Troax Group AB (publ) (TROAX) Earnings Call Transcript & Summary

[Presentation] We now have a presentation for the next 1.5 hour by Martin and Anders. After that, we will have a Q&A session where we will walk around with a microphone if you have any questions. And then there will be a factory tour where we will divide you in groups, and you will be taken around different stations around the factory, and then we will finish with a wrap-up. Okay. And I'll hand over to you, Martin.

Wonderful. Thank you, Jonas. And also from my side, a very well -- very warm welcome to Hillerstorp. It's a nice excursion on a Wednesday, and I'm really happy to see so many of you here, even though I realize there is quite a few hours of traveling by car or by train or hopefully not private planes. Today, we'll talk -- I'll talk -- we'll talk about 3 things. We will go through and go over our position, who we are. We saw a bit of that in the movie. But we'll also look at what makes us the world leader and what makes up our position. And then we'd also talk about the market, what drives our business. Secondly, we'd talk about our revised strategy. There has been a revised strategy, and we also -- through this year, we have started to -- or implemented a bit of a new way of organizing the company, making it also aiming for future-proofing the business. And last but not least, we will look at our ambitions for 2030. We announced new financial targets last week. And hopefully, today, we'll be able to shed some light not only on the targets themselves, but certainly also our way and how we aim to get there. I'd start with our position, and we decided to name this day Future of -- Shaping The Future of Safety. Obviously, we've been around for 70 years, shaping the future of safety. We've also been on the stock exchange for 10 years. So we have a double anniversary this year, which is something we're very proud of. And I think we've also had a very fantastic journey over a long -- many, many years. I also think that this as an introduction picture kind of illustrates a lot what we mean by safety. We truly believe that everyone should be able to come to work, work through the day and also get home safe to their relatives and friends. That also means peace of mind for the business owners, peace of mind as in we protect the productivity and we protect the assets. So it's a double-sword thing. To us, we work in the big scheme of safety, and we are a niche player. So we provide one part of the big safety environment for our customers. We deliver our solutions into manufacturing environments as in this example on the screen. We do deliver warehousing and logistics safety. We deliver safety for valuables in storages, mainly here in the Nordics, and we've done so for a long time. And we have now, the last couple of years, also started to dip our toe into providing safety and protection for data centers and for digital assets. We do so through a couple of product areas. So we have our machine guards, our biggest business. We do doors, protective structures like the one in the data center example, but we also provide several products when it comes to racking, so shelves, horizontal anti-collapse vertically. And since a few years back, we're now pairing this hardware with sensors and connectivity. I'll come back to that a little bit later in the presentation. Briefly about the Troax Group. Last year, so 2024 full year, we had a sales of EUR 279 million and an EBITA margin of 17.3%. That means if we go back over a longer period of time, we have grown the business 12% CAGR. So between '15 and '24, we have grown 12%. 9% of that roughly is organic and 3% are through bolt-on acquisitions. By the end of last year, we were 1,200 employees globally. And as you know, we have -- through this year, we have adjusted to the market. So today, we're roughly 1,100 people. And we're spread out across 40-plus countries. You can see some of the countries where we're present in the map. And here, you can see that there are still quite a few white spots or gray spots where we still have potential to grow. In most of these countries, especially the European ones, we are the market leader and the market leader by far. I'd also say that we are the, in fact, only player who are truly global, which means that we're the only producer in our niche that have sales, product development and production in all continents, which make us really unique. So before we look forward, let's take a little bit look back, and I've already alluded to this. We were founded in this very place, 1955. So we celebrated our 70th anniversary this year. And we're also having the second anniversary, which is 10 years on the stock exchange. And believe it or not, today is the first Capital Markets Day for the company, which we internally as well as externally want to celebrate a little bit extra. We are truly the market leader in our niche. We are almost 3x larger than the second player in the world who happened to be another Swedish company, not that far away from here. And we do generate, we think, strong profitability, good returns, and we have a good strong cash flow. And this is very much based on an attractive business model, relatively simple and also with low risk. And looking back the 10 years, we started our journey on the stock exchange, we had EUR 104 million of sales to not EUR 278 million, but EUR 279 million last year. So a really great journey to date. If we then look at what our business is composed of and if we start with how we go to market, our market is and our way to market is very much through integrators as well as distributors. So roughly 75% are through integrators and distributors until they reach the end users. 25% is straight to key accounts or the end users, could be through direct sales, but could also be through e-com channels. We sell mainly steel into Europe. 79% last year of our sales went into Europe. 16% went into Americas, mainly North America. And 5% went into APAC. If we look at our market exposure and our market segments, our largest end application would be for warehousing and the warehousing segment. The second largest would be automotive, so OEMs, Tier 1s, Tier 2s, et cetera. And after that, we have our processing industries, meaning pulp, paper, steel, food, beverage, pharma, et cetera. And last but not least, we have an array of different subsegments. So in the others bucket, we have probably 30 different subsegments, each being very small, but all in all, 25% of our business. If we then look at our business also from an application point of view. So the market segment is where -- into which industries are the products going. If we then look to which type of application, so a large customer can have both a manufacturing environment as well as a warehousing environment. If we then look to this from an application point of view, we are having roughly half of our business going into warehousing environments, 35% into manufacturing environments, 10% into storages. And since a few years back, we're also now growing really quickly in the data center application. This is a very common theme, and I'm not sure how often we get the opportunity to explain this. And very often, we say the products, they look quite simple when you look at them like here on the slide or on a piece of paper. And I'm hoping that with the factory tour and with the stations later today that you'll get to touch and feel and talk to the team members really making these products the best in the world, I'd say. So hopefully, you'd get away from this day feeling that the products aren't, in fact, that simple. However, you might argue or think that the products are simple or not. If we look at the business in itself, it's, in fact, pretty complicated for a few reasons. So if we put ourselves in our buyers' positions, our products, if we take the machine guarding product as an example, they are mandatory by law and regulation. We have this regulation in Europe. We have another regulation, but still regulation in U.S. Parts of Asia are still not regulated. So it's something you have to have. It's a small spend item. You could spend millions on industrial robots or on warehousing equipment, et cetera. Our products are, in fact, a very small part of that total spending. What also is unique is that there are very few robot cells or installations that are just the same. There is always a tweak. There is a door in this place or there is a panel looking this way, you might put the post in a different way. So every configuration is different, which is, of course, comes to the buying situation. Very often, our products get in late into the process, meaning that I'm not sure in most companies, projects often run late. And since these products come in late, obviously, we get in quite late into the process. That also means that the customers are in a position where they buy something that they need to buy. It's pretty small spending, pretty unique, and it's urgent. Also to consider, and I think it's well displayed in this picture is the fact that we also need to collaborate with others. So it's integrated with other type of solutions, other type of hardware, could be the robot makers, could be the access control, could, of course, be the facility manager, the project teams, et cetera. So in fact, there are quite a lot of different things that need to fall in place to make this happen. And another thing that our customers find out usually is that we have beautiful drawings of everything. But when you get to site, you start to look at, "Okay, does this is reality really the same as on the drawing?" And very often, you realize that the floor is not even. you might realize we can move the fencing or the protective equipment slightly because then we get a better floor layout, et cetera, et cetera. So reality is very often different from the plan. Now what do we -- what can we offer here? Yes. Well, we can definitely offer a cost-effective insurance. The fencing in this example is relatively small spending. The alternative cost, if we -- if there is an accident or if something happens is usually very high. Factory or the production line stands still. So in fact, it's a very physical cost-effective insurance. Another thing where we need to meet our customer needs is we need to have a very wide, very flexible offering. And I think we're doing very well. We have the widest offering in the market as a group. Given that it's often very late, we need to be very flexible, and we also need to be quick. That's also why our business needs to be quite local or regionalized. Another thing that many of our customers when trying an alternative finds out is that, in fact, the quality and the consistency of the product impacts the time it takes to install. So if we look at these things from a total cost of ownership point of view, you could say 60%, 70% would be the product and 30% to 40% would be installation and everything that's kind of surrounded the product. If the floor is uneven, if the panels or posts are not consistent, you lose a lot of time while installing. So the product quality has a direct impact on the customer's total cost of ownership. And in reality, getting this installing kilometers of fencing or miles of fencing, small or big, it's a lot more complicated than you think. Now you can say there are plenty of players who can make a mesh, what makes Troax stand out? We believe it's a few things. I already said we're the only global player, meaning that we are strong in the respective local markets, but we're also the best partner the global customers can pick when it comes to securing that their operations look and touch and feel the same and have the same level of safety in all different continents. So I think that's a clear USP for Troax. The other part where we stand out is that we do have the widest offering. We have -- I'm not sure if there are any applications where we cannot supply or provide a good solution. I'd say also given our size that we're so much larger, we have built a lot of knowledge over the 70 years. So I would say, in terms of domain expertise, we are really good with this. And you'll see later on today that we do have the most sophisticated, most thought-out supply chain in our business, which provides both, of course, the scale, but also the cost efficiency and the flexibility that are needed for -- to meet our customers' demands. And last but not least, this is also something that speaks very well for Troax in many of the countries, we have the largest sales force and foot on the