Systemair AB (publ)

Ladies and gentlemen, welcome to System Air 23-24, entering quarter three report. Together with me, I have here our CFO, Mr. Anders Ulf, and my name is Roland Kaspar, CEO. Let's go right into the report and start with our slide number two. To structure our quarter three report, we have divided it up in some agenda points. We will start up with a brief System Air short, followed by a third quarter quick summary, and then a small strategy update. Directly after, we look into the quarter three financials and the third quarter order highlights. We will then, of course, conclude with the common Q&A. So let's jump into it and change to slide number three. System error brief. The company was established in Queen's Cathedral in 1974 by our chairman and founder, Mr. Jarl Engström. In our last fiscal year, we achieved a total turnover of around 1.1 billion euros. System error has been listed on the Nasdaq Nordic Stock Exchange Market in October 2007. and today we proudly operate our own sales companies in 51 countries, together with 26 factories in 18 countries. We are today about 6,600 employees in Systemair, and we are present in sales to more than 135 countries all around the world. Next slide. The markets of Systemair. A short breakdown of our presence all around the world. As you see, starting from the left, the Nordic region is today about 17% of our total turnover, This is a slight decrease from 19% same period year before. Western Europe is stable at 45% share of our volume, while Eastern Europe represents 12% of our total today. North America is continuing on the growth path and has grown to be 12% of our sales from previous level of 11. And other markets, which covers Africa, Turkey, Middle East, and Asia, have expanded to 14%. Next slide. And normalized quarter three, systemized third quarter, which covers November, December, and January, is normally our weakest quarter, with the exception for the previous year, which was unusually strong. We therefore see achieving an organic growth of 0.1% as a statement of strength. The adjusted operating profit for the period amounted to 198 million Swedish kronors, and we're very satisfied that we, during the period, have signed a number of strategic and large orders in different parts of the world. This shows the growth potential that lies ahead. Following the strategic update, we also want to share that the ongoing integration of SCS Group in the UK and Satya Corp in Italy is proceeding very positively, as also the investments in the new manufacturing capacity in both Lithuania and Germany, which is going according to plan and will be able to deliver its capacity upgrades in September and October 2024. This will secure our continued growth and developments towards and beyond our 10% profit level. The Managa factory relocation is announced in November 2023, where we relocate the production of Menarga to Maribor in Slovenia, is going according to plan. We are proud also to announce that we have strengthened our management team. We're happy to welcome Mr. Martin Dahlgren as the Vice President of Progress in Technology, and in the beginning of this new year, finally also Ulrike Hellman as our Vice President of M&A Activities. Before handing over to Anders, I want to take the opportunity to announce also our 50-year celebration. This year, 2024, Systemair is celebrating its 50th anniversary, and this is, of course, something that we really want to share with our customers and colleagues at several occasions throughout the year. Now I hand over to Anders Ulf, our CFO, for the Q3 financials. Please, next slide.

