Skanska AB (publ)

Good morning and a warm welcome to the presentation of Skanska's second quarter report for 2026. I'm Antoni Ljunglind, Senior Vice President for Skanska's Investor Relations. And here with me to present the second quarter report is our CEO and President Anders Danielsson and Group EVP and CFO Pontus Winqvist. So shortly they will take you through a business and performance update, look at the market outlook for the coming 12 months and provide an update on our financial position. And after that initial presentation, we will open up for questions. So if you have a question, please use the telephone conference provided in the invite, telephone conference number that we have provided and then just follow the instructions by the operator and we will get back to you and answer your questions in a little while. But now I will hand over to you Anders to start the presentation.

Thank you, Antonia. Before I start, I want you to look at the picture. You can see the Portrait Bay Bridge in Seattle, where we are replacing the existing Portrait Bay Bridge to meet higher standards when it comes to seismic resiliency standards. And we see a robust demand and good pipeline of projects for traditional infrastructure. And this is a good example of that and our capabilities and market position in the US. If I look at the second quarter, it's a solid performance. Construction, very strong operating margin and a record quarter when it comes to order intake. Residential development, strong results in Central Europe, but Nordics are impacted by low volumes, provisions and restructuring costs. Commercial property development, two project investments, and we also have U.S. asset impairment charges in the quarter. Investment properties delivered stable results, and we also divested the PPP asset I4 in the US during the quarter. Operating margin in construction 4.3%, also if you look at the rolling 12 months, 4.3%. And the return on capital employed in product development on a low 1.3%. a return on capital employed in investment properties, decent, 4.8%, and a return on equity of just shy of 11%. We maintain a robust financial position, which is critical for us, and we have reduced the carbon emission with 64% since the baseline year 2015. So if I go into each and every stream here, start with construction. Revenue pretty much in line with last year. We have a record high order bookings of 68 billion, which gives us a book to build ratio of 114% on a rolling 12 months basis. And the record high order backlog close to 300 billion Swedish. Operating income 1.8 billion, again representing an operating margin of 4.3%. So strong performance overall. I go into the residential development. Revenue was 1.7 billion. And we have solid sales and strong profitability in Central Europe. Weaker result in the Nordics due to weaker market. And the Nordic operation are impacted by low volumes, provisions and a restructuring cost. And we have started one project in Central Europe comprising 156 homes. And we started two small projects in the Nordics. Moving on to commercial property development. Operating income is minus 170 million in the quarter. And that's due to the asset impairment charges on a few US properties that negatively impacted the results. But we have a gain on sale in the quarter of 217 million. We have 17 ongoing projects. which representing 12.8 billion in total investment upon completion. And we have 16 completed projects, which correspond to 18.5 billion in total investment. In these completed projects, we have a decent leasing ratio of 77%. So we have a positive cash flow from those assets. Two residential rental projects were started and divested in the quarter. And we also handed over four previously sold properties to external buyers. Moving on to investment properties. Very stable operating income of 85 million. We have also a good economic occupancy rate of 83%. And the portfolio today consists of seven high quality office properties in Sweden with a total property value of 8.3 billion and a solid performance in the second quarter. I moved back to construction to look into the order bookings. Here you can see order backlog, order bookings over time, over five years. And you can see on the blue bar here, which is the order backlog, which is on historically record high levels. And it's a good, I would say it's a good quality in the backlog. And we have been successful in positioning ourselves and winning projects in in a position of self where the market is strong and good. And that goes for pretty much all the geographies. And you can see almost touching the 300 billion mark here, which is good. And if I look into the different geographies when it comes to order bookings. So here you can see very, very strong order intake in Sweden and US, which contributes to the 68 billion for the single quarter. And here you can also see the book-to-bill ratio rolling 12, ending up at 114%. which corresponds to 21 months of production. So it's unusually high also when we look at that. So with that, I hand over to Pontus to go into the details. Thank you, Anders.