ground, so to speak, in most of these countries, which is also first in mind, we're best to serve. So I think we have some really clear USPs why we've taken market share, why we continue to take market share and have done so for a long time. Coming back to our megatrends. We are exposed to a couple of strong megatrends, not all of them, but most of them. Definitely the automation trend, which continues strongly. We do see with the environment globally that more and more customers want to have a regionalized production, regionalized warehousing. I think many companies learned this both before COVID as well as after COVID, that long supply chains, long lead times, security of supply were problems. And we do see more and more regionalization of both manufacturing as well as partly warehousing. That's a very positive megatrend for us as Troax. Also, I'd say, if we look at e-com, if we look at the consumer pool, every year, we add more consumers to the pool. Those consumers, young people, they tend to be more -- tend to prefer e-com more than the ones who are leaving the pool. So that is in itself also a very strong trend for us. Another trend worldwide is that we become more and more aware of safety. We want -- we take it almost for granted, and we think it's a right to be able to come to work and be at work and get home, certainly in the Western world and more and more so also in Asia. So there is more awareness. There is more willingness to spend money on this. And this also trickles into government regulation and stricter and stricter rules. So that is in itself also something that's very good for Troax. The other side of the coin would be our width and size, which is resilience. We're exposed to pretty much, and you'll see this a little bit later in the presentation. We are in many places which you can imagine that this is clearly a Troax place. But there are also quite many places where you wouldn't imagine or reckon that there is some Troax products in there. And that is great for us because it provides us resilience. And none of the end-user segments that we're exposed to is larger really than 20% if we look at it. So from that point of view, we're also in a very good position from a resilience point of view. If we then look at the longer-term market growth trends, and I'll come back to where we are a bit more here and now in a few slides. But this is the way we look at the world. If we look at this from an end user or industry point of view, we have an exposure to automotive, which is roughly 20%. We do believe that this long term grows some 2% to 3% a year, long term. We're exposed to warehousing, roughly 35% of sales go into the warehousing industry. Automated warehousing, we do quite a lot with forklifts and pallet tracking and of course, also packaging related to this. This has the closest link to the e-com trend, and we believe this segment over time grows some 8% to 10% a year. Construction, new residential buildings and some renovation grows, we think, with GDP, so 2%, 3% a year. Process grows faster than GDP. We believe it grows probably 2 percentage points more than that globally. And then others, as I said, it's a wide array of different subsegments. You can say it's general industry growing a few percent a year, but there are also a few really stronger growing segments, if you could take data centers or we could take defense and so forth. But you can think of others as GDP plus a little bit. So this -- if we weigh all of these things together, we have an underlying market longer term that we think grow 4% to 6% a year. The addressable market for us is EUR 1.5 billion if we look at the -- what we have considered core up until today. Now that all sounds fine and good. I'll then take a dive into the quarter 3 numbers, which we published last year -- last week. And I think it's clear that we are on a very strong growth path in APAC. It continued now in the third quarter, and we had to that a very good first half of the year. We grew 66% on orders in APAC, strong in all countries and in all segments. So very good development for us in Asia. Europe, on the other hand, our largest market continues to be soft, generally speaking. We see automotive being challenged. We see, of course, the construction as well as others being challenged as well. However, I would say that there is a bit of a positive sign on the -- in the warehousing space. We saw some markets, some customers now starting to take the presales activities that we saw in the first half of the year. This now starts translating into orders at our end as well. And we do see this from -- partly from our customers as well when they report. So a bit of cautious optimism in this regard for Europe. Then we go to Americas, which I think is probably for the time being, the market which is most difficult to predict and also the worst. We had 26% down in quarter 3. And I think here, we are somewhat frustrated because we have very strong -- we have a very strong pipeline of projects, and we're also not losing any projects, but it seems to be very difficult for the customers to make a decision. So in Americas, we see a lot of activity. But unfortunately, we're not able to convert that to orders or we weren't able to do so in quarter 3. So all in all, minus 7% in the quarter. Then when it comes to the profitability side, we are having low volumes coming from the market, mainly in Europe, partly also in the U.S. We are busy transferring our Polish operations to Sweden. That impacted our profitability. And we also weren't able to push all the price increases that we should have done in the third quarter into the third quarter, which also means that our profitability came in a little bit lower in the third quarter. So we reported 16.1% in the quarter. If we add the Polish factory transfer as well as the American pricing, if we add that back, we would have been around the 18% mark for the quarter. Also, I'd like to say that despite we are struggling a bit with the volumes, we generated a very strong cash flow in the quarter, so EUR 12.6 million or a bit more than 120% operational cash conversion. So I do think that from that point of view, the quarter was very solid and very strong. Now coming back to the topic of growth. And on this picture, you recognize the map where we have all of our different countries, the blue countries. If we then break this down a bit more into regions in terms of sales and what that translates to into market share. So if we start with Europe being close to 80% of what we do, this is where we have relative strength. We have a very strong position in Europe, roughly 30% market share. And in Europe with -- I think there is one exception, we are the market leader in all these markets. But we don't give up until we're #1 in all countries, just to have that said. And there is room to grow even further. Unfortunately, not all customers appreciate what we do. So there is still room to grow even we have a relatively strong market share. Moving over to Americas, which was 16% of sales last year. Here, we think we are and we know we are #2 in the market if we look across all the brands. But still, our market share is estimated to be below 10%. So there's a lot of room still to grow in the U.S., both because the market is maturing away from blacksmiththing into something that is more sophisticated and more industrialized, and there is a lot more market share for us to be had in the U.S. and North America. If we move over to APAC, and this is now without the acquisition that we announced last Friday. Also here, quite big market. We are making a lot of progress in terms of how we grow. But at the same time, our relative share and position of that addressable market is still very low. So a lot of room to grow. And that's also one of the reasons why we made the platform acquisition of Vichnet, which we announced last week. So strong position in Europe, excellent opportunities to grow in the rest of the world. Now I'll take a look into how our different businesses are performing. And now I'll take the product view instead. And when we look at this, we're looking at our machine guarding products and the machine guarding products, they go into manufacturing environment, of course, but they also go into warehousing environments. And this product or product line, you could say, is roughly 65% of what we sell across the group. If we look to our performance with these products, and we do look at this over a period of time, we -- there are a few really important takeaways from this. If we look from 2019, so 2020 to 2024, we have had 11% of organic growth. And with one exception, which was the second quarter in 2020, we have had growth every quarter with this product. And that's a very good thing because it's really the core of the core, and it's also having a profitability level that's in relative terms higher than group average. So here, it's all about continue to grow profitably. There are still customers to chase after. There is still business to win in all regions. So a very strong performance despite the weak markets. And in this case, I would say that we are gaining market share in the market also through the last couple of years. If we then switch over to the warehousing products, which is shelves, dividers, anti-collapse systems. This is a bit of a different journey for the group. So in this case, we -- in 2020, we acquired a Polish company called Natom, which had a phenomenal development through the COVID years where we had exceptional demand. And in 2023, we acquired -- or late 2023, we acquired Garantell, which is not so far away from here. Through these 2 acquisitions, we have gone from being pretty much almost nobody in this business 2019 to being the leading player today. So it's a big shift. Now if we look at the market development and the market dynamics, 2021 and 2022, we had exceptional growth. '23 and '24, it's the backside of the bullwhip, meaning that the markets have been very slow, '23 and '24. Here, I'd say, when we acquired 2 companies, which are pretty much in the same niche in the 2 products. There are, of course, a lot of synergies that we can harvest from that. That could be on the sales side, but that could also equally be on the cost as well as on the capital side. And this is what we're busy doing for the time being, putting 2 of these -- these 2 product offerings together. I'll come back to that in a later slide. I'd also say that if we look at the profitability line on this slide, you can see that it's a decline, and it's, of course, volume driven. These acquisitions also come at a dilutive profitability to begin with. But here, I'd say that when we return to something that we can consider to be normal or a normalized market, we do all of the job that we're now busy with internally, putting the offering together, putting the supply chain together, this business will return to solid and very attractive margins and attractive returns as well. So here, we're in a bit of a restructuring mode from an offering point of view as well as from a supply chain point of view to be ready for when the market picks up again. All in all, we have seen a 14% growth over this time. Needless to say, it's predominantly driven by acquisitions and not the organic volumes. Business wouldn't be anything without its customers. So obviously, we do have probably 20,000 customers around the globe, and we couldn't fit all of them into one page. So we had to select a few. On this page, we have just a selection of customers, and this is to show you a bit of the width that I was describing in one of the slides before. And you'd find -- you probably recognize all of the names on this slide. And with many of them, we also have long-lasting relationships, and we've also grown with these customers. As you can see, there are from -- there might be consumer brands, there might be OEM brands, car brands, logistics brands, et cetera, et cetera. And you'd also see that there are from pretty much every corner of the world. So I think this is probably the favorite slide of the whole presentation. I think we can be super proud of this Troax. I'd also like to bring up this quote, which comes from a Spanish retailer called Mercadona, which we've been working with for 15 years roughly. And we asked them before this day too, would you mind trying to summarize how you look at Troax? And I think this quote says a lot. I think it shows that we've been doing really what we should be doing. We are partnering up with them through the whole process from design to