Systemair AB (publ) (SYSR) Earnings Call Transcript & Summary

Welcome to Systemair Q4 2024 and '25 report presentation. [Operator Instructions] Now I will hand the conference over to the President and CEO, Roland Kasper and CFO, Anders Ulff. Please go ahead.

Thank you very much, and good morning all, and very welcome to the presentation of our fourth quarter report, concluding our financial year '24-'25, which is also our 50th business year. We will start off with a rather short presentation, and then we will open up for questions at the end. The presentation you will find on our start page on the Investor Relations website if you scroll down a little bit. And by that, I hand over to Roland to start with the presentation.

Thank you, and good morning, everyone. Roland Kasper, CEO; and welcome to our quarter 4 presentation. I'll jump directly into it and go to the agenda. So what we want to cover in this short presentation would here be Systemair, of course, in brief, then the fourth quarter summary and then the fourth quarter financials presented by Anders. I'll then share some sustainability highlights, projects and product launches and then we open up for the Q&A. By that, switching then and going to Systemair in brief. So Systemair, we're operating based on our core values of simplicity and reliability. Our business concept is to develop, manufacture and market energy-efficient, high-quality ventilation products. And with our customers in focus, we are determined to meet their expectations on delivery reliability, availability, sustainability and quality. Our company, as you know, was established in Skinnskatteberg in 1974 by our Chairman and Founder, Mr. Gerald Engström. And in our last fiscal year, we achieved a total annual turnover of around about EUR 1.1 billion. Systemair was listed at the Nasdaq Nordic Stock Exchange market in October 2007. Today, we proudly operate our own sales companies in 51 countries, together with 26 factories in 19 countries. And with our about 6,700 employees, we, in Systemair, are present and sell to more than 135 countries all around the world. Switching to next slide, a short strategic update on our fourth quarter. So we had a strong organic growth in all European regions. We also celebrated the inauguration of our new 19,000-square meter state-of-the-art manufacturing facility in Hyderabad in India in the quarter. And finally, Systemair's emission targets were approved by the Science Based Targets initiative. This is a significant milestone in our sustainability work. Then on the right side here, you see the highlights within public affairs in March. We, as Systemair, participated on the ISH fair in Frankfurt in Germany, which is one of the biggest ventilation or HVAC fairs in the world. This year's exhibition in March Systemair proudly hosted some of the technical and legislative discussions forums us. Also for us, a successful fair as at the end also counted more than 166,000 visitors, which is a new record. As always, we also presented some exciting new and technical cutting-edge products especially to mention here our new air handling units versions from Topvex and Geniox with integrated heat pumps, but also our new and smart and efficient air-conditioning solutions. And finally, I think worth to mention the old technical totally redesigned and equipped with newest possible technical solutions, Menerga compass units with CO2 as refrigerant, and I'll come back to that later in the presentation. Switching then to markets in the next slide, Slide #5, with just a short look in the markets. As you know, we are a global and diversified customer base which provides us with a solid foundation for profitable growth. Looking at the different regions this quarter, starting with the Nordic region, which represents 17% of our total turnover; Western Europe has 44% share; and Eastern Europe stable at 12% share; and North America, the same, 12%. Other markets, which, as you know, incorporates north Africa, Turkey, Middle East and Asia, is stable at 15% of our total sales in the quarter. This is actually the first time all regions are unchanged in their share of the total sales versus the same quarter the year before. And by that, we continue with a closer look at the financial outcomes in the quarter, and I hand over to Anders.

