Wartsila Corp Unsp/Adr

Hi all and welcome to this result briefing for Wärtsilä Q3 results. My name is Hanna-Maria Heikkinen and I'm in charge of investor relations. Today our CEO Håkan Agneval will go through the group highlights and business specific performance and after that our CFO Ari and Perens will continue with recent financials. After the presentation there is a possibility to ask questions and we are also happy to discuss the strategic review we have announced today for our energy storage and optimization business. Time to start, Håkan.

Thank you, Anna-Maria. Thank you and welcome everybody to our interim report. And if we start from the very beginning, I think we see a very positive trend for Wärtsilä. Improved profitability, strong cash flow and good development on the services side. So order intake is up by 11% and we have a good support from services. We continue to see good progress in services. Service order intake up with 15%. Service net sales also increased by 15%. On the comparable operating results, we took quite a big step forward. We increased it by 53% to 8.6% now. And I think we are on a good path of improvement. And the improvement is supported by continued good development in services. And now we could also announce for the first time that energy storage or energy storage business is profitable. Cash flow has also been good, with good cash flow from the operating activities. Summary of the figures, and you see it here also, order intake up 11% in the quarter, close to 1.8 billion euro, and we still continue to see the growth of the services 15%, Also, equipment continues to grow 7%. Net sales, you could say a little bit more flattish, 1.4%. But if you look at the organic growth, it's up 7% actually, the sales. Services is strong, up 15% on sales. And on the equipment side, we are actually down 10%. Book-to-bill. For the 10th consecutive quarter, we continue to have a book to bill above one. So now it's 1.23. Operating result, it's up quite a lot. And that is, of course, related to certain items affecting car ability that we had last year. Now we don't have them. So the operating result is up quite a lot. And if you look at the comparable operating results, it's up to 8.6%, 53% up, which is, of course, very encouraging. Looking a little bit on the marine market sentiment, it remains positive in vassaless key segments. What hampers the key segments is a little bit its low capacity, for instance, for LNG carriers. on shipyard. Available shipyard capacities is muted because there is so much work in the pipeline. And that has also led to a price increase. But in general, we see a positive development for the Wärtsilä Key segment. The numbers of vessels ordered in the period increased to 1,356, so it's up from about 1,100 last year. And that is mostly driven by the changed mix of contracted vessels. If we then look at the uptake of alternative fuel, it remained more limited this time with 360 orders reported, representing about 23% of all contracted vessels. Demand for new cruise ship capacity remains limited. However, we do see a bit on the new belt coming back now, which is positive also for Wärtsilä. But the key focus still for our cruise customer is to focus on a very good business, actually, with good passenger rates, delivering the business and step by step reduce the debt that they have on their balance sheet. But I would say when I talk to our cruise customers, they are very optimistic about the future. Then, very important, in July, IMO revised its strategy on greenhouse gas emissions and the new framework that are in discussion puts further pressure, creates opportunity for shipping companies to increase their investments to decarbonize their operations. So the decarbonization journey of the marine industry is very, very real. It's going to take years. And it's going to be not a stepwise journey, a gradual journey, but it's clearly a journey where Wärtsilä can play a key role and support our customers and also create shareholder value. If we look on the energy side, we see solid long-term opportunities in the energy market. The energy transition outlook is actually improving in a bit fragile global economy. Our market shares in the natural gas and liquefied fuel power plants stayed rather stable, around 13%. The overall market came down 22% to 10 gigawatts if you look at the last 12-month period. They're coming down. The market decrease from, I would say, a relatively high level in 2022 was driven by Europe and Asia. Also, the volatility of the global natural gas prices shows how the market is sensitive to disruptions in supply and demand. The trend in the transition to renewable energy sources continues globally, and that is certainly a key driver in the development of battery energy storage and thermal balancing technologies. And yes, we have seen a bit of turbulence on offshore wind lately, but I think the onshore wind, which is clearly the dominating share of the wind industry, is moving ahead. The energy transition outlook in the midterms remains strong. So order intake up by 11%. Equipment order intake increased by 7%. On the services side, order intake increased by 15%. And if we look at the organic order intake, it actually grew by 18%. We have a strong order book and the rolling book to build continues to trend up. One thing that we would like to really point out is that the remaining order book for this year is lower than last year. Net sales increased by 1%, which is fairly flat, so to say, but organic net sales grew by 7%. And we can see that equipment net sales decreased by 10%, whereas services continued to grow with 15%. Profitability continues to improve in a good way. So whereas the net sales increased by 1%, the comparable operating result increased by 53% to 8.6 comparable operating margins. Now, some of our technology and partnership highlights, as you know, it's all about innovation and technology and services. And so we are very proud that we have been chosen for the world's first methanol-fueled hybrid Roro vessels. So Vatsalé will supply and integrated hybrid propulsion system for two new hybrid Roro vessels being built for the Swedish shipping company Stena Roro. So each vessel will be equipped with two Wärtsilä 32M multi-fuel engines capable of operating on methanol and also ready for ammonia with a notation. And the combination of new sustainable fuels and electrification, that is really in line where Stena wants to go and the company's sustainable operating targets. And we are very proud that we have a strong relation with Stena Roro. And as early as 2015, we converted the Stena Germanica to operate on methanol fuel. That was one of the industry firsts. We also continue, as we talked a lot about, to evolve our service business and