NCAB Group AB (publ)

Thank you very much and welcome everyone. My name is Peter Kruk and together with Timothy Benjamin, we will be presenting the second quarter results for NCAB Group. Starting point, NCAB, we are a company focused on supplying printed circuit boards. Printed circuit boards are the foundation that you see to the left in all electronics, which forms the brain in any intelligent product. And what is unique with our product is that every PCB is unique to the product in which it is used. So there are no standard components. But everything is our engineered product where we provide value to our customers, both in the design phase as well as through the supply of products. As a company, we are operating globally with a strong local presence in 19 entities. We are serving some 45 markets and we are around 645 employees. And we use some 36 main factories to supply our customers with different technologies and from different geographies. We don't own any in-house manufacturing. In fact, we're using only extended partisan, which makes us flexible in order to support our customers in varying needs, both in terms of technology, but also always being able to give our customers the best supply chain possible for their specific needs. If we then move over to the specifically the second quarter. So I'm glad to see that we have another quarter of positive order intake. We have had in the second quarter a very significant headwind from the weakening dollar, as the dollar has dropped roughly 10% since Q1. But if we look upon the order intake, we continue to have a second quarter of growth in order intake for the group. The continued positive development in Nordic and East has continued, and we also see actually Europe to show ordering take growth in US dollar. Our ordering take in the USA was weak compared to last year, but beside the FX, this is partly due to the tough comparables that we've had in the quarter. Q1 for us was very strong, so I'll come back later to show that full year status. Net sales also devalued by the US dollar movement, but we see growth in the dollar terms in all regions excluding Europe, which is still down. So it's lagging a little bit from the order intake. The impact of US dollar on net sales is around 90 million SEC in the quarter. Gross margin remains stable, improving slightly versus Q1, but the EBITDA is impacted by the weak dollar. The EBITDA would have been some 17 million higher, excluding the US dollar impact. M&A activities, as we have reported earlier, have continued. We were able to close the acquisition of B&B Leiterplatten service in Germany here earlier in the spring, and that integration has now commenced. And we have also, during the quarter, renewed and increased our financing at better terms and with the validity until 2030. If we look more specifically on the numbers for the quarter, we can see that our order intake in Swedish kronor is up by 5% to 985 million. If we look upon US dollar, the order intake is up some 16% versus last year. And it's also positive that we have a book to bill of 105 in the quarter. Net sales are stable in Swedish kronor versus last year. But if we look upon organic growth, excluding acquisitions in US dollars, we actually see organic growth of 8% in the quarter. EBITDA, as we said, is impacted by the FX. So we are down to 94 million SEK or an EBITDA margin of 10%. Gross margin has gone down versus last year, where we had extraordinary margins in the first two quarters of the year. But we are moving up slightly from our Q1. We were at 34.7. And as we mentioned, the negative FX is 17 million SEK in the quarter. Cash flow good at 93.6 million in comparison to last year's 101. Our working capital is up slightly. We are up partly due to the acquisition of BNB, and we also see some effects from the tariffs in the US impacting working capital there. A little bit more information briefly about B&B Latter Button Service is a company based in Eastern Germany with its main customer base also in Germany. It's a company that was started in the 90s and was running production up until 2022. That means the company has a very deep knowledge around technology for manufacturing, which is also valuable in the dialogue with customers. Revenue in 24 was around 150 million SEK and they had an EBITDA north of 20 million SEK in that year. and with the company comes some 25 employees predominantly in germany but also in china and the the transaction was announced and signed on april 23rd and it was now closed on june 3rd so has contributed somewhat in the quarter then i give it over to you tim to continue

