Trelleborg AB (publ) (TRELB) Earnings Call Transcript & Summary

Thank you. Thank you, and welcome to Trelleborg Capital Markets Day 2021, the first one we've had since 2018. Something terrible happened in between the 2 events. But I hope you will enjoy this day. [Operator Instructions]. So thank you and enjoy. And I welcome Peter Nilsson, CEO of Trelleborg.

Thank you, Christofer. And once again, welcome to all of you for attending our Capital Markets Day, where we're going to give you as usual, a rather comprehensive update on Trelleborg and where we stand and especially where we are heading, of course. The theme for this conference, as you see on the screen here is new horizons for Trelleborg. We firmly believe that we are at kind of a breaking point now. We've been, in a way, if we use the American phrase, playing more defense and now we're going more offense going forward. And so that is kind of the theme of the day and what you're going to see throughout the presentations. A few speakers. I'm going to start here joined on the stage where you see Rosman here on the picture. Rosman, is the Head of Sustainability, Vice President, Sustainability in Trelleborg, will give you a run-through on our sustainability work and where we're focusing on that. Also in this first set of presentations, we also have Fredrik, Fredrik Nilsson, standing here, our CFO, also going to guide you through part of -- the figure part. And also, as you already know, I trust all of you already read the press release this morning. We'll also guide you through our, let's say, updated financial targets. Then after this session, we're going to have a break as Christofer said, and we're going to run through with some Q&A later on, focusing on the BAs with Jean-Paul Mindermann sitting here, heading Industrial Solutions going to join us. Paolo Pompei, who is heading our Wheel Systems activity. And then we have Peter Hahn, who is heading Sealing Solutions, who's going to be supported also by Konrad Saur, who is Head of R&D and Innovation within Sealing Solutions. So he's going to give you some in-depth explanations on the more technical side of especially Sealing Solutions, but also Trelleborg. So this is kind of the theme of the day. Two Q&A sessions, after this first set and then after the business areas. And then, of course, also throughout the day, if you are jumping on something during the presentations and you want to address a question, feel free to do it. Feel free to break and ask a question also in the presentation, if there is anything which is unclear. Starting now with my session, Fredrik is actually also in this session also Rosman is participating in this session that we're starting now. Before going into more talking about the future still want to set the stage for Trelleborg. This is Trelleborg today. Rolling 12, this is the figures you can read yourself, operation in 50 different countries, 115 factories, and some 21,000 employees, which is lower than we had a few years ago, I'll get back to that. As you know, we divested some businesses, but also through this pandemic, been able also to create more efficiency in a few areas. So this is Trelleborg and to put also Trelleborg more in a format in a big, I mean starting with rubber. I mean that is our common denominator. Focusing the rubber world is basically split in 2 industrial tires and latex products. We are not at all involved in latex products. And we're also in tires focusing on off-road. And then we are small in automotive. I mean that is something misperceptions there. So everybody being here is aware, but still a misperception in some areas that Trelleborg is heavy on automotive. We are very [ nichey ] in automotive. We're going to get back and talk about that. So the primary focus for us is several industrial niches within, let's say, the rubber -- rubber, industrial rubber part. But then, of course, during the last few years, we've been more and more moving also adding other polymers, which is kind of epoxy polyurethane, a lot of plastic materials. So the game we play is in these areas and then also more and more adding other services is actually go beyond rubber and beyond polymers in order to sell full solutions. So this is kind of the map that we play with. And within this area, of course, our prime objective is to create leading positions in these segments that we select to be acting in. And this is a continuous portfolio work, a continuous activity in order to strengthen the positions in those areas as well. So this is the overall strategy. Why do we have it? Of course, we want to be the best supporter of our customers within these areas where we select. We want to know about this market. We call it early insights, where to play. We want to be the natural innovation partner for our customers. And of course, at the end of the day, to be the best value creator and make sure that we create most value for our customers, but of course, also the most value for ourselves in order to get the highest price and the good premium price and premium -- seen as a premium supplier in all areas. So this is really the firm strategy just as a setting. Most of you know this. But nevertheless, it's important to know when we move on here. Presentation then, as I said, let's say, talk about first area within this framework. We talk about platform better than ever. That's a starting point. We firmly believe that at the moment, Trelleborg has never been in a better shape. We are -- get back to that. We are performing good financial results. We have a solid balance sheet, and we also have a portfolio of businesses all over, which we are very happy with. And this has not really been the case all the time. But at the moment, we feel really that is where we stand. And that is really the starting point, the best platform. And just topics, a few topics on this. Of course, we have been announcing in late 2019 that we did some portfolio changes. All of this is now executed. We are still waiting for the closing on the final deal on the printing blankets, but it's signed, and we know what's going to happen. And we are able to do this and then exited sales of SEK 3.2 billion, which is then for various reasons, not fitting really into the Trelleborg portfolio long term. So this has been done. I'll get back to that to also show you a little bit more of the historic profile, excluding these, which we have not shown before, but I get back to that as well. Also on the automotive part because that's been a long journey, but we want to be clear on that. On Trelleborg today, we have roughly 10% automotive exposure, but basically all of this exposure is good exposure. We are leading, global leader in the niches where we're active. And from a profitability point of view, this is as good as the rest of Trelleborg. So this is not a drag in any way. And we firmly also believe within these areas, we are growing faster than the market, as we say, because we are a leader and we are an innovation partner. We're going to see feels of that also in the other presentations. But that is also important to remember. Then, of course, looking at the business areas, we're going to get more in depth, of course, Sealing Solutions. We say like a clockwork here is running very well. It's been well balanced. And then basically, the target here is scale up and accelerate. That is really what we think. There is nothing more to do about the structure. There's nothing more really to change, it's simply to push forward and accelerate in more or less all dimensions. Industrial Solutions, the standing point, we call it better business. I mean this is the area which has been most impacted by these portfolio changes. We reshuffled a little bit. And what we have in Industrial Solutions now is actually only good businesses. Although we should say, with these changes been done, we have identified some further improvement possibilities. So we have said that, we call it climbing the value ladder, which means that we ought to still in the focus to create more value and actually push the margin up. So this is going to be a story about growing balanced growth in combination with the kind of profitability improvements going forward. So we're also, Jean-Paul especially, going to tell more about this. For Wheel Systems, we saw a leveraged platform. We have been creating a platform here the last few years, very efficient, very good setting. So here it's basically about ready for takeoff because this is really a good setting. We have in this year been exposed to heavy increases in raw material and Paolo will get back and talk about that as well. But the way the pricing is done here is a little bit delayed pricing, but we feel very comfortable that we're going to see solid improvements in this area in the, let's say, not-too-distant future, actually quite soon. We're going to see, let's say, a major step-up in this area. So we feel very comfortable about that. On top of that, we also have the -- we call a stronger financial platform in decades. We have not really had the strength in the balance sheet for many years in Trelleborg, very solid cash generation throughout the pandemic and also throughout before. You're going to see later also that the cash conversion and cash delivery has been very good. Now of course, we have not been able to do as many acquisitions in the last few years as we've been for various reasons. And that means that the balance sheet is, I said, overloaded, but it is very, very healthy at the moment, and we know also more money will flow in, in the next next 6 months. So this, of course, we find that. And on top of that, of course, the financial -- the pure financial performance has never been better. We are running the last 12 months has been the best ever in Trelleborg, highest margin, highest profit and highest sales. So of course, the starting point is good. So this is really where we start today, the platform is actually better than ever. And then, of course, you ask what are we going to do now? Because this is, of course, not enough. And that is what we're saying now. So the next phase here for Trelleborg is actually to accelerate the growth in a multiple of dimension. So that is really the focus of this. We feel the platform is great. The platform is good. We can work on the current platform, and now it's more a matter of how to accelerate grow in a clever and a profitable way. So this is kind of the topic for my second section here. And then starting also with the history. This is a new figure. We have not shown this before. And this is really when we exclude, these businesses are now being divested we are changing our historic profile. So basically, if we go back and take the average, now we exclude the '20 because it's a specific year. But if you take the average for '16 and '19, then the organic growth is a 1.6 percentage points up, which is then changing the profile a little bit. Of course, it's not good enough with this 2.1%, but nevertheless, it's improving the profile, the growth profile, if you may say, on Trelleborg. And then still, if you then look at the rest of the business that we have now, we say that 2/3 of the business is actually growing with industrial production, and we're going to do better than that. We have been, as you see, a little bit on the lower end of this 2.4%. I mean this is -- our estimate of the industrial production up to 2030, we're going to vary between 2% and 4%. So that is kind of the underlying growth for this business, which is 2/3 of our sales. And this, of course, the focus is, what we call, innovate differentiate and grow market shares, that is the focus. And then how we're going to do that. One is to -- we are focusing a lot now, also growing our aftermarket share. So here is few examples of that. Interfit, which is kind of the service business of Wheel Systems. Paolo is going to touch on that in his presentation. We have this concept within Sealing Solutions we call ServicePLUS, which is actually adding more sales to existing customer contacts and making sure also that stickiness to the customer is good. And then a few examples, also 2 examples for Industrial Solutions. SmartPort is this integrated solution that we do for our marine business, in Industrial Solutions. And then kind of a relatively new area. So as you know that we are leading in what we call pipe seals for sewage pipes. And we now also -- we have a business like that, but we're also accelerating this relining business or renovation of sewage pipes. So this is just examples. This is ongoing everywhere. So this part of the business is growing and is growing quickly. The other part then to, let's say, accelerate the growth in Industrial Production is to go from products and solutions. This is an example more on the product business. Now we say we exited kind of oil and gas, but not fully. This is a system that we are -- unique for us, is IP, and it's good, where we're actually in a flexible hose is able to move liquid LNG, which you know is in certain areas -- in many areas today being replacing coal or replacing oil in order to create more efficiency, not also -- only for power plants, but also for ship-to-ship transfer and the kind of fueling ships with LNG instead of, let's say, the old petrol they're using. So this is one way of going a bigger share of one sale. And then, of course, also within Sealing, we have this, what we call, cognitive ceiling, which is actually -- we're offering a system, a full ceiling solution in order to move also outside of the simple. Sorry, Peter, not simple seals, but the advanced seals and to supplement advanced seals with the full solution. So this is something also that we're working with a lot. So this system selling is important for us to kind of speed up the industrial sales. Then, of course, geography. Asia is also continue to be a good focus for us. And that's actually been very good. I mean, it's maybe not seen. We have a CAGR since 2010 of 10% growth, organic growth in Asia. And we continue in the same way. And then if we look at China, it's actually better, we have 16% CAGR for 10 years in China. So that is also an area where we're going to continue to work with. Another area, which is boosting our sales within this industrial area. This is what we call customer proximity, which is an area where we are more global, generally, we are more global and more able to support our customers globally. And as our customers are becoming more and more global, they expect us to support them in all parts of the world. And that's also an area where we see strong benefits of going. So this is kind of a multiple dimensions, multiple actions in order to speed up this kind of underlying 2/3 of the business in order to speed up the growth in that area. But then highlighting and changing a little bit, we are launched -- we have launched within Trelleborg, what we call, speedboats, and we have identified certain areas of Trelleborg where we would like to speed up the growth, which is actually outgrowing. I mean this total portfolio of businesses, we expect to be on a 5% level organically for the next -- up to 2030, next 10 years. And that's an area where we identified and we're pushing through on these areas. And of course, with the ambition then we have not put a time frame on this really because it's also boosted by acquisitions and all of that. But we say that, let's say, long term or even midterm, we expect the speedboats to go up to more than 50% of Trelleborg. So this is kind of the action now we're doing internally and where we're pushing and then doing this change both organically, with organic investments and also, let's say, adding extra efforts to certain areas in order to get this going. Examples on these areas. Healthcare Medical is an area where we created a big platform the last few years, where we're now also going to get back, especially both in Industrial Solutions and in Sealing Solutions. This is an area where we expect -- we have a long range of products here. And of course, we're expanding that both once again organically and hopefully also through acquisitions. So this is an area where we're going to see Trelleborg growing. Another one is aerospace. I mean aerospace, as you know, has been heavy downward during the pandemic. But of course, from a starting point now, we foresee a strong growth over the next few years. And of course, also in this area, we talked about green aviation. And there are some other areas we put in here with the electric urban mobility. There are certain projects here, which is kind of new, outside of the regular aerospace also where we would like to -- where we have already a leading position where we expect substantial growth in those areas as well. And this is also where we have also -- not only the aircraft, but also ground support equipment is also an area where we're going to focus more and more. So this is another area. Semiconductor business, although a small part of Sealing Solutions today, but it's important and very quickly growing where we have, let's say, some proprietary materials now being launched into this area. And just to clarify, this is kind of the manufacturing of semiconductors, it's not actually in the semiconductors, but in the equipment to manufacture semiconductors is where we supply range of products. And here, we have launches now as well with a completely new product update. And we also, of course, if you go into high entry barriers because it's quite complicated to manufacture, and they don't really want to change. But this is also -- we're going to talk more about it in the presentation for Sealing Solutions later on. And then, of course, we have also growth pockets within traditional segments. And I mean one of them is e-mobility, sensor technology and all of that also where we have a strong presence, and we're going to allocate more resources there. We have a wide range of products in these areas, not only battery solutions, sensor technology, but also in other areas. So hydrogen is also highlighted here, which is also an area which will require quite a lot of seals and will require quite a lot of kind of polymer solutions in order to get it to work. Now it's early days with hydrogen, as you know, but we're investing into this as well, and that is also going to be touched upon, especially also from Sealing Solutions, and give you some more flavor about that. Another area which is big for us is this industrial automation. And here, we're kind of redefining the scope. This is a segment which is kind of growing rapidly, very high growth expected in this area, of course, is still not fully defined exactly what it is, to be honest, but it's moving a lot on this autonomous vehicles, which is good for us as well in certain areas, where you have both sensors, electronics, but also some tire wheel solutions on that one, which is good. And then, of course, you have robots and you have all these automatic logistic centers and all of that. And all -- as you know, everywhere there are moving parts, it's really good for us. So if this is moving and it's moving in a good way, so this is also an interesting segment for us. So the topic here is really that we are really talking about accelerating growth, and we're doing that by doing very focused efforts in certain selected, what we call, speedboats internally, which is our kind of definition of this, where we want to allocate a lot more resources to this. So on top of this, of course, there is growth when we look at growth for Trelleborg, there's another area as well. Agriculture, which is you know is a big part of Trelleborg, but agriculture has been depressed but is now really showing good pattern. Now of course, if you look on the right side here, the top OEs, which is easy to follow. But I mean, we need to be aware also that the OE market is only some 20% of the total market or maybe 25%. Paolo, I don't know -- yes, some 25% probably of the total market. So still 75%, which is in kind of in aftermarket, which is driven more by wheat and grain production. As you see that since 2013, what was the earlier peak, it's been growing quite a lot. So we do expect the peak going forward here is going to be higher than the 2013 peak. So we still think we are fairly early in the kind of cyclical move within agriculture. This is kind of boosting. So that's what we feel comfortable to say with all of this in place that going forward with a better history, if I might say, you cannot change the history, but at least you can do the figures differently historically, taking out these businesses that we have divested. And we have then also adding the speedboats and everything, and we have the agriculture. So we feel comfortable telling going forward, we will be ahead 4% organically on the current portfolio. So that is where we feel comfortable about this. And of course, on top of this, we also have the acquisitions, which is still on the agenda. We have not been doing a lot of acquisitions the last few years, but it's still very much on the agenda, and we're going to get back and touch on that later as well. So this is still high on the agenda. But in total, we feel very comfortable telling that we feel that we are ready to accelerate and we are ready to put up growth and then once again from a much better platform than before. So this is kind of the overall message. And of course, on top of this, we also have new opportunities and new changes also coming in. We see this as an opportunity to move into and talk more about sustainability as well. And then I ask Rosman. Rosman is heading our sustainability efforts within Trelleborg and overall driver of this [indiscernible]. So Rosman is going to bring us through an update on this. Please Rosman.

