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

Welcome all of you to this Q2 presentation of Trelleborg in 2026. I'm Peter Nilsson speaking, CEO of Trelleborg and joined here on the call is Fredrik Nilsson, our Group CFO; and also supporting us on the call is Christopher Sjorgen , our Head of Investor Relations. So a presentation of our Q2 for '26. As usual, using the presentation, which you can find on our web page, then quickly turning use this presentation, turning to Page 2, agenda slide. Normal setup for us in Trelleborg starting with some general comments and highlights from the quarter. Then also some comments on the business areas individually or 3 business areas. And then also then Fredrik will jump in and guide us through the financials more in detail and then finishing off with a summary from me and also some comments on the outlook for the running quarter and then finishing off with the Q&A session. So as usual, turning to Page 3. Heading for our report is time strong growth and record high margin. Sales ended up a little bit north of SEK 9 billion, increase of 7% and is the highest sales we have had for a single quarter up-to-date. Organic sales, fairly strong for us at 8%. M&A, adding another 1 percentage point to sales and then currency headwind still of 2%. EBITDA up SEK 17 SEK 61 million which is then, let's say, yes, note will be higher than last year. is also then corresponding to a margin of 19.2%, which is both in terms of absolute EBIT figure and also in terms of margin, the highest we have had for a single quarter so far. Still some negative currency translation effects on...

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We'll start from Slide 1 again, please.

