Sweco AB (publ) (SWECB) Earnings Call Transcript & Summary

Good morning, and welcome to the Blique Hotel and the Sweco Capital Markets Day. Welcome to you here on the premises and also welcome to you that are following us online. My name is Marcela Sylvander, and I'm heading the communication for the Sweco Group. I'd like to start by sharing a few practicalities and instructions with you. As you might have noticed, there was one entry point into this room, and that's also the exit point. Should we need to leave these premises, after leaving this room, you turn to the right and there will be more signs to follow how to exit. Should we need to leave the hotel in total, the assembly point is across the street at the Gävlegatan, right by the North Tower. There is the [ simulator ] at the reception. And as some of you probably have noticed already, the hotel supplies us with an open WiFi that you can use. After this morning's presentation, we will take a field trip for those of you who have signed up to Nacka, where you would be able to hear presentation, also to see a bit about the new metro projects that's going on in Stockholm. So I hope that as many as you as possible are able to join us on that. I will talk more about that and give you more details as we go along. There is no coincidence actually that we have gathered you here at the Blique Hotel because the Blique Hotel is an excellent example of how you can extract, reuse material from an existing building and building something completely new. You see originally, this was a warehouse and office building from the 19th century. And due to the low ceilings, it was sort of doomed for demolition. No use to anyone. But however, there was a thought that there was some culture and also historical value to this area and to this building. So there was a competition held how to transform the building into something else. And we, from Sweco, we had a multidisciplinary team consisting of an architect. I need to read this because there are so many people, culture heritage specialist, structure engineer and a material broker nonetheless, that transformed this warehouse into this very chic hotel that it is today. And not only transforming the building, but at the same time, actually savings 3,600 tonnes of carbon emissions on the way, by thinking in circular terms. And to translate this amount of carbon emissions, it adds up to EUR 2.5 million in monetary terms. And the savings also by not having to buy and -- giving new materials into this were additionally EUR 8.6 million. And the savings for reducing waste, doing the circular construction totaled to EUR 63 per square meter. So this is when Asa, Olof, also Ann-Louise and Erwin will talk about circularity, this is a really good example that you're sitting in right now. Here is the agenda for today. Christina [ my clicker ], will show you. You will soon be hearing from Sweco's President and CEO, Asa Bergman, followed by our CFO, Olof Stalnacke. After the break, that's approximately 10:20. We will welcome Erwin Malcorps, Business Area President for Sweco Belgium and Ann-Louise Lokholm Klasson, Business Area President for Sweco Sweden to share their insights from their respective markets. There would be opportunities to ask questions to Asa and Olof after their combined presentations and individually to Erwin and Ann-Louise after their presentations. And lunch will be served at 12:20. And after that, we will leave for Nacka. Before I let Asa onto the stage, I'd just like to share a short film with you. [Presentation]

So I now welcome, please, Asa Bergman.

Hi, everyone, and again, welcome to Sweco's Capital Markets Day 2023. It has been a long time since we met together physically for half or an whole day. So this makes me really happy not only hearing you over Teams links every quarter. Sweco has a long and proud history. And we can look at our history and the journey that we have achieved in different phases. And -- when we look at the journey over time, Sweco's foundation is really linked to the combination of architecture and engineering and the strength of that combination. And it is, as you heard in the film, it's the legacy of one of our founders, Gunnar Nordström. Built market-leading position in Sweden, within the phase, we took on the growth in the Nordic countries and became regional leader. The acquisition of the Dutch company, Grontmij 2015, and the company was into our books 2016. We started the journey of conquering or established ourself as the market leader in Europe. And that is the journey that we have been on the last 7 years. And the journey so far has been rewarding for our stakeholders with a total return of 16,500% since we were IPO-ed in '98. And since the IPO, Sweco has delivered a total return of 23% per year. While the stock market index have had a total return of 10% per year. So this was a little bit about the journey and our legacy and the growth up until now. Today, Sweco remains #1 on the European market, but with a much larger scale. We have grown our presence significantly in the Nordics and in the northern part of Europe. Which means that we have extended our service offering across those business areas. In total, our net sales have increased from 16.5% -- sorry, SEK 16.5 billion to SEK 27.5 billion today. And the annual growth rate has is -- for the net sales is up 8% over this period. And when it comes to EBITA, it's up 9% over the same period. So today, we are a much larger company, 21,000 experts corresponding to around 20,000 full-time employees. As you can see, it has been a positive period in the development for the shareholders with a total return of 110% since 2016. I have worked in Sweco my entire career. It's some plus 30 years right now. And for the last 5 years, I've been the CEO of Sweco. It has been a journey of constant change to meet the demand for the future. And this has always been backed with a strong and solid company culture and also a clear strategy over those years. And Sweco's combination of stability and flexibility is our core strength, and we are constantly evolving over time. Today, we are in the middle of the green transition. Supporting our clients to decarbonize industries, establish new industries and new technology, new energy system, transport infrastructure, build resilient cities and communities. And it for -- it has never been more relevant and motivating to lead a company like Sweco than it is today. And this is Sweco today. The foundation for Sweco is a decentralized business model, operational model. And it consists of 1,700 teams that carries out some 120,000 projects per year. We focus on 8 geographical business areas where we have well diversified business in terms of geographies, segments and a mix of public and private clients. Sustainability is in the core of our business, and we work integrated and actively to support our clients as well as becoming a frontrunner in our own operation when it comes to sustainability. This diversified client and project portfolio makes us resilient over economic cycles. And if you have heard me many times, some of you talking about how we can distribute our services and our resources across the different segments. And we continue and currently #4 in these two markets. As the market is somewhat more challenging and ensure that we can work with the consequences of the client transition to happen and it affects obviously lots of investments happening. It's about concrete measures to ensure and also water, energy, supply, resources and infrastructure, short-term, long term, of course. Urbanization and demographic development are other core drivers that creates demand for urban development. And today, urbanization interfaces with digital developments and improve sustainability to create new development and movement patterns. Increased demand for climate adapted and sustainability solutions is really driving demand for new types of urban planning, one in which smart solutions from the micro and the infrastructure levels are needed to connect and expand cities and areas. So all of this is interlinked in what we see now in our clients' needs and also in the solutions that we provide. There is also an increased need for digital solutions to solve increasingly more complex task, is also a need to implement digital solutions to speed up the change and what needs to happen linked to sustainability. And Digital Solutions is used in urban development processes also to streamline everything from design to resource utilization in areas spanning from construction, transport and energy solutions. There are, as we all know, also macro and geopolitical trends that are changing and will continue to shape the needs of clients across Europe. It is about energy, supply chain, resilience and security. Even though the macroeconomic perspective and the situation short term is pressing, the trends are clearly pointing towards massive investments in the green transition in Europe, covering and affecting all the above and what I've talked about. So I want to give you some example what this means for Sweco, but first, some words on how to approach sustainability in Sweco. We actively support the world's commitment to achieving the necessary transition in society as set forth in the Paris Agreement and the Agenda 2030. Our approach to sustainability is based on UN's 17 Global Sustainability Development Goals for 2030 and sustainability is integrating in everything that we are doing. But we illustrate this on 3 perspective. And the first one is our client business where we're making sure that we work with and support our clients as an adviser or designing new solutions for the society, meaning that we carry out new technology, new energy production system, transmissions, making sure that we support with whatever is needed of sustainable solutions for the future. The second part is about making sure that we have the right competence, the right tools to deliver sustainability in all our projects, and that is very much linked to making sure that Sweco organization and all our engineers and architects has the right competence in sustainability in our client projects. And the last part is our own operations. And as experts in this field, we have a responsibility and great opportunity to making sure that we act in Sweco in a sustainable way. Sweco's group-wide target to be climate neutral, no later than 2040 and to half our emissions by 2030 is in place. And we also put great emphasis in being an ethical company and a really attractive workplace for current and future employees. All in all, this means that we're taking an active part in everything when it comes to sustainability, not only for our clients, for the new solutions in society for the future, but also in our own business operations. And now let me talk about the opportunities that we see going forward. The green transition in Europe is ongoing, and it's driven by the overall trend of sustainability. But it also is accelerated by the geopolitical situation that I talked about earlier. Political priorities, policies, and programs as well as legislation are also speeding the development. And I could also add that we see an increased demand from consumers, from clients and also from investors, as well as increased funding and accelerating technical development. And it all trickles down to many business opportunities for Sweco. To simplify, we can categorize those opportunities as transition in energy, transition in transport, industrial transition, and urban transition. The energy transition is driven by the increased electrification in society and industries and the shift from fossil fuels and energy sources. And this results in large investments in energy production, grids, and new technology. For example, the EU's repower EU package. The transport transition is a shift from, I said, fossil fuel transportation to electrical vehicles, increased public transportations and focus on mobility and more modernized rail infrastructure over Europe. And one example here is that Europe's high-speed rail traffic infrastructure is expected to double by 2030. The industrial transition is linked to decarbonizing existing industries, establish completely new industries and this is happening across Europe, supported by massive private and public capital. The urban transition is connected to the need to meet a growing urban population and demographic development while also building a more sustainable and resilient cities and urban areas. And estimates here shows that EUR 580 billion will be allocated from the EU budget to climate relevant actions, and this is over the period of '21 to '27. And to sum up, roughly 5% of those investments of total investments will be spent on consultancy service as the ones that Sweco provide. So positioning Sweco as a leader in the green transition is key to monetize on these developments. And we see great opportunity to grow in all our core markets. The total market size in Sweco's addressable market is approximately EUR 210 billion. All markets where we operate are, to some extent, fragmented even though we have a strong market position in many markets. We see still significant room to grow and to continue to consolidate the market. In Sweden, the market is around EUR 10 billion. And this is our home market and where we have the largest market share and the top 5 companies have almost 1/3 of the market. In the other Nordic market, the market size is around EUR 6 billion, and we are in top 3 position in three of them. These markets are also quite consolidated in terms of market share, dominated by top 5 companies. In Belgium, Sweco has the #1 position and the market is worth around EUR 12 billion. So even if we are #1, there is much more potential there. And Sweco Belgium's President, Erwin Malcorps, he's here today to tell us more about how they have succeeded in the Belgium market and how we will proceed in the Belgium market. The top 5 players still only holds about 7% on the Belgium market. So there is also there more to take, so to say. In U.K. and Germany, we see great potential of growth our business and increase our market share. The addressable markets are huge, and there is a window of opportunities to maneuvering to long-term strong positions in those markets. Our strategy remains the same, and we have a clear path forward to execute our ambition, to take on the undisputed market leadership in Europe with a top 3 position in all our business areas. We focus on 3 key growth pillars. The first one is to fully implement and deliver on our operational model, the Sweco model in all our markets. The second pillar is to continue focus on acquisitions to grow our market position and to address new niche markets. And the third pillar is to position Sweco as a leader in the key growth trends in the market. And I will now walk you through these more in detail. The foundation for Sweco is our client-centric approach and working in a decentralized way. It provides us with proximity to clients and great agility and a solid base of small to midsized projects with lower risk also over cycles. And the basis, as I said, is our 1,700 local teams with their own P&L, meaning that every team is a business unit with accountability and a clear business focus. And these teams are delivering around 120,000 projects yearly. This provides us with a very stable and flexible platform for growth, making it possible for us to deliver solid growth in a tougher market and accelerate in better markets. We delivered solid net sales growth despite fluctuations in the market. We saw that, for example, during the pandemic area that we were really quick and flexible of handling that situation. We are also fostering a culture of simplicity and efficiency and the key focus area going forward is to make sure that these principles are implemented in all markets and segments with a clear focus on costs, pricing and billing ratio to improve efficiency and profitability going forward. We're succeeding in this by putting a lot of focus attracting and retaining the right and the best people. Delivering the best advice in the green transition means we need to have the right expertise, we need to have the right competence and we need to have the right experience to be able to meet the client demands. Again, and something that we talked about many times over the last years, this is a people's business, and we sell competence, experience and expertise and our ability to attract and recruit and retain the best people is a competitive edge for us. So through persistent work, Sweco has secured a strong employer brand and we are one of the industry's most attractive employers. We are building a culture based on collaboration, personal development and equal opportunities. And as a result, Sweco can demonstrate high employee satisfaction, we have an 80% recommendation rate from our employees. There is a clear skills gap in Europe, where the green transition and the investment will require thousands of engineers, but in Europe, in all countries, there is an experienced shortage of this specific competence that is needed. And at Sweco, we encourage countries and enterprises to work together. We need to work more together for education of more engineers, for reskilling of existing engineers to green, and for an increased competence mobility between countries. And at Sweco, we work lots with cooperation between the different countries. And I think we will see more of that going forward. Looking at the journey ahead, the focus is to deliver profitable growth in all our business areas. That means a combination of solid growth and margins in line with our financial targets. As you can see here, we have one group of business areas, Belgium, Denmark and Sweden that represent about half of our business that are already delivering on our financial targets. The key to this positive development in these business areas is mainly linked to strong market positions, high efficiency and positive pricing trends. Then you have the second group, Finland, the Netherlands and Norway, who represents about 1/3 of our business and all delivering good margins but need to further improve to reach our targets. Finland and Norway have been on stable levels for a long time, and then Netherlands has made a journey from 1.5% to 9% over the past 7 years. Sweco are well positioned in these markets, and we need to continue to working to optimize our position, internal efficiency and pricing to improve profitability going forward. The development in Denmark and Belgium over the past 5 years are good examples that this can be done. These 2 groups represent more than 85% of our business, the first one with Belgium, Denmark, Sweden and the second Finland, Netherlands and Norway. And then we have Germany and the U.K., there are 2 markets with a similar journey ahead of them. In Germany, the turnaround began in 2021 to get the organization on the right track, with the right project and client mix and to fully implement our business processes. And with that, we have seen a gradually improvement in Germany. And the focus going forward is to accelerate these improvements and to proactively capture opportunities on the German market. This is our largest market, and we see great opportunities in this market going forward. The U.K. has experienced headwind for quite some time connected to Brexit and also exposure to the public sector where several projects have been either delayed or canceled. We have now intensified our measures to create a turnaround in U.K. And there are several parts of the business that are performing well and other parts that are underperforming due to several factors in the market, and we are taking measures to restructure these units. And this is basically to improve the client and project mix towards more attractive segments. We are seeing business opportunities in the U.K. with several sectors with good demand. So we will continue to focus on positioning ourselves in these segments. Our strategy is to grow our company through a combination of organic and acquired growth. We have grown organically and made more than 160 acquisitions over the past 20 years. We have a strong track record and a proven model. This strategy is to use acquisitions to either strengthen our overall market position or in interesting growth segments. We fully integrate all acquisitions, and we're working together with them under the same roof and under the same brand. After the Grontmij acquisition in 2015, we have done another 63 acquisitions, adding more than 4,000 experts and close to SEK 7 billion in net sales. We acquired companies in all sizes across all business areas. And -- one key M&A achievement during this period is that we have established a combined architecture and engineering offering in 7 out of 8 business areas. We have accelerated the pace in our M&A activities over the past the last 2 years. We see that this current market provides us with a window of opportunities. And we are well positioned, and we have this attractive model and a strong financial position, which means that we can act when we get the opportunity. Our decentralized model is attractive to target companies since it allows founders and key personnel to stay in Sweco and expand and grow the business in combination with Sweco. And this year, we have done 10 acquisitions and added a total of close to SEK 2 billion to Sweco. When scanning the market, we see essentially -- we see -- or we're actually looking for essentially 2 different types of targets. The first one is scale. Acquiring companies that enable us to catch a larger proportion of the market and position us stronger in the market when it comes to size. These type of acquisitions adds both new and existing expertise. One example of this OJ Rådgivende Ingeniører that we announced in Q3 that this acquisition takes us to expand our footprint in Denmark and position ourself to be the strongest in the building sector, and it advances us to reach the top 3 position on the Danish market. The other category is niche, where we're looking for specialized companies with the specific need -- competence we need for the future. Normally, it is really where we see high growth and potential for high profitability. An example of this in Q3 is Medins that we bought in Sweden, and they are expert in the water survey business, and that is a competence that is needed in most of the European countries, and it's a scarcity with this competence. So we have this niche competence will -- it will create an opportunity for us to build from that and expand that competence from this company. And acquisition is also closely related to our third pillar to position Sweco as a leader in key growth trends. The third pillar is our focus on building strong position in key areas with strong demand and potential for future growth. And going back to the slides with the opportunities that I showed you earlier, we are actively positioning Sweco as a leader and partner of choice in these areas, and we have a strategy in all our countries to making sure that we have the competencies and that we build the competence for the future in those areas. For example, when you're looking at the energy transition, we are today leading European consultancy in energy technologies, working with transmission, distribution, wind and solar power, hydrogen and energy storage. We have established ourself as the leading European consultancy in the rail business with 6,000 experts working multidisciplinary in the rail area, focusing on mobility and active travel, electrification and fossil-free fuels, traffic safety, climate adaptation of the infrastructure. We are the trusted adviser for some of Europe's largest and most ambitious industrial projects, working with decarbonization, including carbon capture storage, industrial circularity, energy supply and efficiency and battery technology. And then the last part of urban transition. The strength of combining architects and engineers paired with the challenges regarding the urban areas and our cities. We are distributing with our competence. We plan, design, construct and work with circularity, as mentioned here in the beginning in the build environment. We work with a resilient urban infrastructure, and we work with nature-based solutions. Today Sweco has an architecture business of 1,500 architects, which makes us the fourth largest architecture business in the world. And with this, I will hand over to Olof to walk you through the next part of this presentation.

