Systematically, professionally, we've done more than 100, almost 200 acquisitions. We know the craft of doing acquisitions. Alexander will tell you more about how we do that. Market leaders. As you will see when you look at our individual companies, we will cover a few of that today, we acquire market leaders, and that could be in a very small niche or as local geography. And of course, the traits of a market leader gives resilience, pricing power, et cetera, et cetera. Sustainable business models. We have a 100-year perspective. We're really long-term. So we -- first of all, we avoid certain industries, of course, but we also work continuously with our companies to be not only compliant but to use sustainability as a competitive advantage going forward. I think that's actually crucial to be relevant in the long-term. And the infinite ownership horizon. I think a lot of people can challenge, so why don't you do a private equity play? As you can see today, when you meet our companies, we're building -- we're redefining industries. We're doing roll-ups. We're having -- we're creating a changing industrial landscape for some of those companies that we are buying. They are growing tremendously. Why don't you sell them off. But in fact, -- the reason why they sold themselves to us in the first place is that we are extremely long-term. All our decisions are based on long-term considerations. And this is why they sell to us simply at the right price. And an infinite ownership model does not exclude selling off a company once in a while if we have -- if we are not the best owner, if we have done everything in our power to turn it around but we still can't really make it, we will divest 1 or 2 low performers. And of course, it's also a very important signal to our companies that we're not a charity. If they under deliver, over time, we will have to do something about that. We are about running profitable, successful companies over time. But we don't give up easily. So what is our mission? Well, it's to empower businesses to realize their full potential. So looking closely at these words, to empower, it means that we are actually not running these businesses. On the other hand, we have great CEOs and management teams and they are responsible for their P&L -- retaining that responsible entrepreneurial spirit in the companies. But that said, it doesn't exclude us being really supportive, providing them with all kinds of resources and knowledge and other types of facilities that will make them, their companies grow and develop over time to be extremely competitive and successful. But of course, realizing their full potential is totally different for 2 different companies. If you are a market-leading painter with 50 employees in a small town in Sweden, potentially growth is not on your agenda. It's to retain that market position to happy customers, efficient production and strong cash flows. Whereas you have roll-up opportunities with a global expansion plan, both expanding organically and through acquisitions, a very different play. We're helping both of those companies on their own terms to realize their full potential. Finally, our vision, and it is to be the leading international owner of small- and medium-sized companies. I mean this is a very ambitious vision, the journey we are all about. And this means that we are investing long-term in establishing ourselves gradually into new geographies, into new industries and to create a market position within those and create knowledge and really top-of-the-line expertise in those industries and in those issues, those domain and situational issues that are important in those industries. So how is this affected by the short-term fluctuations? Well, of course, we'll get into that. But we'll not do a geographical expansion to any extent when the world is on fire. We will consolidate that. But this is still our long-term goal, and a lot of our decisions is driven by this one. Of course, what is it a leading mean? Well, apart from the geographical and industry expansion, it's about running profitable, healthy companies with strong cash flows that are successful, creating a portfolio that is truly resilient to any type of external shocks. We had COVID the other year, very strange crisis, if you will. Now we have a potential recession. There will always be ups and downs in the industry, and we need to have a portfolio that can manage that over time. But if we're looking at the more important factors, I think we want to be the preferred choice. If you are a company seller, you've built a company for generations even, who will be the next-generation owner? Who will take care of my company with love and competence and being a serious owner? We want to be that choice. And in -- as a direct consequence, we think that we will contribute great value to those entrepreneurs, to our employees, to our customers, to our suppliers and, of course, to the local communities where we are one of the biggest, potentially even the biggest, employer. We want them to open a bottle of champagne in the local community office when they hear that Storskogen has bought maybe their biggest employer, that they will know that we are a long-term owner, taking care of that company, making it grow and flourish over the years to come. So that's what we're all about. So the question is, what about the market opportunity? Why did we choose small and medium-sized companies? Well, first of all, this is a large addressable market. I mean there's almost an infinite number of great companies out there with strong profitability. And these small companies, they face challenges. They usually have a great entrepreneur, but the kids don't necessarily want to take over. If you sell it to an industrial player, there is a big risk that they will potentially move production in a few years, closing down your rural -- your local community more or less. And sometimes they need a personal derisking. It could be about financial security. It could be that they have great opportunities or challenges and they need new competence into the company. And we can provide that. And of course, there are actually other players such as us in Sweden, for example. But if we go to Asia or even U.K. and DACH, for example, in fact, the need for someone like us is fantastic. And we're getting so much deal flow and actually grateful entrepreneurs that there is someone with the business model that we have. And of course, if you look at these challenges that the small-, medium-sized company has, it usually has its personal dependencies. It's too few customers, too -- customer concentration, supply concentration. And this makes each individual company relatively risky. And I would honestly say that a number of the companies in the Storskogen portfolio have had some tough times the last 10 years and they wouldn't have survived outside of Storskogen. So of course, this implies that you can buy these companies at a lower multiple than you would a bigger company. So buying great companies at the right price. And coming into the great companies, I mean these companies are usually very successful. They're profitable. They have strong cash flows. They have leading market positions, long customer relationships. And they've been through ups and downs, and we will show this even further. So of course, if we can buy great companies, really providing -- filling a gap in the market towards the entrepreneurs that really care about their companies and want a long-term owner and we can buy them at the right price, then that's an extraordinary market opportunity. So the fact that we have a broad investment criteria, we're in different industries and geographies, gives us access to an extraordinary deal flow. My guess is probably second to none. And of course, we have a very pragmatic, tested acquisition process, and this provides entrepreneurs and brokers with high deal certainty and also creates a long-term value creation on how to structure the deal as to have align our interest with the sellers, for example. And we have an appreciated ownership model, like I mentioned, the long-term ownership agenda, and this makes us the preferred choice. And I guess there will be more players saying that they are preferred over others, but we know for a fact that a number of acquisitions are made not because we're paying the best price, but because they want us as an owner. And the consequence of this is, of course, that we can be super selective when doing acquisitions. We create a diversified portfolio across industries. And it's a very abstract thing, but over time, the fact that you can allocate capital to where it makes the most use good really creates and without -- and this is not only through acquisitions but also how you invest CapEx and time without any kind of tax inefficiencies in that really creates returns over time. And it provides us with a unique knowledge base. Being active in many industries, they still have many similar challenges but also in the acquisition process, just to be a part of 1,000 transactions, bidding, you start to understand the risks and how to price those risks in each and every industry. And who does this then? Well, we'll get into the organization less theoretically than this. But of course, we have the supporting functions, we have finance and control. We have all kinds of supportive function. We're 12,000 employees, so it's a big company. We need to have ESG specialists, legal specialists, business development, a centralized M&A, still actually with M&A people in each geography. But nevertheless, it's a craft. And to do it really professionally, I mean, [ it's so far superior ] to have these really experienced M&A people running these processes. And of course -- but if you're looking at the operations below, we believe in the mix of the local presence and the industrial expertise. So it's a matrix with -- Alexander will tell you more on how he builds the teams for each and every acquisition, but it's basically [ marriaging ] or merging these competencies, the local presence and the industrial expertise in everything we do. And that friction in that discussion provides better acquisition decisions, but also better decisions on the boards. We've talked a little bit about the values, but actually this is what makes us unique. I think it's very easy to make a slide in some words, but it doesn't really matter. For us, this is what we live every single day. It's the entrepreneurial spirit, and entrepreneurial spirit could be how you run the family business. Really, my own father -- I have a family business myself, my own father did his last working day when he was 83. We still have employees who worked with my grandfather. It's about taking care of your employees for real, having a long-term relationship with your customers, caring about their well-being, your suppliers, your brand, building, making long-term decisions. But it's also about being another type of entrepreneur. I started Tradera, for those of you who know, which was a peer-to-peer platform, which we sold to eBay. And this is about finding a business opportunity, creating a business model that works and then scaling that, being dynamic and systematic, creating a company with less personal dependencies. Being respectful, the company sellers that build their businesses, they are extraordinary people, they have created profitable, successful companies and we need to have a deep respect for the values they have built. And it's also a question of how we interact with each other. So we show each other respect. In Swedish, it's humble actually, but it doesn't translate as greatly as to English. But nevertheless, it's about understanding that we don't know everything centrally but actually drives the decentralized structure with decision makers in the companies that they know their business. We can support them, but they are responsible for key decisions as well as running their daily businesses. And finally, professional. Running more than 100 businesses is all about being systematic, systematic in the selection of companies, the acquisition of companies, how you run the companies in a day-to-day business, introducing KPIs, quantitative measures and being data-driven. And that's why, for example, the vertical teams are always 2 people, one with extensive operational experience, usually CEO experience from that industry, and an investment manager, usually with 5 or 10 years as a strategy consultant or similar. So we want that the marriage of those 2 types of experiences when we run the businesses. We have a very active ownership model. You'll learn a lot more about this one. One part is, of course, to incentivize our businesses. Of course, when we buy a company, it's quite often generation shift. So a succession planning is important. And the question is, so will these companies live on after you've changed the entrepreneur? In fact, I heard yesterday Fredrik told me that out of the 23 Swedish industrial companies, most of them we have owned for quite a while, only 2 of the original founders are still the CEOs. So 21 are actually new CEOs. They've had a tremendous performance these last years, including this year. So succession planning and how to manage that is very important. But then, of course, when we acquired -- and this is an evolutionary process, initially, we used to buy 100%. Nowadays, we usually buy, we leave a minority for management. And even when we recruit a new management, they get to own a small minority. I think on average, we own 88% of the companies in our portfolio. We have earn-outs as well if we have short-term -- usually, the [ seller ] is optimistic and we hope -- we're also optimistic, but we are more realistic, so we want to pay for where they are now. And then we have an earn-out and potentially a minority option to kind of bridge that expectations gap. And then we have an LTIP in Storskogen. And in fact, most of our CEOs are actually shareholders in Storskogen as it is. We get a lot into way of working, but we are extremely systematic in what we do and how we do it. The quarterly -- basically, the annual wheel of quarterly board meetings, monthly follow-ups and even in daily interaction when needed, in combination with various types of specific activities. One of the parts of Storskogen is ESG. And this is not a lipstick on the pig, if you will. First of all, a lot of our small companies have big customers. It could be Swedish customers like Ikea or something like that. But it could also be governments. And the ESG requirements are significant nowadays. So the alphabet soup of various ESG initiatives and targets, basically impossible to navigate for a small company. So we guide them, we help them, we navigate through that and to help them to future-proof their business. And when it comes to how we do this, it's once again to be very systematic. I think we are extremely long-term. So First of all, we avoid certain industries which we don't think is ESG-compliant to our end. But then when we've chosen that, and it's not only the most self-evident that we avoid fossil fuels or something like that, it could be a thing about the culture in that particular industry, if we can be active there, for example. So when we have chosen the companies that we buy, we onboard them, we sit down, have a strategy session, develop some strategies where they can be not only compliant but, in fact, create a competitive advantage. Because I'm all about shareholder value. I think the shareholder value comes first, that's the main task for a company. But it's actually quite well aligned with having a strong ESG agenda, because I think being relevant and competitive and profitable in the long-term, then you need to have these things, being a responsible owner, being a responsible employer, minimizing environmental impact, all of these things combine. And then, of course, we implement targets, plans, key metrics, and we start to follow-up, measure and help them hands-on to achieve those targets. So we have these companies. We have acquired them. And we want to empower them to realize their full potential. And in our toolbox, if you will, we have industry expertise. And out of the 12,200 employees that we have, I can tell you that there's basically not one area where we don't have really leading-edge knowledge. And this could be industry expertise. It could be situational toolboxes. We have done turnarounds. We have done mergers and integrations. We have done new factories. We have placed new automated warehouses. We have in-depth domain knowledge. We get the CVs of some of our members, they are experts in branding, production, in sales force management, et cetera. And then, of course, we are active in the geographical market. We understand that market, the culture, because we have people who are from that market. And that, together with the generic Storskogen way, providing financing stability, you will see some examples where we're doing significant CapEx investments to enable growth, for example. In tough times, a small company usually is very vulnerable, especially if they're a service company, for example. Just knowing that you have a strong owner that believes in your business provides them with long-term decision-making in tough times. So actually, when tough time comes, then it's really, really valuable to be a part of Storskogen. And I usually take this countercyclical example that we increase CapEx. During 2020, the entire -- nobody knew what was going to happen, the economy contracted quite significantly, we invested 37% more that year in CapEx than the year before. And that created actually the growth of 36% organic EBITDA growth the next year. So just by doing that -- and we saw the supply chain disruptions, our choice was to, okay, let's build inventory. We can spend the cash for this year to make them countercyclical, and that really drove growth last year and also this year. Strategy development, always hunting for operational excellence, governance and professionals as we already mentioned, and decreasing team, the personal dependency, broadening the team, succession planning, all of these things. So does this really have any actual impact? Is the company worth more if it's inside Storskogen than outside? Well, I think, like I mentioned, in 2020, the Swedish economy contracted with 4%, something I think like that. We still had a small but nevertheless positive EBITDA growth. Last year was a tremendous [indiscernible] the top of the business cycle, we had a plus 36% organic EBITDA growth. I think decreasing the risks, increasing the upside, that's basically what we do. One of the initiatives, concrete initiatives that we have, is the KX knowledge transfer previously called business excellence groups. So we have 12,000 like I mentioned, in lots of different geographies, with lots of different expertise, and we're pooling all of that expertise into not only a joint platform where we put up cases and we have lots of events and presentations and courses, providing not only the CEO but actually warehouse managers, production managers, et cetera, finance managers with support and then development curve for their own sake. Concretely, right now, we have 6 different initiatives with the team lead experts associated where we run these things. And the question is, of course, is this just like another consultant play? Well, we will just do a small extract today telling you a little bit more about one of these, it's procurement. So actually, all of these are equally important, I would say. But if we just take procurement, it's very concrete. That's why we use that as an example. We currently have 14 initiatives within procurement. It could be the purchase of key materials such as steel or energy or insurance. I think today, we're focusing a little bit on one of these aspects, which is freight. And of course, when it comes to procurement, if you look at our platform that we have, the KX platform, we're actually blurring it because it's actually -- we're just continuously now negotiating frame agreements across the board. And this is a voluntary exercise, so if I want to purchase my gasoline at some other place that we have our frame agreement, they're free to do so. But all the CEOs are hunting, of course, for operational excellence and they're also looking for reduced costs. So if they have great reasons why they want to have another freight forward than we suggest, they're free to do so. But we provide them with those frameworks. And it takes time to negotiate them, to adapt them to each and every company. So it's a slow process, but nevertheless it's ridiculously concrete, the earnings and the benefits that this gives us over time. And I think Christer will tell you more about it. I think Peter will also mention about the work on specifically procurement. So does this convert into money? Otherwise, it's no use talking about shareholder value. Well, I think we've had a very strong sales growth this last year, of course, both organically and through acquisitions. We're guiding towards an organic EBITDA growth of 1% to 2%, real GDP plus 1% to 2%. Some people ask us, I mean, if you look at the CAGR here, 26% since 2019, why don't you guide higher? Why don't you guide towards an incremental increase in your margins? Et cetera, et cetera, et cetera? Well, first of all, we have to understand that there's a business cycle going on and it will fluctuate over time. Some of the companies that we buy, we buy great companies with great cash conversion, with great profitability, but they're not necessarily growth companies. Alexander will tell you more about this, but buying a Storskogen share means that you are into industries that you would otherwise never be able to touch as an asset class. You have SoVent outside, chimneys leading -- Swedish Chimney sweeper. Super countercyclical. Actually, the higher the energy prices, the more people need to buy wood. So actually, they will have more work to do now than ever. But that said, there is some volatility there. But all of our companies are not fast-growing companies. So -- and this is realizing the full potential means that some of our companies will grow quickly. Otherwise, will be very stable and we will be very happy with that. So it's 1 year almost since the IPO. How have we performed? In some aspects, very good. Some aspects, things which we could have done better. Adjusted EBITDA growth. We're guiding -- this includes acquisitions. I should say this is over a business cycle in the midterm. It assumes access to capital. And of course, we've had access to capital this year. Next year, not so much. So we have to take advantage of that. So that said, to maintain the growth that we've had in previous years, the 3-year average here is 79%. At the IPO, we had 60% to 70%, I think if you look at the 5-year average going back. Very strong performance, as you can see this last year, perhaps even in retrospect, to strong performance when it comes to growth. But over time, we're very happy with the acquisitions we've made and the performance that we've had this last year. I think we are set with a great portfolio, with a lower risk overall in the tough times that comes ahead. The organic EBITDA growth, like I mentioned, GDP growth 1% to 2%, real GDP growth. Last year, extremely strong GDP growth, the fourth quarter, the first quarter as a quoted company. This year, it's minus 3%. It's a quite natural development, to be honest, given the fact that we had such a strong business cycle 2021, so a little bit of a bounce back on that one. But I should say we've had a super strong demand but, nevertheless, a very strange year with COVID closedowns as late as in Q1, super strong supply chain disruptions, accelerating inflation, making the time lag between the price increases from our suppliers to us before we could move that on to our customers. That has actually had a significant impact on our EBITDA growth as well as on our organic as well as our margin. And of course, if we look at the margin, we're guiding towards 10%. We're currently at 9 million and we're actually moving into tough times ahead. And we're actually not satisfied with 9%. However, I think -- we feel that the underlying businesses, we have acquired a lot of great businesses. And I think as well, if, for example, just simple things as the super strong dollar compared to euro and pounds and the Swedish krona as well, for example, is impacting that one, we have lots of other factors impacting the EBITDA margin. And given the fact that a lot of these are temporary and especially when the changes come along, like the COVID closedowns and the accelerating inflation, we're -- we're decently satisfied with the actual outcome. That said, we're not satisfied over time, but I do feel confident that we will get in line over time on the margin. So we keep that target, and we're working towards it. And hopefully, we can improve. The cash conversion, the 3-year average has been 70%-ish. Lena will talk more about that, but it's actually been 70% for quite a long time. About a year ago, we had significant supply chain disruptions. In fact, you forgot that already, but this boat actually came sideways in the Canal. There's been all kinds and COVID closedowns in China. And last year, we had such big difficulties even to get the goods in before the Christmas trade. So this year, we told them, let's buy 3 months earlier. So we've had a conscious decision to build inventory to have -- to be able to supply our customers with growth, making them happy. It's been a very successful strategy. That said, we're moving into a recession. Working capital is going to be one of the key concerns. So we will be very disciplined now. And I think you will see that our cash conversion will return to our normal levels over time sequentially. And as of course -- so we actually -- I'm not actually dissatisfied with it. This was a conscious decision. However, this will have to improve over time. Leverage, well, our target -- leverage target is to have between 2 and 3 net debt through the EBITDA. We're currently at 2.5, a very comfortable level for us. So we're happy with that. We also had an ambition to deploy the capital that we got into the IPO, I think we're there at the moment. Of course, the cost of capital has increased tremendously. The access to capital has almost -- at this level, we don't want to do emit newer shares. And of course, we don't -- the debt markets, especially the bond markets, are more or less closed at the moment. And this gives us -- we'll get into the short-term tactics later, but in short, I would say, in a good business cycle, I would probably want this one to be 2.8. In tough times, great uncertainties, I would probably want this to be somewhat lower. So it will fluctuate a little bit in the next quarters, depending on what acquisitions we make. But over time, the ambition level, as long as the world stays uncertain, I think you will see our ambition is to decrease this over time. But in the next business cycle, we will probably want to increase it again. So we keep our leverage target of 2 to 3. Just one thing about the -- what about our overall view on our performance this year, and I'm not talking about the share price, which has been disastrous. But actually, we are quite satisfied. We said that we were going to expand internationally, and we have put down an office in Singapore. We have created -- built critical mass in our team in the U.K. and DACH. The one thing that we haven't done in international expansion is, of course, the U.S., which was an ambition of ours. But already when the war in Ukraine started, we said that let's hold that back, let's wait for that until we have better times. It's still on the horizon, but it's not in the near future. So we're currently consolidating and focusing on those geographies that we have. Organically, the organic growth, the acquisitions, deploying the capital from the IPO, all of that are things that we are quite happy with. In retrospect, could we have done some things differently? Well, given the fact that the recession is coming up very hard, we might have been more conservative on the acquisition pace. For example, we could have been -- and of course, we're building an organization to take care of and manage and do a lot of acquisitions. We'll get into the short-term tactics. It might be that if we would have known in hindsight, you might say that we've been building our organization a little bit too fast given the fact that we now have to calibrate our entire organization to the future coming at us, so to say. So getting into this -- concluding, I have 3 minutes left, Rebecca showed me here. So the next generation of ownership. So talking about the short-term focus, what do we need to do? Well, the prerequisite for us is to have a strong balance sheet. It's -- this is the constraint. Between 2 to 3, it might go up a notch or so in the short-term, but over time, we actually would probably want to bring it down a little bit. So we want to have a very strong balance sheet, a focus on cash flow. So if we said to our companies last year, it's okay if you increase your working capital, I think that's not the signal we're giving them now. And I think you will see some rapid changes in that development as well. And this, of course, gives us the background to all other activities. We have to calibrate our acquisition pace. This does not mean that we're not doing acquisitions. We're just doing a lot fewer for a period. We're focusing instead on operational excellence, redirecting resources to operational excellence. And we need to ensure that we have an effective organization out there. Of course, I asked our CEOs that you have outside, yesterday in the evening we had a dinner, I asked them who was going to recruit people and who was going to be cautious about cost reductions. Some companies are going to be very careful now with costs, but a lot of companies actually we've had it's really been hard to get good people. So some of these companies will be recruiting even through. But we will be careful with costs. And this counts even for a central organization and our market areas. I mean, if we're not going to do so many acquisitions, we don't need as many M&A people. So some of these people will work with our companies. Some of them will actually take operational roles, CEO roles and CFO roles in our portfolio of companies. And there will be some redundancies as well. So we will be working a lot with improving our businesses going forward. In the long-term, the strategy remains the same. We think that it's a viable, strong strategy. We think it creates value. So we will continue to acquire companies. We will continue a gradual international expansion, not this year or next year maybe, but over time. And of course, we will continue to do investments in our portfolio companies to continue to make them even more competitive over time. Three minutes are up. Lena.