Thank you, Roland, and good morning, everyone. So my job here is to run you through the financials, starting off with net sales that amounted to $2,827 million compared to 3,043 millions last year. This is a decline in sales of 7.1%. And as you see, there's currently a trend in our organic growth figures coming down from a rather high level last year. That was due to the effects of the supply chain constraints we had back then. Nevertheless, we achieved a positive 0.1% organic growth in the quarter. Slide number seven, giving a bit more analyze on the net sales. We had an organic growth in all regions except for the Nordics and Western Europe. Acquisitions and divestments contributed negatively on sales, mainly by the divesture last year of the EC segment, 28th of February. Total effect of M&A then negative, minus 3.4%. And then finally, currency effects, also negative by 3.8%, coming from several currencies converted to Swedish kronor. Going to slide number eight, and then we come to the geographic breakdown, and here I will focus on the organic growth rates. Starting off with the Nordic stamp where we saw an organic sales decline of minus 6.3%. Most countries in that region had declining sales in the quarter, but we were happy to see that the Norwegian market being robust despite its higher exposure on the residential segment. In our largest region, which is Western Europe, we also saw an organic sales decline of 7.9%. But it is a bit of a mixed message. The countries in the regions are showing both positive and negative signs. Firstly, we need to remember that we have very tough comparables with a growth of 32% last year in this quarter. So positive developments during this quarter in France, UK, Spain, but negative development in, for example, Germany. Now moving to the remaining regions that all show positive organic growth. Firstly, in Eastern Europe, the organic growth amounted to 1.0%. If we exclude Russia, then the same figure was plus 2.4%. We saw positive development in countries like Estonia, Croatia, and Slovenia during this. In North America, the organic growth rate was 2.8%, coming from U.S. being positive, while sales in Canada was declining, mainly due to its high exposure on the residential market. In Middle East, Asia, Australia, and Africa, we had very good growth of an impressive 33.7%. The reason behind that was due to good sales in, for example, Morocco, Middle East, and Southeast Asia. Then we go to slide number nine. First, on overall level, Q3 is seasonally a bit weaker quarter compared to the strongest quarter of Q2. We had quite low volumes in December, and that, of course, is not good in a month with less activity due to holidays. Our adjusted operating profit margin amounted to 7.0% compared to 9.1% in the previous year. We see this as a normalization, as I stated, if you compare it to the years of 2021 and 2022. In 2023, we had great volumes driven by recovery from disruptions in the component supply. In our Q3, we have also accounted for the restructuring cost of 125 million for moving Minerga production from Germany to Slovenia. Our gross margin in the quarter amounted to 33.9% compared to 34.2% in the previous year. The decline is mainly due to lower capacity utilization, but also a change in product mix. Selling and admin expenses increased by 32.6 million in comparable units, and we are constantly reviewing that to adjust our expenses where needed. Going to slide number 10, coming to the adjusted profit after tax, pretty much reflects the same patterns as our operating profit. We had negative effects from net financials of minus 62 millions, where the bigger parts derives from the currency effects of loans and bank balances amounting to 44.7 million, and then interest expenses amounted to 20.8 million. Then we come to the cash flow, slide number 11. Our cash flow for the quarter was good, even though profits were on a lower level as communicated. Our working capital contributed positively with 343.7 million, mainly due to decreased inventories and increased trade payables. This led to a free cash flow of 381.2 million compared to 244.9 last year. Our net debt is significantly lower than last year and amounts to 1,079 million, which is roughly 1.5 billion lower than last year due to the proceeds that were received from selling the AC segment one year ago. Our adjusted leverage amounts to the very low 0.7%. And then my final slide here, number 12, we will touch a little bit on the sustainability side where we are extra proud to see that our work related to injuries have continued to decrease. And we have, over the last year, reinforced our structure, processes, and follow-up. And this has led to LTIFR rate of 8.8 compared to 14.8% for the last year. So we are happy to see that developing in the right way. And by that, I hand over to Roland also to talk a little bit about orders received during the period.

Thank you Anders, and by that we are on slide number 13. Ladies and gentlemen, I want to present you some orders that have been awarded in the period. The first one here shown is within the application of data centers. As you know, Systemair is targeting the more standardized installations for data centers. These two orders are located in France for a total value of 3.45 million euros. One is to be delivered to Paris after summer and consists of 44 dedicated data center air handling units. And the second one will be delivered to the area in the Bretagne and includes 36 data center air handling units to be delivered between June 24 and January 25. In the next slide, number 14. In the quarter, Systema Netherlands did also receive two very impressive cruise ship orders, also the so-called world-class models. Systema will here be able to supply marine air handling units for these two cruise ships. and the deliveries are expected to occur between September 24 and September 26 for two concurrent ships with a total contract value of more than 9 million euros for Systemair. Next slide, slide number 15. Huge investments in solar panels space by big business houses in India. One of them here shown is Varee, one of the three big players in solar panel manufacturers and integrated energy companies. For one of the new plants, we have the pleasure to deliver 67 air honey units and 604 cooling modules for a total order value of 2.2 million euros. As India is aiming to become the second biggest solar panel manufacturing country by 2026, we see further huge investments coming in this application area. By this, ladies and gentlemen, I'll switch over to slide number 16 and open up for Q&A. And thank you very much for listening to our presentation.

We will now begin the question and answer session. Anyone who wishes to ask a question may press star and one on the touchtone telephone. You will hear a tone to confirm that you have entered the queue. If you wish to remove yourself from the question queue, you may press star and two. Participants are requested to use only handsets while asking a question. Anyone who has a question may press star and one at this time. The first question comes from the line of Ragdonstop, Carl with Nordea. Please go ahead.