Thank you, Asa, and good morning, everyone. I'm Olof Stalnacke, Sweco's CFO. And as a starting point, I just want to recap some highlights from our recent Q3 report. Third quarter was yet another good quarter for Sweco with strong organic and acquired growth and a 41% EBITA uplift adjusted for the negative calendar effect. We have an overall positive momentum despite the partly challenging market and our financial position remains strong. And looking at our operating targets. This has been the case for some time now. We've had a stable margin of above 9% over the past couple of years. And if you take out the effects of the mostly temporary cost savings that we saw during COVID in 2020 and 2021, we have increased margin gradually since 2017. It is, however, at the pace that we are not satisfied with, and improving margins while continuing to grow remains a priority for us going forward. Our net debt remains well within the targets we have, but it's now higher than historically after the accelerated M&A and based on some trade working capital buildup. It's worth mentioning that Q3 is a seasonal peak, and that leverage will come down with the normal seasonal release in Q4 and also with working capital measures that we are taking going forward. Our financial position remains a strength and ensures that we can act on M&A opportunities in the market. We are also delivering -- steadily increasing dividend with the distribution above our target of at least 50%. As Asa mentioned, sustainability is an integrated part of our business in our client projects and in our own operations. Group-wide, we want to have a climate neutral operations by 2040 with a 2030 milestone of 50%. And all emission reductions are measured against the base year of 2020. Also group-wide, we have a target of having 40% female employees and we are currently at 35%. On governance and compliance, we have 0 tolerance for bribes, corruption and human rights violation. In 2020, we had 0 confirmed cases, and we also had quite a high participation rate in our mandatory internal trainings. Looking at the financial development. Since 2016 and the acquisition of Grontmij, which made Sweco in to a European player. We have delivered a solid improvement with a CAGR of 8% on net sales and of 9% on EBITA. We have grown net sales with SEK 11 billion and EBITA with more than SEK 1 billion in the last 7 years. An important part of our strategy, as Asa talked about, is to have a healthy balance between organic and acquired growth. After the acquisition and integration of Grontmij in 2016 and 2017, we have shown this healthy balance with acquired and organic growth from 2018 to 2023. And the exception is, of course, the pandemic year of 2020 when we significantly reduced recruitment. In a consultancy firm, time is money. Billing ratio is our key short-and long-term efficiency measure. It's something we track every week from the individual teams out in the organization up to group level. The way we measure billing ratio, it includes every single hour work in the group, including nonbillable people like Asa and myself. In the consulting firm, money is also money and average fees is also a big lever for us and especially combined with the personnel cost. Fee salary ratio is a key metric for us. And this has become even more important over the last 2 years when we have seen higher salary inflation rates than we have seen for a long time. Calendar, finally, is something that we can't do anything about, but it is a key factor to understand business performance. Working hours will affect our revenue while costs, to a large extent, stay the same. How are we then working with these levers? On the pricing side, we quickly accelerated our efforts moving into the higher inflation environment. There is still more to do for us on pricing. But we are happy with how we have been able to stay ahead of the curve in terms of salary increases and improve our fees over the last 18 months. It is extremely important for us to maintain this focus going forward as we will most likely see elevated salary inflation also next year. Our billing ratio has gradually decreased since 2016, a development which we are not satisfied with. This is partly driven by increasing employee turnover, onboarding of newly recruited consultants, drives inefficiency, both in terms of management time, but also in the time it takes for new consultants to get up to the normal billing ratio. Accelerated pace of M&A has also impacted billing ratio, since acquired companies normally come in with not necessary less efficiency than Sweco, but definitely less focus on time reporting and on follow-up of billing ratio. The third factor that has impacted in recent years is the larger variances in demand between segments making resource planning more challenging. That being said, these are all things that every business area is focusing on. As we have said over the past year, most of the decline of the group's billing ratio comes from Sweden, Finland and the U.K. In Finland, we have taken actions turning the negative trend and we are now, as we announced in connection with the Q3 report also making further targeted personnel reductions to adapt to the demand in the market. The same goes for U.K., where we have taken restructuring actions in the last few months. In Sweden, we've had very high inflows of new employees, but with the employee turnover now coming down and with the structural actions we are taking, we expect to start moving in the right direction also there. What are then the keys to improve margins going forward? And we come back to the slide that Asa showed a little bit earlier. In the high-performing half of our business, Belgium, Denmark and Sweden, it is mostly about continuing to grow and about fine-tuning performance. We also need to maintain the focus and the positive trend we have had on pricing in these markets. In Sweden, as said, there is also, of course, a specific focus on improving the billing ratio. For the third -- there are the business areas: Finland, Norway and the Netherlands that have come part of the way towards our target. The path to higher margin lies in the different mixes of price increases, improved efficiency and also cost control. In Germany, as Asa said, we have been working on a turnaround since 2021. And we are seeing positive signs that profitability is improving and the business is stabilizing. And once we have a stable platform there, there is a significant opportunity as we have seen to drive the consolidation of the very fragmented German market. In the U.K. we have been impacted by a challenging market and by our market position, which, again, as you have seen, is very different than it is in other markets. Short term, we have taken restructuring actions in segments with weak demand and we are focusing our resources on segments or even niches where we have a strong position. Longer term, we want to continue the journey to a top 3 position. Looking then at value creation through acquisition. Asa talked a bit about the turnover and the number of acquisitions. If you look at it in EBITA terms, we have acquired around SEK 500 million of EBITA since 2016. And the weighted average EV/EBITA multiple for this acquisition is at around 50% of our own current multiple. We believe that our proven approach and process for M&A is a key for us being able to create value with these acquisitions. All our M&A activities are coordinated by group M&A team in close collaboration with BA management and with high involvement from Asa and myself. We have structured business area and group pipelines, which goes through a clearly defined funnel. We make valuations and business cases based on long experience and with clear go, no-go criteria for the acquisitions. We performed the due diligence mostly with our own personnel, taking in experts only for very specific areas like tax, pensions, et cetera. And we focus very much in the DD on cultural and organizational fit on the project portfolio and on risks overall in the business. And most importantly, integrations are well prepared, fast and complete, focused on client and employee retention and also, of course, on synergy realization. So to summarize, Sweco has a strong market position, and we are well positioned towards strong trends in society. Sweco also has a proven track record of long-term organic and acquired growth and long-term improvements based on our operating model. Our well-diversified business means both risk diversification and the broad exposure towards growth trends. And last but not least, and again, we have a strong financial position which enables us to capture opportunities in the market and be a leader in the consolidation of our industry. And finally, another recap from our Q3 position. We will continue to stay close to our clients and make sure that we have the right resources to meet demands in all of our segments. We will continue to increase fees to make sure we get paid for the value we provide to our clients and to mitigate salary and other cost increases. We will maintain cost control and we will ensure that we break the long-term trend on building ratio. And finally, we will continue to execute on our M&A strategy. Thank you.