Thank you, Daniel. Yes, still 2 minutes left until Alexander is on. So a quick question to you on this, maybe on this very last page, you explained about the calibrated cost or the calibrated strategy. But is there anything more you can add to what is expected, what the market can expect in terms of benefits from that?

Well, like -- good question. I think you're all wanting numbers here, I know that, but we'll not give it to you. But there will be some cost calibration. There will be redundancies, of course, very concretely. But then, of course, when it comes to where we allocate our resources, like I mentioned, we have 14 initiatives only when it comes to procurement. And the upside of each and every of those initiatives is really significant. We've bought a lot of companies. And the negotiating power we have as a group, it's totally different than we had only 2 years ago. So there's so much to do now to really improve our margins, to reduce costs, to increase the service levels with our suppliers. So just using our resources, less acquisitions at the moment, more resources on procurement, digitalization, sales force management, I think it's going to have tremendous effects actually which is far surpasses 1 or 2 more people or less. Sorry.

Thank you so much. Thank you. So now it's 10:50, so it's time for the next speaker, which -- who is Alexander Bjargard, Co-Founder as well together with Daniel and Head of M&A and, let's see, Corporate Development, yes. There you go. And Alexander has actually, similarly to Daniel, quite an interesting background, combining a background as a lawyer with one of the Nordics larger law firms, Mannheimer Swartling, very corporate, very structured, with a background with start-ups and entrepreneurial-driven companies before founding -- well, and up until and including Storskogen, I should say. I don't think that there's many people here in Sweden who have actually negotiated and closed more deals than this man right here. So we look forward to hearing more about the M&A. I believe it will be very briefly touched upon what actually is the Storskogen M&A model, what goes into -- what has gone into the portfolio that we own today in terms of reasoning and strategy and diversification and processes and all of that. But I'll leave that to you to explain, so go ahead, Alexander.

