This conference call transcript was computer generated and almost certianly contains errors. This transcript is provided for information purposes only.EarningsCall, LLC makes no representation about the accuracy of the aforementioned transcript, and you are cautioned not to place undue reliance on the information provided by the transcript.

NOTE AB (publ)
7/14/2025
Good morning and very welcome to Note's second quarter presentation. As always, when we have the current president in the US, we see some disturbances during the weekend. So how do we cope with those changes and so on? But we will only touch upon that topic and focus more on Note's performance. Let's start with this. When we presented Q1, we were quite, how should I say, nervous about how the global factors would affect us. We were cautious in our guidance. We saw some slowdowns. We were seeing and expecting that the turbulence on the financial market would be bigger than it actually became. So we were quite... pessimistic. We were expecting customers to move out of their orders more in time than we have seen. So if I look at this quarter, it came in, as we see it, fairly much in line with what we said. 980 million in sales with roughly 35 million in negative effect from coming from currency. So sales were as we were expected. Our profitability, 9.6% underlying. were at 10 in the first quarter then we also we we knowing that are doing this we see that there are some what do you call it some vip build up that were stronger in the first quarter that means that we produced some products we stored them over the q1 and and then we sold them out in second quarter and that has some effect so i would say the first and second quarter is Even if we reported 10% in Q1 and 9.6 in this, it's two very similar quarters. It's more of a movement between those two factors. And then that is things you have in all quarters that you have some effects of this. Earnings per share, 2.65, up with 7%, if I made my calculations correct from last year. Cash flow, I will come back to that on the next slide. But we think that it's very important that we continue to generate good cash flows. Net debt, 117 million, also a very strong number. We were down to neutral after Q1, then we did the dividend and now we're back to some marginal debt as we see it. Going into numbers, what we can see is that we are continuing to invest for a growing future. I get some questions about that. How can we be so optimistic when we are reporting flat sales or even reduced sales in the last three, four quarters? But we still believe and we still see that our customers forecast and what they are telling us is that they are expecting growth. We know that the first half year is affected by some negative stock reductions and we are expecting that maybe in the fourth quarter in going into 2026 we will start to see stock build up again and that will of course come as a positive effect on our numbers. So our expectations from Q1 with the negative effects, they have not materialized. We are also seeing that the outlook for the second half of the year remains strong. We adjusted that a little bit on the top end. That is more of an adjustment to the lower or the stronger Swedish currency, where we expect that that will have an effect, the stronger currency will have an effect of roughly 100 million Swedish in lower sales for the year. In this quarter, it was 35 million. But what we see also important is that we see a very strong financial situation. We are continuing to report an equity that is roughly 50%, 49% in this quarter. And our cash position is 634 million. That is higher than we reported in the fourth quarter in 2024. The dividend that we gave out, we earned that back with some margin in the first two quarters. And I think that is a big strength in our current operations that not only are we keeping our margins high, we're also generating a cash flow that is significantly stronger than our earnings. And as I said in Q1, we still expect that we have maybe 100 million more to go until we are neutral, if I call it like that. So we can expect the cash flows to continue to be stronger than our profit of the tax. I think that is also important to know that some of the questions i got after after the q1 and after we we announced the the big dividend or are we stepping out of acquisitions and i would say that that is quite the opposite we are we are continuing to generate cash and we are expecting to have a cash position that during the year will become even stronger than it was in Q1. So this is the second best cash position we have had in forever in notes history. So our room to maneuver is significant and there are quite a few discussions ongoing now on the M&A area. There is nothing that I can report on at this point, but the landscape has improved significantly during this year. I also said last year that there were some discussions of how to view 2024, that was a really weak year, today that is something that is part of the valuation. So I see much better possibilities to agree on price and so on going forward. So this is an area where myself and our CFO Frida is putting a lot of energy into to ensure that we do good and and acquisitions and that we that we closed them we are as i said before we are we are expecting to have at least one acquisition per year and in 24 we did we didn't do any one so we are we are we are we're one year behind if i put it like that so this is very important also Something that I'm very proud of, our delivery performance is now back on track. We are showing numbers that are back to where we were in 2020 and 2021 before the component crisis came in and we went down a bit on performance. It has taken a long time. It is more tricky than it sounds to keep and deliver performance above 95%. So that's very pleasing to see and we know that when we are hitting