Ferronordic AB (publ)

Thank you, good morning, good afternoon everybody. This is Lars Korneljusson speaking, CEO of Nordic and I'm very happy to be here with you to present the result of the first quarter 2024 for us. Let's start with the summary of the quarter on the slide that we're trying to arrange here. Here we go. First quarter again, then we, as you know, we invested into the US in the end of last year, actually in the beginning of December and we have had a good start in the US. Our expansion there has had a very good start and Q1 was the first full quarter where we're consolidating our US operations into our reporting and that very much led to then an 86 revenue growth, which is mainly driven by the US. Our operating result increased to 21 million Swedish kronor, obviously on strong contribution from our US operations. Profits landed at 70 million, which is partly then a result of exchange rate gains. Net debt also increased to one and a half billion, obviously after acquisition and then consolidation of the balance sheet in our US operations. So all in all, 86% revenue growth, 21% operating profit, 8% operating profit margin and an EPS of 4.83 Swedish kronor. Then we move to the next slide. And again, good start. We had a revenue in Q1 in the US, business of 700 million, operating profit of 60 million then with a margin or operating margin of 8.6. The market in the US was down 80% compared to the quarter of 2020. It remains strong, it is a strong market still. And we also gained market share in this market. And especially we did so in the segment of articulated haulers, which is very good for us. It's an important segment. Volvo has a strong position in that segment and it's also something which is building wealth for future sales of service and spare parts. In Germany, the situation remains challenging. Demand is weak, economy is not showing very good signs at all. And customers are in this situation, obviously delaying renewals of their fleet. What is however very important for us is that we continue to grow our aftermarket business and we did that by 9% in the quarter, which is very good for obviously for our profit and loss statement, but also for kind of receipt that we're making the right things and having invested into the network and getting closer to our customers and increasing aftermarkets. Also in a market and an economy and general activity in the market which actually goes down. So that's a good sign, I think. We are continuing our work to reduce costs and create a leaner organization in Germany. It's a hard work and we are expecting to see then the results of that work, meaning a run rates of minus 60 million compared to last year then by the end of Q2 2024. So we are in the midst of that process. We're also working to normalize our inventory that will continue throughout 2024. In the quarter, we sold six battery electric trucks and we have also increased our rental fleet of electric trucks. We have now 40 trucks in that fleet and we have received governmental grants for all of them, actually. Kazakhstan in Q1 was also challenging. The economy is growing, but the market for construction equipment declined. And due to that and the slow sales, obviously, we have a too high inventory in Kazakhstan as well, which we're working on reducing. That will take some time, but it is moving in the right direction at least. Let's see if we can, yes. So next slide, very brief on financials then. So our 81%, 86%, sorry, growth to 1.1272. Obviously, US is now our biggest market with 700 million. German revenue was down 20% to 440 million. And in Kazakhstan, we had a 60% drop in revenue due to machine sales to 34. Operating profit increased to 21 million. Out of that, we had a contribution from the US of 60 million. So net income then to 70 million, as I said, and the net debt that has increased to 1.5 with 33% equity to total assets and the book equity as of March 31 of 1.7 billion corner. More on the US, the total market is roughly in North America, we should say, is around historically 52 to 56. The area which where we are currently covering is around 8% of that market. The estimations are then that it actually decreased in Q1 by 8%, we should remember that it was very high in Q1 2023. And the decline is driven mainly by crawler excavators, but the markets for articulated holders increased in Q1 2024. And basically we drove that increase in the market by selling a lot of more articulated holders. In Q1 24, Rudd then had 81 new units. Rudd, which is the company that we have invested in US. 23 units and then 23 units are converted from sales, to sales from the rental fleet, which is a very, very common way of going to the markets in the US where you first rent out machines and customers are then converting them and buying them out basically. We had a strong service and parts business also, and basically the mix was that 30% of revenue came from the aftermarket and 8% from other sales, which is mainly rental and obviously the rest then from machine sales and conversions. If we move into Germany, market for heavy trucks decreased by 5% in the quarter with a big decrease, actually bigger decrease in March than in the beginning of the quarter. In our area, the decrease was 2%. And so our area is basically 18% of the total German market. Our own sales decreased by 36% to 157 units compared to a very strong Q1 actually that we had in 2023. We are releasing inventory in our used vehicle department and we grew that by 27%. So we're actually trying to reduce both our use stock, but also we are making our rental fleet smaller basically to adapt to the current demand situation in the market. And we see that the demand for rental actually is declining for diesel trucks, I should say. Service and parts sales again, very, very important. 