Thank you, Lena. It was time to stand up according to my watch, it was good timing. So thank you, Lena, and the rest of you for listening in today. I would like to start off on a personal note being one of the founders and having all my savings in Storskogen, you might think that I sleep that poorly at night going into recession, but it's quite the opposite actually, apart from my 4-year at home, but that's a different story. But today, I'm going to try to walk you through why I believe that Storskogen as a group is well-positioned to actually perform well during these tough times ahead and that we are able to -- or that we have a position also to secure future growth. And what it all boils down to for me is the quality of our companies and our portfolio and our diversification. And luckily, Storskogen's strategy from the start has been to create a diversified portfolio of quality companies. So that's good. And quality, when it comes to the acquisition criteria, well, we target, as Daniel explained, market leaders that are strong in their respective niche or local market, that have strong cash flows and have sustainable business models and have a pretty low risk profile. So that's a good starting point if you want to have quality in the portfolio going into recession. You could say we were actually built for a recession. Then we have a prudent and very selective M&A process that increases the likelihood of actually acquiring the good companies and not the bad ones. We have developed during the years an M&A toolbox that provides both quality to the process and scalability. And we do have industry expertise and local expertise as well as M&A expertise in our M&A teams, enabling us to have a high quality, both in terms of identifying and evaluating as well as acquiring the companies. But you also have to be diversified, I guess, to be -- sleep well. And so we have our companies, I will talk about that later on, they rely on many different long-term macro trends, many different geographies, both within specific countries, but also between different countries. And we are not, as Daniel mentioned, reliant on any single business unit. I'm going to walk through all those things right now. So starting off with our fundamental criteria, what are we looking for when we acquire companies? What are the most important things? Well, to the bottom left, in the triangle you can see that we are looking for companies that actually have a proven business model. We don't buy startups, for instance. And they have a financial extensive track record. Usually, that gives you a few answers. Usually, that tells you that they have a strong management, that the company is well managed, that they have a good position in their respective value chain and that their business model is well proven. And also that their products and services that they offer are equal or actually better than their competitors. However, a strong financial track record is actually just a testament of the past, even though it can give you some hints of the future. So we -- it's very, very important for us to assess if the company is going to be successful in the very long-term. Therefore, we try to assess which are the long-term macro trends supporting the company and is the business model actually sustainable over time when things will change? And is the company's offering relevant in the long-term? And is there a possibility to adapt? Sometimes you think that, but you know things will happen, you have to adapt. Is it possible to adapt the offering over time? We also assess the company's market position. As Daniel mentioned, we target market leaders, with local leaders, region leaders or national leaders or even greater regions. They tend to have more resilience, more pricing power and potentially are more successful in the future. And this means also that we don't invest in companies that have an uncertain outlook on the future, even though they can be very profitable and you know for the fact that in the next few years will be very profitable. Just to give you a flavor, we don't invest in companies related to the combustion engine, the oil industry, even though some of these companies are doing really well at the moment unfortunately. And we don't buy companies that are perceived as really trendy. It doesn't have to be fashion or design, it could be a trendy e-commerce platform. Because history shows that some types of trendy businesses or offerings will come and go and we were in it for the long-term. And since we don't sell the companies we buy, we don't plan to sell any companies we buy, it must be relevant in the very long-term for all stakeholders. Both shareholders obviously but also for the local community, for the employees and so on. Therefore, ESG is ingrained in our decision-making, both when we acquire companies and when we develop companies. And since we look at from an acquisition perspective, is, for instance, a specific market in question, the place in the value chain and the products and services that the company offer, how they are produced, how they're sourced and how they are delivered. We also look at the business ethics of the company and the market. And it's also very important that the company has a possibility to adjust because we know that demands from society at large will increase over time. And as Daniel mentioned, we don't only like companies that are compliant today, but we actually prioritize companies that have a competitive advantage when it comes to their ESG. We believe that in order to make successful acquisitions, you need to have a local presence. And also when you own them, it's much better to be close than far, far away. So we actually only buy companies with head offices in our current markets. We could buy an add-on in a different market if it makes sense for that business unit. But basically, we buy companies in our markets that we are in. From a financial perspective, I know all of you like numbers. We tend to buy -- this is the sweet spot you see to the right on the screen. We tend to buy companies that generate an EBITDA of between SEK 15 million and SEK 17 million with a margin between 10% and 15%. And even though prices differ over time and between verticals, business end markets and geographical markets, we usually pay a multiple of 5 to -- or 5 to 8 on the underlying earnings. Daniel already talked about the transaction structure. We try to have a balance. We can use earnouts or minority shares. And we also -- when the company sellers is -- works in the company, it's very, very important to have aligned interest in the transaction. We want to be friends both in the transaction and even afterwards and have the right incentives. So usually nowadays, we actually -- we don't buy 100% of the company. We buy less, always above 50%. And -- and over time, we also have the right to acquire the rest of the shares. But as Daniel mentioned, we usually leave some shares to management even over time. And I guess from the outside in, it must be very difficult for you to follow us when we do acquisitions. What is the strategic reasoning for why we buy this company or that company? Impossible task, I guess. So I will try to give some light on how we think when it comes to M&A. As you can see to the left here, platform acquisitions. Well, the basis starts with a single company. When we buy a company, usually we buy it on a stand-alone basis, on its own merits. We don't expect any synergies apart from the general group synergies that we provide. And it should be a company that provides great return for us as a shareholder over time without regards to the rest of the portfolio. But actually, a majority of cases, it's not platform or not today platform acquisitions, but could be grouped in different kinds of transaction frameworks. So one is add-ons, one category. And an add-on for us is an acquisition made by an existing business unit that we have, and it has to be part of that business unit's strategic agenda. Usually, an add-on creates short- and long-term synergies, both on the cost and revenue side. Sometimes, an add-on can be made in order to strengthen the company's market position by adding products or services or accelerating growth within the market or a way to establish the business unit in another market. Even though we demand and follow up on synergies, when making add-ons, we rarely take synergies into consideration when it comes to pricing the add-on. So the synergies is on our benefit basically. An example of an add-on made is when Brenderup, one of our business units, the leading trailer manufacturer in Scandinavia, bought [ Tysse ], who's the leading trailer manufacturer in Norway just recently. And Fredrik Bergegard will tell you a bit more about that transaction, and you can actually meet the CEO of Brenderup and talk to him during lunch here, if you want to know more. Another category is roll-ups. This is when we make not just 1 or 2 add-ons to a business unit, this is actually when we consolidate an entire fragmented business. And we can go from a local market leader to a national market leader. Usually, we put in a joint group management for the entire company and joint group functions. And synergies could come from purchasing, sharing resources, developing best practices and introducing new products and services as a group and, obviously, knowledge sharing. Example of roll-ups that we have made or are making is SGD, the leading floor distributor in Sweden, and SoVent the leading chimney sweeping company in Sweden. And I think Peter Ahlgren will talk a bit more about SoVent later on. And also you have [ SoVent's ] by chance here today so you can talk to him as well during the break. Then we have something we call holding groups, not a self-evident name. But basically, this is when 2 or more sister companies that usually are pretty equal in size, it's no reason for one to acquire the other, but there are so many synergies that the CEO and managements of these companies feel that it's much better to have joint incentives in a topco. So it's much easier to work together. They could have the same types of synergies as in a roll-up or add-on, but basically, usually, they are a bit more independent, with their own management, trademarks and so on. One example of a holding group is [indiscernible] HairCo, which is the leading group of distributors of hair care products in Scandinavia. And Christer will talk a bit more about this. And I think also we have the CEO of Baldacci, which is a part of the hair group, [ HairCo ] Group, here outside as well, so you can talk to him later on. Our last grouping are the clusters. These are actually sister companies that have worked in the same market space. And they see a benefit of having a more closer collaboration than a general Storskogen company. And Storskogen creates venues and tools for these companies to both formally and informally meet and exchange competencies and experiences and so on. And these types of initiatives can actually include purchasing. I think Christer will talk about that as well. And this has been done many times, for instance, amongst our electric engineering companies, and also our welding companies, for instance. And it could mean a transfer of competence, sharing resources even and their respective networks. And even though we don't expect any synergies when we acquire a company within an existing cluster, some of our greater synergies has actually come from these cluster meetings. And Christer, as I mentioned, will walk you through one of these examples. Worth mentioning is that it seems very static, this. But actually, you can have a platform acquisitions that makes an add-on eventually or they will buy sister companies and suddenly you have a cluster. And then you start working together and then you can become a holding group. So it's not static in these numbers you see to your right, will change over time. So now I've talked a bit about our fundamental criteria, what we like from a financial perspective or we look at and some strategic considerations that we make. We actually have more considerations when we acquire companies. We have different group considerations. And that could be, for instance, the financial targets that Daniel talked about, external targets, but it could also be in our own internal targets. It could also have -- or we can also consider how we want to create this diversified portfolio. So we might choose one identical company to another in, for instance, a new geography. Or we want to build one of the verticals even more. So we have those types of consideration. And all of that leads down to how we allocate capital through our M&A process. I understand this might, to some of you at least, sound good in theory, but this would be basically nothing if you don't have companies to choose from. And as Daniel mentioned, I do think we have an unrivaled deal flow. The last 12 months, as an example, and this has been the case even historically, we evaluated about 1,100 cases. And these are actually cases with sellers contacting us wanting to sell their business to us. And these are all cases that actually fit our acquisition criteria. Obviously, we get many more that we say no to at the door. So how come that we have so many cases to look at? Well, first of all, as Daniel mentioned, we have a great universe of small- and medium-sized businesses that are successful and that are for sale. But it's also the fact that we are located in many markets, and we are active in many different business verticals and we have a proven track record of acquiring companies and we have an offering to the company sellers that's appealing to them. And as one thing is also the long-term ownership agenda that tend to be very, very important if you're going to sell your life's work. And we also have a true understanding of what it is to actually run small- and medium-sized businesses. And that also reflects in our corporate culture. So in conclusion, when we have built the portfolio up until now, we have done that by being very selective. So what are the actual sources? This might be old news for some of you, but what are the sources for our deal flow? Well, we buy a lot of great companies with great entrepreneurs. If they like the experience when selling their company to us and being owned by us, they would probably talk to their peers. So that generates deal flow. So if you're a good owner and a good acquirer of companies, that will generate a deal flow, and that has been the case for us. Even people we don't know, even indirectly, have started contacting us more and more and more over the years since we have built a reputation on the markets we are in. And in fact, this is the top -- these 2 categories is about half of all the deals we get, which I would say are pretty much proprietary deal flow. The rest are the brokers. We actually like working with brokers and we usually recommend, even if a company seller comes to us without a broker, we recommend it to use a professional adviser that usually brings stability and the rate expectations to the whole process, and it becomes more professional. And it takes time to build relationship with brokers. We have built long-term relationships, we nurture those relationships. We rarely miss an opportunity in the markets we're in, especially in the markets we've been in for a long time. So that's very important to us. You don't have to read everything on this slide, by the way. But if you make maybe 1 or 2 acquisitions a year, you don't need many tools. I guess if you're a good person, experienced person, you can do a couple of acquisitions. For us, having done a great number of acquisitions, we have developed tools for every stage of the process, both for internal use and also our interactions with other parties, external parties, such as advisers and counterparties. And this is essential for us, as Daniel mentioned, the professional side, we couldn't have done this without these tools and processes. As examples, we have specific [indiscernible] request list, depending on the type of company and industry. We have handover checklists within our different departments at Storskogen. We have onboarding list once we have bought the company. we have different kinds of decision frameworks, just to mention a few things. And one, too, that I'm extra proud of, if you can be proud of it, an M&A tool, I don't know, is our case assessment tool or more [ sexy ] the cat. And this is basically our -- the boil down experience of making more than 100 acquisitions. This tool, to see to the right, is just an extract, it's at high level, many pages, is used by all members of our deal team. And this forces us not just to go through everything that's important in the specific deal, not to forget anything. But it also forced us to assess the attractivity of the deal compared to all other opportunities out there, which brings a lot of value to our process. So the tools provides for a high quality in our process and also scalability that you can do a lot of acquisitions. Theory and processes aside, you won't be acquiring good companies if you don't have good deal teams basically. And for us, click here once again. This means if you look to the left here, the internal perspective, we have industry expertise to assess the M&A opportunity and also to build relationships with the company if we acquire it, it's very important to do that early on. And usually, this is provided by the business areas and the director of a vertical, for instance. However, it could be also other employees, investment managers or other employees of Storskogen providing the business knowledge. It could also be a CEO of one of our existing portfolio companies or other personnel within the Storskogen group. We actually also use different kinds of external sources, obviously. And for instance, expert calls, we've been using recently a lot, to get insight into different customers, for instance, what their plannings are and or competitors. We get a lot of insight from these expert calls actually. Another aspect is local expertise, which is so important for us. You have to know the local market condition, all the cultural aspects of doing business in another geography. And also legal aspects and tax aspects and all these things, it's really important. And this is provided by -- it could be a local manager, country manager, but it also could be our business area people locally or M&A people locally. Then we have the M&A expertise. Some people say that it's very easy to do M&A. Probably they've never done any M&A or they're not very good at it. Because to my knowledge, in order to both assess the opportunity and have quality in that and also create the best possible transaction, not just for us, but for all parties involved, creates a lot of -- or demands requires a lot of experience and knowledge. So we have actually dedicated M&A resources in all our deals. Then we obviously use external advisers, such as legal and financial advisers and technical advisers and so on, when needed in all of our transactions. Just to give you a bit of an example here. this is a company Hans Lofqvist Engineering, an old company, kind of a small company that we bought earlier this year, I think. And the team behind is -- was from an investment director of industry automation vertical, [indiscernible], he's previously been the CEO of 2 automation companies and also been the head of the automation companies at AdTech, managing a lot of automation companies, buying a lot of automation companies. He was supported by [indiscernible], Investment Manager with an experience both within management consulting but also in operational roles. Leading from an M&A side was Vilhelm Stern. He's been working with M&A for over 7 years and lately for a few years within Storskogen, probably done more transactions than many people. We also had our co-founder [ Ronnie Bergstrom ] this transaction since he has a vast knowledge or industrial expertise, but also actually knew the company from long ago. And we have, I think, [ Roger Kall ], who is out there, one of our CEOs for PV Systems, also supporting in the process. The decision makers were Fredrik Bergegard, heading Industry and Daniel and myself. And I also actually met the company 5 years ago and followed the company since. Okay. Now I'll try to talk you through why I believe that we have acquired a portfolio of companies of rather high quality. Well, if all of those companies were to be in the same region, targeting the same end market, relying on the same macro trends, I still wouldn't sleep good at night. So -- but as you can see here, and Daniel already mentioned this, we have 3 business areas that are kind of equal in size. They in turn have verticals. But also these are sales numbers. If you look at earnings, it would be slightly different. Truly diversified. But more importantly, they rely on many different macro trends. These are just examples. And for services companies, for instance, some of those are relying on the underlying digitalization trend. And these would obviously be the companies within our digital services vertical and other companies as well, for that matter. Another example is the green energy transition. We have a lot of electrical engineers working on that right now, relying on that macro trend. Trade companies, you have a trend -- underlying trend of health and wellness. We're all getting older as well, which helps that trend. We all want to live longer. So that's one of the trends that supports Christer's business area. And industry, there are a lot of different trends. You have near-shoring, but also have Industry 4.0 together with automation that drives a lot of business for our companies and their customers and so on. So apart from being not reliant on any single macro trend, we are not relying on any. This is a really fun slide or pardon -- the biggest company stands for only 6% of our net sales. So we're not relying on any single business unit. And as Daniel mentioned, this is a journey we still are on. We're not there yet. We started out as a Swedish company, but we really want to be more diversified from a geographical perspective in the future. Okay. So now we talked a bit about the theory. What has this ended up in? Well, these are -- and I don't expect you to read this as well. These are actually the top 20 biggest companies that we own today. And 2 takeaways here. If you can read the numbers here, they are usually 1 or 2 or 3 in the respective market. It could be a national market or a bigger region or in one of those cases, a bit smaller region. So that's the takeaway, market leaders. Another thing for the sharp side of you down there, you can see that they are pretty old, on average 47 years old. And this means that they have been around almost as long as I have. But they have actually been around in good times and in bad times. And as you can see here, pretty stable growth for the last 20 years. And these are actually just 14 of those 20 companies. The reasons why we left out a few companies were that they actually started somewhere in the middle here or we have a carve-out from Schneider that we didn't have the accurate numbers. So still, I feel pretty confident with the quality of these companies that have historically performed even in tough times, as you can see the financial crisis there. And I think Lena will show more slides to that effect. So the last slide for me. So now we know hopefully, and you can share and sleep well at night knowing that we have a good portfolio of companies and we have a diversified portfolio of companies. But sleeping well is not fun or it's fun to get up out of bed every morning. And I think it's really fun. And one thing that drives me is I actually truly believe that Storskogen has a unique market position to effectively allocate capital towards long-term macro trends, attractive end markets and geographies as well as in specific companies. If you're dedicated to one niche or one company or one country, for instance, you don't have that opportunity. And this goes for both internally, in internal perspective -- no, that was not it. As Daniel mentioned, we can work with CapEx and OpEx, we can choose what -- where do we place our money. We still want to be the best owner, but we still have the option to choose where we allocate capital internally but, obviously, also when you acquire companies. And since the companies we acquire are not listed companies, I guess it will be almost impossible to get this kind of exposure for investor, both with regards to the specific companies, since you remember a large part of our deal flow is also proprietary. And also to certain market segments even. A couple of those examples are the chimney sweeping industry, which we talked about a bit, or the automation industry for sawmills, very specific niche, but still you can't get in there. Or the floor distribution industry. I would say you can't get in there if you do not invest in Storskogen that is, that's the only way to get in there. So I think thank you for listening to me, and I guess, over to you.

Thank you. Thank you. We're running 1 minute behind but -- a couple of minutes. But one quick question for you. One thing that you did not touch upon, but that we actually wrote in the Q2 report and in the press release that went out this morning where we used the word possible divestments, is this something that your team is looking at? And is there anything that you can share with the audience about those plans?

Yes. In the line with what Daniel already talked about, it's not our plan to sell any businesses that we acquire. We are in it for the long run, and we have different criteria, how we work with underperformance. And we try to obviously turn them around. And -- but if we are not the best owner, and we have done everything we can do and there is a better owner out there, we might sell off 1 or 2 of our low performers or where we are not the best owner at the moment. So my M&A team is currently looking at a few of those cases.

Great. Thank you, Alexander.

And I'd be happy to answer any questions out there and also on stage later on. Thank you.