that number we have very few discussions with customers where we are failing to deliver. So this is a focus area for me, it's a focus area for the group and it's a focus area for everyone in all our factories to ensure that our customers get the products that they are ordering on time and in full. So that's very pleasing. Our quality remains strong. We are still delivering a quality that I think is world class. When I look at what the demands are from the automotive industry, we are exceeding those requirements. And those are the toughest, they have the toughest demands in the market. So really pleasing to see. Order backlog, this has been a topic that we have talked a lot about and we're seeing that our backlog increased with 6% compared to end of first quarter. I think that is a better indicator compared to where we were a year ago. order backlog one year ago we are down one percent but if i look at where where we are heading so to say we are we are seeing that the order backlog currently is increasing and that is really pleasing to see i i said that in my comments after the first quarter that this was the number that i was hoping to to get up to this number and this this reflects a bit of how our customers is viewing us at the moment so really pleasing to see moving on um with our bullets. I think operating profit is something that we're very proud of and that we're pleased to see. We are delivering 9.6 underlying and we are at 9.8 year-to-date. And as I said before, I think that that number is more reflecting how we are performing. We will have some swings up and down, but as long as we remain in our guidance, I think that is a very strong message that we're continuing to deliver good profitability even though we are not growing. So this is really pleasing to see. I think also that one thing is to deliver on the EBIT level. We're also seeing that our financial costs are going down. We see that our profit after taxes is improving quite significantly and our profit per share went up with a very strong number. And I think this is also something that we are proud of and that is something that we are focusing on, not only to have a good EBIT margin, we also focus on delivering good result of the tax. And I think that is something that we will pay off over time because that is the cash we can use for all our investments and so on. But as I said, our cash flow, 260 million year-to-date operational, 214 after investments. And that is a number that is higher than what we paid out in dividends. And that was my expectation, just to be clear, that we were expecting to generate cash flows that were really strong in the first half of this year. And that was part of the decision to make this quite substantial dividend payout. But our financial situation remains really strong. We are expecting to close at least one acquisition this year, if we can agree on the pricing. So that is where we stand. Moving on, looking at our segments. Western Europe remains where we are expecting, 10.1% this year. What is also good to see is that the rest of the world is improving. 8% of underlying EBIT level is really strong. I think we have been higher than this one year before, but this is also getting to a number that we are expecting and where we want to be. Now we see that what is lacking is our growth, and we can see that When we look at our countries, we see that we see growth in basically all countries and we have a negative number in Finland that is after currency. And I think they were growing four or five percent underlying before we did in Euro and then in SEC. That means that we are declining a bit. The same goes for China, where we're also reporting negative growth, but it's positive growth in local currency. But UK is where we are struggling, and minus 34% is a really high number. And as I said before, we see that our largest customer, UK, has zeroed out the first three quarters of this year. So we will have one more quarter with low or no sales to that customer. After that, we are starting up the production again. And that customer stands for maybe 12% to 15% of the UK sales, so it's significant. But what we should take with us here is that we are, after the reduction that we saw in 2024, we have adjusted our cost base in especially the rest of the world to better meet our current run rate and that is reflecting in the numbers where we see that. I think 8 percent in what you can call our low-cost countries, that is very strong. We know that the price pressure is higher on those entities. So, if we can maintain on 8 percent, I'm really pleased in this region. Moving on to our customer segments, and I was a bit afraid that the growth in green tech that we saw in the first quarter would end, but now we see 15%. We also see that the order backlog in the green tech area is improving. So I'm expecting that the segment will continue to show positive numbers in the same range as we're seeing now. 15 to 20% is my expectation. The second segment that we see strong growth in is security and defense, 18 percent year-to-date. We should know that last year we had 100% growth in this segment. So 18% over a year with 100%, that is really strong. I think that would equal to maybe 60% CAGR in last year and this year combined. So growth with some customers are going in steps, if you put it like that, that some quarters or some years is really strong and then they flat out and then they can continue to grow. And especially in defense, for those that work in it, it's a lot related to which orders do you have in the quarters. Some orders are really high, and then you can have one or two quarters that are a bit slower. And then at the moment, we are expecting this segment to continue to grow. But it will be a bit, it will not be linear. It will be a bit, how shall I say, changing between the quarters. If I look at the