Storskogen Group AB (publ)

Good morning and welcome to the presentation of Storskogens result for the first quarter of 2024. I'm Christo Hansson, the interim CEO of Storskogen and with me today I have CFO Lena Glader. I took on this role about two months ago, but I'm not new to the company. I joined Storskogen about eight years ago, initially as an investor and then as operational head of trade. Before that, I've had senior position at companies such as Dustin and Telia. Since taking on this role, I've been focused on identifying both these challenges and the opportunities that we have ahead. I will share more on that a bit later in the presentation. To start, I would like to share some perspectives on the past quarter and then discuss how we plan to move forward, focusing on organic growth and improving our financial health. So thank you for being here today and let's begin by taking a brief look at Storskogen. As you know, we are a business group with a sales of about 35 billion SEC of the last 12 months and an adjusted EBITDA of 3.1 billion SEC spread across our three business areas. The average business unit size is around 280 million SEC in sales and most of them have been around for decades. I also want to mention Åsa Murphy, the interim head of trade, who's taking on my previous role. Åsa is a great leader with extensive experience in the tech and e-commerce industry. She has held leading positions such as managing director of Bookie Table in the Nordics and the Dock region and director of Expedia in the Nordics. So I'm really excited to have Åsa joining the team, heading a business area and forming a great team with Peter and Fredrik. So let's move into the first quarter. We reported sales of about 8.4 billion SEC and adjusted EBITDA of 703 million SEC and with an adjusted EBITDA margin of 8.4%. This quarter is a tough comparison against a strong start that we had in 23, as reflected by the negative organic growth. Part of this is due to the continued difficult macro environment and what seems like a return to a traditional seasonal patterns with typically softer first quarter. On a positive note, the margin has improved from .8% in Q4, which indicates a positive trend in our operations. A significant event this quarter was stepping down of Daniel Kaplan as CEO and me taking on the role as an interim CEO. I'm in regular contact with Daniel and I'm really thankful for all his continued support. As we move forward, I'm committing to getting us back on track, growing our earnings again, while also ensuring continuity and stability in the Storskogens leadership. On the financial front, we continue to strengthen our balance sheet by refinancing our bank facilities, extending the duration and reducing the scope to better align with our needs and priorities. This provides comfort in terms of our financial situation. Sales for the first quarter was in line with our expectations when adjusted for the divestment in 23, which accounted for about half of the decline. The remaining decline is due to negative organic growth and as mentioned, a strong comparable from 23. I will add some additional comments on each business area later in the presentation. The EBITDA margin of .4% is more in line with the historical seasonality as shown in the graph. In contrast to the unusual strong performance in the first quarter of 23. One of the main difference compared to last year is the Easter holiday came early this year, resulting in fewer business days in the quarter. This affected March, which is usually the strongest month of the quarter. High interest rates and the currency business cycle also had an impact. As mentioned in the fourth quarter presentation, we expected to see seasonality patterns align more closely with historical trends this year. This means softer first and third quarters and stronger second and fourth. While we are happy to see the margin improvement sequentially, we won't be satisfied until we reach our target of 10%.

Turning

our focus to the service business area, we observed a softer quarter. The beginning of the year typically see lower activity levels. Both sales and profitability were affected by significantly cold winter and fewer working days in March. Net sales decreased by 11% to about 2.5 billion SECs. Organic sales growth was down by minus 3%. But the divestment had a more significant impact with minus 11%, partly offset by acquisitions and FX at plus 3%. The adjusted EBITDA was 204 million SECs with a margin of 8.2%. This is lower than the comparable period at 9%, partly due to the continuous soft demand in certain sectors. Looking at specific sectors within this area, companies exposed to construction continue to experience weak demand. Installation companies, however, which operate later in the construction cycle, managed to maintain a relatively solid performance with a slightly lower profitability due to increased competition. Logistics has continued to perform well, so has digital services, with a product and consultancy firm enjoying strong demand and profitability largely due to demand for general efficiency improvements, where digitalization plays a crucial role. Looking ahead, while the second quarter is typically stronger, the market remains somewhat hesitant. We are hopeful, however, that potentially lower interest rates in the near future will have a positive impact on services. Similar to services, our trade business area experienced a seasonally softer first quarter. Net sales decreased by 11% to 2.3 billion SECs, with organic sales growth down by 6%. The remaining change comes from divestment compared to last year. The adjusted EBITDA was 169 million SECs, with a margin of 7.3%. This is lower than the .4% last year, mainly caused by continued muted demand for companies exposed to construction and consumers. However, on a positive note, we did see an improvement from the fourth quarter, where the margin was 6%. We continue to see a solid performance from our companies within the health and beauty vertical, despite the soft quarter. Overall, continued high interest rates, weakening Swedish corona, continue to impact margins negatively. Through long-term cost efficiency measures, they will have started to show some positive effects. Looking ahead, the second quarter traditionally shows stronger seasonal performance. We remain cautiously optimistic, expecting that lower interest rates may soon strengthen demand, especially benefiting sectors like consumers and constructions. Meanwhile, demand in the health and beauty vertical expected