Thank you, Olof. I'd like to welcome back Asa on the stage now. It's time and opportunity for questions. My colleague, Christina has a microphone. So just raise your hand and for the information of everyone, please state your name and company when you ask questions. For those of you online, you're able to ask the questions through the chat function. So please.

Dan Johansson from SEB. I think I'll start with 2 questions here, mainly. The first one on -- I thought it was an interesting data point on your strategy of sort of getting in a combined architecture and engineering units in most markets. It seems like you accomplished that. And what sort of the tangible results of that combination of engineering and architecture skills? Is it sort of growth synergies? Or is it more of a diversification that perhaps you get a lower risk in different cycles. So what's sort of the tangible results of that combination?

I mean, it's many things. One thing is that we actually -- if I'm looking back now, I mean, 20 years ago, it's really clear that we worked in more of silos in the industry, meaning that the architect did their work and they were handing over the work to the next. Today, we are working in a more iterative way. Everyone is designing in BIM modeling, meaning that we are working with one modeling and you take decisions to create sustainable solutions by one profession is doing one thing and then you kind of discuss and then you redo so to say. So there is a need for architects and engineers to work much closer and more interlinked. So to have the architects in Sweco makes us more, I'd say, capable of building up the competence of working architects and engineers together. So it's about having the quality but also from the client side to be able to go and approach Sweco to get the full package. This building is one example of engineers architects and then environmental experts working together to create the solutions. So that is one thing. And of course, it's a growth platform for us. It's also about that we -- there's many projects that starts with the contact with an architect. So also about, I mean, how do we win our projects. So when we kind of go to market is also strength to have the architects in-house. I can take the example of hospital projects always start by architects that has the skill set of health care planning. So to have those architects that is health care planners in Sweco's business will makes us more attractive to be able to distribute the full package of health care and hospital design, for example.

And maybe a second question, if I may. On sort of the margin potential in different markets. I guess industry consolidation or consolidation in a single market is quite important factor and the Nordics is quite extreme in terms of 1/3 in the top 5 companies. So would you say that is it possible to get the same margins also in these countries that -- or markets that are less consolidated than in the short term, so to speak?

I mean, let's take Germany as an example. As we -- I mean, we are -- we're having a -- I mean, #1 or 2 position, top 3 position in the German market, but we're very small on the German market, meaning that we don't get the traction that we could have as really strong top 1, 2, 3 player. But I mean, what is going on in the German market has gone on since some years, maybe the last, I don't know exactly. The pace of it, you can start to argue about, but, that for me that has to do with how active we are in that market. So with that said, the consolidation is ongoing. The question might there be more about how many of the midsized companies can you find on that market? Or do you have to do much more of smaller acquisitions to create that platform if you can make the same margins. That question I got 2018 when I entered in, in this role. And I was questioned around, as I then been Business Area President for Sweden. If the markets outside the Nordic wasn't different when it comes to profit levels. But then I think we should post that question until Erwin is providing the information about the Belgian market. Because for me, it's about -- and I've said it before, it's about making the right choices on the market. Making sure that you create this product portfolio of working in the right segments, select and deselect and also making sure that we go for those projects and the growth where we see an opportunity to price ourself, to get the right terms and conditions in place and that we deselect maybe parts of the market for a period because normally, when a client or a segment is lacking resources or need resources, they will start to rethink the terms and conditions that they procure on. And as insight, when we measure all our bigger contracts, we win on quality, and we lose when it's a fierce price competition. And that is part of our strategy to making sure that we're really relevant, staying close to the client and that we distribute qualitative work. With that said, it sounds easy, but of course, it's tougher if the market sentiment is that everyone is having lower margins. But I had this discussion with the Business Area President of Denmark as well 5 years ago. So even internally, there is discussions about look at the competition, this market gives you certain margins. But that's not true. It's about how you operate the market and what you -- how you choose the projects on the market.

Johan Sundén for Carnegie. Two questions from my side as well. First one is on Germany, where you -- to some extent, opened the door for making a little bit more acquisition than we've seen over the last few years, where you also mentioned the -- you must reach a more stable platform where -- how do we measure when it's time for making more acquisitions in Germany?

We don't have sort of a fixed target for that, at least not one that we want to communicate maybe. But I think we are seeing, as we saw now in Q3, especially we are seeing that we are starting to stabilize on a higher margin level, so I think we are maybe not that far away, but we still have some more work to do in terms of the turnaround plan and the improvements. But it's true what you say. We are getting closer to that point.

And it has -- can also have to do, of course, the stability of the whole business, but it can also be so that we are looking into certain segments where we see that we're strong and if we find an opportunity. So you will know the day, first day that we announced, first acquisitions. As you know, when we were in shape in the Netherlands, going from -- in my perspective, a weak performance in the Netherlands, we were not ready to invest at least 2018 when I entered in on the Dutch market. But when we did the first acquisitions, we were really there, and now we are kind of investing and looking for targets there. And hopefully, we'll see the same situation in Germany going forward.

Perfect. And one other question for Olof on the billing ratio trend. You are not satisfied with the current level? Is it possible to quantify where you want to be? Or is the history where you performed historically, is it still relevant or the market shift has different position.

I mean we don't have a specific target, but I see no reason if we sort of reach the efficiency levels, we want to reach in all business areas that we shouldn't be able to get back to the 2016 level, for example. Maybe it's difficult to compare with the time before that because before the Grontmij acquisition, Sweco was, to a large extent, a different company, but at least 2016 should be a reasonable starting point for us.

[indiscernible]. Thank you for hosting this day. First, I would like to ask you on the EU finance. I think you spoke about EUR 580 billion over 8 years or something, 20% tilted towards the services sector. A large part of these EUR 580 billion would be in your markets would you say?

I think the normal rule of thumb is to be a bit careful is that around 5% of the investment goes to the consulting part of the projects if that's what you mean.

And the EUR 580 billion is also -- it's within your geographies or...

It's distributed all over.

All over Europe, I'm sorry...

I can't really -- is it half, maybe.

Maybe half of it. Yes.

Okay. Perfect.

But that's just a guess.

Just to know ballpark to understand. And secondly, if I may, on the recruitment strategy has been obviously extremely positive for many, many years. Has this uncertainty in the market changed the overall, the organic recruitment strategy for the company or anything you can?

No. I mean over economic cycles, we always, I mean, recruit where we see growth and where we need. And then we are a little bit more careful maybe where we don't see the growth. We have talked a lot about, for example, in residential and housing and commercial real estate, we see a weaker market. Then we might not, I mean, push on. Because it's about making sure that the existing employees or consultants has work to do and then we focus more on growth in other segments. With that said, I mean, if we find very skilled and very good competence, that makes us more successful. Then we, of course, recruit in those areas as well. But it's more about when the market gets a bit as it is now mixed, to be more diligent in where and what competence, what experience do we need? And I said, one reason to why it's so important for us to take a leading market position is because not only the brand leadership, the working environment is important for Sweco, it's also about making sure that we win the most interesting project. Because if you ask an engineer and architect about what is the most important thing for them, it will be that you actually are contributing to the most exciting projects where the new technology, the future in this specific field happens. I can assure you, if we could measure, we could see movements. If we win a big contract, you could see some movement in the market where people are jumping from one company to another to be part of that project. So for us, it's really about making sure that we win the exciting projects.

Johan Dahl at Danske. Just how do you steer the business in terms of operating risks? I presume we should always look at this margin target, the margin performance in relation to risks. And is that something that you're sort of driving pricing models or project scope, et cetera, to increase or decrease risks in Sweco's operating model? It would just be interesting to hear.

Do you want me?

You start, I can.