Then starting with construction and the income statement. As you may remember, we had a somewhat weaker start of the revenue in Q1. You can see that we are now catching up by especially growing the Nordic business. US revenue is still somewhat behind, but You have all seen that we have a strong order booking in the quarter and you also saw that we released another order here during the day. So quite confident that we will gradually see an increase also with the US revenue. Totally, the revenue increased with 1% if you adjusted for currencies. Selling an admin of 1.7 is resulting in an operating income of 1.8 billion for the quarter. and a strong operating margin of 4.3%, both for the isolated quarter and for the rolling 12-month period. Looking, so... Looking then into the income statement for the different units, you can see that it's a strong delivery overall and I would say especially in the Nordics and in the US. Operating income increased by 12% in local currencies and resulting then in a margin of 4.3% compared to 3.9% for the same quarter last year. Going into residential then, you see here that we have a lower revenue compared to last year. This is mainly because of fewer started and then consequently fewer sold units, resulting in an operating income of 25 million and a weak operating margin, I would say, of 1.5%. For the different units then, we have had a low sales in Finland and Norway. It has been a better sales in Sweden, but still we are selling from a backlog with lower profitability. and added to that we had taken costs for warranty provisions and restructuring for 70 million in this Swedish business. Central Europe is continue to perform on a very strong level, started 156 units and sold 132 units in the quarter. And they came out then with 122 million in operating income, which is then 23% in operating margin. If you look into the rolling 12 months margin, it's 18% for the central European business. If you were excluding the restructuring and warranty provisions, the total RD margin would have been 5.6%. In the Nordics, two minor projects were started and, as I said, one larger project with 156 units in the Central European business was started. If you look into the sold unit, the absolute majority of the sold came from either Sweden or Central Europe. I would say that we have stable levels of the homes in production, where more than half is within our central European business. The sales ratio increased somewhat to 55% from 53% by the end of first quarter, and the number of unsold completed is decreasing. from 315 Q1 to 326. And here it's worth to mention that Nordics is decreasing more actually. They are decreasing with 42 units and the central European business is increasing somewhat with the completed unsold, increasing with 18. And that's basically good because we have a positive price momentum in the central European business. Going then into our commercial property development business, we sold two rent residential projects in the second quarter and we had divestments gains of 217 million and those includes also some provisions from previously sold projects. We have, as you heard, made impairments in a couple of our U.S. properties. Total amount of write-downs was 464 million Swedish. And the reason for that is that we have seen increased long-term interest rates within U.S., which also is then resulting in uncertainty among US property investors and therefore we have seen that there is a need to reduce the value of our US portfolio somewhat. When it comes to the development gains in our portfolio, it's stable unrealized gains. We completed one project during the quarter and therefore you can see that it's a slight increase here of the completed properties and the unrealized gains. The completion profile of our unsold products has increased. You can see here the bar far to the left increased from 71 to 77%. One project was completed, so generally you can see that it's a good leasing activity in our completed portfolio. And there are some other, if you're tracking this, other increasing of leasing ratios if you compare to previous quarters. Yes, as I said, stable leasing in the portfolio. We leased out 54,000 square meters in the second quarter and you can see that we steadily are keeping the occupancy rate above the completion rate of our ongoing projects. Investment properties continues with a stable operating income similar to previous quarter of 85 million and an occupancy rate of 83%. There are no changes in the market value and we have an average valuation yield on the portfolio of 4.7%. So summing up the group, you see that we have an operating income from our businesses of 771 million and that includes then the write-downs in the CD business of 464 million and the warranty and restructuring costs of RD of 70 million. On the central line, we have a positive contribution of 334 million, and that includes then a net contribution from our business operation of 559 million. This includes the profit from the PPP portfolio, including the divestment of I4, and also cost from legacy operations. Net financial items of 241 includes interest payments from dispute settlements. Tax rate is the same as we had in Q1 and ends on 24%. Cash flow, we had a very strong operating cash flow during the quarter that was supported by payment and delivery of previously sold commercial properties as well as a positive development of working capital in construction. Also, the dividend was distributed out to the shareholders of 5.9 billion during the quarter. And you can see also after that we had a positive cash flow in the group. continued strong development of the working capital. And by the end of the quarter, it amounts to 33.9 billion. We had 31.6 billion by the end of Q1. And 1.7 of that is based on improved working capital within the business. And especially, I would like to mention that there are milestone and mobilization payments in recently started projects in especially our U.S. business. It's also 0.5 billion in a positive currency effect of the working capital. Investments and divestments. We had strong net divestments during the quarter mainly then because the earlier mentioned delivery and payments of CD assets also already contributed with net divestments during the quarter. This also then resulted in a reduced capital employed and sum up to 63.4 billion. We had 66.3 billion by the end of Q1. When it comes to available funds, it has went down somewhat from 27.7 to 23.1, of which 7 billion is unutilized credit facilities. And the reason for the decline here is that we have choose to reduce some of our unused credit facilities and also repaid some parts of our external debt in order to have a more efficient management of our financial position. Then we continue with a strong financial position with an adjusted net bearing interest net receivable of 8.7 billion. You can say that the reason for the reduced adjusted net cash position, even with the strong operational cash flow that I mentioned, is explained by a lot of the cash that has been coming in is coming into our joint ventures and then is treated as a restricted cash and that is then deducted from our adjusted net cash position. So by that I hand over to Anders and comment about the market outlook.