Good. Thanks. So over to myself. I'm not going to present and introduce myself further than that. It's time for the CFO presentation part. If you want to -- you've been sitting for a long time, if you want to just stretch your legs while I talk, that's completely fine, to get the blood circulation going. If you want to sit down, that's also fine, of course. So I will talk a lot about -- I will show you a lot of numbers now, so buckle up. I think that you people are number crunchers, however, so you'll probably be all right. But I'll try to talk you through the numbers and not just show them. My intention today is to show you through numbers why basically what Daniel and Alexander have been explaining so far, why we feel confident that our portfolio has the ability to perform throughout a business cycle, even in a downturn. I'll also talk you through how we manage the portfolio of companies in terms of control and financial steering follow-up of performance. I'll also talk about cash flow, working capital, which is, of course, the name of the game for many companies right now. And then finally, I'll go through the balance sheet items of net debt and cash and leverage items. So starting off a bit softly, however, with a classic revenue and EBITDA margin slide. What we show here is revenue in terms of like rolling 12 months, from the beginning of 2019, and the [ EBITA ] margin on top, also rolling 12 months. What you see here is, of course, a strong revenue growth going from [ SEK 4 billion ] at the beginning of 2019 to [ SEK 27 billion ] at the end of -- at the rolling 12 months ending in Q2. You can also see here, Daniel showed on one page that the average EBITDA margin has been 9% over this period. What we see here, however, is that the margin was around 8% in the beginning in 2019, has then gradually improved to 10% in 2020 and 2021. A little bit lower than that, 9.3% is the rolling 12 months at the end of Q2 this year, largely or mainly only due to these external that we've seen there out there in the market and have experienced, which also tells us that the margin potential of this portfolio is higher than that. To the far right on this graph, you see the bar that is slightly darker that shows RTM, so that is pro forma, as if we had owned the portfolio the entire 12-month period. Whereas the other graphs showed the owned period only. So the pro forma is, of course, the run rate of the business. And there, we have a revenue of SEK 36 billion with a margin of just above 10%. But this is only 3.5 years. Let me show you how the subsidiaries have performed during the -- for a longer time series, during the past 21 years, in fact. So even though we were founded only in 2012, our subsidiaries have, as you just told us, Alexander, been out there, been existing for 47 years, which means that they have been through a number of business cycles. And what we show here is the EBIT margin of -- the combined EBIT margin of more than 100 business units, in fact dating back since the year 2000 here. We highlight the 3 downturns we've had during this period, the IT crisis in 2001, the financial crisis in 2009 and then the mini-COVID crisis a couple of years ago. And there are some takeaways from this slide, I think. The first one is the light gray line, which shows the EBIT margin of the industrial portfolio, clear cyclicality there, of course, as expected due to large fixed asset basis. But also look at the graph and see how the rebound was after the crisis in 2001 and 2009, as well as the COVID, of course. The dark gray line shows services. Also quite interesting, I think. This actually proves what we have known all along, that the services business area is resilient. Actually, in fact, more resilient has been in the past than the other 2 business areas. Perhaps not as much improvement in strong business cycle, but definitely more resilient in weaker business cycles as you see here. And then finally, the blue line, which shows Trade somewhere in between. But what I think is most interesting here is, in fact, you see since -- actually the whole period, but definitely since 2012, it has a clear negative correlation to Industry, doesn't it? When Industry's EBITA margin goes up, Trade goes down. When Trade go up, Industry goes down. The portfolio today -- the dotted line here is the overall group or the combined margin of all of this which in fact, is then Storskogen. Elements of cyclicality in there? Yes, for sure. But is it as cyclical as the industrial sector or the capital goods sector? No, I would say no. And of course, every business cycle has its own traits. Some macro experts now seem to think that this time around, it will be that consumer demand that will be more hurt than the industrial demand. Jury is still out there, I guess. But in either way, this portfolio is resilient, even if it's the industrial or the consumer or Trade demand that goes down. And also the consumer demand is not directly correlated to Trade because you have almost -- all of it is business to business, so not as sensitive as consumer demand. So on the next page, I look at the distribution of profitability in the portfolio today. What we show here is the bubble graph, of course, I'll talk you through it. The X axis is the EBITA margin. And the Y is the revenue. So what we're seeing here is that 7% of the revenue belongs to companies with a margin of below 0%, so loss-making. This is too high. But I believe that this is what you have alluded to, that some of these companies are clearly affected by external factors. And we know the management is strong and good. And once inflation comes down, they will be able to produce profits again. In other cases, this might be on the divestment list. 9% of revenue belongs to companies with a margin of between 0% and 5%, 33% belongs -- of the revenue belongs to companies with a margin of 5% to 10%, 29% of margin between 10% and 15%. And then 12 plus 10, so 22% of the revenue comes from companies with a margin of more than 15%. So all in all, 84% of the revenue is from companies with margins above 5%. And as I said, the red bubble there, I think, is the one that we -- that would be most likely part of it maybe to be subject for divestment and which would, of course, have a positive impact on the group's overall profitability. We're not giving any guidance as to when and how that would be done. So now we've seen how the portfolio has performed since 2000, regardless of whether we were the owner or not. And now I'm going to get to the question of, so how have they performed under our ownership? We get a lot of questions on this. So we thought we'd set things straight. This is a bit of a messy slide, but I'll talk you through it. So to the right there, we have divided the acquisitions into cohorts or vintages. So the worms you see there belong to a certain cohort. So the cohort of businesses that were acquired between 2012 and 2017. So this is the original portfolio have performed with a negative organic EBITA growth, mainly due to, I would say, 2 or 3 subsidiaries in there, some of them have clear difficulties with the macro environment inflation and have an EBITA margin of 6.6% here. But they only represent 8% of revenue, and they were acquired at a multiple of 4.9x. The next cohort acquired in 2018 had a positive organic EBITA growth development since acquisition. And an average margin of 8.6%, so still below the target of which is 10%, as you know. But then again, they were also acquired at quite low multiples of 5.4x. So the return on invested capital in this cohort has been really good given the strong organic growth. Same goes for the next cohort, 2019, with extremely strong positive organic growth and a margin of more than 16% acquired at a multiple of 5.6x. The last cohort, 2020, also a positive organic EBITA growth there, a margin of closer to 16% as well acquired at a multiple of 6.3x. And then finally, the big one acquired in 2021 at an average multiple of 8.2%. Have an average -- they're not included because we don't have history, of course. But they have an average EBITA margin of 12%. So also above the target. These don't add up to 100%. Some of you will ask and why is that, because this is organic growth. So add-on acquisitions are not included in this strip in our organic growth calculations, we don't include add-on acquisitions. So that was a bit about to showing the strength of or resilience of the business and how they have performed both before we bought them and during our ownership period. And then moving over to control, of course. The end game -- I mean, we get questions all the time, how you manage such a big portfolio with the acquisition pace that we've been keeping, yet making sure that the numbers are correct? But nothing fishy is going on. You -- Alexander just explained how you work through this in terms of M&A processes, and I will guide you very briefly through how we work with this in terms of financial control. Endgame, of course, being reliable financial reporting and ability to forecast developments so that we can make better decisions as a group as well as tools to set targets for the companies and for the subsidiaries to be able to follow up on the -- towards the targets and on their performance. We have -- the financial process is, of course, starts in our financial onboarding. Of course, that's already at the M&A process stage. We onboard each acquisition within the first month after acquisitions there in the group reporting system, and then they tag on this beautiful annual wheel of ours with budgets every year. Budget process is -- project is going on right now as we speak out there. We follow up on the budgets every month, every business unit. We have then forecast periods. So we update the forecast in Q1, Q2 and Q3. And then we follow up on that as well, including a 5-year forecast for each business unit actually. We have internal control. We have risk management. We have tax. All of that is included in this annual wheel. And then it all, of course, results in monthly reports from the subsidiaries to us. I'll show you some examples of that in a minute. And then, of course, from us, to our Board of Directors, monthly reporting and then the stuff you read in the quarterly reports and annual reports. On top of this, cash pools, cash management, that we -- and internal financing that we work with on a group level as well. So this is what a monthly KPI follow-up tool might look like. I know that the ones who look at this online are trying to zoom in to see what's going on behind the numbers. I'll come back to that in a while. So of course, Trade, Industry, Services have different set of KPIs. Now we all look at revenue growth, EBITA, EBITA margin. Of course, what Trade more looks at is gross profit inventory and cash conversion. Industry also, follows up order book and working capital and CapEx. And then Services, you don't have almost any working capital, but instead, you have a lot of projects. So there is a project profitability follow-up, occupancy rate, et cetera. So different sets of KPIs. And what you see here to the right is an example of an anonymous trade of -- quite large trade company. And they do follow up on a number of -- numbers here, as you see, compared to budgets and expectations and last year, et cetera. So for instance, here, you see the income statement with sales, gross profit and EBITA margin. You can see if you look very closely that they beat their EBITA margin budget every month except for April this year. We look at the balance sheet with focus on working capital. So we have return on working capital, which is close to 100% in this case. Inventory turnover, which is down from 5 to 4, which is not good, of course, but this is what we see in many companies, Industry and Trade companies now with high inventory levels to put it frank. And then finally, cash conversion cycle down there. You can see that it has been above last year also as a result of inventories. And it's follow-ups like this, that is the foundation of our control. It makes it possible for us to allocate resources where needed and to be a sounding board for the CEOs out there to give them the support needed or the applauds, of course. So apart from monthly follow-up and internal control, we have another tool as well, which is our own confidence indicators, Storskogen [indiscernible], we call it in Swedish. We've been doing this since April 2019, actually asking all our CEOs every month, 10 simple question regarding demand, pricing, regarding inventory levels, forward-looking and current statements regarding occupancy rates, et cetera. And it takes them only 60 seconds to answer so very quickly. And the result here is actually a very useful tool for us to stay a bit ahead of the curve, to give us the -- it gives us an early warning in some cases. And because what we see here is the dotted line is the average of all these business areas. And there are 2 takeaways here, I think. The first is we plotted the EBITA margin there, which is the dotted line or the orange line is the EBITA margin quarterly. And so you see here that this is an early warning tool actually. The EBITA margin follows, not perfectly, but at least to some extent, the sentiment out there in all our subsidiaries. And the other takeaway, I think, is what happened in March 2020 when the sentiment just went down very sharply, but the margin declined a little, but not a lot. So it held up pretty well during this period as well. So over to cash flow and financing. There you go. One of our communicated financial targets Daniel showed on the previous page here is cash conversion, which we target to keep at 70% or above. This has been the level for the past 5 years. The beginning of the first half of this year, we were significantly below that target. And there is a lot that projects that we are working with to get that straight. You will hear from the business areas what they're doing, for instance, but the point being here that the history has been at this level. If you look at return metrics, the P/WC is actually earnings over working capital, 73% in this 12 months -- last 12-month period. 91%, I believe, last year, so very high return on working capital. Return on equity, 9.2% and return on capital employed, 9.6%. However, some companies out there, some peers even have -- calculated return on capital employed, excluding cash. And if we do that, the return on capital employed is 11.9%. And I've learned that some companies even calculate return on capital employed excluding goodwill. And measured that way, it would be 20% in our case. So just keep your mind sharp when you look at our compare return on capital employed numbers between companies because the way that is calculated might vary a lot. The return metrics have been diluted by share issues. You know that. Here, we try to illustrate how much of that is or how much the share issues have actually been diluting. So you see here, we have made quite large share issues around 20% of the balance sheet in new share issues every year, except for 2021 when it was 35% of the balance sheet in new share issues. So strengthening the equity. This, of course, has a significant dilution effect in the fact that we haven't deployed all the cash and the proceeds in investments directly. Of course, it takes some time so we have had quite significant cash balances as well, which you should bear in mind. And also, it takes time for the companies that we do then acquire and where we do employ -- deploy the proceeds in investments. It takes time for these companies to actually start growing their profits, which is what will, over time, is the profit growth that over time will improve this return metrics. And then staying still with the cash flow for a while. On this graph, you see the free cash flow, operating cash flow as well as free cash flow to sales. So free cash flow to sales has been between 5% and 9%. It's in line with some of the comparable companies out there and a bit lower than other comparable companies out there. But if you look at the absolute number of cash flow, you see we had free cash flow of more than SEK 1 billion last year and operating cash flow of SEK 1.6 billion last year. Bear in mind, the portfolio is significantly larger today but our cash flow this year has been disturbed by external factors. So again, the potential is quite significant in the portfolio we have. The free cash flow is in a normal year, in a normal time. That, of course, can be deployed and complemented by debt, keeping the leverage intact in new acquisitions, providing quite nice growth. Just not issuing any new capital, just using the cash flow. So that is perhaps good to bear in mind. Right. And then again, I'm going to talk a lot about cash now, I realize. So moving from the free and operating cash flow to working capital which is more concrete and tangible what we -- where we can make quite a big difference. And the way it has evolved this year is in a negative way. So you see the average cash conversion cycle days basically measures the days between the sales -- when the sales turns into cash basically. So the higher the bar, the -- it's not good if the bar goes up, so to say. But this has -- it's been an exceptional year in many ways, and I'm sure that you've seen this in other companies as well, where inventories have been higher due to price inflation which is quite a large impact on these inventory levels as well as volume, of course, with larger inventories. You see that the inventory is the orange line there. So the days average accounts receivable or days sales and the days payables move in tandem, which means that they offset each other. So it's actually what affects the working capital is the inventory change. And interestingly, you see the split here between the business areas, where Services ties up basically no capital -- working capital at all. 0 inventories and days sales and days payable are offsetting each other. Whereas the days sales and accounts receivable are almost at the same level in Trade as well and slightly higher in Industry, but it's the inventories here that, of course, attracts the interest. Trade companies always have larger inventory than industrial companies, but you see the trend there in this beginning of the year. Now you understand where the focus is now in Storskogen, it is to manage this. Of course, making sure that we have the goods needed to deliver the sales but not keeping them too high for the foreseeable -- this shouldn't be a normal, so to say. I should also add I mean, even though these are trade companies, there's almost no element of fashion or anything like that in there. So this is -- there's no -- these are very high-quality inventories, if you will. So no need for in currency there. Just wanted to tell you that some trade companies obviously have a high fashion. But I think that Båstad-Gruppen that you can meet outside here, they can sell their work shoes even 6 months from now. I mean, their model don't change much. So moving to the balance sheet items and the debts here. We have -- you see here the interest-bearing debt and the cash. And then you see here on this other little box, what the interest-bearing debt consists of. So we have an RCF, which is a revolving credit facility of a total of EUR 1 billion, which is, I guess, at today's euro it would be SEK 11 billion, of which SEK 7.5 billion was utilized at the end of Q2. And then we have 2 sets of SEK bonds, SEK 3 billion each maturing in May 2024 and in December 2025. We also published a press release on Friday -- last Friday of a new term loan of EUR 300 million, so a little more than SEK 3 billion, and that will, in its entirety, be used for paying down the utilized part of the RCF to increase the unutilized part as rather than to increase the total net debt of Storskogen. And then there's a bunch of operational liability items there. We have an investment. We have a credit rating from Moody's and S&P of BB+ and Ba1, indicating also that we do have -- once the capital markets open up, the ambition is to extend the average maturities here on -- mainly on the larger bond markets. But however, also bear in mind that the next maturity we have coming up is May 2024 in terms of the SEK bond of SEK 3 billion, which is still some time ahead. And then we have some noninterest-bearing liabilities on the balance sheet as well. We have earn-outs and minority options. Also bear in mind that only 40%, so a smaller part of all of this is due within 12 months from now. And the larger part is the long term. So due within 2, 3, 4, 5, even 6 years maybe in some cases. And also the way we carry these on the balance sheet is quite -- using quite a prudent way of valuating these. So using the upper -- typically the upper end of the forecast for the acquired subsidiary. So should we head into a slower economic -- economy, then, of course, these forecasts might be lowered a bit. And in that case, then these liabilities would come down as a consequence of that. And then net debt and leverage. So Daniel mentioned that the -- one of his very first page is that there is a target of interest-bearing net debt-to-EBITA to keep that between 2 and 3x. And that is the shaded corridor we show here. And you can see that dating back a number of quarters, we have been in the very lower range or below that. And right now, at the end of Q2 at 2.5. So still comfortably headroom to that 3.5x that Daniel, I think, also showed on the page, which is the absolute maximum. So still comfortable headroom to that. And I don't think I need to comment more on this. We were quite clear that to be in the very upper end of this range is something that we would be comfortable in doing a very good -- a strong economic cycle and doing a weaker times, maybe in the middle or lower here. So my final slide is about costs. So we thought that we would give you a glance on the operating expenses. So perhaps that could help you estimate how various inflationary forces could affect us and have affected us, in fact, because these are the first 6 months of this year. So we already have quite significant inflationary effects in this P&L right here. So I'll talk you through some of the items. So the first one is raw material and necessities making up 55% of sales. Here, of course, Industry represents the largest share of this, Services the smallest, obviously, due to the nature of the business. For Industry, it's metal is the by far largest share of this. Steel, also for Services, steel is actually quite a large part of it. And for Trade, it is finished goods basically. So steel, but you also have an industry, there is plastics. There is a number of other components as well, of course. But it's a mixed bag. And then we talk about -- we get questions on energy cost and fuel while direct energy costs are quite low. So only 0.2% of sales actually indirect energy costs, so more difficult to calculate, of course, since they are included in the cost of the raw material and goods. But the direct cost is quite low. Fuel cost, 0.6%. This is less of an issue now. It was more of an issue in the beginning of the year. And then, of course, personnel expenses, which is higher in Services due to the nature of the business again and lower in Industry and Trade. And then finally, the share of HQ or group expenses of this EBIT, it's a negative minus 100 -- I think you should say a minus SEK 171 million is attributable to group costs. And transaction costs are only to a very limited extent included in that cost. So transaction costs are actually distributed in the business areas. So I think that was the last page from my part. I managed to keep the time even, yes. There you go. I don't know, should we ask Daniel and Alexander up on stage?

We're back.

Yes, exactly. To open up -- ill just move these. To open up for questions. Should I start with some questions from the online chat room here?

Let me see. Okay. Yes. So there is one question here to you and me, but maybe you want to take that. Regarding the stock price and the increased rates and cost of lending. Will there be a buyback of shares?

Well, I do feel the urge to buy back shares. But I think at this point, our main concern is, of course, that we want to have a strong balance sheet. So I think it's not the priority at the moment. I think having a strong balance sheet is the primary priority at the point.

Right. Is there any comments -- we had another question here about the share development. Is there anything more you'd like to -- any comments on that, what are your views?

No. I think -- I mean, apart from the macro and all of these things affecting our share price, I think the reason why we're here is that we obviously want to take the opportunity to explain more about what we're doing and how we create value and our resilience. We understand that we are the last one into the stock exchange, we're new to the gang. And when the risk increases in the economy, you look to decrease risk and you move away from newcomers such as ourselves. So I think for us, it's all about performing over time, delivering strong quarterly reports. And I think some of our peers that are more highly valued, I think they have had already 100 or so quarterly reports to show how they perform in various business cycles. So I think we will just have to deliver over time. I think that's my take on it.

Sounds good. Questions from the audience? I think there are some microphones...

Erik, I think...

Yes.

Hannah is running like a gazelle down the stairs.

Yes. Thank you, Erik Salz, JPMorgan. Thanks Daniel, Alexander, and Lena, first of all, for the presentation and the -- and further clarity. There may be a couple of questions I would like to ask. And starting, first of all, with the infinite -- the holding period horizon. And I get that you altered a message a bit in terms of underperforming companies. Those are the ones that you may dispose of but it still feels a little bit that it comes out of a position of weakness, although you say, okay, if we've done everything and we can't deliver more, then we may sell a company. And I appreciate that a long-term view is a good thing, and it delivers you the network of potential deals, and I get that. And I wouldn't advocate for changing this to a PE model because you're not a PE company, is just completely different in terms of your P&L and your approach. But if you say we are holding things forever, then you also -- you -- this may be interpreted as you expect of yourself that you always are going to be the best owner of companies. And it's hard to sort of argue that. We get that times change. And if you are doing like the best thing for the companies, then a great testimony of that would be that private equity or any insurer investor would line up to buy things off you because they would see like the people at Storskogen, they are doing the right things for company -- for companies. They're building businesses, but at some point in the future, you may not be the best owner and you can recognize that. And by saying you're not open to disposing businesses except for the point where you think they're underperforming sort of rules out the potential avenue for shareholder returns. And why would you not change that message and be open sort of over time to sell businesses in a situation where you could accept that you're not the best owner anymore, although these businesses performed well.

