Alleima AB (publ)

Hi everyone and welcome to the presentation of the first quarter results for Alerma. My name is Emily Alm and I am head of investor relations. I'm joined here in the room today by Göran Björkmann, president and CEO, and also by Olof Bengtsson, CFO. Göran and Olof will take you through our results and we will then have a Q&A session. You can also ask your questions through the conference call and you can also write them in the field below the webcast. You can also download the presentation from alerma.com. As always, safety is a top priority for us and I trust that you are safe now and that you know the safety routines of where you are located. With that, I would like to hand over to you, Göran.

Thank you, Emily. And also from my side, welcome to this presentation of Alerma quarter one. Well, I think we have a solid start of the year and I'm pleased with our performance. Let me take you through the quarter one highlights. We have an order intake growth of 6% if I exclude major orders and our backlog continue to grow in the quarter. We have a continued positive oil and gas momentum and demand across the board. Other contributors are chemical and petrochemical, industrial heating to give you to name a few. Slightly positive sequential development of low-refine products. This is something we talked about in Q4 that they were down. They are down year over year, but sequentially improved. I think that is important. We see a weakened demand for consumer segment and strip. We'll come back to that. Revenues grew 12% with a positive mix and again, supported by oil and gas, chemical, petrochemical, industrial heating and also medical. We also improved our earnings. Adjusted even more than .1% versus .1% last year. This comes through high revenues and improved product mix. Also this quarter, we have successfully increased our prices to offset the cost inflation and we had a solid cash flow. Also to give a few comments on our strategy, where I think we continue to execute on the strategy today, Cantale announced a strategic partnership to expand the heating offering. We also have had several orders to capitalize on the green transition. Now in April, we announced the acquisition of the production facility Söderfors Stil. That is to support growth

in medical and aerospace. Looking at sustainability,

I'll start with the one that I'm not pleased with. That is the safety development. We see a negative trend. But if I look on a more long-term perspective, I think the problem is that we've been flatish for a number of years and that is not good enough and we are not taking actions to improve. Looking at recycled steel, it improved for the 12-month rolling period but declined slightly from last quarter. But that is due to product mix. We had to have a higher share of virgin materials for the mix. We are also continuing to implement buyback programs with the customers. Greenhouse gases emissions are in the low range compared to our peers. And despite already one of the lowest emitters in this industry, we can always improve. And you can see we have a nice trend on that. The share of female managers increased if I compare versus quarter one last year. And we are now on 22.4%. It declined slightly compared to the previous quarter as a consequence of the total number

of managers. Sustainability is not only

about our own operation. It's not to do with how we act on the market. We continue to contribute to the sustainability of our customers and other stakeholders through our product offering. Kantal is targeting growth in segments where industrial heating solutions are contributing to customers' reduction of CO2 emissions. And that enables the green transition. And we have received several orders for the industrial heating solutions. And that is in applications like solar, lithium-ion battery manufacturing and also downstream steel. And this is of course a crucial component for their ability to drive the green transition in their part of the industry. Gareling, that's an acquisition that was made last year. They are targeting a fast developing hydrogen market. And we have secured yet another frame agreement for high pressure tubes that will be used to support the build out of vital infrastructure for hydrogen gas refueling stations in Europe. Surface technology, that business continued its positive development and deliveries for pre-coated strip to be used for station and power projects ramped up during the quarter. And this is growing in line with the commercialization