Thank you, Peter. Pleasure to be here, everyone. And I've been with Trelleborg since 2006, and I'm heading sustainability, as you have learned. Well, sustainability leader in our industry. We have a very good starting position. Most of you are aware of this yearly ranking has some kind of status in Sweden, Sustainable Companies run by the daily [indiscernible]. For the years this ranking has existed, Trelleborg has been a top position. We came out second this year. We have always been within the top 3 within the category then of capital goods. So Trelleborg's approach to sustainability. You can see much more about it in the Expo on top of us. If you go up there in the break. But it's fairly simple. We've divided sustainability into 3 main focus areas: compliance, operations and social engagements. So it's fairly simple, but I think that the main thing we have achieved by having this simple structure, each of these focus areas contain a number of KPIs, as you can guess, compliance has the usual ones, anticorruption, competition, human rights, et cetera, operators has all the environmental indicators, health and safety and some HR-related or people-related KPIs, social engagement. It's a lot about having good relationships with all the places where we have operations in the world. In Trelleborg, we have managed to push the responsibility for having a good performance out to the business itself, to the units, to the BAs. So they have integrated these plans in their strategy, which I believe is a very, very, I would say, big accomplishment and maybe during my years in Trelleborg is the biggest thing we have achieved basically. So that's really good as a starting point. And if you look at our track record when it comes to climate, which is obviously on top of the sustainability agenda. We've had 2 periods where we have achieved our climate goals well, I would say, up to 2015 and to 2020. And now we are really raising the bar for the years to come. So up to 2025, we will reduce our emissions by 50% related to sales, of course. So that's an ambitious goal, and we do not stop there. I mean, what we actually want to do is to reach net zero by 2035. And net zero in this case will address the whole value chain. We have committed to the science-based targets initiative that we will set a full science-based target goal. So Scope 3 targets will be set during the few years to come here as long -- as soon as we have established the baseline for it. So you may ask yourselves, but how, how do you reach that goal? I mean if we look at climate to start out. Of course, we will continue with our energy efficiency programs. We've had energy excellence as part of the manufacturing excellence efforts for quite some time, and they yield 3% to 5% energy efficiency improvement per year. That will continue, of course. And for the first period up to 2025, a lot is about, of course, the transition into green or renewable energy. So that would be a main factor, of course, improved manufacturing processes. There's a lot we can do to reduce that. The CO2 emissions coming from the processes, there are new technology coming in, in many places. If you look at a somewhat longer perspective, then, of course, we need to become much more circular in everything we do. We'll say a little bit more about that later on, but it's about becoming more bio-based, more recycled, obviously. It's about product innovation, how our products can help society, in general, become more sustainable, of course. And footprint optimization in this case is about our own footprint. We consider every factor, every sustainability factor when we locate in different places around the world, of course. So that would increasingly become important. So I mean, as I've said, this is actually integrated into the strategy, and you will learn much more about this because we will regularly report on sustainability on the quarterly reports also from selected indications, of course, climate. So there's no backing from the fact that Trelleborg solutions are in very many cases, of course, fossil based. But we argue that we use these fossil materials for advanced industrial solutions. There's a big difference between that or making a drinking straw, for instance. We have a group, a task force, my colleague, Konrad, here is part of that as a material specialist, who are acting on exactly this to make us ready for tomorrow and for getting more into an increasing bio-based materials, recycled materials, new polymer formulas into what we do, systematically increasing this. And this will entail some partnerships, of which we have already entered some of them, the Global Platform for Sustainable Natural Rubber. It's a very natural step for us, of course, if we increase bio base, that will increase also our natural rubber use, and you know that there are some issues with natural rubber. But this particular platform allows us to work together with others to address things like deforestation and bad working conditions in the supply chain for natural rubber, of course. So we will work together with others to be as good as we can in that particular respect. So more sustainable raw materials, and I'll give you a very a good example of this. This is from our industrial tires, where we have already started working on this, and we have good targets and ambitions for the future to decrease then the use of fossil materials starting from a level of about 70%. So in the next 5-year period, we will go down at least 10% from that. Biomaterials, the other direction, of course, from 28%, up then about 10%. And with recycling materials, absolutely go up about 10% as well. That's the ambition, to raise the content of those materials in everything we do. Peter talked about speedboats, and there are certainly speedboats also that are clearly sustainability related. Well, we could start out by saying simple seal, a sophisticated sealing solution, such as the one you have on your left here is, for instance, in a hydraulic construction saving maybe more than 25%, this is a moderate figure here, of energy, purely by reducing friction within that solution. So more efficient seals performance, and that will, of course, also be the case when we have seals for all these different niches like e-mobility, renewable energy, which is both wind and solar, where we make sales, green aviation increasingly. Konrad will speak more about that, how biofuels, et cetera, will come into play, of course, in that niche. Industrial automation, Peter has already mentioned, of course, that's part of the digitalization as such. Okay. Just to give you also a flavor of what Trelleborg's participation in large projects such as this one, the Fehmarn-belt submerged tunnel, which is an area where Trelleborg has an extremely large market share for your knowledge. The annual CO2 savings. This is a recent study that came out from that project, reducing then the emissions from the ferries that are in this route for today, the tunnel will reduce emissions by what corresponds to 50% of Trelleborg's yearly emission. That's between 150,000 and 200,000 tonnes per year. So being part of these projects and providing in this case, the tunnel seals is absolutely something that will help society as a whole to become more sustainable. So I hope that this little expo, say, gives you an idea about how Trelleborg in itself becomes more sustainable and helps society become more sustainable. Thank you.

Thank you. Rosman will stay here as well, of course, to questions in the Q&A session. But before opening up for the Q&A, just finishing off by talking a little bit about each business a little bit deeper on that one, without taking away from Paolo, Jean-Paul and Peter their message later and also, let's say, then get a flavor on this new horizon, more figure part of Trelleborg. So talking -- we talk a bespoke strategy for each business. I mean it is important. We don't have the same strategy everywhere. We are adapting the strategy for the position of this business and for the market of this business. I mean that is something which is in the core of Trelleborg. We want the decision-making, the operational decision-making to be very close to the business. I mean that also entails that, let's say, the responsibility goes down to cash flow to full cost in the P&L and that is the way we would like to run the business, and that is the way we run the business. We just also shown very good now in the pandemic. People are very close to the business, can make quick decisions and can really adapt to the reality for each business, and that is important for us. And that is also why we run it in this way. We had the group on the top, of course, supporting -- I trust. I have to just ask Peter and Paolo that actually we are supporting them, but that is the intention, at least sometimes, of course, we are working on the same, and we are working and supplementing the businesses. And I mean, this, as I said before, there's different priorities for the different business. I already mentioned that Industrial Solutions climbing the value ladder, Sealing Solutions scale up and accelerate. And Wheel Systems is more ready for takeoff. So a little bit different position in the business and different priorities. So looking then in Industrial Solutions, there is a range of priorities, profitable growth. We're going to grow in the areas we want to grow. Offering got to be more differentiated in order to create more value. And we -- as I already highlighted, we see further improvement opportunities in this. So it's going to be a balance between profit improvement and growth in this area. And of course, still some supplementary acquisitions that we want to do in this area in order to further strengthen already strong positions. Sealing Solutions is a scalable business model. We would like to add more to this business model, push more into the model that we're already running. Peter Hahn is going to talk a lot about accelerate growth in certain segments, and we are kind of trying to change the growth profile to something even better in Sealing Solutions by organically push ourselves into the areas where we want to be stronger. Products to solutions is a big area here also going from one seal up to actually Sealing Solutions. And now we're also discussing going beyond the Sealing Solutions in this ServicePLUS concept, where we're going to support the customer even sometimes outside of the sealing where it makes sense to combine it with something else. Globalization continues. We are still European here. In a way, we are making great strength in -- let's say, strengthening ourselves a lot in North America and also Asia has been great, very heavy organic growth, but we're going to continue, the globalization continues, and we want to find global customers, who are appreciating our support across the world. And then, of course, focused and accelerated acquisitions in this area as well. So this is the priorities, the high-level priorities for Sealing Solutions. But once again, touched later on by Peter. Wheel Systems, we have a very much better platform already. Improved positions beyond Europe is also moving, very strong position in Europe. We're improving in North America, also growing in South America and also now growing in Asia Pacific more and more. So that is high on the agenda. And here also to expand the service offering, the Interfit in order to get a more stable business. I think Paolo is going to touch on that later. So the service offering now is approaching 10% of the total sales, which is more recurring sales and also -- don't tell the customer, but also getting us better profitability, higher profit margins in that as well. So that is also -- and then, of course, innovation leadership. We are the premium supplier in the industry where we work and we need to continue to invest in innovation. We need to continue to be, as I see, as a more focused specialty tire manufacturer because in this area, we have to recognize that we compete with Michelin, Bridgestone, which is very big, bigger than Trelleborg, but they are not as good in agricultural tires, material handling tires as we are. And then we have to be seen as the innovation leader in those segments where we're focusing. So this is a little bit. But once again, little bit touch and feel on the BAs and with the high-level strategic priorities, but once again, going to listen to more there on that one after the first break. So then finishing off this first session before we have a chapter here we call new horizons for Trelleborg. And once again, I ask Fredrik to join me. And this is, of course, an area once again, just setting what we have explained now and talk about the improved platform, more focused on accelerated growth. And now we talk about the figures and also a little bit about the targets going forward. So please.

Thank you, Peter. I will start. So a little bit of looking in the rearview mirror and see a little bit about the historical performance for Trelleborg. Sales wise, if you go back 10 years, we have delivered a CAGR of 6.5%. But as Peter said, that has been mainly driven by acquisitions, and I will come back later when we talk about the new financial targets and talk more about the future. EBIT wise, we have been able to grow better than the sales. And that is linked to that we have sold more value-added solution during this time period, but also work quite a lot to optimize the footprint in Trelleborg. The EPS has followed the EBIT. And then on return on capital employed, you can see there was a quite good trend. And then it was a big drop in 2016, and that is linked to the CGS acquisition. And then now we can see it starting to kick in again in 2021 linked by increased profitability, but also that we have now working with working capital. And just to give you one example, we have never had as low past due that we have today. Looking into more details as Peter presented. You can see this is the sales growth going back to 2016 to 2019. And if we exclude the business under development, you can see there is an improvement every year, except for 2019, and that is due to that there was an extremely good year in the offshore business that is now divested. So that is the reason why it was flat in 2019. Looking at EBIT, it's much more stable. You can say it's 1 percentage point higher in general every year from '16 to '19 if we exclude the divested entities. So to summarize this a little bit historical review, we have a 1.6 percentage point higher growth if we exclude the BUD. And then on the EBIT side, the margin should have been 1.1 percentage points higher. So that is giving us the foundation for the future growth. Looking at more at the balance sheet. I mean, Peter also mentioned that we had had a strong position. You can also see that in our free cash flow that has been very, very strong, particularly during the last 2 years. And also looking into the operational cash conversion that is actually close to 100% during the last 5 years with a very strong 2020, but also continue very good in 2021. That actually implies that the debt level in Trelleborg is the gold colored bar is on a record low level and also looking into the net debt over EBITDA, that is now down to 1.3. That give us extremely strong foundation for the future. And we believe, based on the -- where we start with the strong cash flow and the strong cash flow that we expect for the coming years, that we have around SEK 15 billion to SEK 20 billion in firepower. And then we can discuss the different strategic option that is available, and I will do that in a few seconds. One is, of course, we would like to accelerate the M&A activities. We have a strong list of prospects that we now would like to turn into, of course, to pipeline, and we are also now allocating more resources internally to be able to drive the M&A agenda to be able to close more deals. So that is clearly something we try to accelerate as we speak. The other part is, of course, what we have announced today in a press release that there will be a share buyback program proposed by the Board of Directors. And it's up to 10% of the B shares that is in that proposal for the extra ordinary general meeting. Our ambition here is to buy back 2 billion to 3 billion annually. And that is, of course, a little dependent on how much M&As we will do every year. So that give us some flexibility in the balance sheet. But the overall ambition is 2 billion to 3 billion. And as you can see, it's a multiyear program. But of course, it requires a yearly approval by the AGM. And then on top of that, the ambition is also to redeem the shares. But it's the same thing there as well. You need an AGM approval. Looking a little bit more now into the future as well. Trelleborg is raising the bar with new financial targets. The 5% to 8% sales growth is exactly the same we have in the past. But as you could see a little bit earlier here today, we now will -- we will have around at least 4% organic growth. And then on top of that, that should be M&As. So there will be a little bit more organic growth than you have seen in the past. Just to have that in mind. Margin-wise, we now raise it from 15% to 16% over a business cycle. And then there is a new target added. We had the return on equity in the past. That has now been -- we changed that to return on capital employed. And here, the ambition is 14%. When we're talking about the target, this is not the long term. We see this more as a near-term target where we now turn full speed here to try to achieve these targets. To give you also some further financial guidance. And we will come back when we come into 2022 with some more details for the specific years, but this is a little bit more overall guidance. We say CapEx in percent of sales, 3.5% to 4%. So it's slightly lower than you are seeing, for example, this year. Restructuring should be less than 1% of sales. That is, of course, very dependent on how much M&As we are doing because most of the restructuring we are doing is linked to the M&As, but there's still also some further optimization of footprint in Industrial Solutions. Dividend, exactly the same as in the past, 30% to 50% of the EPS. Cash conversion, we would like to keep on a high level, so above 90%. And then leverage-wise, we would like to stay below 2x.