moving up the service value ladder. I think here we have a long-standing agreement with our Brazilian customer here, where we have renewed our operations and maintenance agreement. And we talked about that before on our agreement side. over 90% renewal rate, both in energy and marine, which in my view really shows the value that we are providing to our customers. So in this case, we have signed a renewal of operating and maintenance agreement for Gera Amazonas. The agreement covers the Ponta Negra power plant in Manaus. That is a plant that has been in place since 2006 when we commissioned the plant. Now we extend the agreement for another two years to ensure that GER Amazonas can meet its power purchase obligations to Electronauts. History here, I mean that this plant was built and originally operated on heavy fuel oil. In 2013 it was converted to gas diesel technology and now the plant basically operates 24 7 base load delivering 60 megawatts to the system. Let's look at the different businesses and how they are performing. So if we start with marine power, we see a strong development in the order intake and profitability, and the good development in services continue. And you can see order intake up with 33%, net sales with 26%, profitability improving. And the major drivers, we have good service performance. We also have good progress now in the voyage services turnaround. We talked about that if we combine the two businesses that we earlier called Voyage, they are still loss making, but the losses are clearly significantly reducing. So we are really on a good path and the right path on our turnaround plan. If we look at the negative side in Marine Power, it is that the margin improvement was partially diluted by lower share of services this quarter. We continue the good development on the marine power service agreements and on the net sales we are clearly increasing. We are exceeding now the pre-covid level on the sales to our installations. And here is another example with a technical management agreement providing maintenance flexibility for China LNG shipping vessel. It's a 15-year agreement, so it's a long-term commitment that will ensure the operational reliability and provide maintenance, planning flexibility to the Dapeng Princess. That's the world's largest shallow draft LNG carrier. And this vessel operates three Wärtsilä 34 DF dual fuel engines. And the technical maintenance agreement includes constant data monitoring, maintenance support for the engines and the gas valve units. And we took this in as an order in July 2023. So 15-year agreement, long-term commitments. This is how we move up the service value ladder. Now, another really exciting example, more than on the driveline side, is our order within Catasmonia, which has selected Wärtsilä for the world's first zero-emission lightweight rope-packed ferry. So we will power this biggest battery electric ship ever built so far. The vessel is a new ferry, the largest ever built of its type. And it's the world's first zero emission lightweight catamaran. It's built by Inca Tasmania and it's been ordered by their longstanding South American customer, Bukibus. The Wärtsilä Fullscope includes our own energy management system, the power conversion system, the DC charging system and also 40 MWh battery modules, the DC hub, the eight electric motors, eight Wärtsilä water jets and a Protouch propulsion control system. So you can see it's a fairly all encompassing scope. And this order was also booked in end July. Moving to marine systems, we see that the equipment order intake increased, or whether the net sales is down. Order increased with 55%, net sales down. Scrubbers is one part of that equation. If we look at the comparable operating result, it's down. have good service performance, but the lower equipment sales is affecting the operating income. Energy. comparable operating results increased and and we see also here a good development on the services side ordering take down 16 percent we still see this a little bit as a periodization between q3 and q4 as you know this is a project many parts of it's a project related business and i think we we also communicated before that for energy power plant that the second half of the year would be stronger than the first half of the year. We still hold to that. But for Q3, the order intake is down with 16%. Net sales is also down 12%. If we look on the profitability side, we do see a positive trend there, supported by the good service performance and also improved profitability of the storage business. But the lower sales volumes are affecting our profitability in Q3. On the energy storage, comparable operating result is now positive. We are there. And the profitability is improving. Now, you also saw earlier this morning that we announced that we are initiating a strategic review of our energy storage and optimization business. So basically, the Wärtsilä Board of Directors have initiated a strategic review to consider options that would support the continued growth of our storage business in a way that benefits our customer, employees and our shareholders. And throughout this process, all potential alternatives will be considered, including different ownership options. And that involves all alternatives from keeping the business to partial divestments to full divestments and other possible strategic alternatives. Also very important to highlight, we will continue to develop and invest in our battery storage business as we have done also going forward to continue to build the business for the future. We have not set the timetable for the completion of the strategic review as we want to thoroughly assess all the strategic options. Now, if we switch to energy service business, we do see continued good development in the service agreement side also here. And here, once again, asset performance agreements to support the US utilities efforts towards net zero carbon emission, 10 year guaranteed asset performance agreement signed with OPPPD in Omaha. The agreements covers the 150 megawatt standing Beer Lake station located in Omaha, and it's set for commencing its commercial services in 2024. And when we activate, the plant will provide dispatchable balancing power as part of the utilities power with purpose project. And that's an initiative designed to add four to 600 megawatts of utility scale solar generation and then 600 megawatts of balancing natural gas generation. And this order was booked in Q3. Now, to sum it all together, you see the waterfall here, how the different businesses have contributed to our improved profitability. The biggest improvements are coming from marine power and energy. And as we see, the comparable operating results is increasing by 53%. Now, Arjen, please join me.

