Metso Outotec Corp

Good afternoon. Good morning, everyone. This is Juha from Metsos Investor Relations, and I want to welcome you all to this conference call where we discuss our second quarter 2024 results, which were published earlier this morning. We will start with the presentation by our president and CEO, Pekka Vauramo, and CFO, Eva Sipilä. And after that, we will be taking your questions. And we try and limit the length of this call to 60 minutes, so please keep that in mind and try to limit the number of the questions you'll be asking. In the beginning of the presentation, we'll be discussing forward-looking statements. Please take that into account. And with these remarks, I'll be handing over to Pekka to start the presentation. Please go ahead.

Thank you and welcome to our second quarter earnings call. If we start with the highlights of the quarter, first of all, we didn't see any major changes in the market outlook, so it was very much in line with our expectations in both of our segments. We saw continued headwind in orders in both of our segments, and since we have had headwind with the orders already already for a couple of quarters, then that starts to be very visible in our sales. So both our top lines negative development as such for the quarter. What was very positive during the quarter was that our margin development continued to be very resilient. We are showing almost stable margin with reduced sales levels and that of course shows that we are doing in-house what we can in this kind of situation when there is a very much delayed decision making in equipment orders in minerals and at the same time we've seen some slowdown in destocking in aggregates equipment. We are seeing some signs of cash flow improving, still not satisfied with the development in that area, but we are moving in the right direction with the cash conversion. And the group numbers as such, so both top lines orders and sales down, orders 14%, sales 13%. There's a minor currency impact there as well, maybe 2% out of those numbers are because of the currency, but main contribution is obviously the volume. And adjusted EBITDA came down naturally, the millions from 238 to 205. Margin remained fairly stable in this kind of conditions, similar drop in operating profit Profit, Eva will comment a little bit on that development later on in her part. EPS came down two cents and cash flow shows an improvement, but still room to improve from 150 million to get the cash conversion on the level where it should be. Looking at segments, aggregates, orders, 314, that's down 16 million from last year. Market activity remained more or less on same level. We saw sort of earlier geographically wide recovery or signs in the market. Now we see more of a mixed picture in the market at this moment. And maybe the notable situation which became evident towards the end of the second quarter was that the North American mobile equipment market slowed down, and in fact the destocking of dealer stocks slowed down quite much towards the end of the second quarter. So equipment orders down 5 percent and services 3 percent. With the outlook that we have for this part of the business, it's evident that we'll end up below last year's sales numbers, order numbers and sales numbers in aggregates, as the situation will be the same for minerals as well. Sales numbers 331 down clearly from the year before and that is of course because of the thinner backlog that we do have. Margin supported very well by the mix improvement. being more stable than the equipment order services share being 33% and the total adjusted EBITDA for the segment 55 million down 11 million margin 16.6% versus 17 a year before. We have continued good cost management and sales mix is contributing and like we have said many times we have done some medium-sized and minor acquisitions in aggregates area, and we keep on finding more synergies in this area, and that contributes to the cost side and margin development as well, despite all the lower volumes in our aggregates business. Then moving on to minerals, major change, really, the equipment orders down 34%, really no major orders, or there is one, in fact – order that we booked, e-scrap smelter order, but that was the only one, the major one that we booked during the quarter. Services down 6%, some sort of seasonality and lumpiness in services side, but that clearly shows that it's much more stable business as such. Good strong pipeline but delayed customer making, the system making really here is the name of the game and this is just something we need to live through. Those things will finally come through. We see some signs of that one now. But since there have been so many delays so difficult really to commit and say that they will come now or fourth quarter or so, but we see some possibilities there. Sales follows naturally the lower order intake from the previous quarters. Equipment down 22 percent, services down 7 percent, and services share now at 66, supporting through mix the margin development. Same as in the aggregate side, we have managed, in our opinion, our costs well in minerals as well. We made some changes in the way of operating. We have finalized those actions, and that contributes nicely to the cost development in aggregates. Margin, 17.3, 152 million euros. down from 18.2 a year before. But good resilient performance there in the mineral side as well. Emma, please.