Thank you, Roland. So first of all, our net sales amounted to SEK 3.002 billion compared to SEK 3.069 billion last year. This corresponds to a decline in sales of minus 2.2%. This decline, however, mainly relates to currency effects. The organic growth, as mentioned by Roland, was positive by 0.5%. We can conclude that for the third quarter in a row, we are reporting an organic growth in a relatively slow market. Slide #7. To give a bit more details behind the net sales development, we saw organic growth in all European regions while North America, Middle East, Asia, Australia and Africa had negative development in this quarter. Acquisition of PHEM in Malaysia had a minor effect on sales and contributed by 0.3%. And then finally, currency effect. The strengthened Swedish krona resulted in a negative effect on sales by 3.0%. Our main currency exposure is towards euros, U.S. and Canadian dollars and Norwegian kroner. Going to Slide #8. We come to the geographic breakdown, and I will talk about the organic growth rates for each region. Starting off with the Nordics, where we saw a decent growth for the quarter in Sweden, Denmark and Finland. While the Norwegian sales declined slightly, but overall the market has been holding up quite well. All in all, a positive organic growth in this region also in the current quarter of plus 4.5%. Going to Western Europe, we saw a growth of 5.5% for the quarter, which we think is quite strong. The region has experienced positive development in Netherlands, France and Italy while the German market is still not back on track along with countries such as Austria and Spain. We although are happy to see yet another quarter with positive organic growth in Western Europe. Going into Eastern Europe, we had a solid organic growth of 11.2%. Sales increased in Czech Republic, Slovenia and Slovakia while Poland, Lithuania and Romania declined. The sales in this region tend to be quite volatile from quarter-to-quarter due to a high share of project-driven sales. And then over to North America, where the organic growth rate was negative by minus 8.8%. We saw good growth in Canada while U.S. sales contracted. The Canadian growth relates mainly to our residential products. Certainly, the ongoing tariff discussion is creating a volatile market situations in U.S. As described in the report, we have a regional production strategy with factories, both in U.S. and in Canada. So if needed, for economic reasons, there are possibilities to transfer production volumes and competence from Canada to U.S. to mitigate these effects. We also saw boosted sales figures in the last quarter due to a change in the legislation for refrigerants implemented from January. This had a negative impact on our fourth quarter in North America as well. And then Middle East, Asia, Australia and Africa, we had an organic sales decline of minus 16.8%. This decline was mainly driven by the markets in Turkey and India. In India, we had delivery constraints while moving the production, as Roland mentioned, in Hyderabad, to a completely new factory. We are now back to normal delivery capacity. And in Turkey, last year's Q4 was boosted due to a large project delivery, resulting in tough comparable figures. Most of the other countries in this region showed continued good growth. All in all, the organic growth in total amounted then to plus 0.5%. Then heading into Slide #9. Our gross margin in the quarter was again strong and amounted to 36.5% compared to 35.1% in the previous year. We are happy to see this continued positive development. This is due to a high utilization in several of our more important factories, a favorable product mix, but also the contribution from implemented cost reductions and efficiency measures made. Our adjusted operating profit amounted to SEK 260 million or an operating profit margin of 8.7% compared to 6.8% in Q4 last year. The adjustments for the quarter relates to bad debt losses of SEK 13.9 million, the acquisition of the 2 last agents for Menerga in Germany at a price of SEK 27.1 million. And we have also adjusted for the capital gain of SEK 27.8 million from the divestment of Menerga's factory in Mülheim in Germany. Selling and other expenses in comparable units increased by SEK 50 million. Going to Slide #10. Profit after tax amounted to SEK 118 million compared to SEK 167 million last year. The main difference here relates to negative currency effects of minus SEK 82.3 million on receivables and bank balances. Our interest expenses amounted to minus SEK 21.4 million compared to minus SEK 22.9 million last year in. And the tax rate for the period amounted to 28.7% corresponding to SEK 42.3 million in tax. And then Slide #11, my last slide. A positive cash flow development for the quarter. Our working capital decreased by SEK 89.2 million, leading to an increase in the free cash flow. This was mainly due to decreased trade receivables. Our net investments in the quarter amounted to SEK 140.6 million relating to finalizing investments in Canada and in Sweden. And this leads to a free cash flow of SEK 240.3 million compared to SEK 76 million last year. Our net debt is lower than last year and amounts to SEK 901 million compared to SEK 1,070 million 1 year ago. The net debt-to-EBITDA amounts to the very low 0.56, and we have plenty of headroom for strategic M&A and further investments. And finally, as you might have noticed, the Board of Directors suggests a dividend of SEK 1.35 per share compared to SEK 1.20 last year. The suggested dividend amounts to 41.3% of the net profit, which is above our financial target at 40%. And by that, I hand back to you again, Roland.