Yes. So this kind of concludes this figure part. And also before opening up just finishing off again. I mean we feel that we have a strong platform. We are accelerating our growth ambitions. We have had high growth ambitions also with M&A. We have not been able to execute. We feel we have good prospects, and we believe that we'll be able to execute some M&As. But on top of that and also a higher focus on the good positions we already have and a continued improvement on the underlying kind of ordinary growth. We're doing this by bespoke strategies as we call it on the various areas. And we also show, I think, the financial performance now also when, call it, cleaning off, if I may say, the let's say divested business. See the history is slightly better. And now we would like to also speed up, and we're improving the targets. And as Fredrik highlighted here very clearly, I mean this is not kind of ambitious long-term target. We actually would like to achieve them, I say, fairly soon. So that is something we see within reach quite soon in order to top these targets. So this is really the summary. And I think here, with that, we're opening up and I think the Q&A, facilitated by Christofer?

Yes.

And Rosman, please also join us.

And we have some questions from the Internet. But I think we will start with questions from the floor. So raise your hands and pick up your mic and make sure the red light comes on. So we'll start with Agnieszka. Please state your name and where you're from also.

Agnieszka Vilela, Nordea. Starting with your growth targets, you talked about the speedboats, 1/3 of Trelleborg and what kind of businesses you have there. Can you give us a bit more color on the kind of size of these businesses? Is it majority aerospace today? Or what's the kind of breakdown to date? And also, how will it look like in the future?

As I said, I mean the speedboats, as we define the speedboats, we highlighted a few of them. But I mean, there is more, of course, in this one. But I mean, we still think it's 1/3 of Trelleborg today. So that is really where the starting point is. And we said within the foreseeable future, we expect that to be 50%. But this move from 1/3 to 50% is, of course, we're going to invest a lot in organic growth, but it's also a little bit dependent on the success rate in acquisitions. So really the -- but we definitely -- we have a target or an ambition we have an internal plan in how to grow this 30% up to 50% of Trelleborg. And that is once again some targeted acquisitions, ongoing discussions and a little bit about how to execute it. But that is basically the framework we're working with.

And when it comes to profitability for these businesses, is it better than the 2/3 of Trelleborg?

Probably slightly higher, but it's not a major difference. But of course, it is better now looking at the guys, but I think we can say that. So -- but I mean, Peter, it is better profitability generally in these segments. Generally, I guess. Also for Jean-Paul, I guess is the same. Paolo is the same. If we talk about the, say, extra large tires, which is then one of it is also higher, definitely it is higher, but I don't know the figure actually.

Okay. I will have one more question, then I can get back to the queue. So on the margin target, you say it's over the cycle. Should we interpret it that the peak should be higher than 16% and maybe, so it's going to fluctuate, yes.

Yes. Definitely. Yes. Definitely, yes. So the peak should be higher than 16%.

Erik?

Olof Larshammar, Danske Bank. Could you just elaborate a bit on the acquisition agenda going forward? I think you're mentioning 4% organic growth and [ 5% ] in total, which means 1% to 3% organically. And I guess, is it most smaller bolt-on acquisition? How does price tags on such look like now?

The majority of the target is within, let's say, EUR 10 million to EUR 50 million. I mean that is really -- on sales. That is really a majority. Then we have a few bigger ones, but I mean on this 200, I guess, less than 10% is on the -- bigger than this. It's usually also longer work on the bigger ones. Our industries, in certain areas, I mean, we are leading. So we are really targeting very selectively on a few of the bigger ones. So the majority, I mean, smaller bolt-on acquisitions with great synergies where not necessarily the -- the price tag is always important, but the synergies in these cases is also substantial which means that it's easily to execute. So it's more a matter of the, if the seller wants to sell, then actually -- and we can agree on the valuation if you see an opening up for an M&A discussion. And that has been the tricky part during the pandemic because most of these cases is from private buyers or private individuals, which you have to develop relation, and you're working on it. So that has been a little bit troublesome, honestly, because we couldn't meet. We couldn't have dinners. Maybe it's good for something else. But when -- we couldn't have these dinners and we couldn't facilitate these discussions. But this is still -- the majority of the targets is like that.

And you should expect to see most of the acquisitions in Sealing Solutions. And then there will be selective bolt-on acquisitions for -- in Wheel Systems and Industrial Solutions.

So that's important also to highlight, that the priority is within Sealing Solutions.

Erik Golrang, SEB. I have 2 questions. And the first one, on this accelerating growth ambition, it's a step that's proven very difficult for quite a few industrial companies historically to achieve. You improve profitability, and then you want to grow faster, but you typically don't. It's tricky. And I appreciate the speedboat thinking. But often, there's something in that other business that ends up a drag. So it feels like you're sort of extrapolating on an outperformance now in a business where you sold that -- which was a drag on that one, and now that's supposed to continue to trend the same way. But what's the risk that those 2/3 that aren't speedboats, that we end up finding a couple of assets there that -- what's sort of your real confidence in accelerating growth here? Where does it come from?

But I think, I mean, it's a multidimensional question, of course. But I mean to start with -- I agree with you, it's a challenge. It's a challenge to go from, let's say, profitability up to growth. We feel though that -- I mean we have been spending too much time on the struggling business a little bit. So it's definitely higher resource allocation to these areas. We saw also higher allocation of hours from our guys, but also, let's say, higher allocation of CapEx. So we are definitely identifying those areas. And I think also then historical, I mean we showed here, the starting point is a bit higher than probably we had before, and we feel confident that this multidimensional approach, solution selling, being closer to the customer, geographical expansion, being -- more clarity in actually what the priorities are. But of course, the proof is in the pudding. And then -- but we are pushing on that. We firmly believe in it. you think there are firm actions to push that ahead. So -- but it will always be, let's say, low and high also in this area. But overall, we feel confident that 2% is kind of the floor, and then we should move on from that level. And potentially get closer to 4% on that 2/3 and then you'll be even higher on the other 1/3. And then totality then is going to be more than 4% in this kind of organic journey going forward. And then -- but once again, Erik, I mean, that is a challenge, and that is what we're working on daily, and that is what we're pushing. I mean that is what we're discussing in our meetings. And that is what is higher in agenda. I mean, before, can't say always, but a lot of the management meetings was on kind of fixing and all of that. Now the fixing is done. And now it's more going forward, accelerating growth. And we said this now it's about playing offense instead of playing defense in order to -- so that is a matter of allocating more resources, having more focus then we do expect that to get results. And if it does get results, then we're not doing the right thing. So that is kind of the area. So this is, once again, a multidimensional, a lot of actions in order to get that growth to become slightly better than the underlying growth.

Okay. One more question. That SEK 15 billion to SEK 20 billion in firepower, over what period should we think about that?

I would say, over the coming 3, 4 years.

I'm going to ask a few questions here from the Internet. And this one comes from Klas Bergelind, Citi. He says, great to see the renewed growth focus. Are you also changing the management incentives linked to this growth step-up? Today, I think incentives are linked to EPS and return on equity. And are you also linking the incentives now to return on capital employed now that you have capital employed a target?

I mean, management incentives is always a balance. You, of course, want to address everything, but you cannot address everything, then it gets too complicated. And we have a system in Trelleborg where the primarily, let's say, okay, component in the management base is actually EBIT growth. . That is, I mean, in order to get EBIT growth, you also need to get the top line growth, so we think it's linked to that. But we have not kind of changed that so far. Of course, it's being discussed whether we should put a return target or whether we should have pure growth target or whether we should have. But at the moment, the primary driver is actually EBIT growth for the top management.

A follow-up question from Klas. The 2x leverage target is also -- is that also through a business cycle? So does that entail that you can go above this target should [ you ] decide to go for larger strategic acquisition?

Yes. I mean I think temporarily, of course, we are prepared to do that with the right acquisition, but then the long-term ambition is to get it back to the 2x.

Thank you. And Hampus Engellau from Handelsbanken, and he asks, to what extent does rising energy prices and potential energy shortage constitute a risk for Trelleborg?

I mean the energy prices at the moment is -- I mean, it should be fair to say that's been increasing more than we expected, and we, of course, adjusting -- nobody doubts and nobody complains, in a way, and we open discussion about compensating our pricing for this. So we think it's a normal component, a normal cost component like anything else, and we need to discuss it. If the cost goes up, then we need to solve that either by sourcing it in a more, let's say, clever way or making sure that it is compensated on the sales side of it. So we are not too concerned. There is always a time delay. But energy shortage, I mean, we are not really -- yet, at least. We are not really exposed to that. We cannot see that being a true problem. It's more a pricing problem today. I mean we have in certain areas, in China or India or something like that, where they have some problems sometimes. But with that energy shortage or a system failure, I don't know. But I mean, that is more in the strong growth areas there is some -- one scenario, but it's not kind of a generic problem what we see in Europe or North America to that extent. I don't know, looking at Jean-Paul, we don't really -- cannot say that we have an energy supply problem to be discussed. China, China could be the issue sometimes. There's more they're closing on Fridays or something like that. But that is generally well planned. And then, of course, we don't like it, but it's not that it's breaking up without us knowing. So China is probably the only issue there. But it's not a big thing.

Hampus Engellau from Handelsbanken is also asking, how do you see the historic trade-off between pricing, organic growth and profitability when you look at both the raised margin target and raised organic growth target?

We are generally happy with the positioning we have everywhere. We don't really want to increase the margin or increase the sales price like that. I mean, of course, we could increase the margin by selling more on existing fixed cost base. And I think that we are. So we are not really focused on increasing the pricing. We are happy with the gross profit generally. Of course, there are some pockets where we still want to increase the gross profit. Specifically in Industrial Solutions, there are some areas where the gross profit needs to go up. But other -- generally, we are happy with the gross profit. So the focus is more keeping the pricing and then grow with the current pricing. So that is kind of the -- I think that covers that question.

Okay. And some more questions here? Karl?

Karl Bokvist from ABG. So actually a follow-up on that one, and the kind of step-up from the historical 2% to above 4% organic growth. We should interpret it as almost entirely a kind of a volume step-up?

Yes.

Yes. Of course, there's some pricing component in it as well, some mix components and there's some mix in it as well. So of course, as we said, we're stepping up on the speedboats, and then, of course, that is going to grow, and there's slightly higher gross profits in that one. So it's a mix issue in it as well. So you can say it's a price component, yes, because we're raising the general asset average gross profit but simply by a product mix change, not primarily by pricing adjustments. Of course, we're always going to adjust pricing based on the cost. And if we have opportunities -- so don't misunderstand me, if we have opportunities to increase pricing, then, of course, we'll go for price increases. But that is not kind of the driver for the improvement. The driver for the improvement is actually primarily volume, but also slightly mix change. Then there are still pockets where we feel that we can get better pricing and we can get more. But I mean, the primary driver again is volume and partly mix.

All right. And a follow-up on this topic related to sustainability. Do you feel that you could get tailwinds on mix, pricing and so on with products that are becoming more sustainable?

Do you want to take it [indiscernible] more from the sustainability perspective?

Well, I mean looking at the macro trends in the world today, I think that Trelleborg needs to go in a direction, which is basically driven by sustainability and the needs of the world. So if you took it from my point of view, at least, I'm sure that -- and you've seen examples here of what we're looking at for the future. And you will see more examples in the business area presentations going forward here. So from my point of view, absolutely.

Sustainably assists us. I mean, it is good. I mean we had a heading here, sustainable leader in our industry. We recognize that we use fossil fuels, we recognize that we need energy to transform our products. But within our industry, we're the leader. I say, we are better than the others that we are competing with. So we're getting benefits. When this -- when sustainability comes more and more into play, the customer is more and more looking at it, more and more putting up demands, we are definitely in the pole position. I mean, if I'm to say what that was, we are definitely in a pole position. So if sustainability gets higher on the agenda, they will need seals in a wind turbine. If they have a turbine on the wind power, they will need. And of course, if I want to add that and put more sustainability demands on the supplier for the seals for the turbine, we are in the pole position. And we believe it's going to be higher on the agenda, so it's going to benefit us.

There's no secret, of course, that in each industry today, there is a sort of rat race ongoing to become the low carbon player. You've seen Tesla, you've seen SSAB. You've seen a lot of things happening in various industries. And rubber is the same. We have the trouble that it's hard to recycle rubber in a way once it's vulcanized. So that's a technical demand -- challenge, of course. But you've seen our ambitions to be the ones that can offer the best rubber solutions and the best polymer solutions from a carbon point of view.

And we are in the pole position. I mean we firmly -- I mean that is not bragging. It's a fact.

Yes, please.

[ Garrett Howard, UniCredit ]. And my question relates to growth ambitions and, in particular, to funding. So we've heard on the M&A pipeline of potential transactions. We've heard of the firepower. And the question would be, is there in any foreseeable point in your base case sort of a funding requirement on top of what can be financed with existing headroom? And if not, which scenarios would you see where additional funding requirements could arise?

Now, I think, I mean, this move -- we have made a plan here. We feel that with the current kind of asset base, this current machinery, we can grow in -- like we explained today. Then of course, it could be other areas where we could potentially -- I mean, don't misunderstand me, but we could potentially decide to put up new factories in areas or, something like that, it could require. But I mean in total scheme of things, it's not that expensive. I mean we talked putting up a factory for us. We talked big CapEx, let us say, a few tens of millions of euros and that we can manage within the current. May go up with, let's say, a few tens of a percent on sales 1 year or another, just to facilitate and to put up. But we don't have this major CapEx to the EUR 100 million or whatever to build a new factory. So that is not really a concern. Then of course, in the funding, it's more on the acquisition going up and down. It could be that we make some bigger acquisitions, let's say, closer to that. We cannot really time it. It's not a regular business. It's something that's simply happening. But we don't see long term that we will require substantially higher funding in any case, I cannot see that...

No. I mean it must be an exceptional large acquisition. I mean, we have the committed facilities that should cover. I mean the regular bolt-on acquisitions and our -- what we have in the CapEx. And that's also taken into consideration the firepower we are talking about, then it should be fine. So that needs to be some exceptional on the M&A side, if there should be a need for more.

Yes, okay. 2 final questions before we take the break. Agnieszka?

A follow-up on the sustainability. You showed that in some [ locations ], you have ambitions to use more of the recycled product and more of the bio product. Do you have any ambitions on the group level as well?

I mean this is actually driven from the group level as well. I mean as I said we're pushing this, of course, to our BAs, but we're working in a cross group called Polymers for Tomorrow, where we're trying to systematically address all the key material categories, setting targets for each one of them in terms of bio based, in terms of recycled. So yes, definitely, this is a group ambition.