Thank you. Good morning, good afternoon to all on my behalf as well. If I start with the group income statement, so a few additional comments to what Pekka already mentioned. So the operating profit was €195 million, and it's high relative to the adjusted EBITDA of €205 million for the quarter. Now, this is due to the adjustments in the quarter being positive. The adjustments were plus €6 million, thanks to a provision release of €13.13 million from the remaining tail of the Russia wind-down related provision. we successfully completed a settlement agreement in the second quarter for the remaining couple of big projects that were signed before the start of the Ukraine war, and hence now marking the end of a very long legal process to exit all the business that we had ongoing when the attack in Ukraine happened. Regarding taxes, our effective tax rate for the quarter was 25%, which is in line sequentially and also with last year. And then earnings per share were 16% for the quarter, and this is both for continuing operations as well as including the discontinued operations, i.e. for the full reported EPS number. Regarding our group balance sheet, so the total is down a few hundred million euros from the end of March or from the beginning of the year for that matter. And the main impact comes from the fact that we paid back the last bit of our 24 bond, public bond. Some 196 million euros was paid back in June and obviously reduced significantly. both the liquid funds as well as the interest-bearing liabilities on the other side of the balance sheet. And our net debt now at the end of June was roughly a billion euros. Moving to cash, so group cash flow from operations before financial items and taxes was on a similar level as in Q1 with 152 million euros. Cash flow remains supported by the healthy profitability, and our resilience obviously is very important. Unfortunately, the net working capital change was still negative in the quarter. We did manage to achieve a reduction in our finished goods inventories. and work continues with multiple initiatives across our business in the inventory space. However, projects tied more capital in inventories and also had a negative impact on payables in the quarter, and hence the total of minus 102 as the change figure. Now, such fluctuations as such are part of our business and not easy to predict in timing. But certainly in this quarter we were aiming for a better cash flow. So work continues throughout. And then my final slide on our financial position. Liquid funds consisting of cash and cash equivalents amounted to 348 million euros. And this is taking into account the already mentioned repayment of the bond, but also then our first dividend installment of 149 million that was paid out in May. Both are gearing an equity to asset stand at about 41%. And with that, I would hand it back to you, Bek.

Okay, thank you, Eva. Our sort of a Follow-up on sustainability KPIs, we are making progress in most areas of sustainability. These are the targets that we have communicated earlier on as well. Planet positive, we continue to sell relatively more planet positive products than year before. Now the differential is quite small. Only 2%. It's a sign also of lower order backlog and lower deliveries at this moment as there is less and less new equipment available. in our order bookings and sales, and especially very few green fields. But we are in target with that one as well. Our net zero, we are very well in target in achieving our net zero by 2030. And the area where we continue to struggle is really logistics. I mean, we have by the end of 2025, minus 20%, and we are currently at minus 8%. This is sort of absolute target, and when it was set, we did take absolute amount of CO2, not relative to our or proportional to our production in any ways. I mean, regardless of our production, we committed to absolute figure, and with the way how, for example, current shipping lines, two of the channels being partially blocked. Currently in the world we are shipping longer distances, and there's in sort of a short term very little we can do with the logistics. So there we are behind on the rate where we are. Then on the other hand, committing our suppliers to the science-based targets, we are very well on target and above the target. target there, very close in fact of the 30% by the end of next year. So all together good positive development without really excluding the logistics part of this one. And our outlook remains the same. We expect the market activity both in minerals and aggregates will remain at the current level so there is no change from the

previous one in that regard and now to the Q&A if you wish to ask a question please dial pound key 5 on your telephone keypad to enter the queue if you wish to withdraw your question please dial pound key 6 on your telephone keypad The next question comes from Elliot Robinson from Bank of America. Please go ahead.

Hi, team. It's Elliot from Bank of America here. Just two questions, if that's okay. The first one is, what underpins your comments that the speed of decision-making will improve in H2? Obviously, you've spoken about higher copper prices, but is there anything else that you're going off for that? And then the second comment was actually just on something that you said on the call itself regarding the is evident that you'll end up below last year's order numbers within aggregates is that is that definitely the case i just want to clarify that because obviously q3 and q4 was very weak last year due to destocking so if you had a stable level of orders from now to the end of the year it might not imply that it would be down year on year so i just wanted to to clarify that point thank you that's right yes we we do have uh

A few major packages in our mineral site that we see are heading towards the decision by our customers, and that's why I made the comment that we see some light there. I don't see any sort of, let's say, wider – wider improvement or speed up in the system making in that regard. But there are a few packages that we feel could be sort of concluded within this year. So that's why the comment was made. In aggregate side, probably I meant that in the sales side, we'll end up below last year's numbers. The order bookings, yes, the second half of the year was weak last year already. It continues weak in this year and remains to be seen where we end up then in order intake at the end of the year.