Okay. So we are -- I mean, we are measuring and steering and leading risks in different dimensions. And maybe the most important thing for us is our project portfolio, as you referred to, making sure that we have good terms and conditions in place, which means that we have controlling mechanism in when we put contracts or take contracts into Sweco. So we take -- we are taking on terms and conditions that we evaluate being the right risk level for Sweco and then also making sure that we have the right organizational set up and then we have this monthly project follow-up, making sure that we can maneuver what's going on in all projects in the portfolio that we have. And when we're talking about implementing the Sweco model, it's about also this risk mitigation and having control over the project risk because -- and we're also talking about write-downs in projects and the better you run your business, the more implemented those processes are and the more skills and competence you have in the leadership, the more stable the business is. You will always have write-ups and write-downs, but you will have control over the potential project risks in your portfolio. So that is like for me at least, our main risk mitigation activities, is to securing the product portfolio we have in hand to limit the risk of project write-downs or clients claiming us for something that we have done wrong?

And I think also the fact that the bulk of what we do are small and midsized projects, relatively short in time span, relatively less complex as well, reduces the total risk in our project portfolio.

All right. And also this is a very big question, but perhaps you can provide a brief answer. But looking at your competitive set globally, you used to be pioneers driving consolidation and the way you grew. But it seems just that if we look globally on the business, some other players have significantly accelerated their growth, cross-continent acquisitions. What has changed when you meet your competitive set? Would you argue that this has made things tougher for you guys to be competitive and to sort of operate relative to your peers?

I wouldn't say so. I mean what we have experienced the last 10 or 15 years in Europe, we have experienced all global players being present in one or the other way, trying to compete, but mainly on the bigger projects and then as I said before, if we have -- if some of the global companies is buying something on the local market, that competition shifts to another kind of dress, but it's the same competition on the local market. It is still so that the local language and the local circumstances is what makes you relevant and strong and capable of making the right choices on the market. So we operate the same way and really clear of having this local presence, but at the same time, I have to say that if I talk about a language as a barrier into the market, I also would like to see more of English in our projects in Europe because that will make the possibility for us in Sweco to distribute the way our work in a more easier and accessible way across countries.

Raymond from Nordea here. Two questions. First one regarding higher average fees. Could you elaborate a bit more on how you intend to achieve that considering that we are maybe starting to see inflation though? And do you expect to continue to raise prices and for how long?

I mean we have been increasing prices. And if you look at the somewhat illustrative graph I showed earlier, it was the only period where we saw some flattening out of that is really during the sort of second half of 2020 during the pandemic. So we want to continue that, of course. I agree that it will probably be slightly more challenging with inflation coming down. But that being said, as I said, there is also more to do in some of our business areas when it comes to pricing. We said it would be the biggest challenge probably for us this year, and I think it will be one of the biggest challenges for us to continue this also next year. But again, quite happy with what we have done, and we see that there is room to do more in some of our business at least.

Great. Second one regarding utilization. I recall you saying that M&A time -- because of some M&As, you had certain areas that were not necessarily less efficient, but perhaps whereas a time reporting. So if you would go back to 2016 levels, would that maybe be partly due to just paper improvements and not so much actual improvements, if you know what I mean?

I think when we have talked about that, it has mostly been in the second and third quarter of this year, when we've made somewhat bigger acquisitions and maybe coming in with a bit bigger short-term impact on the billing ratio. So sort of short term, there will be more of a paper effect when these completely come into our processes and do the time reporting and the follow-up as we do it. But over the sort of longer term, it's not -- it will not be a big factor.

Tom Guinchard, Pareto Securities. I was wondering about you speak of lack of engineers in the long term. How are you working with the knowledge sharing within the organization whilst having a decentralized M&A strategy?

That was a really good question because that is really a flip side of an organization like this, but we have a long tradition of working and connecting competence across meaning that we connect the different competence centers across Sweco. We also define areas of important growth segment, for example, with hydrogen as we did, I think 3 or 4 years ago, where we interlinked the competence in the network to -- with the focus of supporting each other to win contract with that competence, but also to supporting a specific business area to expand. But we're having those different processes in place, but we also try to be very flexible in looking into certain segments and thinking about, okay, how do we operate this segment to become successful. For example, data centers. Some years ago, all the investors for data centers were established in London? And how do you make sure that you have the kind of investors interface and the client interface, but at the same time, distributing the work across Europe. So it's a little bit situation based, but we work with different tools to distribute the competence.

And just a question on the matrix organization. You have your business areas and geographies, how much are we working in the different directions horizontally?

So we have a very straight line business model. We don't have any matrix. It sounds like we have a matrix when you kind of think through -- when you look at it from outside and you see the projects as you're actually distributing resources across. But the organizational structure is a straight line with the responsibility from the Business Area President down to the team manager, and that is where the responsibility lays, meaning that when we take on a project, the project ends up at a specific team in a specific business unit in one country and then all the work is distributed from wherever, but the income is registrated on the specific business unit. So we don't have a matrix, and we are very clear about that this is the responsibility that we have.

Anders Jafs from Kepler Cheuvreux. Just expanding a bit on the billing ratio. Do you see a correlation where in markets where you have a higher market share, you have a higher billing ratio? Or do you see any correlation there? Or do you measure that in any way or...

We measure billing ratio, of course, as we said, from individual teams up to group level and we do it every week. There is no correlation between market share and billing ratio.

And another question on that topic as well. Considering that you will continue on this profitable growth strategy, one can assume you will continue making acquisitions. Will that also put maybe some downside pressure going forward on the billing ratio? Or are you confident in your ability to internally raise that to previous levels in 2016 levels, for instance, or...

I think if you look at it historically, the acquisitions we have made have not been negative for billing ratio. I think we have some of the short-term impact that we talked about earlier when -- before they sort of come into our processes and not necessarily that they are less efficient but that they are maybe measuring it less diligently than we are. So no long-term risk for that. You can get the same short-term effects that we've had this year, but nothing else than that.

And also to add on that, I mean, if we find companies with lower margins, where we see synergy potential and value creation in acquiring them, we will, meaning that short term can see also margin dilution in some of the integrations.

Fredrik Lithell from Handelsbanken. On your decentralized organization, the 1,700 teams -- P&L teams, is that a sort of -- have you ever questioned that or challenged that, that is too decentralized in terms of reaching your margins? You have not been close to the 12% target for some time. The more decentralized you are maybe the more non revenue-generating people you have. Is this something you have a debate and challenged internally?

There's many parts of the business model that is debated and discussed internally due to the fact that -- I mean you can organize and structure yourself in many different ways, and there is always a flip side. So I think it's more about -- I mean, in our view, how is the client organized and where is the client? And where is the build society project established. That is really linked to that we want to have this local presence with a close interlink between the local organization and the client. The size of the teams, of course, but there is many dimensions to this because it's also about personal turnover, making sure that the span of control is not too big for our team managers. It's also about having control and linked to Johan's question before regarding risk. It's about making sure that they actually can control the project portfolio in a decent way without taking on risks. So of course, we have discussions about this, and especially when we get the big contracts into Sweco's portfolio. You could argue that there maybe it becomes a question for you how we handle those big projects, but for sure, we identify big contracts in a different way and then we organize ourselves around those projects, meaning that then we are handling those in a different way. So we try to be flexible in that sense. But that we normally don't talk that much about due to the fact that this model we have of bread and butter of small and midsized project is what makes us strong, resilient and also a preferred adviser for many clients because, I mean, we all hear -- read about the big projects and the ones that we read about in the media. But if we look into our clients, no matter what industry they are in, the small advising reports, feasibility studies, pre-studies, reconstruction things is daily work for our clients, and they need the competence of Sweco for that kind of work. And that builds the trust and the relationship long term with our clients, meaning that when the midsized and the big contract schemes or investments is coming up, we then show that we are capable of delivering those. You have that established that way of working with the client and then that benefits us.

But I think -- I mean, it's a good point you have because one part of both becoming efficient and staying efficient is making sure that you -- I wouldn't say minimize but optimize the number of non-billable resources out in the organization. So it is an important point for us to work with every day.

And just a second, maybe touching on this, the M&A strategy. Is that less decentralized in structure and how you work? Or is it that you need to -- is it coming from the small teams that this one you should look at and then it moves up into a funnel or something like that. How does that work?

As I said, when I talked about M&A, it is a very coordinated process across the group. And I would say this is not -- I mean, obviously, leads can come from team level, but in terms of coordinating the M&A we actually have in the pipeline, it's business area management together with our group M&A team and with very much involvement from Os and myself. So that is a more centralized process in Sweco.

Just following up on the M&A question previously. I want to understand, as you said, those margins -- sorry, those deals are margin dilutives. And correct me if I'm wrong, it might take up to 1, 2 years to extract all the synergies, right? So is it true that M&A is accelerating, as you mentioned? Could this on a certain extent, counterbalance the let's say, operational efficiency and so put the stuff on those 12% EBITDA target in the, let's say, mid- to long term. And if that's the case, then how you would like to achieve those 12% completely?

To start with, I mean, historically, on average, M&A has been margin dilutive, and that is, as you say, it takes us further away from the margin target in a way. But we believe that in addition to the margin target, it's also important to have an absolute EBITDA growth, which is also what we have shown over the last 7 years. That being said, all acquisitions are not margin dilutive. The big one we made in -- mostly in Belgium this spring, VK, as we have shown after Q2, that is margin accretive on the other way. So it should improve or win wonderful margins even more going forward. And now I sort of dropped the second part of your question, sorry.

You answered, but just wondering, indeed, if this counterbalance is a bit old and what are the concrete actions to achieve this 12% target?

No, I think that's very much about what we had on the slide. It's about fine-tuning performance in the high-performing markets that are already on or around the margin target. It's about taking the sort of halfway Norway, Netherlands and Finland, the final steps and it's a mix of price increases and efficiency improvements. And then it's the turnaround in Germany and the similar turnaround in the U.K.

Thank you. And we have 2 questions from our audience online. The first question is from Simen Mortensen, DNB Markets. How is the price rate competition trending in your market given current building markets?

Sort of not talking about the pricing in the building market specifically. I think not only we, but also competition has been quite successful in improving prices over the last year in the inflation environment and with the higher salary inflation. So I think it has been quite disciplined in the market when it comes to price competition.

Second question is from [indiscernible]. Sorry for the pronouncation. It's a long question, so bear with me and with [indiscernible]. Can you talk a bit more about the benefits from European programs that have been initiated around COVID times such as EU Green Deal or ships. Some of your peers communicated, they see European programs to start being deployed next year? Do you see similar and what do you think will be the uplift to grow from these programs in percentage terms to your organic growth and if you are not able to take a benefit in organic growth due to the employee bottleneck, do you think it can accelerate margins by allowing you to be more selective on your projects? So it's 3 questions in one.