Thank you, Peter. So I think you heard a little bit from Peter that we had sales around 934 million SEC in the quarter, fairly flat with quarter two last year. However, when you look at it in US dollars, which is more of a fixed currency comparison for us, since we do so much trading in US dollars, we were up to 10% year over year growth with M&A contributing nicely as well. We did have an EBITDA at 93.9 million SEC, down 22%. And you heard a little bit from Peter that some of the impacts there were both FX and then also a little bit of price product mix. So we ended the quarter at around 10% or about down to 2.9 percentage points. If you look at our gross margins over time, we're running at around 36% last 12 months. And that's compared to around 36, 37 for the past two years. But in the longer term, we've been able to drive up gross margins quite nicely. When we turn our heads then to order intake and sales, it was really nice to see the order intake increasing 5% year over year to 985. But again, in a more fixed currency comparison with US dollars, it's actually up 8%. We did see some very nice positive indications on the Nordic side, as well as Europe and also on the East. And then a little hesitation on the North American side with all the tariff movements back and forth in that country. As mentioned, net sales were flat for the quarter, and that presented the third quarter in a row of positive book-to-bill, which we were happy to see, as well as a good trend in new part numbers in customers' one. When we then look at the result, as said, we were down to around 94 million SEC. That's partially an impact of the lower US dollar. In total, 17 million SEC. But then also around 22 million SEC coming from a negative translation effect as the US dollar weekend offset by a little bit of positivity on the balance sheet revaluation of 5 million SEC. And the balance sheet revaluation is something that isn't expected to repeat. It really just happens. has to do with how much AP and AR we have on the books in US dollars at the end of every quarter, whereas the translation effect is something that we expect to continue wherever the US dollar is. So that one continues forward. EBITDA margin, as said, 10%, with a gross margin slightly improving over quarter one. But we did see gross margins decreasing year over year, which was mainly attributable besides FX to the pricing and product mix, which was quite elevated in H1 2024. And then we thought we'd give you a little extra detail here since we do have big FX movements within the quarter. So if you take a look at the US dollar compared to prior year down around 10%, so down to 9.66 on average during the quarter versus 10.68 last year. So that gives us a full 90 million sec impact on revenue. And as we've said for a while now, we tend to have our revenue coming from the prior quarter's order intake. And when you have a prior quarter order intake that translates into a different exchange rate, you tend to get impacts like this. So we saw a 90 million sec impact on revenue versus prior year from FX. That then resulted in around 27 million sec total impact to gross profit, of which minus 32 translation and plus five on the revaluation side. which, again, the revaluation side is the one that's not expected to repeat, whereas translation we do expect to see repeating as long as the US dollar stays this low. And then SG&A also repeats, and that was at a positive 10. Some of our SG&A converts into less SEC. That gave us a total EBITDA impact in the quarter compared with the prior year quarter, quarter two, at the higher exchange rates of around minus 17 million SEC. With that, over to you, Peter.