You should note development in this area is quick. I mean, if we're standing here a year ago, one of our key -- we didn't mention it here, but one of our key materials called carbon black, which is coming basically from burning coal to simplify it. But there was not really a technical solution for that or a year ago. But now suddenly, there is a technical solution where you could reuse some 25%, 30% of it is recycled material driven from Russia, by the way, which is a little bit strange in a way. But I mean there's a few of the Russian companies is actually leading in this to return used carbon black into -- we cannot use it 100%, and that is the problem because most of the recycling materials has a slightly not as good performance, not as good properties. So we cannot use it 100%. But in this area, carbon black, I think Paolo, looking -- you're using it, you pass the 30%. 30% of the material could be recycled, and that was a technology not existing a year ago. So this area is developing very quickly, and we do expect -- so I think -- I mean how we put up the target, and we -- at the moment, we're fighting with the guys I think is really ambitious. But I mean, in a way, we do expect development to speed this up quite a lot, and that is happening as we stand here.

Erik, you have a question also.

Yes. A quick one. On the 50% CO2 reduction by '25, what's the biggest piece to get there? Is that to increase the share of green or low carbon energy? And how are you going to solve that? .

We're using the best expertise there is to find. We're talking to Schneider Electric, et cetera, because we have a plan. But of course, we want to do it as smartly as possible, of course. And that will include probably some new approaches. Going for power purchasing agreements is one option that we're looking closely at, of course, and that could address several of the countries in Europe, for instance, and several of the countries in U.S. as well for that kind of solution. That will also have the benefit of that you secure your energy price for that particular energy at least. So I mean, that will be part of the picture. But during these 5 years, we will not only work on the electricity and energy side. We will also look at what we call Scope 1, I mean, the on-site energy, which is mainly natural gas today. We don't know exactly how we can run boilers for tomorrow yet, but the technology is developing fast, just as Peter indicates. So it's biomass, it's biogas, it's electric. It's maybe hydrogen coming into play. We're looking at all these things. And at the time when we're ready to go, we will go. And we know that sometimes, we need a little bit longer payback to this kind of investments, but that's already sort of in our plan.

But it's also, this daily. I mean if you remember, in Rosman's slides was energy excellence project or energy efficiency. I mean that is -- this small -- I think some of you later on going to tell, I mean we talk about hundreds of actions, small actions. And this daily, that's a 5% annual improvement. And there's new technology coming in, so we shouldn't -- okay, green energy, yes, to make sure that we source that. But the improvement in technology, improvement of these actions, everything from changing light bulbs to change upgrading the hydraulic systems or changing compressor, all of that goes up. And now we have a focus on that. But I mean, I think that is what Rosman said is and I don't say -- we're proud by the way we were -- I think compared to a lot of other companies, we have action plans on every single plant where in some plants, there are 100 actions ongoing to save energy, and that is from small and big things. And I think Rosman proud, I think you've mentioned the word before, proud to be pushing this out to the operations. And we have got an operational ownership for this. There is actions ongoing, and we expect that also in a way to accelerate. At the moment, the plans are this 3% to 5%. But I believe also new technology coming on and new focus coming on, new attention, new generation of employees, that's going to be higher on that agenda. So I believe this underlying daily improvement actually going to speed up. It must not be neglected because this is also talking about 5% CAGR in 5 years. That's quite a lot.

There will be further opportunities for Q&A, but let's take a technical pause now, and we will be back 20 past. There will be coffee outside as well. [Break]

Thank you. Welcome back. Now as already said, we're going to go through the business areas, starting with Industrial Solutions and Jean-Paul Mindermann. Jean-Paul has been working with Trelleborg for a few years and also been instrumental in this kind of turnaround -- it's probably wrong -- okay, improvement.

Fine tuning.

I'm not trying to -- more than fine tuning, but I mean the improvement and the changes in the portfolio with Industrial Solutions, which has been pushing up to kind of all-time high margins. And of course, Jean-Paul is going to elaborate a little bit further on where we are and what we're aiming forward. And then after Jean-Paul, Paolo and then also Peter, following up. Before, I think I don't know, before we're having Q&A, I guess, with all these 3 BA presentations being done. So please, Jean-Paul.

Right. Let's just check. Yes, absolutely. Trelleborg Industrial Solutions. Trelleborg Industrial Solutions is made up of a portfolio of businesses that have one thing in common: the vision. So to be or to provide world-leading solutions to select industrial niches. Peter had mentioned earlier on that we're always premium-positioned, another matter that these businesses have in common. Combined, we can say that 60% of the sales of this business are industrial and construction and 40% diversified industries. So rolling 12, end of September of this year, a little over SEK 10 billion in sales of a 12.9% return on sales, which was actually, as Peter mentioned, just an all-time high. So very happy about that. 6,200 employees, 53 factories, quite a lot of factories still. And proudly, we have 15 R&D centers as well around the world. Critical and important to ensure that we keep having premium products, that we are world leading with the solutions that we provide. Looking at the historical sales, you will see that we've grown at a rate -- at a steady rate of 4% year-on-year, a little blip in 2020, but we're back up there now. And more importantly, profitability has grown at double the speed of sales growth. And that's key. And also there has done that on a -- at a steady basis, increasing particularly over the last 4 years. So 3/4 of the growth you see going from 8.9% to 12.9% has been in the last 4 years. So there's an acceleration there. How have we done this? We've done this by, on the one side, enhancing our offering. We focused a lot more on innovations. We divested some businesses where we were more regional and couldn't obtain a world-leading position. We have established a systematic annual procedure of product pruning. So products which over time, become commoditized, will go down in the S-curve. And from there on, we also added some businesses via M&A, some bolt-on acquisitions, rounding off our portfolio of offering. So in itself, a far better offering now than it was -- than we had some years back. Second focal area was the operations. We consolidated factories. We restructured some of them. We closed them. We moved some, but we also sold some off. Again, here, we have a far better operational setup also in upskilling the workforce and ensuring that the efficiency in the operations has improved considerably, also from a quality point of view there. Then this business has historically been very Euro-centric. And over the past years, we've expanded our reach on a global level. We have opened factories in the growth areas of this world. We have moved sales there. We have established R&D centers there. So we are very much more a global business now. So on the back of this better, stronger business, we now believe that the next steps is to continue to climb the value ladder and at the same time, still continuing to focus on our bottom line improvements. We believe that the 2 are absolutely achievable going forward. To do this, we have 3 strategic priorities, which we will be focusing on over the next years. First one, profitable growth. Differentiated offering as the second one. And third, we do have some further optimization opportunities within the organization that we have as it stands today within the business. On a profitable growth point of view, we are focused on growth segments on the one side. These are just 4 examples. And within those growth segments, we see opportunities with our products and solutions to outgrow the business and actually gain market share in those specific segments. Building & Construction. Rosman mentioned earlier on, as an example the Fehmarn-belt tunnel, this the longest immersed tunnel in the world. There are -- that tunnel where we supply the seals and gaskets over the next 4 years, just to give you a touch and feel, is worth about SEK 20 million to SEK 30 million in sales value. There are 17 such projects planned in China over the next 6 years. So we're ideally positioned to benefit from these projects. Marine equipment or the marine and ports business, 90% of the global trade goes via boat. Boats are becoming larger and larger. The supertankers, they have up to 24,000 containers on them. The only problem is that ports haven't grown. So ports are having to become more and more efficient, improve their turnaround times. We have some ideal products and solutions which help do this, which I'll show you later on as well. Automotive. Also here, the growth of the automotive segment -- sector is not going to be from Europe. It's coming from other regions around the world. We have opened factories in India. We have opened a factory in Morocco. We are opening a factory in Japan. So we see great opportunities to grow with these markets as they develop. Then the rail and mass transit segment, where we are very well established in Europe is developing and growing rapidly, again, outside of Europe. Here, we have our first success story where we set up a little manufacturing plant and -- sorry, what's the word? We set up a little manufacturing plant and building plant for air springs. And air springs are is the suspension part within the rail that keeps the curve that ensures a comfortable ride. And this we have in Bangalore and with it, we were able to win the metro rail project in Kampur, that's in Northeast of India. And that, we believe, will give a lot of opportunities going forward for the expansion of the rail segment. Again, there, there's over 55 metros planned, new metro lines plant in India over the next 10 years. So great opportunity to grow with this market and actually outgrow. Not only industry sectors, but we've also looked at the geography where we plan to grow. We know that 50% of the world's growth in the next decade is going to come out of Asia. We have already set up our production units and increased the capacity -- production capacity there, notably in China and India. So we are ready to accompany this growth. And we see also the opportunity to bring products which we have currently -- which we're currently selling within Europe also to Asia, as you can see here on the bottom right-hand side. So also here, we have 4 examples of sectors where we see opportunities for us to grow profitably on the side and gain additional market share beyond the normal growth. China infrastructure. I mentioned the immersed tunnels. But for example, another sector, which is going to be a rapid growth sector there are the wind turbines. They are planning to have 4,000 offshore wind turbines again over the next decade. We are ideally positioned with our grout fields to provide to this market and to cater for their needs. Construction machinery market. Fastest-growing market in the world with respect to construction machinery. Here we deliver various products. Anti-vibration mounts for the engines, anti-vibration mounts for the cabins. Also here, we are well poised to accompany the growth of that segment. Automotive. I have mentioned, particularly maybe what I want to re-mention is Japan. Japan is not a growth country as far as the automotive is concerned. But if you want to supply to the Japanese car industry on a worldwide basis, you have to have a production setup in Japan. And that is what we plan to have as of the first quarter of this coming year. So that will allow us to penetrate the Japanese part of the automotive market, which is a good 10% on a global basis. Rail and mass transit, I've already mentioned earlier on the 55 projects. Also in North America, where we have been a little bit underrepresented. We have good factories there. We've consolidated the factories. We've rendered them more efficient, but we now want to also add products, again, that we are not selling to such an extent there, create a local footprint and benefit from the opportunities on the market that exists there. Here are some examples, again, select examples. Water infrastructure. Peter mentioned that we are the world's #1 pipe seals provider here, but that we also supply for the pipe repair market in aligning. Now you need to know that in the U.S.A., the water infrastructure network is in a desolate condition. 50% of the water that flows through the pipes never reaches the tap, it gets lost in the ground through cracks, et cetera. So the infrastructure build that was just went through where President Biden, he's allocated $100 billion to this segment. So again, we see great opportunities of profitable growth within that segment. Health care, mentioned earlier on, here, we have some unique innovations. We have antibacterial materials, which -- on the one side, I used for the patients themselves. That avoids the additional disinfectant being used, which is again a sustainability matter here and benefit that we will have with the antibacterial fabrics that we have. But also within the furniture, we see opportunities there to replace currently funded PVC furniture with our antibacterial fabrics. So also there, a very interesting segment. COVID. Work from home has changed the housing market in America. It has created a boom of people moving out of big cities, moving into homes there. And again, here, we are ideally positioned with our window and door sales -- premium window and door sales. Again, the energy savings factor here as their consciousness increases with respect to sustainability, where we have a wonderful opportunity to benefit from this growth here. Marine equipment, I've also mentioned earlier on, so I won't go into that too much. So that's our #1 strategic priority, profitable growth, recognizing the segments, having specific growth initiatives. We have the factories in place geographically. The output is already there to accompany the growth of these segments. So we're well positioned with respect to that. The second part is the differentiated offering. I mentioned earlier on that we had increased our focus on innovation here. That is a key element to ensuring that we can demand premium prices. Here are some examples. On the top left-hand side, in the water repair market, you see the world's first sustainable liner. It is made 100% out of recycled plastic bottles. And it is 100 -- production process, manufacturing process is 100% solvent-free. So this is something that we are launching as of 2022 completely new in this segment. We are sure that when we talk about innovation and sustainability being a value added, I believe that it definitely will give us the opportunity to add value to our products and to the bottom line moving forward. Top right-hand side, a bit difficult to see, but the yellow thing there is a huge suction pad holding on to a supertanker on which there are 24,000 containers. And what this product does, which we call the auto moor, it reduces the docking time when the boat comes to the quay from 90 minutes to 90 seconds. And that is a critical factor for the ports and for ensuring that they improve their efficiency and turnaround times. As I mentioned earlier on, the ports haven't grown, but the volume has grown tremendously. So also there, we see great opportunities in this specific market. Again, also there, rope free. No more ropes being thrown over the boats and being tied up to bow knots. Strangely enough, the most -- it's the #1 risk factor on a port. When we think it's machines, it's the ropes being thrown around, which has caused a lot of problems there. And obviously, the ship when it takes 90 seconds -- 90 minutes to dock, you can imagine the fuel that it consumes. Here again in 90 seconds, no more fuel consumption for that period. So great business accelerating advantages that we can use here to grow this business. Bottom right-hand side, another world's first. It is the first wireless self-charging road in the world, and it's in Sweden. It's in Gotland. It's a test ports -- it's a test road segment, a little bit over 1 kilometer. We supply the profiles on the ground under which secures that the electrical energy that is throwing -- that is coming out of them is not subjected to the slow that we have out here to the salt that we get on the roads to the rain and to the grit. So that's a very exciting project. Sweden or the Government of Sweden has plans to build 2,000 kilometers of self-charging roads by 2030. So also there, very, very nice little niche product where we see great opportunities of future growth. On the right-hand side, again, medical health care fabrics. This is a smart product. Here, we have sensors in the fabric itself. Unfortunately, there are patients who are immobile, who do not move, in hospitals. And through the immobility, they get pressure injuries. And the pressure injuries -- the treatment of these pressure injuries costs $27 billion a year in the U.S. And with the sensors, we are able to detect the immobility of a patient over longer periods of time and, therefore, then launch the movement of the mechanical bed or the air cushions in the bed to trigger that. So also there, a very nice little innovation when we talk about the unique products and solutions that we have. All of those 4 that I've just shown as an example have, in one way or another, sustainability as a need to go broad of our innovational process. Sustainability, the concept of sustainability has become part and parcel of how we think, how we develop products and how we want to be promoting the products going forward in the future. And as mentioned earlier on, also Trelleborg itself has a large sustainability target. We have a target which we name by 50% by 2025. Our business area has 130 projects well defined around the world to achieve this target, and we're absolutely certain that we will achieve that. So very happy with that. So our third little strategic priority here. And as mentioned, we've come a long way, but we still have some opportunities within the current structure to further improve the business. We see, on the one hand, opportunities to move some of the factories out of where they are, principally Europe, and inverted back. It's putting them closer to the customers, be that Asia, be that North America. We see some opportunities to restructure a little bit further. Fundamentally, large opportunities still there to automate further. So we see the operations still improving, getting closer to the customer. And third but not last, obviously, digitalization, the use of digitalization. What we have learned during the COVID times is of how to use digitalization to improve the efficiency of the whole organization is quite substantial. And also there, we see great opportunity still to enhance the value and the underlying efficiency of our company. So in total, summing it up. This business has been in a transformational process. We have come a long way. We're not quite at the end of it. We still have a little bit to do. Fundamentally, the structure is there and prepared for growth. We have the setup. We have the operational capacity. So I think we have a better, bigger business. We will continue to climb the value ladder with the innovations and products that we supply. And through it, we will continue to improve the bottom line. Thank you.