First of all, I think on the last question, being selective when it comes to our clients and in our projects, that is how we operate our business. And then another thing is that we're actually looking for, as I presented, the growth areas where we see investments coming and where the need for our competence is huge, meaning that we try to position ourselves to really grow in those areas. We have experienced that the focus linked from EU down to governments and down to legislations and regulations has been there for the last years. So it's ongoing. But of course, with Russia's full-scale invasion of Ukraine and what has happened afterwards linked to that on the different markets, the pace of things and how to prioritize differs between different countries. But in an overall perspective, we foresee this kind of push from those programs going forward.

And I think in terms of putting numbers on this, I think it will have a positive impact on organic growth. It will give opportunities to increase margins, but putting a number on it is not possible at this time.

But maybe we can elaborate a little bit about -- because we have said -- I mean, if I look back 20 years ago or even 10 years ago or even 7 years ago, we said that Sweco's business is interlinked with the GDP growth and the GDP movement and that is true. But with that said, there is also some kind of long-term overarching trends and focus when it comes to investments that has really started to benefit us the last, I would say, 5 years, and I've talked about this before.

Thank you. I thought you like numbers, Olof.

Yes, but not making them up, though.

With this, you for all your interesting questions. We'd like you to invite you for some coffee and refreshments. And as some of you have already tried out, there's a virtual reality possibility for you outside looking into the new metro line, looking into what the -- I say it in Swedish [Foreign Language] will look like eventually and also climbing top on a wind turbine for those without motion sickness, et cetera, et cetera. After break, we will invite Erwin Malcorps, Business Area President for Sweco Belgium to tell their exciting journey and I really -- you back here at 10:20. Thank you. [Break]

So welcome back, everyone. I hope you had some good refreshments and some nice journeys in the virtual reality world standing on the turbine or whatever. Without further introductions, perhaps, but let me introduce Erwin Malcorps to take us through the Sweco Belgium journey.

Good morning. Good morning, everyone. My name is Erwin Malcorps. I'm a Business Area President for Sweco Belgium. This year, I worked 25 years for the company. I can't beat you with 30 years of loyal service. Well, we've been part of Sweco since 2015, since the acquisition of Grand May. And yes, since 2015, we've seen an incredible journey of growth to become today #1 on the Belgian market. Today, we are 2,650 people in Belgium working, as you can see for almost 4,000 different clients. We work on 10,000 different projects, have small projects, small assignments. At the same time, very large assignments as well. For instance, we work on the Antwerp Ring Road. We work on large hospital projects, on metro projects as well. Strong regional presence, also a very decentralized organization. Our priority business, of course, is the Belgian business, but we have also operations in France, in Luxembourg and also in Vietnam, mostly linked to work sharing business. Immediately on slide, you can see some pictures below, picture of our industrial projects. And on top, it's a rendering of the new railway administration in Brussels. And maybe as you can see, September construction and there was a question in the room regarding knowledge sharing. Well, this is a good example because we sent 2 young engineers to Norway because our Norwegian colleagues already did the design of a very large timber construction building in Brumunddal. So there, we used all the knowledge available in the group to do the design era of this new building. That will be built soon in Brussels. Our business is divided in 6 divisions. This year, we added VK after the acquisition. As you can see on the screen, it's a very important part of the business, a very large acquisition, which we added to the Belgian business. We're active in the building environment. We're also active in energy and environment. The industry business is quite important in Belgium, a lot of industrial activities, mostly linked to the Antwerp Harbor infrastructure. Also important business, Pharmaceutical business. I believe almost all major pharmaceutical clients, they have business in Belgium, and they do a lot of investments. And then VK architects and engineers in BUUR. So you need to pronounce it BUUR. It's a bit special name. It's well known in Belgium. In fact, it's a Dutch acronym for Bureau for urbanism. So it's an office for urban planning. And at the same time, in Dutch language, it means neighbor -- neighbor because we work close with our customers, but also close with citizens because in the end, we do city planning, we do urban planning. But the key topic of my presentation today will be the incredible journey of growth we've made with the Belgian organization. And as you can see on this slide, our business today in '23 is 6x -- 4x as large as our business in 2016, which means an annual growth of 23%. And we also managed to increase our margin profitability looking at EBITDA from SEK 50 million in 2016 to SEK 400 million year-to-date in '23. This means a margin improvement from 6% to 12.6% today. Of course, this growth had a huge impact on our Belgium organization. We're very proud of this development. And on the next slide, I will walk you through all the key drivers that contributed to this success. And as already mentioned, the Belgium business for Sweco started in 2015 after the acquisition of Grontmij. And the 3 key pillars in our journey of growth are the ones on the screen. First, we implemented the Sweco model. I have to say immediately from day 1, we started to roll out the Sweco way of working. Later on in the presentation, we'll give you some more details. The second pillar are the strategic acquisitions and the third one was the positioning of Sweco towards real growth opportunities on the Belgian market, where we saw clear trends of important growth. And indeed, the implementation of the Sweco model has been key to our success. And Sweco strategy, as already showed earlier in the presentation, it's based on 4 cornerstones, and the first one is the client focus. Of course, we focus on our clients. We work closely with our clients. We also measure client satisfaction. We use a Net Promoter Score, NPS, which today is at 51. It's a very decent result. It's also what we hear when we speak with our clients, we listen to them, they're satisfied about our expertise, about our service and I believe my dear colleague and Louise, in our presentation will show even a higher NPS score in the Nordics and at the same time, that's also our ambition in Belgium to get those Nordic levels in results. But what is also important, this is much more than just a commercial KPI. This is the result of the rollout, the implementation of a strategic plan. Because we wanted to make sure that each team, each team manager really understands the importance of client focus and that all the teams, they start to work with the feedback we get from our customers. And of course, there, we need the best people. Best people recruitment is important, retention is important, the development of our people are important. And just to give you some figures on the recruitment in 2016, we recruited 50 new people -- employees yearly. So this means as an average, almost one contract signed a week. This year, in '23, we expect we'll recruit 500 new employees. So this means more than 2 contracts signed a day, which is a huge difference and put a lot of effort on our recruitment team. We look a lot on diversity, personal development. We measure employee satisfaction. So client focus is important. Our people, of course, are important. I don't have to explain that best people today is maybe our most important key focus in a market where we face fierce competition looking for the best talent, but we want to work with the best people. Internal efficiency is also important. And when I showed the graph in the presentation, this one, how we became a double-digit margin business area, starting from 6% to 12.6% year-to-date in '23. Of course, this is a proof of the internal efficiency and the measures taken in our business area. And yes, we focused a lot on the efficiency, our internal flows. We invested a lot in digitalization and scripting in our design process, in automation of our design process. And that enabled us to reach this higher margin, double-digit margins, combined with the decentralized responsibility. And the decentralized responsibility, we believe -- we are convinced at Sweco that by working in smaller units that it really increases the accountability and the responsibility of our people working for customers. So it's -- today, we work on almost -- we work with almost 250 teams. They have all their profit and loss. They have their dashboards and of course, by working with a decentralized organization, we also need make sure that we have our governance, that we have the monitoring, that we have to follow up. So that everything is well prepared. Working in 25 offices today in Belgium and also 9 offices outside Belgium, 2,650 experts working on those 10,000 different projects. So yes, we are very proud of this development and this achievement. And yes, the decentralized organization also helped us to achieve good results and client focus. It helps us to have good people management and it improves our internal efficiency and yet to reach the result from 6% to 12.6%. It's a matter of internal efficiency and at the same time, also focus was already a question in the room earlier on average fee on our pricing. And as you can see in '23, year-to-date, we boosted results compared to last year. Well, we started up a huge program on pricing and on average fee. Of course, there was the inflation on the market, but we believe that just this inflation was the right momentum to go to our customers, to go to our clients and to ask for higher fees and to get paid for the quality of our services. So together with all the teams, with all the team manager, with all the project managers, we rolled out a program in '22 already to make sure that we get those higher fees. Once we face again the high inflation rate, we managed to do so. So when we look at the average fees today in '23, they are significantly higher than they were in '22. So it's another result of this decentralized responsibility where we ask the commitment, the engagement and the accountability of everyone in the company. Yes. As already said, retention is important. Recruitment is important. Development of our employees is key within Sweco and yes, we've seen a significant growth in number of employees since 2015. So over the 7 years, we've grown from a company of roughly 800 people to a company today in Belgium with 2,650 employees. So of course, it's a huge evolution and it's a huge impact in the company. And to do so, we also invested a lot in our brand awareness. And just to explain you in 2016 when we organized early bird breakfast with the young starters, and I asked them if they knew Sweco before they joined Sweco, about 15% of the young graduates told me that they knew Sweco before. Today, we organized those early breakfast also with much more people due to a lot of young starters. When I asked the same question, they all know Sweco but at the same time, 90% of young starters, they're convinced that Sweco today is the best workplace for young people. So it's a huge difference, a huge difference in brand awareness. And of course, it's a result of a lot of work done. We focused on social media campaigns, very professional campaigns. We are at all the job fares, at high schools, at universities. We organize lectures, we organize site visit just to make sure that we have this brand awareness in Belgium. And yes, a second pillar that contributed to our growth journey, where the acquisitions. So together with the organic growth, it really enabled us to reach this leading position in Belgium to become market leader in Belgium where in 2016, we were about in fifth position. We did more than 20 acquisitions over 7 years' time, adding SEK 1.75 billion to the net sales, adding 1,300 new employees to the large Sweco family. So yes, we've been very successful in -- also in the integration of acquisition, in the preparation of acquisition and also afterwards in a very fast integration of those companies. And yes, we look at 2 types of acquisition. On the one hand, there is what we can call the scale acquisitions, adding capacity, extra market share to our operations today. I believe that VK Architects and Engineers, which we acquired this year is an example of the scale acquisition, really giving us a strong market position in the building business in Belgium, also adding extra services to our portfolio. Another one maybe is Talbrum. They joined us in 2020, very active in the pharmaceutical business just before the COVID lockdowns. And then the second type of acquisitions is what we can call the niche acquisitions. Sometimes companies, maybe not the largest ones, but really specialized in some specific industries, and maybe just one, VENAC. They were only 5, very small acquisition, but key experts in acoustic engineering. And that really gave us an extra unique selling point to our portfolio. And maybe also FPC. They joined us this year, fire consultants and experts in emergency management. There, again, a very good complement to our actual portfolio. Maybe also to mention future proof, little bit special. Why? Because they're future-proof design software. So they design software that help customers to monitor their carbon footprint and also at the same time to have a good view on the impact of actions taken by the clients. And of course, today, with future proofed and Sweco and combined offering, we're not only selling software but at the same time, also selling extra consultancy services, helping our customers just in their journey to become more sustainable. And yes, maybe the other one [indiscernible], was part of the VK Group in -- which we acquired in '23. You could say they're are BIM infrastructure engineers. I suppose you've tried already the VR glasses of the Stockholm Metro. We tend to call them information -- infrastructure information engineers. And as an idea, I added a small movie. And this is also a 3D rendering, it's a virtual reality. This is what we already use today. It helps us in our design process, in our engineering process. It also helps us to explain our customers the real details of our concepts on our projects in any conditions, whether it's a car or a truck or in rainy conditions. But we also go already some steps further because we use this BIM model also for training purposes to help a customer, for instance, for a centralized traffic control center, where we simulate reality. And we also add some traffic data and big data in the model. And then by some machine learning and with artificial intelligence, we can help the customer to preset some scenarios. For instance, if an accident would occur in the tunnel, how to react and how traffic signals should be organized in reality. So this is just an example how digital tools and artificial intelligence today are already used in a lot of our infrastructure projects. So this is one example of tunnels we designed also in the Antwerp ring roads. It's one of the largest infrastructure projects today in Europe. The works already started and we're still designing the next phases. And the third pillar that was key to our success in our growth journey was the positioning of Sweco towards clear growth trends on the Belgian market. And I've made a selection of some of those opportunities. The first one here, I mentioned is climate adaptation. We can't deny that local municipalities, cities today, they have to adapt to meet climate change, extreme weather conditions in the next future. Well, our country, almost 2 years ago was hit by strong floodings in the South and the East, where some local municipalities were really destroyed in 1 hour time after floodings. Maybe that was kind of an eye opener and at least created a lot of awareness in the country. Some weeks ago, we also won the assignment for the government for coastal protection measures. So just as an example that this is a growing market and that customers ask for our services in this area. The same goes for energy transition. Belgium invests a lot in renewable energies, also in the backbone of renewable energies. As one example, there are a lot of investments planned in the hydrogen backbones. So we already are working on a lot of those projects on hydrogen. Also the energy grids, it's about energy transmission and even also the renewable energy production. As I've shown in the movie, the -- another trend are the digital solutions within infrastructure. Within our business area today, we work on the Antwerp ring road, as I just mentioned. We also work on New Paris Metro lines, we work on the Brussels Metro, the Brussels ring road as well. And what we see today is that digitalization becomes much more important in infrastructure projects. We are on top of it. We have a lot of expertise and experience in this area. And then last but not least, the pharmaceutical business. Well, Sweco was responsible for the design for the new Pfizer COVID production site between Antwerp and Brussels. Huge time pressure, I don't have to explain on that project. We worked day and night, during holidays, during weekends to meet the extreme severe deadlines. But we did not only the civil design, we did also the process, we did the design of clean utilities, the filling, the dry freezing. So in other words, we are really experts in this area. And I can say today, we are market leader on the Belgian market but we are also very active in a very broad portfolio, in all indices today. And I believe today on the market, we are the only ones with such a diversified portfolio on the Belgian market. So to conclude, yes, we are very proud of this development on the Belgian market, which we've seen over the past 7 years. As you also can see on this slide, there are a lot of growth opportunities on the Belgium market. Looking forward for continued growth and also to support our customers in the green transition which is key today. Thank you.