A very good question. I think there's lots of different levels to that. We do get actually one question a week from some of our private equity colleagues who want to buy parts of our portfolio or things like that. So that's, of course, nice for us to hear that they appreciate what we're doing with our companies. Of course, there is an element where the key aspect, are we the best owner of these companies? And I'm not ruling out that sometime in the future, we would not be the best owner of a well-performing company. But that said, there are so many fantastic aspects, that we feel are fantastic, very introvertly speaking, with our -- the way we are working with these companies. Not only in the acquisition process, but how we -- we get into that this afternoon, how we actually work and develop these companies and the joint synergies of having the capital allocation without tax [Foreign Language], how do you say that in English? Well, tax effects when moving money around. But also from a systematic perspective, when it comes to procurement, all kinds of synergies with kind of digitalization, cross-benefiting from through verticals. I think if you ask the CEOs down there, they are selling each other products. They are pitching towards big projects together. They're selling things together, they're buying things together. And the way of working that we are in the Boards actually make us really quite firm that we are the best owners of this. And I think the companies and the verticals and the various bits are actually a lot more worth together in the diversified portfolio, decreasing risk. But we're actually -- with an infinite holding period, that's our ambition. It could be a low performer. In theory, we could divest even a high-performing company, if we are clearly not the best owner. But I think we're very far from that distinction. And I think the strategic price for us, if we would start to divest well-performing companies, the strategic price would be that we would pay a lot more for new acquisitions because they would not choose to sell to us because we would potentially sell off their company to an industrial buyer later on. They usually already have a nice price on the table from a private equity player, for example, but they choose to sell to us. So the moment we start selling off our great companies, there will be some strategic negative consequences for us.

And also maybe can I add something. You usually talk about when you were in start-ups and you started Tradera. And you had an internal name. I don't know if we can...

Yes, yes, yes.

Internal name was on the first slide, [ Prebay ]. You know who you're going to sell to. You kind of -- all operations is focused on how to sell the company for a great value in the future. And if you're long term, you can't really do that. It's a completely different way of working, I guess.

And I think the way when we started Storskogen, myself having been an interim CEO, working for a lot of these private equity companies and venture companies, also starting traditional start-ups within -- with the aim of selling it onwards. We really wanted to do the exactly opposite way around to buy long-term profitable companies with strong cash flows being extremely long term in all our decision-making. So the heart was basically where Storskogen comes from is to be something totally different. And that's the value offering. Yes.

If I can ask 2 more shortly. On international, like is Asia, given it's far away and there's not so much exposure that you have there, is it still something in the near term, is there an ambition? Or is the team going to change there or you going to keep a team in place? And then the other question, which I'll ask immediately, the confidence indicator that you showed on Slide 42, I believe, it ran until December '21. Obviously, times changed. And can you give an indication how it looks now?

Can I just answer the very last one. So the reason why we stopped in December 2021 is so not to -- except for compliance reasons, basically, not to give forward -- because many of these questions are forward-looking. So not to give any forward-looking statement. We weren't allowed to do that. So that's a simple reason for that.

Yes. But getting back to your question with the international, I think it's -- one of the regrets I have is that we don't have 30% of our business in the U.S. and 30% of our business in Asia at the moment. I think we would have been a lot stronger company with a great diversified portfolio even geographically. So we are going to keep the team in Singapore. We are going to acquire -- I should say, we already have factories in China and Taiwan and Japan, we have people already working, and we're sourcing from Asia. We're selling to Asia. We are very much active in Asia. And it's not only 3 or 4 people in our Singaporean team, it's actually hundreds of people that we have working in Asia. So we are, in fact, already there, and it's an important part. And we believe that we've actually seen that the value we bring in these early first contacts with company sellers that the value we bring is even greater there because they don't have anyone like us, a long-term owner, but the entrepreneurs are still the same. They've built a company for a generation or 2, and they want someone to be the next-generation owner. So I think being a long-term owner for SME companies, I think we get access to great companies at the right prices, I think, so the market opportunity is fantastic actually.

But also -- can I add something?

Yes.

I can't keep quiet. But from a value creation perspective, also from an operational perspective, we actually missed out in the early days companies that wanted help because if you're a medium size, a small company, you don't have the resources as a big company. So you need help going into different markets, sourcing from different markets. And we didn't have that back then. And we weren't the best owner back then for those companies and gradually we want to be the best owners for these companies, helping them sourcing and selling, for instance, in Asia, not just acquiring Asian companies, for instance.

Great. There's another question from the audience.

Marcus Albert here from [indiscernible] Bank. I'd like to tie on to where you kind of start -- where you -- the last question -- or the last answer. There lots of compounders that comes in a similar type as yours here in Sweden. And outlook, it would be interesting to hear the differences in operating and making acquisitions here in Sweden and internationally in terms of -- because you're much more diverse than most of the other compounders here, which I know that there is something that has been discussed widely and this diversification. So is this very different to do this in Continental Europe or Asia or in the U.S. compared to Sweden?

Well, one aspect, I think, Daniel already talked about that the business model itself with the internal ownership that as some of our peers have is actually quite new to many of the other markets outside Sweden. And they are longing for that type of owner. So -- and one difference there, I mean, we have several peers and they do it quite differently among themselves as well. So -- but I think on average, we want to be very local, that might differ us. And some are very decentralized. We're a very, very small head office, others are not. We have a decentralized model, but we also want to help our companies even in the tough times, for instance, going ahead. So our governance is a bit different, I would say.

I was thinking of the decision difference -- how -- if it differs how we acquire companies in the different countries. That was part of your question, was it?

Yes, it was part of -- just if the process is different if you have less type of acquisitions, less type of competition when you are going into deals. If you can meet the company here where you have, let's say, an installation company in your -- in one of your divisions. For instance, there are other companies here who also makes a similar type of acquisitions. If the discussion with the target is very different here than it is if you would make similar acquisitions in Asia or in Italy or in...

Yes, I think from -- thank you for asking that question. That gives me the opportunity to tell you that I think this is a great opportunity that we have being in different markets if, for instance, it's a crowded marketplace not only in Sweden to buy electric engineering company, the prices go up, the quality of the company's go down in comparison that previously, we can choose not to buy them here. We can choose to buy them in the U.K., for instance. So I think that's a real -- and that's actually what we do or I do every day to make these decisions. And so that's, I think, is a real strength that we have. That was half the question. What was the other half?

The other -- I can start with that one. It's basically the process. And I think the entrepreneurs are surprisingly similar, having surprisingly similar concerns regardless of country or industry. They care about their companies, they care about their employees, they care about the long-term health of their business. So I think that is very similar. Then in fact, in Singapore, most deals are proprietary, it's long discussions. It's a little bit different when it comes to sourcing. Whereas in Sweden, for example, we have established relationships with the brokers and everybody knows that we want the broker. So for the half, that is not add-on acquisitions where it's quite often proprietary deals, they come through brokers. So I think it's a little bit -- the processes could be different. I think in Asia, to be explicit there, we are a little bit more -- it's longer processes. We're a little bit more careful in the due diligence processes and to see that they fulfill our various ESG agendas, for example. So there could be slight differences, but yes.

But basically, the needs are the same for the company sellers. One thing is different maybe you want -- some people want -- they don't like being bought by a foreigner. So that's why it's also important to have local teams because they are the same nationality, so to speak. So that might be one difference. If you kind of do cross-border transactions.

And on using brokers, I know that you've used quite a lot of brokers in the past. And now that we're going to different kind of environment. Has this changed? Or do you think that this will change, that you will use more internal resources and rings in the water with the subsidiaries you already have? So will this change? And then tied to that, if you can just talk a little bit about if you've seen anything on the pricing environment for the targets as we go into a different interest rate environment.

Yes. Good question. The pricing has, I would say, in general, come down a bit during the spring and summer and then now. Obviously, there are certain industries that still hold up prices in certain end markets. But in general, I would say it has come down quite a bit. And I foresee that will continue to go down. Some of our -- or most of our companies that we buy are really profitable companies, and they don't have to sell basically -- usually. So they can wait it out, bad times. So we expect them to get back into the market in a couple of years or so. With regard to the brokers, we nurture our relationship with the brokers even in the tough times. They are usually more creative in tough times, and they call us a lot more, I guess, to -- with different kinds of things that we can do together. So I guess we will try to nurture the relationships a bit more. Obviously, we have time to spend on operational excellence, and that will bring probably -- we think about synergies, we think about our clusters, and we think about all the things I mentioned before internally. But we'll definitely keep the relationships with our brokers going forward.

Yes. There is one aspect, of course, when we build, I think, for example, Christer will talk about how we're building one vertical for some health and beauty. And of course, we you're talking about the rings on the water. And as we gradually gravitate previously, we did primarily platform acquisitions. I think these last 6 months, it's been 50-50 add-on acquisitions. And if you add clusters and et cetera, it's even more. And a lot more -- add-on acquisitions are quite often proprietary processes. Either we have contacted them or they have contacted us and it's through networks, et cetera. So -- and you can see some of the other geographies are all about networks. So there is a little bit of a shift, I should say, on average. Yes.

Maybe I could just pitch in with a question online here. There are 2 questions from different people that are actually tagging on to each other. So maybe I'll ask both of them. They have to do with succession. And so we showed a cohort with the organic growth development during our ownership. Would you have a similar for before and after succession in the company? I know we can't show you any graph of that, but any comments on the performance? Yes.

Since we don't have any numbers, I can speculate why [indiscernible]. No. But since -- depending on the type of companies we buy, if we buy as we did in the beginning, we bought a lot of small companies and we want them to be future proof. So usually, as Daniel mentioned, they had one really good entrepreneur. They probably didn't have a CFO. They didn't have other types of staff that could provide processes and routines and know-how buildup so that could be resilient in the future if that key person leaves, for instance. So for these companies, we might add cost at first in order to future-proof them and make them successful in the long run. So the cohort will probably be that, all things equal outside, that will probably go down a bit profitability. And then over a couple of years, start going up above the previous level. Now since we buy a bit more bigger companies, bigger teams, the need for us to add those types of costs are fewer, I would say. But it takes some time for us to get to work with the companies and the growth.

I should say, I mean the business model has evolved. Initially, we usually bought 100% directly. We had a relatively rapid succession into a new owner. Usually, these are generation shift companies. Nowadays, we buy more and more, we leave a minority stake. So we have a more orderly and a more prolonged transition where the existing management stays on, potentially, and then we have gradually find -- in the company or else where we gradually found that succession plan. So we actually -- it also has to do with the multiple and what companies you buy. But I think we've seen a lot less, like you said, the original decrease and then the increase, I think that has kind of evened out. So we don't really see that shift. This is qualitatively speaking, we actually haven't -- numbers on this one. But that's -- the gut feeling is that we had more of a dip initially previously than more of steady state.

A little bit related question is -- comes from Martin here regarding the earnouts. Are they all performance-based or would some of them be due without any performance requirements?

I would say that all are performance based. There might be some exception, I don't know, but probably not. So all.

All? Is that the same...

Usually, they are actually not -- depending on 1 year, usually want to have a couple of years to even out the performance so we can have a kind of more true value.

Any questions from the audience here?

[ Thomas Carson ]. How big can a vertical become? I see that you have the biggest vertical is 14%? Is it LNS or, yes?

I actually should know by heart, which one is the biggest vertical. Actually, I don't know which. It's products, yes. So LNS is actually an automation. So I mean, the vertical can become quite big. I think we just don't need to have 1 vertical director for each and every one, but we could have several. And we also have several indifferent geographies, for example. So we divide the work in between. So we don't necessarily see a size matter. And of course, if you take products specifically, we have a few companies, Brenderup outside is a very big company in itself and LNS you mentioned. So as we do add-ons and roll-ups and things like that, the individual business units can actually become relatively large. So if you have a vertical with 10 or 15 companies, which is a reasonable size. The -- I mean, last year, I think our average size of our business units actually grew with 30% organic growth and acquired growth. So as they move -- it's not necessarily the number of business units, but the total size of the vertical will certainly increase. But I don't actually see an upper ceiling for that one.

It has to make sense from an operational perspective, I guess.

Absolutely.

Okay. Just one more question. How is the -- how do you see investment grade on Storskogen looking forward, the credit rating?

Well, we can't -- we're not going to comment on that. I mean we're happy to have the credit ratings that we do have today that are one notch below investment grade. I believe that we need to first weight out the capital markets. Cost of debt is very high at the moment. So of course, we have to wait out the capital markets and start working in that market, which is a lot deeper, of course, than the markets here in Sweden and then grow in size and develop according to plan, and then maybe investment grade would come. But we're not per se targeting that, that is the end goal at some certain point.

[ Rutger Smith ]. This has been touched upon earlier. But with this idea of infinite ownership and your company culture, one market that has been mentioned just a little, which is considered difficulties, the German market, but I think that your culture would fit perfectly with the SME businesses there. And if there is indeed no hard competition, I think you should have a large focus on that market because I think your ideas would be looked upon as appealing.

Well, actually, I have to say that making -- well, my German is a little bit rusty. I have to say when I bought the -- when we bought the [indiscernible].

Yes, you might have to take a crash course in German.

I used to actually, I live in Switzerland. So actually, I knew some German, but now it's rusty. But that said, I think Germany is, of course, relatively speaking, from a culture perspective, they have a very good view of Sweden. They would -- like you said, a lot of companies actually don't want to be owned by foreigners or sell to foreigners and having a local organization helps. But I think the discussions with our German company sales have actually been very beneficial. So I think I agree with you, and they have a fantastic Mittelstand. But that said, short term, they are facing lots of challenges and they have wonderful industrial companies, but they will have to overcome a lot of challenges. So well, they have to compete with the other markets for our attention, so to say, on fair grounds, yes. More questions? Go Erik.

And then maybe another question for me on the M&A strategy. So if I -- in the slide deck today, there's quite a bit more detail on what our roll-ups and holding and cluster, et cetera. But in terms of the M&A criteria, and the process is the key thing that has changed over time? Is that the minority interest and leaving shares with owners? Or is there anything other than that in terms of how you presented the story at the IPO with the criteria that has changed in the M&A process?

From the IPO, nothing basically has changed in our acquisition criteria. We had the same logic then with the transaction structure, for instance. And from a fundamental perspective, we looked at the same companies. We like the same type of companies than as we do now, obviously, now we are facing in near term with an uncertain future. So we'll probably shift our focus. Different verticals are interesting than in the IPO. Although we are in it for the long term, we have a 100 year perspective, but still it's -- if you can avoid buying a company that really a real tough times next 2 years, we will do that probably. But from a criteria perspective, nothing to...

I should say that -- I mean, we have decided not to guide towards a higher margin or an incremental increase of our margin from 10% and upwards. I should say, though, that we've had a massive deal flow. And I've always had the assumption that we would have a big correlation between the price of the company and the margin. And I'm not so convinced anymore because I see that we have found a lot of great companies this last year without necessarily a lower margin. Margin can be an indicator of quality. It doesn't always -- that's not always the case. But I think on average, I think like your cohort analysis showed, we were buying a little bit higher margin on average, but that's not necessarily true for the future, I should say. It's depending on each and every company if they have the quality.

I think the cohort analysis also showed that the correlation between the multiple paid on the organic growth rather than necessarily the margin of the business, even though there is a positive correlation or negative correlation, if you will, with margins as well. Yes, sure.

I want to mention something on the pricing of the company. It is true, for example, that you will have lower multiples paid now on average than you had last year. On the other hand, they're counting on historical numbers that are historically very high. So if you look -- actually, my experience of the pricing of the companies that we're buying, like you're saying, in good times, they don't necessarily become a lot more expensive. And in bad times, they don't necessarily become a lot cheaper. It's more that over time with a forward look, I mean, we're basically buying them on a forward-looking multiple rather than a backward looking, if you're talking about our internal process. That may -- it's some small [indiscernible]. It's not like a stock exchange that goes up and down like crazy. This is very stable over business cycles. Yes.