so if we look a little bit closer to the segments i mean we can see nordic has had a fantastic order intake in the quarter being up 15 in sec and around 26 in us dollars i think positive development in a number of the countries and i think like denmark but we've also seen good orders from aerospace and defense but this also means that some of the order intake that we've seen now will have a longer digestion time so we'll primarily or part of it will primarily impact 2026 rather than the second half of 2025. Net sales up 4% in Swedish kronor to 250 million sec versus 207 last year. EBITDA around 23 million sec versus 29.6 and margin down to 10.7 and versus 14.3 margin last year we have significant effects in in in the quarter as tim highlighted both the translation part but the revaluation part has hit different segments differently so Whilst we have for the group a positive of five, we actually have a negative in the Nordic segment, but positive more in the European segment. So FX or EBITDA would have been on par or better than last year's EBITDA had we not had the FX in the segment. So Nordic's doing quite well operationally. Looking at Europe, we can see here positive here actually that order intake started to grow and that we also see positive order intake in development in US dollar. Europe has been the segment lagging in the turnaround and we're positive to see that this is is changing and in US dollars, even though we have to say that there is uncertainty in a number of our markets, also in Europe, not just in the US from the tariff situation and what this may impact the general demand sentiment. So some hesitation in the market, but still positive that we are showing growth on the order intake. And some countries like Spain and Benelux have been more clear in their turnaround. if we look upon net sales we are here still lagging behind we're down seven percent in swedish kronor and organically if you then take away the impact of the acquisitions we're actually in swedish kronor down still 18 versus last year or nine percent in us dollar and there are here of course there's one part which is the time lag between order intake development which is positive and when it translates into revenue and we can see that say the the markets where we are still sort of trailing behind primarily are some of the bigger ones like germany italy and uk but hopefully that order intake trend will start to move the needle here as well so ebita is down quite significantly to 33.6 versus 56.7. And it corresponds to a margin of 7.6 versus 12.0. And so the decrease is say a big portion of this is coming from the revenue further enhanced by the effects, but then also some product mix and pricing. If we then look on North America here, I think we're doing quite okay. Order intake is showing a big decrease versus last year. Beside FX, there's also here quite a bit of a kind of timing activity of larger orders. We were up 18% versus prior year. So if you actually look upon the full year, we are 9% up in US dollar. So it's more some part of it, this is timing. But there is also a little bit of that anticipation or hesitation in the market. from the from from from pending on the the tariff situation and also to remember is that the tariffs are not booked in the order intake as they are only visible or only become known when they are actually imported into the concrete products so we will have tariff showing up as part of net sales but not in our order intake If we look upon net sales here based on the order backlog we've had, we've had a good sales increase. We're up 12% to 225 million sec versus last year of 200. And here we've been successful in transferring tariffs to customers, but we're also very well positioned to benefit from our global supply base. I mean, NCAB has over the years invested in building a factory network also outside China in various parts of Asia and other parts of the world. And this is a big strength for us right now, being able to help customers who may want to shift their supply. Right now, there's still a lot of discussions ongoing and many customers still waiting a little bit because there are still a lot of the tariffs that are up for discussion and are not confirmed. And since moving production is a big step for many of our customers, it means that many are in the kind of holding position to make those switches. If you look at the beta, we are up to 32 million SEC, up versus 28.1 last year, and our beta margin stable at 14.2, up then from quarter one and on par with last year's 14.1%. If we then look finally on our East segment, also here positive to see that we see growth in order intake despite the FX movement. So the order taking US dollar is up a full 12%. And I think we are, the market is starting to grow in high tech. And I think it's, we are able to capitalize on our supply base. We have a strong network of factories in this area and are able to sort of provide good service to customers. Net sales decreased 2% to 54 million SEC, but in US dollars, we're up 7% in revenue. And our EBITDA is down a little bit to 9.5 versus 11, but we're still a very healthy EBITDA margin of 17.4. And this is a little bit of a mixed situation. And I think we continue to be able to drive high margins since our East segment is the area where maybe we are doing more engineering support than other regions for high-tech applications. Over to you, Tim.

Thanks, Peter. So return on equity, 13.5% versus 26% prior year. As you can imagine, that's just linked to the EBITDA development between the two last 12-month periods. Net debt sitting now at 1.8 versus 1.1 last year and up a couple tens of basis points from prior quarter, I believe 1.6 in quarter one. And that has to do with the acquisition of BNB that we completed during the quarter. Equity asset ratio stable, slightly higher versus prior year at 40.7. And then working capital also sitting at about 353 million SEC or 9.2%, which is a little bit higher than last year and a little bit higher than prior quarter. But again, as mentioned, we had the BNB acquisition during the quarter, which increased both those two numbers, as well as the impact of the U.S. tariffs impacting both as well. Available liquidity at 1.26 billion SEC, as well as options to increase that as well, ready to go. And then, as mentioned before, no dividend expected for the year. Thank you, Kim.

So on the M&A side, I mean, we continue with our strategy to explore opportunities for M&A, and we have a good pipeline of potential companies, which we have kind of filtering down, and we remain with a kind of short list of some 50 companies that we feel would be a good fit for NCAB. And we are in dialogue with some five to 10 companies on a continuous basis. And as we said before, we closed B&B light product service here earlier in the year. And we are hopeful that we can find some other opportunities that can close in the coming quarters. If we look upon our overall strategy, we remain 100% focused on printed circuit boards. We also believe in the model of having an asset-like model where we do not have in-house manufacturing. It gives us flexibility to really have the best service for our customers and be flexible and move with varying market needs. So we are instead focusing more on continuing how we can improve the support for our customers in this market with engineering services and other ways of making our customers more efficient. And by that, growing our market shares in existing markets. We're also looking how we can expand geographically. We believe very much in being local to our customers. There's a big value of that. of that local interaction with our customers and looking to expand into new markets. M&A is an important part of taking those steps into new markets. And finally, it is also a market with a high degree of fragmentation, and we see benefits in consolidating here and looking for economies of scale, both in terms of developing stronger capabilities, but also in terms of high efficiency and cost advantages. So this is something we'll continue with and our M&A strategy serves both the consolidation aspect as well as the geographical expansion. And with that, we close today's presentation and open up for questions.

