Ferronordic AB (publ)

Welcome everybody to this presentation on our fourth quarter for 2024. And we saw in the quarter continued strength in the United States, strong performance, and we created a much stronger position to go forward in Germany and Kazakhstan. We had a 43% revenue increase, obviously driven by the additional growth in the US operations, mainly. We had an operating result which increased to 2 million or 19 million, excluding effects of impairment of inventory in Germany and Kazakhstan. Net profit ended up at 9 million kroner, partly because of exchange rate effects. And we have, of course, after the acquisitions of the US operation, partly driven by expansion of the rental fleet in the US, we have a net debt of 1.978 billion SEK. And given the negative result we had for the year, no dividend is recommended. So if we look a bit more into the US, we're starting there. We saw, as I said, continued strong performance, good margin development and cash generation. Total revenue was 720 million SEC with a strong operating margin then of 9%. Overall, Our sales of machines grew by 15% while service and part sales were stable quarter on quarter. We do have a higher inventory and rental fleet in the US, which is in line with our strategy to take market shares further. In the articulated hoarder and excavator segments, we have been successful in gaining market shares in the US throughout the year. And we see opportunities to grow that further. If we go to Germany, the market declined by 14%. However, our own deliveries of new trucks in units actually almost doubled, which is partly on strong order intake we had of new trucks in the previous quarter, but also continued efforts to clear out old stock, which has been standing for too long. We'll come back to that. And given then the current marking conditions in Germany, we had to recognize another impairment of 13 million SEK on the remaining stock that we have left. There's not much left to be honest, but we took another 13 million SEK there. We saw stable parts and service business and we saw good continued development on our electric rental business. And we'll come back to the cost efficiency program in Germany, but we have now been able to take the cost down to the targeted level that we set for ourselves before that program started. And also in Kazakhstan, we had to give up margins to clear out all inventory. And we also recognized an impairment of 4 million kroner in Kazakhstan. Overall, then, group revenue increased 43% to 1.3 billion kroner. Strong growth in, obviously, in the US, German revenue more or less flat, and the decline in Central Asia. We had an operating profit increasing to 2 million and again 19 million if you exclude the impairment of inventory in Germany and Kazakhstan and most notably it's very interesting and very positive to see the profits that is delivered from our US operations at at going from 25 to 65 million Swedish kronor. Also in Germany, we had an increase in the operating profit, but we're still negative, obviously, partly because of impairments, but we are negative there. We'll come back to that. And then net income increased to 9 million. So some operational highlights from the US. The market for construction equipment was more or less flat compared to Q4 2023. In our own market, there was a slight decline, mainly in the excavator market. Our own sales, however, if we compare to Q4 2023, both, I mean, if we take sales from new machines and conversions then from rental fleet into account, we actually increased by 22%. And obviously, we then continue to take market shares in our markets. And we have, as I said, we've done that throughout the year. And it's very good to see that we're actually able to increase the sales and create a population for the aftermarket, also in a stagnant market. We had a particularly good increase in excavators and wheel loaders. Sold in all, we sold 65 new units, 53 were converted to sales from rental, and we had 22 units We have a stable service and parts business in the quarter. So the mix is basically 58% new and used equipment sales and conversions, 9% rental income, and a healthy 33% to service and parts. If we go to Germany, the situation is different indeed in the sentiment of the market and the economy, obviously. So we saw a continued decline by 14% in Q4. So all in all, the market was down 13% in 2024. And in our sales area, it was a decrease by 8%. But again, then we increase our own truck sales in units by 90% to 317. Compare them to 267 in Q4 23 and 96 in Q3 2024. Again, we had a strong order intake in Q3 2024, which part of that was then delivered in Q4, not all of it. But we also then obviously continued to sell our old stock, which we have had throughout the year. We still have some left of that stock. And given that the pricing level in the market throughout the year has gone down quite a lot and continued to go down in Q4. We had to take another impairment there. of 13 million so but as you can see total inventory then we had 574 million in q4 2023 and now that is down to a total inventory of 262 million in the end of q4 we saw parts and service sales remaining stable in the quarter However, we see a continued strong demand for aftermarket services. The problem is that we can't fulfill that demand because we lack skilled mechanics in some of our workshops. And we have a very high focus on attracting skilled mechanics to the network, both from within Germany, but also from other countries in the world where we have looking very promising for certain countries with a good regulatory environment when it comes to work permits, et cetera, outside the EU. There are a few other countries, quite many actually. And we have a high, high focus on attracting Skid Mechanics to the network. It's pivotal for making the German operations profitable. We go to the efficiency program, which we have talked about before, which was launched in Q4 2023. And obviously the key objective is to increase our absorption level, which is how much our fixed costs are covered by the gross profit from the service and parts business. And the expectation was that we would have a run rate of 60 million Krone less annually. And we have reached that target starting from Q3 2024, which obviously creates a different base and the different resilience going into 2025. and at the same time then we continue to invest in our aftermarket business and in e-mobility. We go to Kazakhstan, Central Asia, the market grew and The economy is doing well. Our sales was unchanged and we have had a similar problem in Kazakhstan as we've had in Germany with too many machines on the yard basically stock units that we have worked very hard throughout the year to sell and we have been successful in that and obviously partly it comes at the expense of gross margins to do so but we are clearly in a much much better position now than we were going into 2024 Sales are used to create construction equipment, slight increase. But also here, given the age and the current market conditions for some of our remaining machines in the stock, we have to take a four million impairment in the quarter. But again, as you can see, we have more than half our inventory throughout the year. And we had this recovery of the service and parts sales from if you compare to quarter three, but it was slightly lower than in Q4 2023. So total revenue decreased by 38%. Equipment sales decreased 45% and 16% decrease in service and parts sales. um us network um some of you have seen this map before this is our footprint in in the united states um and we are operating them in either fully or partly in in nine states in the midwest in in the us and it is the second largest market for construction equipment and in the area where when we're operating the total market in 2024 for General purpose equipment, meaning bigger machines that we are mainly focusing on amount to close to 4000 units. In Germany, we have a network of 20 outlets spread out through the territory that we are representing. And in Kazakhstan, we have concentrated our efforts to these four locations that you can see on the map, which are where the main economic activity is taking place in our industry. And that's where we are. So all in all, I should say it was a good performance in the US, really. And we created a strong, I will say, platform uh in germany and also in kazakhstan for for profitable growth going forward we have a very very different situation and a much better situation now with with the balance sheet positions both in germany and kazakhstan and then we can we can operate now more in normality than we have been able to do due to the uh very many customer cancellations that came after the supply started to actually work again after the very, very long lead times we had during the COVID phase. And then a lot of customer cancellations happened because prices were different and they might have put orders in for different brands at the same time, just to make sure that they actually got some trucks. So that created far too big inventory that we have going into 2024. The situation is now very, very different and we're very happy with how we can focus on expanding the aftermarket going forward, which is really where we as a dealer make money. So all in all, I'm positively looking into 2025. So by that, I'm handing over to Erik for some More numbers, please.