Perfect. Thank you very much for that. Cheers. Cheers.

The next question comes from Klaas Berglind from Citi. Please go ahead.

Thank you. Hi, Petr Genieva, Klaas from Citi. My first one is on the service business, on the orders. It seems like June was weak. Was this a timing issue, and should we see July improving? And linked to this, I struggle a bit. to understand why sales in service was weak as well, as it seems like the issue was linked to modernization, the on-site sort of repairs business, which I thought was longer lead time from orders to sales than repairs from wares, which seems to be holding up. I'll start it. Thank you.

Well, I think indeed, Klaas, June was a weaker month, and we do feel that it is more a timing issue, and hence expecting on the minerals segment side, really the aftermarket side, to do better in the coming months. Now, on the sales, so obviously most of – Most of the project type or sort of longer lead time deliveries in services are not sort of POCs, so they're complete contracts. And if then for a reason or another we're kind of not able to push them over the line, we don't get the sales revenue at the month's end, even if the project as such wouldn't be sort of massively late or there's no big thing. So, hence, indeed, we had a bit of low sales, but really from different reasons behind orders and sales, but now happened on both. So, hence, you see the impact in the mineral segment numbers.

All right. My second one is coming back on the comment you made, Pekka, do you expect decision-making to improve into the second half? And I just want to sort of clarify on the previous question. Is this just because of the sort of technical facing of the projects or have the conversations with your customers improved, i.e., are the customers? I mean, obviously, the copper price had an awful week last week, but we're still up versus March. Are they more positive in your conversations following, obviously, the copper price recovering from March? Or is it more a technical effect? And linked to this is the framework agreement that you talked about in Uzbekistan. It looks like a large project. Will you see some orders from that agreement starting to land here into the second half? Thank you very much.

Yeah, discussions are more positive, especially with copper customers and obviously also with gold customers, even though there's nothing really that major happening in the gold mining area at this moment. But more and more copper things are coming back on stream. We're doing continuously work on them, and we are in discussions with – within, I would say, in advanced stage of discussions with several customers in Kappeside. And currently it looks like that we will see decisions being made within this year on those ones. And that's why the comment. And on individual customer cases, I wouldn't like to comment anything in this connection.

Yeah, I appreciate that. My very quick final one for you, Edvard, is on the inventory, on the balance sheet. If demand doesn't come back here in the second half, we probably need to cut production to take the stock out. That could obviously hurt the margin. Or do you think that the layoffs here in minerals will be enough to offset the low production potentially to get on with that?

Well, Klaas, we've actually been cutting on production already, so that wouldn't be anything new indeed. Obviously, some of the union discussions are publicized, and that has been very visible in aggregates, but we've also done that already. across the board just to in really to match our inventories better to the demand. Of course, it also means that we've been reducing clearly our procurement because some of the things are not really manufactured by us, but kind of come to us as components and hence so really taking that action. So I think we have a pretty realistic view as Pekka commented already in the beginning of the presentation that the The quarter has gone very much in line with our expectations, and hence I think we have a realistic view on what we need from a production point of view and how we really manage the inventory situation.

Thank you.

The next question comes from Max Yates from Morgan Stanley. Please go ahead.

Thank you. Good morning. I just wanted to ask about pricing in aggregates, because obviously this is the industry where I think you've heard about the capacity of the dealers. I just wanted to understand, what are you seeing on pricing in terms of orders that are going into your backlog? Are they... sort of markedly lower prices or margins than what you're delivering on today. Any comments on the pricing trends, particularly in North America, where the high inventory issue seems to be most pressing?

Yeah, pricing, obviously, it's in our dealers' hands in North America. And we do not comment in general on the price development as such. But we do realize that the market conditions have changed significantly. also some of the supply side has eased off and for us it's more important that we manage our margin rather than individual sales cases, the prices as such and I would say that the totality comes really through our segment report and development of our margin in both of our businesses.

And maybe just an extension of this, I mean, quite a few of your kind of mining equipment peers, we've seen a sort of dynamic where they put up prices quite aggressively in 22 and 23, and now they're putting up prices less and costs are now catching up and margins are coming down. I mean, you've obviously been the exception where you've managed to keep margins relatively stable. I guess my question is also, would you expect a similar dynamic in the coming quarters where there is a bit more of a catch-up on cost. It's harder to put up prices to the same extent, and therefore kind of potentially your margins get worse before they get better. Is that the right way to think about a business, or do you see this kind of 17% margin level, 16.9% as probably sustainable in the coming quarters?