execution. We are delivering the right product quality. We're delivering on time. And we make sure it works for them in reality, the last mile of the process. So I think this is a very good quote, and this is how we want to be recognized by the customers and in particular, Mercadona in this case. So with that said, I'll jump into -- with this as a strong foundation, strong customer base, I think we are having a very solid business, even though we're struggling in with the warehousing predominantly as well as with the storage to some extent, volumes, we're in a very good, strong position when we start our next 5-year journey. So since I came on board a bit more than a year ago, we've spent quite a lot of time with the team internally on our strategy, where to go, what to tweak and so forth. We have also thought about, okay, how do we now best set ourselves up for success, how do we organize ourselves. And we started -- if I start with the internal part before we get into the strategy, we have a new way of organizing the company since the 1st of Jan this year. And I'm born and raised. I come from -- came from Sandvik before I joined Troax. Decentralization and true P&L ownership is important to me. I think it's important for many different reasons. First of all, I think it's important for business reasons. We are, by far, the largest in our niche. When you are large, you tend to become slow. And our business is a lot about speed and agility. So chopping the Troax elephant is -- makes a lot of good sense. Performance management, P&L accountability is also very good for building the new generation of leaders. Another thing that -- which we have put in place is that we are now looking at geography over brand as main dimension for how we measure the business, which means that all of our country managers are using the whole portfolio to extent possible to win the business and gain market share. So that is both good when it comes to driving sales, but that is also great for making sure that we do this in a cost-effective way. And I'd say we have done a lot of progress during '25 to run this way. And going into 2026, I'm hoping that we will have clarified and put all the last pieces in place to be able to run really according to the model with full speed and enthusiasm. Important here is also that the regions are the result owner. It means setting their own strategy. It means sorting out all of the executional parts and also living with the results. That also means that the regions are the ones who are driving our M&A efforts. So the team in Asia, obviously, would be better suited than me sitting on this side of the world to figure out what pieces of the puzzle are we missing in Asia. So it's also a decentralized responsibility to drive not only the organic growth, but also the acquisitive growth. Then we support from a group or headquarters point of view with specific skills, could be legal, financial DD, operational excellence when it comes to, for example, manufacturing, et cetera, et cetera. But headquarters is there to support. The main thing that needs to happen and should happen and is happening is surely that our regions are the ones running and driving the business and being accountable for the results. And last but not least, decentralization sounds great, but without clear performance -- without clear targets and without clear performance model, decentralization will fall flat. So that's also one thing that we have spent a lot of time on, which will generate good, I think, outcomes going forward. Now it's great to listen to me, and I've met most of you or all of you before. But I think the real heroes of the group is or the real hero is not me. I think it's, in fact, the team and all the 1,100 colleagues that we have across the group. I'd like to take the opportunity to introduce the ones from the group management who are here. So you'd see the nice faces and functions on the screen here. But perhaps we'd go a quick around the group management to say, hi, Mia, would you like to start? Mia is our Head of HR. Hi, Mia. Who's next? Camilla, who's Head of Marketing. Thank you, Camilla. Martin, IT. Cool. Christian. Thank you. And then we have Jonas, who you've met, who's heading up our new business, and you do a bit of strategy and portfolio development as well. That's right. So double hat. And then Anders, and you'd introduce yourself when it's your turn. Very good. Great team. Then I think management is super important, especially in a decentralized environment. But I would like to say that nothing in this business would happen without our colleagues, the ones who are working day in and day out to make sure we sell something, we deliver something, we develop products. We make sure the IT platforms run well. We make sure it looks cool on LinkedIn. So it's really, really about the people and guided by our purpose and vision and mission, guided by our values, this is what guides our promise to the customers. And what we promise our customers is that we do things in a responsible -- quick, responsive way, that we do things efficiently and also that we are acting with integrity, meaning doing what's right, playing fair, playing just, et cetera. Very important promise that we give our customers as well as our suppliers and, in fact, also ourselves. Now we get back a bit into our vision and mission. And as you hopefully understand, we're very passionate about safety. And our goal and mission is really to make sure we have zero harm workplaces. Zero harm workplaces, obviously, for all the people that work into the manufacturing and warehousing environments. But surely also, it's zero harm to the business owners when it comes to minimizing productivity, downtime, asset damages, et cetera, et cetera. So it's a zero harm in a very conceptual way. If we look at our role in this from 55 until today, we have been doing this mainly through our machine guards, through our partitioning and also through our racking offering. A few years back, we started to dip our toe into something where we can provide our offering and our customers also with sensoring technology, where we can have people and machines talking to each other to make sure that we even prevent the accidents from happening in the first place. And here, we have done a lot of good work in the past couple of years to grow that business and provide value to our customers. But we don't think our mission ends with our mesh products and our active safety solutions. There are other natural parts of this ecosystem where we have a role to play, we think. A couple of obvious products or solutions would be barrier systems, for example. It's, in a way, a version of guards. And there is also a lot of value that we can provide our customers by advising them, acting as their partner, training them and equipping them with the right tools. So with this, we can, of course, have cross-selling and make sure they buy more of the right products. But the advice in itself is also a very valuable, highly profitable part of this. Now that sounds perhaps good and a bit theoretical. If we now look at what is this wider view of taking safety at the center and not the product, what does that do to the addressable market? Well, we looked at these numbers before, and we said the addressable market is roughly EUR 1.5 billion, growing 4% to 6%. If we now add new segments, safety driven, we believe that we're looking at the market that's roughly EUR 7 billion big. And that would be adding active safety components, that would be adding advice training tools, that would be adding barriers, that could be adding also the data center in a sense, which hasn't been seen as core. And if we then look at this EUR 7 billion of, i.e., additional potential, the beauty of this is also that these segments are growing faster than the core. We believe that's 6% to 8% annual CAGR longer term. And this makes perfect sense for our customers. They are already asking us to do this today. And partly, we do that, but I think there is a lot more that we can do for our customers if we organize and structure ourselves a bit accordingly. So I think this is very promising when it comes to growing Troax and growing Troax profitably. Here, I'd say also when it comes to selecting segments and products and solutions that fit into this vision or this mission purpose, it's important that we select that we are careful, it needs to make good sense for our customers, and it also needs to be products and solutions that provide high value. Very good. So how do we then get there? Well, we have set ourselves -- I think it's pretty clear why we're here. We're here to make sure that our workplaces are zero harm, that they are safe, both for people as well as machines and assets. We do this by acting as a safety authority towards our customers, being there to help them with advice, being there helping them with design, helping them all the way through the process. And we do that in a beautiful way with the machine guards already today. We have set ourselves 7 focus areas across the group. And there are 2 fundamental things. The first fundamental in our beautiful strategy house is safety. Obviously, we are a safety company. If we sell safety, we also need to live safety internally. And we can also preach safety and teach our customers safety. The other part is about being sustainable. We've been around for 70 years. We want to be around for at least 70 years more, hopefully even longer. So it's being in business sustainably, but it's also about making our business even more sustainable. So it's 2 -- there are 2 meanings in this. So it's a very fundamental thing, and I think it's also very well ingrained in the company. We've been doing a lot of minimizing waste, optimizing transportation, using as little material and as little energy and all of this for many, many years. So it's very much a continuous improvement and a continuous process. The other fundamental part is around our people and our culture, making sure that when we are the biggest that we don't become fat and happy, that we are quick on our feet, that we are speedy with our customers and also that we live our values coming back to being efficient, being accountable and acting with integrity. So a lot of work and dialogue goes into this with middle management, with our employees, et cetera. So without those 2 fundamentals in place, the 5 boxes on top will not fully work or we won't get full leverage on that. If we then look at the focus areas, we will continue to grow market share in our -- what we have decided to be core segments. We have innovation to be done and also here in 2 ways. There is more innovation and development to be done on our core products, could be big and small things, could be technical innovation, could also be commercial innovation. And the other part of this is to make sure that we develop products and solutions that are more sustainable from a planet point of view. So here, we have 2 avenues, so to speak. At the center of our strategy, we have our customer experience. Our customers should have the best journey with Troax, Everything from I realize I have a need, we should be easy to get, we should be easy to deal with, and we should make sure that we deliver what we promise and do the after care. So it's the whole customer journey and the whole experience. Now this is something that we -- since we're working 75% with distributors and integrators, this is something that is a bit of a challenge for us practically. And so here, we do need, I think, to put in quite a lot of effort. We're doing a good job today, but good can always become greater and better. The third -- or the fourth area is the acquisition agenda. And here, it's about acquiring with care. It's finding companies and niches where we truly believe it makes strategic sense, where it makes financial sense and also where we can find an operational fit where we can work well together because that's really how nice music gets played. So acquisitions, bolt-ons as well as defining acquisitions are part of the strategy. And as I said, it's also a decentralized responsibility from 1st of January. Last but not least, there -- we are and have been doing a good job when it comes to cost and capital efficiency. This is very much into the spirit of continuous improvement. There is more always that can be done on the cost side, on the efficiency side and how we use our capital. So these are the 7 areas that we're focusing mainly on. So if we start with going for growth, we have set ourselves a target of EUR 550 