If I look at the market outlook stream by stream, start with construction. The construction market outlook is mostly stable. We have a demand in the civil segment, generally robust and in all our geographies. The building market is somewhat weaker but improving, supported by investment in tech, industry and defense sector and also other social infrastructure. US market is stronger than Europe, but we do see increased activity in the Nordics. So we have raised our outlook for the building market in Sweden and Finland based on demand in our important segments like social infrastructure, industry, data center, and so on. Residential development market, good level of activity in Central Europe with stable increasing prices. In the Nordics, slowly improving activity in Sweden, but it will take some time before full recovery of the market will take place. And the Norwegian and the Finnish market for new built remain muted. Commercial property development in the US, the occupier market remains broadly stable, but the transaction market activity is constrained by elevated long-term interest rates and macroeconomic uncertainty. Good access to financing and generally stable yields support transaction activity in the Nordics and Central Europe. And for the investment properties, it's a polarized market, but we do see a strong demand for high quality space versus the older stock. And we can offer that, of course, high quality. It's a competitive market, but the rents are expected to remain mostly stable. So if I summarize this report, strong performance in construction. It's a mixed picture in project development. So construction, operating margin very good and record high order intake. Residential development, strong result in Central Europe. And Nordic, they are impacted by low volumes provision and cost for some restructuring. Commercial property development, two project investment and US asset impairment charges in the quarter. Investment properties deliver stable results and we divested the PPP asset I4 in the quarter. And cash flow from business operation was high and we maintain a very robust financial position. So with that, I hand over to Antonia to open up the Q&A.

Thank you very much. So thank you for presentation of the second quarter performance. And as Anders mentioned, we're now going to open up for questions. So as I said before, if you have a question for us, please just use the telephone conference number provided in the invite and you will get put through to us here by following the instructions that you can get from our operator. And we will answer the questions one after the other. So I will start with now open up for the first caller. And I will ask you to present, stating your name and organization. So, Maruna, please introduce the first caller for us.

Thank you very much. Just a quick reminder for any questions, you may press star and one on your telephone. The first question from the phone comes from Sandvall Julia with ABG. Please go ahead.

Yes, hi and good morning. Julia Sandvall from ABG. Just a couple of questions from my side. Starting on the residential, you are rebalancing the Nordic portfolio. Can you give us some more flavor? How long will it take? When are you happy with it? What's the strategy and target?

I can answer that, hi Julien. Our target is 10% return on the capital employed in project development, that goes for RD as well of course. We are not starting project if they doesn't support that target. What we have seen now in the quarter with the increased sales in Sweden, most of them are from the older stock with low profitability, but we can see that product that we recently started, they are performing as expected and supporting the 10%. And we also have sort of... refocused our portfolio or strategy in the Nordics. We are focusing on fewer cities and we are focusing in Sweden on the large three cities with the surrounding area. The same focus in Norway and Finland as well. And that because we see that we need to come back to the 10% return on capital employed in a reasonable time.

Yeah, perfect. Sounds reasonable. And the restructuring slash provision cost you're taking, is that the end of it or should we expect more in the future?

We have done some changes in the organization and we're taking charges for that in the quarter. But I cannot outrule any further action going forward. It depends on how the market will develop. But right now we see we have the right organization structure in place to meet the current market.

Yep. Perfect. And then another question on commercial development. You take write-downs in the U.S. Can you give us some more flavor? Is it in a large project? Is it smaller projects? Which regions?

Hi, Julia. The flavor I can give you is that there are in a couple of projects in our U.S. completed portfolio.

Okay. clear. And then on the construction, the margin is overall super. Europe is a little bit weak. Can you give us some more on that?

Yeah, it's weaker than other. It's very strong in the Nordics and US, but I would say it's not something I'm concerned about. They have a good position and I expect them to continue to perform on a decent level.

Yeah. And then just one last question for me on the U.S. sales in construction. Is it the same reason as in Q1, if I understand it, or is it some other reason behind it?