of that industry. So I mentioned at the beginning a

couple of activities to deliver on a strategy. We acquired Söderfors. The acquisition is to support our plans to grow the medical and aerospace business. And for that we need the capability of making small sized bars. And we have been looking at different alternatives to do that and now come to the conclusions that the best alternative is to buy Söderfors steel. And it is the production capability that made us decide to make this acquisition. And today Kantal announced that they started up a strategic partnership with the company Rath. And I think we complement each other. Kantal leading in heating and Rath leading in insulation. So together we will bring sort of the broadest range of sustainable industry heating solutions to the market. So let's look at the market development and go through all our segments. I think demand during the quarter, I mean it noted a sequential improvement in most customer segments. While it declined compared to last year for parts of the business. In total we are well positioned and long term trends and underlying tailwinds are offsetting uncertainties in the market environment. And we have a positive mix in our growing backlog. Demand in Europe was positive, North America was flat and if we exclude major orders while Asia was down mainly explained by higher comparables mainly in the energy segments. Quarter one last year was a strong order to take quarters, overall high comparables. So I think from that sense a solid performance. Quarter two last year was the best quarter ever in terms of order and take. So looking ahead we're meeting even higher comparables. Let's start to look at the short cycle low refined products. They were down year on year but slightly up sequentially for the group. And if we look at the industrial it is a decrease in Asia and North America but up sequentially and still positive in Europe. It's the Cantal tube that is driving the development in this segment. Consumer negative especially in white goods and for compressive valve steel which is hurting the strip mostly and we have a sharp decline in strip. While we can see for instance in application wiring Cantal that is also in the consumer segment. They were down year on year but slightly positive quarter over quarter. Oil and gas, I mean investments continue to materialize. We had both OCTG and umbilical orders and we have a continued solid project list. Chemical petrochemical application, this is application tubing is positive in all regions but mainly driven by Europe and Asia. Industrial heating we see solid development with strong underlying momentum in any customer segments like Semicon. Metal, solar, glass, steel, many sub segments needing electrification. Transportation, strong aerospace particularly titanium tubing for hydraulic systems. Medical, we have a strong positive underlying development. However timing effects in the quarter somewhat related to the major order we received in quarter four last year. Hydrogen and renewables, still a small segment where we have a strong order and take growth in the quarter. Positive trend and we are finding new opportunities all the time. The positive development was mainly related to hydrogen in the quarter. So again we have a diverse customer segment exposure and that is clearly one of our strengths. And we have a good momentum and sequential improvements. But remember the high comparables we

will meet in the next quarter. Let's look

into order and take revenue a little bit more in detail. The order and take is strong. We have an order and take growth of 6% if we look at the rolling 12 month period. In the quarter we had a positive organic order and take of 6% when we exclude major orders. It was 1.3 billion last year related to power generation and oil and gas. And this quarter we had two major OCTG orders with a total value of about 880 million. And the total order and take was 6.4 billion. Organic revenue grew 12%. Total revenue approximately 5.4 billion. And booked the bill 119% in quarter one and 115% rolling 12 months. So well above 100 and our backlog remains

solid and it's growing. Even more in detail then looking

at the components of the top line. Rolling 12 months order and take trend is upwards. That's the orange line. This means that we are growing our backlog. Year on year bars for order and take are getting smaller. But that is of course because we are meeting higher comparables. Slightly lower volumes compared to the corresponding port period last year. But that is supported by pricing, LSO charges and also positive product mix. We also see tailwind from currency. We will get into more of the details later on. But overall organically strong development both for

orders and for revenue. Some more details on

earnings. Adjusted EBIT increased by 48% to 567 million. Margins on 10.5%. It was .1% last year. And it's supported by higher revenues, favorable product mix. Currency had a positive impact of about 80 million. But LSO also diluting. So it's diluted by roughly 0.9%. Price increases are offset in cost inflation. We continue to have a positive effect from that. Even though now energy prices are more in control. We see a result of passing on less energy surcharges to our customers then of course. However, general inflation has increased. And to match this we have been increasing our base prices. And we've done that in a successful way. And this is something I am very pleased with. Maybe it will be a little more difficult. But we're still managing this. And we have of course a good pricing in our order backlog. As everyone else we are also affected by higher cost. And we are dependent on the cost inflation. But we're still positive. Let's see. I think we could have a slight impact on margins short term. The reported EBITDA of 1 billion included method prices effects of 479 million. And we had a free operating cash flow of

404 million.

Tube is performing well. It shows good momentum. Organic order intake of plus 16% excluding major orders. That's strong across the board. Strong oil and gas momentum for OCTD and umbilicals. And why we booked two major OCTD orders. Totally 882 million. Also high order intake in the chemical and petrochemical and in aerospace. Year on year decline for mining construction in industrial. But we can see a positive sequential development for the low refined products. Which is good to see. Organic revenue 14% mainly driven by oil and gas and chemical and petrochemical segments. Adjusted margin on .7% despite some margin dilution from alloys. And this is supported by high revenues. Positive product mix. Price increases, compositional cost inflation. And currency had a positive effect on roughly 61 million year over year. And to comment there, strategy execution. As I said before, in April now we have signed an agreement to acquire a production facility. And that will be organized in the Tube division. We also received orders for high pressure tubing. To support out the build of hydrogen gas refueling stations in Europe. And we also during the quarter has integrated a new application tubing factory. On our Messana site in

India.