to remain solid. In the business area industry,

we've seen demand stabilize as reflected in the past three quarters. Net sales of about 3.6 billion SECs, with an organic decrease of 8%. The adjusted EBITDA of 387 million SECs, with an adjusted EBITDA margin of 10.9%. This is lower compared to the very strong first quarter last year, but shows sequential improvements from the two previous quarters. This progress comes as companies focus on price adjustment, productivity improvements and rationalization, also supported by a positive currency effect. Orderbook has strengthened, providing a solid outlook despite continued uncertainty. Automation solutions, especially in wood processing and robot integration, continue to see robust demand, as do sectors like metal processing and infrastructure. However, the consumer market and parts of the construction industry remains weak, similar to what we see in other two business areas. Looking ahead, while the market is generally solid, the geopolitical impact is unpredictable. Orderbooks have improved and we do see signs to further strengthening, though consumer and construction demand may stay subdued. Before I hand over to Lena Gladry, I want to share some reflections on the short-term priorities to achieving organic growth. As we look at our short-term priorities, I want to highlight our focused approach towards navigating the immediate future. We've structured our plan around three core phases, today, triggers and tomorrow. Driving organic EBITDA growth will be our top priority, even if the macro environments remain challenging. We will also continue to focus on cash flows, building on the great work that all our companies did last year. Growing EBITDA with a solid cash flow will gradually improve our leverage ratio, which of course is an important step for us in order to return to quiet growth. We will also continue to review our portfolio to ensure that each business unit aligns with our strategic goals and financial targets.

So

what do we want to see before adding acquisition on our agenda? A satisfactory leverage ratio is key to returning to quiet growth. Persistent organic EBITDA growth will demonstrate the effectiveness of our operational efforts and readiness to scale up. This is also important from demonstrating the strength of our business model. We are also closely watching for more favorable market conditions, especially for an uptick in demand related to the consumer and construction sector. And if we look towards the future development, the tomorrow phase, we anticipate persistent EBITDA growth, building on today's groundwork. Cash flow from today's operations will be strategically deployed into EBITDA positive initiatives. Capital allocation will ensure that every investment is justified by its return, supporting a sustainable growth. Whether this means paying off debts, investing in our companies

or acquired growth. In our tactical

approach to achieving organic growth, we are implementing a balanced mix of initiatives to strengthen our market positions and prepare for increased demand. Regarding sales initiatives, here we are focusing on increasing sales volume and gaining market shares. Our efforts include strengthening sales organizations, working with customer segmentations and branding. Regarding pricing strategy, I think our companies have done a great job in handling inflation and currency effects the past two years. However, I do think that we can take a more structured approach to pricing optimization. Obviously, improving sales and aiming for solid pricing strategies are part of the everyday work of our business units all year round and over a business cycle. However, equally obvious from our perspective is that we can always improve. Especially when identifying various best practices in certain areas of the business group that can be replicated in other areas of the group. To establish a more structured approach to sales and pricing, Fredrik Berggård, the head of industry, is leading these efforts along with a number of other members of the team. We plan to share these best practices at our KX portal, similar to the efforts last year to decrease networking capital. In terms of strategic investments, we continue to enhance scalability and professionalism across our operations. Such as in some of our largest entities in the industry, be it L&S for example, or warehousing initiatives in Båstad Gruppen and Scandinavian Cosmetics and Trade. These types of initiatives, which increase production capacity, streamline product lines and enhance warehousing solutions, will allow us to benefit when demand increases. Cost control, of course, remains crucial, especially in challenging times. Our rigorous cost control continues, identifying efficiencies to reduce overheads without compromising on quality or output. In summary, these strategies are designed not just to navigate the current economic landscape, but to position Storskogen to capitalize on the opportunities as market demand strengthens. Now over to Lena Blader.