9% increase, that's a combination of organic growth and acquisitions, but we're still moving, we're still targeting towards absorption rate of 100%, as we call it, where then the gross profit we make in the aftermarket should cover our fixed costs. And we believe that we're on track doing that in Germany, although we had hoped to be there already, obviously, but it's good to see that we have a continuously strong growth in the aftermarket, even in the downturn market. So that means that then our share of the sales, the aftermarket actually increased 10% is pulling and was share of revenue to 37%. And as we already announced last quarter, we are working on the efficiency program in Germany. We're also doing Q4, 23, and that with the aim to make our organization more efficient and resilient. And again, then to increase our absorption level, which is an important task and target for us, basically. We're reducing then costs both in horizontal and vertical administration units, and we have reduced the number of regions, we have changed the organization, become more flat, removed the number of middle management roles, and basically analyzed by cost structure across all functional areas to identify opportunities to reduce costs. Obviously, this needs to be taken, we need to take into account that we see continuously growing aftermarket business, healthy and good to see. And so that should be seen in the light of a cost efficiency program. We're obviously continuing to invest into the aftermarket, and we also see opportunities to grow the electric business. So that we're taking that into account when making this efficiency program. It will continue, obviously we continued it in Q1, it will continue in Q2, and by the end of then Q2, we expect to see approximately 60 million savings annually. That's what the target is, which we're looking good to reach that. And again, we continue to invest in our aftermarket business and also in mobility, e-mobility. In the next slide on the Central Asia, as I said, the Kazakh market has an increasing role as a regional hub. Commodity prices are fairly high in big infrastructure projects. And the economy is growing quite nicely, but the market for construction equipment continues to decline as it did last year. Anyway, so we had a decrease in our sales, quite a big one actually in Q1. The numbers are very, very small, I should say. So a few deals here and a few deals there make a big difference in between quarters. But both new and used equipment sales decreased, whereas again, aftermarket sales were stable in the quarter. And we expect then our inventory position, which currently is too high in Central Asia, that that should normalize towards the end of 2024. So if we look at slide number nine here with the US network where we are, again, in November, late November 23, we acquired 100% of the shares in Rudd Equipment Company. And Rudd is one of the largest distributors of Volvo construction equipment in the US, in North America. And as well are also representing other strong brands such as Hitachi, Sandvik, Linkbelt Cranes and Bergman. Our area then is covering all or parts of nine states in Kentucky, West Virginia, Ohio, Indiana, in Western Pennsylvania, Eastern Missouri, Southern Illinois, and some counties, which is in Tennessee and Maryland. Again, US is the world's second largest market for construction equipment, and there are substantive infrastructure investment programs. In our territory, there are also big, big projects, massive projects for building data centers, for building battery factories. So also that type of construction is going very well. In 22, which is the latest really statistics that we have for the market in the area, over at approximately 4,000 machines, which is then basically corresponding to that 8% of the total market. So that's the market we are in, in the US currently. If we go to the German work, this is a map of where we are, and as you can see, we now have then 22 outlets in the territory where we are operating in Germany, which is covering then roughly, the market is around 18% of the total German market. Here is our network in Kazakhstan, where we're basically also covering the main economic center and activities for the business of construction equipment in Kazakhstan. So basically that was the development on the operational side. I hand over to Erik for some more on economics and financials.