Antal. Antal continue to see strong development. They are clearly benefiting from both electrification and the medical trends. Organic order intake of minus 2% in the quarter. This is impacted by timing orders in the medical segment. But overall a solid demand. Major orders of 350 million Q4 impacting the quarter. But we will also impact comparables going forward. Also they develop for industrial heating segment related to heating elements for as I said before. Semiconductors, solar, glass and other subsegments. Organic order intake declined for the heating materials due to lower demand for appliance wire for white goods. And boiler igniters for the consumer segment. But was subsequently. Organic revenue growth of 11%. Roar based positive development across division in all regions. Strong adjusted EBIT on 16.4%. Increased revenues and strong product mix supporting. Also price increases to compensate for inflation. And Cantal had a positive currency effect of roughly 18 million year over year. And they as I said before they have announced today that they expand their offering with industrial heating through strategic partnerships with the

company Raft. RIP.

RIP have had challenges in the quarter. They have seen a continued weakening demand for stainless compressive valve steel and consumer related goods. The decline was sharper than we expected. And we noted a decline in all regions. But it's mainly visible in Asia where we have a large part of the compressive valve steel business. It is a decline from high comparables. But orders are now on lower volumes. So nothing that we can neglect. And we are taking it seriously and we're acting with mitigating actions to which we'll come back to soon. Organic revenue growth of 1%. We are delivering from the backlog with positive contribution from razor blades and knife steel to the consumer segment. Also pre-coated strip steel for stationary power projects in the hydrogen and renewable energy segment performed well. Just the EBIT margin of 9.7%. That's a decline from last year. And we are noticing under absorption effects from lower volumes. When we are producing the higher cost due to inflation and how to manage in the short term. We have price increases and we are which is part of that mitigating the other problems. But we are not getting any real leverage from this now. So even though this decline of volumes is not having a significant impact on the group. We need to protect the division's profitability going forward. So we are now taking actions to adjust capacity and reduce cost. And we're doing that by using flexibility. Strip has already reduced their temp workers. And now we are utilizing the flexibility we have on the Sunbeacon side. So what I mean with that is that the tube division is now supporting strip division. I think that's an excellent operation. Looking at some new launches. We have launched the first large scale manufacturer, Damascus Steel. Samples are now with several potential customers and we are working on commercialization

of this product. Thank

you, Johan. Yes, if we go to the financial summary then and start in the upper right hand corner of the slide. We see the breakdown of the total growth and already take growing by 7% and revenues by a good 27%. And splitting it up organic growth of minus five on the order intake. But as Johan just mentioned, if we take out the major orders in the two periods we're comparing, we arrive at a good 6% plus. And also on a rolling 12 month basis, which is our preferred way of viewing order intake. We are also at a good 6%. While revenues growing by organically 12%. Obviously having a good and growing backlog. Structure, a small acquisition in Germany contributing. Currency, good tailwind from a weak krona. And alloys, high metal prices during the quarter. Molybdenum and nickel is behind this. And so 7% and 10% respectively on impact on the growth. And if we just comment on the alloy surcharge, if we look ahead into the next quarter. If you remember last year in Q2 2022, we had very high metal prices, especially nickel prices. So looking ahead, we think that this surcharge will turn neutral or even slightly negative in coming into that quarter. Going further down the income statement. We see a .5% adjusted EBIT versus .1% last year. In absolute terms, we are increasing by 48%. A very high positive metal price effect in the quarter. Takes our reported EBIT to just above a billion. That corresponds to a margin of 19.4%, also an increase from last year. Net financial items very close to zero. We have, as I will come back to, no debt at the moment. Further down, normalized tax rate of 23%, a little bit below the guidance. NDC, I will also come back to that, 32% of revenues. A good free operating cash flow in the quarter. Some seasonal buildup of stock, but a lot less than last year. And also good collections made in the divisions. Rose, if we look at the capital employed and if we take out the cash, we are seeing a return of just above 16%. Finally, looking at the earnings per share and the adjusted earnings per share is 175. That's an increase by 28% from last year. To just then go to the bridge on the next slide. That takes us from the 384 in adjusted EBIT last year to 567 this year. 102 million of that is what we call organic, coming mainly from price and mix. Also some health from currencies, as I mentioned before, around 80 million. A tiny contribution from an acquisition. It's a net number, so actually the gross contribution is 2-3 million higher. We are also absorbing some M&A costs in the period. So this takes the operating leverage to 20%, which we think is good. Going then to capital efficiency. The net working capital, 7.2 billion at the end of the quarter. Very much impacted by high metal prices in our inventories. Inventories stood at 8.3 billion at the end of the quarter. There is, as I mentioned, some seasonal build up, as we are normally building stocks for the summer stops. Starting in late Q1 and then going into Q2. But we have very focused work in the divisions on keeping the volumes and tones down as much as possible. But it's masked by the higher metal prices in this quarter. I mentioned the accounts receivables. Good job done there by the divisions. Good control. DSOs are going down and overdue are also going down. If we then take a look at the capital employed and then we take out the cash and focus more on the operating assets. And liabilities, we see a good 16% return. We have about 10 billion of fixed assets on our books.