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. Next question comes from Johnny Jin from Seb. Please go ahead.

Yes, thank you and good morning everyone. I want to start a little bit in North America and understand the demand and impact from tariffs a little bit better. I suppose that you increase the prices and push that on in the US, which is reflected in the sales. If you break it down a little bit, how would you say if you could elaborate the underlying demand that is developing? And I mean, it's a lot of moving parts, but book to bill is quite a lot below one. And again, I know that the tariffs is not reflected in the orders, I suppose. But how is the underlying demand and the sentiment in the US and how is the momentum going into Q3 here, if you can say some words there?

I'd say it is a challenging situation to understand exactly what the sentiment is. I think there is, say, some concern in the market given the uncertainty of what happens with tariffs. As you know, there are a number of tariffs being discussed also with Taiwan, South Korea, Japan that are still up in the air. And I think that creates a level of uncertainty. We have still seen pretty good order intake, but I think there is always that little bit that anticipation which makes it hard. And maybe not specifically on our product, but it's more on end consumer products where, for instance, you can see truck industries and others where people are holding off on making, say, bigger capital investments. So I'd still say that our Our order tick has been pretty good. The drop in Q2 versus last year is largely timing of larger orders. If you look back, we see we had a very strong Q2 last year. And I think this year we also have bigger orders coming in, but they happen to be more in Q1 this year. So I think it's a little bit of timing of those bigger orders than to say that it's related to, say, a general drop in the market. But there is a level of uncertainty. And I think there's also this still... partly impacting European sentiment as well. I think we can see that we are coming to a turnaround where maybe the European markets have bottomed out and the inventory build up after the pandemic is starting to come out of the system, which is improving things. But I think the whole trade war with tariffs has made everyone a little bit more hesitant and maybe means that the recovery is coming a little bit slower in some of these markets. But we don't see big shifts. I think it's maybe more of a little bit of anticipation at this time.

Okay. Yeah. And just a clarifying question. The timing of those, some larger orders that you see, did you mean that the they came in Q1 already or that the timing is that they can be pushed to Q3?

No, I think what we had, if you look, say, both last year and this year, we've been running certain projects with research customers, which comes more in kind of projects. And we've had last year, we had a number of those being booked predominantly in Q2 of those orders. Whereas this year we had a number of similar orders coming in, but we had them predominantly in Q1. So if you look back, our Q1 was way above 24 Q1 and Q2 now we're a little bit below. But if you look first half, we are still up in US dollars by some 9% in order intake in the US. So I think that sort of those bigger orders plus the FX makes a big part of that sort of shift or the drop in the order intake.

Okay, yeah, that's clear.

And of course, we hope to see more orders like those research orders coming, but they are a little bit harder to predict when they come. They're kind of intermittent in their nature.

Yeah, yeah, I understand, I understand. But then the underlying book to build in North America, maybe we can look at over a little bit longer period or what is the... best estimation for the underlying book to build, would you say?

Yeah, I think that the trend that we have seen in the U.S. with, say, I think U.S. was one of the markets combined together with East to start the recovery on order intake during 24. And I think that situation is still healthy. I think the turmoil with the tariffs, et cetera, maybe has made the U.S. market slow down a little bit, but we're not seeing it break in at this time.

Yeah, okay. Yeah, we'll see. It's a lot of . If we shift focus to the gross margin a little bit, it's a lot of moving components here as well with the price and mix and tariffs and FX and so what. So what is the underlying gross margin here in the quarter, would you say? And what can we expect forward? I mean, you mentioned the mix, but would you say that mix is representable for Q2, for Q3 as well here in Q2? Or how should you think going forward?