Please. Thank you, Lars. I, as usual, start with a bit of the environment that we've been operating in on a macro level, starting with our biggest, as it is clearly by revenue, in the quarter market in the US. So the US grew 3% in Q1, expected 2.1 in the three years. So there is an expectation of some slowdown in the rest of the year, but we have seen the US economy being very resilient and looking very strong. Core PC inflation at .8% in March. Some of you will have heard about the readings this week, which came down a bit softer, and at least not above forecasts or consensus forecasts this time. So giving the Fed some more room to maybe lower rates or at least not raise rates further. Fed Fund stands at 5.3. We are in our deck structure in the US on floating rates. So lower rates translate into lower funding costs for Fair Nordic. Looking at Germany, a different picture. Lars has spoken of this, which would decline in GDP in the first quarter. There is an expectation of that turning the other way in the year to go, so second to fourth quarter. But we still see business confidence in our sector as being quite weak. Customers being reluctant and hesitant to renew their fleets, place orders, and taking a wait and hold stance to see more speak in the economy before the end of the year. Or placing those orders. Inflation rate is coming down in Euroland, which again gives more room for Miss Lagarde to follow the Swedish Riksbank and potentially lower rates in latter parts of this year. Kazakhstan, strong growth, 5.1 in 2023, still strong in 2024, and even stronger expected in 2025. But even at that, as said already, weak market construction equipment, the macro economy disrupted by natural disasters, floodings and earthquakes, and there's also been political changes, which disrupt some of the infrastructure investments that is otherwise going on in the country. Inflation rate high from a European and US standard, but lower, significantly lower in Kazakhstan, so coming down, and so are rates, although again, they remain high, of course. If we turn to, closer to Fair Nordic and look at our income statement, a table there with quite a few columns for you, but what you will have to your left is by segment, as we say, so our geographical markets, the reference quarter, the same quarter, same period in 2023, starting with Central Asia, i.e. Kazakhstan as it is at the moment, Germany, and then the US, which we didn't have, of course, in the first quarter of 2023, adding up to the group, and then operating profit there of minus 14, and then you have the segments for 2024, first quarter, and what we can see, we had a decrease in Kazakhstan driven from the top line, very low sales in the first quarter of this year, so a negative operating results, mainly as a result of that. Germany, similar low new sales, resilient aftermarket, that was still up, but lower revenue there again, driven by sale of new trucks, and then, of course, us not making as fast progress on our cost reduction program that Lars discussed, that continues, and we hope to see the full fruits of that again at the end of the second quarter, but the combination of the time that takes, and again, the lower top line puts us at a negative EBIT of minus 12, and then we have the US, which had a strong quarter that should be distressed as well, Q1 was very good there, so contributing 60 million Swedish in EBIT and bringing the group to a positive 21. Looking at some of the metrics in there, the distribution of revenue in the first quarter, then 60% in the US, 37 in Germany, and three in Kazakhstan, again, Kazakhstan was very low in terms of revenue, Germany, new sales low, so maybe a more typical picture would be 55, 45% in that order, it will vary, of course, in the segments, especially quarter on quarter, you can have swings between the quarter, but that may be a more typical picture. Between the revenue streams, 61% equipment and trucks in the quarter, 33% after market, and 6% other, remind you that in the other one, there is mostly rental revenue. Yeah, that, at least in Germany, a higher share of after market, given the resilience of that, while the new sales were lower, similar in Kazakhstan, again, there was also, after market was largely flat, while the equipment sales was low, and then in the US, you have strong on both. So potentially, again, you'd see bigger equipment and truck sales as share of revenue. Moving on, gross margin, also looking very strong year on year, that's of course with the contribution from the US, the strong performance there, and the product mix that we had in the US. Lars mentioned that we did sell a lot of articulated haulers in the US, and that's one of the more bigger and complex machines, which is good in terms of margins, but also in terms of potential for future after market business. FG&A app driven by, again, US acquisition, as a percentage of revenue, 18.7%. Mentioned, again, low revenue there in Germany and Kazakhstan on a comparative period basis, so we'd expect that to be higher there, and then working to bring down the costs in Germany. Operating margin 1.8, good to see that in a positive territory, but of course, we want to continue to drive that higher, and then in absolute numbers, 21 million. Net income, quite affected by the forex gains in the