other segments, we see communication minus 7%. This is a segment that we see quite low activity in. So I am expecting that this segment will start to be growing already from Q3. If that means that we're year-to-date after Q3, we'll be positive. It's hard to say, but quarter over quarter, I would expect communication to grow. For those of you that remember, this was one of the segments that were really weak in the third quarter last year, and that was, so to say, one of the reasons why we did not meet our guidance for Q3, that the communication came in really weak. So therefore, we will be meeting quite low quarter in the third and fourth quarter in this area. Mentec, fairly flat. We are expecting that to continue to be a few percentage down for the year, but the run rate we have is roughly the run rate we are expecting. Then we have our large industrial segment and here we have some customers that are still performing quite low. We see that the order intake and that their forecasts are getting up to a higher pace. So we also expect the industrial to start to grow year over year when we look quarter over quarter to Q3 and Q4. So if I look at this thing, Greentech to remain at quarter over quarter, roughly the same security and defense, some growth. Industrial, we will start to come back to neutral or a few percentage up. And communication, especially in Q3, we are expecting that to grow. And then Medtech will remain where it is. Yeah, green tech, security and defense, very positive. The rest, flattish, if you put it like that for the rest of the year with some ups and downs. Moving on. I think that what is important when we look at our business is that if you look at this trend, if you take 2020 as a starting year, we doubled the sales in two years from 2020 to 2022. Then we continued to grow in 2023 and then we had a reduction in 2024 and now we're guiding for a marginal growth, 0 to 5% up for the full year. We should also know that the sales that we are expecting in local currency will be 2-3% up to 8-9% when we summarize this. So the reason why we are guiding down is mainly due to that the Swedish currency is stronger and that means that the sales we do in other currencies will affect us quite significantly. We are expecting to keep our margin in the 9.5% to 10.5%. If I would guess, I would say that Q3 will be lower and Q4 will be higher. If both of those will be within this estimate or if Q3 will be slightly below and Q4 slightly above, I think we did 10.7% in Q4 last year. And Q4 is naturally our strongest year when it comes to profitability. We are expecting the second half to be fairly aligned with the first half in margin, but we are expecting to start to see growth in the second half. The guidance that we put in front there is roughly 5 to 10 percent positive growth for the second half of this year. So even if we reduce the upper end of the estimate, we're still expecting quite good growth in the in the in the second half our order backlog is indicating six so that would mean that we are in in this that we have orders to support this if i look forward what do what will happen into 2026 we talked about this one customer in uk that will come back that will mean a few percent we are also seeing that especially the industrial segment is starting to show some positive signals we are expecting security and defense to continue to grow in the 20 plus percent range year over year and we also expected that the that the green tech will show quite good growth in the coming year so we are we are seeing quite a few positive signals when we move into the second half of this year and the fur and and in 2026 but that we will come back to later on um so with this said um i can i can comment a bit on on acquisitions i think that is one one area where we have been seeing that we are are lagging i we talked a lot about it last year that many of the sellers were expecting that we would pay or evaluate the companies on 22 and 23 that was boosted with the inventory build up and that we should not look at 24. currently we're seeing that that that the expectations of the valuation is coming down and that 24 is naturally part of the valuation. That means that we have much easier to meet our sellers on price because the market is quite, how should I say, the expectations is quite fair. So we have a few very constructive dialogues and we are expecting to close one or two of those during this year. Hopefully we will close more than one, but as you know, that is quite a lot of work to do that. But we are quite active in this area at the moment, which is very pleasing. So with that said, I will hand over to the audience for some Q&A. And this time, since we're not having this with an audience, we will open the floor for questions from telephone questions or voice questions from the web.
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 Thomas Blikstad from Pareto Securities. Please go ahead.
Good morning, Janice. Thomas there from Pareto. If we look at the guidance for 2025, we see Q3 is facing much easier comps and you also have the new Torchbee plant being operational from Q4 and onwards. The first question is if you could give some color on the expected contribution from the new capacity in Q4 and also what sort of volumes you need in order to sustain the margin.
I think that if we hit the lower end of our guidance, we will be around the midpoint of the guidance. That is what we expect from a profitability point of view. If we hit the higher end of the guidance, we are expecting to have double-digit OP for the year, roughly. That is how we see upon it. Second question about the capacity in Torsby. We are not running out of capacity as of now in Torsby, so that will not have any higher sales impact. That is more of an adjustment of capacity for the future growth that we are seeing. Was that clear, Tomas?