Cash flow. Next slide.

If we focus this, we can see that we generate around, focus on the table, around 1.3 billion in EBDA, including the metal effects. Then we absorb about 700 million in inventories. Most of that is then the metal prices. And then good performance on the receivables. Then spend around 116 million on capex. Up from last year back to a more normalized level this year. We arrive at around 400 million in free cash flow. And that's if you just take it out of the box, around 32% cash conversion, simplified. But we think that that is OK, given the high metal prices and the seasonal buildup that we normally have this time of the year. And if we were to look further down the cash flow statement, you would see tax payments of 189 million. Coming mainly from Sweden. And then we have some minor financial items adding roughly plus 20 million. And that takes our net debt change to 277 millions. And that takes me to the next slide, which is the net debt. And here you see the split of the net debt. Starting from the left, then we have a net pension liability of 416 million. That comes mainly from Sweden. Leasing liabilities of close to 400 millions. That's capitalized according to IFRS 16. And then a cash position of 1.1 billion. That takes the net debt to 256 million, which is the cash position. So we have no debt. So all the gearing ratios are, of course, very close to zero. And this is obviously far below our capital structure target. If we look at the guidance, how well did we succeed with the guidance last quarter? For this quarter, CapEx, the outcome in the first quarter was 116 millions. The guidance is still 800 millions for the full year. It can vary quite a lot between the different quarters. But we stick to the guidance. The currency effects are net 80 millions. We guided for 100 millions for the translation and transactions. So fairly close, I would say. Metal price effect a bit above the 300 millions that we guided for. And this comes mainly from the fact that the price of actually both nickel and molybdenin was quite volatile in the quarter. And if you look at the moly price, it actually doubled during the quarter from around, it's normally around between 15 to 20 dollars per pound. And it went up to, I think, 36 dollars per pound. The nickel price went from around year end around 25,000 dollars per ton up to more than 30,000 dollars per ton. But both metals have come down in price at the end of the quarter. Tax rates 22.9 and versus our guidance, so a bit below the guidance. And if we then go to the Q2 guidance, CAPEX, as I just mentioned, we stick to our forecast of 800 millions. Based on the currency rates at the end of March, we estimate that the transaction and translation currency effects will be around plus 100 millions in the second quarter. Metal prices, always difficult to predict, but based on the prices we've seen at the end of the quarter, we believe that and remembering that we had very high metal prices coming into the quarter, we think that we are at minus 200 millions impact for the second quarter. Again, no less tax rates. We stick to our prediction there as well. I think that's all from me. Back to Jörg.

Thank you, Olof. So outlook for the second quarter. I mean, we have a positive momentum in most of our customer segments. And I think the underlying trends are expected to mitigate the impact from other uncertainties in the macroeconomic environment. However, with continued caution regarding the impact from cost inflation, demand is expected to remain subdued for both industrial and the consumer segments in the near term. So going into the second quarter, we do that with the high comparables from the corresponding quarter in the preceding year. Product mix is expected to be similar compared to the first quarter. And also, as you know, cash flow is normally lower in the first half of the year compared with the second

half of the year. So we should make it total summary

then. I mean, I'm very pleased with our performance in the quarter. We are executing our own strategy and I think we are clearly heading in the right direction. We saw improved market sentiments. We have a growing backlog. We continue to have successful price execution, of course, then continued high inflation as well. We have a strong financial position and a net cash position. And sustainability continue to generate business for us. And I think we have consistent strategy execution.

Thank you, Göran and Olof. So it's now time to start the Q&A session. So again, you can write questions in the webcast or you can ask them on the conference call. So operator, do we have any questions from the call?

We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the touchtone telephone. You will hear a tone to confirm that you have entered the queue. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested with only handsets while asking a question. Anyone who has a question may press star and one at this time. The first question comes from Patrick Mann from Bank of America. Please go ahead.