Thank you, Håkan. I'm very happy to present here the other key financials. In fact, if you look at it, it's all better than previous year at the same time. And it's also better than, let's say, Q2 end state. So really good quarter in many ways. First of all, cash flow, €213 million. operating cash flow in this quarter compared to 100 million euro the same quarter last year. 432 million euro year to date, which is a really good level, considering also that it is about 92% of EBDA. Working capital, clearly one of the big contributors to a good cash flow, besides also improved profitability compared to Q2 and state. Let's say we improved quite significantly on the working capital as well from 105 to 43. Net interest bearing debt also going down from 477 last quarter to now 356, of course, supported by a very good cash flow in the quarter. And that, of course, also supported, let's say, the gearing ratio, which went from 0.24 to 0.17 in the quarter. Solvency also clearly improving, 33.4% at the end of last quarter, now to 35.2%. And basic earnings per share also significantly better than, let's say, previous year. Good to remember, or to remind actually, that the minus 0.16% that we see year-to-date last year includes the $200 million a write-off related to the Russia exit as well as at that point of time 75 million euro related to the Trieste manufacturing closure. While at the same time the 0.28 year-to-date basic earnings per share that we have in this year includes a 45 million euro write-off that we did on portfolio business or impairment actually that we did on portfolio business in Q2. So all in all, I would say looking at where we are today compared to, let's say, previous year, all significant improvements on all financial parameters. Really happy with this. Cash flow continues to trend upward. And that's, of course, what we want to see. Also looking at working capital to net sales ratio, we are now on a 12-month rolling level, just below 1%. While it's a long-term average, if you compare 2015 to now, it's just below 9%. So we are at a very good level. Nevertheless, we will, of course, continue to work with our working capital and try to improve it further by a collection of receivables, getting better payment terms with customers and suppliers, inventory reductions, etc. So really going well forward. With these words, I give it back to you, Håkan, on the prospects.

Thank you, Arjen. So if we look at our prospects, first, if we start on the marine side, we expect the demand environment for the next 12 months to be similar to that of the comparison period. Similar. And on the energy side, we expect the demand environment for the next 12 months to be better than that of the comparison period. So better. The marine, similar. Energy, better. Okay. I think that wraps up the presentation for today.

Thank you, Håkan. Thank you, Arjen. Now we're happy to take questions.

Yes. And please keep your microphone muted while not talking. Thank you. First up is Daniela Kosta from Goldman Sachs.

Hello, Daniela. We can't hear you. Welcome.

Hi. Can you hear me now?

Now we hear you, Daniela. Welcome.