Yeah, perfect. And considering that we are squeezed by the volume as well, I think this kind of margin performance what we have right now shows that we have not given up our margin targets and our pricing is done very much differently in our minerals packages than what we do, for example, in the aftermarket side or how we do pricing in our aggregates. and it's more of a cost plus model that we do apply in minerals packages and we tend to work with our suppliers as well with fixed prices, not always 100 percent but let's say majority of our costs are fixed at the time when we book the order with our suppliers. so it doesn't expose us too much on inflation during the project. I think the most important thing is that how well we are able to execute things during the project than the individual pricing.

And maybe just Max to add on that. So I don't think we see a lot of additional sort of cost pressures in the market in our aggregates business. I mean, obviously, labor has been an issue early this year, but it is easing out. And on some logistics lanes there is some pressure, but other than that, I think there's actually sort of also deflationary opportunities that we, by procuring in the right locations, that we can take advantage of. And as you well know, the sort of order to delivery time line is very short. We talk about three, four months. So it's not that sense. What we see now is very much what we expect to deliver in three, four months. So that's just kind of the nature of the business. So it doesn't really, you know, it's not one where you sort of would hide cost in.

Okay. Understood. Maybe just one very quick final one. One thing I'd like to kind of understand a bit better this quarter is in your minerals equipment, obviously there's issues of lower orders, but there's also an issue of kind of timing of deliveries. I guess I'm a little bit confused about why your sales are going down as much as they are because your 2021 and 2022 orders were materially above your sales level and roughly by around 800 million in minerals equipment. So I would still think that you have very healthy backlog to be delivered on through this year. So I guess what I'm trying to understand is kind of going into the second half, is there any kind of help you can give us? What a normal sales level would be? How much maybe revenues sort of slip this quarter? and whether we should expect sales to be more flattish and up. Because I guess on my numbers, I would look at it, and it would suggest that you still should have quite a lot of backlog and minerals equipment to deliver.

Yeah, I think you're right, Max, and I appreciate that. Certainly from the outside, it can be a bit tricky. The answer really lies in the composition of that, that we have had some of the shorter periods shorter cycle minerals equipment parts where the sort of lack of orders roughly a year ago now came through and I believe we did mention already at the sort of So a turn of the year in a way that the second quarter from a sales point that we will actually be more challenging than the first quarter just because of the sort of how the composition of the backlog is built and that is now very visible. What I would say is that then that obviously means that then there is a clear portion of the backlog that is indeed then weighted to the second half and into 2025, so I think we will have a slightly better balance in the second half. And obviously now, this quarter, it was kind of the impact is more visible also because of slightly lower performance in aftermarket sales in minerals. And that we do think will also be improved slightly, but obviously nothing in time for the backlog.

A customer is actually pushing out deliveries, or is this just a timing effect? A customer is actually saying to you, we don't want this stuff right now. Can we delay delivery, or is this just kind of backlog composition?

This is backlog composition. As I said, we kind of – it was already at the beginning of the year visible that this will materialize, so in that sense.

I think we communicated in the third quarter of last year that our backlog is fine up to second quarter. Second quarter, and in case we don't get any major packages, then we will start to see our top line coming down in the mineral side. Okay. Very good.

Thank you.

Thank you very much.

The next question comes from Ponu Leighton-Maki from Danske Bank. Please go ahead.

Thank you. Just continuing on the same topic, so can you kind of comment how much sequential improvement should we expect on linear segment sales in second half compared to Q2, like directionally?

I don't think we want to go that close, but you have the backlog numbers, and yeah, as I said, we don't provide quarterly sales guidance.

Okay. Then, secondly, on the aggregates, I mean, in February, when you reported Q4, I think you sounded quite optimistic on the outlook, and then after Q1, you changed it, and now you talk about continuing destocking in the U.S., so I'm wondering kind of what's happened in the market, and how long do you think the destocking in the U.S. will continue, and what are your thoughts maybe going into 2025, so like what has changed and what is your view on how will aggregates market develop from here?