quarter, which in turn is driven by net assets, which is a positive in US dollars, that was the main effect, but also euro in the quarter again. Just taking this table, moving on to the next slide, very similar to the previous one, but the one that you will find in the financial report, showing the segments in the first quarter, adding up, and also showing the group costs that we had, that's the component that was missing on, or not missing, but included in the consolidation on the previous slide. So adding up to the total, and a group apparatus that is still built for a bigger operation than we have at the moment. Moving on to the balance sheet, explaining some of the dynamics there, year on year, but also versus last quarter. Of course, big growth in property plant and equipment, that's very much driven by the US acquisition. In this property plant and equipment, we have our workshops, but also importantly, we have the rental fleet in Germany, but also in the US. Lars mentioned the sales channel, which is rental conversions in the US, and that's an important part of the competitive landscape and how US dealers operate. So taking machines into rental fleet, renting them to customers, and then the customers buy these machines out. These machines do not sit in our inventory, but they sit in our PPE, and in the cashflow statement, you will see that then as capex going into the rental fleet, rather than as movement in working capital. So that's worth bearing in mind. Looking at the segments in Central Asia, i.e. Kazakhstan, a high level of working capital, 29% of last 12 months revenue. That's a weak revenue in especially Q1, but even Q4 last year was also not strong, and admittedly a high inventory that we have at the moment, which we will work down through this year. In Germany, similar picture, but for different reasons. Also a networking capital of 30%. I've mentioned lower sales of especially new equipment in the quarter that ties into that last 12 months, but also a higher working capital on lower payables that have come due. In both these markets, inventory levels are high as we write about in the report, and we will work through 2024 to bring those levels down to more normal levels. In the US, lower working capital, quarter on quarter, partly a result in contrast to Germany of higher payables. And then again, noting here that the difference in accounting where these rental conversions sits in PPE, and they do so because of average rental periods being more than 12 months. Net debt increased somewhat during the quarter, and that is to a large extent driven by reinvesting cash flow from operations into rental fleet and inventory in the United States, in our operations there. Equity to assets was almost precisely flat at 33% versus the end of the year. Moving on to some graphics just to illustrate the movements over the year. So this is delta, meaning the difference year on year, not the absolutes. So you would have our starting point at minus 14, that is an absolute, and then the difference, we didn't have US, so that adds 60 to us. In Germany, we were plus five and moved to minus 12, rounding makes that 16. Similar in Kazakhstan, we were in first quarter of 2023 at plus seven, now at minus three, again rounding to minus 11, and then slightly lower costs at the group level brings us for the group overall at 21 million. Moving forward and looking at net debt development this is quarter on quarter, mind you. So from the 31st of December, again, capex in US, mainly driven, this is capex for the group, so it includes also smaller investments into real estate, but these in the context are again minor. But investments into the rental fleet in the US, some investments in rental fleet in Germany, partly also driven by investment into our electric rental fleet in Germany. Income tax pay, that's a lagging one that we've had on gains from our disposal of the business in Russia, came through in this quarter, interest pay, and then FX effects and some movements in working capital well, which levels out to some extent across the group, and that brings us to a again higher net debt at the end of the quarter, so very much driven by the investment into rental fleet in the US. Moving on to NAD, so the balance sheet basically, looking at cash and equivalents where we are there, partly driven by the previous slide, meaning the movements in net debt, trade and receivables building up, starting off on the asset side, that includes subsidies for electric trucks in Germany that is due from the German government, but then of course, usual receivables from customers in our three segments. Inventory, Kazakhstan, Germany, and the US, and then we have property, plant, and equipment, and here I split out the US rental fleet so you can see the part of that, but these sit together in the balance sheet that you will find in the report, and then we have other assets, we have our payables to our suppliers, and borrowings, mainly Volvo financial services, and also the acquisition debt to Nordea and working capital facility that we have with them in the United States, and then we have some lease for our properties, and that brings us to our NAD of 1.7. We're about 117 Swedish Krona per share. And with that, I hand back to Lars for an outlook before we take questions from the audience.