Yes. So sorry for this, all of us, we were not aware that we were out of the call, and we just pick it up. So we start off the full call. So welcome all of you to this Q2 presentation of Trelleborg in 2026. I'm Peter Nilsson speaking, CEO of Trelleborg, and joined here on the call is Fredrik Nilsson, our Group CFO; and also supporting us on the call is Christofer Sjögren, our Head of Investor Relations. As usual, when we present our quarterly results, we're going to use a slide deck, which has been on our web page for some time or for a few hours. So that is what I'm going to refer to throughout the call. And using that, turning then to Page #2. Agenda. Agenda, Page #2, please. So Page #2 agenda. We'll talk about the highlights, and then commenting on the business areas and commenting on the financials, Fredrik going to guide us through the financial part of the slide deck and then finishing off with a summary and some comments on the outlook for the running quarter and then finishing off with the Q&A as usual. So then turning to Page #3. Heading for our report this time, strong growth, a record high margin coming sales in the quarter. Ending up a little bit north of SEK 9 billion, which is an increase of 7% compared to a year ago, which is also to be noted, the highest sales we have had to date for a single quarter in Trelleborg. Organic sales in the quarter ending up at a high 8%. M&A adding another 1%. And then currency bringing us down with 2 percentage points. So that is the kind of the sales development. And if you look at the results, EBITDA ending up at SEK 1 761 million which is corresponding to a margin of 19.2%. And both of these, both EBITA and the margin is also the highest to date for a single quarter for Trelleborg. We have some still some negative currency in elation effects on the EBITDA, which is bringing that down by SEK 24 million going down, but nevertheless negative earnings per share, increasing more than the EBITDA benefiting from improved financial net and actually increasing in the quarter by 18%, of course, also supported by the share buybacks, which I will comment on also a little bit later. Items affecting comparability linked to restructuring and line integration of M&A of some SEK 67 million in cash flow, solid cash flow, good cash flow. A bit north of 1.2, which is up by some 20% compared to a year ago. Good management of working capital in a growing environment. And I mean on a rolling 12 basis, we keep the operating cash flow Cash conversion above 90%. Share buybacks continue at the same pace as been commented before, a little bit out of SEK 500 million in the quarter and also in the quarter, we announced an acquisition of a company called Gomet, an Italian company -- Italian-based company, focusing on the aftermarket of niche it automotive sealing products called Boots, which is overall, our position within [ Boots ] is strong globally, and this is kind of adding capabilities and adding a product range more focused on the aftermarket. So a very good supplementary acquisition to us, which we're going to benefit from in this niche application and this kind of what we call business unit within Trelleborg. Turning to Page 4. Commenting a little bit more in detail on the sales development in the quarter. We have, let's say, a fairly solid organic growth in all main geographical markets. Europe growing by 6%, which is substantially higher than a year ago. Americas and Asia, both of them close to or even slightly higher than 10%. And good development in U.S. and Asia, we noted satisfaction as well. We are behind this 10% growth. We have good growth figures, both in India -- in all main markets in Asia, India, China, Japan and Korea. Overall, summering up on 8% organic. So good organic sales development in the quarter, which is fairly equally sprit globally as well. Page 5, on the agenda slide, commenting on the business areas, quickly turning to Page 6 and commenting on Industrial Solutions, a solid organic growth organic sales up by 4% and M&A adding another 1%. And behind this is still a little bit lower project deliveries in the quarter, which we have announced before, and we keep to that guidance that we -- it was a little bit lower in the quarter, and we do expect that to pick up more here in the second part of this year. We also noted satisfaction that we Construction Industry sales is actually showing some improvements. It's been a fairly bad market for quite some time. And although running substantially below the peak a few years ago, we noted satisfaction that we see the first signs of an improvement. Also good performance within Aerospace, within Industrial. We have an Aerospace exposure. Within Industrial Solutions, although the biggest aerospace exposure within sealing, solutions, but we also noted satisfaction that I get back to that later, it's developing very nice in Sealing Solutions and developing also nice within Industrial Solutions. Overall, this kind of boils down to an improvement, slight improvement, [indiscernible] EBITA and margin owing to higher sales volume and operating efficiency. And behind this figure is actually slightly better as we see it because also with this mix that we have mixed development within the quarter, we have had a slightly negative mix on the sales development here. So we are let's say, happy with the development of Industrial Solutions in the quarter. Also here, of course, this acquisition of government is kicking in when that being fully integrated, this government acquisition, which I already commented on. Turning to Page 7. On Trelleborg Medical Solutions, stable organic growth. We are growing by 2%. Some mixed let's say, sales development with a good development in Europe and North America. While Asia was temporarily somewhat lower. Life Science segment, a smaller part smaller part of Medical Solutions, but a focused area for us continue to develop nicely and developing in a very robust way. Slight improvement, basically on par with last year for benefiting from the slightly higher sales, but well managed and good development overall. And we have a slight downturn and that is mainly a mix effect, but no big things here, stable performance and solid performance for Medical Solutions. Turning to Page 8 and commenting on Trelleborg Sealing Solutions. Yes, we say very strong sales growth and also, let's say, with a nice uptick also in the EBITDA. Good development in most segments within Seal Solutions, good developer industrials generally with especially good performance in Europe and Asia. Automotive actually growing very nicely for us in the quarter. We are benefiting from our global presence, a global balance within this segment and of course, also -- most of you are aware, good development in truck and buses and also a recovery in the aftermarket sales where we've been suffering a little bit the last few quarters, but that bounced back in this quarter. So a good development overall for us within automotive, aerospace, developing very good growth on a good -- on a global scheme, which is also creating good benefits for us in the quarter. So overall, a very good development in Sealing Solutions, which is then, let's say, delivering very good results. We're good -- very good development EBITDA and good margin development, good performance overall, also creating solid foundation for at least for the rest of the year. Turning to Page 9. A few comments on the sustainability before entering into the financials, continue to bring down our CO2 emissions within the group, down by 19% year-on-year, solid development. Of course, as it gets lower, it gets more challenging to deliver it further, but the Yes, it is a high priority also going forward, and we are going to continue to improve. But although maybe not with this we have seen in this quarter, same, Page 10, same applies here. We have also another KPI on the next page, Page 10. is then also a share of yes, electricity, which is also a good development here, where we see that we are more or less now up to 100% of all electricity used is coming from renewable or fossil-free electricity. So -- but as we go close to 100, and then of course, we cannot go above 100%. So you should not expect to big improvements here. We're going to make sure that we keep it on this level and continue to deliver good results also in these aspects. Turning to Page 11. On the agenda slide and financials, turning over to Fredrik, who is then starting on Page 12.