million in 2030. And it all starts before we even start about growing with existing customers, growing into new markets, it all starts with delivering good value to our customers and doing that to 100%. So that's the foundation and really where we start. If we start with the map, which you -- which we saw a few slides back, we still have a lot of gray or white spots in the world. There are new geographies where we can -- which we can move into. In some of the markets, we don't have the market share, we can still grow market share as well, also in existing geographies. There is more room to grow share of wallet with existing customers in all regions, I would say. And we are deliberately also attacking and going after market segments where we have a relatively low share. So if we look at the period where -- the last 10 years, we've been very busy with automotive, we've been very busy with warehousing, but there is more to be done in the other segments. So there is more to be done in processing. There is more to be done in parts of the other segments as well. And then, of course, we have our acquisitive agenda. Also here, it's about carefully selected acquisitions that we add over time. Then when it comes to growth potential, I'd like to open up a bit with the data center example. Obviously, this is an area which is very strong for the time being. We started with our data center offering a few years back, so pretty much from zero. And we've grown this niche in the company with -- we've doubled this every year since we started. So we're growing very fast from a low baseline. Here, we're targeting both the hyperscalers. And here, we do need to get the same recipe as we've had with the automotive guys and with the warehousing guys. We want to get into the specs of the hyperscalers to be part of how they set up their centers. And we have done good progress with this over the past 2 years. So hopefully, this is something we can harvest from going forward. Opportunities exist in all regions. So it's not only Europe or it's not only Spain or France or Sweden or only Singapore or only Saudi or only Texas, it's really all over the place. Here, I'd say we have a good foundation when it comes to our offering. We have a lot of capabilities and knowledge that we have built in-house over the years. But here, we could also think about perhaps expanding that offering a little bit either through own developments or potentially M&A. So big growth opportunity for the Troax Group. Coming back to the customer experience. Here, it comes back to having speed and service at the center. We do definitely have the widest offering. We have the best product. We have the best quality. We also need to make sure that the experience, the speed and the service matches the product. And here, I think we can do more. We're not doing this. We are good, but we can become greater, I would say. We can pair the product also with advice and support, could be installation, could be project management, et cetera. We have a great opportunity to open up the e-com and digital channel, both externally to our customers. We can invite them to do a little bit more in the process. And there is a lot of things we can do internally to support and to pair the customer needs with the product and the offering that we have. So the digital tools have a big portion and role to play when it comes to enriching this whole journey. And we've started this year investing in these tools. In parallel to building an e-com channel and supporting our customers in a quick manner, there is also the portion for the 25% of our business, which is key account management that we do support the large direct customers in a good way. And that needs to be done, that could be done regionally, that could be done globally. This is also a good area or an essential area, I would say, to be able to grow. And it's really the portion of this that directs whether we grow share with the large customers and that we grow with them globally, that we grow with them in the region and that we support them and that we're truly a partner. So we have a key account program going since a few years back. And also here, we're making really good progress, and we have high expectations on this to deliver value for our customers as well as for ourselves. The fourth area and something I'd like to pick up is also our M&A agenda. I view M&A as -- I shouldn't say cherry on the top, but it's certainly a natural part of our growth journey. Based on the strategy, we are targeting targets in 4 core areas. We have something we call core expansion, which is really to continue to consolidate the machine guarding markets or the core of the core. We could do like in the Vichnet case, we can acquire a target to get a foothold or a platform. We can target smaller companies. There are targets in every region, which is more about buying a brand or a customer base and finding either market synergies or cost synergies. Plenty of targets out there. I think we need to be very careful and very selective when we do acquisitions. And I'll come back to the Vichnet acquisition specifically just after here. The second area, which is the service portfolio. And last year, we acquired a company called ST&L from the U.K. This is very much about advisory and machine safety. So it's a very specialized, very niche player that adds to the core. So we add another layer to the onion. What we want to achieve here is more customer -- more touch points with the customers, of course, and we do want to provide more and more value coming from this that also then gets associated with the products and with the core. I think there is also here a few targets where we which we potentially could add to the group. The third area is adjacent products, which are natural to buy from customers. And of course, there is a safety umbrella or safety attached to that. And here, I think it also comes back to finding the products which really add value to the customer, which are natural for them to buy from Troax, and it should also have a significant contribution to the customers' safety. The fourth area is around active safety. We started our journey back in 2022 with the Spanish company called Clitech, which has had a great development in the Troax Group. But here, there is always new technologies that we could add. There is also an element of critical mass when it becomes electronics more than steel. So from those 2 points of view, we'd look at this. And for all the 4 themes, we do have targets in every region. So I think there is -- we're not lacking opportunities. I think it's more making sure that we select the right ones and for the right reasons. Then I'd like to say a few words about Vichnet, which we announced last Friday. Vichnet is the market leader in China for machine guarding solutions and also cable management or white trace. Last year had a turnover of EUR 26 million and the profitability, which is pretty much like Troax Group to begin with. And now we're in the process between signing and closing, and we aim to close this before the end of the year. And I think here, this is a beautiful example of where strategic fit, financial fit and also the fact that we like each other really comes together in a very nice way. This means that Troax will become the market leader in the core of the core in Asia. So very strong platform, very strong offering that complements what we already have. In addition to strengthening the machine guarding position, we also now get to expand a bit into the data center business. So we're already with the Vichnet acquisition, making sure that we get more of a foothold into the data center business. So the wire trace or the cable management systems isn't something we've had in the portfolio and something that we want to add both for data centers, I should say, this is probably the biggest short-term opportunity, but also more in general that specific applications for Whitetrace is very attractive for us to have in the portfolio. Then I'll move over to cost and capital efficiency. And on this slide, you'd find a pretty fresh picture from Portland in Tennessee. This is our new North American manufacturing facility, which we will inaugurate next year, sometime midyear. And why are we doing this? Yes. Well, we definitely have a higher need for capacity longer term, and we definitely also want to move away from the manual or semi-manual operations that we have had in Illinois, Chicago. So we're bringing the best of breed, so to speak, practices, flows, et cetera, into the North American context, which will provide a lot better efficiency and also profitability eventually when we're up and running. I'm not sure what you guys think, but I think it looks pretty nice. Then the other topic to cost and capital efficiency comes back to the acquisitions that we made into the racking portfolio. And here, we -- after the acquisition of Natom 2020 and Garantell, we are equipped with 2 half full factories and partly overlapping offering. The exposure as such and the market as such long term is very healthy. We looked at that through e-com and warehousing. But at the same time, we're now having a setup where we have 2 factories, we have 2 offerings. And the question is, does this -- from a longer-term point of view, does this make sense? And we've come to the conclusion that, well, probably we can fit it all into one place with one management with one ERP system with one combined offering, so stronger offering. And we're now busy with both going through the portfolio to streamline and prune and fix that. And we're also busy moving the equipment from Portland into the facility that we have some 30 kilometers away from here in Vannimo. So by the end of the year, we will have all of the equipment moved and the factory in Portland closed, bringing everything under one umbrella in Vannimo. So we'll have a fully-fledged racking offering consisting of shelves, anticollapse systems, and it's all part of the same portfolio on the supply chain. So we're looking forward to this. This makes sense not only from a strategic point of view, but it also makes a lot of sense from a cost and capital efficiency point of view. Then I'd like to say a few words on one of the fundamental on the foundation in the house. Safety and sustainability is, in fact, for Troax, nothing really new. We've been on this journey for a long time, and we are committed to doing our part. We have submitted our SBTi commitments, and we're pending for approval. We have EcoVadis Silver. -- we're aiming for more. You might say from your point of view that EcoVadis Silver might not sound like something extraordinary. Well, in our nation, in our business, it puts us light years ahead of the others. So it is, in fact, a business advantage. Well, we can always ask for more, but certainly a big achievement by the team. Another thing that I think is worth -- definitely worth mentioning is that we are mainly a producer of steel materials or steel mesh. Steel is perhaps needless to say, a very sustainable material. It's highly recyclable. We use probably as little as we possibly could. And we are not only using virgin material and virgin steel, we are to more and more extent, adding recyclable material into the mix. So I would say we are in a very competitive position from our niche point of view. But then last but not least, I would say that it's always about making sure that we can always do a little bit better. So hopefully, we're a little bit better today than we were yesterday. And next week, we're a little bit better than this week. And this is an endless process. And of course, we do our part in this. I know Christian is chasing waste a lot. We're chasing waste in papers in the offices. We're chasing a lot of things to always become a little bit better, not only from an environmental point of view, but certainly also from a business point of view. And I think here is really where business and sustainability go hand in hand. Perhaps something that might not intuitively the regionalization. So we are, in fact, shipping very little within the region, we are shipping from our factories to our customers, but we're shipping very little across Continental. So we're self-propelled in Asia to a very high degree. We're self-propelled in Europe, and we're self-propelled in the U.S. and will be even better next year. And that is, of course, in itself also very good from a sustainability point of view. Excellent. That being said, Anders, can you make sure we get some decent numbers and returns out of that?