I think overall, I can start. I think overall, I think what we've said before is that we believe probably a reasonable gross margin that we can maintain is somewhere in that range, 35-36%. I think we believe that is to be true. I think in Q1, we had more of revaluation impact, which actually hits gross margin percentage as well, whereas a translation doesn't really impact the percentage of the gross margin so much. So I think we think we are pretty stable. I think we also knew that, say, during latter part of 23 and early part of 24, we had sort of extraordinary gross margins, partly due to this kind of timing of purchase price movements and customer pricing, which gave us a few quarters with, say, a boost to the gross margin. But I think that 35%, 36% is probably more stable to be sustainable at, at least for the midterm.

Yeah, okay. I would agree. I think 35%, 36% is quite reasonable. You'll always have timing effects when it comes to re-evaluations or, for example, M&A. But other than that, yeah.

Yeah, yeah. That's clear. And then shifting focus to Europe, orders seem to be developing well there with orders coming in above 8% above sales here in the quarter. So could you maybe elaborate a little bit more what is driving this? And I think that you mentioned also some early positive signs of recovery in Europe already in Q1. So has this developed as you expected, would you say, or? Has there been any shifts and how is the gut feeling or what do you hear from the dialogues of your customer and the best guess of the outlook in H2?

I agree. I think we saw the trough of Europe in the second half of last year in Q1. We started maybe to see some signs on order intake moving in the right direction. And I think those signs have kind of continued into Q2, maybe becoming a little bit stronger, maybe some more markets starting to show progress. But it's still quite sort of weak growth in Europe. And you have some markets where we see where we're still somewhat challenged. I think UK is a market where the economy is maybe more challenged. And we also, through our UK business, are partly involved with the truck industry, where you see, for instance, a truck industry order intake slowing down. So I think there are some things there in Europe where we still see some challenges. But overall, I think we are slowly starting to climb out of that trough in Europe. And I think that's happening kind of stably across the board right now. And I think we can see, if you look upon German trading or German manufacturing PMI indexes, you can actually see that they're now starting to climb up. They're still showing actually negative in June, but they're now climbed down from kind of low 40s up to 49. So it's a clear trend where they are approaching a general growth in German manufacturing industry. So I think this is what we're seeing as well. It's not yet booming in any means, but we start to see pockets of growth, and I think we're benefiting from that.

I think we also saw some very good performances as well.

Yeah, so cautiously optimistic, if I interpreted correctly.

Yeah, I mean, you can say we have momentum in a couple of other segments. I think Europe is starting to sort of turn around, but maybe we don't really see a strong momentum yet. But it's positive, at least, that we're making steps forward.

Yeah, yeah. And then one final one. Sorry, a lot of question here. But on the cost and OPEC side of things, do you see more underlying cost reductions ahead to help the EBITDA margin going forward? Or do you think that you will need some help from the market and higher volumes to drive the margins going forward?

you can say we are we are continuously look to find steps of making sort of things more efficient at the same time we are also in the process right now where our order intake is growing so we are this time not looking to kind of downsize for lower volumes which is a different story so yeah yeah okay thank you that was all for me and happy summer when you get there thank you

Next question comes from Jacob Edler from Danske Bank. Please go ahead.

Hi, Peter and Tim, and thanks for taking my questions. I'm just getting back a bit to the tariffs to start with. If I read the report correctly, order intake grew 8% in comparable units in US dollar. But as you stated, it does not include tariffs, as we spoke about a bit. If I was to shout out the number and guess that, you know, if I was to include that, that could have been like 3 percentage points on on growth year over year. Does that sound like a half reasonable number? Just trying to understand the ish magnitude.

I'm not sure, Tim, if you have the number.

We're not looking to give out exact numbers on tariffs, but yeah, there was a small effect somewhere in that range of tariff.

Perfect, perfect. Thank you so much. And a second question also on order intake. But I remember last year you had, what was it, 6% of sales coupled to defense and aerospace. But you have stated that order intake was a bit stronger, a bit above that number last year. And I believe most of those deliveries were set to be seen in sales during the course of 2025. So I'm just wondering, did we see any defense sales bookings here in Q2? Was there any big increases year over year there, or is that something to expect more for H2, those delayed bookings?

I think we do have some of it in the Nordics, but I think we predominantly, some of the bigger orders that we booked during, say, Q2, Q3 of last year, I think we'll predominantly start building during the second half of this year.