Thank you, Erwin. Now it's a possibility to ask questions to Erwin as we did before. Cristina will hand out the microphones. And for those of you online, please ask your questions through the chat function. And please state your name before.

So Johan Sundén from Carnegie as well. Question on the kind of brand and if you compare Sweco as a employer compared to the other kind of engineering firms that were present in Belgium, what is make really different? And what is the thing that newly graduated engineer really appreciate with Sweco.

Yes. Yes, good question. How can we attract young graduates in another way compared to our competitors? I believe what is key today in our branding is our focus on our sustainable development. So we've been very clear in the market in our portfolio, that this is the way forward. It really attracts a lot of young graduates. They want to join Sweco because they want to make a difference and they want to have impact. If you look at the project we are working on, we really look for those projects where we really can contribute and can make the world better. At the same time, I believe there are a lot of other branding elements which we use in our branding towards the labor market. This is, call it, a great workplace. And this is focusing on the company spirits, on how we can develop people, how we invest in training, development possibilities, the decentralized responsibility. So there are a lot of elements which we use in the branding.

And maybe a question for maybe also Olof but if you look at why the kind of European perspective, do you see that the engineers in, say, Germany, Netherlands, U.K. are looking for the same attributes?

Yes, I would say so because, I mean, the -- I mean, the world has become more globalized, meaning that, I mean -- and transparent, meaning that the knowledge about what is doable and what is needed for the whole society and what challenges we are meeting, everyone knows about that. So I would say, especially the younger generations, they are actually thinking more about that they can move to some other countries. They are expecting more and they are expecting exactly what Erwin is saying right now. But I won't say it's only for the youngsters, it's everyone that wants to work in a company that is leaning forward and want to kind of develop in this way. So yes.

Just looking at what opportunities do you see from Belgium to possibly look sort of in adjacent countries? Maybe that's sort of a group type of question. But just from your perspective, what you see into neighboring countries? And secondly, also, if you compare yourself to Netherlands, as you can see significant difference in organic growth in between those 2 countries. What, in your view, is the main difference there between you and the Netherlands?

Yes. To answer your first question, when we look at activities in adjacent countries, first, if we look at the Luxembourg market, just next to Belgium, we already have 3, 4 offices now in Luxembourg and we have about 100 people working in that country. So there are clearly some more opportunities to explore in that market. Looking at the south to the French market, of course, we speak the same language, which is an advantage. We look at specific opportunities. It's a huge country. We have one office in Paris, where we rather focus today on large infrastructure projects like the Metro. Compared to the Netherlands, when we look at the growth we've seen in Belgium, I believe each country is different. Each market position is different. I believe when we entered the Sweco organization in 2016, we felt that there was room for further consolidation on the Belgian market. It was -- the Belgian market in 2016 was quite stable and we have not seen a kind of a consolidation wave, maybe that already happened in the Netherlands, when I look at Dutch landscape. So there's room, it was the right moment and we were in the right position to do so.

If I can add to that as well. It has also to do with the project portfolio and the client portfolio that Belgium has compared with the Netherlands. So part of our business model is, as you know, from today that having a diversified portfolio but also bringing on the big contracts. So I mean when we implement the Sweco model, we work a lot about making sure that we have this right mix and that we have also the big contracts in our portfolio. So the starting point of the Netherlands and Belgium was different in 2016. And also, of course, what Erwin is putting forward with the market circumstances. And if you also look at the numbers, as I said before, Netherlands started at 1.5%. We saw back then that the -- how to say, the trust in the management and what we needed to do on the Dutch market to secure stability on the platform before we started to take on M&A activities. We had to go a bit further. So it has to do also with how aggressive we could work in Belgium with M&A, again, compared with the Netherlands. So in that sense, they are a little bit behind.

Daniel Djurberg, Handelsbanken. I was just curious about the trend you see in fixed pricing and also in the procurement processes if you see more smaller projects -- than due to some uncertainties or shorter projects, perhaps, I should say? Or is it more business as usual?

Well, when we look at our actual portfolio, we have a clear well-balanced mix of lump sum agreements on time and material contracts, fixed price. We have huge differences in contracts and in the way customers do the procurement. To answer your second question, whether we see a trend towards one specific direction, I have to say that rather within infrastructure, we see a trend towards more time and material contracts, where before most of the contracts on the Belgium market were based as a percentage on the investment amounts. I don't have to explain that, that contains a higher risk to manage than time and material. Each contract is different. It means different risk level, also means different way of handling, different way of follow-up. But I couldn't say that there's a trend towards one or more different kind of contracts.

Asset Management. On the decentralized model, could you give us a bit of color on what are the pros and the cons of having 20 plus teams running their own P&L, so in terms of efficiency but costs, resources -- usage of resources.

I like that question because I'm a strong believer of our decentralized model and I already also explained it. We don't have matrix organization. So it's quite simple organization with a decentralized responsibility. This means that we rely a lot on the leadership and the accountability of our team managers, which we do. It also means that we need to have a good follow-up, good governance and good monitoring of what is happening. But in the end, what we feel is that decentralized responsibility creates indeed a lot of accountability and ownership and people are proud. They're smart people. We look for the best and they are ready and eager to take up that responsibility. So we want to give them this space to maneuver, space to manage their business. So we don't want to bother them with too many administrative burden. Of course, there is a good governance and a follow-up but it's something else than strong hierarchic or complex organizational setups. And we rely a lot on our culture. We rely a lot on leadership and on collaboration. As I just explained on the first slide, if we win a project in Brussel and we need expertise from our Norwegian colleagues, I just pick up the phone and I call my Norwegian colleagues. So we don't have a complex structure to organize cross-border collaboration but we support the company's spirit and we support people that want to collaborate. And there again, we rely a lot on decentralized responsibility, which helped us a lot during COVID crisis, where all team managers took up the responsibility when we get stuck in lockdowns. It also helped us in the pricing. Today, when we face high inflation rates, we don't have one centralized program to ask for higher average fees but we ask all team managers to take up contact with the clients and to ask for the higher fees because they are the best to do so, they can convince the customers to pay for the quality of our services.

Raymond from Nordea here. Just one quick question. So you mentioned, for example, that you don't want to burden your key account managers with too much admin. Was there maybe a tangible difference before Grontmij joined Sweco versus after in terms of admin work or...?

Tricky question because now you ask me what's the difference between Grontmij and Sweco. On that point, honestly, I believe there was a difference between Grontmij and Sweco. Grontmij was a bit more centralized, a bit more organized in a top-down way. So that was something we discovered in 2015, 2016, when we became part of Sweco, where we really took the time to understand the difference and the strategic differences. And this decentralized responsibility, it was well perceived, of course, when it was presented to us. But it also took us some time to understand what it really means. And on that point, indeed, I believe there is a difference. We really try to limit the administrative burden on our team manager, also on our project managers. And because if you ask young people joining Sweco what they want to do, most of them, they want to work on projects and not on administration. So we try to limit and to lower down the administrative burden.

More questions.

There are -- no, no, no, I'm not letting you off the hook, yet. Yes, we have the chat. And we have Mark from -- the guest -- from Neuberger Berman, who's asking how many days of Sweco Belgium employees in the office and how many days do they work from home? How do you see this balance evolving?