Well, thank you, Krister. So let's have a closer look at the numbers here, starting with the Q1 financial. Krister already mentioned net sales growth of minus 9%. And I'll come back to a closer look at the sales ratio on the following page. However, the negative organic volume growth compared to a year ago and, of course, items affecting comparability, again compared to a year ago as well, meant that we had an EBIT decline of 43% to 478 million in the first quarter. Had we adjusted for these items affecting comparability in both periods, then the EBIT decline would have been 27% from 679 to 497 and not 43. Net financial items were a negative 280 million versus 194 in Q1 last year. This increase is due largely to, of course, higher rates, both base rates and margins, and a one-off cost of 24 million related to the refinancing that we did in March, like Krister mentioned, and I'll come back to that in a little while as well. However, if we split out interest expenses and look at the sequential change, you can see that they decreased from 217 million in the first quarter, from 225 in Q4 and 257 million in Q3 of last year, thanks to lower debt and somewhat lower average margins during these three quarters. Looking at our KPI table below, I already mentioned the adjusted EBITDA and EBITDA margin, which was in line with our own expectations, but below where we should be. Return on equity was 2.8 for the 12-month period. Adjusted for IACs, it was 3.7, negatively affected by, of course, these financing costs and, of course, then the volumes decline and the consequent margin pressure that a number of companies in trade and services have experienced. A return on capital employed for the 12-month period was 6.8%, or 7.1, adjusted for IACs, mostly impacted by the lower profit levels. EPS adjusted for items affecting comparability in both EBITDA and netfinancials declined 49% to 0.09 Swedish kronor per share. Then on the following page, the Q1 bridge, we show sales and EBITDA for the first quarter, starting with the sales bridge to the left here. Again, total sales growth minus nine. Our three business areas contributed equally to the group's total sales growth, part of which was, of course, a result of divestment. Total EBITDA growth was minus 21%, and the corresponding EBITDA bridge to the right here shows that all business areas contributed negatively to the group's EBITDA change. All three business areas had an organic EBITDA growth of around minus 20%, which is not shown on this page, but Krister had them on the previous slide. Business area industry is the largest negative contributor here, with 11 out of the total 21% decline, and that's largely explained by the fact that it currently is our largest business area in terms of absolute profit levels. In fact, industry represented more than 50% of the group's EBITDA in the quarter. And you can also see here that lower central costs contributed positively by one percentage point to the -on-year EBITDA change. And then a closer look at the Q1 sales bridge here. We illustrate the contribution to sales from organic, structural, and currency changes on a group level, same numbers as Krister showed per business area just before. Organic sales growth was minus six for the group, whereas minus three in services, minus six in trade, and minus eight in industry, which again had a very strong Q1 last year, so demanding comparisons there. Divestments represented minus five of the nine percent sales decline. The largest divestment was DEX III Group and the three electric installation companies within services, as well as Sheeps, Stahus in business area trade. All of these were included in Q1 last year, but not in Q1 this year. Divestments had a weaker margin, bear in mind, I think an average of four percent margin last year. Acquisitions and currency represented a combined plus two of the -on-year sales change in Q1. And then over to cash flow statement for the first quarter here. First of all, a reminder that we do have seasonality in our cash flows as well, especially in trade and services, but also in paid taxes, which is why we've included the LTI model the last 12-month period on this page. Paid income tax was 387 million, which is lower than Q1 last year. And it was, as a reminder, actually positive in Q4, and is expected to be lower again going forward in Q2 and Q3. The cash flow effect from change in networking capital was minus 163 million. That's due to somewhat higher inventory and receivables, but partly offset by higher payables as well. And we would say that this is a normal seasonal pattern. Summing up, all cash flows from operating activities, and mind you again, this is after interest costs as well as after tax. We arrive at 109 million for the first quarter and 3.0 billion for the last 12-month period. CPEC's to sales .3% or just over 100 million SEC in the first quarter. Cash effects from M&A is minus 171 million for the first quarter, of which acquisitions is only 7 