So the alterations and the strategy that you presented today in terms of the focus on the synergy -- more focus on synergies, maybe a bit less focused on M&A, the clear focus on balance sheet, cash conversion, cash flow. Do you see that -- like if you think about the business longer term as a short-term sort of hiccup in the strategy that you need to work through before you can resume had the similar ambitions as presented in the IPO, which may have been like altered a bit given the learning over time. Is that how we should read that?

I think you're absolutely correct. We have the long-term ambition and when the markets open up, and I think we will increase our acquisition pace again. I think there is a natural -- we already -- we have always had a plan, so to say, even though we haven't been so explicit with it when it comes to the vertical groupings and the clusters and the add-ons and the roll-ups. But it's as we grow and we get the critical mass in each and every potential area, then it kind of -- I think it becomes easier for us to present our thoughts rather than, for example, if we had 1 or 2 or 3 companies within that particular area. So as we grow, I think our methods, so to say, our strategic agenda for each and every area will become clearer over time. So it's true that we have the same strategy, even though there is a hiccup now and we have to adapt, but I should say there will be long-term higher cost of capital. That's my belief. So it might not be 100 acquisitions in 3 years regardless, I think we will still be -- have a more steady pace. Never stop talking, sorry.

I think there is one minute left. So do you have a final question?

I don't want to get people from lunch, of course. I make myself even more unpopular with you. I'm joking. On the Slide 31, you show the revenue reliance in the 6%. Do you have assume -- like is the percentage for EBITDA? Is it similar? Or can you say anything about it? Or is it something you can't disclose?

I'm sorry, could you repeat the question?

Slide 31, you showed, I think, the 6%, which is the biggest -- 6% is the biggest contribution in terms of business unit to your revenue? And how -- what's the percentage for EBITDA? What's biggest reliance?

Our biggest company...

It's more or less the same. It's pretty much the same, I would say, yes. I think the biggest company in the portfolio has pretty much the same margin it would be in your portfolio as the average.

About 10%.

Yes, you're nodding. So that's it. Okay. So there was one last question on the line -- on the online. So -- but I think we answered that already. It was about -- from David, would it be possible for you to exemplify how the profit of a company that you acquire increase under such focused governance and management. But I believe that the cohort, and this was posted 2 hours ago. So I believe the cohort analysis have probably answered that question.

I think some of you have seen myself before or heard Lena as well. The interesting part will be to listen to our business area managers this afternoon, they will tell you a lot, I think the actual understanding of what we do in Storskogen it really hits home when you listen to what they're doing, what they will tell you this afternoon. So that's our ambition anyway. So I hope that you stay and have a wonderful lunch. Don't forget to talk to our fantastic CEOs out there. They will tell you the truth. They're -- at least they've been told to. They're shareholders of course, so they would probably want to increase the price, but nevertheless.

So let's meet here again at 1:30.

Thank you.

Thank you. [Break]

There you go. All right. Okay. So welcome back from lunch. Hope you got something to eat and drink and hope you had some good chats with us or our subsidiaries or business colleagues out there. So we -- during the morning session, we focused on strategy. We also touched upon operational excellence, the way we work with synergies, in roll-ups and add-on acquisitions. Alexander explained the rationale behind that. And now the next session, we will learn more in detail, more hands on how this actually works. From the business -- our 3 business areas. They will give us a deep dive into the business area, but also all 3 of them will give you some real-life examples of how we work with operational excellence in various forms. On a group level, even though they are described as a business area specific cases, I can assure you that these similar examples can be, and are, in fact, rolled out in all business areas. So the first person on stage is Christer Hansson, Head of Business Area Trade. He's been with us since 2015, I think, but has a vast background from sales basically being an Executive Director at both Dustin being part of taking Dustin public and then also before that, at Telia among other places. So senior experienced sales guy to lead the business area trade. It's the right person right there. Go ahead, Christer, the floor is yours.

Thank you, Lena. And just before going into the deep dive of the Business Area trade, I would like to introduce one of the companies that have been with us for a couple of years, 2019. And we've been on a journey together with this company in a roll-up case. We have done a lot of acquisitions and build a platform for future growth. And that is Båstad-Gruppen and Jonas Cedås. So please roll the movie. [Presentation]

Thank you for those words, and the movie, Jonas, I hope you had the opportunity to meet him out here at lunch. But now I will go more into details into the business area, which I'm heading on. And if you look at the left-hand side, you can see that we are now an international group of companies. We, of course, are still a lot of Swedish business units in our group, but now 9 companies outside of Sweden, 3 in Norway, where we actually did our first acquisitions in 2020, 3 in the U.K. and 3 in the DACH. So with the operational presence in most parts of Northern Europe. If you look at the business area, it now stands for about SEK 10 billion of net sales. which is approximately 28% of the group, if you look at the run rate. Looking at the graph on the right-hand side, you can see that we have been on a steady pace of growing the business area. If you look at from 2018, we were under SEK 2 billion in net sales and now are trending towards SEK 10 billion. So of course, we have more than 5x the sales from 2018 to this date. You can also see the margin on that graph that we had a dip in 2019 been working really, really hard with the margin situation. Pricing has been extremely important for us. And I think we've been on a steady pace of increasing the margin and been now delivering on around 10% since. And this goes with the companies that we have acquired, of course, but still with the companies that we have owned for several years. And I think that's really, really strong. You have to bear in mind what kind of situation we've been into since the 2.5 years we've been since the pandemic. I mean there's been all kinds of supply chain issues. We have had factories in -- where we are producing a lot of our products in China closed, skyrocketing freight costs and so forth. So I'm really proud of what we have delivered so far. Lastly, on the downside here, you can see how we are divided our companies into verticals. This is a fairly new way of us dividing our companies now, did this before summer, but it feels good that we're doing it now. We now have the companies within the same field, same industry, selling the same kind of product in the same niche -- in the same vertical. Starting with the niche businesses. Here, we have all the companies working with professional equipment. So it's only B2B related equipment or products, like Båstad-Gruppen, selling safety shoes and workwear for B2B customers. It can be Primulator sending coffee machines to Orica and so forth. So really, really focusing on the B2B professional equipment. Sports clothing and accessories. Here, we have like Alexander was in when we're focusing on people's spare time, both equipment and apparel in this vertical. Home & Living. Here, we have the companies working with homes and all products related to homes. It can be the flooring distributor of SGD, which has been a fantastic journey for us. It can also be the home interior companies working with products for that area. And lastly, we have the health and beauty, which is a vertical which I'm going to come back and do a little bit more deep dive into, but it's really, really a vertical that we think is going to have a bright future. So that's a short introduction to the business area trade. Lena was saying something that we often get questions on how can you manage so many different kinds of companies and a variety of companies. And my answer to that is, I mean, we, first of all, have management team out there in the companies like Jonas Cedås, like all the CEOs here, managing their own business on a day-to-day basis. Great management team. We have invested a lot in new CFO capabilities in our companies. So we feel that we have a great management team out there. But secondly, we have also really experienced professionals working with the companies from the Storskogen side with a variety of different market expertise. Looking at my team, Jacob Sandström, for example, experienced CEO from the branding and the marketing side, was the CEO of DDB, one of the leading Nordic firm in this field. Erika Butterworth, an entrepreneur, building her own company prior to joining us. But has an experience of a highly competitive market in travel agency where she was the CEO of Apollo, Sweden and Denmark. Åsa part of the team building Expedia in the U.K. and then took that to the Nordics, where she was the MD. Been working with Bookatable on a Nordic and European level. So highly, highly skilled in e-com. And then it goes on, Anders Molander experience from distribution. Mikael Neglén and [indiscernible], latest Roger and Lars Tomas also really experienced people working in different areas of the business here. So I feel that we have a team that can support our companies in both good times and in bad times. These guys are also supported by a team of investment managers, like Daniel said, often 5 to 10 years experience from management consultancy firm. Okay. Where are you working? Like Daniel said, we try -- our mission is to empower our businesses to -- so they can reach their full potential. And what does that mean for us in the business area? It goes with trade, industry and services. We have to work differently to different companies depending on what kind of situation they are in. First of all, we have the companies where we really, really believe that we can grow and scale the business. On the left-hand side, you see the companies that we are talking about the first path. We usually talk about 4 paths. The first one is where we can believe -- that we believe that we have an organic growth opportunities. It means that we can invest in new sales organizations. We might invest in new factories in industry, automation lines in order for us to be more efficient. It means that we can hire more people maybe in our consultancy firm in the services area. And it means new sales organization and sales strategy. And we really, really support that in the trade area, of course, with a team that are around me with different capabilities from different industries. So highly supportive from us, but also from the management, of course, in those companies. And then we have the second path, which has been really successful in the past years. Alexander showed us that 40% of our net sales are around companies that have done add-ons or roll-up activity together with us. So here, we have both companies that we think that can make one add-on acquisition but we also have the companies where we really think that we can consolidate the market. And then we will try to do that. We will identify we will try to meet the target often together with the management team from us at Storskogen and the management team. Usually, the M&A discussion are taken care of by us. But then, of course, the team around the platform companies are together with us achieving those goals and taking on board the company when we have acquired them. So it's really, really a cooperation between the Storskogen team and the team doing the acquisitions. So I think those 2 really shows the company that we feel have a growth opportunity. We will absolutely go for it. And of course, there are add-ons or roll-up cases that had that from the beginning, but also have organic growth. And we, of course, support that as well. But this is trying to just show this is the way that we think about it. Thirdly, I think Daniel mentioned those companies as well. I mean, we have companies that have a stable growth or stable profitability maybe not as high growth. And we like those companies as well. It doesn't necessarily mean that we have to do a lot of changes. They are stable as they are, and we support that. They are good as they are, and we will continue to for them to be able to maintain the operations and try to maintain the client relationships. So highly supported by us as well, more focus of our time, of course, on the left-hand side then on that. Fourthly, of course, we have -- unfortunately, there will be companies that need to change. Lena showed that we had about 7% at the time that was not having an EBITDA margin on around 0 or less than 0. And of course, the team from Storskogen together with those management team work hard to change that. Sometimes it means that we have to kind of change the whole strategy, might have to change the business model might sometimes need a new management in place, but we work hard for those companies to change. But it will mean in the future, if we can change them, we might also divest them. But we are not the ones that are -- we have been trying really hard, and we will go for it and try to change those companies as well. But I think this is what we're trying from the business area to see how can we help the companies in the best way with the position that they are in. And of course, there are companies coming and go from this kind of different. There can be a reliable performance that after a while can do an add-on acquisition. So this might change over time. But this is just to get you to understand how we think of doing business and how to manage our portfolio. If we look at operational excellence, I think we have been driving one project from the business area trade, which has been around freight. I don't know if you know how this situation has been the past 2.5 years, but it's been crazy. You can see on the right-hand side, the prices from Shanghai Container Index from September 20, in the middle of the pandemic, where it costs about USD 1,100 for 20 footer, which that TEU stands for a 20-foot to container and then skyrocket up to USD 5,500. So the cost of container, of course, has been really, really substantial. But that has not been the only problem. I think for us, and Lena showed that the inventory level for the trading business has gone up. And one reason for that is the conscious decisions that we took a year ago that we really should have the products in place when we want to sell them. But this has also been a factor. It has been really, really tough to get products in. And so what we have tried to accomplish now is to be able to have better prices, but also great service level. for our companies. So what we did back in the spring, we had a cluster meeting with our home interior companies, led by Erika Butterworth. They had a lot of discussions on how they could operate with each other. But one theme was freight. We also saw in that case that we had a lot of different prices within our companies, a lot of different service levels within our companies. So we decided together with the team out there in our subsidiaries to focus on this and started a project negotiating a new frame agreement for Storskogen. And the team has done a terrific job. I mean, we're seeing freight costs coming down. But on that level that we are today, we are seeing a cost savings on a yearly basis if everyone are moving there into our new frame agreement of approximately SEK 25 million to SEK 30 million on inbound freight. With a higher service level, which is as important, in order for us to be able to have the right inventory with a slow buffer inventory as possible. Of course, we need to have good freight situation, and this ensures us that. But it doesn't come with only that. We send, of course, a lot of parcels from our companies, and we will be able to save another SEK 15 million on that. So I really, really think that this shows -- first of all, we have now the strength and the volume that we can negotiate good deals. That wasn't the case a year or 2 ago. But now we really have an important player for the freight companies. So what this shows, I think, is that we can now deliver and negotiate frame agreements on the group that the company's that are as a subsidiary in Storskogen can have and work with. And talking about SEK 40 million here, I mean, it's a great amount of money. So I'm really, really proud of the team that has been doing this. This is not only for trade company, I should say. There's also a couple of industry companies that will be able to do this. And it really, really shows the importance of us working together, I think. Lastly, I want to comment on -- and some of you might have heard me talk about this before. But I would like to kind of make a deep dive into the health and beauty vertical. A vertical that we really feel is in a market that has a good macro going forward. It's been really resilient in the last downturns with these kind of products. But it all started with an acquisition in 2019 where we found -- where we met a CEO of -- Daniel Odehn, which is the CEO of Baldacci and we really, really like that company. It's a haircare distributor working with products for the professional haircare side. You've seen him out here talking about the products. We really like the company. We really like the market that they were in with a lot of salons, a lot of different customers. We then had the opportunity to acquire 2 more with the same -- in the same field, also professional haircare distributors of Alba and Frends. Alba's name was L'ANZA at the time. Frends was our first acquisition outside of the Swedish area. But with this, we felt that we were heading in and starting to consolidate the market, and we are really, really market leader with these 3 companies. We continue when we went into the DACH region. We did 2 more acquisitions. So this PerfectHair was the first acquisition in the DACH region. It's a professional haircare on online distributor. More like Baldacci and Alba distributor of professional haircare. And before summer, we had the opportunity to acquire more -- 2 more companies with Session MAP also haircare distributor and Scandinavian Cosmetics. Scandinavian Cosmetics is a large distributor for beauty, skin care and cosmetics. Market leader in their field have built a Nordic presence and a really, really strong supplier for the brands that they are delivering on. And with Scandinavian Cosmetics, we also have done a Vox in Norway. But with the knowledge of Scandinavian Cosmetics and what they have done with their portfolio and ensuring that they get new brands that wants to come into the Nordics. We have decided to consolidate the 3 first companies with Baldacci, Frends and Alba. So we will have them -- we haven't even decided the name. That's why we call the HAIR CO. It will not call HAIR CO going forward. But we are, in the moment, have structured in a holding company, but we are absolutely the new Nordic market leader in this field. It means that we will be able to go to place whenever a new brand in the U.S. wants to come in to the Nordic market, we will be the place to go to. It doesn't matter if it's cosmetics or a haircare professional haircare. I'm pretty confident that we will be one of the players that they ask. So I strongly believe that this is going to be a good future for us going forward. But not only are we building a new group, we have a group management team. Of course, we're strengthening the customer offering that we're building here. We have several brands that we will expand to these new markets. We are now in Norway, Denmark and Sweden. We also have a lot of synergies with the consolidation of one warehouse, a new -- absolutely new platform for doing more acquisitions. So I really think this shows that we started with a company that we liked. We like the market that they were in. But now I have confidence that we have built a vertical that is so strong that it will be the go-to place for new brands. And we also have our own brands, which I hope you seen out there called [indiscernible], which we are expanding to other markets. So this is a place now with over SEK 2 billion sales -- net sales and hopefully, a great story going forward as well. Thank you.

Well, thank you, Christer. I think that I was planning actually to ask you a question in between here, but Rebecca tells me that we're running a little bit behind. So maybe I'll save that for later, Christer, so beware.

Thank you.

Thank you so much for that. So that was Business Area Trade love their shampoo. My teenage daughter refuses to have anything other than the Olaplex that you saw out there. So over to something else, Business Area Services headed by Peter Ahlgren who is one of the earliest -- well, almost a co-founder of Storskogen, having been with Storskogen for -- since inception, more or less. Also with a background similar to Daniel and Alexander with a combination of being a strategy consultant, I believe that there are basically no business situations that you haven't met before as well as working with entrepreneurial-driven companies. And with the services companies that we have in Storskogen. So welcome on stage, Peter. I'll leave you to press the button first. Is he on?