Yes, thank you, and looking forward, and we're obviously optimistic about our expansion into the US and the opportunities we see there to grow and take market share and expand our current business, potentially also other businesses. It is the second largest market in the world of construction equipment, and demand is supported by a dynamic economy and extensive support programs for infrastructure investments. German economy appears weak. Truck market, we expected to decrease in 24, and then as we talked about, we are taking actions to adapt our organization and constructor to that weak market. But again, we believe in continued strong demand in the aftermarket business, and we certainly remain optimistic about the long-term potential in the German market, and also the opportunities in e-mobility and sustainable transport solutions. Our operations in Kazakhstan, they continue to develop, although they are, and they will represent a relatively small part of our operations in the future. So that's about it. And we'll stop then for questions, please.

If you wish to ask a question, please dial pound key five on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial pound key six on your telephone keypad. The next question comes from Adrian Jelani from ABG Sundial Collier. Please go ahead.

Yes, hello, Lars and Erik. I'd like to start off with a couple questions on the German markets. First of all, with the market likely declining in 2024, can you give us a rough indication of what absorption rate you're on currently, so we can perhaps better understand how much of the decline in equipment sales that you can offset with higher aftermarket sales?

I'll take that one, Adrian. I mean, we don't give any direct guidance on that. I mean, we have our stated objective that we want an overall absorption rate of one so that we can cover, but clearly in Germany, we're not there. And we need both the cost reduction program to be implemented in full and to continue to grow our aftermarket to get there. So I think that's in sort of reference to what we've published and said before what I would say on that. We are of course implementing this test program or sorry, cost reduction program to make the organization more resilient and more efficient so that it can withstand bigger swings in the trucks market.

Okay, understood. And on or a follow-up on the reduction or savings program, you write that it will have full effect from the end of Q2. Was there a partial effect already in Q1 or will it go sort of from zero to a hundred percent between Q1 and Q2?

No, it will not be zero to one at the end of Q2. It is a, I would say a sliding scale, so to say. We definitely, we started already in Q4, even early Q4, but then it was more of a planning mode and started implementation end of Q4 and through Q1. But we hint to the fact in the report, we say that this is a lot of work and it's taking a lot of time. So it's negotiations with stakeholders and careful planning of the changes we make. We want here to make the organization more efficient, but of course we want to continue to make the aftermarket growth after more of that. So we want to be very careful about not taking out anything that can hurt our productivity in any way. And again, that takes time. So short answer to your question, we expect the run rate to be reached at the end of Q2 for the number that we mentioned in the report, but it is a gradual, how do we say, walk to get there.

Okay, perfect. And then looking at the US business, in Q4 we had one month of numbers from RUD. And if I remember correctly, you cautioned us that December was a very strong month. How would you characterize Q1? Was this an unusually strong or weak quarter or is it fairly indicative of what we can expect going forward from the US business?

I think, I mean, we, we usually, as you know, Adrian, don't give guidance. We speak of market direction and I think consensus we're expecting a slowdown in the US economy this year. We have provided the market with the numbers, US gap be it, converted to IFRS. So you have that reference point. And again, I think consensus forecast have been for slowdown in the US economy, but we have not seen that yet. So we saw a very strong December. We characterize the first quarter as strong as well, versus those, I think consensus forecast, will the economy in the US continue to perform and the construction sector continue to be that strong? Well, we will just have to see. But I think versus what consensus were pointing towards for 2024, Q1 was a strong quarter.

Okay, I hear what you say regarding the slowdown in the economy, but on the other hand, we have these big infrastructure programs that what we're hearing from other companies is that most of those projects haven't really started yet and that that demand is sort of still ahead of us. I guess, first of all, would you agree with that? And also just the timeline. Yep, go ahead. That's true.

We have the overall economy and then we have the more sector-driven and those infrastructure support programs as they are still being implemented. So that also remains to be seen how much boost that gives to our customers and their pipelines of work. And in addition to that, as we also mentioned, we see quite a lot of construction activity in our area in the US. So some of these big data centers being built by our customers partly. So that adds another, how do we say, secular aspect to the activity that we supply to in our area of the US. So, I mean, we are, again, very optimistic, but yeah, I mean, consensus pointed towards a bit of a slowdown. We're not seeing that yet.