Good afternoon, team. And thank you very much for the presentation. I've got a couple of questions. Maybe I'll just take them one by one. The first one is, you know, your margin improved, the adjusted EBIT margin improved year on year, but kind of flatish versus the fourth quarter. How should we think about this .5%? How does it progress from here over the rest of the year, given what visibility you have at this point? That's the first question. Thank you.

I think

what has improved versus last year is product mix, price versus inflation. And as I just said, looking at quarter two, we foresee that the product mix will be the same. Referring to fourth quarter, fourth quarter was also a good product mix. I don't see a big change in product mix between the fourth and the first quarter. I hope that answers the question.

Yes, I suppose I'm thinking more about how does that .5% adjusted EBIT margin progress from here? So is it all product mix? Should we assume .5% is a good margin level for your level of activity going forward? Or do you think you could see some margin expansion over the balance or into the second quarter?

Normally we don't speculate for the full year and we don't give forecasts. I mean, the market is still positive for us. It's made more price and mix than its volume. So I think the improvement versus quarter one last year is probably sustainable. However, inflation will start to be a larger problem going forward, I think, even though we've been successful with price increases so far.

Okay, got it. And I suppose it also depends on each division as well. And then the other question is, I mean, just looking, you've seen a very strong financial position from a balance sheet side. Net cash, I think your gross cash is now 1.1 billion SEK, Krona. How are you planning to allocate this capital going forward? Just remind us of your capital allocation policy.

Thanks. But we have a growth strategy. I think we've been clear on segments where we prioritize growth. That is in medical, it's in chemical and petrochemical, it is in industrial heating and it's in renewable and hydrogen. And of course, we're going to use capital mainly for organic growth. So growth investments. I mean, I mentioned one inauguration of a new product production line in India. That's a CapEx investment. But also, of course, doing complementary acquisitions. If you look, last year we made one was buying out a GVA partner, but the other two acquisitions last year was one in medical, one in renewable. This year we're done soon, it needs to be closed as well. The third and fourth acquisition where it's focusing both the medical business and the aerospace business. So that is how we will act. But of course, yes, the balance sheet is strong and I think that's good.

Okay, brilliant. I'll go back into the queue in case I don't want to hog all the time. Thank you very much.

Thank

you. The next question comes from Frederik Agar from SEB. Please go ahead.

Yeah, thank you very much. Hello, I have a question continuing on the margin. Looking at the tube division, I get an operating leverage or drop through 14%, which looks to be quite low given the 14% organic top line growth. Could you give us an explanation of this? Is this driven by the fact that it's mainly price in that or is there any other good explanation? And also then how should we look upon leverage on that on the incremental volumes that you're getting now going forward?

Also leverage. Sorry, can you repeat that please? Yeah, repeat that please. The leverage.

Yeah, well, when I look at the organic drop through, I get 14% approximately in the tube division, which given the fact that you had 14% organic revenue increase, it seems quite low and it's low. I mean, in my calculations, it's significantly lower than you've shown in the past quarters. Is there any reason to why you didn't get more margin through or more earnings through

given the rising top line? No, I shouldn't. But that's

one part because this is comparing this quarter with the quarter last year. And we see in one part of the business, which is PowerGen, where we had really, really good project orders delivered last year with good pricing. And this year it's lower. So part of that is a mixed change within one segment of this PowerGen. That is the main explanation because I agree with you, 40% is in the low range. You could expect higher on tube division.

Okay, so if we just, I don't want to, I'm saying you don't want to call them margins, but if we just look at the dynamics and taking the adjusted EBIT that we have in this quarter and roll that forward, you say that we have good sequential demand or at least it's not falling. So we should have slightly higher FX impact. And then that means we should make a bit more in EBIT in the second quarter, adjusted all else equal unless we see some sort of a decline in volume that we do not see today. Is that a fair assumption?

You know that I don't say yes or no to that. I think, I mean, it's not such a wrong assumption. I think we continue with a positive mix. I think there is one negative part of the mix and that is the business that is down in a strip. Compressor steel is a very sort of high margin product. And we have good pricing or order stock. So I think a lot has to do with how inflation is developing. Okay.

And I guess the big orders you've been taking that are mixed positive, the backlog you have, that's a sort of fairly back and loaded story for this year in terms of developing.

