Sectra AB (publ)

Welcome to Sectra's year-end report presentation with Torbjörn Kronander, CEO, and Jessica Holmqvist, CFO. My name is Helena Pettersson, Investor Relations Officer, and I will be the moderator of the Q&A session that we will hold after management presentations. And with that, I hand over to you, Torbjörn.

Thank you very much. So we just had our Broken year, so we had an end of the session.

We'll start with the intro and highlights from the quarter, and Jessica will talk about financial development for the full year in the last quarter. Now we'll briefly talk a little about the way forward, and then we have the Q&A session. And you can do that via both the chat function, but you can also send emails during the presentation. So our business operations sector, repeating for those who are not familiar with us, is imaging IT, the largest portion, which is now in a huge transition into a software-as-a-service business. We have secure communications, which have our by far highest growth right now, doing very high-end encryption devices and phones. And then we have business innovation, which is a greenhouse business. of future projects or things that we want to keep out of the ordinary business lines because they're too long term or a strategic vanish. A little about the highlights from the quarter. We won again. We were very proud of the happiest customers in the US. Large hospitals, which is our prime, but we also won best in class. And class is an organization in the US that actually does surveys of customers of medical IT systems primarily. They ask, are you happy with your vendor? And they have a lot of detailed questions. And best in class means you have the highest customer satisfaction in the area surveyed. It began only being done in the US, but now it's done in more regions in the world. And this year, we won a record number of eight of those from different portions of the world. We also won the digital pathology, and digital pathology is the only award won, because there's too few installations in the US so far, so that is only for Europe. But the most important for us is large hospitals in the US. We also won small hospitals in the US, Canada, Middle East, Northern Europe, Southern Europe, and digital pathology, as I said. We have a high customer satisfaction. That is a very key part of our growth. We are not a multi billion US dollars company who can afford fighting with the big dragons in marketing money, but we can fight with customer satisfaction. And that is how we gain our market shares and have happy customers and then growth. We are in a very prominent transition as a service model. We sold licenses up front for software, still do in some parts of the world, but in our largest markets, the US and Canada, and increasingly UK, we only sell now as a service model. And the big difference is then initially you got a large license sale up front. now that is flipped over and we sell over time long term it's it's better for both us from and the customers but short term there's a strong impact from this change of revenue recognition model we have a record order intake for the quarter we'll come back to the figures later We also have an extensive patent portfolio sector, both in communications and medical, and that resulted in a one time income for this year. The transformation to a service model is mainly done as a cloud sale. So we sell over the cloud. It's not the same thing, though. We do not sell cloud solutions, so that means you have a provider selling over the internet to many providers. We don't sell that as a licensed model, but we can sell a transformation as a service sale to on-prem, which we do sometimes. The cloud recurring revenue is the future, and that is the thing we sell over the cloud and being recurring revenue. That increased by 49%, and now the Overall number at 591 million is so large that this percentage growth really is noticeable. Before we had very high growth, but coming from a low number, it did not impact the overall figures very much. Now it's beginning to be seen. Recurring revenue as a whole includes cloud recurring revenue, but it also includes things that we sell on-prem. where people pay as a service or old service revenue, so service support contracts with customers. And that is also increased, but of course, a very large portion of that increase with the cloud income revenue, which is part of it. And then if you sell as a service, you don't want to lose these customers and you want them to stay. And we have a very low churn. That is the percentage that leaves us between different periods, different years, and it's 0.6% right now. And it's been very below 1% for the several years back. Happy customers drives growth. Contract order bookings went up. With happy customers, a lot of other customers want to buy from you. Our contractor order bookings, which is the guaranteed ones, Our contracted levels is up 40% to a very large order intake of 8.7 billion Swedish kronors over 12 months. Net sales increased by 9%, and the difference there, of course, is attributed to the fact that we sell as a service. So recognizing all the contracted order bookings will take time because it's spread out over several years. And the profit per share, which is our main financial goal, increased by 32% to 2.9 kronors per share. Positive non-recurring effects from patent settlement. We had a patent settlement in Q3, which meant that we actually got a one-time income of 110 million Swedish kronors. We try to isolate that in the financial reporting so we should not measure operational efficiency by a one-time impact. And these are financial targets for the group. Stability, equity, assets, it's a very important figure for us. We are considered one of the most important IT systems of