You mean a U.S. sale, what you're referring to?

Yeah, the construction U.S. sale.

Yeah, were your question on top lines or revenue?

Yeah, exactly.

And just please repeat the question. It was regarding when the top line will increase or what? Sorry.

Yeah, exactly. So it was a little bit weak in the Q1 and it's a little bit weak now with a decline year over year.

Yes, it's lumpy. There are especially some projects related to data centers where you have a quite quick burn rate in the projects. It depends a little bit when you are starting new projects and they are burning into the revenue. But as I said in the presentation here earlier, you also see that we have quite a strong order intake in our U.S. operations. So I think you will gradually see an improvement during the year.

Okay, perfect. That was all for me. I will jump back in the queue. Thank you.

Thank you very much, Julia. So we're going to move on to the next caller.

The next question from the phone comes from Hans Graham with Jefferies. Please go ahead.

Hi. Yeah, thanks guys. I'll ask two questions and then I might jump back in the queue. And both on U.S. construction actually. First of all, margins here I think exceptionally strong in the quarter. Just trying to understand if there's anything one-off in the print. We've seen some other companies booking tariff refunds as a positive. So just checking if there's any impact from that in the US in your numbers in Q2 or anything else that you'd call out that drove that strong margin. And then a second question on US construction. We've seen order intake in this market be very strong in Q2, particularly in some of these large civil projects. Has there been anything that's really driven this acceleration? We've been going through a period of quite of slightly softer demand, I suppose. So we've really seen that pick up in the first half of this year. So just trying to understand what you're seeing on the ground for order intake and what you're thinking or how the just outside of the order book is looking into the second half. Thanks.

Yes. Hi, Graham. If I start at the US margin, we have some movements underneath this overall margin, which is very strong. But it's more of a normal positive effect and also some right negative effects. So overall, we don't have any impact from recovering from tariffs. That's not included in the U.S. operation. But it's a strong performance and of course it can be a bit lumpy when you look at the single quarter. But it's overall very strong. We have a very strong on a rolling 12-month basis which supports the second quarter as well. So it's a strong performance. Order intake has been great. We have been very successful. It is a strong market and have been a strong market over time. So we have a very good book to build of 126% in US and that also supports the... operation and the revenue going forward. So I'm optimistic. We can see that the current infrastructure investment program is holding up and we see that a very good pipeline going forward. And we can also see that the House of Representatives, the Congress, they are discussing new funding program for the future. But the current one will support the market for a few years ahead, definitely.

Thank you. I might squeeze just one more in. Sorry. Just on the buildings outlook upgrade for those Nordic markets, I think I can see that those have been weak for the past three years. And so just looking at trying to understand what you're seeing there that's really driven that upgrade in outlook, particularly you mentioned around the data centers. Is that somewhere we could hope for a little bit more activity from Skanska in the Nordics region going forward. Thank you.

Yes, we see higher activity from clients and we have good experience from US and UK from previous years. So we are coordinating and transfer knowledge and also the client relationships to the Nordics and I would expect us to be part of that development positively. I also said in the presentation that we see higher activity in other segments as well, social infrastructure, prisons in Sweden, very high, strong demand, and for sure investment in defense that is strong in the whole Europe.

Thank you. Thanks.

Very good. So we're going to move on to, I think, Bank of America.

Thank you very much and good morning to everybody.

Just a couple of follow-ups on commercial development. If I remember well, I think in the US you have seven completed projects. So I'm just trying to understand why, considering interest rates have gone higher, why you think it makes sense to do some write-downs on only two projects? and why not the other five, I guess, is the question. And the second question is in terms of the strategy in commercial development. You've been talking in the past about expanding in new categories, including life science, but it feels like maybe this is on pause at the moment, waiting maybe for more disposals in the office assets. Is that the case or are you already exploring opportunities in new product categories? And in a way, your balance sheet is strong, so you don't really need to sell projects to start new ones. Thank you.

If I start with the write-downs there. You said too, sorry, you misheard me, I would say. It's a few projects, a couple of projects that we have written down. regarding the other questions when it comes to other kinds of investments in US segments. I would say right now we are not starting any new projects. We are focusing on the existing portfolio. Then what happens later on, it's very difficult to say anything about right now. Then it was maybe some more question.

No, that's it from my side, just for life science development, if you have any projects in the pipeline.