Yes, absolutely. And also one further question, if you could. What sort of dynamics do you anticipate between the next two quarters, considering... you know, the easier comps in Q3 and also, yeah.
It's I would say that we are expecting both quarters to be fairly aligned in growth when it comes to percentage growth. We know that also this year it's not what you call it, it's not these kind of years where you have the full throttle on, so to say. So we are having a two to three weeks closure of the Swedish factories during the summer that will have a negative effect on the sales in July. But that is a smarter way to do it than to run factories with lower capacity over a longer period. So I would expect that both quarters would come in in a percentage growth in fairly the same number. And that would mean that we are in the 5 to 10 percent growth compared to what last year.
As a reminder, if you wish to ask a question, please dial pound key five on your telephone keypad.
I will continue with some questions that I've got from the web. First, I have one from Carl. Large order announced in security and defence. Can you tell us a bit more about the win? Is it towards defence more than security? The answer is yes, it's more towards defence. Very easy question to answer. Second question from Alexander. Inventory turn rate has improved during the last quarter. Do you see further improvement and how do you expect it to develop if the market turns up? I mean, we have stated to the market that we are expecting four to five in inventory turnover. We are roughly running at four at the moment. Over time, we think that this will be more like five rather than four. So there is still maybe 100 million left of inventory to go until we are where we want to be. And we are expected to be in that range. If we grow or if we are flat or whatever, I mean, inventory turnover, if the market conditions are aligned with the sales, which they are today on the component market, then we should be in this range. It doesn't really matter if we grow or not, because what we order is coming within, say, eight to 12 weeks, even on the longer lead time components. And that means that we should be able to balance our inventory towards our sales. The reason why we had this massive inventory buildup is that the component industry started to go from 10 to 12 weeks lead time on semiconductors up to maybe 50 to 70 weeks. And then there was very hard for us to keep service level up and at the same time keep the inventories balanced. And we don't see that there is an, how should I say, the imbalance between demand and supply at the moment on the component market. So we are expecting to be in this range also going forward. And that is why I say that we have maybe 100 million more in overstock or in expected over cash flow to come in the second half of this year. And that will come in. It's never linear, unfortunately, so it will come when it comes, so to say. Then I have a question from Carl. What is the driver behind the strong growth in the rest of the world, and a particular customer or segment or regions? I would say that the rest of the world had a really negative growth last year and it's more of a recovery back to normal level. We can see that, especially Estonia, we have our customer base there is to quite the biggest and quite large industrial companies. And they overstocked quite a bit more than the rest of our customers did in 23. I mean, 24 was quite weak in especially Estonia, and that we're seeing that Estonia is coming back to good growth numbers. Also China, we saw a very negative development in 24, and that is now recovering to... slightly higher level, but we are still quite far to go in China until we are back to where we want to be there. But those are the main reasons for it. Then we grow nicely in Bulgaria. It's still a small site. We are seeing good order intake. We're seeing that we grow with our existing customers and we have good dialogues in that factory to also grow that with new business. So the rest of the world has a strong position to support in the growth journey that we're looking at. I hope that answers your question, Carl. Then we have one from Antti. What kind of multiple EV-EBIT are you willing to pay for M&A targets currently? We are in dialogue with a few targets, so I will not give you more statements. But you can say that historically we have seen that normal numbers, if I read the reports from the M&A banks and advisors, has been... If the business is flattish, maybe EBITDA level or EBIT levels of 7. And then if they have shown good growth, we have seen numbers up to maybe 9 to 10 on EBIT levels. I would expect that some of the targets will go higher than this, especially if they are heavily... heavily dependent on defense, because the multiples there, we are seeing that those are driven up. But I will not be more clear on this, because that can affect some of the dialogues we're in. But I would say that it has came up maybe one or two turns. That is my expectation, if you look two, three years ago. Okay, next from Tommy. Possible acquisitions. What geographical areas are you looking into? Also, the fact that UK has been challenging, how do you look upon challenges when entering new geographical markets? Very good question. We are looking at acquisitions especially within Europe. I can say that we're European companies with the majority of the business in Europe. Some might have business outside of Europe, but where they have the current head offices is in Europe. Then we have one from Carl. There has been quite a few acquisitions made in the market recently. Sconfield made a quite sizable one yesterday. Did you look at it? Also, the acquisition has closed to 40% from defense, but the price tag was a bit high, 10 times a