Yes. Of course, the first days of the COVID were a bit awkward. In Belgium, we had quite strong lockdowns where people were really forced to stay at home, so heavy lockdowns. After several months, we felt it was not easy to ask people to come back to the office immediately. Well, we asked our team managers, so what to do, if they would prefer to have a clear guidelines set by the management to ask people to be 4 -- 3, 4 days in the office or to leave it up to them to organize the best way they can do in the teams. Well, there was a clear answer from our team managers. They said, no, we can handle the situation. We don't need the guidelines. Maybe that's the easy way to do, just putting forward a guideline 3 days in the office, end of story. No, they answered us that they as team managers, they want to have the mandate to organize in the best way they can do so, which they did. And when I look at the situation today, I believe we are at 60%, 70% of the people normally in the office, which is quite a high figure. And what we do, of course, we organize things. We organize a lecture or sit-in at noon, which makes it also attractive to come to the office. But then in the end, it's a team manager's responsibility. And we always say, client first, team first and the project goes first and then, of course, your individual private organization and it works well.

Okay. [ Jonas Ericsson from HH ] is asking, if you could say something about your projects with the subway in Paris, the Metro in Paris. That was a good question, wasn't it?

Also a question I like. We work on Line 17 projects in Paris, which is a new Metro line between the airport, Charles de Gaulle in the north and the city center, project is in execution today. So the TBM, the tunnel bore machine already arrived in one of the underground station. So in other words, in full execution. We met a customer a while ago, Asa and I, we got good feedback. And yes, project is on track and it's a huge investment. It's EUR 1.5 billion investments. And now the contractor was appointed for the last part where we will cross underneath 2 runways in Charles de Gaulle. So from a technical point of view, the challenge we like.

And it has been ongoing on for quite a long time.

Yes, I think it was almost at the same time when we joined Sweco. So I believe it's 2015, 2016, when we started that assignment. And when we opened a project office at that moment in time in Paris.

So good project to recruit youngsters.

Yes, it is.

Yes. Thank you so much, Erwin for your presentation and thank you for your questions. Now I would like to invite Ann-Louise Klasson on the stage, Business Area President for Sweco Sweden.

Thank you so much. And now you can hear me. Hi, everyone. So I'm heading the Swedish operation and has done so for 5 years. And I'm actually the youngster here. I only been within Sweco for 15 years. So compared to you guys, I'm a youngster. Sweden is the home market of Sweco and it's also the largest business area. So a big and interesting responsibility. So this is how it is. We have a net sales over SEK 8 billion and an EBITDA margin at 11.6%. We have a really strong market position. And if I'm listening to you and your journey, when I started back in 2008, nobody knew what Sweco was. But today, I think it's very common in the society to know what we are and what we stand for. So it's big journey here as well. We are, though, #2 on the market when it comes to size. And we have about 6,300 FTEs in the organization. And I'm really thrilled about the numbers we have around our clients. So we have about 7,000 clients in Sweden but we also have an export organization, so we do clients outside -- we do projects outside Sweden as well. And 29,000 ongoing projects. And we have the really, really small project. It could be down to a few hours up until the subway that you will see out here and that we will visit after. So we range broadly in the organization. And yes, I will brag -- be very proud of our Net Promoter Score. So 67 is really high and really nice feedback that we are getting from our clients. And I think it's something we've been working on for a while to have this close relationship, understanding our client, be curious in the feedback. But where we are in Sweden now with the market, this number is more important than ever for us. We are in a very tall country, as you know of, Sweden is a tall country and we have 50 locations, from Kiruna in North down to Malmo in the South. So very decentralized, very local organization, which is key for us. My organization is divided into 6 divisions. It's a fairly new organization, since 2 years back. And it's clear for the division managers what their role is. Their role is to become #1 in whatever they are doing but also understanding on the shifts coming short term and long term and prepare us for that. The smallest division here now is digital services with a huge potential to grow. And my largest one is transport infrastructure with about 1,500 employees. So it's a big range also here. We are #1 already in quite many areas like the whole building division is #1 in what we provide our clients. Transport infrastructure, #1, within water and environment, #1, energy, #1. And I'm really happy to say that our architects are #1 on the market with a bit over 600 employees. So that was Sweco Sweden at a glance. So decentralized local 6 divisions and we have a history of combining architecture and engineers. We are very used to this. We've been working with it for a long time. But today, I think this is more important than ever with the changes we have on the market, in complexity, the uniqueness that we create together is giving us something else that no one else can really provide on the market. And it's -- and I will come back to more in depth regarding trends and what's happening on the market. But to really create something sustainable, like the Blique Hotel, you need to work together really closely with the client, of course but also between the engineers and the architects. But we are also very careful in not just talking about the architects and engineers. It's so important for us that the digital solution team are working close to water experts, for instance, to create smarter solutions. And we see that the complexity is driving a need of innovation. Innovation to create new solutions, new way of doing things and also, like you touched upon also in the increased speed that we need to solve the climate solution. And to meet that, it's one key thing here for us to have the right culture, the right mindset, the right leaders, the best people but also making sure that we put diverse set of viewpoints into the room and we do that with competencies but also with diversity and equality. So Sweden is almost, almost there when it comes to true diverse and equal organization, with 38% women, both on manager level and overall employee level. And the diversity target is set to [ 20% ] and we have reached that this year. So a bit more about our numbers. So we have an industry-leading margin. I'm really happy and proud about that as well, especially in a mixed market, as we are in now, to be able to maintain a strong sustainable margin is important for us. I'm also proud that we are creating growth and really strong growth the last couple of years. As you can see, we were affected by the pandemic a bit lower but we have also created growth thanks to the changes that we see in the market now, the potential. And I will come back to you on this. We are, of course, not happy with the trend that we have on billing ratio and we are taking measures on that. And that includes improving organizational setup. We are looking into the onboarding, how fast can we get our new employees out in the projects. And we hired 1,200 new employees last year. So it's a machinery ongoing on this, of course but still has the potential to do it even better. We have a good cost control. But with the inflation and what's going on in society, this is a key thing for us to continue to focus on. So for a couple of years ago, we did a job in the management team to look on where are we heading? What's going to be important for us? What's going to affect our clients? And we spoke about sustainability, digitalization, all the megatrends and so on. And we said that there are some certain things that we need to focus on and that we need to understand and that each division needs to really be on top on. And we gathered in these 4 areas with the shifting client needs, all the sustainability, digitalization driven and so on, it's a whole package here, which I will come back to you on. But we also said that we need to look into how our clients are purchasing us, what kind of new demands they are putting on us. And there was a question to you regarding fixed price and so on. And Sweden is a time and material organization. And if we look from a Swedish overall perspective, there's no real big trend on this. But if we look at the division, there are trends. like we can see in the transport infrastructure, it's more fixed price or in the digital area. It's something we call item sales. So there are some movements below in the organization. We also see a competitive landscape transition and this is partly a long-term trend for us but it's also partly new trend. So what we can see in the Swedish market is that we have competition from abroad coming into the market. But due to new regulations and so on, we can also see existing other actors moving into our field, for instance, within CSRD. And also touched upon the engineering problem, so to say, in Europe and the skill complexity that we have. So we can see also in Sweden, a lack of engineering. And this is something that we decided to focus upon when we did this work that it is going to be a lack of competence. But what's interesting with that one is also that it contains a shift in competence due to AI, for instance, how we work, what we do. So we decided that we needed to focus on that as well. One thing I forgot to mention, in a competitive landscape, what we decided was to increase how we work with sourcing. So we have an organization in India with a couple of hundred employees that are supporting our organization where it's needed. So one thing we did when we saw that it's going to be a scarce resource with engineers, we said that we need to be really attractive when it comes to senior professional civil engineers because we were already on a really high level when it comes to young professionals. So we decided to invest stronger in our employee brand connected to senior. And well, this is the result. So we are in top in Sweden and I'm so proud of this result. So together with Polestar, Spotify, IKEA and Google, we are in top in Sweden. So this is the really key for us to have the best people. The best people will also bring in the best projects for us. And then you are in the positive movement. So apart from organic growth, we are also working with acquisitions, not as much as you are doing in Belgium. But again, it is a different market and we are more consolidated in Sweden than the other countries are. But we have selected some really strategic important acquisitions in Sweden to tap into new growth segments. And in this selection, you will find energy with the Petro Team, Tovatt Architects, urban planning, which is something that we did before but they strengthen us in it. AdviceU is a digital strategic competence, advisers in early stages. And also, you mentioned Medins and that's also on the picture here. So Medins are doing water surveys and it's a scarce resource. This is something that we see will grow for us. And together with the competence we already had, together with Medins, we are now #1 in Sweden in this area. Here we are. Okay. Growth areas. This was really hard to select a few words on what to put on the slide because it exists in so many ways, in so many areas that are interesting for us. Just for instance, with the new regulations and laws coming from EU, there is a need -- a growing need for strategic advisory service. So one area that's growing for us is that CSRD competence, where we can support our clients in how they will respond, how to act, how it affects their organization. But there's other parts here as well that's really interesting. So I mentioned before, we are #1 in water and water supply, water cleaning, all of that. But water is also like you touched upon, we have higher sea levels, we have more flooding, more rain coming. So how to protect the society. And then it's really interesting to let digital solutions meet water competence. So our digital team, together with our water experts, for instance, formed something we call Smartwater. So Smartwater is where we're using AI competence to provide our client with risk mitigations that can predict the future. In another way, work more efficient. And that's, of course, is applicable to regardless of because it's a really interesting meeting we have there. Security, well, it's on our lips as well as the society, especially in Sweden. And we are, of course, talking about security from different perspective. It could be cybersecurity as well as protecting our roads, railroads or houses. Energy. Energy is, of course, on everyone's lips, the transformation, the growth in Sweden. We're supposed to double the energy production. So how is that going to be? So for us, energy is a growing area, both when it comes to production but also the strategic advisory services. How are we going to move? What kind of decisions do we, as a client need to take. Circularity is also something really interesting. And here, we can learn from Europe because Sweden is behind when it comes to circularity. So Blique Hotel is a really good example, where we have used circularity to reduce the CO2 emissions. But circularity also comes into the industrial transformation, where we can connect different industries. For instance, one industry has too much heat and another one needs heat. So we combine them together. I hope you have some questions about this later because this is really interesting, I think. And -- but I think I will stop there actually. And moving to this. So you all heard about the green transition in the northern part of Sweden. And it's driven by industries. But of course, what's interesting is the growth and the production of energy, together with the needs in infrastructure, together with the need of urban planning. So about 100,000 citizens are needed to fulfill the green transition up in the northern part of Sweden. And how do you then attract people to move up there? You need houses, you need daycare center, culture and so on and so on. So that's what we are also working on. And to be a bit more specific on it. So we are securing future power supply in the northern part of Sweden as well as in the rest of Sweden. We are doing industrial transformation and working with the new industries as well as the established ones. So new could be Northvolt. The established could be LKAB or SCA that we are supporting. A really nice example with critical infrastructure is one of our larger projects up in the North with Norrbotniabanan. And urban planning is, like I said, supporting the society to develop, to attract and have houses and so on. One thing that didn't fit on this slide but I think it's really important also to mention. We are #1 when it comes to environmental permits. And we do about 400 every year. I mentioned in an article once that it's in the eye of the storm in Sweden and also in many other countries. But we are involved in many of these things happening up in the northern part of Sweden and the rest of Sweden when it comes to permits. Okay. Final slide. So today, you all are invited to follow us to Nacka site, where we will look into the new subway in Stockholm. And it's one of the largest investments ever for region of Stockholm. And I mentioned in the beginning that it's one of our largest projects as well. So we have been working with this since 2014. And if you have been paying attention on your phones today, you saw the press release that we launched earlier this morning. So we have now won a new contract worth SEK 250 million, with that contract, we will continue to work with the subway up until 2030. So really, really long project. And we are doing that together with our partner [indiscernible] and the one we launched today, we will deliver site supervision, works coordination, expert support service for all utilities. Railway is supporting system for the implementation of the 11.5 kilometer new rail and new -- 7 new stations. So a really interesting project that as well. And here again, we have a good example on where our engineers are working together with our architects. So we have engineers involved from 2014, we have won stations where our architects are designing and now this one. So it's different pieces of the puzzles coming together. And if you haven't tried the VR glasses out there do that because it's quite fascinating to try out and see how it looks. Okay.