Good morning. It's Carl here from Rodia. A few questions from my side here. Firstly, looking at the EBIT margin, near-ear delta, down to other basis points, could you help us understand a bit to what extent this is driven by the seemingly negative geographical mix you had during the quarter with, I guess, strong organic growth in typically less profitable markets? And also on that note, if you could help us just breached the ECE companies. I guess they were loss-making in the comparison quarter, which I guess helped the margin a bit during the quarter. Thanks.

Good morning, Carl. Yeah, regarding, first of all, the drop in operating profit margin, as explained a bit during the presentation, then Of course, November was good for us. December was not that good. It is a weak quarter for us, especially then when we see a negative organic growth in important regions like the Nordics and Western Europe that affects our product mix and also the profitability for us. That is the main reason behind the drop in margin really for the period. The second question was regarding AC, I suppose, one year ago. Roland, do you want to touch on that?

Yeah, the AC companies contributed in our last quarter three in 22-23. They contributed around about 150 million Swedish kronor in turnover. And, of course, they had rather good margins in that period of time. So that's, of course, also something I had a little bit interest in.

Did you say that they had good margins during the quarter last year or bad margins? I couldn't hear. Sorry.

No, in that quarter, they had on not our normal EBIT margin target, but they were on a positive margin. Yes, absolutely.

Okay, they were. Okay, despite the low season for ACS. Okay, good. And also, I mean, obviously, I took the charge of Menerga reallocation to Maribor here. I guess such events tend to be a bit costly and less efficient for production. So could you give us any sense of what the production move did impact EBIT during the quarter, EBIT margin? I mean, if you adjust for the charge as well, I guess it didn't help as you moved during the quarter.

Only one of costs. coming from Manerga is included in the 125 million. And underneath that, they are facing quite good volumes now. So it's a little bit both positive and negative as well. And because trying to move the production during a period where they have a busy production is not that easy. So, of course, but it's hard really to quantify that single effect if that's what you're after, what is underneath. Exactly. Yeah. Now we have problems really to point that out specifically, but the volumes are good.

Yeah, it's rather a challenge. As you know, it's always the devil is in the detail when you want to move something and then actually have good volumes. So we're trying to keep first thing first, which is to help the customers. And that's the first thing. But here with the relocation, we are on time. It's going according to plan when it comes to the timeline. But it is, of course, a positive impact when you want to see it like that. But you also have a rather good ordering factor.

Okay, very good.

Sorry. Yeah, maybe we should say that. I mean, we see this as a normalization. We are not that disappointed. I mean, what we had one year ago, that quarter was extreme, really. So this is more back to the normal. Of course, we always hope for more, but But this is back to the normal levels, really, where we have been.

Okay, very good. And on the order intake, you mentioned in the report that you had good activity levels from, I guess, the technical consultants, installers. Is it just quotations coming, or are they actually... placing orders nowadays? I mean, the interpretations are converted into orders. And could you give any indication on the organic order intake development during the quarter?

Well, in general, of course, we monitor several indicators, one being the activity level with the consultants, of course, which is very good, and they are very occupied with future projects. But, of course, we're also looking at the installers and the and what is going on on the market as such. So what we have been seeing is that January was a good level compared to the year before when it comes to the market activities and orders. And what we see on the market is more is moving and more installing companies are actually very active. If you look at the different geographies where Systemeira is acting, we have positive inputs on the North American markets. and overly positive on the Middle East and Asian markets. In Europe, as also described in the report, it's a little bit of a mixed picture. You have several markets where you have a lot of local activities, some of them fueled by subsidies and others by huge projects. So it's a little bit plus and minus on the European mix. So it's a little scattered picture in Europe, but overall in the other regions, it's positive.

Okay, very clear. And the final question from my side is, I mean, if we, as you said, you had a negative geographical mix in the quarter where you had high areas in the Middle Eastern, I guess, Morocco and Eastern Europe as well. I mean, could you help us understand the margin trajectory within these markets? I mean, given that you're growing quite nicely there, are you seeing higher margins or are they structurally lower given, I guess... higher competition or perhaps higher transportation costs or whatever it could be.