Absolutely. I mean, if you look at the large orders, both in umbilicals and in OCTD, they are now into 2024. Yeah, okay. That's fair.

Just one last question before I leave. Do you think the downturn in strip, is that inventory driven or does that reflect the actual underlying demand

contraction? I think it's a combination. I think

if I stay on that note, I mean, to make a little bit longer answer, I think we saw a decline. I mean, it was not strong in Q4 and it was also weak at the beginning of this year. Then it was, I mean, a lot of this business is in China, not China for China, but our customers are in China. So a little bit about the Chinese New Year, but later in the quarter, I would say that we were a little bit surprised that it didn't, that it continued so bad. And that is why we now are executing the changes that we need to do. Okay.

So it is a pretty poor underlying demand story.

Yeah, I mean, all in all, I think, I mean, if you compare a year ago with all the uncertainties and problems with transports, etc. I think some customers are more sort of home safe now from their own inventory point of view. Lead times are shorter. So I don't think they sort of overbook as they maybe did a year ago to be on the safe side. So I think from that sense, it is some stock adjustments at the customer side.

Okay,

that's fine. Thanks. Thanks. Thanks, Frederick.

The next question comes from Igor Tubic from Carnegie. Please go ahead.

Thank you. And thank you for your presentation. I just wanted to ask you, because you mentioned a lot about the cost inflation. I just wanted to see, can you give some more flavor about what type of cost you are continuing to see increasing?

Yeah, I mean, if I compare a year ago, I think we were mostly nervous about energy and also transport costs. I think energy, and I think many of us were nervous what's going to happen in Europe during the winter that came out better. And the prices are still on the high side, but more in control. What we can see is that I would say the more general inflation is now higher, direct or indirectly impacted by salary increases and so on. That is what we see.

Okay, but didn't you mention that you have energy surcharges now?

Yeah, but we have energy surcharges, but if the energy costs go down, those surcharges go down. We don't have general inflation surcharges, so to say, that when we need to work with our base prices. So I think the inflation has changed a little bit, less energy and more general inflation.

Okay, thank you. And I don't know, you maybe mentioned it before, but can you give us some sort of outlook for the Q2 when it comes to the different regions for North America, Europe and Asia?

It's a little bit difficult

to say, but I can comment a little bit how it looks now when I don't foresee any big changes. I think to some extent, a little bit surprised how strong Europe came out in the quarter. And as always, we need to exclude major orders, but if I exclude major orders, Europe was actually double digit order and take off in the quarter. Asia, there we have strong comparables, mainly the energy segment that brought them down. But if I look on the, I should say the normal regional business we're doing, like application tube, for instance, that continued to be very strong. Then, of course, strip has a negative impact on Asia and that this probably will continue. North America more flat, oil and gas positive, chemical and petrochemical, flatish, while industrial is negative. So, and I think that is my best assumption also in

the near term. Okay, thank you. That was all for me.

As a reminder, if you wish to register for a question, please press star and one. We have a follow up question for Mr. Patrick Mann from Bank of America.

Please go ahead.

Thanks very much. Just wanted to go to working capital. So we obviously had quite a big bold in the first quarter and you said that the, you know, the first half of the year is usually seasonal working capital bold and then unwind into the second half of the year. I'm just wondering with some of the alloy prices having come down in the quarter, how do you see the second quarter? Should we, you know, does it partially reverse first quarter? Or do you still expect a bold into the second quarter? Thanks.

Zoloff here. I think you'll see some seasonal build up. I mean, in general, of the stocks before the summer stop, I think we'll see that this year again. It's normal. Metal prices are coming down, but it takes a little bit of a while before it works through the inventories. But if prices come down, stocks will come down as well in value, even though, so to say the tonnage goes up. Of course, that has an opposite effect.

Sure. So probably still volume impact outweighing price in the second quarter.

Sorry, what did you say again?

So probably, you know, volume impact will be higher than will add to working capital by more than price subtract to working capital in the second quarter.

Yeah. Difficult. I would say that's that's quite difficult to say, but probably less than last year. I mean, if you remember last year, peak in prices in combination with a with a normal seasonal build up. So we should see less touch wood, of course, metal prices, but we should see less of an impact this year. And also we have better controls over our inventories, I would say.

OK, thanks very much.

Thank you, Patrick. I

think that was the last question from the conference call. So with that, thank you all for listening. And we are looking forward to meet some of you at our upcoming Roadshow. So with that, thank you and goodbye. Thank you.

Thank you.