I will try my best. Thank you so much, Martin.

Thank you.

I think I have met you all before, and you know me very well. But for the sake of it, my name is Anders Ekle. I'm the CFO of Truax Group since 8 years. I will now talk a little bit about our financial targets. And before I go into that, since I'm a finance person, and I like to close books, let's close the books of the previous financial targets looking back over a 5- or a 10-year period. As you know, we have divided our financial targets into 4 different buckets. The first one is sales growth, where we have defined the target as growing more than the market. And as you heard from Martin, we are defining the market growth to be between 4% and 6% on an annual basis. If you look at the last 5 years, we have grown 11%. And if you look at the last 10 years, we have grown 12%. So in that regards, we are by far exceeding the market growth. So we give ourselves a fully meat on that one. When it comes to profitability, we have had a target of exceeding 20% adjusted EBITA margin over a cycle. And here, we didn't reach the goal all the way through. Over the last 5 years, we have had an average EBITA margin of 19%. And if you look at the 10-year period, we reached an EBITA margin of 19.7%. So close, but not really there. Here, we have plans to improve. But overall, I would say that we're not extremely unsatisfied with this. Having an EBITA margin between 19% and 20% over a 10-year period is quite okay anyway, we believe. When it comes to capital structure, we have said that we should have a net debt in relation to EBITDA of less than 2.5x. And here, we have had many, many years, I think, 7 years or so with a constant ratio of below 1.5. So we have been way below the ceiling here for quite some time. And last but not least, then the dividend policy. We have had a policy of sending out 50% in annual dividend of net income. That is something we have done if we look at it over a longer period of time. So the last 7 years, in average, we have sent out 50% in dividends, but it has fluctuated between 40% and 59% during that 7-year period. So to summarize the historical financial goals, we have 3 targets that we have met fully, and there is one target where there's a little bit way to go, but still a decent performance over the last 5 or 10 years, whatever you want to measure. Let's go over then now to the new financial targets. I will go through each and one of them and go a little bit more into details of what we can expect from an activity point of view, how we will reach there. But first of all, I just wanted to mention the sales growth or the growth targets in numbers here. So if we start with the sales growth, we are moving away from a relative target of growing more than the market to a fixed target of reaching above EUR 550 million in 2030. And that means, give or take, a 15% CAGR over that 5-year period. When it comes to profitability, we have changed that from exceeding 20% to get at least 20% EBITA margin. it's a little bit same, same as we see it. You should not see this as a decrease in our ambition. But we wanted to reflect a little bit what Martin said before. When we look at acquisition targets, they are rarely at 20% as we acquire them. They are rather perhaps between 15% and 20%. So with a more aggressive M&A agenda, it will give us some room at least to bring these companies into the Troax portfolio and increase the profitability from where they are. So getting to at least 20% EBITA margin will be our target for the next 5-year period. Capital structure, basically no change. We will still be below 2.5x, but we will give ourselves the opportunity to step over the 2.5x over a shorter period of time, that could be in conjunction with a bigger acquisition, for example, we allow ourselves to go above 2.5x ratio. And when it comes to the dividend policy, we are moving away from the fixed 50% dividend ratio, and we will go over to a range of between 40% and 60%. And as I said before, we have actually performed in that range over the last 7-year period. So you can say we are adjusting our goal to more towards how we have performed. And I will come back later on why we do this. This is a slide that Martin has already showed, so I will not go too deep into this. There are some buckets here that will drive growth to EUR 550 million in 2030. Martin talked about the geographical expansion. You saw all the map. There are some white spaces in that map. We have some of the Eastern European countries. We have Middle East. We have some of the countries in Southeast Asia that we can do more in and also in South America. So -- for sure, there is more to be done on the geographical expansion side. Then we have the grow with the existing customers. As also Martin mentioned, we have a 20,000 customers in our customer base. However, very few of them are single sourcing. So that means that in every quotation situation, we have competition. So one way of driving growth is by increasing the hit rate with the existing customer. It could also be that we are introducing new products to our existing customer. That could be barriers, for example, that Martin mentioned, it could be active safety products, it could be services. So we can do a lot more with our existing customer to drive growth. The third bucket here is new segments. Martin also mentioned this that we are strong in warehouse, we are strong in automotive. But when it comes to the core business, there are still industries where we are not so strong and where we can get more sales and growth. And as Martin also mentioned, we have new segments, new industries, the data center industry, for example, which will help us grow also the sales. And last but not least, we will grow through acquisition. It could be smaller bolt-ons when it's applicable. It could also be more of a platform acquisition like we did with Vichnet last week. So all in all, with these activities, we hope that we will reach at least EUR 550 million in sales in 2030. Coming to the next financial target, reaching an EBITDA margin of at least 20% over the period. Here, we also have 4 different buckets that we will drive activities within. The first one is talking about volume, it's talking about price, it's talking about mix. So if we start with volume, you all know that we have had a little bit of a headwind now for some quarters. But when the market will bounce back again, there's a lot of assets that we have in our company right now, both in terms of machinery as well as in people that will drive this sales growth without much addition, I would say. So at the time the market bounces back, we will get a pretty nice flow-through of additional volume in the beginning. When I talk about price, it's not that we are not driving price initiatives today, we are, but there could be more done when it comes to customer segmentation, product segmentation to get more price out of our portfolio. And when we talk about mix, I'm really talking about product mix. We will help or help our customers choose the products that are most profitable for us. So hopefully, with those activities, we will drive more sales of more profitable products, and we will decrease sales of less profitable products. And it could also be that we are removing some products from the market that are not as profitable as we would like them to be. Operations improvement in Europe, Martin talked about already. We are closing our Polish factory, and we will save a lot of fixed costs in that transition. No doubt about that. Also, Martin talked about the operational improvements in Americas with a new machinery in a new factory, it will drive efficiency. That will also help the margin. One thing that we have perhaps not talked so much about is the lower sales and admin costs. And that will really come from digital investments. We have been very highly efficient, I would say, in our factory for a very long time. We will try to do the same journey now in our selling and admin expenses. By investing in digital tools, we will try to get this efficiency of scale also in the selling and admin cost. So that is -- and that's why you will see more of CapEx going into digitalization tools in the next 5-year period than what you have seen in the past. The third financial goal is about our net debt ratio. Here, you saw also that -- I mean, we have been below 1.5 for the last 7 years. Right now, we are at 1.0. So -- and we are utilizing right now SEK 80 million of our facility. And if you go back -- you can go back to the introduction on the stock market, we actually had SEK 70 million of debt when we went into the stock market. So that means over a 10-year period, all dividends, all CapEx, all acquisitions have been made through cash coming from operations. So -- and yes, we have a lot of power to increase debt. And also, we will continue to drive a good cash flow. And those 2 in combination will give us an opportunity to find and acquire those good companies out there. And I can say with a normal multiple on future acquisitions, we can, for sure, more than double that debt, and we will still be far below the 2.5x target. So there's a good opportunity for future growth through acquisitions. And last but not least, I will talk a little bit about utilization of cash flow. As I said before, we are using the free cash flow for CapEx, for dividends and for acquisitions. And when it comes to dividends, the reason why we are changing now from a 50% fixed ratio to a 40% to 60% ratio is to be able to give our shareholders, I would say, an annual growth in dividends in euros because the net income might fluctuate between years, but giving us a range between 40% and 60% will enable us to give you a stable and increasing dividend on an annual basis. I've talked a lot about acquisitions already. And when it comes to CapEx, I would say that with this investment that we are now doing in America, we are very well equipped, both from a capacity standpoint as well as from an efficiency standpoint in all 3 regions. So -- of course, there will be future CapEx in machinery. It will be -- it will come with the market growth, there will be capacity investments. There will also be a need for replacement of old machinery over time. But I think also that what you will see now in the next 5 years that we will move a little bit towards more digital investments to get that efficiency of scale also in the ST&A costs. But overall, I think you can expect from a total CapEx point of view, combining the machinery with the digital tools, I think you can count on approximately the same ratio of CapEx that you have seen in the past. It's just a little bit of a shift towards more digital investment and perhaps a little bit less of machinery. Yes, I think that was all I had. Then I'll hand over again to Martin for closing comments before Q&A.