Good. Excellent, Jean-Paul. Thank you. We'll get back and ask questions later on, if you want, to Jean-Paul. So now, time for Paolo. Paolo is very happy to be here. He's been building a great...

As always, yes.

As always, but he has been building a great business the last few years. I mean struggling a little bit with the market, but now, finally, some headwind. And he's going to touch on that one and start with that. But of course, explain a little bit more also about the business. So please, Paolo.

Yes, thank you very much, Peter, and good afternoon, everyone. I'm going to introduce this afternoon Trelleborg Wheel Systems. Just starting from figures that are representing our business areas. I mean we are, today, as you know very well, a leading company when we talk about agricultural tires, material handling. And we have a niche, but growing position when we talk about the construction and 2-wheel business. More than 60% approximately of our business is agricultural, while 40% is made by material handling, construction and 2 wheels. Sales are just below SEK 10 billion. The operating margin, the EBIT margin, is 12.2%. However, I don't think this -- actually, we believe this number is not well representing the profitability of the company at the moment. This is very well explained by this slide. As you know, we have been facing strong raw material increases in our own business in the last few months. And obviously, there is always a time lag in the application of the pricing in the original equipment business that is representing today approximately 50% or just less than 50% of our total business. So obviously taking this dimension in consideration and looking at the future of having raw material now stabilizing, we believe obviously that with the implementation of the pricing formula that, as I said before, is kicking in 6 to 9 months later. Obviously, we are in a position to travel at our average target that is 15% return on sales. This is past anyway. So let's look into the future, and I would like to introduce Trelleborg Wheel System with a very, very short video. [Presentation]

So Trelleborg Wheel System, as I said before, is a leading global company. When we talk about agricultural wheels and material handling wheels, we have a European position and a niche position when we talk about construction and 2-wheel business. Looking at our platform today and also considering the, I would say, integration of CGS-Mitas that started at the end of 2016, also in 2017, and considering all the structural changes that we did within the organization in order to improve and to leverage the existing new platform, today, we can really say that we have a strong platform that is based on very strong brand. Any brand, in particular, Trelleborg and Mitas is represented today a clear added value for any customer we have around the world and is actually able to cover different market segments as well as different market needs. So we play -- our brands represented today really our key assets. And utilizing this brand in different applications, we are able to service customers all over the world in a more efficient and productive way. We have also enlarged our product portfolio today. Really, we have 7,500 products in our portfolio that are covering different market needs. So any customer sees Trelleborg Wheel System as an ideal partner to work with because it's able to any need that is part of his own business. And also, we've been working a lot in the geographical balance of our company. We have, today, 14 manufacturing facilities around the world covering 3 continents. This is very important because we want to be closer to our customers in any geographical area where we are in the world, in particular, now facing growth in North America as well as in South America and in the rest of the world, including Asia. Innovative leader. Yes, Trelleborg Wheel Systems is clearly, as Peter mentioned before, an innovator -- an innovation leader when we talk about agricultural tires and material handling tires. And that has been, in the last few years, fully demonstrated also by the trust that our regional equipment customers are obviously considering when they are working with us introducing new innovation. We will talk about innovation later on during the presentation. So a very strong platform, very strong platform that is ready to face the new challenges of the future and is able to face also a growing market. Yes, because at the moment, we enjoy a very good market development in any segment where we operate. The agricultural business has strong fundamentals. This is driven by growth population. We will be, very soon, 8.5 billion people. And obviously, all these people need food. And we are improving ourselves also in the mature market. The content of our food, in the way that we need more sophisticated and, at the same time, more demand, we have more demanding needs when we talk about heating and food. Material handling growing together with the growth of the global economy. We have spoken today about aerospace, but it's also about, obviously, movements in the ports and then transportation, in general, warehousing. And together with also construction segment, considering the growth in the construction industry that is driven by the strong urbanization. We have today the possibility to leverage a very strong platform that is facing the challenges of a growing market in the last few months and for the next few years. Peter already introduced this slide, and this slide is talking about the agricultural business. Very often, agricultural business is seen as a cyclical business. And in some way, it is a cyclical business. But if you look, decade after decade, has been constantly growing year-on-year. And this is clear. I mean this slide on the left show, at the end of the day, the production and the consumption of grain, but we can see many other agricultural commodities. The demand is growing and it's growing together with a global population. So we need to be able to face those challenges, and we need to be able to feed the world with more food in the next decades. Obviously, original equipment. Original equipment is also another key indicator. Those are the 3 top guys in the world that are obviously delivering machinery in the agricultural industry worldwide, and they represent more or less 50% of the total market. So this picture is reflecting that those guys, they are now enjoying a growing curve, not yet back at the level where they were in 2014. But looking again at the same trend in the last 20, 30 years, you will see that it is a growing part. And obviously, being a strong partner of the original equipment we enjoy, together with them, these opportunities of growth. Trelleborg Wheel Systems, as I said, is an innovation leader. And obviously, we are not present everywhere, also when we talk about agricultural tires. So we want to be present wherever we're able to deliver added value to our customers, wherever we are able to build and to deliver solutions that are increasing the productivity and the efficiency of our customers. This slide is showing that when you look at tractors above 100 horsepower, those tractors are obviously presenting CAGR that is, today, just below 7% and it's going to be 8% in the next 4 or 5 years. And this is logic. I mean it's all driven by stronger mechanization in new emerging markets and by the need to increase the efficiency and the productivity of the machine in the mature markets like Europe and North America. So we'll keep following this growth. Obviously, supporting our factories and our business with new products and solutions that are fully dedicated to high horsepower machines. Moving to material handling. Again, very nice growth, very nice picture. Today, when you look at the population of forklift existing in the world, growing constantly in the last 10 years. And this is clear. I mean you see that the goods are moving around the world. The automation of the warehouses increasing, together with the necessity to have forklift. It's growing. Also, the movement is so good between continents. And we see, also in this segment, an important growth, a CAGR of 9% in the next few years, simply driven by the growth of the economy by strong urbanization. Construction. We are all familiar with the construction business, I guess, in this room. I mean the construction is growing fast at the moment, and there is also something more that is happening after the pandemic. I mean any government in the world is supporting the economy with new investments in infrastructure, and we will benefit from those investments being able actually to service key OEMs and key customers worldwide with our own product and solution. So as I say, the market is looking really good for the next 4 years. And obviously, our platform is set today to face this challenge and to service more and more customers around the world, in particular, in new markets outside Europe, where we are -- where we have already a quite a strong and leading position today. Moving to the geographical expansion. As I said at the beginning, the biggest opportunity we have at the moment, and we live at the moment is really North America. In North America, we have, obviously, already a leading position when we talk about material handling. But we were able to build a new status of the [ art ] factories in the last 5 years that are located in South Carolina and in Iowa. And those factories are fully dedicated to the growth of the agricultural tire business in North America that, as you know, is very strong as I speak at the moment. And we are actually enjoying the saturation of this factory that has been, in some way, undersaturated for a while in the last few years due to the downturn of the agricultural market in North America. But now having the market recovering, obviously, we have an opportunity to grow our own business. And then obviously, our product portfolio today has been built and made in order to face the North American market with product and solutions that are fitting with the local needs. Last but not least, it's all about branding. It's all about building the value and proposing a new value proposition, and this is obviously clearly applicable when we talk about customized products and solutions and marketing activities that we built in order to grow in the North American market. Very often, we receive a question about North American market. When do you see the growth? Well, the growth is happening right now. And as you can see, we are just at the beginning of the recovery. The market has been down since 2013. That was the best year ever in North America when we talk about big tractors, so tractors above 100 horsepower. Now the market is recovering. This year, we reached approximately 32,000, 35,000 tractors when they were more than 50,000 tractors sold all in 2013. So we believe this growth will carry on for the next few years, and we are very happy to have a manufacturing footprint today that is able to face this growth and to support the local market. And obviously, we have put in place actions in order to gain share versus local competitors. North America is the biggest opportunity. But obviously, we have obviously grown. We are growing, obviously, elsewhere in the world, in particular in South America. China is still an important area of growth for us, together with the whole Asia Pacific and in the rest of the world, including Africa and Russia. This is really an opportunity for us. We have, today, 48 companies located all over the world that are fully dedicated to support the local customers with products and solutions that are able to meet the local market needs. And then we talk about services. Peter before was telling to all of us, I mean, 10% of our revenues today are generated by our service capabilities. This is very important for us because it's increasing our customer proximity. It's giving us the possibility to protect our margin, being closer to the customer at the same time, and being able to give them added value activities that are increasing their productivity and their efficiency. We've been working hard really in developing this business concept at a global level. Today, we are in more than 20 countries, and we have 82 service points around the world and we keep growing either investing or buying new service points or building or new service points from scratch, meaning opening new service points wherever there is a need or wherever there is -- there are business opportunity for us. So we've been growing our business by more than 50% in the last few years. And we keep, obviously, investing in the service activities, enlarging the service model that started with the material handling business, also to the agriculture and to the construction business. But the future of our industry is really all about producing more with less. This is not only in our business, to be honest, I think this is valid for any business in the world. We need to make sure that we are able to create products and solutions that are delivering more value to our customers, that are giving the possibility to our customers to be more productive and more efficient in what they do. And we need to be more productive and more efficient in anything we do. And this can only happen really if we are able to think a little bit more wider than building a simple product. We are, at the moment, working very hard in delivering smart products, smart solutions that are obviously made in order to maximize the efficiency of the operation of the customers that we have around the world. We want to be able to reduce the consumption of natural resources because they are scarce, and we need to be able to make sure that we are able deliver more value from the resources that we utilize today. And at the same time, we work with artificial intelligence, with automated solutions, anything that can make the business more efficient, producing more with less. And this is a value concept in all our organization, and this is really something that is driving our development activities day by day or our production activities when we talk about our own factories. This is just an example of what we are developing together with our OE partners worldwide. We are, today, delivering tires that are intelligent and are able to read the soil conditions in the agricultural industry and to translate what they're able to read in operational direction to the machines. The machines should be able to understand how to operate, adapting the tires to the soil condition in order to improve the efficiency, to reduce the soil compaction and, obviously, to reduce the fuel consumption as well at the same time. And this is what we call intelligent tire. This is the tire that is able to think in an autonomous way and to adapt to the pressure and the working condition of the machine without any input given by the operator. Last but not least, obviously, we have, like any company in the group, a clear target to reduce the CO2 emission by 50% in 2025. And these were reflected in the value chain of our product. I mean we start with raw material. We have seen before, together with Rosman, some clear example of our effort in order to reduce the utilization of the fossil fuel and our effort in order to use recycled material, our effort in order to be able to use biomaterial that can be recycled at the end of the product life. And then, of course, this is reflected in our formula when we do our compound. And then, of course, at the same time, when the product is entering in a production facility, we need to be able to -- going back to the previous concept, they're doing more with less. So we need to be able to reduce as much as possible the consumption of natural resources, like water, for instance, or to reduce the CO2 emission. Finally, delivering a product that ideally, thinking forward, thinking 30 years ahead, will be fully recyclable and then will be, again, utilized in the value chain of our own products. Those are only few of the activities Peter gave us only a few minutes, but I will need 3, 4 hours really to describe Trelleborg Wheel System in more details. But obviously, the key message here is that we have a very strong platform, we're a very strong brand. We are very well developing our service concept, and we are obviously extending our geographical footprint at the level that we will be able to face the new challenges that are -- and the new opportunities that we have in front of us in new markets that are developing fast at the moment. And the platform is also, today, we believe, profitable to sustain future possibility and future opportunities together with our team. Thank you very much. That's all from my side.

Great. Paolo, thank you. And also with Jean-Paul, Paolo will be, let's say, available for -- we are available here also in the break. But I mean, afterwards, more for some formal questions on the stage. But the plan now is to have a brief break. Just a leg stretcher, 5 minutes. And then Peter and Konrad will be on the stage. But one takeaway is, of course, now you have to see that this is also kind of a seal around seal, but now we go down to some smaller, circular things. But an interesting fact that we don't have it, actually, we -- just this year passing that we make more than one seal for each single person on the earth. So we're actually breaking now some 8.5 billion seals. That is an interesting fact that has been supplied from Sealing Solutions this year. I don't know if -- we asked on the break, isn't it, Peter -- we asked on the break of making 1 seal per individual on earth, which is quite amazing. So that is something. So we're going to talk about the smaller things, not as, say, sexy as a tire, but still very interesting. So 5 minutes break, leg stretcher, and then -- I don't know, sorry, I mean maybe too much involved in the business to talk about tire is a sexy thing. But nevertheless, 5 minutes, and then Peter and Konrad on the stage. [Break]

Okay. Now we're be back and talk about Sealing Solutions. And as I already said, Peter Hahn, but then supplemented by Konrad Saur here also to give a little bit flavor more on the in depth technology and a few items. And also Konrad is also responsible for sustainability within Sealing Solutions as well. So that is also [indiscernible]. Like most people in Trelleborg, he has more than 1 job, but I only get him paid for one, but he has multiple jobs. So Konrad is not [ exempt ] from that general role. So please, Peter, please go ahead.