bit. Do you think Note could pay similar multiples if the exposure is very good? Yeah, maybe. We will see. Once again, I will not comment so much on pricing because we will get back to that when we have closed something. That is a much better way, I think. Then we have one more from Antti. What is driving price pressure in rest of the world and how do you aim to offset it? I think price pressure is something that we're always facing and the rest of the world we're seeing that we have lower material margin. That means that the material stands for a higher portion of the sales and that means that we have to be more efficient in how we produce to maintain our margins that we expect. As always, we are investing in automation, we are investing in better equipment, and we are looking into ways of how we can continue to drive cost out of our production process. And I think that is our measures of how we are how should I say, addressing the price pressure. We are expecting to maintain our margins. We are expecting to meet this competition with a stronger cost base. That is how we try to handle that. Okay. Next question from Antti. What is driving price pressure in... I already answered that. Simon, what is your preferred acquisition size in terms of sales? I would say that our expectation is that they should be plus 20-25 million euro and then we don't have an upper limit of that. We want them to be sizeable, that they make a difference. The one in Bulgaria was smaller, but here we are expecting to add a lot of organic growth to that acquisition. It was more that we wanted the footprint in the lowest cost base in Europe. So that was a slightly different strategy behind that acquisition. But otherwise I think they should be sizable, otherwise it's more work than gains, if you put it like that. Then we have one more from Carl. A lot of talk about Plaid. They are growing a lot and are insourcing more and more. Can you talk about how this impacts you? I would say that we have a very good dialogue with Plaid and we are acting jointly with them and we are doing whatever we can to support them in the best way we can. And we're very happy with the cooperation with them. for me that this is they are very open in how they think we and we are open with how we want to pursue this business so very very pleased with their relation with them then we have one more from alexander revenue per employee is quite a bit lower in rest of the world compared to western europe why is that is it the volume question or less automation in those factories i think that The nature of business that you're putting in the lower cost base is that there are higher on work content. If there's pure PCB production, then you can as well do it in the higher cost countries. So the nature of the business is that the material content is lower, the work content is higher. So therefore, it requires more people for the same sales. And that is... in my opinion, more related to the business that we do and the products that we produce in these regions. So that is why the sales per employee is lower. We are, however, trying to automate also the activities in the rest of the world, as well as we do it in Western Europe, because that is how we want to grow our margins over time and also become more compatible when we look at our peers. So that is natural. It's not something that we think is bad, but we want to improve also the sales for employees in the rest of the world. That is also part of our strategy. I think that is the last question I have got in.
The next question comes from Anders Ekerblom from Nordea. Please go ahead.
Yeah, good morning. Thank you for taking my questions. Starting off on the sales guidance for 2025, as you mentioned, you lowered this mainly due to FX, but is there anything in particular or any other dynamic we should take into consideration to why you lowered this?
No, I think the second half is looking quite as we were expecting after the first quarter. FX has a natural effect of it, so that is important. And this also shows that we are expecting a growth of 5 to 10 percent in the second half, which is more aligned with where we are seeing that the sales are heading at the moment. So it's nothing really more than that.
Okay, because I was thinking that kind of the FX impact should have been seen then as well, and that if some sort of sequential deterioration in any type of customer group that preceded this.
I would say that in the first quarter, our FX was flat, so that was neutral. And we don't really... how shall I say, we don't speculate in how the currency will go when we guide, so we are simply, how shall I say, we are multiplying our order backlog in local currency towards the Swedish currency at the end of the quarter, and then that will have an effect.
Okay, yeah, makes sense, makes sense. And also on the backlog development, I mean, good to see growth here, but I was wondering if partly if there has been any sort of lead time consideration that might have impacted us given that you know if lead times have shortened or such is that something that's affected the the numbers
Yes, for sure. I mean, if you go back, say, one year ago, I think the lead times on customer order were significantly longer. If you go back two years, it was extraordinarily long. We tried to be open and show the market on how we were looking at this. Now we can say that we have customers that are forecasting and then are calling off at, say, less than five workdays. And then we have, of course, some flexibility barriers, if you put it like that, on how they can fluctuate, how shall I say, week over week or month over month. But that is how our industry is normally looking. So the order length is now, how shall I say, harmonized to how it was before the component crisis.