Thank you, Peter. Starting then on Page 12, looking at the sales development. We have reported a 7% increase in sales in the quarter from SEK 8.5 billion to SEK 9.16 billion, which is the highest sales for a quarter. If we look on the right side of the slide, you will see an organic sales growth of 8% in the quarter with growth in all 3 business areas. And there we have 2% negative from currency in the quarter and M&A added 1% growth in the quarter. Moving on to Page 13. I Here, you can see in the second quarter, we achieved 9% sales growth at constant FX, which is above, you can say, the sales growth target we have over a business cycle. And as you can see here on the chart that it's quite some time ago since we were above that target. So it's nice to see that we are hitting that level. Moving on to Page 14. Looking at quarterly sales for the rolling 12 months for continuing operations. You can see here on the rolling 12 that we reached SEK 34.7 billion in the quarter. Moving on to Page 15, zooming in on the EBITDA and the EBITA margin. If we then start with EBITDA, excluding items affecting comparability, we have a nice increase of 11% to SEK 1,761 billion. And in the quarter, as Peter mentioned, we have minus SEK 24 million in negative translation effects. If we're then looking on the margin side, you can see a nice increase from 18.6% to 19.2%. And this was the highest margin that we have had for a quarter and the margin improvement was due to, of course, the good organic sales growth, but also continued operational improvements. Moving on to Page 16. Looking at the EBITA and the EBITA margin of rolling 12 months. You can see an EBITA of SEK 6.43 billion. And then we had a margin of 18.5% on a rolling 12-month basis. It's an increase of 3% of the EBITDA over the last 12 months, but you need to have in mind that we have had significant negative translation impact during the last 12 months. Moving on to some details in the profit and loss statement. Looking into the items I think comparability, we have minus SEK 67 million in the quarter. and that was entirely relating to restructuring projects. Looking at the financial income and expenses, you can see that it was a lowering of from SEK 125 million negative to minus SEK 109 million, so a nice improvement and the tax rate for the quarter at 25%, which is also in line with the earlier communicated guidelines. Moving on to Page 18, looking at earnings per share. And if you're looking at earnings per share, excluding items affecting comparability, a good improvement of SEK 431 million up to SEK 507 million. which was an increase by 18%. And that was, of course, due to the higher EBITDA, improved financial net and the share buybacks. And then if we include items affecting comparability, it was an improvement from SEK 403 to SEK 485 million. Moving on to next page, Page 19, looking at the cash flow. Improvement of 22% in the quarter from SEK 1 billion to SEK 1.217 million. And then you can see here that the CapEx level is coming down. So there is a nice improvement year-over-year from the net CapEx. And then you can see an increase on the working capital side. That is, of course, partly related to that, you see the good organic sales growth. We are tying up a little bit more in accounts receivables. And we have also temporarily built up some strategic inventory of some important raw materials to secure that we can supply with strong organic growth. Moving on to Page 20. Looking at the cash flow conversion, and very good cash flow conversion continue. As you can see here, a year ago, we have 87%, and now we are ending the quarter with 96% cash conversion over the last 12 months. Moving on to Page 21, the gearing and the leverage development. We're ending the quarter with a net of SEK 1.031 billion, and that's an increase compared to prior quarter, but please have in mind that we paid out our dividend in late April. We have also done share buybacks of SEK 458 million in the quarter. So then zooming in on the ratios, you can see on the slide, net debt over equity, 27% and net debt over EBITDA has gone up to SEK 1.3 billion. In other words, our balance sheet remains strong. Page 22, looking at the return on capital employed. You can see here from a year ago, were 11.6%. Now we're at 12.6%. So you can see that the trend from the third quarter in 2025 continue. And the main reason here is the higher profitability that is improving our return on capital employed. Moving on to Page 23, financial guidelines for the full year. It's unchanged compared to what you saw end of first quarter. But looking into the details here. CapEx, SEK 1.450 billion. Restructuring costs, we expect that the year will end around SEK 375 million, amortization of intangible assets, SEK 650 million and the underlying tax rate should stay at current level, up 25%. By that, I would like to hand back the microphone to Peter.