hospitals today. And customers do not want to buy that from an unstable provider. They want long-term stability and trust. And then our financial stability is important. And the target is to be above 30%. We are at 51% right now, and we have been above or around 50% of the foreseeable history. Profitability is a second most important target. That is a hygiene factor. Our target is 15%, and you see there is two curves there, one with a patent comparison and one just being the normal operations, which we think is more important. Patents are great, but it's still a one-time income. And then we have growth of profits, which is actually our main goal, but it's priority three. The first one, the hygiene goals, and the third one, is the better the higher we get and that is EBIT per share over a five-year period that should be above 50 percent. We are clearly above 107 percent and including the patent we're almost at 150 percent. In secure communications which is as I said our fastest growing area right now We also see an increasing amount of sales as a service, though that is a very small part of what we do in communications. Most of these are payment at delivery. But there are some, and we had a contract renewal for one of them where we sell security as a service. We see a high demand for secure communication products, both because of the tensions in the world, but also because we are now, we have invested over several years, we have very good products that are very interesting in modern telecommunications environments. And we had the patent that of course gave a very positive one-time earnings boost from that settlement. In business innovation, our greenhouse, We have orthopedics IT, which is one of them. Profitable growth, and it is just ticking along. A very large portion of our customers in imaging IT, which is bias, radiology, and diagnostic tools, they also want special tools for orthopedics. So that area is one of the areas where almost there is no license sales anymore. It is 100% recurring revenue in that area right now, or very close to 100%. Medical education, that is kind of a spin-off of our diagnostic tools. The medical field moves very, very fast. So you both need continued learning of medical professionals, but also we need to speed up the training of new nurses and new doctors. And we have very good tools. We can save and present medical images in such environments. That is our most Widespread sales, we have it almost all over the world, and also in areas where we do not sell the imaging, the diagnostic imaging parts. And genomics IT is a new area that is, it has a very large interest. We still only have one customer. It's been live for one year, but we're in the cash phase. So we are now, we will do in the next year, we hope to get a few more of these products, but it will take time before it begins growing. really fast. And research, then we have different research activities, both together with customers. We like to do common research products with our big customers, where of the university hospitals, but we also do things for decision-making and AI going forward. AI will influence the medical area a lot going forward. In digital pathology, example of a thing that we started in business innovation, we also celebrated just now 10 years with digital pathology. And medical is not the fastest of areas. You want it to be a little careful and conservative as a patient. But we are now a leading provider. We estimate we are the biggest digital pathology provider in the world. But it has taken 10 years. It started out as a business innovation product, as I said, and now a key part of our diagnostic imaging IT strategy. And we are more and more going forward, going towards having a few, one system solving all imaging needs for hospitals instead of hospitals need to buy a lot of small systems, which they do not like. They want to have as few IT systems as possible. It's also including the cloud offers in sector one, which is our kind of common framework for selling cloud solutions as a service. You have both radiology, you have pathology, you have all the other ologies in one single content. Sweden is today world leading in penetration. Almost all pathology departments in Sweden has begun using digital pathology. Not for everything. They still have microscopes, but they use it predominantly for histopathology, mainly associated with cancer. So we have a dominant market share in Sweden. Around 4 million cases have been diagnosed with our solution. It's a growth market, as most labs are still not digital. In the U.S., who's lagging behind Europe a little bit in this, the penetration right now is not large. By far, not even 50% of the market is sold. So imaging IT solutions in general, we have the ongoing transformation to software as a service, as I spoke about, heavily influencing both revenue and profits in that area. Right now, we're still in the transition, and we will be in the transition for at least one more year, one to two. Cloud recurring revenue in that area, of course, increasing rapidly, 51% up. And we have been winning increasingly larger contracts with the trust we have of being the highest customer satisfaction that we succeed in getting some very large customers to buy from us. We are now trusted, one of the few, very few trusted companies who can provide very large infrastructure. One such order that we are working with right now is all of the Quebec area in Canada. which is all hospitals in the entire province of Quebec. But there are more of those contracts. Many of those contracts, by the way, we're not able to publish who the buyer is, especially US hospitals are very reluctant to allow us to present the names. So we can only sometimes make anonymous press releases. And I'll leave the work to Jessica.