Thank you very much, Lars. I'll pick up on the next slide, which you opened up for me. Thank you very much.

Yeah, as usually opening up with some of the macroeconomic context that we've worked in, Our industries do correlate with the macro economy, but also driven by specific investment programs, both government, but mainly private initiatives that are going on. Starting in the US, we saw strong growth in 2024, 2.8%. There is a consensus for about 2.1%, so continued strong growth in 2025, but the range of forecasts, I think, reflect an increased uncertainty about how the US economy will develop in the new political context. So I've seen from 1.5 to 2.8 there. Meanwhile, inflation lingers arguably a bit higher than the market had previously anticipated, also lifting the interest term structure a bit, so a bit higher curve. That said, the funds rate was decreased during the quarter. We are impacted directly by our funding, both with Volvo Financial Services and our other funding facility that we use in the United States, but it also impacts our customers, of course, their liquidity. And Germany, very different situation as Lars already indicated, negative point two growth in 24. That's the second consecutive year of negative economic development in Germany. It is an economy that is struggling at the moment. 425, there is an expectation for a turn and a small pickup, as you can see from this slide, at 0.8. Inflation rate, they're also arguably a bit still high above target for ECB to lower aggressively and that way to stimulate the economy. In Kazakhstan, continued strong growth. It's more for us, I think, how that translates into investments on the corporate side for companies working in construction and resource extraction. And there, I mean, funding is a factor in Kazakhstan. Inflation has come down to 8.6%, but the central bank rate remains high and that's propagated into the rest of the economy. So funding has been and remains a constraining factor on demand in Kazakhstan. So moving on from that macroeconomic again context to our income statement and performance in the quarter. uh starting from from the top line we we see a 43 increase in the revenue that's of course very much driven by uh the addition of the united states uh operations in um end of november of last year so that's one month we had a very strong month as we um commented uh in in the q4 report of last year but one month all the same and and uh yeah we have the effect of the full quarter now this year that drives a big part of the growth in the top line um if we look at a revenue mix in in the fourth quarter 55 us 43 germany and two percent um uh kazakhstan kazakhstan is smaller two percent uh but probably not expected to be more than five, but low in that quarter. And we continue to see a lot of potential for our main markets, United States and Germany, to grow organically from where we have them in this quarter. In terms of revenue mix, about two thirds equipment and trucks or 63% and 30% aftermarket. The 7% other I remind you is mainly rental income. Aftermarket is of course an area of intense focus for us. In Germany, Lars mentioned that even as the economy is weak, we continue to see strong demand for repairs and maintenance of the truck parks that are out there. Indeed, when fleets are not renewed, the demand for maintaining the older fleets tend to increase. But we are to some extent constrained by not having as many qualified mechanics as we would like. Gross profit up significantly again driven by the consolidation of the US business. SG&A I would tend to look more on a percentage of revenue basis and there we are down year on year 15.6% compared to 21.5% last year. Operating margin positive but not by wide margin, but a big increase versus last year, 0.2%, or Swedish krona, 2 million. That's after, of course, these provisions or reserves that we took on the trucks in Germany, 13 million, and inventory also in Kazakhstan, 4 million. So without those, we would be at 19 million Swedish krona. in the fourth quarter. Net income positive nine. significantly driven by foreign exchange effects, 66 million positive effect in the fourth quarter. Remind you there that's driven by the assets the parent company has in the subsidiaries. So investments in Germany in euros and in US and Kazakhstan as it were in US dollars. Moving on to the balance sheet, in a summary, again, movements year on year now would have the US included. So when it comes to increase in PPE, it's really driven by changes in the businesses as they stand and in the US, You will probably recall that we have said that we have increased the rental fleet as part of our core strategy to gain market share in the United States. So that is reflected