Hamid, we don't have any in a shorter pipeline, no. Then, of course, I mean, from a longer perspective, we can't say that right now.

Okay, fair enough. Thank you very much.

Thank you, Arnaud. So, moving on to Kevin with SEV.

Sir, your line is now open.

Yes, good morning.

Can you hear me now?

Good morning. Yes, we can hear you now.

Yeah, perfect. Just a couple of questions. The first is sort of a follow-up question on the construction US net sales. And you mentioned it has been a bit behind in both Q1 and Q2, but given the backlog also, maybe you should expect some improvements in the sort of growth rate for net sales onwards. Could you maybe say something about what is sort of a reasonable run rate in Q3 and Q4 and maybe into next year, given that your backlog is up by 20% in the US compared to last year?

I can answer that. We don't give you a forecast, but we have a very strong order intake and it definitely supports growth in the future, but I cannot give you any figures on that.

Okay, and then my second question is related to CD. So you made some impairments in this completed property. I also would say that What is required for you to be able to divest NFTs assets in the foreseeable future? Is it solely due to sort of long-term US interest rates or is there anything else that could maybe open up for some divestments?

The transaction market in the U.S. is still muted. The transaction that we see in the market is more opportunistic. We have very good assets, high-quality assets in good locations with good leasing ratios. We want to get the value out of those when we divest. We have good relationships and discussions with investors that we used to do repeat business with. But they are sort of standing at the sideline right now and waiting for the right moment. And when they do take action, we have very attractive products and assets to offer the market. So we're not in a hurry. We have a positive cash flow during that time.

Yeah, that's good. And also another question on CD, are you willing to maybe deploy more capital within your better market that is the Nordics and Europe to be able to sort of compensate for the US and be able to have a sort of a pipeline to sell heading into the next year and onwards?

Yes, we are starting projects, but we're doing it in Central Europe and in the Nordics. And we are prepared to do that where we see that the market activity is supporting our business cases.

Okay, good. That's one more question.

Perfect. Thank you very much, Kevin. So moving on to the next caller. Marina, can you please introduce?

The next question from the phone calls. from Kubrow Jonathan with Deutsche Bank. Please go ahead.

Thanks. Good morning. Could I ask a follow-up question on the construction order book growth and timing of converting this into revenues? I appreciate you don't give a revenue forecast, but it looks like over half of the growth in the order book in the second quarter came from tech industry. which tends to convert a bit more quickly. So is it fair to view this as a little bit growth-driven predominantly from the building side, which does execute a bit quicker?

Yes, that type of tech building, there are quicker starts. So it's slower starts before we see revenue in more traditional infrastructure. So that's correct.

Okay, thank you. And then just a question on project development and how you view the occupier backdrop and whether you think leasing activity in general is improving. And when you look at values across the portfolio, clearly they've been dominated by yield movements. But do you view any support from the leasing environment?

Hi. Yes, I think we had quite a good quarter when it comes to leasing. We leased out 54,000 square meters during the quarter. And generally you see that there is an increase also in our completed portfolio reaching now 77%. So I think, yes, there is a leasing market out there and it's working and it's actually working in all our markets. Even though, I mean, as you understand, we are not currently divesting in our U.S. properties, but we are leasing out in our U.S. property portfolio. So, yes, leasing market is working.

Okay, thank you very much.

Very good. So, I believe that we have a couple of more persons in the queue. So, can you please introduce our next caller here, Aruna?

The next questioner comes from the line of Moa Nicolas with Morgan Stanley. Please go ahead.

Good morning, guys. Just a couple of questions. First one on U.S. construction. So I'll leave aside the revenue debate for a few more on the margin side. When we look at the makeup of orders in the past couple of years, you should continue to skew more and more towards civil and data center. which usually tend to carry a higher margin. And if you stop me if I'm totally wrong. Should we continue to see improvement in the margin just out of the mix, considering you've been signing these projects in pretty healthy markets and backdrops, so margin should be higher above and beyond what we've seen in the first half? That's the first one. And then coming back on RD, on residential development, So you've accelerated the cleanup of the backlog of completed and sold homes. That's something we should expect to continue in the near future, I mean, mostly in the second half, or this is going to be, again, on and off, on and off for, let's say, the foreseeable future. Thank you.