Thank you very much, Anders. Now let's have a look at some of the highlights in the quarter and our strategic priorities, going directly to Slide #13. So Systemair, we [ aim ] to be an attractive workplace with an inclusive culture that promotes employee development and entrepreneurship. We build strong relationships internally and externally based on our expertise and trust. We really want to improve our profitability by taking advantage of economies of scale and with a strong local presence, with decentralized decision-making, want to be close to our customers. A global and truly diversified customer base gives us a stable and resilient foundation for profitable growth through organic investments and active acquisition agenda and a wide range of quality products based on standardized technical platforms with energy efficiency and improved indoor air quality as guiding principles. We meet the demands of tomorrow by looking at the whole life cycle of the product to improve resource efficiency and the client footprint. Our service business can optimize the products and operations and promote long-term sustainability. Switching to next slide, Slide #14. So this, to me, summarize what we do. We create better air every day and worldwide. To show you some of the applications that we actually serve with our products, I just want to mention those that you see here on the screen. It's mainly the commercial applications, which is the biggest for us, followed by industrial and then the residential ventilation. Infrastructure and transport, including applications like tunnel ventilation, metro roads and tunnels. Health care is growing strong, especially after the increased awareness and latest update of the EPBD, the European Performance of Buildings Directive (sic) [ Energy Performance of Buildings Directive ]. It is to be expected that this will continue. Education like schools and classroom ventilation. And hospitality entertainment, which is covering everything from cinemas to shopping malls. And of course, as everyone, we also cover data center applications. Next slide, Slide #15. Ladies and gentlemen, switching over to our sustainability highlights. This has been overall a successful year for our sustainability performance. Our emissions and work-related injuries with sickness absence continued to have a positive trend. We're exceeding the targets that we set for '24 and '25. As a result, we will achieve 2 out of 3 prioritized sustainability targets for the year. On the right side, you see the targets we set. The first one is the decrease in our Scope 1 and 2 emissions intensity target, which was set to 32% and we actually decreased 36%. On the work-related injuries with sickness absence, the target was set to 15% and we achieved 19% decrease. And sadly, our target for the amount of female leaders, our target was 24.7%. Due to restructuring in Turkey, managers and functions have left the company and the outcome is impacted negatively here. So female leaders, the achieved is 23.6%. Next slide, Slide #16. As already announced initially in the beginning of this presentation, we are proud now to finally we can say the Systemair, our science-based emission targets are approved. So Systemair now has the science-based emission targets approved by the Science Based Targets initiative. This, to us, is a significant milestone in our sustainability work. The science-based target had been set for near and long term, covering emissions in Scope 1 and 2 and 3. For net zero greenhouse gas emissions, and for us, the target is fiscal year of 2050 and '51. Then going to the next slide, Slide #17, just to present one of the projects here that we supplied in the quarter. I want to show you the first one here is the project where Systemair is supplying to the event district and here a car park installation in Diriyah, Saudi Arabia. This is actually the fifth car park that has been awarded to Systemair in this new region of Diriyah called City of Earth, which is the area of the King's ancestors. This car park consists of 4 levels totaling 160,000 square meters and a capacity of 4,500 cars. The project includes supply of fans and jet fans, testing and commissioning and we will be the first complete delivery under the label of MADE IN SAUDI ARABIA with an approximate value of EUR 960,000. This label, MADE IN SAUDI ARABIA, means that these are products that we are producing and installing coming out of our own facilities in Riyadh. Switching to the next slide, Slide #18. Now switching over to look at some of the product launches. At the ISH in March this year, the visitors got an exclusive first look at our products, one of them being the Topvex with integrated heat pump. This unit today is a compact all-in-one unit designed for streamlined installation operations, featuring an integrated rotor heat exchanger that delivers up to 90% efficiency and combined with a reversible heat pump. It maximizes energy recovery and climate efficiency reducing the total energy consumption by up to 65% compared to traditional systems. The Topvex heat pump unit is a top connected air unit and achieved very high COP, coefficient of power, and EER values. It is also suitable for both renovation and new builds as in our basic design, which is a nice feature, it always fits through a 900-millimeter door opening. Very nice for renovation purposes. The next slide, to conclude the product information here. This is another product that we also presented on the ISH. The next here is actually a cutting-edge development based on the new Menerga platform that we implemented in Maribor after the move of the Menerga manufacturing from Germany to Slovenia. We launched this Menerga CO2mpass units on the ISH. The unit reduces the carbon footprint by delivering top performance and represents a really big step forward using natural refrigerant R-744 or another expansion, CO2. This refrigerant sets the benchmark for a minimal global warming potential as it has the GWP of 1, which means it's completely free from per- and polyfluorinated substances for cleaner, safer future. It's all now on our new platform, the Menerga NX from Maribor. By that, I switch over to the last slide and open up for Q&A. Thank you.