Okay. Cool. Yeah, okay, great. Just Getting to, I guess, you know, during the last week here or yesterday, actually, we had some, I guess, positive news from Germany with the stimulus programs being increased and almost doubled, if I've read it correctly. Do you think that can kind of help the recovery here ahead? Or how do you think those programs could impact you guys?

I have not had the time to analyze specifically what those programs entails, but I think generally to say the fact that the German manufacturing industry would benefit as the pickup, I think that would clearly have a benefit for us. So I think it's something we would anticipate and look forward to.

Yeah. Great, great. And then just for East, you stated that you saw some price increases finally coming through. able to add any you know flavor of the magnitude instead of you know low single digit number we're seeing now a couple to those you know um or connected to those high-end tech products

I think the price increase that we're seeing now is not specifically for East, but I think what we're seeing is, I mean, you have in some tech areas, the factory loading is growing. So I think the tendency for price aggressiveness from the factories is coming down and prices maybe will start moving up. But where we have seen specifically price increases, which we are also now starting to push on on new orders here in the second quarter is more specific related to certain areas where you have, for instance, we have gold. So you have certain technologies with Inigo and gold surfacing, et cetera. And given the gold price movement there, there are price increases, which may be in the high single digits or even above or 75 to 15% on some product areas. But it is in select product areas. So the impact on the total number is still quite small.

Great. And the last question from my side, just looking at the margins in North America here sequentially, we obviously had quite poor margins in Q1. How much is that delta sequentially mainly related to mix from phase three sequentially? Or are there any elements of you guys being more prudent with costs given the tariff situation during the quarter?

I think it's more of a question we have also good revenue in the quarter, which helps a lot. I mean, we had 225 million SEC now versus 190 or 187 in the last quarter. So I think the volume translation with that gross margin creates a great leverage, which is also the key for us as a group that the volume development is important because I mean, we are still in many parts like Europe, operationally running significantly below volumes where we historically have been. So if we can see a pickup in some of the key European markets, we should see a good leverage on that volume increase. Yeah, very good.

Thank you so much, guys, for the answers and have a nice summer. Thank you.

You too.

Thanks. Next question comes from Gustav from Bernablad. Please go ahead.

good morning it's Gustav Bernabé from Nordea I thought maybe if we can start on the margin in Europe and just it would be interesting to hear your view on that development here I mean you comment slightly on product mix and also price so if you can just elaborate a bit on the margin there in the quarter and possibly also quantify the impact from that specifically And then also I mean are you saying that you're seeing also price pressure in the market and is that something you know more structural that we should extrapolate or yeah?

I think you can say that for sure there is a general price pressure in the market and has been for some time here, given that the market has been quite sort of low in 23, 24. So I think the price pressure is there. And I think specifically, as we've highlighted today, we had good margins in the beginning of 2024 overall, as there was some timing effects, partly on purchase prices from factories as they were coming into effect versus for customers, which kind of gave some boost. And I think Europe benefited from that as well. So I think that is one big part of it. The whole group is still down around 3% versus last year. So that is a big part. And then you have, of course, a significantly lower volume in the European saving compared to last year. Even if in SEC it looks pretty stable, but then you have to factor in the fact that you have some acquisitions adding to the existing volume. So the organic drop is, of course, much lower than in in the local sales numbers, only Swedish kronor.

Yeah, and I would say just to add a little flavor to that, a lot of the pricing and product mix development that we had compared to our margins this time last year, that was happening late last year more than it's happening sort of within the quarter. So that's something that's been happening a little bit over time, not so much lately.

And then, of course, to remember which contributes as well is, I mean, when we talk about that we have impact on FX, we have some SG&A savings, but of course, they are all in more or less in the US and our East segments where we have costs in dollar, whereas Europe, the FX drop of sales related to dollar hits directly versus in SG&A, which is largely fixed. So you see that impact very clearly on the European and Nordic segments.

That's very clear, thanks. And then I mean if we look sort of at the average four-year margin in Europe I mean it's been 12% obviously it's been quite healthy margins but I mean I understand you probably don't want to guide and anything but how do you look up on that number sort of going forward I mean once sort of we see a normalization in the market etc.? ?