Oh, perfect. Thank you. Sorry for the difficulty. I have two questions here. First one, I wanted to explore on sort of the strategic rationale for the storage. why doing the strategic review now? I guess it's not obvious for us from the outside that there is a massive disconnect between your valuation and the valuation of some of your main storage pure play peers. Also, you have articulated that one of your differentiating points in the past was having, you know, these integrated balance power and storage. So can you talk through, you know, some of the benefits of potential different ownership structures and really the timing. Why now? So that's my main question. And I have a second question. It sounds like your portfolio company is actually doing a bit better than expected. Can you articulate what's the vision for that segment going forward? I think in the past I've interpreted that as maybe being more of a non-core segment. Just any update there would be useful. Thank you very much.

So if I take storage, maybe you take the portfolio. So if you look at storage and why now and what's the logic? I think we found the timing good. I mean, we have grown this business now successfully to 1 billion euro, give or take. And we now brought it to profitability. And I think this is a good time together with the board to take a step back and look at how do we want to support the continued growth? Because clearly this is an industry that is growing. We are growing and we need to find the best way to fuel that growth. And that's why we want to do the strategic review to look at different ownership alternatives. And the conclusion could be that we keep the storage business, but it could also be that we partially divest, fully divest, et cetera. So the timing, we kind of reached the milestone, one billion, now profitable. Okay, how do we continue to support the growth? So that's the rationale. So portfolio.

Your question, Daniel, on portfolio business, of course, let's say this is, as we have also communicated earlier, let's say non-core, let's say it's not strategic, let's say critical for us to keep, and therefore we have also earlier decided many business units to put in portfolio business, so the plan remains to divest. The performance is, of course, let's say we are very happy with the performance, let's say good profitability always makes it easier also to divest these businesses, so It's a temporary thing. We will not reverse our aerial decision. So the divestment roadmap continues.

Okay, thank you very much.

Next up is Max Yates from Morgan Stanley.

Thank you. Can you hear me?

Yes. Hello, Max. Welcome.

Yeah, hi, good morning. Just my first question was on the marine orders. And obviously there was some pretty good equipment orders in there, particularly in the marine systems business. So I just wanted to understand, if we're thinking about kind of run rates of order intake, were there any kind of abnormally large sort of one-off orders that maybe we should sort of strip out in the business? How should we think about some of those growth rates and the momentum going forward? Thank you.

If I start with marine power, maybe you can comment marine systems. Marine power, I would say that strong equipment, water intake, as I said, the core or some of the core segments of Wärtsilä is delivering in Q3, including cruise. So that is a driver. And I would say that we see positive, continued positive development in our core segments from a demand side.

Looking at marine systems, of course, for marine systems, I would say it's better to look at a bit more long-term trend and not, let's say, stand-alone, let's say, quarters. Let's say there can be very big orders, in particular in the gas solution business within marine systems, while on the other businesses like shaft line solutions and exhaust treatment, they are... typically, let's say, smaller in size. So if you have these incidental, let's say, bigger ones every now and then, it can, of course, make a big, big difference in one quarter. So I would recommend to look more at the, let's say, rolling 12-month trend than any specific single quarter. I think that makes more sense.

Just secondly, just on the energy storage announcement, I completely understand your comments of taking a look at what's the best path forward. Just in terms of how integrated that business is in your organization, would it cost substantial money to disentangle this? Do you have a shared service network at this point? How should we think through how integrated that business is and

any kind of yeah cross um i guess people involved in both organization if you could comment there that would be helpful thank you i mean there are certain uh synergies clearly uh especially on you could say on on the on the admin side on on on everything there there is also a bit of synergies on on the salesforce side so so if Whatever, I mean, as we talked about, there are many options. But if we pursue that option, we will need to see how the structure would look like. I mean, clearly what we are doing today is that we are tracking the profitability separately. Correct, yes. I think we have a good understanding of the cost structure. And that is valuable input for the review when we consider all different options.

Just to add on that, as we also commented before, there is a lot of cross-utilization of people as well, let's say, depending on load, let's say, in the different parts of energy, being it EPP or storage. So on the sourcing side, on the logistics side, but also in the group functions like shared service centers, of course, they are also supporting, let's say, storage. I wouldn't say it's super complicated. It's not super integrated.

And then, of course, we have the GEMS platform that we use in both parts of the business. So there are synergies. And that's why we need to look at all different options.

Fantastic. Thank you very much.

Next up is Vivek Midha from Citi, please.

Hi, everyone. Thank you. Can you hear me?

Yes. Welcome.