also in the balance sheet. Looking at these segments and in terms of our effort on working capital, we do aim for as a strategy to increase our capital turnover. on the operating capital side. In Kazakhstan or Central Asia, networking capital increased, but it's really a decrease in inventory. What we have had at the same time is the maturing of payables, so that's what drives up the working capital. In Germany, networking capital is down, and that is as Lars described, as we had been selling out the old stock, but also had good sales of new trucks in this quarter, specifically with big volume sales. So lower inventory driving the change in working capital there. And in the US, the change is more marginal with a more business as usual replenishment of inventory in the quarter, increasing that a little bit. Again, the rental fleet sits in PPE, so that's not included in this calculation for working capital here. Net debt is a small increase, very much driven by a move which is non-cash, as we stress here, of payables into debt, other financing arrangements, and thereby it goes from working capital into the net debt calculation. And then equity to assets decreased slightly quarter on quarter to 30%. Moving on, added this and it's really a response to questions on our PPE. So I thought it would be good to illustrate the distribution of PPE in the different segments. And I would say notably the United States here, the American segment that we have. So to make clear to investors and readers of the report, the share of property, plant and equipment that is related to the rental fleet, and you can see it's almost 70% for the group as a whole, and more so in the United States. And really most of the rest of PPE is properties. So our workshops, the ones that we own, And then I put the IFRS 16 separately here so you can see that as well. That would also mostly be related to properties, but to some extent also carpools, vehicles that are mechanics and employees work as they produce for the business. Moving on, this one slide illustrates the EBIT year on year. So mind you, this is all compared to Q4 of last year. So here the U.S. increase is very much driven by again adding two months more. December last year was very strong. So it's more of an effect here of again having two more months added. Germany, we took a hit on the inventory and Laura said we have made efforts to really clean up the balance sheet and put ourselves in a good situation as we enter into 2025. We've also in 2024, as you know, made a lot of efforts to streamline the organization and increase efficiencies in in our SG&A and OPEX. But in the fourth quarter, we are up versus last year. But again, maybe more investments going still into this quarter to put our in a better position really for the year to come. Kazakhstan, small change and a small saving also on HQ costs in the fourth quarter. So with that, I move on to the next slide to explain movements in net debt. And here I really put this in to show, as I mentioned on the balance sheet slide, that the movement in that it is very much driven by non cash effects in the US and in Germany. So again, to explain that we initially buy inventory and into rental fleet with the payable term. So it's payables in our balance sheet, and then it moves over to other funding arrangements, typically Volo Financial Services related as our supplier. But then it moves over from payables to interest bearing debt at that time. And that's, again, a non cash transaction. On our Group NAV, really just illustrating the shape of our balance sheet there. Again, you can see the inventory and the US rental fleet we have separately here, making up a big part of that. Then you can see other property, plant and equipment. In this case, that other property, plant and equipment would hold also the German rental fleet. So that is that on the balance sheet. And then I move over to our financial objectives that we introduced at our capital markets day on the 2nd of October, I think it was. Um, and we have, but started our journey towards those objectives. Um, we are, uh, growing versus our, our starting point, but we obviously have much more ambitious targets there. Uh, similarly on, um, operating margin, uh, we do believe we can, uh, lift our, our, uh, whole organization, uh, to a large extent by, by organic growth. Uh, and then, uh, on our net debt, uh, we. are working to come to the target levels we set there. With regards to dividend, as Lars mentioned, given that we had a negative earnings result for 2024 as a whole, the board is not recommending a dividend is paid on the year 2024. So with that, I give back to Lars for a very brief outlook and before we take questions from the audience. Thank you.