[indiscernible] Alexander, in many ways. Good afternoon, everybody. My name is Peter Ahlgren, and I'm going to take a deep -- take it through a deep dive to services, which is business area. Nowadays, we are almost 1/3 in each business area. Although I must say we -- in services has almost doubled the number of business units, and I think that's to say something about the market really and the verticals. It's usually smaller companies in the services segment and usually quite fragmented segments as well. You see the same pattern as in trade. We are so far heavily geared towards Sweden, although we -- about 2 years ago, started to do our first acquisition outside of Sweden in the same verticals that we are here in Sweden. So we try to leverage the knowledge we have here when expanding outside of Sweden. We are about 5,000 employees. And as say, services. I mean, the definition is quite broader, I usually say when Fredrik produces products and Christer sell products, we do none of that. We do the services around it. And looking at the financial performance, I think we have seen a steady growth on top line wise, both organically and acquisition driven. And I think we have -- where we have a small downturn in margins here in the first half of '22, mainly to the reasons that Lena explained. I think we have been hit pretty hard at least some of the companies of the external shocks we have had, I think the first -- the last COVID wave. I hope that was actually -- there would be no more was hitting us quite hard in the beginning of the year. We had companies that have sick leaves raise of about 20%. And if you're billing hours, I mean, then you have a challenge, basically. You have a hard time working from home if you are like a painter, for example or at least you have a hard time invoicing someone for it. So that affected us had a negative impact, mostly for the installation companies, I would say. And later on, the price increases have a time lag usually to pass on to quite a large extent works in different project type of business when you have a fixed price for everything for a week up to like half a year and then increase in prices and pushing them through down the system takes time, basically. Look at the verticals. We have 7 verticals within services that we group our companies in and Alexander talked about our M&A strategy and trying to identify companies within macro trends that things are viable and relevant in the long term. And 2 of the trends there were urbanization and aging infrastructure. And there is, let me say, about 4 of our verticals that are active within that market segment. That's engineering services, contracting services, infrastructure and installation. Obviously, in different small niches and in different phases of the value chain. But here, we have a kind of a wide spectrum of companies usually very niched. We don't have any like large construction companies. We like to find smaller niches where we have market leadership in quite well-defined smaller segments. And for example, we have land contractors that work with excavation and horizontal drilling, basically expanding the backhaul network, the water pipe and electricity backhaul network. We have companies that are judging our harbors. We have specialist companies in the fire safety, for example. We have one company that is specializing in measuring vibration at demolition sites or blasting sites. So there's a wide spectrum of companies. In the installation area, we have plumbing, we have companies working painting, [indiscernible], cooling, ventilation. So everything around the building, but we don't do the actual building itself, so to say. If we let's say, that was the more construction-oriented areas. And then we have logistics, which is of group of companies, mostly active at 3PL actors and freight forwarding. So they don't own their own infrastructure usually. We have digital services, that's an area where you have been expanding and focusing on for the last 2, 3 years. [indiscernible] is a consulting company based in [indiscernible], working with government agencies, trying to find the right word. And we also have 2 product-related companies there. So it's both consultants and products. And obviously, they are benefiting from the digitalization trend, which is wide, and we are also leveraging them for our internal digitization projects. And on the other side, the land contractors and the installation company is quite immature when it comes to digitalization. So that's a lot of -- some of these initiatives we are driving. Last but not least, we are the HR and competence area, and they are mostly focusing on education, adult education and staffing services. And stand out a little bit from the crowd because they are actually looking forward to a potential recession since increasing unemployment means more business for them. Moving on to the team. I have the same structures in trade, and you will see the same, I think, in the industry. So basically, as Christer mentioned, we are very much decentralized. So I have 62 people, which I see as -- or person I see as the key personnel that are not on this slide. Of course, it will be too crowded. But the CEOs and the management teams in our subsidiaries are taking the daily operational decisions, and are supported by investment directors. And as you would see, the investment directors are have a background from the vertical which we are working in. So I have 7 verticals and investment directed that are heading up each vertical. So for example, you see Oskar Bjursten is heading up Digital Services. This is a background from -- as a CEO for a number of fintech companies. I think the latest one was Zimpler and it was Payson before that. Katarina Hedberg is heading up HR and competence, and her latest position was from Atvexa, which is a company group with education company, where she had the same position as here. And Thomas Pilo comes from Havator, which is large Nordic crane operator where he was the CEO, and has been within leadership positions at NCC. And he's heading up engineering and contracting services. So I think I will stop there. So not to throw everybody here, but I think you get a picture that we try to have more senior personnel as investment director that heads up a vertical and from their position heads up the Board of each subsidiary. And as a Board member, basically, we are involved in target setting the business planning, setting the strategy. But the P&L responsibility when the plan is set, that's CEO's responsibility. And as in trade, we have a number of investment managers that support our directors. And usually, there are 2 persons in the Board as an investment director and investment manager from our side. And then usually the company sellers, the minority owners could be external persons as well. Yes, I will just give you a couple of examples. I think Chris talked about the freight initiatives, and we are working on a number of initiatives. I know both Industry and Trade have a couple of -- and a bunch of initiatives they're working around in parallel. I was mentioning procurement because that's an area where we are working as well, obviously. And here's an example from our companies working with electrical installations, which is as Alexander took different M&A perspective, I would say that it is a cluster because they are sister companies. We don't have a common legal structure, but they are working together when they can benefit from it. And in this case, the pull their purchasing of [ right ] material, which is like cables and everything you install. And that together was about SEK 250 million, and they went to their suppliers and used that for bargain and reduced on average cost by about 8%. But obviously, there's a lot of differences between these companies and some of them have been really skilled before and have had low prices. But I think the company that were -- it's cost the most was there was a decrease of 30%. So obviously, there is some benefit that we can use by drawing on our critical mass when we're getting more and more companies into the portfolio. I think Daniel mentioned the framework agreements that we have, which is everything from services part, we have a lot of vehicles, service vehicles, all the Installation, installation, you usually have a service vehicle. And here, we have a couple of framework agreements, which have lowered prices for them and as well framework agreement for fuel. So that's something we are benefiting from. And cash flow and working capital [indiscernible], and we don't have that much working capital when we compare, which never happens, but obviously, something that we can get better in. And we have something we have looked at, for example, is how to structure the payment plan in a project, for example, that's usually a negotiation. How much do you invoice in the beginning? And what kind of [ toll gates ] do we have? And they will try to push and decrease that kind of the order to cash cycle so we could be even more capital efficient within services. And we're also running using our size, we're running a number of initiatives for knowledge sharing and -- for example, one area which we have worked with a lot is ERP systems, some companies when we acquire them, don't have a system. They have someone doing the accounting, but they could have time reporting by their personnel handling in paper and so on. So that's something we've worked with quite a lot within this fragmented small companies to get a better information flow. And for us and for them to get better control of their operations, basically. Yes, I will take a deep dive into one of the companies that we have because it's always interesting to discuss and talking about aggregated figures and verticals and so on, but what's really, I think, fun for me to work with this is not the verticals, it's each an individual company because that's what's interesting, and that's where our real business are. And SoVent, I think is an interesting example. Alexander mentioned our M&A perspective. And I think this is a textbook example of a rollup basically. SoVent are consolidating the chimney sweeping segment here in Sweden and have done over 30 acquisitions and we are over 40 locations in Sweden. And basically, I would say, to some extent, transforming that industry because many of these companies are really small, quite traditional in how their business practice could be like 5 to 10 employees, for example. And SoVent has turned that around, I would say, and taking them into a modern context with a lot of focus on company values, on customer focus and profitability. And they also launched an education program called SoVent Academy, where they take the employees through. And it's both, so to say, the soft part of it, but also the hard part lie about add-on sales, how to do route planning to maximize the number of chimney sweeps per day per person. And it's really had a good effect with an EBITDA margin, which is clearly above average in the industry. And SoVent is also a clear market leader in chimney sweeping segment here in Sweden. And we also see that this is interesting from a capital perspective going forward because there's a plan -- I think the market in Sweden is rather consolidated. I would say we have a couple of more targets on the list, but we are quite big as this, but we're going to try to leverage this position to expand the offering. So going from a chimney sweeping company to be more of an indoor climate company and working with ventilation as well and add on sales. I actually had SoVent visiting me and fixing my chimney, and they actually sold overview of my ventilation system as well, which really needed the cleaning. I saw it when they kind of they did it. But then I was convinced that they were good at add-on sales as well. But -- so I think we have a possibility here to expand the offering and as well are looking at other markets nearby where we could expand this concept because chimney sweeping segment is very fragmented in many of the neighboring countries as well. That's it for me. Thank you.

Thank you, Peter. That always reminds me that I need to get the chimney swept, too, if SoVent CEO is still out there, then maybe I'll book that. Right. So next, thank you so much, Peter. We've heard about sales from Christer Hansson. We've heard about operational strategy, operational efficiency from Peter, and we'll hear something similar, but also a little bit more production related, I think, from business area industry. So Fredrik Bergegard is the Head of Business Area Industry. He is a seasoned business leader from this -- well, from the industry, basically, having had managerial and senior executive positions with companies such as Electrolux, Gunnebo Industry and Ahlsell before joining us. And so maybe I'll just leave the word to you then, Fredrik, go ahead.

Okay. So last but not least, you're going to hear about the industry and a deep dive here. Is my mic on? Yes? Okay. So we'll start with the overview. And we start looking up in the upper right corner. We have had a nice growth in the last couple of years, especially in the last 2 years we have grown roughly 100% per year. And on a running basis, we are now on SEK 14 billion in net sales. Together, we are 38 companies with almost 5,000 employees around the world. We are 39% of the group's net sales now. And if you look down to the right, you see what kind of companies we have. We are split into three verticals. We have industrial technology, automation and product company. And they are roughly 1/3 each within the business area. And if I would describe them briefly, industrial technology companies are focused on manufacturing excellence. There are typically a subcontractor of another product company. So typically, they have like CNC machines, auto machines producing steel components going into, for example, an excavator or a pump or something similar. So we compete on manufacturing excellence simply, having efficient manufacturing, but also good service availability close to the customers in their R&D projects when they develop a new component or they do cost reduction projects or so. We work close with them to find ways how to lower the cost of their product. If we look at the automation, this is companies where we sell automated products or we do softwares or we do integrated solutions. Out in the whole areas of PV systems, which is one of our integrated solutions companies. So they simply help other manufacturing companies. For example, starting out with, if I say, dumb robot. But then putting together a solution where, for example, you can have a robot arm, but then being programmed and then pursuing a certain amount of tasks like we have seen out here as well. And someone asked about LNS, which is our -- one of our bigger companies, they belong here. LNS is then manufacturing, designing, manufacturing automated products. So all the peripherals around the CNC machine is manufactured by LNS being an automation company. And then last, we have products, which is -- for those of you who are here, we have [indiscernible] out here visiting us. So trailers, trailers that you pull behind a normal car as an example, and so this is companies where you have their own -- your own assortment, you have R&D. You have your own manufacturing, you have a brand and then distribute and sell branded products, so a classical manufacturing product company. And then to the left, you see our presence. So also within industry, the majority of our companies are still Swedish, but we are also expanding, finding a lot of new nice opportunities like in the DACH region, but also surprisingly nice companies in the U.K. And if you look at the brown colors, you see that we have people employed and factories all the way from the U.S., most of the countries in Europe and all the way to Asia, with China, Japan and Taiwan. And also within business area industry, we have a very, very strong team of experienced people being the sounding board to our CEOs. And all of them or all of us has the experience, we've been there, having quite significant staff responsibilities, P&L responsibilities. We've been there with when you lead to lay off people, when you have a drug problem in your organization, when you're in a legal dispute with a supplier or when you have a recall of a product, et cetera, et cetera. So all of the seniors in our team have their own experience of all these situations that our CEOs can end up in. If I take a couple of examples, Patrik, was actually mentioned here earlier, long -- or 25 years in automation industry started out as a technical sales director, CEO of a small, medium-sized automation company, was promoted into one of our peers, Adtech and then was there for a number of years before he joined Storskogen and came to us and is now responsible for our vertical with all our automation companies. Monika Guten, a long career in heavy Swedish industry, Sandvik, SSAB, was CEO of Tibnor for Sweden & Denmark. Multi-billion SEC responsibility. And then shortly with Epiroc before joining us, and she is responsible for our product vertical. And then another example, if I say, is Jost Bendel, who just also joined us, responsible then for our companies in DACH. Many years, 12 years with Siemens, 5 years with the Schindler Elevator Company. And now joined us and talking about culture, we got Swiss German, who lives the values of Storskogen, also a really nice personality, really people managed person who will lead our companies in DACH. And then a way of working, and I was asked this is -- this applies for all our business areas. So I will say I'll kind of describe how we work in the business areas. And important for this is that while it's all about people, right? And we have a lot of people in our organization. So the way we work is always the underlying and the main purpose and the aim is that this is to empower the companies, but also the CEOs to reach their full potential. And that we always, when we work with our companies remember our values about being entrepreneurial, always thinking long term, being professional and show respect -- sorry, in all situations so that we always live that when we think through this kind of structured way of working. So we started out already in the transaction phase, tying relationships with management and with the company, assessing the culture and feeling really is this the company that we want to work with. And of course, we do the commercial parts like DDs, evaluating the company, making sure that we believe there is a market-leading position, et cetera, as Alexander described, but then also thinking through the succession plan. Like will the company sell or stay on? Or is it explicit that he will stay only long enough to hand over? And then how will we manage the succession. All the incentives that there are in place so that we have -- if there is the CEO, what's the employee agreement look like so that they are incentivized and so forth. And then we do the onboarding. And as mentioned before, like we have the check list to make sure that it runs smooth and in a simple way. Then once the company is on board and with us, we have established the Board. We established all the formalities. Then we have, on a quarterly basis, we have a routine for board meetings. And the year starts, you could say, in Q2. Because in Q2, we take the step back and we think about the long-term overall strategy for the company, and we're also thinking about the long-term ESG aspects and ESG activities. In Q3, after the summer, we try to compile this into a 3-year business plan. And all the way -- this varies, of course, if it's a small company, we try to make it fairly simple to them but they all do a business plan. The larger ones, I mean, they are used to creating and having the routines for quite extensive business plans, and then we'll let them do it that way. As long as they tick the boxes and has thought through what are the like 3 to 5 things I'm going to do over the next 3 years to develop my business. And then in Q4, we narrow it down even more. We make a budget. For us, it's important also to do the CapEx budget in industry so for the next -- for the coming year. And we also do the conclusion of the internal control where the companies have done their own self-assessment during the year. And at the end of the year, they do a gap analysis and they present activities and actions to close potential gaps in the internal control. And then in Q1, we just summarized, have everything in place that we have said we're going to have to start up the year, is everything planned for the year. And we have some other themes like risk assessment which all companies do in the same way in that case. Then monthly, we have monthly meetings. All of us have monthly meetings with all our companies, and it's the Chairman of each company who held -- who holds the monthly meeting. It's 30 to 45 minutes, depending on the size of the company. The CEO always participates, sometimes the CFO from the business unit. We have KPI reports. We can either automatically generate like the one Lena showed, which we get out of our system if they don't have one of their own. If they have, we'll let them use their own, as long as it ticks the boxes of the KPIs, we want to see. Some of again, bigger companies, they have more extensive monthly reports than we require, and then we make a summary of that. So we keep track of the business, but also then ongoing projects and activities, and we do the forecast update. Then I think the most important part is the last one, the kind of daily interactions that we have, trying to always be available for our companies. And here also the investment managers that was mentioned before, play a key role being very close to both the CEO, but also the CFO. So our younger, really skilled sharp colleagues helping out, supporting the companies as well. So we are in close dialogue. So if I am, for example, Chairman in like 8, 10 companies, I mean, we constantly keep like texting. We're calling each other. We e-mail, of course. And then if we have certain actions, it could be a recruitment ongoing or it could be a large quotation, they want to just check off with us before. Then we take Teams meetings. And if there are bigger decisions that requires a Board decision, we don't wait for the next Board, but we take the team meeting with the Board 30 minutes or like -- and then make the decision and then we just repeat it in the next board meeting and put it into the minutes. So we try to work in a very pragmatic but still very professional way. And these are typical topics varying from business unit to business unit. And a while ago, like last year in 2021, for example, then as we have heard, availability was key, but then we could -- and then we rose prices. I mean, we increased prices and we kept our customers happy. Now with the change of climate this year, we have changed foot. I mean now we are really looking and pushing with the companies with the main, for example, inventories, we're really following up on that instead and costs. So we are kind of tailoring topics based on the needs of each individual business unit. I'm going to do an example of operational excellence in industry. I picked that we are very, you can say, fond of and we're big believers in optimizing the production. And this is then optimizing the production of typically product companies or industry technology companies, in particular. Just some examples of investments lately in Alfta, which is in a subcontractor of steel parts. We have invested in a robot cell, including a CNC machine, just like less than a year ago. Albin, the same and another more efficient CNC machine, also increasing their flexibility, [ Renholmen ]. In Stal & Ror we invested in a beam manufacturing line with an automated robot cell and Wibe was a test equipment. And then a specific example of Swedstyle where PV systems that you saw out here was actually then the supplier. Swedstyle wanted to redesign one of their products. They redesigned it from being manually assembled to be possible to have an automated assemble, then move the manufacturing from China to Sweden to our manufacturing site south of the Jönköping. We lowered the cost and we had a payback of the investment of less than 1.5 years. It was actually close to 1 year. And we have got an improved ESG footprint from this project by decreasing CO2 from not transporting all this material from China to Sweden, but also using Swedish Steel which is much more positive, again, about CO2. And then having a manufacturing in-house, we had much better control of the working environment for the people producing the product. So really important for us in addition to the cost savings that we did. And then that this was a collaboration and the work done between two sister companies within Storskogen, PV systems and Swedstyle. And then another example. This is a case study of Brenderup acquiring Tysse. Brenderup Is the leading trailer manufacturer in Scandinavia and also one of the biggest trailer manufacturers in Europe actually with headquarter in Malmo but then production site in Wielen in Poland and then a distribution hub in Jönköping, turnover roughly SEK 1 billion and then acquiring the Norwegian, you could say, a local player, Tysse with a turnover of SEK 240 million a year roughly. And this was then an add-on. So this was fully like possible to fully integrate and get all sales synergies and cost synergies we can out of this acquisition. So Brenderup and Stefan, who is out here has the responsibility as the lead. We supported them with, of course, M&A skills and also our own support from the Board. And what we did -- I mean, actually it was Tysse and the company [indiscernible] Tysse and the Tysse company is actually located in Tyssebotnen , North of Bergen. So as we have heard before, a lot of strings from the company seller with emotions tied to both the brand and the people in the village. So he was concerned, of course, what was going to happen at first, not fully transparent. There was something in the air. So in the end, I said let's -- we have to talk, and we invited [indiscernible] and his external CEO, [indiscernible] to Stockholm, and we put everything on the table together as if we were going to do this acquisition, we needed [indiscernible] to at least understand and agree that this was the plan. We couldn't acquire them and then try to do an integration and then realized that they were not with us in this. So we did that prior to signing everything and agreeing on everything. We came up with a good plan, which ended up with a real good cost benefits for all parties. So in step one, we are combining our purchasing power for all the trailers in Norway and all the trailers in -- within Brenderup from Wielen, lowering purchase prices. We're also optimizing production in the sense where Tysse actually has a very nice, highly automated production of the sides of the trailer, which Brenderup doesn't. So with much higher volumes to Tysse in that automated line, we'll get even bigger and better cost benefits from their production, and then optimized logistics using Tysse as a hub for the Norwegian market, just like we have a hub in Jönköping for the Swedish market. due to the long transports from Poland of trailers. So optimizing this immediately gaining synergies. And then in step two, we're actually moving into kind of a functional organization, where also the sales side is combined basing the Norwegian sales on Tysse's sales force, but then adding some of the Brenderup salespeople, combining the assortment, which, of course, takes longer time to do, but in R&D, finding the same components in the different trailers. And then using Brenderup's digital solution, where Brenderup is actually quite advanced in the rental side with softwares behind the rental, when you, for example, go to [indiscernible] renting a trailer, it's actually in Brenderup's system, you're renting it. So we're using that platform now and expanding it also to Norway. And then last but not least, Tysse's assortment for the Professional segment is more extensive and very well recognized. So we will use that to and replicate that under the Brenderup brand in different markets. So a lot of synergies is how we can work when we do in acquisition like this. I think that was my last slide. So hopefully, by that, you've got a picture on how we work with the companies on a day-to-day basis, monthly basis, but also what kind of activities we do together. And of course, the things like an acquisition is a project that we keep in close dialogue together with the companies.