million, while paid earnouts represent 150. And cash out for purchase of minority shares is 19 million. And a reminder that when we buy back minority shares, which we will continue to do throughout this year and next year, we will also, we're also buying shares in profitable companies, so that will contribute positive to the earnings per share. Cash flow from financing activities goes to zero, so summing it all up gives us a cash flow for the period of minus 176 million for the first quarter. I'll come back to cash conversion on the following page. But finally, a remark on the total cash balance that was 1.4 billion at the end of the quarter, with total available liquidity of 3.7 billion. And the reason for the lower available liquidity is simply that we tightened our revolving credit facility to better fit our current balance sheet and funding needs and as a consequence, reduce the funding costs. So then here on this page, we show operating cash flow and cash conversion, which is one of our financial KPIs. We have a group target of at least 70% cash conversion over a 12 month period, which is the dotted line here on this page. And a reminder, cash conversion is defined as EBDA less change in networking capital, that's capex, divided by EBDA. And in the isolated quarter, cash conversion was 72%, also again above target. But given the already mentioned seasonal nature of especially trading and services businesses, we prefer to look at the rolling 12 month number, which is, as you can see here, improving significantly from the low point in mid 2022, thanks to great work by our subsidiaries in reducing inventories and receivables and negotiating payment terms. And we reached 104% cash conversion for the rolling 12 month period, which is actually the same as for the full year 2023. But as demand returns and growth starts to come back, we do not expect cash conversion to normalize, or I'm sorry, we do expect cash conversion to normalize again, but at more efficient levels than pre pandemic. And then a few remarks on the refinancing, which we did in March, and that was quite significant and important to us. Chris, you already mentioned that before, but we successfully refinanced both our outstanding credit facilities in March. One positive aspect of the refinancing is that it removed the nearer maturities and prolonged the weighted average maturity, which is now more than 30 months. I believe it was 23 months at the end of last year. Secondly, it gives us a more diversified maturity profile. As you can see here on this page, we have 3 billion maturing in 2025, 3.8 billion in 2026, and finally 3.7 billion in 2027, where of 1.7 billion can be extended to 2029. And it also better aligns the overall facility size with our current balance sheet and financing needs by reducing the overall RCF substantially with consequently lower costs, of course. And yet we have unutilized credit of sufficient size, in this case 2.3 billion in undrawn facilities. And then finally the margins in these new facilities is actually somewhat lower compared to the prior facilities, which is of course nice. Following this refinancing, our next bond maturity is in December 25. And we will of course continue to actively work with our debt portfolio to make sure that we can gradually reduce our financing and interest costs and keep our refinancing rate low. And then over here to the condensed balance sheet for the end of March. Our total balance sheet is 5% lighter compared to a year ago, largely as a result of divestments, of course, as mentioned, as well as working capital focus that has enabled us to lower our debt. Equity ratio increased to 46% from 43 a year ago. While debt and net debt have been reduced. Interest bearing net debt, including leasing and pension liabilities, but excluding earn-outs and minority options is 615 million lower compared to March last year. If we include earn-outs and minority options, then the net debt is reduced by 1.2 billion year on year. But quarter on quarter, however, comparing to the end of 2023, net interest bearing debt increased by just about 600 million, largely due to leasing debt increase of more than 200 million, currency translation that increased debt by 75 million SEC, and paid earn-outs as mentioned before during the quarter of 150 million. So our interest bearing leverage ratio was 2.8 at the end of Q2, and we had expected it to increase from the year-end level of 2.5, which we were clear about at last quarter's earnings calls, given that we rolled out such a strong Q1 last year and rolled in a little more, a little bit more normalized Q1 this year based on the lower volume. And that's the kind of leverage that we experienced also at the end of last year. Our ambition remains to bring leverage down to the lower end of the range of two to three times, which is why we will continue to prioritize profit growth and cash flow. And yeah, I think that was my last slide. So over to you, Kristjur, for final remarks.