Perfect. Thank you very much. I have one question on the energy business. It's relating to the thermal power parts business. So it sounds like you're still looking for an improvement in demand in the fourth quarter. But could you maybe expand on that? What gives you that confidence that that's going to improve in the fourth quarter? Thank you.

Well, I think we look on our pipeline of potential projects and that gives us some positivism, so to say. Also going in, if you look at our guidance for next year, we do see certain power auctions coming in South America, etc. So we are looking into our pipeline.

Understood, thank you.

Next up is Sven Weyer from UBS, please.

Good morning from my side. I hope you can hear me.

Yeah, good morning, Sven. Welcome.

So first up, also on energy storage, just coming back to the motivation for the strategic review, I was just wondering, did you also have an increasing amount of expression of interest in the business lately? Is that maybe also... behind the motivation, or would you only expect that to happen once you start a clear process there?

I think this is clearly driven inside out, you may say. It's more our strategic perspective, working together with the board, It's not what I would call an opportunistic approach, so to say. So it's clearly coming from taking a step back, looking at how do we best fuel the continued growth and looking at different models.

And when you say partial ownership, you mean IPO as an option?

We don't rule out any option at this stage.

Okay. Second point was just regarding the phase-out of the legacy contracts for the last time, Q3. I was just wondering which business unit there has been the residual impact of that phasing out.

Well, I think we talked about that before. It has been on energy. It has been on marine systems, so to say.

Mostly, not only. Yeah.

Same in Q3.

Yes, correct.

Okay, thank you.

Next up is Sean McLaughlin from HSBC, please.

Sorry, Sean, we can't hear you.

Can you hear me now? Yes, John. Welcome. Perfect. Thank you. Just I wanted to come back maybe to Vivek's question a little bit about what is driving the improved outlook in energy? Is it across all segments? Is it specifically driven by storage? storage over thermal is it more the services side within thermal i.e more customers willing to take on long-term service agreements just any any moving parts within that um guidance improvement i think we actually see uh in all those dimensions

positive signs that triggers this outlook. So it's about new building in power plants. It's about new building storage. It's about service. So you could say it's a broad array of drivers. And if I come back, for instance, on the power plant side, we see certain auctions coming in South America, et cetera, et cetera. So we see the market demand evolving in a positive way.

And on the thermal side, you specify LATAM. I mean, is that then region specific or is that a, let's say, regionally broad, better outlook?

It's a broad outlook. I just gave that as an example to make it. It's not only in South America. We also see in certain countries in Asia, etc.

Asia, yeah. Thank you.

Thank you. Do we have any further questions? We still have some time, so in the case you have a question, we are here for you.

Next up, Erkki Vesola from Inderes, please.

Hi. Good morning, guys and dolls. Anyway... Regarding the legacy projects, how much of a drag were these in Q3 and how big an improvement should we expect in Q4 regarding the

the omittance of this? Sorry, it's a good question, but we don't get guidance for the profit margin. I mean, it's the story that we have communicated in the past. When we went into this year, we had about 1.2 billion euro in our order backlog left of orders that had been heavily affected by the accelerating cost inflation. We have now worked that out through this year until now. So those projects have also had an impact on Q3, but we are not guiding on the margin impact.

Okay, thanks. And then secondly, still coming to this storage review, why did you have to come public with this, starting this review? I mean, you could have just carried this out internally. Is it just that you are kind of flagging that we are out here and we are looking for partners, et cetera? What was the...

No, I think being a listed company, we need to follow the regulations, of course, of Nasdaq. And this is a sizable decision, even to enter the strategic review. So the board made the decision and we immediately go out and release the news. That we need to do in a line being a listed company.

Size and potential magnitude. Yeah.

So you were kind of not more forced to do that, not just that you wanted to come public with this?

No, it's part of being listed and then if you make sizable decisions that could have a significant impact you need to immediately go out and disclose it and that's what we have done.

Fair enough, thank you.

Next up is Tommy Railo from DNB, please.

Hello, Tommy. Sorry about the short delay there. Yes, a couple of questions. Firstly, maybe on the energy outlook as well. To what extent is it a true environment improvement what you see, or is it just a reflection of the, let's say, weakness or delays in the market activity, customer signing delays in the previous quarters?

Well, if you look at the development during the second half of the year, it's a bit of periodization between the quarters. But when we do the outlook, I think we are looking at two things that is a little bit hard to delineate. You know, there are up and demand for power. And then there is the decarbonization journey. And both of those are coming together. So that gives us confidence when we see, as I said before, in our pipeline going forward.