Thanks, Anders. And then to conclude this part, I would say, if we look at Troax as an investment, we think we've done good to date, but there is definitely more to come. Takeaways is that we are the leader in our niche, and we're the only global player. That means we have the strongest offering. We have probably the strongest customer value, and we can provide that to our customers. We are well positioned for organic growth and the macro trends and the markets are turning and are working in our favor. We've set ourselves a profitability target of 20% -- of at least 20% of the cycle. There are improvements underway to improve the profitability, footprint consolidation as well as efficiency improvements into the North American market. We do have a strong financial position. We have a strong balance sheet, which we can hopefully work a bit more actively with, especially on the acquisitive side. We do see attractive opportunities for M&A in the market. We have a strong pipeline, and we do aim to lead the market consolidation, both within our core niches, but of course, also drive the industry with safety in mind. And we are long-term committed to sustainability. We're very much in the forefront in our niche, in our industry, and we will continue to be the leader. Thank you so much. And now I'll hand over to Jonas for Q&A.

Well done. I think we're 7 minutes ahead of schedule. So now we have planned a bit of a Q&A session for the next half an hour, roughly. And we'll see what you -- what questions you have. And after that, we'll go on with the factory tour. And when you have a question, if you could ask the question in English, and we use the microphone there as well. Okay.

Daniel Lind with Danske Bank. So I basically have 2 questions. Could you maybe flip to the graph with the way forward to your financial target? Then looking at that graph, I'm a bit surprised with the organic ambitions you have because the M&A part--- from M&A seems to be very much smaller than I expected. So should we read that bridge as illustrative of the sizes and the parts of it or just an illustration of the components?

I think perhaps you could help me out a bit there, Jonas. I think you should look at it more as a conceptual thing. I think when it comes to growth, the lion part should be organic growth. I think we have all the means to continue to grow organically. I think what we're saying is that we do think that we could do a little bit more on the acquisitive side, perhaps comparing to the previous period. But you should not look at this as we give up on growing organically and then it's all acquisitive growth and balance sheet. So I think it's both. The lion part of this needs to come and should come from organic initiatives.

Okay. Perfect. So then the other question is a bit on the same theme. If you look at the improvement in EBITA, I guess, now with the capacity utilization of some 60%, 75% something, then I would have expected the scalability on ST&A to be a much bigger part of the improvement in profitability. So -- how should we view that?