All right. And we are optimistic about our expansion into the US and the business opportunities we see there. We see that demand is supported by a dynamic economy and a significant need to upgrade infrastructure. The new administration has caused many government initiatives, but we believe that federal and state infrastructure programs will continue to support demand. We also expect further large construction projects involving data centers and logistics centers and hubs in the US Midwest. The German economy, however, it remains weak. As we talked about, we've taken actions to cut costs and make our organization and balance sheet more resilient. We have been successful in optimizing the balance sheet, and we are confident that the demand in service and parts business will remain strong. and we are optimistic about the long-term potential in the German market, and particularly in the opportunities that e-mobility and sustainable transport solutions provide. Kazakhstan represents a small part of our business, but we continue to see opportunities in the market. So by that, I'm handing over 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 Galani from ABG Sundahl Collier. Please go ahead.

Yes. Hello, Lars and Erik. Just like to start off with a question on Germany, where the equipment sales took a big step up compared to prior quarters. But I guess, is this entirely driven by the inventory sell-off that you mentioned? Or do you think that there may also be a component of improving end market demands baked into that figure?

Well, actually, most of our unit sales in Q4 taken mainly in Q3. We have nowadays a normal delivery timing, not 15 months anymore. It was when the supply constraints were there, but now it's three, four months, which is the usual cycle. And then orders we took in Q3, part of them were actually then delivered in Q4. And we had a strong order intake in Q3 where we saw we could adapt. We had the opportunity to adapt to the price changes that were quite dramatic in the market last year, actually. going from January to December. And that development continued in Q4. And that's why we had to make another impairment of our stock, the remaining stock that we have. So we saw potentially a higher supply out in the market than demand, if I put it that way. And the only conclusion I can make is that we were not the only one having a stock problem. So that is basically what it is. I mean, the market is still there. It's down 14%. But for sure, there's still demand for renewal of the fleets. And most importantly for us, we don't see any downturn at all in demand for our aftermarket services.

Okay, understood. And then for Germany, for Q1 specifically, should we read anything into the run-up ahead of the election and whether that's had any impact on your business in Q1? And also perhaps if there are any potential policy impacts we should have in mind based on the outcome of the election then?

Well, I mean, we can't talk too much about Q1, but there is, of course, an uncertainty when there is a new election and the previous government has resigned and called for a new election. So there is a lot of issues going on in politics in Germany, for sure. I think the real issue that they need to tackle going forward is how do we go back to getting economic growth. which they haven't had now for two years it's been actually negative not a lot but negative growth in both 23 and 24 and despite that we don't see actually too much uh decrease in in transport activities which we can measure very very precisely uh thanks to road tolls and etc in germany but clearly there is a we don't expect too many policy uh changes in our industry. Our industry is really driving economic activity. But clearly there is an uncertainty regarding the elections coming up.

No question about that. Okay, understood. And then perhaps a bit of a detail-oriented question, but a fair chunk of your net debt position now is these machines that have been moved from working capital to net debt. Can you say how high the interest rate is on those? Or does Volvo not want that info to be public?