Thank you. Good morning and welcome to our call. We have the pleasure of delivering a report that shows solid financial development for the fiscal year that we just ended. And during this part of the presentation, I will take you through the key financial metrics. And we start with the order intake. Fiscal year contracted order intake is at an all-time high for SECTRA, surpassing 8.7 billion, giving us a book-to-bill ratio of 2.7. And the Quebec contract, of course, contributes largely to this number, but we also had a very strong finish to the fiscal year with a fourth quarter order intake of 2.9 billion. And behind the 2.9 billion, there is successful contracting in North America, but also in several other markets, confirming demand for our products and services. Net sales for the fiscal year ended at 3.2 billion, equal to growth rate of 9.3%. And growth is driven by the SAS transition and Increased services, recurring revenue up 20%, cloud recurring revenue up 49%, as you heard from Torbjörn's presentation before. And at the same time, we see a decline in our non-recurring revenue year on year. And this is all in line with our expectations transitioning to a SaaS business. Currency development. impacted sales negatively in the period, and especially in the fourth quarter with the US dollar, the euro and the British pound weakening against the Swedish krona. And given the currency trends, we foresee a major impact on sales in the coming year, provided that more than 70% of our sales are generated in foreign currencies. And the fourth quarter sales increased by 1.8 percent, growth dampened by currency development and less non-recurring revenue. Plus, we also have a very strong comparable quarter from last year. Excuse me. Moving on to some water. Moving on to sales by operating area. We increased sales in all our operating areas. In imaging IT, where growth sits with the recurring revenue, the major drivers increased usage and new sites going live. We note that we have a share of recurring revenue of 70% in the past fiscal year. In secure communications, sales increased by 11% And it is driven by the need for further investments in high assurance and encryption solutions and also cybersecurity. Here we see larger quarterly variation in sales due to the nature of the business being where we have a lower share of recurring revenue. Growth by geographic market. We report growth in all our geographic markets, the highest growth in the US in absolute terms. And in rest of Europe and rest of world, the growth is represented by sales in countries such as Germany, Norway and Canada. Our operating profit, excluding the non-recurring patent settlement, rose by 18% year on year to 613 million, of which 199 pertain to the fourth quarter. We see profit growth in both our major operating areas, whereas we have a decline in our business innovation segment. And that is explained by less hardware sale in our medical education business. Our operating profit margin is improved. It's strengthened to 18.9% as a result of improved gross margin, as well as restrictive increase in operating expenses. And as currency is one of our major financial risks, we point out again that the stronger Swedish krona is expected to impact our financials in the coming year, 2025-2026. Imaging IT increased operating profit by 14% and report a margin just about 20%. There's strong development here in the operating profit, despite the cost for transitioning to SaaS, as well as cost for deployment of the large contracts that we have secured in recent years and that are not yet in full production, generating the full volume of revenues. In secure communications, we increased our operating profit by 7%, excluding the patent settlement, and report a margin of 15.8. And we have seen strong development Q1 to Q3, but we did not achieve the historically high levels of the comparable quarter in Q4. And this is due to that we are facing some delays in product deliveries. The cash flow from our operations is strong. We generated 922 million in the fiscal year, 222 in the last quarter. And the main drivers behind the cash flow are profit growth, reduction in tied up capital in current receivables, and also the impact from the patent settlement. And considering the cash flow and our overall financial position at Sectra, the board and our CEO propose an ordinary dividend of 1.1 krona per share and an extraordinary dividend of 1 krona per share for the annual general meeting to resolve. With that, I'm handing over to you.