Thank you, Fredrik. Okay. Thanks. So I think you can -- maybe you can stay on stage and we'll ask Peter and Christer to join us on stage as well. So now we've learned how Storskogen can create value not only through acquisitions, but actually through hands on work with add-on acquisitions such as this last case you showed with Brenderup and Tysse Group through building a cluster of sister companies within the same vertical, cosmetics and hair care that then, as the next step can be joined together and create synergies that way through roll-up cases and strategic advising, of course. And then through the day-to-day work with platform acquisitions that we have, just like you described here. So thank you so much for that. I think that we can just -- I don't know, open up for questions from the audience, if there are any. Do we have the microphones ready? There you go.

Yes. Marcus at Penser Bank. Maybe a question to Christer and Fredrik, just you are on the ground, it would be interesting to hear, and you were talking about trade before, for instance, secondary sourcing, which is something that happens is a big trend. How are you affected by that? And have you seen anything of that happening as of yet?

I think you have to -- so when I say second...

Sorry. So let me rephrase. So we have basically production moving closer to home and -- so you're -- I mean you're sub supplying a lot of businesses. If you're seeing and if you're able to ride on that trend where production moves home, supply chains are changing, getting closer to maybe the home markets, moving home from Asia, et cetera?

Yes. So okay, so that I understand. Yes, absolutely. So we have a lot of customers. I can give you many examples. Swedstyle, the example I gave, that's, I mean, [ IKEA ] that is asking to like, can you bring home manufacturing, which we then look into and obviously then did more maybe surprisingly is that even if I say steel construction, welding construction or welded constructions, we also see an increased demand in Sweden of larger projects that usually went to BalticRIM, which now the big construction companies in Sweden, ask us for, and we actually win the projects, which we didn't do 3 years ago. Because simply the Baltic competitors used to take the steel from Russia or -- and it's more difficult to really know where are they now getting it from or they can't even get it because they don't have the sources to Arcelor or the other like Italian or Spanish steel manufacturers or so. So yes, definitely.

And if you would try to -- I know it's difficult and maybe impossible, but if you try to kind of draw a time line where you had the geopolitical crisis with the China and U.S. conflict before the pandemic and then came the pandemic? And then have you seen kind of these movements kind of gradually increase or accelerated or taking a hold? If you could just talk about that because I think it's a big trend.

Yes. I think the trend is really, really strong. a component like it takes longer to move while steel construction for construction is much faster. It's just the next project you ask this Swedish supplier instead of the Baltic one, for example. So we see it coming surprisingly fast, I would say, in project business. And we see it gradually, but it just takes time because you have a product -- a component that is specified into a product. But also the trade companies are asking us to deliver.

But I might -- yes, looking at the trade companies, I think -- I mean, you saw the freight volume that we have, about 5,000 TEUs and mostly from Asia. I think Asia will still be a valid and long-term place for us to produce. However, I mean, the discussions around our companies is, of course, to move things back to Europe as well. But I think it will take a little bit longer than in the industry sector.

And then maybe a question about the hair care products and the consolidation of those companies because I think it's -- so just to maybe elaborate a little bit about how you're thinking about this, what is needed for you to kind of consolidate like that? Because I think I mean, correct me if I'm wrong, but the ground, like the main thinking about this is to keep the companies independent, et cetera. So what makes you take that step and -- I mean, how should we think about this? Is it more of an like abnormal thing or...

Yes, really, really good question. And to be honest, I've had the question on my table for many years. But for me, it has been really, really important for the team around those companies that want to do it. And it's been a discussion with me, the CEO of France, CEO of Alba, CEO of Baldacci, that they also think this is the greatest idea because we have so much things that we can do together. And I think that's the key. So we're not going to do this on an everyday basis because as you say, I mean, first and foremost, we like to keep the companies independent. This is the first time we really do this on a sister level. Of course, we do add-on acquisitions, but then that's part of the game plan from the beginning. But this has evolved during the past years. We have actually had products that we took in, the brands that we took in that all 3 companies were selling on their market. So we have started and gradually worked for this. So I don't think you should see this as something that we will do on our own with all our companies. But in this case, I really think it's a huge opportunity for us in building this big brand house for -- and being a market leader in the Nordics. So -- but you're right on it. It will not be on -- we have to have the management team with us.

Thank you. Any other questions, Eric? Time are running. There you go.

So if you think about market leadership, and you've talked about that, are you -- if we look across the three different business areas, are you like typically a market leader in very fragmented markets? Or do you consider that some of the verticals that you're in, you're like an established market leader with very little competition. And how do you define these markets? Is it mainly geographically? Or how would you look at that.

I think if I'm talking about the trade, I think you're right. In some verticals, we are a market leader, taking the hair care distributor, they were absolutely the market leader in the Scandinavian Cosmetics, being a distributor distributing those kind of products. They are top in Sweden, Norway and probably the second in Denmark. So they are a market leader in that sense. But then, of course, we have companies like SGD, which is -- we have built to be a really strong position in flooring distribution in Sweden then, of course, Sweden is the market. So it will be on a geographic base, I think. And some of them are really, really small niches as well as I think Daniel mentioned.

Maybe we should hand the same question to services, which is in a slightly different...

Yes, I think it depends a little bit on why are we kind of targeting market leadership. I mean, it's we want the company to be strong to have a good market position to have above-average profitability basically. And services is very fragmented and for some extent, quite a local business. So we can have like the largest electrician installation company in Vetlanda, which is a small place in Sweden. And then they -- I mean, by any means, they are not kind of the leading player in Sweden, but they are in their market, they are the biggest one and have a good profitability; and that's kind of good enough for us.

In the industry?

Yes. I mean some -- if I take the biggest companies in the industry, then some of them are truly like European or even global, LNS is a global market leader in peripherals for -- but then also going down to the smaller companies of course like but if I say [indiscernible] SEK 150 million in Sölvesborg there, I would say, it is a Swedish market leader in stainless steel bridges. They are extremely I mean, competent, it's difficult for you to find someone who can weld in large stainless steel products like they did, they are keeping [indiscernible] from flowing over in [indiscernible] . So the ports keeping [indiscernible] in place are stainless steel welded in Solvesborg in Sweden as an example. So yes, so also the smaller company, we strive to have market leaders.

Like I think we have time for one last question before we should hand over the word to Daniel for closing remarks. I have no questions online, but there is one in the audience. Go ahead.

This is [ Eritka Smith ] This is perhaps the most relevant remark of the day. But still I find the name of the company a bit awkward. It's not that I object to it, but the association between the name and the activities a bit difficult. So the question is whether you consider to change the name, shorten it because internationally, it's a bit cumbersome. And now is perhaps the time in 20 years' time, it's more difficult to do such a switch?

Well, thank you for that remark. I'm sure that everyone here has struggled to pronounce it right, Storskogen, so well, let's keep that question alive within the company for a while and see where we end up in that in a few years from now. So -- but thank you so much. Okay. Thank you, gentlemen. Well, let's say it's time for closing remarks by our CEO. Let's say, does he have his own? There is a summary. There you go. Go ahead.

First of all, with regard to Storskogen, I think there are 2 parts to that one. First of all, it's the joy of having a DACH in U.K. and then Singapore and colleagues to pronounce Storskogen. So that's one part why we want to keep it. And the other one is, of course, it's a part of our soul and our history, of course. I guess with my Jewish ancestry shortening it to SS does not really cover it. So we'll be skipping that. But -- sorry about that joke. But all in all, we have considered it not yet anyway. So that joke aside. Well, Storskogen, I hope you've enjoyed, it's been a long day, lots of information, but our ambition has been today to really explain what we're all about. What is our long-term vision, what is our mission to empower our companies to realize their full potential. And more importantly, why SMEs, what is it with us that makes us believe that we have a unique position to get the deal flow to be able to identify and select the right companies and to create a high-quality portfolio. Then, of course, if you have a high-quality portfolio, it's all about how do we manage that portfolio. And hopefully, listening to our fantastic business area managers, Alexander, Lena, you understand that we have been really working hard with getting the right people in place, fantastically skilled, experienced people, both analytically with investment managers, but of course, our investment directors as well that we have the culture that ties us all together, our behaviors. And of course, coming back to the very relevant question, why is our company is more worth within Storskogen than outside? Why don't we sell off verticals or groups of companies? Well, the magic is in the small details of how we work with the companies, the systematic selection and support and daily interaction between us and our companies. I mean we are not a portfolio manager. We are not a private equity player. We are, in fact, industrialists. So we buy the companies, we run the companies, we make them better and we own them for a long period of time. So we're not about multiple arbitrage or anything like that. I think that wasn't even in our vocabulary until we heard it like a year ago. It's never been a part of our acquisition processes or anything like that. It's actually for an industrial, it's about the long-term buying and taking care of these companies. And does this convert, Of course, into good profitability, resilience. Hopefully, Lena has shown you a little bit on how we work to control and understand and measuring and following up on KPIs, but also that it actually delivers over time. I think we have a proof point, it's going to take us a few years, a number of quarterly reports. I think the recession is like almost perfectly placed for us to be able to show you the proof of concept that we have acquired a quality portfolio, that we actually are not only capable of managing that portfolio, but actually doing it better, being the best owner, so to say. So that's all a part of our agenda. Short term, I think we've talked about -- what we need to do to tackle the short-term chaos basically. We're looking at a recession. We've actually had pretty chaotic 2, 3 years back now with all the supply chain shortages and the war and the COVID and everything. So it's been actually very challenging times. But being a little bit masochistic is actually quite fun. And I'm actually looking forward to these years that comes because I think we have so many great things to do. And I'm actually super excited, I have to say, which is partly stupid, but probably -- but it's true. I think we're actually feeling very energetic to the challenges that come ahead. I think it's a great possibility for us to really push our companies to take market share to become even more competitive going forward. And as to the market, the share price and things like that, I mean it's not my place to value the company, but hopefully, we will, over time, show the value we bring, and hopefully, that will be appreciated by the market. I'm sure that there are some great points here. Well, all in all, a diversified portfolio, providing the resilience, strong deal flow, consistent returns. And I think you will see over time that we will return to the strong cash flows that we've had historically. And I think you've also seen that we are ridiculously structured in the way we are working, systematically creating value and trying meanwhile, to retain that important entrepreneurship with lots of supporting them in all the kinds of ways and it's going to take time. We don't have a predetermined margin route for each and every acquisition we make for every single initiative. But over time, I think you will see that we have some extraordinary developments going forward. And finally, we're planning for the recession. It's no drama. They come along every 5 or 10 years. It's time for one now. I think we've built for it ever since we started. And we're actually strangely enough looking forward to it in some kind of way. So that was actually what we had to tell you today. Hopefully, you've had the time to meet the heroes, the real heroes of Storskogen, our CEOs, our companies out there. There, they're creating the value. Those are the ones that we're first of all, really enjoying working with, but also that we're really proud of and the journeys that they -- we're on together with them. Thank you, everybody, for today. And enjoy the rest of the afternoon. Take care. Bye.