I guess the margins or in general, you can say better on the markets where we have a better market position. So markets like Germany, Norway, Sweden and so on are more profitable than a smaller market, for example, in our other regions then. like Morocco or so. There you have to fight a little bit harder really with the prices. Yeah, the mix is different as well then, so that also affects.

But can you see that if you're growing by 34% now in other markets, can you see that the margin is following the organic growth or is it a stable margin despite the higher volumes?

We see improving margins in that market, yes. Or in several out of those countries in that region. So we have a positive development there when it comes to the margin.

Okay, very clear. Thank you so much.

Thank you.

The next question comes from the line of Dashing Adele with Jefferies. Please go ahead.

This is Adela Dashing from Jefferies. Just a couple of questions from me. A follow-up on the gross margins where you mentioned that the change was driven by product mix. By this, do you mean that the regional mix was weaker due to the declining growth in the higher margin areas or was it like actual product mix that drove it?

They are corresponding. You know, and this is what we touched on in the question we called, and also we are growing more in the other markets rather than in the Nordics, really, and that is also now connected to the product mix. It goes hand in hand.

Yep. Okay. And then you also mentioned that activity in January was pretty good on good levels. Is this... Do you see this in the Nordics as well, that it's getting progressively better, or is it a continued slowdown, similar pace as in the beginning of the quarter in current trading?

I think it's a little bit, as also stated in the report, that also throughout January, countries like, for example, Norway was really stable for us, which is a country with, for us, a good mix, and this was a good January also. So we see a little bit some signs of recovery in some countries, maybe far too early to say that everything is going well, but some good signs there. And we're really happy about that because these are the countries with a good product mix for us.

Yeah, got it. And then maybe also, how do you perceive your ability to continue to pay down or reduce inventory levels going forward? What's your expectations for that? the remaining quarter of the year.

Yeah, we have seen a positive development up until now, and I think right now we have come to more normalized levels, so I don't expect the huge positive effect from reducing inventories. A little bit more maybe, but in some cases we also see a need now to increase the inventory levels to meet some of the demand also in some countries.

To be very specific, we're, of course, coming into what we call our summer season, I would say, pre-summer season, which is meaning that we need to prepare a bit for high seasons coming, which also is for us that we need to keep good support to our customers in terms of delivery terms. So we will be prepared for that. And it's like every year we're coming into that season now.

That makes sense. And then just finally on the momentum that you're currently experiencing in the Middle East and Asia, what's the majority of end market exposure in these regions that's driving that good development there?

I'm really happy to be able to answer that. I mean, really, among all the different applications, it's pharmaceutical, it's new energy, it's solar plants, it's everything in that, especially in Middle East. It's everything from car parts to normal residentials. It's everything in that. And that is why we're also overly enthusiastic about the development, of course, because it's not a single application. It's really the market developing as such.

Okay. And if you were to generalize in very broad terms, would you say that the subsidy levels there are greater in Europe or lower?

I would say that here you have to look a little bit differently from, for example, Middle East and then to India. In India, I would say it's something driven by government incentives. They really want to turn the country as such to be more on the front end when it comes to, for example, solar, to energy, when it comes to electrical vehicles, a lot of things to be done. a little bit maybe also in the year of looking into energy efficiency and sustainability, which is, of course, a big change for a country or region like India. In the Middle East, it's really, as you know, I mean, everything that is ongoing in the Middle East region to turn those countries to be not only in sustainable terms, but also to be self-sufficient without looking into, for example, oils and other things. It's really to build society These are the main drivers in that.

Great. Thanks a lot.

That's all for me.

Thank you.

The next question comes from the line of Douglas Lindell with D&B Markets. Please go ahead.

Yes, good morning, gentlemen. A few questions from my side as well. I wanted to start off with the organic growth. Previously, you've been really helpful in breaking out the volume and price components. So I just wanted to see if you could give some indication on that with regards to what we saw here in the reported quarter.

I would say that there is a very small amount of price increases currently in most markets. We have made small adjustments, but it's a little bit up and a little bit down also on others. So that is the minor part. Yeah, absolutely.