All right. Thank you. And again, the reason we are not increasing the order of dividend this year but proposing an extraordinary dividend is that we are not entirely through in the transition to software as a service, and we don't want to raise the order of dividend before we're through. Our way forward, we have used this slide before. This was an interview with Wayne Gretzky, the best hockey player in the world for many, many years. He was not particularly good in anything, but he was very good at the overall hockey game. And when he was interviewed how he could be so good, he said, I do not skate where the puck is, I skate where the puck is going to be. And that is very important for us to be able to look into the future, what's happening in medicine and digital communications. And we've been good at that. We saw that pathology and and radiology need to be in the same backend. And we're still one of the very few companies who has radiology and pathology in the same IT system, in the same solution. We saw cloud coming very early. We saw also the need for mobile communications, high-level security, communication, mobility. So this is a real strength of ours. Now, we have not always been right, but we have very often been right. And then if you see how things are going to move, you need to adapt to them. And this is a quote from Charles Darwin. He did not actually say the strongest of the species thrives and proliferates. He said it's the most adaptable. So the species that can adapt to change will adapt and they will thrive and proliferate going forward. In medical IT, the main change right now is that the demographics of the western world people live longer and longer and get and thus get sicker and sicker we are keeping sick people alive for much longer time especially in cancer than before but they still need health care and in the same time we have poor fertility or in the society we have fewer and fewer kids being born that does That makes a very difficult equation. We cannot have everyone working in healthcare. So healthcare needs to be profoundly more efficient. There is a discussion in all countries. All countries think it's local. Everyone's blaming their politicians because healthcare is not available as it used to be and the queues are increasing. But in fact, the main reason is that we have very many old people and we have fewer young people who can work in healthcare. Not everyone can work in healthcare. And this creates, of course, a need to handle the age-related diseases. And they are neurodegenerative disease, cardiovascular disease, oncology disease, cancer disease, musculoskeletal disease, and vision. And that is where we are supposed to be, or we intend to be very, very good, because that is where the demand for the future will be. We also are good, of course, in pediatric imaging as well. but the societal problems that has to be solved there's no way out of it are these five areas and the ones you see green we try to do almost everything ourselves in the blue we work a little with other applications to solve the problems of the customer and it's image related diagnostics i would say so and and genomics as we define genomics is a part of molecular pathology which is actually helping pathologies to diagnose by also doing sequencing of, for instance, cancer disease. What we hear from customers all over the world, typically we lack medical staff. Our workload is increasing. That's a demographic problem and that people live longer and longer. And it's scaring close to burnout in many countries, mainly, I would say, in the U.S. And the US burnout risk of physicians is alarmingly high. And of course, if the existing doctor burn out, the remaining ones will have even more to do. So this is a real issue now all over the world. We cannot just increase the number of hours people work. They want to see their families as well or need to see their families as well. So efficiency is super important. Work efficiency especially is that you do not waste your time on unnecessary documents, unnecessary waiting times that can be effective when you work as a medical physician or medical staff in general. Another thing we hear very often is we have too many IT systems. We have one customer on the West Coast of the U.S., Stanford University. whose CIO told me in a meeting that they have more than 1,000 IT systems. And that's not a super large hospital. 1,000 IT systems is very expensive to handle. It's also high cybersecurity risk. So there's two reasons. Very high cost based on maintenance. You need to have people who know all these IT systems. But as I said, also cybersecurity risks increase. Having fewer IT systems doing the same thing that many did before is thus very much important. And that's exactly what we do in imaging. We have this overall structure, sector one contract, which solves all the imaging need on the hospital, which is a strong argument for us now. Multimodality imaging is becoming important. And lately, we also integrated diagnostics, which means you use many sources for information before you take a decision what disease it is you're handling. And especially in personalized medicine, which has grown very fast, which means different people get different treatment depending on what you see for the same disease. It depends very much on effective integrated diagnostics. Future AI, which would be increasing rapidly in healthcare. We use data from different areas, both EMR, lab, radiology, pathology, genomics, and you want ideally most of this data to be in as few systems as possible so you easily can access it for AI and the physicians taking decisions. In cybersecurity, we do live in a new digital reality. Everything is computerized. Everything is digitized. Very, very dangerous society, and we know that Both national states and crooks and criminals are addressing this to try to get both political but also monetary advantages from it, more or less steal money. We are very well positioned in the very highest range of cybersecurity. We're not doing things in the kind of general antivirus things you can buy over the net. We are providing things of a national strength. And that is not as large market, but it's a very nice market to be in. Very high barriers of entry in that market. And we have grown rapidly over the last years. We also have an extensive research in this area and a lot of patents. Key takeaway from this presentation, Portland variations, et cetera, are very large. So again, and I've said it before, I said it again, If you want to evaluate, et cetera, look at 12-month rolling average. Quarterly, we go up and go down, even though that will decrease because of more and more services and revenue, and people get sick also in summers. But we really see the variation by quarter being very large even going forward. Also, as Jessica pointed out, we have a large currency exposure now. And the Swedish krona, we had had a tailwind for many years by Swedish krona being weak. We do see for the next year that the Swedish krona will be much stronger. And that will affect our profitability going forward. The highest priority for the next year for all of Satra is to get the new customers. We have a fantastic order backlog now. But we don't get paid before they begin to use the system. So that's the difference. When we sold by license, we got all the money up front. Now it takes time. And like Quebec, it's hundreds of hospitals. It takes time to do the implementation and to get the speed up so we can begin to get paid and the customer actually can use the system as early as possible. It's definitely a mutual interest between us and customers. is crucial because then that we begin to pay and then our current revenue will take benefits from the large order intake we had over the last years. So I will end up with sorry the order of the animations was wrong here but if you start with the rational strategy and growth market then we are in two major markets medicine which has to address the demographic challenges and the problem that people live longer and longer. It will not work in the current framework. Change will be needed and change will be paid for because of absolute need. And cybersecurity, we have built a very dangerous society. These issues need to be addressed. And as we are now with increasing tensions, building, of course, a normal weapon industry, but digital attacks are very important. We can help in securing from digital attacks as well. So both of these markets will grow, and they will grow because of external pressures. Even if it's a low tide in society, these two areas will have to grow to a well position. Then if you're choosing these markets, if you have happy customers, and in order to have happy customers, you need to have happy employees. We spent quite a lot of that because there is no way you can have happy customers unless you have happy employees. It's felt by the customer. Dare to be expensive when you're worth it. You're not selling on price, et cetera. Have a reasonable, you know, thick forehead and perseverance and are willing to wait for things because both of these markets, the barriers of entry are very high, but it's also slow markets and new things will take time. As pathology has shown, now pathology is substantial in income, but it took 10 years to get there. Then if we fulfill all of the above, shareholders will be happy. But it comes in that order. We are not putting shareholders on the top. We think that shareholders will be very happy, but the other conditions need to be fulfilled before we can do that long term. The next financial events, September 4th, we have our three-month first quarter report of Then they now began a new fiscal year. September 9, we have our annual general meeting. It will be physical. In Linköping, it will not be broadcasted. And in December 12, we have our six-month report. And then, of course, a normal reporting structure of our quotas will continue in 26. Your feedback is important. We don't do these meetings or this presentation for the sake of ourselves. We do them for you. And if you think we can improve or if we can be more efficient or if we lack information, we can't fix it unless we know about it. So send an email with your suggestions. We can modify and learn and become even better. With that, I thank you for the meeting and your time. And then we go over to the questions part.