[Operator Instructions]

So if we start by going back to the development in North America. Obviously, it feels a bit uncertain with the tariff situation and everything and -- as we saw growth slow down a fair bit in the quarter. Then perhaps on the volume side, do you sort of expect this weaker number in North America to be more temporary? And sort of if you could talk about that shift throughout the quarter, sort of comparing February to March and then April?

As mentioned during the presentation, there were various reasons behind the dip we had in North America, one of them being that Q3 was boosted a bit due to a change in legislation for refrigerants and so on. But of course, we are coming back more to a situation of seasonality, especially on the classroom units that we're selling out from Canada right now. So that's another reason. And of course, there's turbulence especially on the U.S. market right now due to these tariffs, and I guess, now ongoing discussions about steel and aluminum and so on. So a bit more cautious market, I would say. And the reason behind this seasonality, I would say, is also the reduced COVID incentives in the market that we had previously that boosted sales as well. And so -- but we are quite optimistic, and we believe that volumes are there still to come.

I see, that's clear. And sort of you mentioned that tariffs and that uncertainties is seeing a bit, do you -- sort of did you see that towards the end of the quarter? Or was it quite similar comparing the start and then...

I think -- Roland here. I think at the end of the quarter, we saw an ease on, let's say, the uncertainty on the market behavior. Absolutely, yes.

Okay. Very clear. Then second question on the M&A side. You're talking about your strong balance sheet and sort of now that we enter a new fiscal year, if you could talk about the pipeline and how your discussions are going around that.

Yes, of course, for us, very important, very attractive topic. We are having a quite positive pipeline, a lot of projects that we are running. But as you know, some of them might end in agreement, others that you have to postpone a little bit depending on the different discussions. But we are quite optimistic and see a very positive pipeline with some close buy decisions. So very good for us.

Yes, we believe quite strong report, especially, I mean, the growth rates we have announced for Europe here and like a trend, you could say. And what we have seen, I mean, in the other markets in North America, we see as more as temporary bumps on the road there.

Okay. I see. Then speaking about the German market, it seems to continue to slow down as well. Do you see any signs of improvement there? Or what's your expectations there as well?

The feedback we get from our local companies in Germany is more a clear sign of stabilization. There has been a lot of ups and downs, driven by political discussions, and of course, also the influence of activities due to the European situation around the wars. So -- but now it's more stable and I think that's a good point to start with, at least.

The next question comes from Adela Dashian from Jefferies.