Thanks, Lena. To sum up our first quarter performance, we experienced a seasonally softer quarter, facing a challenging -over-year comparison due to last year's exceptionally strong start. The quarter was also impacted by divestment made in the year. Our bank financing is now better aligned with our current needs and has significantly extended our maturity profile. And moving forward, our priorities are clear, focusing on organic EBITDA growth and maintaining strong cash flows. And with that, we want to thank you for listening

and are ready for questions.

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 Carl Ragnestam from Nordea. Please go ahead.

Good morning. It's Carl here from Nordea. A couple of questions here. Firstly, on the cash flow and leverage, which you could see creeped up a bit here, a sequence that you also mentioned. I mean, your previous ambition level was to take leverage to the lower end between the two to three times interval. I mean, obviously, stickiness was a bit higher, but could you share your ambition for the current year? And do you realistically believe that you'll be able to lower leverage year end versus the end of Q1 level? Or do you think that the rate cut or divestment of, I guess, profitable assets is required to reach that?

Thank you, Carl, for your question. What we are seeing now going forward, we absolutely need to focus on getting back on organic growth. And that will help us to take down the leverage ratio. We need, of course, to strengthen the macro environment, but we will do our utmost in order for us to come back to that growth. That is what we can say at the moment.

Okay, so we need macro to get better.

Do you foresee that in the coming future? It doesn't sound like Q2. Will we see a massive increase in the macro at least, or macro situation, according to your comments? No,

but we see, as most of the things that people, we think that we will have a better situation end of this year. Hopefully, interest rates are coming down in the nearer terms. That would probably help the demand in the end of the year. And as I said, we will continue to focus, even if a tough macro environment, to enable us to strengthen our results in our subsidiaries. So we are working really, really hard, even in a tough environment, in order for us to increase earnings.

And you also mentioned some new initiatives, price optimization, also sales improvement to drive organic EBITDA. You mentioned, could you first perhaps mention a bit on an aggregated level how much you plan to lift prices also by segment? And also secondly on that, you mentioned, and we should again, market shares through increased sales organization. Given that it might take a bit of time between, I mean, gain market shares and what's the result from branding? Should we expect S&G levels to increase in the short term?

We are aiming to get back on our margin targets to 10%. That's what we are aiming for. And all companies will have different initiatives. Some of the companies will have to work even harder on sales initiatives and pricing initiatives. Other will have to continue with cost controls. And I'm really, really sure that our investment organizations, together with the management team in our subsidiaries, are taking these questions and optimizing every single company in order for us to get back on organic growth.

And is it too early to tell on the aggregated level how much you plan to lift prices?

Yeah, that's too early to give an indication on that.

And have you started with the measures of price increases or is it more the project started now and that we'll see metronization of the price increases in a quarter or two or?

No, I would say that we have, as I said, we have taken measures for a long time and that's what we have seen. Our margin is even with a tougher environment and a lower demand, we still manage to have a decent margin even though it's not in line with our targets. And that comes from our companies which have been doing really a lot of initiatives in order to take control of inflation and currency effects over the past years. So this is a constant evolving thing within our companies.

And looking at trade, we saw organic growth down. Was it 6% total sales down? 11. I mean the EBITDA decreased by 23% but still the number of FTEs were up by 2%. What's the reason behind the uptick in FTEs given the environment?

I

don't know actually that. I'm sorry, I have to look into that question Carl.

Okay, because it would be interesting to hear a bit more because that might be one reason. But please come back on that, it would be super. Secondly, I think you divested ConLift in the quarter as well. Could you give an indication of the exit multiple in that transaction because looking at it, it's seemingly a decently profitable company, close to 9% profitability in a tough market. So on one hand I guess you're fueling cash flows in the short term by the divester hopefully, but decreasing it in the longer term. So how do you look at these?

Looking at divestments, we are of course taking in multiple measures and looking at are the company strategically fit for long term? Will we have benefit on the margin side and networking capital? And in that we saw that ConLift will have probably some problems on margins and it's also a company that has a pretty large networking capital in there. So we saw that that was part of the reason for us divesting it.

And the

multiple, could you say something about that? No, we don't talk

about that multiple.

Okay, and the final one from my side. You took 19 million in non-recurring items in the quarter related to central restructuring costs. Is it possible to give any comment on what it's related to?

Hi Carl, yes. Central restructuring costs is namely, the absolutely largest part of that is the CEO shift.

Okay, so the vast majority is the CEO shift.

Yes.

Okay,

thank you so much. I believe

we also mentioned that in that new report actually.

Okay, thank you so much.

The next question comes from Carl Johan Bonnevier from DNB Markets. Please go ahead.

Yes, good morning, Krister and Leona. Just to continue

on Carl's question, if you look at your internal StorSkog and confidence indicator, when I also interpreted your presentation, Krister, it sounds like that might have bottomed out and is now turning positive even though it might not be more than green shots at this stage. Is that the kind of right interpretation of what you see?

I think we are taking a lot of measures in order for us to come back when the market is turning. If it has turned already, I think it's too early to say. But hopefully we'll see interest rates are coming down and more demand is coming from consumers and hopefully even the construction side will look better in the end of the year and the beginning of next year. But it's too early to say if it has turned already.