Okay. And going forward on price, are you planning to do any adjustments there?

We have a normal standard procedure that we are reviewing the normal cost versus price and market price developments rather closely. And we do adjustments as a standardized process three times a year. But for the next, which is coming, the window here, it is only minor adjustments, as Anders also indicated, a little bit plus, a little bit minus, depending on different components' developments. There is no big swing just currently, no.

Okay, so it should be fairly neutral going forward. Yes. Previously, you've also given us an indication on the book-to-bill situation. Are you able to give some sort of cover on that?

This is not something that we have communicated in this report right now.

But it's fair to assume that it's below one, at least.

I think you see the current trend right now in some of the markets, but it's also very positive in others also. So in general, it's hard to give a strict answer on that, really. And we have not planned to communicate anything on that topic, really.

No, I'm just trying to understand how much to extrapolate in your positive water intake comment and the delays of that, really. But I appreciate it.

You're answering.

Then on looking at your cost base, can you maybe give some comments on how you're working to adjust that now that we're entering sort of a softer market? Absolutely.

Absolutely, yes. So for us, of course, it's also an answer to some of the questions before that we had here in the call. For us, it's a little bit plus and minus. We have some entities where we have to adjust the cost base. And we have others where we have to gear up to be able to deliver on the capacity that is demanded from the customer's level. So I would say we have mostly in Europe, we have not everywhere, but in some spots we have been in the process of have adopted the costs. We have adjusted the FTE level. And in other countries we have, like in India, we have been gearing up. So yes, we have done quite a lot during the last nine months in this fiscal year. for us, and we're proactively looking into that, of course, constantly. But also to be very clear, as we have areas where it's growing really hard, we have some areas where we have to give up and others that we have to adjust. So for us, it's the plus and minus all the time.

Fair enough, I understand that. And on the 10% margin target, I realize it's a tougher market now, but How are things moving? Is your perception that things are moving in the right direction fundamentally, structurally within your business, so to say, in terms of pricing projects and those components that we talked about historically?

Yes, Douglas. We still see that we are moving in the right direction. The process and the underlying things that we're doing in the company and on the pricing, on the market price levels, we still see that everything is according to our plan. So, yes. There is no deviation from that time.

And would you consider further restructuring of your business or basically letting go of underperforming assets?

That is, of course, something that we are constantly reviewing, Douglas. We also announce in not only our capital market, but of course also in other interests. that we have an internal, always ongoing plan of reviewing our footprint and our operations. If you have areas in the world, as we all know they are, as it is today, they are developing dynamically. Sometimes you also have to draw the right conclusions and maybe to step up when it's needed. So we are having that as a normal process under surveillance all the time. And we have the ability to also step down when it's needed. Gladly, these days, we see that the mid- and long-term outlook for System Air and for our products and our services that we bring to the market is quite positive. We are, of course, being careful, but we are positively careful.

Okay.

Thank you. That's it for me.

Thank you, Douglas.

The next question comes from the line of Del Johan with Danske Bank. Please go ahead.

Yes, good morning. Just two questions, basically. Firstly, on the actions, the CapEx projects ongoing in Lithuania, Germany, automation, etc., and also the Menarga move. Would you be able to put some sort of number to the targeted efficiency improvements from those projects? Alternatively, just express some sort of payback period on the charges you're taking from the Menarga move right now? That's the first question and possibly some timing on that. Secondly, can you give some sort of progress update on a potential redeployment of the cash from the aircom business into existing system air business, whether you have made any progress that would be interesting to hear?

Maybe if I start with the first one there, Johan. When it comes to the capex investments that we do in Lithuania and Germany, it's about building the possibility to give up the capacity. As you know, in Lithuania, we are actually manufacturing air hand units, but also having our center of excellence and also the development center for our residential air hand units. The residential market, as such, looking at the European development in future, is deemed to be very, very positive. So we really need to give up because the factory was really running on full capacity. So we are just expanding and be able to cope with future demands. That factory and that investment will not be in full operation until the beginning of 2025, as it is expected today. So we're just concluding that one. In Germany, investment is actually expanding warehouse and some production capacities, also because we are running out of space. So it's more into that. And that will be finalized, if everything is according to plan, by end of this year, somewhere in November, December. So also not really in the plan just now, but it will come by end of this year. When it comes to the Manago restructuring, As we said, this is an ongoing project where the move as such is planned to be done during this next year, 24-25, or finalized during that. And then we'll take the gains out of that coming down the road, as also explained in our announcement that we did in November 23. I hope that answers your question number one. It comes to the deployment of the cache. Yes.