Thank you, Trojan and Jessica. Maybe if you have time to move into the image. I will start with a few questions that I've got via email from analysed Nicola Kalanowski at RBKIA. And the first question is, you signed contracts with the Cancer Centre and the Multisite US Health System. And these contracts seem to include additional meaningful module sales. I have two questions on this. The first is, do new clients increasingly order other modules than radiology on the first contract signing?

Yes, it's a big strength of ours. If you go back five years, a lot of customers order like radiology only, methodology only. But now the IT departments are more and more involved, and they want fewer systems, as I said before. They want as few hospitals as possible to solve the problems the clinic needs. And we have several orders of multi-older Gs, as we call them, that typically begin with one. They begin with radiology rollout, radiology pathology first, but then they fill up. And that's a huge money saver for the hospitals. And we are very unique there. So we have a very strong market share of those

And the second question related to that, does the implementation and onboarding process for new clients change when they order multiple modules immediately?

You roll them out one by one because otherwise, you know, keep it simple. It's always a good rule and you take one out, but you prepare for the next one and you roll that out later.

And another question from Nicola is the growth in secure communication has been impressive in the last couple of years. Do you see any capacity constraints from your end?

Mainly people. We need engineers in order to deliver and develop new things. So we are hiring people, but we also have very high demands. We hire typically one out of two to 300 asking for a job with us. We like people to be very smart and that can provide future benefits for customers as well. So the main constraint is actually finding the good people we want.

And the follow up on this is you have decided to retrofit around four and a half thousand square meters of workspace, according to a news article. Will this change your capacity and ability to deliver on secure communication projects when the retrofit is finished?

Well, people need space. And especially in communications, we cannot work from home. The security level is too high. And so they need to be in the office five days a week, seven or eight hours a day. then of course you need space. So a condition for being able to increase the number of staff is that we have room for that. And that is what we do.