Thank you. Turning to Page 24. Back to the agenda slide and going for summary and some comments on the running on the outlook for the running quarter. Turning to Page 25. Overall, we see an improved demand in a lot of our end markets and basically struggle to see areas where we see not an improvement. So it's looking good. And we see, once again, most of the areas moving in the right direction. We also have, let's say, wide good development. All business areas recorded solid organic growth. And we also see that sales in the quarter was also the highest date for a single quarter for us, good demand overall, both running quarter and also the way we look at the future. improved earnings. We also get a reasonable good drop on this one, which is also -- this higher sales is turning into the best EBITDA and the best margin for a single quarter that we had to date. Cash flow following. We are managing -- we feel we're managing the working capital in a good way in this growth environment. Although, let's say, we are also, of course, cautious here, we have had some uncertainty related. I mean I couldn't say that we have any problems yet at last year, we don't know what's going to happen a little bit some of the raw materials. We'll be a little bit capital. We're building some inventory to make sure we get both availability and also to safeguard a little bit of the pricing. So that has been impacting us. But good management of accounts receivable, good management. And on top of that, that we have been guiding before also CapEx is going down, which is also benefits a good cash flow, good cash conversion above 90%, looking slightly lower in this quarter. But overall, kind of guidance in relation to share buybacks is the same as before. Turning to Page 26 on the outlook for the running quarter. We should be open here that was a little bit struggled to get it right. We see an improved demand actually quarter-on-quarter but also that we have, let's say, the comparative figures going into Q3 is a little bit more challenging. So you should read this that actually we see that the organic growth figure from 8 might not be 8 in the Q3, it will be a bump down on that, but we will still remain in a very positive territory. So we feel confident on the demand, and we have good order books going into the quarter. So happy to answer more questions about that. But I mean this is the way we would like to send a message. Demand is solid, demand is good. The money is actually sequentially improving. But as let's say, if you're looking in we do expect the organic growth figures to be down compared to what you saw in Q2. And then, of course, a normal add-on. We are living in a little bit uncertain territory at the moment in terms of political situation, of course, things might change and things might be different, but that is -- cannot do anything about that. We are ready to adjust. But nevertheless, we need to add this comment to highlight the uncertainty we see around us. Turning then to Page 27 and then Q&A. Quickly turning to Page 28, I guess, and opening up for questions. Please go ahead.

[Operator Instructions]. The next question comes from Chit Sinha from JPMorgan.

I have three, please. Maybe just firstly, on Sealing Solutions. And maybe just commenting on the margin from here. Clearly, a strong development organically year-on-year and a good drop-through. But perhaps if you could just shed a bit more light in terms of how we should think about the margin development as we head into a quarter with tougher comps.

Starting on that one, I don't say tougher comps in that respect for TSS. We still believe we can improve from the running margin. We expect a good demand overall, and we're running with fairly high gross profits here. So if the volume continues as is, we are kind of positive also about the future. Of course, we not talk about another 2 percentage points or whatever up, but are running on a good level, and we expect it to remain at this level or even somewhat better for the second part of the year.

Very clear. And then my second question is just regarding your commentary on the product deliveries. So you pointed to a bit of a sequential increase in deliveries and obviously have communicated a bigger pickup in H2. Just wanted to clarify whether the deliveries in the quarter were in line with expectations. And then how are things developing on the demand side here?

Are you referring now to Industrial Solutions? Is that the question related to -- yes. So I mean, that is a long order. But generally, that business that we referred to is very long orders, and we know that we know the order book well in advance. So it's a very, let's say, low turn in the quarter, if I may say. So that is why we feel confident that these deliveries will be -- is developed as expected and is well in line what we guided for and believed in. So we don't see any -- you never know, there could be some, let's say, delays in certain areas, but we don't know that at all. So it's not really a problem about availability or lack of orders. It's more a matter that the customers did not ask for the products here in the first part of the year, and we've seen increased project activity here in the second part of the year. So nothing really surprising or not in kind of no challenges as we see it today.

I'm sorry, just on the demand side one...

I mean, if you look at the project business, the demand is still, let's say, flat positive. So we do -- I mean, we are -- I mean, on this project part of Industrial Solutions, the main exposure is not the only one, but if you should pick someone is LNG development and all of that. And then that is kind of still -- so overall, let's say the activity level is high. And then, of course, it's always be bumpy on this kind of big project business. It goes a little bit up and down and there is always a phasing in the projects and all of that. But we are a solid order book. We have a if I may say for that business, an all-time high order book. And so that is more a matter of executing and making sure. So it looks good, and that's not only for the next quarter, that looks good for kind of the next year plus in that part. But it will be a little bit fluctuations in between quarters since this kind of sizable project deliveries. And my final question is just on pricing. I just wanted to get a bit more color with regard to development in Q2 and then just what you're seeing at the moment as well. Pricing, of course, a lot of -- let's say, suppliers indicating, let's say, cost ups and there's also some freight costs going up. But I mean, we are confident in managing that in a good way. We are you kind of resourcing where that is beneficial for us, and we do, of course, also do some pricing. But we believe the acceptance for price increases, well motivated price increases is good in a way. So we don't see a challenge in adapting for this potentially higher raw material pricing. We should say that most of this raw material price increase has not really kicked in yet, but also [ Nader ] has our price increases. So we feel going forward, we don't feel any kind of -- we don't see that as a risk for us going forward on this cost inflation in relation to price increases. But there, we need to stay close to it and see what happens, and we adjust when we need it -- when we need and we feel confident that we will be able to adjust if needed.