Okay, and secondly, if you could maybe explain a little bit about the service profitability development. Very strong order sales as we have seen in the previous quarters. Have you been able to improve the service profitability as well?

Well, I think we are gradually doing that. I mean, there is, of course, a volume effect. I think the key thing here in fueling our growth, of course, we have high utilization of the equipment that our customers are using. But this strategy of moving up the service value ladder, we clearly see that it's fueling the growth. I mean, we showed some examples here with the maintenance agreements, I mean, 10, 15 years agreements. and they are profitable we are creating value for the customers as i said 90 percent renewal rate of this type of agreement so it shows also customer things that we we are creating value and that is one of the of the major growth levers and we are growing profitably thank you very much next up is max yates from morgan stanley please

Thank you. I just had a quick follow-up question on the services order intake. I mean, I guess if I look at your sort of 12-month rolling service order intake, it's nearly up 40% versus two years ago. I guess we've seen in some other industries, we're now starting to see kind of orders normalized. We've seen some early ordering kind of supply chains have made customers do strange things with their ordering behavior. So to what extent do you see any of that in your own business? And do you think we could then go through a period of more stable order intake as customers sort of focus on the deliveries or do you just see a sort of fantastic runway ahead lots of opportunities on maintenance contracts and you think this is kind of customers are behaving in a normal way any color on that would be helpful yeah no i think we see a a mixed portfolio so to say if we look at the different segments i see clearly that that the merchant side is starting to stabilize a bit offshore has been growing a lot

Very steep. Cruise is also going up. So it's a mixed bag. Certain segments are clearly kind of leveling off, might be going down. Other segments are growing.

Yeah, just to add, I think if you make a comparison to two years ago, of course, one factor that is clearly not continuing going forward is the effect of, let's say, moving out of COVID. So I think that exceptional, let's say, growth rate is definitely, let's say, 21, still being deep into COVID, and then the crews returning, let's say, ferries coming back to life again, I think has clearly had an impact. But I would say we have a strong belief in the growth of the surface also on a continuous basis going forward.

Because what we do see, sorry, to, I mean, the decarbonisation journey, retrofit projects, you remember that we talked about in our previous CMD, we see a 2.5 billion euro retrofit market potential of our own equipment over 5 to 10 years, so the retrofits are still there.

And Maybe just to follow up, if I go back two or three years ago, one of the negative cases on your stock was the potential risk in energy services of more flexible power in your base load, less running hours, and that would negatively impact energy services. We don't seem to be seeing any of that. Is that a case of kind of some of these retrofits and kind of bigger service contracts are offsetting kind of lower consumables for some of your customers, or are we just not really seeing that happen at all in any parts of your installed base? Is that happening in pockets, but there's obviously offset? Help us through that.

so basically you could say that we are growing our installed fleet of megawatts on the energy side and we do see that the total if you aggregate all the number of service hours is stable although our share of balancing which has lower running hours is increasing so we grow the installed base the total number of hours is stable and then I would say on top of that, and we talked about that before, moving up the service value ladder, we clearly see that that is supporting the growth, moving customers into agreements.

Thank you very much.

Thank you. Do we have any further questions?

Next up, Vivek Meetha from Citi, please.

Thanks very much for the follow-up. A quick follow-up on Magda's question. The service order intake has been growing quite a bit over the last few years. Appreciate it if you can't disclose this, but could you give us any indication as to where those prices are in service compared to, say, two years ago or pre-COVID levels so that we can work out, you know, X price, whereas your service activity versus previous levels? Thank you.

Now, I mean, I won't go into the X percent you might be looking for. Sorry for that. But I mean, clearly, we have worked with price realisation and we have had to do that in the wake of inflation, so to say. And as you know, there has been a rather steep inflation. And I think on the services side, we have been able to work quite a lot with price realisation. I don't know, Arjen, if you would like to.

No, it's exactly as you say. We should not and we will not open up on this one. It's very competitive, sensitive as well, of course. But what we can clearly see is that the whole industry has done the same. So we are not an outlier in this respect.

Understood. Thank you.

Thank you for great questions. And thank you, Håkan. Thank you, Arjan. I would like to remind you about our Capital Market Day, which will take place on November 9. So please register on our website and join us following it. Thank you. Thank you.