Anderson, can you give us, I guess, as a final question, a sort of timeline for what phase those major infra projects are in at the moment and what timeline you would expect as to when that actually translates to, to higher demand?

I'd probably venture into macroeconomic territory there again. So I'm sure I may use you, the US Department of Commerce or somewhere. But I think, I mean, we are obviously very interested in the progress and we're monitoring the ones that are more tangible in our area. And as you said, we're not seeing so much of the actual implementation of the F as for the planning of it. As for the timing of them, I would be cautious to venture into, to give you any timeline on that.

Okay, I understand. In that case, that was all for me. So thank you.

The next question comes from Anders Ekerblom from Nordea. Please go ahead.

Hi, Lars and Erik. Good morning. I have a few questions, just quickly on the US. Firstly, I mean, you mentioned gaining market share in the US. Could you kind of just clarify what this was due to?

Yeah, hi Anders, this is Lars here. A lot of factors actually, but mainly one factor was supply and that we managed to get access to machines that maybe wasn't there last year. And also that there is an increased activity in the market. And I think the customers that are there that Rod has had and have are strong customers and they're taking part in the projects that are starting. I mean, we see, for instance, big data center projects where we are selling machines into already and the general, I'm sorry, good work from our American colleagues. I mean, really. So.

So I shouldn't interpret that as potential competitors exiting the market or your specific areas. No,

no. That would have been nice, but no, unfortunately. Yeah, all

right. Okay, so kind of just moving on to, and not on the major infrastructure projects, but just these kind of large construction projects that you're seeing in your area. You said that some have begun and are underway, but some are kind of in the future. Could you say anything about when you expect this to begin and when it might trickle into your panel?

Some of it has already started to trickle in for sure. But they're in the early phases yet, so they will continue for a while. Obviously, when customers are mobilizing for these projects, obviously they need equipment and they're starting. So it is starting and has started for those projects. Then coming back to the big infrastructure spending that is planned. I mean, we also see some of the projects going ahead and actually implementing, but the bulk of the projects might not have yet done so. So that's why that keeps our optimism about our potential in the market, in our sector, very healthy. So we believe in a continuous strong market, really. That's what we do.

And just kind of finishing up on the US specifically, you mentioned in your report kind of your ambition to continue gaining market share in the US. I mean, could you quantify a bit what you will focus on to drive this? Is this in any way related to kind of the investment and in rentals in the quarter and kind of expanding on this part of the business or what will be kind of the leg that will drive this market share?

Yeah, I think there are, it's a mix of things. You mentioned one thing, rental business for sure. There are segments of the market where we see that we can do more in certain product groups and in some segments. Clearly we can go more into those segments and we believe that by doing so, we will take market share. It's not going to be easy, it's never easy, but there are potential to do that which is very promising really. And the team is very excited about it. So that's, it's good.

Oh, cool, cool. That's good to hear. So I just wanted to move on to Germany quickly and then I'll let you go about your day. But on pricing, I was wondering here like heavy truck registrations decreased by I think it was 5% in the quarter. Your unit sales were flat dish sequentially, but revenue kind of decreased by 28% sequentially. Could you help us understand here kind of what is the impact of mix and price respectively in the kind of tug of war? What's kind of the overweighing parameter that drove this down take?

Well, first of all, as we say, I mean we had the comparative Q1 23 was high.

I was looking sequentially just that unit sales seemed flat dish sequentially, but sales were down closer to 30%. So what's kind of the impact of mix and price respectively?

Well, as you say, I mean, if we're looking on average units, then it would be the mix. And there is a big range of the different vehicles we sell from the small, you know, LCDs to the biggest trucks that we provide. But then also I'll just mind you the electrics, which we sold a lot more of in Q4 than we did in Q1, even if we did have six, I think in Q1 that we sold. But these are, I mean, significantly more expensive as you know, I mean, new prices around, if we're excluding the subsidies around 320, 330 versus a diesel truck around 105 or something like that. So that's obviously a very big difference in ticket that would impact revenue.