Thanks, Peter. Well, if you think tires are sexy, I think now you're going to see some really sexy stuff. We share the weight. So it's going to be a ping pong between the various topics. Let's get going. Sealing Solutions, and it is seals and engineered products around the seal, just to expand the scope. We claimed that we are the most successful in our industry. That is true in 2 dimensions. It's the best value that the customer is getting. And when you get value, you are usually willing to pay a bit more for the value. Hence, a very satisfying EBIT margin that we get out of this. We have a very nice balanced portfolio, strong industrial portfolio, which is made up of several different segments, of course, aerospace, health care and medical or about the same, aerospace, of course, in a catch-up mode, historically was much higher. And automotive it's 2 different type of businesses. One is brake noise reduction, a very lucrative business, a very good business. And the other one is a mix of niches, of which about 25% is in combustion engine and the rest is in all kinds of applications in the car. This comment about what is the future of automotive going forward from a change from combustion engine to electricity. We have 33 factories around the world. I have to say the strategy is to be region for region. So we have the same capabilities or similar capabilities in all of the 3 regions: the Americas, Europe, and in Asia Pacific, with few exceptions, of course. That's the factory concept. R&D centers are spread all over the world. It's now 10. The last one was just opened up. Konrad introduced India to be our next one and therefore, has strengthened that. And they have very special capabilities depending on the site, $12 billion sales approximately. So where are we? What's the platform? The platform. The first dependable platform is our business model, which is scalable. We are a functional organization by and large, and we focus on the customers where they are. There's no country that we -- where we have customers that we wouldn't be with our own sales and marketing organization. Engineers on site close to the customer, solving customer issues. This proximity is important. And at the same time, we work these global customers through a coordinated approach because many of these global customers they have development centers in one country, they have purchasing in another country, and they have production all over the world. We need to be able to deliver that full service wherever they are. That's the setup. In the background, we have a very sophisticated logistics setup, supply chain organization, and they get fed by the various manufacturing plants. And they also get fed by what we call the third-party suppliers. These are partners, I'd say, roughly 250 different supply partners over the years that we have built up to come up to our quality expectations, and they supplement the product line. We'll get to that product line question now in the next one. It's the strong portfolio. When the sales guy goes out to the customer and says, "How can I solve your problem?" We need to be able to solve all the problems in the space that we are playing in. And therefore, a full product portfolio is key. And we get that through this share of external and internal capabilities. The offering is strong technically, but also from a service point of view, and we'll get to that later on in the presentation. And as I said, R&D could be anywhere in the world. So we will have -- we have global development partnership in most -- all of these countries. There's R&D in Europe, in multiple locations in the U.S., in China and lately, as I mentioned, in India as well. Platform is ready. Now we talk about the acceleration that Peter was talking about. The acceleration, it's about picking the right and attractive segments and within those segments understanding what it takes to be successful. So if you have a strong growing segment and you do the approach right, you can't avoid to grow. These are the 6 that stick out, of which 5 are market segments and the electrification. Hydrogen is really across several of the segments. It's a trend in that sense. So we look at each one of them step-by-step now, let's go for aerospace. Aerospace is a highly condensed customer base. As you all know, there's only 2 big -- very big commercial aircraft manufacturers, but they have a network of production sites and partners delivering the tier structure that is quite dispersed over the country -- over the world. And therefore, we have these, what we call, aerospace hubs in all of the regions to be able to work with these engineering challenges. In addition to that, China is becoming the next big thing. There's an unbelievable forecast for Chinese domestic flight, and we definitely know that there will be the local manufacturing of planes for the local market. Therefore, we're in all of the models that are now being either developed or actually have been launched already, very important. Unique testing capabilities besides R&D. Testing is everything in this industry. We have the world's largest hydraulic landing gear test rig that exists. We can test the life size of a landing gear and it had actually allowed us to enter this market. It's a huge piece of equipment that Konrad's guys are operating in Stuttgart in this case, 2 stories high, basically. There's another one that I want to point out. When it comes to fire seals, I'll get to that in a moment, what that actually is, it means unique testing in the sense that you actually burn the seal and see how long it lasts. That is -- we are the only manufacturer that has that capability. All the others have to go out to test houses to get that done. And it takes weeks to get lined up to get a test done. So here are the 3 big subsegments, if we call it, that we play in. Hydraulics and actuation, we are the market leader from a market share point of view. It's everything that actually gets the plane to maneuver, so all of the flaps and the controls that are hydraulic. It is also the landing gear that I was just mentioning that's in that section. And it is a highly complex set of seals and bearings that you see with our company colors. Second section is aerodynamic seals. We've been in that business for a long time, significant growth right now. We are not the market leader, but we are in the top group. And therefore, there's huge growth potential still in that area, and they're growing very fast at this point. That's probably the only seal in a plane that you will ever see because when the landing flaps pull out in the last phase of the landing, you will see those seals just around all these flaps, it's fuel consumption -- reduction of fuel consumption. That is the reason why these seals are there. And the third one is the engine seal, the fire seal. It has one purpose only. When the engine catches fire in air, the pilot has 15 minutes to extinguish the fire. And it is by extinguishing with a fire extinguisher. But in that phase, while this's going on, the fire has to be routed outside of the engine. It goes through pipes and seals that we provide. And therefore, the stringent test requirements to make sure it lasts 20 minutes at least. So it has a chance to actually distinguish.

So great opportunities today in aerospace, even greater opportunity is going forward. Greening the aerospace industry is part of our mission. We work with our partners, with our customers hand-in-hand, both in terms of new types of fuels as well as continuing the journey towards fuel efficiency, and that is mainly through light weighting. What you see there is examples. We have actually been chosen by Airbus to work on their hydrogen propellant consortia, which is really great, developing the whole infrastructure in a plane for future propelling hydrogen instead of kerosene. And we are also developing a new set of materials, and through that seals that can withstand the biofuels that are, by the way, super aggressive. That's not a stupid rubber, that's a highly engineered product. Light weighting goes in multiple directions. High-performance plastics replacing metal components. And the example that we brought here, the wing of the future, you can imagine the further you go out on the wing, the more important [ lifesaving ] gets. And this is where we are playing in the composites arena towards structural composites.

The ambition is to grow this business by 100%, double it. That is within the horizon of what we're looking at, that is doable. There's multiple dimensions to this. Of course, one is market recovery. Airbus as well as Boeing out to their suppliers asking for rate readiness and the ramp up is significant. Just one example, Airbus has been running in the past at a rate of 40 to 45 planes, and they are talking about 70 to 72 planes that they want to ramp up to. So the market itself is in strong recovery mode and very nice growth rates. The second one, I already mentioned, expansion in Asia, specifically China, but it's also the tier structure. We are in Malaysia with supply to Boeing and suppliers, et cetera. So there's a fast-growing section there, and expansion into high-performance materials. Konrad mentioned that one example, there's a few other ones on the drawing board. I'd also like, on the technologies and capability side, mentioned that we have a new playground, while we were, so far, on the outside and the wings, we have now moved into the interior. And with our colleagues from TSS, we are now actually collaborating using their exclusion capabilities that they have built up for other purposes, and we are now delivering into the aircraft extrusion seals in many dimensions. The other one is we're in the injection molding of plastic in the bathroom of an airplane. Maybe that is less sexy as a topic, but it's definitely a good moneymaker, and that's going on right now. So the first project have been won, and it has -- just to give you a flavor, it has a dimension of flipping the share of aerospace of one of our bigger manufacturing sites in the U.S. from a share of 10% aerospace to 70% within the next 3 years already on projects that we have won. So exciting capabilities. Let's move on to another one. That is also a very exciting market. I don't want to touch on all of them, but I'll get back to pharma and biotech in a moment. Let's look at drug delivery. A number of projects going on right now of changing the world of drug delivery. The first one is now being launched into the market, where we provide a little touch, a silicon and plastic microneedle patch that, in this specific case, is a Botox application that you just don't inject anymore, but you just put on your skin and it releases, in a defined way, releases the pharmaceutical. There's, as I said, a multitude of projects right now. The market is hot because this is the next big thing. It takes a few years, and we are a few years now into the next, let's say, in the next 3 years, you will see a number of releases in this space simply to release medication. Very exciting. Diabetes care, amongst a number of them, these are products that need high-precision silicon injection -- molded silicon parts, and there's multiple of these and several of the plants in the health care and medical unit, they are actually producing these high precision parts. Very good business. Cardiology, urology and a few others need catheters and need high precision tubing, made in a clean room, assembled in a complex assembly depending on the application, another big playing field for us, just to mention a few. Let's get to pharma, biopharma. Hot subject right now because this is where vaccines -- COVID vaccines are actually being processed. This is where they're manufactured, and we have this -- this is one customer solution. Where it started initially with the magnetic coupling, and you can see all these other products that's now [ theory ]. This is true deliveries into this specific bioreactor, and there is a number of players in the market. We're actually making also a composite frame throw-away products that every time you finish one like this, you finish a batch, you have to throw it away. It's several thousand dollars, in this case, per tube, and you put a new one in. Very nice. And of course, right now, very hot project. So what are they growing at? They are looking at further concentrating on the top 75 global customers. A lot of them, most of them actually originate -- original in the U.S. Top 75 are beyond 60% of the global market. We focus on those. And then they bring, of course, all these applications that you saw because they're working in a multitude of these applications. We have not even explored the potential -- the full potential of all of these. We have the sales force ready and we're already digging to take best practice and experience and then replicate into the other subsidiaries of these conglomerates. So that's one. The second one is our factories are U.S.-based. We are in the process of using sites that we have in Europe. But in Asia, we have to build the platform. We have a factory, and we are now introducing the first liquid silicon soon into that existing factory. So it's a scale-up challenge. Broadening the offering. We are mostly concentrating on silicon right now. Now there's other materials playing around silicon, high-precision metal, micro injection technology that is needed in this space and thermoplastics. And with the addition of all of these capabilities, organically as well as in the acquisition, we will be able to do one more step, and that is a trend in the market right now that these customers want a fully integrated solution delivered to them. We have a few examples where we already deliver medical devices, and this can be greatly expanded. We will not develop the application, that's the customer's job, but they want an easier life to simply go to us and say, "This is what this machine is supposed to do. Can you please develop all of the parts we need? And we will source third party and assemble it and then deliver the assemblies to us." This is a strong trend, and we're positioning ourselves to do that. M&A is an accelerator. It will help us, of course, greatly to speed this expansion up in the strategy. Get to the next one, Konrad?

Yes. Food and beverage. Paolo was speaking about the food production going up. At the same time, the regulations towards food safety are increasing. Now fortunately or unfortunately, that's very regional. You have national regulations. You have regional regulations. Our customers, however, want global solutions. Our clue is that we are developing materials and solutions that meet all global regulatory requirements. We can offer solutions that nobody else has. And going forward, the same thing is happening with potable water and other things. It is high growth. It is very high entry barriers through these regulatory means. Today, we are very strong in Europe. We have a very solid foundation to grow that business globally. And the expansion is happening as we speak.

Here we go. Now the next ones were group in a group of 3 exciting other segments. Peter has already alluded to the semicon in his presentation. We have a product line, which is based on a revolutionary material, which is a state of -- not more than state of the art, it's advanced compared to what is out in the market. At this point, we call it PureFab. It's ready to be launched, and it's about now getting into the phase of sales and marketing for this. Where technically, it's already proven to work and is superior in all tests. It's an operational challenge to just ramp up the manufacturing capabilities, so we know exactly what to do and where to put more clean room space, not a problem. And finally, there's another product line that is in the final touch of being released. So this is a good start, and it's -- as we saw 9% growth for this market annually. This is here to stay for years. This is going to be a really good business, not just for the market, but for us as well. Industrial automation. Staggering numbers from those numbers. It's important to understand which of the subsegments within the automation is relevant for us. Wherever is something that moves fast, moves with high precision and robotics is one of these examples, that's our domain. This is our sweet spot. It needs a lot of seals to drive a robot, a lot of seals. So therefore, this is a focus area. It has been for some time now and it's growing fast, but it's also taking us into the future. Konrad?

Another high-precision, high-accuracy application e-mobility, fast growing. And what you see here is only a selection of applications that we are servicing. And this is all brand new. There is nothing that exists. Today, everything in the car, like an internal combustion engine, is evolutionary. All of that is new. Offering unique possibilities towards functional integration, introducing new materials, new designs, working hand-in-hand with the customers, and this is opening doors for us and gives us good opportunities. Now it's not only about passenger cars, electrification and mobility is happening in various places. e-bikes, a very good example. In 2019, the world's sales in e-bikes have been 3.4 million. It is expected that by 2030, that will be 17 million. We play into it. We are in this business. And if we assume that we have a share of EUR 40 to EUR 50 per bike that is being sold, you can see what growth that would deliver. It's other electrification needs, movement things. It is the hydrogen economy that we are going. And it's not only the hydrogen fuel engine, it is the entire infrastructure, the whole value chain, producing hydrogen, storing hydrogen, transporting hydrogen, bumping hydrogen that needs new solutions. There is nothing available today that can seal against hydrogen. Those of you that have a little science background know, hydrogen is the smallest molecule that exists. So sealing against for something that is very small and that is highly explosive is a challenge. But it is believed that this is one of the potential future energy sources. And if we speak about sustainability, this is where a significant contribution will come from us.

So you need to find the solution.

We have it already. But we can't speak about it.

All right. So here's to summarize the concept, we're not going for a single part at a price. We're going for always a solution. In this case, in a windmill, you see all these existing solutions that we're actually servicing. It's about understanding the application, and then having a complete offering around it. But it's not only about a product and the engineering that goes around it. It's the entire ServicePLUS concept. Peter had mentioned that as well. We live that. We breathe that. The digital tools -- our digital tools that help engineers to save time make their life easier. One only example, there's only 6,000 aerospace hydraulic engineers in the world. 7,000, I don't know who the other 1,000 are, have downloaded our engineering app to design hydraulic systems. This is -- the entrenching and giving full service, make their life easier. Assembly work. I just talked about integrated solutions in health care and medical. It's everywhere, and we are now launching a number of ServicePLUS centers. We have -- in the U.S., we have 4 now. And they will also be launched in Europe. These are service centers close to the customer, and they are actually performing assembly work for the customers. So we will be delivering entire modules, depending on the customers' desire and our ability to take a seal and put it into whatever assembly this may be. Advanced delivery, out in the market, several of those installations fully automated. In a Kanban system, the bag gets taken out of the box, and a sensor detects this. Box is empty, initiated its purchase order. And we ship the next goods. And all they have to -- all the customer has to do is put the bag into the bin, fully automated. Now special handling. Whatever you may need as a customer in terms of delivery, shape, packaging, the yellow dot on a black ring, whatever it may be that -- in the special handling service, there is probably close to 70 different operations that we have standardized module approaches to the customer. And finally, QuickSeal. If you need it tomorrow, we will deliver it tomorrow. It can be done. It's a matter of setting it up. The latest one we've released is a so-called iCast process, where we can 3D print and ship it out. Konrad is going to allude to that now.

Yes. Talking about that innovations in all we do. We will continue to develop new materials, new designs, specifically for more and new demanding applications. That's where we are coming from, protecting it through intellectual property protection like patents but sometimes trade secrets to really protect our markets, artificial intelligence being one of the key ones. And that's an example we brought from our colleagues in then damping systems, where today, through trial and error on test rigs, we -- it takes us months to develop a solution. Now we are using artificial intelligence, use historic test data, current test data and are now able to come up with a solution in days. What that means, we are first to propose a solution. We are first to be in customer trials, and that is enhancing the likelihood of success. That's only one example how we use the combination of artificial intelligence, simulation and other tools. Peter mentioned iCast. The lead time for some of these products, because you have to go through tooling and toolmaking, is weeks to months. iCast delivers you a prototype within hours should that be required. And the big advantage is this is not a cheap and dirty material. We can produce parts in the fully specified final material. So that's not a show-and-tell sample. It's a real part that customers then can go into validation within hours. Its speed to market, it's helping our customers to quick -- with quick turnaround times.