We said that we do see improvement in wide front and in different geographies and that was after the fourth quarter. fourth quarter, and that really what was happening at that moment. But we saw towards the end of the second quarter, now particularly in June, that the mobile equipment market, particularly in North America, which is the biggest market, slowed down quite dramatically. And that, of course, made us to think about how does the rest of the year look like. We still see robust demand in In parts of South America, we see good demand in India. We didn't see super quarries in China delivering orders. Now in the second quarter, we still have some of those in the horizon for the rest of the year. And then, of course, we have the seasonality that kicks in in third and fourth quarter. of the year, and we saw some improvement in European market as well, but really the big kind of disappointment was the North American slowdown that we see. The momentum that we had over there, it was probably a sort of enthusiasm on expectations of interest rates coming down. We haven't really seen them to come down other than in Europe. Europe marginally, but not really in North America yet.

Okay, but what do you think is causing the weakness in North America? Is this that the kind of end customers are just doing worse, or is this like a technical destocking, or what is the kind of fundamental reason for this?

End customers, if you look at some of the key players, they are doing very well and very fine. Aggregates pricing, which is publicly announced in U.S., has continued to develop favorably to the producers, but looks like that they are, despite of the situation, having some sort of investment holiday at least for this part that we do supply.

Okay. Thank you.

The next question comes from Vlad Sojewski from Barclays. Please go ahead.

Yes, good afternoon. Thank you very much. A few questions, please. First of all, gross margin, I think it was a record high quarter for gross margin. What's behind it? Is it mainly a sales mix, which is, of course, what service-heavy cost savings or other factors at all?

Well, indeed, that's gross margin improvement has been a big focus of ours, Vlad, in the sense that that's really fundamental for us to reach our our financial targets in both segments. And we did have some tailwind from the mix. I mean, obviously after market share helped on that, but then in addition, it's really been the focus on the execution in projects on the mineral side and then overall cost and price management in both segments that are the reasons behind.

Absolutely. Thank you very much. Like a quick one on cash flow and working capital. Obviously, working capital has been headwind for almost three years now, almost every quarter. What sort of visibility do you have or you can share with us that this could change as soon as second half of this year? And a more specific question is on contract liabilities. This line has declined a lot. Relative to sales, it's much lower compared to where it historically has been. Any particular reason of note for that?

Yeah, I think if I start with the latter one first, the contractual liabilities obviously are dependent on or tied to the bigger projects and their volume. And as we've had less of that type of business, that's the reason behind. Now, obviously, we've also been, as I mentioned earlier, behind the adjustments, being able to sort of settle things. settle on what was remaining from the Russia business, so that helps as well. But then to your question on our visibility, I think our visibility comes really from the visibility we have on our actions, and as I said, we have very clear, focused actions in all of our businesses on inventories, and we follow follow them on a rather granular level. And that's why we do think that we have a realistic target of really making an impact on the inventories in the second half.

That's all clear. Thank you very much.

The next question comes from Christian Hinderaker from Goldman Sachs. Please go ahead.

Good morning, Pekka, Eva, Juha. Thank you for the presentation. My first question is on the service mix and its composition. In the report, you've talked about healthy demand for consumables, but slower decision-making that we've touched on in rebuilds and modernization. Can you just help us with the scale of the main categories within service? And I'm happy to take for your 23 numbers if that's more representative than it was this quarter. Thanks.

Yes, sort of a mix in the services. We really don't give that breakout, but roughly our consumables business is closer to one billion in sales and remaining is 10 and other parts of the service. So it's just the ballpark numbers.

Thank you. Maybe then just want to turn to the acquisition you've announced in PCV. obviously a bit of focus on the dewatering trend and a shift to pumps perhaps at some of your peers. Can you just talk about the scale of that business, not that that you've acquired, but your existing capability and whether this reflects a more focused intent on that part of the product mix?

We have had really focus on our pumps business for several years already. and this latest small acquisition, it's a very small one, that one is very focused on valve types that are used in concentrating plants. plants and that's why we decided to acquire the business. We don't have any further ambitions in sort of flow control area which we sort of divested at the time of the merger. But it supports very well our sort of a pumps business also, our sort of cyclones business, classification business since these are more or less integrated packages that go into concentrating plants. Small business, very profitable business.

Thank you, Paget.

As a reminder, if you wish to ask a question, please dial pound key five on your telephone keypad. The next question comes from Andreas Koski from BNP Paribas Exane. Please go ahead.

Good afternoon. Two questions on your profitability, please. Firstly, on the gross margin, which was, again, very strong at close to 35% for the second quarter in a row. Do you think that this is a sustainable gross margin or is the mix extremely favorable at the moment and when the mix normalizes the margin? will also normalize to another around 30% instead of close to 35%.