Thank you. Then I will move over to questions in the chat function. And the first one is from Jakob Lemke at SCB. Can you comment on what drove the strong increase in imaging it recurring revenues quarter on quarter for example implementation of any particular customer contract or any regions and i would i i cannot comment on any particular customers but what i can say is that increased usage and new sites so it's both

volume on existing customers and adding new customers that drive the recurring revenue growth.

And I will continue with two questions more from Jakob Lemke. We now have two straight quarters with strong recurring revenue development. Is this a factor of that you have increased efficiency when implementing? Should it be viewed as a new normal?

I'll take it. We are learning, of course, and deploying, as I said before, a high priority now is to increase the speed of going from one of those large orders to getting paid for it. That means people need to use it. We spend a lot of effort, especially in machine IT, to be able to deploy faster and be very effective in deploying the system. So we are increasing the speed of this.

And I can also comment that we have I mean, we still have the seasonal pattern going forward that we've had. It's maybe becoming less of the seasonal variations and there will become less over time, but we still have them. There is less activity in the summer months than the rest of the year.

And the next question is around order intake. Could you highlight any significant orders that contributed to the strong figure in the quarter?

Mainly from North America and large hospital chains and systems that we very often, unfortunately, are not allowed to disclose who they are. We can only disclose the order values.

Thank you. And then I will go back to questions I received via email. And these are from Christopher Liljeberg at DNB Carnegie. The first one is how much of U.S. orders this quarter was included in the picture showed at the Capital Markets Day about 90 million annual contracted imaging exams per year?

I don't have the answer to that right away.

Sorry. That's fine. We can get back to you on that afterwards. What is the annual numbers of exams for order signs in K4?

I don't know, to be frank. If you sum the press releases up, it will be disclosed there.

But I don't have that off the top of my head.

And a third question is, I noticed external costs increased again sequentially in K4 after having been flat recent quarters. Will you have to increase that further next 12 months to onboard new customers, or do you have the resources needed now in the U.S.? ?

But given the order backlog, we will continue hiring. We always see an increase in the last quarter. We also have on the personnel cost side, we carry costs for the incentive programs that we run. And with the share price going up, the cost is also increasing for those. that can have a substantial impact on the quarterly numbers.

I can also add that this is an issue we'd like to address by noting that separately, that if the stock value goes up, of course, incentive programs has to be, you know, it's the costs involved with that first on the salary line, but we need in future to disclose that separately. still part of EBIT and still part of cost, but we wanted to be very clear about what cost is associated with actually the stock changing, because that's not operational.

Yes, and next question from Kristoffer. Is it possible to highlight which contract is driving the sequential increase of cloud recurring revenues with medical IT?

Many, and many quite large. But as again, things were not allowed to disclose the name of the customer.

And then I have another question from Christopher. Why is other items positive this quarter? Was there no negative impact from FX revaluation of balance sheet items?

Other items... Which line? I'm not sure which line you're referring to. I can... Other items. I would need to take a look at the report before I can comment on that.

And before you do that, we can take another question from Jakob Lembke. On personal hiring, Should we continue to expect around 10% personal growth per year, or will it go down as you increasingly become a bigger company?

I would not say you should expect us to hire at a certain percentage. It goes up and down. With the large orders we have now, especially the very complex ones, we need to hire people, but we need to hire people ways before they actually begin to pay. So it's a cost part before we do line. It will vary. And long term, of course, that percentage needs to go down. Otherwise, we're not using our strength as large and larger. Efficiency has to go up with the bigger size we will get. And again, when we begin getting the return revenue from the very large orders that we haven't seen yet, That will, of course, look much better because that drives revenue.

It does not drive cost. The cost is already taken.

Yes, thank you. Could you please repeat? Yes, I will repeat. I will just change my... Why is other items positive this quarter? Was there no negative impact from FX revaluation of balance sheet items?

There's no other items line. Maybe if you're referring to other operating income, that's because we have, we're forwarding costs to the landlord for the office that we are rebuilding. And that impacts the other operating income line, if that is what the question refers to. I am not sure.

Kristoffer, you're perfectly all right calling us and explain the question a little further.

Yeah. And I'll just check my email, but I can't see any more questions in the chat function.

I can just comment one more thing then when it comes to the exchange rate loss. Yes, of course, we have that on. relating to revaluation of balance sheet items, but that will hit the financial items line in the P&L.

Thank you, Jessica.

And with that, we have no further questions.

All right. We thank you for your attendance and look forward to seeing you in September. I wish you all a good summer.