Yes. I think there are 2 sides to this. I think there is the relative measure, and I would agree that we'd get in relative terms, perhaps more help than what you see on the screen. So view it as conceptual. At the same time, I think it's also managing ST&A in absolute terms, which is the other side of the coin. I should be standing here. Thank you. So I think we consider both of them. I think we do need to bring some of the ST&A costs in absolute term down. But of course, as we grow the top line in relative terms, we'd also get more help from that. I'm not sure, Anders, if you want to add something.

No, I agree with you.

It's Gustav here from Nordea. I thought maybe just to start off, if you can elaborate a bit more on where you are in capacity utilization in the different areas, just for us to give a better sense of where we can see a sort of swing factor once sort of demand returns.

Yes, I'd say just high level, I think we're about half here. We're probably about half or just north of half in Italy. Poland for obvious reasons on its way down. Verno A bit below 50%, of course, probably even lower, 30, 40 perhaps. China, we are somewhere between 40 and 50. And in U.S., we are -- given the processes and so forth, we're closer to the capacity ceiling, even though the volumes currently are down. I'm not sure if that's even a fully relevant question given where we are with the factory transfer either.

No, that's fair. And then maybe on the acquisition also you made last week. It will be interesting to hear because what we've heard previously was maybe to look more into distributors to approach the Chinese market and to sort of get access to the larger customers. Now you buy sort of a producing company. So it would be interesting to hear your strategy there, what has changed? And also if there's any risk of overcapacity situation also in China as you have 2 plants there now.

Yes. I think if we start with the first question on the market channels, in fact, I think Vichnet has built a very good distributor network in combination with their own direct sales force. So I do think we're tapping into that distributor network through the acquisition. So in a sense, I do think it's kind of a little bit similar thinking as to before. When it comes to what we are seeing more longer term in Asia overall and in China, I do think that we are in -- we will be in dire need of capacity looking at the market growth rates and what we believe will happen both in the Chinese market as well as in some of the other Southeast Asian markets. So I think for now, we're not looking at overcapacity in Asia specifically as the biggest topic. Can you hear me...

Okay. It's here from SEB. A couple of questions from me as well. I think we start -- you talk a lot about you entering new market segments, and that would increase your addressable market significantly. I'm trying to understand this a little bit better. Could you specify a little bit more what exactly you're trying to add what applications and such? And also, can you also say something why you aim so much to go outside your bread and butter business? I mean one mean interpretation could be that you see limited growth opportunity or more mature market in your core segment. So could you maybe elaborate a little bit there?

Yes. No, I think there are 2 -- I think it's a great question, first of all. I think there are 2 sides to this. I don't think you should interpret going -- widening the offering as such as there is less potential in the core. I think we had in the presentation roughly where we are market share-wise. So there's still a lot of room to grow in the core. In addition to that, I do think there is also a strategic context to being a niche player versus widening the scope a little bit. And I think we want to make sure that we're strategically stable with other niches and other products. If we look at what the customers want, they really love our core offering and our core products and our machine guarding solutions and the way we interact. At the same time, they are asking us to, okay, can you provide and help us more? Can you simplify our lives with expanding on that offering. So that would be a natural expansion to core. And I wouldn't even say that's Troax pushing ourselves into the market. I would say it's also the market kind of pushing this space a little bit. So I wouldn't interpret that as we're less optimistic about core. That's simply not true. Then when it comes to specific segments, I do think there is both the customer side of segments, so segments where we haven't been able or haven't focused on before. We talked, for example, about process in this case, food, pharma, beverage, et cetera, are great businesses to be in where we have a relatively low market share. There is more room to grow. The other side of the segments or products is coming from what we just discussed before. You can look at data center as a new segment. Really it's quite close to -- from a product point of view and from a capability point of view, it's pretty close to core in a sense, okay, dimensions are different, perhaps the mesh is a little different. The customer base might be a little different, but it's quite close to home in a sense, but it's, in a sense, also a new market. If we look at the active safety, which is a big potential addressable market, very healthy, provides a lot of value to our customers. That would also be something to expand into also stemming from the fact that the customers are asking for, okay, is there more? Can we extract more out of this? Can we combine this and that? Can you help us with more things on site. So I do think that is also a customer-driven process. Then last but not least, I do think there are some hardware products. We talked about, for example, barrier systems, which is a big business in itself. There are different types of barriers. There are steel metal barriers, there are plastic barriers. That in itself is also very close to our customers. They usually buy it in connection to our products. That is a natural way for the customers to ask us to provide more, and it's a natural way for us to grow. So with that said, we have one leg in each ditch, so to speak.

And maybe I can add a little bit to that as well. So I mean, of course, you can look at it from our addressable market perspective and an opportunity for us to grow our business. But a little bit like Martin already alluded to that. But from a customer perspective, these are also complementary solutions, and we want to be an industrial safety leader, and there's no one else in that space, like someone does machine guarding, someone does barriers, someone does active safety. If we take the lead and can provide a full scope solution, like that provides us a competitive advantage, which is also good for our core business. So by doing this, we're also protecting ourselves and creating synergies for the customers. So there is a logic beyond just finding a bigger pie to go after in doing this, I would say.

Okay. Do you see any close or nearby segments that could add the aftermarket component to your business? Or is that not possible?

I do think -- I think this concept of aftermarket, if we look at steel -- if we look at our core steel products, they are not much of an aftermarket product. I don't think they should be either. For sure, there are some of these products that are a little more, perhaps not aftermarket per se, but more recurring. If we look at some of the active safety solutions, they might be subscription-based. They might need upgrades and so forth. So you could say that's kind of a repeat business. with this shorter cycle than the steel. I do think if we look at potential new segments as in barriers, they get probably hit a little bit more than -- or more often than because they are more in positions or places in the warehouse, which get hit more often. So those are an aftermarket and replacement business with shorter cycle as well. So you can say the aftermarket intensity is higher on some of those segments. Now that being said, if we would look at this as -- will this make us an aftermarket-driven business overall, likely not, at least not short term.

Okay. Fair enough. And then one final from my side. I mean you talk a lot about your investment in Americas, which sounds very promising. Could you say something about the profitability in Americas today and also where you aim to go with that investment?

I think we have deliberately been quite cautious on this for several reasons. I do think we have good experience with upgrading facilities and seeing what those results are. So I think we do have an internal pretty good view of what we're aiming for. I'll be, at this point, a little bit conservative and not give you any numbers. I prefer that you'll see them in the P&L later on. But I'd say that it's substantial. It's a substantial improvement. On Americas, we are not reporting per -- externally per region, but it's fair to say that the North American operations, both at the current volumes as well as with the current way of running it, it's below group average.

Anna from DNB Carnegie. So my first question is on the Vichnet acquisition. Could you tell us a bit on how the historical growth has been and how much of that has come from data centers?

Yes. Well, I think if we look at Vichnet, they've gone from EUR 0 million to EUR 26 million from 2006 to now. I do think they have grown half of their business in machine guarding over the last 5, 6 years. So very strong growth on that side. On the data or on the cable management system, it's both data center driven. and of course, also for all the other customers. I think the growth of Vichnet has not predominantly been to date data center driven. But I think going forward, I do think it's fair to assume a substantial part of that growth coming from data centers.

And then my second one is on -- you've talked a lot about the pool of possible acquisition targets. Could you maybe give us a bit more of your sense of the multiples that you must pay for the high-quality ones and what the general like financial qualities of these are? You talked about margins potentially diluting at least in the beginning and so.

Yes. I think-- I think, first of all, I do think between the different themes, the margin profile is quite different. Both the growth and the margin profile is different. So if we look at active safety targets, usually growing a lot faster as we've seen in the market, usually more profitable, okay, then you end up with some kind of multiple on some type of agreement. If we look at core machine guarding acquisition targets, they would be performing Yes. Well, roughly around the level where we are depending a little bit on the width and the complexity and the market. So it varies quite a lot. It varies also whether the companies are well run or whether there are room for improvements and so forth. So I'd say it's a big spread. If we look at acquisitions into the core of the core, we're talking single-digit multiples without being more specific than so.