Well, I think certainly the mix is favorable in the sense that as the equipment side is impacted by the slow decision-making, so then we have a stronger share of aftermarket where gross margins are higher. And that, of course, can and hopefully will change as we start to see sort of customers change. making decisions also on the bigger equipment orders. But as I believe I answered an earlier question, so there's also a lot of fundamental work that has gone behind that improvement. And of course, that's not something that we expect to on the contrary, that we continue to focus on operational excellence and in that sense driving that because, again, I believe I said it already, but the gross margin is an integral part of delivering on our financial target of exceeding 17% of adjusted EBITDA.

And is it possible to quantify how much comes from the fundamental structural changes and how much comes from the mixed effect that might reverse later on?

No, I don't believe we're really sort of breaking it down externally to that level. Obviously, I think you have a pretty good visibility into that in the overall on the course of the five years that this has been a key focus. And, of course, there may be some sort of quarterly sort of ups and downs. It's not a linear figure, but nevertheless, I think directionally, you can very well tie it to our sort of various actions that we have been discussing.

Thank you. And then on the inventory reduction that you plan to start in the second half of this year, and hopefully that will continue also going through 2025, is there a risk that your profitability will be negatively impacted by inventory reduction?

Well, let me first correct that we've been working with our inventories for more than a year now, so it's not something we're starting. And as I said, we did see a reduction in the finished goods inventory in the second quarter. The risk is obviously if you take the route to reducing your inventories of writing them down and you get them off the balance sheet, but then you get a negative profitability impact. We don't have issues with that the inventory wouldn't be current per se, but we've just sort of stocked too much of it to kind of over-ensure availability to our customers. And hence, the idea is really to sort of work consistently and step by step on it, but not with sort of with a focus on writing it down.

Okay, but you don't see a margin risk from underabsorption and low production volumes when you go through this inventory reduction phase?

Well, again, that has been happening already in the first half, and you see the impact of our margins. we've been able to deliver very resilient margins despite of that. So this would be not something new that happens in the second half, but it obviously is an element of really having that sales and operational planning and optimizing that absolutely has an impact on profitability. But as I said, this would be nothing new for the second half.

Okay, I thought you built the inventory in the first half. Understood. Thank you.

Thanks.

The next question comes from William Mackey from Kepler Chew Reacts. Please go ahead.

Yeah. Hello. Good morning, Eva, Pekka. A couple of follow-ups, I suppose. Just on the inventory discussion, which is hanging with us for a number of quarters uh can you just remind me the scale of the opportunity to reduce the inventories in the second half of the year whether you have any targets or expectations in mind with regard to the amount of capital that should be released if the plan works and um What would you sort of point towards as normalized levels of inventory? I mean, is a lot of this sitting in one or the other of the two segments, and where should a normalized level be? That's the first question, really.

I would say the normalized level for our business should be somewhere in 1.5 billion level. Altogether, we are close to 2 billion level. At this moment, so overall the opportunity is there. The inventories, to a great extent, they do exist in our services business, both in consumables and other areas of services, and then on the other hand, aggregates. The other areas... they tend to work fairly close with the zero networking capital in general, at least during the normal times when there is a steady flow of new orders coming in and we are not going up and down in sort of volumes as we currently are. But those are the three businesses where we have the inventories.

Okay, thank you. And With regard to the overall business footprint, I mean, over the last quarters, you've made a number of actions to consolidate factory facilities and capacity and rationalize some of the footprint. Do you see that ongoing in the second half of the year, or are the operations structurally where you would like them?

I think we have such a big number of factories all together that we have continuously that kind of work ongoing somewhere. We don't have any specific plans at this moment to take any actions, but of course we follow very closely things like, for example, de-globalization, what impact that does really have in the long run. We are not that... keen to close any locations at this moment. We need to understand that how the – when the world politics evolves and moves on, we need to understand what kind of trade barriers there might be or may not be before we start consolidating more of our factory footprint.

Okay. Thank you very much for your time. Any questions?

All right. There seems to be no additional questions, so at this time, thanks Eva and Pekka for the presentation, and thank you all the participants for your questions and discussions. The next item on our financial calendar is the third quarter result, which will come out October 24th. And before that, I'm sure we'll be meeting many of you at Mine Expo in September. And before that, we wish you a good summer and speak soon. Bye-bye.