Easy to understand. And Leona, just looking at the profile of earnouts and minorities for the rest of the year, is there big amounts that are going out there?

Hi. Well, that depends on what you consider a big amount, but I would say fairly substantial. Around $350 million in total is expected to be paid out this year. A smaller part of that is earnout payments, a little bit more than $100 million. And actually the rest is then expected buyback of minority shares. And bear in mind again that buying minority share is positive for earnings per share because we are buying obviously shares in profitable companies. So, yeah, that should answer. And the payouts are expected to be distributed across Q2 and Q3 mostly.

Excellent. Thanks for the comment. And just on that, Leona, you have had a little variation in what you would call your normal seasonality pattern. How do you see the seasonality in the cash flow this year?

We do expect normalized seasonality in cash flow this year as well. Last year we, of course, reduced our working capital tie-up substantially, reducing networking capital to sales from closer to 18% to 15% throughout the year. This year, and 15% was our internal target. So this year we do expect to be able to keep working capital around those levels. So, but with normal, a little bit normal seasonality, which means typically more working capital tie-up in Q1 and Q3 for higher sales seasonality in Q2 and Q4. And then, as I said, paid taxes larger in Q1. That was quite a substantial amount and this is mainly related to the taxation year 2022 and the quite large number of acquisitions made back then. So going forward in Q2 and Q3, we expect lower, clearly lower taxes paid compared to Q1. Excellent.

And just to, I heard your commentary about the decreased available liquidity levels. Would you say that it is just on the basis of you now having the kind of debt structures and the kind of debt profile that you need to, so you've also then been able to optimize the liquidity levels to not overpay for, on the financial side, for having access to things that you're not really see that you're going to use?

Yeah, well, that's a pretty correct take on that. We feel no need to pay for available liquidity, which we don't think that we will need in the coming years, because right now focuses on improving or reducing leverage through profits and as well as cash flows. And once we get on track also on profit growth again, that's when we would start looking at making acquisitions again. But I think that these levels in the previous RCS were far too big for that purpose.

Sounds logical. Thank you very much and all the best out there. Thank you.

The next question comes from Johan Dahl from Danske Bank. Please go ahead.

Good morning,

everyone. Just on those minority earn out payments, excellent color there for 2024. Can you say anything regarding the following years in that respect? I mean, what's your visibility there? And secondly, also on the same topic, you know, is there something that I'm missing here in the valuation of those commitments? I would have thought that when one sort of earnings capacity comes down, that should also affect the value of those out of that outstanding debt. Or is there anything else in the valuation of those commitments that are missing? Thank you so much.

Hi, Johanna. I'm going to take that question. So as well, just to close the question about earn out, earn out would be quite small amount left on the balance sheet. We expect to pay, as I said, a little bit more than 100 million this year, and then there would be very little left. So the biggest part of this one, one point, a little bit more than one point eight, one point nine billion in the balance sheet is minority valuation of minority options. And the way they are valued is, of course, there were using a discount rate. And I believe during the first quarter, actually, the discount rate decreased a little bit due to lower rates. So that might be that's probably the reason for for the slightly higher debt. But that's a very marginal effect. So of the one point eight, one point nine billion that's in the balance sheet, as I said, I think two fifty million or something like that is expected to be used to pay to buy back minority shares this year. And then the remainder would be distributed across twenty five, twenty six, but also twenty twenty seven. And in some cases, it's not necessarily so that the holder of these minority shares will want to sell them to us. If they think that the profit is going to is a normally low level, they might want to hold on to their shares and and sell them at a later point in time. So the value we have in our books is pretty cautious and pretty prudent in that we estimate in the valuation that we will buy back all of these shares. But in some cases, we believe that that they will want to hold on to those shares. It's also a nice incentive for the holder of those minority

shares.

OK, got you. But what you're saying now is indicating that the earnings performance is affecting the price eventually when the minorities are

acquired.

But I don't get it why you don't why that just seems that if the value of the minority should come down as earnings capacity comes down. But I guess I have to look more at that later. Thank you so much for your reply.

I mean, again, coming back to that to that question, the way they're valued in the in the books is expected profit development over the coming years, discounted to to today's value. So if we expect to buy them in three years from now, that's the profit that we use for the valuation.

Thanks.

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

Thank you for being

with us today and thank you for all the questions. Have a good day.

Thank you so much.

Thank you so much.