I'm going to continue on the topic of the U.S., and I appreciate the commentary around the uncertainty of the market improving somewhat towards the end of the quarter. Just on tariffs specifically, are you able to quantify how much of your sales today in the U.S. that you actually import from Canada? And are there any other countries that you have imports from other than Canada to the U.S. market. And that's both for components, but also equipment, please.

Yes. That's a good question. Thank you for that, Adela. So we are quite local for local, I would say. So both Canadian factories are mainly producing for Canada, especially the residential unit manufacturing entity. The one doing the classroom units that we have in Canada also, of course, has volumes down to U.S., but that is in quite limited way. And it is -- the importer has to pay the tariffs, which is the distributor of companies in the U.S. There are not too many of them. So we see limited impacts. And we also have the possibility, if this should be in a final stage on a higher tariff levels than it is today for taxes and all, we could and we are prepared to move the manufacturing to our American factory, if that should be the case. But at the time being, we don't see a bigger issue. It is all handled by the market in a good way today.

Yes. And the products are exempted as it is today, just to clarify.

And we have no other components that we actually are exporting in. As I said, we are local for local also with most of the components that we need for manufacturing. So there is none or very little impact only.

Okay. Okay. That's very good to hear. And then just on the seasonality aspect that you mentioned also in the comments here. Maybe this has changed versus historically, but what would you consider to be the strongest month for the U.S. market specifically in the year now with increased focus on schools and hospitals and so on?

I think the dimension of the seasonality is, I would say, mainly related to our manufacturing entity in Tillsonburg, outside Toronto, where we produce the classroom units. And now a little bit before pandemic and before component problems, it was quite clear that you deliver most of the projects when the schools are empty, we'll say that there are holidays. Then throughout pandemic and especially with the component shortage situation, it was more of the situation of if you can deliver, please deliver, so there was no seasonality anymore. And this is now coming back in a more normalized environment. There is no component shortage. And of course, the schools are operating as before. So this seasonality is coming back to more normal stage, which is around New Year's, somewhere in spring and then during summer are the main months for deliveries for the classroom units.

Okay. So that's one of the reasons why you have confidence that Q1 will be -- there will be a rebound already in the first quarter. Okay. And then on the Indian -- the production relocation in India, is this now over and done with? We shouldn't expect any lower volumes to drag on to the coming quarters that's affecting regional sales there?

Yes, that is over and done. This new factory was inaugurated in mid-March. And the stop that we had is that we had to move a factory. Even though it was some few hundred meters, but we have to close down and move over a whole manufacturing entity, which makes around about 30% of the volume in India. So we had to stop there for 3.5 to 4 weeks that impacted us, but that is totally over. And just now we are even in a ramp-up because we now have quadrupled the factory space and doubled the capacity, so we're in a ramp-up phase there. So on a positive side.

The next question comes from Carl Ragnerstam from Nordea.

It's Carl here from Nordea. A couple of questions. Firstly, if we continue on the U.S., could you help us understand a bit the organic development by product segment in the U.S. between sort of school ventilations and residential? If we -- and also on that, what you also mentioned some perhaps headwinds, I think you said, from refrigerant regulation, I guess you're referring to the A2L regulations. So while we saw a prebuying effect during, I guess, Q4, I guess it's a reversed effect now. So how long do you think that would last, if that is what you're referring to?

That effect is already over. This was new legislation from 1st of January, which boosted sales than before this legislation was enforced.

And just to make that clear, the A2L delivers -- yes, the A2L deliveries that you're referring to, which you're talking right in that boosted our sales in November, December of last year related to the heat pump applications that we deliver out of the Tillsonburg Gutenberg factory in Canada for classroom applications and for Geniox also. What we have to explain maybe is that the residential sales, Canada is developing really well. Classroom units we just discussed, out of Toronto. And in U.S., the manufacturing facility is totally designed and focused on fans. All different kind of commercial fans, kitchen exhaust, the roof fans and Radon fans. And some of those applications are going to residential, others to commercial and light commercial, it's a little bit of mix of that, but that's where it is. So when the overall building or comfort ventilation is a little bit flattish or the market is a little bit sluggish and then waiting what is happening, then we feel that mostly in the U.S. The residential development in Canada has been much stronger than in U.S. And the classroom units, as I said, only part of that is going to U.S., but the rest is going to Canada also.