I think you're right. We don't guide here. But maybe one thing to remember around Europe is, you know, they are a little bit lower than the historical average, as you point out. But we do expect to see them grow with some pretty decent leverage as well. So just remember, they're at a bit of a low point. I don't know if you want to add any color there, Peter.

Yeah, I mean, if you look sort of over longer terms and if you factor out, say, pandemic boost, et cetera, I mean, typically what we should expect is, let's say, Nordics and East are probably the segments that, based on, say, mix and technology mix, where we expect maybe to be able to be sort of stable, to be able to perform north of 15% over time, whereas, say, Europe and North America may be to be somewhere between 10 to 15 in the longer term. And I think Europe right now, as you said, Tim, is the one that is hit by the lower revenue. So the underabsorption of cost structures there means that we are now struggling. We are kind of back to below 10%, but we expect to come back north of 10% over time, depending on how the market develops, how quickly that can happen.

Yeah, perfect. That's very clear. And then I thought maybe we could focus a bit on your comments regarding taking market shares in the report to say both organically and through M&A. I mean, if we take the organic part, I mean, You have comment quite recent or recent quarters that you've taken or won a lot of articles, et cetera. And I guess maybe if you can just give us a bit more conviction in the organic part as the market is a bit volatile. I mean, what are your basis on this? Is it that you actually see competitors go bankrupt or are you seeing customers, new customers that come to you or yeah, anything there would be helpful.

I think the different parts that we see, of course, is the trend we see in new customers starting to buy from us, the amount of new part numbers that we are winning, even though in some cases we are still, we know that we are running at maybe say lower volumes per part number than what we did a few years back. So we can see the positive trend that we are eating into new customer positions. But it's also positive to see that we now start to see an order intake, which is kind of up 8% in US dollars, even organically or even or 16%, including acquisitions. So I think that I think we don't have market data right now regarding the market development here in in 25. But I think we believe we feel comfortable that we are in a very good progress here overall growth on the order intake side.

Yeah, perfect. That's very helpful. It is tricky.

It's somewhat tricky to find exact data on the different markets, but I think we feel quite, we feel that we're in a good position here to continue to develop well.

That's perfect and then sorry just one last one here also if it's possible to give any sort of ballpark numbers of the impact of the higher freight rates here in the quarter and also I mean assuming sort of stable rates from here should we also expect a negative impact in Q3 or what's your view there?

We actually saw a slight positive development on the freight rates versus quarter one. Year on year is still a negative effect. I would say, without giving any specific guidance, we do still see some lagging effect on the earlier part of quarter two from the higher costs that were coming through on items from quarter one, but no large material changes expected.

That was all for me. Thank you very much and have a nice summer.

Thank you, Gustav. Same to you.

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

So we have one written question from Philbert Vessier at LFDI and he asks what is happening between the given what is happening between the US and China do you foresee at some point reshoring of PCB production in the US in the near future? Peter.

Thank you for the question. At this time, we don't see any such movements or indications at all. I think what we are seeing is potentially that manufacturing is moving potentially from China out to other parts of Asia. So I think we are seeing investments in manufacturing capabilities in Southeast Asia, countries like Thailand, Malaysia, etc. which potentially is a next-term sourcing ground. What we see, however, where we can see impacts from the US-China implication and trade wars in general is that you may see more near-shore final assembly. And that, of course, could be something which could be beneficial for our relationships in North America, that you see more customer activity, but we don't see manufacturing of the circuit boards themselves move to the US. Same thing with Europe. We don't see a shift in more investments in PCBs, but more pickup of assembly work. I think nearshoring of assembly work. That I think there's a trend of, but not of the manufacturer of the printed circuit boards.

Okay, thank you, Peter. And that was all for today. I just want to remind you that our Q&A report... I think there's one more question actually.

I think there's one more question from Anders Rudolfsson.

No, sorry. Yeah, that's right, came in now. Anders Rudolfsson at DNB Carnegie asked, do you see any indications of new fabs in the US? That's the same question.

I guess it's probably the same question, actually, yes. Yeah. No, so we don't see any investments in manufacturing capability right now in the US.

So well then thank you all for listening in and our Q3 report is on the 24th of October. Thank you Peter and Tim.