The next question comes from Alex Jones from BofA.

If I can start on the outlook statement for Q3, you're talking about demand sort of an underlying basis sequentially better. Are there particular regions or end markets where you're seeing that? Or is that sort of across the board. And then you're also talking about sort of putting that to one side, the comp impact on Q3 growth. Is there any way to think about the magnitude of that and therefore, the potential step down from the 8% this quarter?

The demand is surprisingly good more or less all over. Of course, you have some automotive pockets, which is weak, if I say that. But overall, the global automotive is good. And also, the said truck and buses is good. We see the aftermarket automotive picking up. So there is, of course, but we don't really have this exposure -- direct exposure to the weak areas of that. But overall, we see aerospace is good semiconductors continue to delivering very well. We have oil and gas, LNG, delivering good. We see also some uptick in this, what we call, industrial automating, robotics and stuff also where we see higher demand. I mean the area construction industry only commented on that one a lower level. We see slight kind of lights in the tunnel here for both commercial and residential construction. And a big segment for us, which is hydraulic, pneumatic, which is then driven by off-highway and agriculture also where we -- after some kind of challenging quarters, we see also an uptick in this. So I have to say, Alex, that we're looking fairly bright at the moment or wherever you look. Medical Solutions is the one, but it's really bumpy on say prudently, I should say, the start of programs, and they are a little bit bumpy in the ordering. So that is what we have. And that is also maybe if I say on that, the main one of the main things here again in Q3. If you look at our Q3 figure last year, we had, I think, 13% or something organic growth in Medical Solutions. And we did comment already then that, that was kind of abnormally high and that is where we had to bring with us here now going into this quarter where we have a comp with a fairly, let's say, high. So we talk about a couple of percentage points down from this. So we still let's say, expected to stay on a very solid number above our kind of long-term guidance of 4%. But then when it ends up, but if I can be very direct, if it ends up 5, 6 or 7, I don't know, but we don't believe it's going to reach 8%, but we neither believe we don't see it going to go buy. So that is kind of the ballpark figure to give some more clear guidance on that, as I understand, there were some confusion also some questions around it.

That's really helpful. And if I can just follow up one more on margins. You're talking the release about pricing and sort of cost efficiency, having covered extra cost due to the geopolitical situation. And I'm aware that you're particularly proactive as a business on those pricing and efficiency points. Was there any benefit in the quarter that you're able to sort of mobilize the company to price and to be more efficient on cost ahead of some of those raw mat inflations hitting the business? Or is it more sort of a neutral effect on margins this quarter?

I would say it was neutral to positive, but a very slim positive if that -- I mean also when you have all of this kind of turbulent situation, I mean, change management gets a little bit easier, you can speed up with actions, you can do the adjustments a little bit quicker. Both in terms of pricing and kind of own cost actions. But I mean, overall, this is not kind of an explanation on the margin. It's not an explanation of growth. And we don't -- I've got some questions also on prebuying. We don't see any sizable prebuying, we don't see really customers protecting themselves on prebuying. So we cannot -- of course, we're watching it carefully, but we cannot really see that driving sales growth or driving the development in any meaningful way. Then of course, there could be individual cases. But I mean if you look at the overall development, we cannot see that being kind of any kind of meaningful impact in any way.

The next question comes from Ope Otaniyi from GS.

Good afternoon, Peter, Fredrik and Christofer. Two questions for me. Most of my questions have been answered already, but maybe just on medical, so low organic growth there. Could you just maybe talk through what's driving that? I think previously you talked about that being driven by Life Sciences, but sort of any idea what the run rate is maybe from when you speak to customers, especially in light of the fact that you've expanded capacity and it should be supporting organic growth.

It's not -- I know you're looking at the figures in detail, and we do as well. But I mean, this is really a small deviations here and that's a kind of a weekly delivery here and there were people, let's say, fill up their inventory or lowering the inventory. We don't see that as kind of linked to an octave level. And I think it is a little bit bumpy in medical, I must say. And we need to look at the rolling wring more to get the guidance. It will be, let's say, bouncing a little bit in between the quarters. We still remain in a solid positive territory, and we don't see that changing going forward. Now of course, it gets tough comps in Q3 here as we had a plus or 13 last year. So now -- and that was kind of linked. So maybe we will get into a negative here in Q3. But I mean, that is not going to kind of influence the rolling 12 figure that much. So I cannot really -- sorry that I cannot really give you any more guidance on it. We need to accept that this is the way it is, and we need to look more on the routing 12 figure. We are not concerned. Sorry, we are not concerned. We see the development. We're keeping the customers. We're keeping the programs. We're growing in the programs, but the customers are ordering a little bit in go a little bit up and down sometimes in orders, which we honestly do not fully understand why.