Okay. And coming back to the A2L regulation. So while you had the boost in November, December, you think it already normalized because listening to other companies, it will take a while. But for you, you think it's already done. Headwind from...

Yes. For us, it is a mix a little bit because we supplied a lot of the units that were pushed into November, December to the American part of the business. As I said before, a little bit -- the Canadian applications or Canadian projects, they have been a little bit more long term or midterm looking all the time. So there is more regular volumes coming to that. And on top of that, in that factory also, as discussed earlier with one of your colleagues here, we're coming back to more seasonality where now the school units are coming more into season. So that is why it's the same factory, but other products that are coming now.

Okay. That is clear. And coming back to other markets or rest of the world, the drop there, to what extent is it driven by India? What is the sales drop year-over-year related to the production move?

For rest of world, we had 2 impacts. One is the India, the move of the factory, which is around about 30% of the Indian turnover. Then the other part that was an impact in the quarter was also, as Anders mentioned, Turkey, where we had in the same quarter the year before, we had the bigger deliveries to electric car manufacturers. So these are the 2 main impacts. And just the deliveries out of Turkey, if I remember right, one of the projects that we presented last year, the same quarter, for example, was a big car manufacturer where the volumes were going to one of the countries out of Turkey there. So these are the main reasons that we have.

So if you try to...

Sorry. Go on, please.

If you try to sort of remove the production move in India from the negative 17% organic growth in Middle East and Asia, what was the underlying organic growth? That is my question. Secondly, I think, on Turkey, we had -- have heard rumors at least from the trade fair in Germany talking to competitors that Turkey is the weaker market. Is it solely the comparisons you think? Or do you see a weakening in the market? Or is it still as robust as before? Or how do you see the Turkish market out there?

Sorry. The Turkish market, you are totally right. The Turkish market, for the time being, is weak. I would say that also, a lot of the -- as you know, earlier, quite beneficial export markets out of Turkey are weak at the moment. So midterm outlook, Turkey is not a [ strengthening ] symbol, I would say. The situation is quite different in Middle East and India and Malaysia for us where the market is really ticking positive upwards. So it's only Turkey that is stable on a lower level today.

To clarify the question on India then, the drop we had there, I mean I would say, roughly, it's constitutes of like SEK 25 million out of that. So main reason in that region would be Turkey.

Okay. That is very clear. Sorry, a final question, if I may. With the slowdown in the U.S., I guess, even though you've seen improvements, do you consider taking out costs in that market to adapt to potentially slower environment? Or do you think that the market will bounce now already in Q1, hence, you'll keep the cost base? Or how do you manage these uncertainties in what you see in North America right now?

We do a little bit part of -- we see that the market is slowly coming back, at least in those applications. We have invested quite a lot in rearranging both -- to your estimates here, to both the organization, but also in new products and product development for mid and long term. So we have adjusted already a little bit in the organization. We have also moved a little bit products to strengthen the footprint in the U.S. So there are a couple of different activities that have been done already to strengthen ourselves for future.

The next question comes from Anna Widström from DNB Carnegie.

Just a follow-up on India then. When you had the sort of the factory being closed down, have you built the backlog that maybe going to show during Q1 or Q2? Or should we sort of see that pause as orders being lost?

No. We had a really nice backlog in India. It is actually that we were running at the edge of capacity, so we really had to move to bigger facilities and to enhance our capacity for future. So it was really -- it's never [ kind of ] welcome when you have a high need of deliveries, but we needed to move to be able to fulfill the capacity demand from our customers for the future. We had too long delivery times, which we now can cope and bring down.