Okay, thank you. First, when it comes to the US construction margin, and you talked about if we will see improving margins coming from civil and data centers, you are right that we continue to see a strong increase of both general US civil contracts and the data centers. However, there's a little bit mix when it comes to those two different categories and margin expectations because the data centers are normally more of a construction management kind where you don't have the same margin levels as you normally have in the more self-performing works within civil. So it's a mix, but you are right, it's probably growing in both of those segments. When it comes to RD and what you said, the cleanup of the backlog, yes, we are of course continuing to divesting out of our current unsold residential development projects, so you will continue to have an impact of a lower margin from the current backlog. At the same time, when we are starting up new projects, those projects should support our margin ambitions. So it will take some time, but gradually we will close out the backlog and have new, fresh projects with good margins in.

If I may squeeze a last one, the effect you've seen in the US, a bit of a slow start to projects, it's something we've kind of seen as well in Europe. Is there Is there anything new there or it's just once again the makeup of the projects, which means it's a bit of a slow revenue recognition at the start and then we should ramp up. I mean, you want some big projects, especially in the UK, for example, flight, but it seems that's not yet contributing to the P&L, if I'm correct.

But it's always the case that you can win projects and it's not different projects. Some are started directly after you won them. Some is taking some time during the ramp up. So it's not that you just direct after the win, you will see that in the revenue. And it's not one answer. There are many different projects that... But if you are looking into the trend, I think you get the good guidance. And we have seen that we have a strong order take. And that will, of course, at some time come into the revenue.

Okay. And final one, just on US building, we've seen some relatively mixed... numbers from the market in terms of excluding data centers. The market is basically at a standstill. Are you worried when it comes to the outlook on the building side ex-DC in terms of what you're seeing on the ground?

Oh, I can take that. No, I'm not concerned over that. It continues to be a stable market outlook, and we are well positioned. We are building mainly social infrastructure, like schools, hospitals, universities, airports, which is a big need, and also that we've been discussing the data center. So I can see a healthy pipeline going forward and a stable market.

All right, thank you very much.

Very good. Okay, so I believe we have one last person in the caller queue. Merona, can you please introduce?

We have a follow-up question from Mr. Han Graham with Jefferies. Please go ahead, sir.

Yeah, thanks for allowing the follow-up. Sorry to keep you here. Just two for me, please. Just coming back on maybe one for Pontus and one for Anders. Maybe you called out Pontus, the underlying operating margin you would have seen in Resi X, the one-offs, but are you able to give us that on the gross margin level as well? I'm just trying to understand the, and apologies if I can pack it out from the numbers in the print, but just trying to understand the profitability of the housing you're selling before the restructuring costs. if there's anything captured in the gross margin, that is. And then second question, maybe for Anders, just on margin outlooks for construction. When you set or when you listed the margin target at the CMD last year, I believe, the Could you see this positive development that we're seeing now? Was that what was giving you confidence to sort of raise the target? Or have you been positively surprised by the delivery this year and in that context? How are you seeing delivery for the full year and beyond? Is it running ahead of your expectation? Thank you.

Okay, Graham, yes. You were asking a bit about the underlying gross margin within the RD business. Yes, I said that if you were excluding the one of 0.70 million, it would have reached a 5.6% EBIT margin on the total RD business. That is, of course, quite tilted towards the positive margin that you have in our Central European business. When it comes to the one-offs, part of that is within the gross margin. I would say the majority is within the gross margin, while a smaller part of that is included in the selling and admin. I don't know if that's a clear answer, but of course, it will take some time until we reach the margin that we would like to see from the Nordic operations. But as you see, we are selling in quite a good pace, I would say, from our Swedish business. It's more slow when it comes to the Norwegian and Finnish part.

Comment on the second question regarding the margin targets. You're right, we increased the margin target end of last year. And we saw it, we talked about it on the CMD also that we have a very... very good quality in the backlog. And we also showed some trends there. So I'm not surprised, but I'm very pleased with the performance in the construction organization. have performed well over quite many years now. And we have a very high quality in the backlog that definitely supports the 4% or more or higher operating margin. But we have to execute, of course. It's not in our hand, but I'm very pleased to see that we continue to perform on a higher level than our current target. So I'm satisfied with that.

Thank you very much. Thanks, guys.

Very good. So that means that we've come to the end of this session, your questions, and therefore we're going to wrap up this session. So thank you very much, Anders and Pontus for presentations and answering the questions here today. And for everyone joining us, engaging with questions and listening in on our webcast, thank you very much for that. We will be back with more comments and the presentation when we release our Q3 report later this year. Thank you very much and have a lovely day.