And then the final from my side is on the active safety. I'm a bit curious on which customer segments or anything else that could sort of be the ones that are most in demand these new kind of solutions and also how you're experiencing the competitive situation amongst other players who are offering this?

Yes. I'd say I think where we have experienced more interest and also we've had more success is definitely more to the food and beverage side. So the big beverage makers would probably be in the forefront from our point of view. And we could look at the American ones or we can look at European ones. So I think that's the area where we've been most successful to date. Then when -- on active safety, the -- it's a pretty scattered marketplace. So we do have the forklift OEMs, this is not really their core business. We do have plenty of start-ups being more technology product-driven. And there is us and a few others. And I think what the end customers want to see from this because they trust us with data, they have concerns about liabilities, about the safety, making this work is are we now, in a sense, collaborating with someone who will be there for the long run, is there support and service and reliability to this. So I do think that we're in a good position because we are agnostic from an ecosystem point of view, which helps with the forklift makers and with the customers, especially in the mixed fleet situation. At the same time, we are larger than the smaller technology developers because they are not having the scale and credibility that we would have. So I do think from that point of view that we're kind of in a sweet spot from that point of view. We're clearly a safety company. We're listed. We're large enough to provide the security. So I do think from that point of view, it's -- we're in a pretty good position. I'm not sure if you want to add something, Jonas.

Well, I could add that. I mean, if you look at the machine guarding business, as Martin mentioned in the presentation, that's regulated in the developed markets. So if there's a robotic welding cell today, it needs to have machine guarding. That's already a reality. When you look at active safety, that's not regulated. So that is driven by customers that want to go above and beyond in safety. And if you look at that megatrend that safety is becoming more important, more and more companies will consider active safety as a way to take their safety work to the next level. More and more customers will not consider machine guarding. It's already a regulation, right? So that's why that market can go quicker than the machine guarding market, which requires new robots to be installed. whereas here, we already have thousands of warehouses without active safety. So all it takes if management decides we want to be lower our incidents, this could be a solution, right? So I think, yes.

So Fredrik here from Handelsbanken. I have a question about your historical M&A and what would you say is the greatest learnings or what do you take with you going forward?

That's a good question. I think connected to Troax specifically is that M&A -- doing M&A and getting all the value out of it is complicated, and it takes a lot of work. I think we have learned a lot through the various acquisitions that have been done over the years. I do think also that it comes back a little bit to, I think, the basics. I think it's -- does this make strategic sense? Do we have the financials on our side? Or can we potentially get there? And it's also getting together with people that you can imagine working with. I think the way I look at this, I prefer targets that are a little bit larger because the small companies, you need to go through all of this integration work and get them into the family. If you can acquire companies that are slightly bigger, they've proven themselves, they're also a little bit less dependent on a certain individual, which makes it a lot easier to create value and create value quicker. So I think if there would be anything, I'd prefer to do something that's a little bit more sizable. I think the Vichnet acquisition is a great size. I think the Garantell acquisition is also a great size where we have a certain quality on middle management and it's less dependent on a few things. So that would probably be, I guess, one learning. Anders, you want to say something you've been around longer than I have.

No, I agree with you. I totally agree.

And then I have a question about the new organization, and you mentioned KPIs. What's the most important KPIs that you will push on your bosses?

We grow, we make money, simple as that. 50-50, 60- 40, 40-60.

We have 10 minutes left. So a few more questions possible.

Yes. Just 2 more here from me as well. Maybe on the data center offering. I mean, we all understand the major shift we are seeing in that space today. But just regarding your offering within this niche, I mean, has that accelerated with the value of servers increasing, so to say, that you need to protect the value of them, if you understand my question?

I'm not -- yes, well, I'm not sure I do understand it perhaps. Jonas, I mean, it's your...

Jo I mean it if you look at the NVIDIA valuation, I mean, a lot of data capacity is necessary to do all the computational stuff related to AI, right? And data centers are popping up like mushrooms everywhere. And for every data center, those servers need to be protected from being accessed and tampered with. So fundamentally, it's a similar solution to machine guarding, but you have machine guarding is protecting the human from the machine. But here, you also need to make sure the human cannot get into the servers. So I mean that's the main function. So for example, you have smaller aperture on the mesh. But then there's also cooling, heating, direction of airflows that our products contribute to as well size.

So is it possible to say how much more mesh and also in data center versus a traditional?

I don't think so. I mean it all depends on the size of the data center, the type of operation and warehouse and so on. But yes, I mean, if you walk into a data center, there's aisles and aisles of servers and they're all encapsulated. So there's a lot of protective structures in a data center.

I think your question is difficult to get a firm reply. I think it's fair to say this, though, that in -- on the average project, the data centers are larger on average deal value, which is kind of a proxy for content or meters or whatever -- square meters or whatever you want to see. So from that point of view, the data center business contains a higher share of large projects, especially comparing to the bread and butter business that we have on machine guarding where the average order size is relatively small.

Perfect. And then my second one is on installation. I think you mentioned that before. Has your view changed on that driving installation business?

No. I still think installation is a nice complement to our products, and we do quite a lot of installation already today with some of the key customers. I don't think we're going to be the ones providing installation for each and every customer for each and every design. So I do think we do need to work a bit with care, definitely with large customers, perhaps in areas where we have high density of installations. et cetera, et cetera. But I don't think we would -- we're not going to all of a sudden have a huge installation force with own ranges all over the globe. I don't think that is not our business. But certainly coming from a customer point of view in terms of being easy to deal with, holding their hand through the whole process, certainly, there is an element of installation. Now that being said, since we're having a big portion of our core business being dealt with through integrators and partners, we also need to be very careful to be on the right side of the fence, so to speak, when it comes to not stepping out of the, from a vertical integration point of view.

So if we just look at the acquisitions of Folding Guard and Natom historically, in those markets, you had quite some success with your basic Troax offering. Has those offerings been helped by the acquisitions you've made in those countries? Or would you have the same success even if you hadn't bought the Folding Guard operation?

I think that will become very hypothetical, first of all. I do think we can debate whether a certain acquisition has been successful, has been successful in a certain period of time, has been successful in the long run. I don't think that we would have the combined market position if we take North America without adding critical mass. So in a sense, I do think there is a correlation between growth, being able to also get the supply chain in place, critical mass and skills to be able to grow. So I do think there is a connection between those 2 things. Absolutely.

Anna from DNB Carnegie again. So I just figured a bit on the channels to market where you have 75% through integrators. Are you happy with this current setup? Or would you benefit from having increased ratio of either of those?

Yes. No, I would like to have more bigger share of the sales straight to the end user for a few very obvious reasons. Number one is -- we get direct feedback on what the market wants. So that connection is easier. If we have a higher share with the direct customers, we also get more touch points. So we get more stickiness in the customer relation that helps additional sales, obviously. And having fewer middlemen along the way, of course, is helpful for the margin. So those would be the reasons. So if we can move the needle a little bit more towards the end users or end customers, I think the better.

Is there any region or end segments that you have a higher tilt towards the direct channel? Or is it very evenly spread out?

I'd say probably from a -- we will most likely have a more -- to date, I should say, before the Vichnet acquisition, we have a higher share of direct in Asia, in fact, if we look at it proportionally, than we have in the Europe and the U.S.

And moving the Natom volumes into Garantell, just thinking about how they have their e-commerce set up, is that going to be beneficial from that point of view?

DI think for -- I think overall, absolutely because it's a much better user experience or customer experience. It's smoother, quicker. The customers can choose how much they want to do themselves, how much they want to help with. So from that point of view, I do think it's very positive. Some of that will then go through straight e-channel and some of this would then also be utilized in the key account structure by our own colleagues as well as the customers. So I do think from a service point of view, it's going to be very beneficial for our customers and also for ourselves in terms of sales, quality, efficiency and smoothness.