All right. Globalizing. Well, globalizing the offering is simply, as I mentioned, you need to have the same offering all over the world, and there's still some pockets of improvement and expanding this. I talked about the ServicePLUS centers just a minute ago. And finally, we have a strong project that is accelerating growth in Asia. The markets are growing. They have been -- our organization has been growing significantly, but there's much more to do. And as part of that initiative, we moved R&D activity into the new R&D center in India, but there's many more coming. And we have decided to put a factory, a new factory into Vietnam. Southeast Asia, strong -- very strong growth rates and significant growth in the years to come. So we are positioning that factory not just as a low-cost site for the wider Asia Pacific but specifically also for the Southeast Asian region.

Sustainability, part of our DNA, long history, and Rosman was referring to it. It's not new. It's not a flavor of the month. It's deeply ingrained -- it's ingrained in our innovation process. It's ingrained in our design reviews. It is detailed action plans, pretty much what the colleagues were describing for the other BAs to greening electricity, reducing our own footprint, focus on energy efficiency. Avoiding waste is very clearly high up on our agenda. Sustainability being part of our DNA, now with the protecting the essential campaign even more highlighted with super positive feedback from our employees that they are fully engaged. They love the initiative and pay back with loyalty and engagement, driving the performance of our and certainty of the other BAs big time.

All right. Summarizing the ambitions, these segments that we went through, the high-growth segments, the ambition is to get them to 50% of our revenue as a share. Absolutely doable, but there is an accelerator. Of course, M&A comes in, in pockets where the know-how and the organic approach would be lengthy, and this can be shortened by going for specific targets. We talked about ServicePLUS. That could be accelerated. We just completed an acquisition in the U.S. It's more of that same nature. This will -- is a distributor, and we'll turn it into a ServicePLUS center. Technologies to broaden the offering, I talked about high-performance plastics and high-precision metals and microinjection. And then finally, geographic expansion, there's a lot of targets that we have now put on our search list in Asia Pacific. And we're quite confident that we can pull that one off. So ready, scale up and accelerate, that's our task.

Great.

Thank you.

Thank you. Now we're opening up for a Q&A session and ask Jean-Paul and Paolo and Fredrik to join.

Do you want to get the chairs?

And ask Christofer to facilitate.

Yes. I think we'll start with some questions from the floor. [ Erik ]?

Okay. So I have 3 questions. The first one, on Industrial Solutions but comparing a bit to Sealing Solutions in that which is that we saw all of these end markets that you're talking about, which feels that you're -- you see the end market, you assume you see high growth there, and then you develop a product and try and go for that. And correct me if I'm wrong, but on sealing, to the extent one of those end markets bets doesn't materialize, some of them obviously won't, it feels like you won't be sort of tied with specific production capacity specifically for an end market. What does that look like for in Industrial? If you -- if one of those end markets doesn't develop the way you thought it would, can you rearrange that production capacity and that product? Or are you sort of stuck in that specific vertical? How flexible are your business when you go after all these specific end markets?

Sure. Okay. Obviously, I mean, one of the key messages, again, is that we select the niches in which we play in. So a lot of preliminary work goes into understanding that specific niche and to understanding where the demand is and then understanding what the customer needs are, because the ultimate goal is always to add value to the product itself. So when we talk about developing a product, so far, I would tend to say that most of the products are products which are replacing existing products in that specific market only with a premium added value to them. Then when we talk about innovations, so that's where possibly a risk could be higher like the AutoMoor or like the pipe repair solution that we have, which is completely sustainable. There, we are creating a market. So we have to create the market demand. But the actual setup and the factory setup is relatively small. So we accompany the growth of the operations with the growth in demand. But the risk is small.

So on pure manufacturing, if I understood you, also another angle on that is, of course, most of the manufacturing units has got a multi-market approach. There is a few factories, which is maybe the automotive boots factories, which is linked to automotive. But I mean, the vast majority of the -- doing seals or doing houses, so doing anti-vibration mounts, that is kind of a multi-market factory, if that's what would you meant there. So there is flexibility in that. But also, like in Sealing Solutions, there is a few factories which are very targeted on specific materials. But still, the offering might be more integrated, but the manufacturing unit behind it might be very specialized. So that is not that big difference in a way.

No. No. I mean, the short answer is the risk is extremely small. Yes.

Okay. And then another -- sorry. On Sealing Solutions, and you're talking increasingly about sort of robotics and windmills. And they've been around for a very long time, deployed in very high volumes for several years. Those are not sort of new markets. But are those new markets to you? Are your market share there very low at the moment and you're now starting to explore those end markets? Or why haven't we heard you talked about -- I mean, we deployed a couple of million robots 10 years ago globally. So...

Yes. The windmills were just an example for the complete approach to it. This is existing business. And as you say, we're in it. And there is -- this is growing with the market. The forecast for the windmills, we saw earlier in the presentation, is significant. So that's riding the market with a complete solution. On robotics, the example of the specific manufacturing robotics, that is a still very fast-growing market because it's not just Japan who is the leader in this, but it's China now very much entering this market and a few other regions growing into it. So the market is adding dynamics. And we are ready for high-performance seals, which is unique in the market. There's not...

And we're already very well represented in both areas. But I mean, if you say industrial robotics, you still talk about the CAGR of 20% in the next few years.

But there is another element of growth, and that's why these numbers are so staggering. It's not just manufacturing robots. It's these autonomous driving robots. It's all kinds of variants now developing in the years to come, and almost everyone needs seals.

The automatic logistics centers is a big area as well growing. So this -- I mean, you have, let's say, tens of percent CAGR on this one. So we are -- don't misunderstand. We are well represented in this segment. We simply say that from this space, we expect substantial growth. Also, for windmills, I mean, the number of projects for the next 10 years is multiples of what we've seen in the last 10 years.

Okay. And then one final question also in Sealing Solutions and on China, which, if I'm not wrong, China or sealing is still a much smaller part than what China IP is or global IPs. So what's the -- are you continuing to grow faster than the market in China? What's the competitive situation look like? When do you think we'll see more of a sort of advanced seals penetration in China as we have in Europe and North America? What's the trend there?

Yes. Well, there's multiple dimensions to that. First of all, we've been playing in the market, you could say, in the top 10%. And then there is very many local competitors that are producing cheap standard seals. So we're in the high end. As China went more and more into export, they realized they have to have high-quality products. And therefore, they do gravitate towards the high-performance seals. And this is a strong growth driver for us. In terms of IP, you mentioned this. Well, we manufacture in China, but we keep the recipes distributed. There's not one person that knows how we actually make it, and it's our IP. We are the only one that makes this type of quality material. And therefore, that is a protected island, if you want.

And please remember also, we have had a CAGR for the last 10 years in China with 16%. So I mean, it's been growing dramatically and, of course, with the base being substantially bigger. So of course, it's much more euros every year as we continue to grow with this 10%, 15%, 20% CAGR, which is still the ambition. It's still the plan. I mean, we should also be open about the acquisition targets in China is not on the level where we believe the vast majority of competitors is not sustainable with the current quality or the current, let's say, setup they have. And that is why we kind of have not stepped into that. And the high-end ones, of course, there is high-end manufacturer of seals. But they are a very heavy automotive-focused because they're driven by automotive. And that is why we also decided not to go for that. We looked at quite a few companies, and there is a few targets which might be interesting. But the majority of them is either low quality or very automotive focused and then selling a little bit into the industrial segments. And we don't want to buy a company for 100 if we are only interested in 20. Then it's better to grow that organically. And once again, remember that our CAGR has been 16%, and the base is getting bigger and bigger. So I mean, I think China is developing very good for us and also to be in a very profitable way as well. I mean, it's above average profitability in China compared to the rest of the world for us as we have a much more focused offering in China compared to what we have in the rest of the world. Olof is hiding, but he still...

Yes. Olof from Danske Bank. I'm curious about -- you're talking about growth going forward. And at the same time, there are some supply chain issues. And I think John Deere mentioned that for large tractors, there should be 15% growth in next year. So I'm a bit curious, given the growth that you are talking about, how much more do you need to invest maybe next year and the years after to come as well?

Is this specific for ag gear?

I think also for sealing solutions, aerospace coming back quite sharply. How much do you need to invest in order to meet the organic growth target that you have?

Shoot first, Paolo.

Of course, we were expecting this growth. I mean, it is not coming -- it's not a surprise for us. So we were already expecting the company, in particular in North America, and John Deere is referring to North America in this case, in order to face this challenge. And we have 2 new -- brand-new factories at the moment. And those factories, actually, at the moment, enjoy a much higher saturation. And there is still plenty of space to grow. So really, this 15% growth anticipated by John Deere is just a good news for us and for Trelleborg in general. So we are ready. And actually, we are, at the moment, enjoying this growth, especially in North America.

And maybe to say as well, when you build, let's say, tire capacity, you have some kind of infrastructure. You have a steamer. You have the preparation and all of that. And basically then to grow capacity on that, you need to add building machines and presses, which is quite small investments in compared to the total. So of course, the overall infrastructure -- of course, we'll see soon. Hopefully, Paolo, soon...

When I ask a new investment, it's very small. I mean, it's...

Yes. Yes. But I mean -- so that is a step-wise to grow with another, I don't know, 20% or 25%. It's actually, in relation to the totality, fairly small. It's more than you have the step-up investments. And as Paolo said, we have framed the factory for much higher capacity. But of course, I mean, hopefully, we're going to end the wall soon, but that is not within the current kind of time frame.

Not in '22.

No. Not in '22 and hopefully not in '23 either. Hopefully, in '23, then we put it like that because then it means that it grows quicker. But I mean, within the current framework, we can do this still with some CapEx, but that is within the overall CapEx in order to add a building machine and a few presses and all of that to cope with that one. I don't know if you want to comment on the capacity for aerospace specifically.

Yes. Is the mic on? Yes.

Yes.

Capacity, specifically on those 2 examples you mentioned, John Deere is a big -- very big customer for us as well. It's not a problem from a capacity point of view in terms of floor space or machinery. And even if it were to need one more lathe or one more injection, molding machines, it's really negligible. Ramp-up for us is more the challenge to get people, get enough people. But that is a manageable challenge. In the case of aerospace, you have to remember that aerospace is still down compared to the boom in '19. So again, physical capacity of space and machinery is not an issue at all, and the people case is a challenge. Aerospace has the advantage that it has very nice margins. It has small quantities, actually. So even if they say we're going from 40 to 70 planes, it's not a real logistical challenge if we plan it in the right sequence.

And maybe also to highlight that in aerospace, it has actually very long planning cycles because it's a long upgrade. So we are, I don't know, a year ahead. But I mean, a year ahead usually have a good -- now of course, the pandemic pushed it down in a completely different way. But in a normal environment, I mean, Airbus is adding 5 planes a month. So they know if they go from 40 to 70, I don't know what the time frame for this is.

3 years.

3 years or something like that. So it's a step-wise. So it's quite easy in a way to plan the capacity specifically for aerospace.

Yes.

Okay. I see here, we have many, many online questions here for you guys, and we will not be able to answer all of these. But rest assured, I will go back to you and answer this question to you personally in the days to come. Anyway, very quickly then, Hampus Engellau for Handelsbanken asks to Paolo, "Can you talk a little bit about the competitive landscape for Wheel Systems in North America, your profitability right now and how you think about profitability versus growth in this market?"

Yes. We have a unique opportunity now to fill our factories with this additional demand. So by nature, I mean, the profitability is improving because we turn from a negative because, obviously, when we started these investments, we had very low volume to extremely promising margins growth for the next few years. And this is happening already today.

And I've had also several questions on the same topic here, and it's directed to both Peter and Fredrik. And it's basically about not having set individual business area margin target in this presentation today. Can you comment a little bit about that?

Yes. I mean, we decided to focus more on the group margin. And of course, we have internal targets, internal ambitions per BA. But I mean, that is, I mean, our communication in external in totality. And that is why we have decided not to keep kind of specific targets, external targets per BA because that is more important for us that we have, let's say, moving on the top-level ambition. And that is really where the focus should be for us and also, we believe, for the external markets following us. So that is a decision we made solely in order to make sure that there is more focus on the totality than individual business because we know the businesses is different. We know they're moving a little bit, let's say, -- not, let's say, equal, a little bit different exposure and then moving a little bit in different ways. So that is why we said that the most important targets for us is the group target, and that is why. I don't know, Fredrik, if you want to...

No. I think you summarized it extremely well, Peter.

And to Peter Hahn here in -- on Sealing Solutions and ServicePLUS, this is Klas Bergelind, Citi, who is asking this question, "I thought the approach for customers to use online configurations was introduced years ago, to move away from a traditional distributor model to a more customized approach. I'm trying to understand what the real difference is with ServicePLUS."

Yes. Yes, Peter.

Well, ServicePLUS is to move closer to the customer and have an answer to their requests to deliver modules, to deliver a bigger share of supply to them. And wherever the seal needs to be mounted anyway, we are the expert for that to start with. So it's a win-win for both sides, and we are opening these ServicePLUS centers as there is customer demand. We're not just opening one and hope that somebody will come by and maybe buy something. So it's enhancing the full-service offering in this case.

It's more a selling than an engineering service. So that's a sales service and not an engineering service and not a design service.

Yes. But it's a very individual solution every time.

Thank you. Agnieszka?

Yes. A question to Paolo. You showed the kind of underlying structural growth for the wheel market and agricultural wheels with increasing food production and so on and more tractors that we need. However, if we look at the sales of wheels, they have been quite stagnant. So what's the reason for that in your opinion? Is it that the tractors are more effective, they can cover more land? Or what's driving that?

I mean, we need to distinguish -- when we talk about units, of course, you see that the increase of the market is not the same speed as it is in revenues. Obviously, there is an inflationary level at the moment. But clearly, yes, you need to see the mix, as you said. I mean, there are more powerful machines sold in the market. There are more smaller machine, I mean, in that one machine is doing the job of 3 machines 30 years ago or 20 years ago. This is what is changing. And this is where we are very well positioned for our future growth because, obviously, we are a specialist in that part of the segment. And we are actually leading the market since we are partner -- a strong partner with all the original equipments worldwide.

And it's growing bigger and bigger. I think we can share that in Tivoli, I guess, on the major plant making big...