Even better than, I guess, to be able to show black numbers on order backlog then in that case. But also kind of just on, I mean, this has been a theme for quite some time, not to labour the point, but in terms of kind of tariff-induced buying or any sort of tariff effects, is that something that has perhaps affected the numbers as well?
Yeah, I think when we presented Q1, there was, how should I say, even more discussions about how the tariffs would affect us. We were reporting a week or two after this, what do you call it, liberation day, and there was a lot of uncertainties. We can say that the second quarter has... How should I say? It has not driven more uncertainty. It has been more that, okay, this is the new reality, so let's face it and let's do the best out of it. We are seeing some movements within our production between different factories within note, but the movement is really low. We are taking what we call, we are preparing ourselves for if there is big, how should I say, deltas between how the currencies will be in different markets. But so far, I think the customers are, how should I say, they are taking this with some, they want to wait and see how this is going. sorting itself out if you put it like that and then we might get into bigger changes. We're not there yet and I think the biggest problem that we are seeing is that the recovery of the market is becoming delayed by the uncertainties of the tariffs and the trade barriers. Does that make sense?
Yeah, it makes sense. Thank you for the flavor. But does that to some extent explain the dichotomy between the performance in Western Europe and the rest of the world, which was quite pronounced in the quarter? Or is that not something that played into that directly?
I think that if you were to put it in a good context is that Western Europe is going fairly well if we exclude UK. So UK is what is preventing the Western Europe to grow. And that is something that we are dealing with and trying to change, of course. And we are... Sorry, please. We are expecting that market to recover. So it's more of a very slow period at the moment. And we're seeing that the pace we're looking at the second half is quarter over quarter, if you put it like that, where we're standing in second quarter. We're expecting that to start to improve. So that is also part of our guidance, of course.
Yeah, and just one final question on a scene from before, a question you got before. I thought it was a very good question with kind of, you know, the green tech market, which grew some 25% year over year, based on the numbers you provided. I mean, with regards to kind of insourcing and such, I would appreciate if you could maybe give a bit more clarity on that answer, kind of what you're seeing in terms of the risk of that, if it's most pronounced in that market, and what you think you'll have to do in terms of pricing in order to negate that effect as much as possible.
I think that, naturally, the green tech area is where we are not expecting any competition from, how shall I say, our product owners' own factories, because they're normally not building factories in that area. There is one exception that is played, and we have talked about that, and I don't want to elaborate more on that deal. But otherwise, we don't see any reason for insourcing in this area at all. I don't see any reason for insourcing at all, to be frank. So, I think this is... If you look at the trend of insourcing versus outsourcing, and if you look at that in, say, a 25-year perspective, the outsourced part has been growing every year, and we don't see any reason for why that would change. The investments that you have to make to build up electronic board assembly factories is significant and there's very few companies that are willing to take that and do that. So I think the business case for outsourcing is becoming stronger all the time as I see it. I don't expect anyone to insource to be fair.
I agree, and it was maybe a play that I was referring to, so to speak, but I appreciate that you can't say too much about that. Thank you very much, in any case, for taking my questions, and have a good day.
You too. Thank you very much. Any other questions?
There are no more questions at this time, so I hand the conference back to the speakers for any closing comments.
Thank you. Quite a few questions. I like that. So please call in and send questions. I think that is very, very important. When you make a presentation like this, you think that you know what the audience want to hear. But so we are always willing to take any questions also on this call or also if you have Any specific questions, please contact Frida or myself and we will try to answer them as timely as we can. Final remarks. I mean, we have seen maybe five quarters where we have seen sales that are lower than last year. This quarter we are on par with last year. if we exclude FX effects. Now we're moving into where we are expecting to start to see growth. Order backlog is higher. Our expectation for the coming quarter is growth. And we're also building for the future. I think that is very important. If I look at what our customers are expecting to buy from us one or two years away from today, it's significant growth. There is a market hesitation with placing orders, there is a hesitation of building inventory from our customer sides, but that will change and we are building note as stronger to meet those demands. And I also want to thank all our customers for the faith that they have in us and we are very pleased with all the cooperations and all the dialogues we have there. With that, I will close this call. And thank you everyone for calling in during the summer to listen to us. Thank you very much.