Okay. Great. And then maybe if we can get some updates on the Menerga situation just given that we're going to probably see some additional cost savings from Q1 and such, how is everything going and how are your expectations and how are you working with this unit?

I think we mentioned 2 important parts here already. I mean, that we have acquired these 2 German agents is one thing that will improve the margins going forward. I mean, we have also closed down the factory completely and sold off the factory in Mülheim in Germany, which is for us a milestone. And also -- what also, in a way, indirectly affects our sales in Germany is that we have streamlined the product assortment of Menerga and cut off some of the more unique products here and one-offs with lower margins. And that, of course, is also affecting the gross margin overall for the group.

And I want to add here maybe also to make it really clear then, what you clearly see is that we have switched over from being so focused on the manufacturing issues, now everything is in Maribor. Now we are switching over to new product development and optimizing the sales and the front with the customer. So we are now in the next phase and everything is according to plan. So we're quite happy with the development for this time.

Okay. Great. So because you mentioned that the positive development in gross margin, some of that comes from a positive product mix effect. Is that mainly related then to Menerga? Or is there some other details that you could give us?

It's not only Menerga. Menerga is one piece of the puzzle, really and then there are, of course, I mean, the mix, how it is distributed between factories. It's also one reason the number of bigger projects that we run in each quarter and so on. If you come for a big project, normally, the margin tends to be a bit lower with bigger projects. So it's various reasons behind that statement, but of course, Menerga is an import part. Sorry.

Okay. Perfect. So just a final question for me. Just given the whole global turmoil that we've seen, have you noted any effect on the European market? Or is that just going in its own momentum, so to say?

Come again, I don't think we get the question completely, Anna.

Sorry. Just given the sort of global turmoil that we've seen on tariffs and everything happening in the U.S. and as such, have you noted any effect amongst customers in the European markets? Or is it not effected in any way?

No, nothing yet to be really honest.

No, not in Europe. Not for us.

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

We got 2 other questions here. I think they are more or less indirectly already answered. But I can read it out for you here, Roland, and you can comment if you want any further. It's from Henrik at Redeye, who is asking, I assume the factory relocation in India did not quite go according to plan, given the impact on sales. Could you please elaborate, explain?

Yes. Thank you for that question, Henrik. We actually -- we see it on the difference. We got access to the factory in November. And we redesigned and developed everything inside and the movement of machinery equipment to the new facility with less than 8 weeks, all in all. And the real impact on the manufacturing was for us a little over 3 weeks only. So we actually have highlighted the Indian team to have been done this really in record time. We are really happy about how fast they could conclude this to really high quality and very nice standards. So no, we think it actually went really, really well. The impact is more that we, really during the physical move, could not deliver any product out of the Hyderabad facilities. And they are quite important for the South Indian market for us.

Yes. Second question then also from Henrik, I believe, was more or less here already responded to in previous question. But if you want to make any additional comment, Roland, it's about gross margins then partly supported by sales mix. Is this related to seasonality or something else of more temporary in nature? Or has your sales mix improved year-on-year and possibly on a more sustainable level?

I think it's partly, as you say, we've already discussed that and I think it has been clarified. So yes, first of all, we think it's in a more sustainable level, absolutely, and it's the fruit of all the different activities that we have internally in effectiveness to increase that, but also, of course, Menerga and all those different things. So yes, it's a sustainable level and we'll continue with that like this. Okay. No more questions, also not in the feed and not on the line. And I think with that, we conclude this presentation.

Yes, we can welcome you to visit our Annual General Meeting, 28th of August, in Skinnskatteberg, where we also will present the next quarter report, Q1 report also, which will be very interesting to see.

Exactly. So we're looking forward to that. We, meanwhile, thank you for participating today. And as we then will not hear or see until August, we want to take the time and also wish you a wonderful summer, hopefully. Thanks a lot, and looking forward to August. Thank you.

Thank you all.