When I started in this business in 1996, the biggest tire was smaller than me. Now it's really 2.3 meters. So obviously, this is reflecting -- a lot smaller previously. But obviously, today, it's even bigger. It's 2.1...

The average weight as well. I don't know...

Average weight now is almost -- when I started, it was less than 100 kilograms. Now we are at 250 kilograms. So it's really more than doubled.

So more sales per unit. So we don't calculate the unit anymore. It's more the sales value, which of interest for us.

And the margins are more attractive.

And the margins...

I have several questions to Peter Hahn on the same topic also. And you mentioned you want to double the aerospace and the health care and medical segments and using M&A as an accelerator to achieve that. And at the same time, we all know that the price for targets within these segments are quite expensive. What exactly are you targeting? Where do you see fields where you need to be strengthening your position?

Yes. In aerospace, as we talked about the high growth coming back, the -- it's more of a complementary strategy, so adding what we call adjacencies, technologies that we're not into. And as we move into the interior, that opens up a whole range of potential targets for us that we would use as a stepping-stone and then continue with organic growth. In health care and medical, I mentioned these extra, we call it adjacencies as well, thermoplastics, microinjection and high-precision metal. We have these technologies already, but we don't have enough of it. And therefore, M&A is an accelerator. The price has to be right. The integration needs to fit to the strategy. And ultimately, it's building that platform to get to a fully integrated solution provider, the story I was talking about. So that is where the focus on acquisition is.

Sorry. And maybe to supplement Peter also, maybe you can share as well because we have changed a little bit the approach because earlier, we were probably looking much more to clean companies doing only aerospace or only medical, which means that the valuation usually gets very high. But now we opened up a little bit also. As you say, micro molding, we could potentially go for a micro molding company who is not focused on medical or on -- and let's turn it into that one. And then it's just more realistic, and we can use the other capability as well for other segments. So that is, I think, what's a little bit differentiated for us compared to a lot of other companies is go for fully clean medical company. We can -- like one of the more successful acquisitions we've done in the last few years in Switzerland, I mean, we -- that was automotive focused for that factory when we bought it. And now we turned it over more to life science and then medical. And that is a kind of more -- to get more value creation in, let's say, buying it. Maybe a little bit -- to be very open minded, that's the change a little bit, where we change the last year or so, to be more open to this kind of not turnaround stories because they are well performing, but they might not be...

Rebalancing stories.

Rebalancing their exposure into various markets. And we can still use the other capabilities to sell into other segments but still turning the companies more into a good fit for us.

Okay. Any questions from the floor?

Yes. One up here.

Yes, please.

Daniel Johansson, Pantechnicon. Coming back to the U.S. ag side of things again, what is your current market share? Who are you taking from basically? And what's happening -- what is the competitive response? And secondly...

Sorry, saying that, which area?

Which business?

Wheel System, sorry. Yes. Yes. And secondly, are you overweight, Deere, for example, or Case New Holland or any such aspects to it?

Right. We obviously don't disclose market share, but we have a leading position, as I said before, when we talk about material handling. And we have a growing position at the moment when we talk about agricultural business. Clearly, the growth is coming, as you mentioned, from big global accounts like John Deere and CNH. And this is really what is driving our growth at the moment in order magnitude...

But we can say we are not overbalanced to any of this. We have quite equal, let's say, exposure to Deere, AGCO and CNH.

Right. Yes, of course.

Yes. So we are well represented in both of them. So it's not like we have 50 in 1 and 10...

No. No.

We are fairly equal.

Obviously, North America, AGCO is very small. So actually, the biggest one remain John Deere and CNH, while AGCO is extremely small. AGCO is strong in Europe and is reflecting...

But overall, we are not dependent on any of these 3. I mean, that is what I know.

No. Not at all. There are other customers like Buehler, Versatile and other bigger players as well.

And on the market share in total for the material handling, it's Michelin?

Well, you talk about, yes, caps for Michelin and a bit of Continental in North America.

Yes. So that is kind of 2 main competitors in material handling. And for the ag, it's a little bit...

Ag is Firestone, Titan and then obviously us with the 2 brands [indiscernible]. Michelin, very little in North America.

Yes. But we're talking globally.

Ag, no, we're talking about U.S.

U.S., sorry. U.S., sorry.

U.S., yes. Michelin do not have production capabilities in North America. So at the moment, it's really focused on Europe.

So U.S. is Bridgestone, Firestone and Titan.

And us.

And following up, do you think it's easier to gain even further market share in a growing market?

Nothing is easy. Otherwise, we will not be here. But obviously, in our case, it is easy because we are bringing new technologies, and we have actually a global brand that is well accepted around the world. So we can leverage actually our strong position with the original equipment in order to be supported in growth in North America as well, while, for instance, our local competitors in North America are really local in some way because if you look at Titan, it's really strong in North America, but it's very weak all over the world. They have a presence in South America. And Firestone is really a strong brand in North America, but it's not in other regions of the world. So we have an opportunity. And we have, I believe, also the technology and innovation that is supporting our market share growth in North America.

We can be open as well. Bridgestone, Firestone has more -- I mean, let me talk about the global organization. They have a regional organization. They don't have a global -- so they have basically no global strategy. I mean, it can be -- don't copy me, but I only listen to him. But I mean, they don't really have a global strategy for ag tires. They have a more regional strategy, which means their approach in North America is different from the European one.

And let's say, the brand value reputation in North America is higher than it is in the rest of the world.

Yes. And that's why also, our support in globally the OEs is much more appreciated because they don't get, let's say, a coherent approach from Bridgestone, Firestone globally. So that is also why we have a big -- in developing, we talked -- developing special tires with new tractors. Of course, we are more attractive as a partner than the other guys who is only regional in their approach. So I think we have a big, big benefit, especially...

We are more attractive also in term of people. I mean, it's...

Yes. And then, of course, they have good brand names. So we shouldn't neglect them. In the aftermarket, it's very well recognized. But for the OEs, we have a better setup.

I have a few questions to Jean-Paul also that I will actually merge several questions into one. And one is, if you could say something about the profitability between the construction -- infrastructure construction part and the general industry part or if there are any outliers that needs to come up. Or is it the whole business that you're referring to, right?

Right. Okay. Very good question, actually. So we have obviously, over the past years, been either exiting businesses which were -- which have been outliers. And like I mentioned earlier on, there are still some outliers within the overall business to be taken care of. So there are slight differences within the diversified portfolio that we have. Some are in infrastructure, and some are in diversified industries. From a margin point of view, they're very close to each other. One is obviously more project-based, the infrastructure part, and the other one is more day-to-day business-based.

Thank you. Any final questions to the gents here?

Yes. There's one question there.

Karl?

Karl Bokvist, ABG. A question on sealing. The applications that you highlight, apart from ones that we can know about from your reports until today, you mentioned a lot of different applications. Is it possible to get some flavor on how large these ones are today, such as the food and beverage and semicon and everything?

Well, altogether, the ones we highlighted, they're about 1/3 of the business. Now you get into fragments, you saw the pie chart, aerospace is in the range of 10% right now. Health care and medical is 12%. So the rest makes up the difference in that sense.

Well, the biggest part of the rest is food and beverage, food and beverage Europe. So semiconductors is small, but it's growing its individual percent.

All right. And just my follow-up was on the kind of speedboat terminology, and you say 1/3. Is there any area within Trelleborg where you say that it could be a bit more than 1/3? I could imagine it might be in sealing, but it would be interesting to know.

No. I mean, I think it's -- I mean, it's fairly equal. And then of course, it's part of agriculture, there's the extra large tires. There's a speedboat we want to go. So it's kind of the segments. So I don't think we are far apart. I mean, Industrial Solutions might be slightly lower. But I mean, it's still in the 30% range. So I think it's 30% plus/minus in all areas.

Apologies for a near-term question. But obviously, cost inflation and supply in the services are the headaches right now. So Peter, if you could share what are you seeing right now.

Sure. I mean, there is a shortage of supply. There is a strong push on raw materials. Even though it seems now with automotive going down, there's a little bit softening, it's going to be a little bit softening on the raw materials. And then whether it will last, I don't know when that kickback is coming back here. And of course, our impact -- I mean, you can see the external markets of butadiene and monomers is going down. And whether that is kind of -- and that is, of course, a time delay before it hits us in a positive or negative way. But whether that is a reflection of automotive being down, I don't know, 25% or something in Q4, which is a big user of polymers and rubber, and whether that is -- I don't know. But at least there are going to be some softening of the raw material pricing, which means also some softening of the, let's say, capacities. So I think that is the general view we have at the moment. And then, of course, there is still other inflation on freight. There's also shipping on a high level. But I mean, energy -- so freight is also in the same. It's been peaked, and it's probably a little bit down, still very much higher than it was before. But that is kind of manageable, I should say. But at least, it's transparent and we know what it is. The trick now is more energy has been -- I mean, honestly been a surprise for us and primarily in Wheel Systems has been hit with that. So that is something which was a surprise that this went up that much, even though we're talking about millions of euros, we're not talking tens of millions of euros. But nevertheless, it's a lot of money for kind of an individual quarter. So that is probably what is hitting us. And then we do expect the general inflation kicking in when the salaries and everything else, cleaning services, whatever. So we do expect the general inflation to kick in more going into next year than before. But I think we are well aware of that, and we are working on different kind of tools to maneuver around that. So I'm not overly concerned about the cost inflation. I think neither of us is really. Okay, Paolo has a challenge with his energy. But I mean, otherwise, I think -- I'm looking at Jean-Paul, I think he's well under control. We are not overly concerned about the inflationary pressure. The lack of labor in certain areas is more of the concern. We are short of labor in a few of the American plants, a few of the European plants. Asia, still relatively okay. We are finding people. But I mean, there are certain labor shortages, which is a concern. And we have started to make, I think, some needed decisions where we can not necessarily optimize the manufacturing locations. From a cost perspective, we have -- in certain small areas, we had to adapt to the availability of labor. And that is a concern. And that is something we're working on. And there's not a solution on it, honestly. But we're working on it with a variety of actions to try to find ways of maneuvering around that. But that is probably the concern. I don't think they're once again looking at cost inflation. I think we are well under control. But the lack of labor is probably a challenge, which is still around where we don't really have a solution everywhere. And it's not -- but don't misunderstand me. It's not valid everywhere. It's valid on, let's say, individual sites and individual, let's say, product areas. Because it's quite -- I mean, also, we have to say, I mean, even though with my rubber, we make a tire, but it's not easy. I mean, to have a good, let's say, tire builder, it takes at least...

3 to 6 months.

3 to 6 months, depending on -- to get them in. And I mean, then this -- so it takes -- it's not easy to ramp up. And then you have people leaving. And so we don't really want to have the turnover among the people. And that is probably the most concern at the moment. I mean, demand is still good. But there is, let's say, a concern about this lack of labor in several locations.

I'll merge a few questions to Fredrik as well, and we've been talking about accelerating M&A. We've been talking about the share buyback program being introduced today. How does that affect our ordinary dividend policy?

Yes. As we speak, we have no proposal to change it. The idea is to continue with the policy. We have to pay out 30% to 50% of earnings per share. So that should have no impact on the dividend we are paying out on an annual basis.

And could you also say something about your CapEx plans for -- the company's CapEx plans for the next few years. Is that coming down compared to the heights we've seen in the past?

I mean, the new guidance we gave today, 3.5% to 4% of sales, that implies that we will go down a little bit comparing to what we have guided for in 2021, where we have guided for SEK 1.4 billion. So 3.5% to 4% means that you go a bit down, maybe SEK 100 million to SEK 150 million.

Thank you. Okay. It doesn't appear to be any more questions here. So I'll hand over to Peter for a summary of this day, and thank you all taking all these questions.

Thank you.

Now quick, I mean, we've been touching on and I hope you understand that we're maneuvering around this. We call it new horizons with Trelleborg. We feel that the starting platform for us is stronger than ever in a way. I mean, we have a good performing company. I mean, we have all-time high EBIT, very good cash generation. We have a strong balance sheet. We feel that we have a lot of options open for us. We have done this, call it, a cleansing a little bit of the portfolio, which, as a starting point, is also stronger from an organic growth perspective. On top of that, we are now launching or pushing into this, what we call, accelerating growth. We have a clarity on where we want to go. And we are, let's say, allocating more money both in terms of CapEx and ordinary resources and innovation to certain areas in order to do it long term. Of course, it's not happening overnight that we're changing the profile. But now we know at least where we want to go, and we're going to push in that direction. And then whether it takes 2 years or 3 years or 4 years to get into this new profile, that depends a little bit on the pace of acquisitions and the valuation of acquisition. Of course, the acquisitions are also going to be allocated to the speedboat areas. So this is one. And we think we have power, we have plenty of prospects for acquisitions as well. So hopefully, we'll also be able to present a few acquisitions in the right areas in the foreseeable future. And on top of that, I mean, all these boils together, then we feel confident also that we're raising our financial targets, although, I mean, some of you, of course, I read the commentary in between, you don't think it's too ambitious. But I mean, when you read these figures, of course, this is something -- I think Fredrik elaborated on as well, this is something we would like to reach in the foreseeable future. We're not talking about reaching this in 3, 4 years. That is something that we want to achieve on a shorter horizon than that. So that is the way you should interpret these objectives and I think -- or the targets. And I think also for growth, we have been delivering. It might be a slightly different touch on the growth, more organic and a slightly lower average, let's say, acquisition in this area. So that is a little bit higher organic and, once again, a little bit -- 1 or 2 percentage points lower on that one. And then also, on the group target, we are launching, as we elaborated here also in the question -- Q&A session, we are now launching fully, let's say, group target on EBIT margin. And we, of course, have ambitions internally. But I mean, we want to focus more on that. Then return on capital employed, return target, also, it could be a question. It should be higher, but we think still that we can push up the margin if we can create growth. And then maintaining this 14%-plus return on capital employed, I think this is a good balance. I mean, this is always something that you can balance and doing less CapEx or doing what else and move it up. But we prefer to grow the company, push up the margin a little bit and keep the return and even up the return target in line with the margin up on the target. So that is a decision we have made, and that is the way we look at it. So I guess that's it. Thanks a lot. Christofer is here now, and he's also here tomorrow. So if you want to have follow-up questions, I know from Christofer that he was a little bit sad is the wrong word maybe, but there was a lot of questions on the web. And I'm sure that Christofer will follow up on that and get back to each of you. Sorry for not being able to answer all these questions, but Christofer has promised me that we will get back to you shortly and address this. And of course, as always, we are available also directly for follow-up questions. So thanks a lot and thanks for sharing into Trelleborg, and hope to see you soon again. Thank you.

Thank you.