I'll probably hold off on that one, Adrian, as you might suspect from me.

But I think also, if you go back to last year's annual report, I think we do fairly detailed disclosures there. And then, obviously, April 11th, you'll get another one with updated. But given that we haven't put anything in bias, I wouldn't put it out on this call. So please refer to, I think, the report that is out there. And yeah, I think you can make reasonable assumptions about how much that would have changed through the year.

Okay. And a final one just on the net as well. I understand you won't give hard guidance on this, but given that it has risen really every quarter now for the past year, and Germany is in a sense limiting your ability to generate cash flows, can you say anything about when you expect to sort of turn around the trend of rising net debt levels?

I think you're right.

That would be to give guidance, which we're cautious on. I would probably go back there to what we said at our Capital Markets Day and what is in our financial objectives, that we are higher than we want to be on a long-term basis now. And we are working both to make our balance sheet across the organization as efficient as possible. So in that way, in Germany, for example, we have taken down the debt part. But in Germany, it didn't, in this case, generate much free cash flow. The trucks we sold were funded by VFS mainly, and when we sell them, we should keep a margin for some of the older stock. There wasn't that much margin to keep, so the MAP1 went back to VFS. But we have still, again, decreased and shrunk the balance sheet, is part of our strategy. And then overall, we of course aim for Germany to start contributing and for the US to continue to generate good cash. And similar with Kazakhstan, but that's obviously a significantly smaller factor. So I think more, Adrian, that we have an aim to bring it down and that comes together with our wider strategy to grow the business in Germany and continue to do business in the U.S. organically. And through that process, we do expect that we will be able to bring down the net debt for the group as a whole.

Okay, I appreciate the answers. That was all from me, so thank you.

Thank you very much, Adrienne.

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

Hi, good morning, Lars and Erik. Thank you for taking my questions. I was wondering firstly a bit on the US, if you could elaborate a bit on the reasons behind the sort of sequential decline in services and parts sales and how we should view this going forward.

I think we were more or less flat in service and part sales in the US in the quarter and also year on year actually so not a big change quite stable performance in the US so I think I mean we have seen again some uh i mean i would actually call the the the new equipment sales market relatively stable as well but there as we discussed in the previous quarter we had a bit of an uncertainty and caution ahead of the elections and then after the election that that uh uh sort of dissipated and especially towards year end uh we saw quite a strong market actually but with regards to uh parts and and uh and service, I think we've had quite a stable trend there.

Okay, thank you. On the measures you're kind of taking to ensure that you have a skill pool of mechanics for the aftermarket business in Germany. Could you elaborate a bit more on specifically what type of measures that includes?

Well, it's a wide range of measures on this and we've started that previously, but that of course includes, we have an apprenticeship program, which is successful and it's actually supported by the government. So we have kind of our own sourcing of young mechanics, which we train and come out. It's a four year program and they partly go to school and partly work in our workshops, being trained by our key technicians and how to do it. So that's one part of it that we actually have an internal supply, so to speak. But it's not enough to cover for the demand. So we're also going quite aggressively out to technical schools to attract mechanics. We go to competition, we go to other industries where we can find good technical skills that we can train. And we pay finders fees for our colleagues to bring a friend or somebody they know into our workshops. But we also then go internationally and then mainly so far we focused on three countries, which is Turkey, Morocco and Vietnam, they have good supply of skill mechanics and a reasonably well-functioning regulatory framework with Germany, making it easier for them to work in Germany. And we look quite optimistic about those programs, particularly Turkey's is obviously from a language point of view in Germany, it's easier to simulate into the workshop we have about church people working of church people people working for the radio and so so these are some of the measures we do uh i mean obviously considering the importance of of the success of this recruitment for our automotive business we follow this up in the same way as we follow our part sales and ordering tape on trucks every week where do we stand how do we do where are the how many people have the pipeline, how many interviews have we done, etc. So this is extremely high up on the agenda. And again, it's a general problem in Europe, actually. I mean, notably so in Germany, that there is a fight for this type of talent, and we need to be strong to get the best in here. It's good to see. I mean, it might be a positive problem. We're lacking. The demand is there, but we can't really fulfill the demand because of lack of people. So we just need to become better at recruiting good, skilled people. So it would have been worse if it was the other way around. But the demand is there. That's the most important thing.