Great. And maybe just on Sealing Solutions, 12% organic growth is pretty strong, and I know the guide kind of reflects this in the go forward that you never have tough comparables. But could you just give us a sense of if that sort of -- there's any actual pull forward demand and particularly like what effectively weather plus 12% came versus your initial expectations going into the quarter?

I mean let's say the order book supported this going into the quarter, it was slightly -- was a kind of a slight acceleration in the quarter. but not really meaningful. We had a very good order intake in Q1. We have a good order intake in Q2. So we feel confident also going into Q3. There's a few segments pushing. We have aerospace continue developing very nice semiconductors is a lot up as well for us, although a small part of totality, but it's growing rapidly within Sealing Solutions going -- develop in a nice way. if there is anything which is more, let's say, meaningful positive in the quarter is probably the development within this, what we call Hydraulic promatic which is off-highway agriculture, where we see an improvement in the quarter. Otherwise, it's kind of the same, a little bit slight in automation, robotics, but these two areas by both kind of hydraulics, off-highway and automation has been a little bit negative development in the last quarter. We've been waiting for the uptick in there, and now it's kind of yes, we're seeing it, but it's not kind of dramatic changes. So we see Senior Solutions is very wide in the exposure. So it's a kind of a very wide growth in a lot of segments and also in also a lot of geographies. So it is in a kind of a broad-based growth that we see in ceiling.

Great. And maybe just one last one just on margins. really strong in Sealing Solutions is sort of flattish in Industrials and Medical versus quite strong organic growth. Can you just help us understand sort of why the drop-through was maybe less than expected in those two segments despite decent organic growth.

I commented that the Industrial Solutions likely say, internal, you don't see it, but we guide you on that one. It's a slight negative mix that we have a little bit unbalanced growth in a few years. We do expect it to be better in the second part of the year. But nevertheless, in the quarter, that is why you don't really get the drop-through that we should be getting. But that is the way it is sometimes. In medical, once again, it's a fairly small business. So it's individual orders, individual customers as driving it. And we are kind of happy as long as it stays above 20%, and that is what we're aiming for, and that is what we do. And we were we were about 20% in this quarter and then whether it's 20.2% or 20.4%, 215 is kind of very similar as we see it. So that -- I don't know if that's enough or you

The next question comes from Forbes Goldman from Pareto Securities.

Just one follow-up on what you said there on the semiconductor exposure. Could you give us any sense of the current revenue run rate? Or share of group sales and give some color on how that is growing and perhaps margins as well would be...

It's a low single digit, let's say, compared to the to the overall group sales. But I mean the growth rate is tens of percent in organic growth. And of course, we're also looking there to be just fully transparent on that one looking also for acquisitions, and we're doing investments. We are building a new we're expanding, for instance, our factory in China in order to support organic growth there. We have recently inaugurated a new facility for semiconductor is also in Malta for Europe. And we're looking also for a setup in U.S. So we are investing into that, and we're looking for continued kind of tens of percent of organic growth for the, let's say, kind of foreseeable future. So this is going to be a growing part of Trelleborg, of course, we're focusing on organic growth, but also, hopefully, able to support it also with some supplementary acquisitions. So it's a priority segment for us. It's not as big as we wanted in Trelleborg today, but it will be will be a substantially bigger part of Trelleborg, if you look for the next kind of 3, 5 years. So that is kind of the horizon where you're going to see this growing part of Trelleborg.

Great. One more final one for me. On aerospace, the capacity investments you've been doing in Morocco, when do you see those ramping up? And how much capacity are you adding in total?

I mean, on that one, we are not only adding in Morocco is kind of a little bit specific to Airbus and Safran investment here to support them locally. So that is kind of more part of a global supply chain from them and being able to deliver products to them with the same kind of quality systems and same quality control. We are investing in a lot of sites to grow with aerospace activity. I don't really want to give guidance there, but I mean we're also talking here, let's say, 2-digit organic growth for the foreseeable future.