Thank you, Ann-Louise. And yes, we're getting really good at this. So Cristina, you hand out the mic and you ask the questions.

Dan Johansson from SEB. I think I have 2 questions. I can take them both at the same time. You've done a few M&A in Sweden as well as the other countries. But no larger M&A, more of the sort of niches that you find interesting. Is it totally out of the table to do a bit larger M&A as well, adding a bit of people, for example, in the North? And perhaps also another question, I can take it at the same time. In terms of the onboarding, how in practice do you improve on that? Is this sort of digital training modules? Or how can you actually speed that up, a bit more there.

I don't know, do you guys want to answer on the M&A part? Or should I take it?

[indiscernible]

Yes. I would say it's not -- yes, it's, of course, interesting also with the size. And I think what I wanted to show in my presentation is that it is growth potential if we find the right candidate, of course.

And I have no -- nothing to add because that is the answer.

Okay. So we have done quite some work now in how to onboard from a central perspective, when it comes to doing introduction as much as we can actually before they start. And then it's up to the manager to meet them and train them and so on. But everything that we can, we are trying to do before or right when they start. Then it's more how used are they to the consultant work. Do they need training like that, that takes longer time. But I think for Sweden, it's critical, of course, to get them out in projects as fast as we can but also to get the personnel turnover down because they will calm the organization a little bit. It's a big work that we did last year with 1,200 new employees coming in together with personnel turnover. But now we see that one coming down, like Olof mentioned. So that will support the managers, so they can be more efficient in the onboarding as well.

A few more questions from me Johan Sundén at Carnegie. The first one is on the NPS score, which you were very proud of in the beginning. Is it possible to give some color on the kind of industry average and what potential there are to convert that NPS score to higher fees?

Good question. I actually don't know how it looks on the market. I haven't seen those numbers and maybe you guys have seen them. No? No? No, it's a no on that one. I think the NPS scores shows that we have a close relationship with our clients, that we understand what they are going through and their needs, so we can be advisers to them. That also means that we win the projects we want to win. And I think with the market and the mix market we have in Sweden today, we are quite successful when it comes to raising prices as we see different situations all over the map that we have. So in some way, it's a yes on that one. But I think the correlation that you are looking for in your question could be, we're higher, of course. So it's a potential, I guess, we can say.

Yes. And my second question are related to the construction market and the building area. Would be very interested to hear what kind of planning assumptions you have looking into 2024? And what you are seeing currently in the market and how you are tackling with the current troublesome situation?

Yes. And I'm guessing we don't want to go into those details. Asa? Olof?

As we have reported and the market is mixed, it's the residential housing market, it's the commercial real estate market that we see is weaker. And then parts of the industry and more traditional industry is a bit weaker and that is what we reported in Q3. And with that said, I have to say that if I look from my horizon to Sweco Sweden and what we are capable in this market of selecting and deselecting and growing in the segments that actually is stable, we are doing a good job. And the order backlog is stable.

Yes. Johan Dahl, Danske. You talked about change buying behavior. You talked about some change to competitor behavior as well. To what extent is that structural for this market domestically in Sweden because looking over an extended period of time, earnings have been relatively flattish. You talk about a strong market. You have a market position, employer branding, et cetera. So what has changed here in your view, which may mean that economies of scale aren't what they used to be.

So that slide that I show is the work we did looking into the future to 2030 on things that we need to understand on the market, need to work on. And again, if we look on a Swedish level, it's no real trend. But if we look into the different divisions, we can see trends like on the infrastructure side, we can see, over time, more competitors coming from other countries into Sweden, for instance. So it's a bit different regarding how you look.

But would you say that profitability in Sweden for the entire sector is sort of deteriorating?

No. I think our stable margin shows that it's not.

Yes, sure, you're the market leader, you could be outperforming but you claim it's fairly stable than domestically in Sweden in terms of margins? Is that your view sort of the profitability, the way it's developing in Sweden?

Well, if we deep dive into Q3, I think we saw some differences regarding how it looks. I don't know. You have done the deep dive, I think, Olof.

Without knowing sort of the full sort of picture of the profitability in the industry, my impression is that we may have seen a bit of a slow short-term decline maybe in the industry. But at the same time, what I said earlier about discipline in terms of price increases, et cetera. I think that goes for Sweden very much as well. So I wouldn't say even if you will see the short-term fluctuations with the sort of mixed market picture we have right now. I can't -- don't see that sort of there has been a general decline or general change in the profitability in the market. You do see a bit of volatility but not a step change, I would argue.

Fredrik Lithell from Handelsbanken. I was thinking about your short comment around you see some movements towards more fixed-price projects with Sweden being a very traditional time and material market. How do you prepare for that? Is it a big move? Is it very slow? And how do you prepare the organization for that in order to not get caught up in wrong calculations on fixed price projects?

We have seen it mainly in the transport infrastructure area, and we have trained the organization well. We are really business-minded and have a really good process when it comes to our tenders, in doing the calculation, really looking into the risks. And here, I would also like to say that we have good support in how to work with fixed price from our colleagues in other countries like Belgium because you're really strong in that. So it's a good benefit to be in the family from that sense.

Can I just add to that question because it's normally a view, especially in the Nordic countries, that it's either/or fixed price or time and material. I mean both Ann-Louise and Erwin has related to that. We see a mix depending on what segments we look at and what type of projects. With that said, it's not so that you kind of have higher profit levels in fixed price projects or higher profit in time and material projects. But it's normally so that if you work in time and material projects, you think that you should move into fixed price because then you can make more profit. And the other way around, if you are in fixed price, you want to go to time and material because that is -- the grass is always greener somewhere else if you are in a tough competitive market. But I would say that your question is really good because what I have seen from my horizon is that the movement from time and material to fixed price or the movement from fixed price to time and material, that is where the risk lies, meaning what Ann-Louise is emphasizing that we're training and we are trying to have the right people in place to steer and lead and we are a little bit more in control to look at those projects when we are moving from one condition in a project to another.

Which, for instance, does mean that if you select a project manager to drive that, you're really careful in who you select.

Daniel Djurberg, also Handelsbanken. I'm a little bit wondering about the -- also these large projects in the northern part of Sweden, we have the [indiscernible] of Kiruna. We have the Hybrit. We have Boden, defense investments all over the place. But can you say, is this still in the beginning? Or have you placed the biggest part of the project from your perspective? And also another question that I can take at the same time. On the use of these digital twins. To some extent, you move also human capital into more structural capital for example, building a factory. It's perhaps easier to replace this, when building the second factory. So my question is, is this in essence, creating better stickiness for those helping the customer with this? Or is it the opposite? That it's easier to take this digital twin and replicate it and do another procurement because all the data is already in the cloud or whatever.

Okay. Good question. So no on the first one. No, we are not above. It still continue. We still see growth. We still see things happening and it's still a need to develop the society to be part of it, so to say. So it's not ready. So it will continue. No, I dropped the second one -- the digital twin. So it's very -- every product is so unique. And we have touched upon this in our organization, how we can support some of the clients who wants to build factories similar but it's still so unique. So we can partly use the competence, of course, the experience, the reference and so on but the uniqueness makes it hard to make it actually more efficient. So you still need to go through the process. We still need the people and so on. So if we take the larger projects that we are doing up there when it comes to industry, we have the local experience, we have knowledge but we support it with competence from other parts. And in the industry, we are, for instance, working very close with you but also with Finland, we use the competence all over the place.

One last question.

Raymond from Nordea. So a short one, you mentioned previously on initiatives to deliver on the margin target, mentioning, for example, improving the organizational structure. I'm not sure maybe I'm reading too much into this but could you maybe describe how you're working with that, give some more color and maybe compare it to how other divisions or countries are having their organization set up right now?

I think with a high speed of change, together with high level of personnel turnover, we have had a little bit too many managers in the organization. For instance, we are looking into that. And we have really good guidance from the Sweco model in how it should look and how we can drive the business. So we are leaning on that and making sure that we are following the Sweco model. And I think the work that you have done in Belgium is a good example. And the learning is also that this is something you don't fix once and leave behind. This is an ongoing work that you need to continue to keep your eye on all the time. And really together with the high speed of change that we are seeing on the market, it's important to follow it and track it.

Thank you, Ann-Louise. And then I welcome back Asa on the stage.

Now we have come to the end of this presentation and thank you for listening. The purpose of this day was to deep dive in our business model and deep dive in our diversified business. And also show you what great opportunities we see ahead and how we should make sure that we're actually capturing those opportunities on the market. We will focusing on continue to delivering shareholder value over time. We will, as we also reported in Q3, continue to focus on cost control, efficiency and increase our fees to expand our margin and to provide profitable growth going forward. And also with this financial position, we have continued to focus on our M&A agenda that we had tried to put a little bit more flavor on today. So thank you for being here and thank you for good and insightful questions from your side as well. And a big thank you to Ann-Louise and Erwin that has contributed today. Normally, you meet Olof, myself and Marcela when we meet at the quarterly reports but it's always nice to be able to provide you with a little bit more from Sweco side. So thank you very much.

So the moment we all have been waiting for, lunch will be served outside in just a few minutes. And there will still be time to try out the VR, if you -- or again, perhaps if you felt that you wanted more. The buss that will take us to Nacka will leave at 1:00 p.m. at -- and I'm looking to see if I can find some logistic colleague here. But I think it's [indiscernible]. Yes, Cristina, it's -- yes. So 1:00 p.m. outside, the bus will leave for Nacka and lunch is served now. Thank you for joining us here at Blique and thank you to all of you joining us online. Have a nice day.