Yep, okay, makes sense. But I mean, you also mentioned seeing an oversupply kind of exerting pressure on margins. And I was wondering here, like, are you seeing a kind of balancing supply demand dynamic here or is this oversupply and kind of disadvantageous price picture something that will also, you know, continue to affect the market also looking past just Q1 now, but also the remainder of 24? What could you, like, what's the pricing dynamic kind of in the market in Germany currently?

Well, I mean, obviously we have had a situation since COVID started that we've had

supply. Sorry, I can't hear you that well. Okay, can you hear me now? Yeah, much better. Yeah, I'm sorry.

I mean, we've had a situation in the market since COVID started really with supply constraints where the demand has been stronger than the supply. That is now changing, it's normalizing. Coming back to lead times for deliveries that are rather than extraordinarily long. And that obviously puts the pressure downwards on the pricing as economic theory would say, right? So that we see, having said that, our margin grid, so to speak, on new truck sales is fairly, doesn't really, if I put it that way, affect our bottom line that much. So our task is to make sure that we keep up and are able to sell in order to feed our aftermarket basically. And that we do with, clearly there is price pressure downwards in the market as always when the market goes down and normalizing. How long that will be, we don't know, but we see that for sure. Not necessarily affecting our bottom line very much to be quite honest, but we see that, yes.

But yeah, so, but I mean, in order to kind of keep the unit sales flat disequentially, I mean, some prices have to be sacrificed, but on the aggregate, the big down-tick in sales in new equipment sales was primarily due to mix, if I understand it correctly then, but some price, negative pricing dynamic.

Yes, yes. But again, I mean, the real achievement, I think, in the quarter here, which we've done well, is to continue to grow the aftermarket in 9% in a downturn market, meaning that we move towards a sustainable profitability in Germany by increasing the aftermarket. And I think that's the real achievement here. Now we obviously want to sell trucks, more trucks than we did in Q1 in order to have something to service basically. And there's a lot of work going on to increase that, obviously for future years to come.

Right, very, very good. Thank you so much for answering all my questions and I'm finished here, so have a nice day. Thank you.

Bye. Thank you. The next question comes from William Aflot from Private Shareholder. Please go ahead.

Good morning Lars and Erik. I have a question about RAD. I'm wondering if they have any revenue exposure to the coal mining sector, and if they do, how significant is the statement? Thank you.

Yes, I can answer that. Thank you for the question. The coal mining segment in general in the world is going down and so it has in that territory. It used to be 20 years ago, a big part of the business, it is no longer in the area. So our focus is to increase on the general construction and road construction, et cetera. So the coal business as such as a share of the revenues is low and it's going down. And I don't see that coming up going forward either. So I think RAD in general has made a very good work in transitioning from that business to other businesses and that has taken place a long time ago already. So no, the share is fairly small. We don't give it a number, but it's not big at

all. Okay, thank you. Thank you.

There are no more phone questions at this time. So I hand the conference back to the speakers for any written questions and closing comments.

We do have a few that we have received. One of them is are there any significant seasonal variations within our sales in RAD? Not really, they're not that big seasonal variations actually, not maybe as we have been used to in other places we have been. But so not really is the answer, not big swings in seasons. There was another one on our Sandvik business in Germany. And we can say that we're not satisfied with our Sandvik business in Germany at all. And it's been a tough ride. We have had very good Sandvik business. We have very good Sandvik business in the US. We have had very good in other markets where we have been. In so far in Germany, it has not taken off in the way we wanted to do. So we still have opportunities there which we don't really have caught yet for sure. So if that satisfies the question anymore.

No, I think that was the questions online maybe just for me to add to the last question that as some of the audience member, we did take a write down of about one million euros. So 11 million Swedish crowns in the fourth quarter on Sandvik. So that was an adjustment for a stock that wasn't aligned with the local market. For the rest of it of course, we are working to find opportunities and have indeed actually in the quarter some such opportunities for Sandvik. And again, doing very well of course in the US with Sandvik, very good progress there. So with that, I think no further questions as I have it online. So maybe pass back to the operator. Is there any other question? Otherwise, I suggest we thank you very much for your interest and attention today.