Yeah, that makes sense. Thank you for that elaborate answer. You broke up a bit, but if I interpret you correctly, I mean, I guess what I'm trying to understand is, do you think that it could potentially be a constraint to growth in the coming quarters to kind of continue the soulmate in the aftermarket business in Germany owing to this?

It is already a constraining factor for our sales in the aftermarket. Yes, absolutely. We could sell more if we had skilled mechanics. That's why it's so extremely important that we quickly can attract skilled mechanics that can start working from day one at the same time, obviously, as we do to continue our apprenticeship program and build for the future. So it's a mix of things that we need to do, but clearly, This is one of the main constraining factors for growing our automotive business. But again, it's good to see that we have demand and now we just need to make sure that we can fulfill it in a good way.

Okay, thank you. I think finally on sort of the gross margin in Germany. It's clear that, of course, this is quite affected by this quarter specifically and sort of the lower price point. But if you could kind of help us understand a more abridged, a more normalized gross margin and the timing impact of this. I mean, should we see this normalized already now in Q1, would you think? Will there be a few quarters of still quite the best gross margin, if you could help us understand that a bit more?

Yeah. Thank you, Andreas. I think, as you know, I mean, we don't give guidance, so I can't sort of give you anything specific, but maybe

I mean, in terms of how to think about this and interpret the results we release, I would say if we look at Q4, you're absolutely right. I mean, in that quarter, we have a big volume of trucks coming out. I mean, 90% year on year, in our case, an increase. But a lot of those are the ones that we did adjustments in terms of the value on our balance sheet in Q3. And maybe a bit hint at least that we took another 13 now on trucks that still remain in our balance sheet and they will need to come out. And we also... say that it is our strategy to really make our balance sheet more efficient as quickly as possible. So with those trucks we had remain that we took an adjustment on at the end of last year, our aim is to get them out as quickly as possible in the beginning of this year. Not sure if that helps you, Anders, but I hope so. And maybe just going back to your previous question, question on the aftermarket. I mean, first thing to say is, I mean, I know, again, if you compare year on year, then you have the effect of one month of December versus three months this year. But quarter on quarter, yes, there is some decline there. But I think that there are sort of some temporary customer and seasonal factors there. So I don't think it's indicative of anything. And then I mean, we did have, as we said, it was in the beginning of the fourth quarter, a bit more caution and uncertainty in the business around the elections. But I think towards the year end, we were through that effect, so to say.

Yes. Okay. Thank you. I appreciate that because I was just looking at the numbers. It was, you know, 270, 275 million in Q2 and Q3. And now this quarter, some 235. So I just wanted to clarify that, but really appreciate it. Okay, that's it. That's all from my end. Thank you, North and Eric. Thank you.

Thank you very much, Anders.

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

I think maybe, I hope we are still online, questions from the audience. Lars, we have a question with regards to sustainable transport solutions in Germany. If it is up and running and if there is a pilot project going there. Anything you want, can comment on that.

And the pilot project is still not up and running. We are in the preparatory phases for making that happen. And we will let you know when we have that rolling. It looks promising, but we still haven't started.

But we continue to develop also our electric rental business, and that is developing well, as we write in the CEO comment of the report. Another question is with regards to if there are any plans to introduce new product lines or brands to RAD's portfolio, specifically forestry logging, maybe, the question in the email says.

Well, this is one cornerstone, actually, of our strategy, and that is that we should be able to leverage on the network that we have in the countries where we are operating to add then complementary products to what we have already. In the US particularly, then, we have quite a big portfolio already of brands for different assignments, if I put it that way. So it's not only Volvo. Volvo is the biggest one. But we clearly want to develop that further in a smart way, and we see opportunities to grow our product portfolio in the United States. Definitely, we just need to be very smart about it and make sure that we don't lose focus on what we have. It's a big responsibility to take on brands. We need to perform and it should be profitable. So yes, indeed, there is potential to grow not only geographically in the United States, but also within the territory we have to expand our product portfolio.

Thank you very much, Lars.

I don't see any more questions online at this point. So if there are no more questions from the audience, then I would pass back the word to the host of the call.

There are no more questions at this time.

If there are no more questions, then we thank you very much for your interest in Fair Nordic and encourage you if you do have follow up questions, you can reach out to Investor Relations at that email or call me at Fair Nordic after this call as well. Thank you very much for your interest and goodbye. Thank you, everybody. Bye bye.