The question again, Johan, was regarding what we will do with the cash from the proceeds of divesting the AC business?

I guess reality changes every day. You made that divestment and you have a great return on capital employed in your existing business. I was just wondering how you're progressing and seeing the potential to redeploy that cash.

Right now, I think we are in quite a good spot, really, with the current interest rates and so on. And from my perspective as CFO, of course, it feels comfortable to be on this side. And as Roland also mentioned, we have hired a new vice president, M&A, also. And we also have the potential to continue with acquisitions also, even though we have been in a lower activity level here for some time now. I think we are good as we are for the moment, and we are happy to have this possibility and to continue to develop the business.

I do understand. I mean, also with our history, Johan, of course, we're looking into further expanding our footprint also into attractive applications or markets. And that is, of course, also possible with M&A. So we're quite happy to be on the spot with all of this.

Gotcha. Thanks.

Thank you, Johan.

The next question comes from the line of Hendrik Alveskog with Redeye. Please go ahead.

Okay, hello.

Good morning, Hendrik.

Good morning. Yes, my first question is probably for Anders. I'm looking at the region, rest of the world. There is a big difference, obviously, between your reported sales growth and the organic growth. And if you could just help us understand which currencies are making up a major part of this difference.

Yeah, so there are two parts in that. I mean, currencies, mainly from the Turkish lira, but also from the Indian rupee and that. And secondly, it is also the effect from the divestiture of the AC segment. And that makes the big difference then.

Okay. Okay, I see. Great, thanks. And then just if you could maybe comment on what you see and what you expect in terms of raw material and component cost. going forward? Is there anything we should be aware of here?

Looking into those main raw materials and maybe also electrical components, for the time being, as also stated earlier, we don't see bigger changes coming. There are some of the materials going down in cost, but others still being stable or even increasing slightly. So we think our outlook just now would be that it's balancing itself and it only will lead to minor adjustments on the pricing side.

Okay. Great. That was all. Thanks. Thank you, Henrik.

The next question comes from the line of Luma Lina with Handelsbanken. Please go ahead.

Good morning. This is Luma Lina from Handelsbanken. Thank you for taking my question.

Good morning, Lina.

Good morning. The first thing I was wondering about is regarding the development in the Nordic region. Have you noticed any difference in demand comparing the beginning of the third quarter and the end of the quarter? And what are your expectations going forward?

Yes, Lina.

If you look at the beginning of which is November, as already stated before, we still see rather good activities on the industrial side, especially in the Nordics. As you know, we have huge investments ongoing when it comes to not only maybe to call on the data centers, but also you have on the energy side a lot of things ongoing, but also in some infrastructure movements or in, for example, fish farms. So we still see good activities in the Nordics. What everyone is looking at, which is only a really smaller part of our business in the main area, is, of course, the residential new-builds. which was on a very low level. But we saw a little bit of new activities here in January. So we'll see how it will continue. We don't see that the industrial investments will slow down. It is more the average new-built construct that is on a lower level, as everyone knows, these days in the Nordics.

Perfect. Thank you. And then also on the back of your new vice president of M&As, What is your view of the M&A environment at the moment regarding purchase multiples, and are there any specific geographical regions we are currently focusing on for M&A?

For us, for the time being, I would rather say that we're, first of all, of course, very, very happy that Ulrika has joined the team, and we have a rather nice pipeline in M&A possibilities that we are reviewing. We see that still there are a lot of potentials. There is, of course, a different set of expectations, especially maybe in the North Americas on valuations, but still a very positive and interesting market ahead of us. So we are quite active and looking into a lot of different activities there also. When it comes to regions, I would say it's rather balanced between North America, Europe, and Asia for the time being.

Super. Thank you very much. That was all for me.

Thank you, Lina.

As a reminder, if you wish to register for a question, please press star and one on your... All right.

We have a question.

Sorry, there are no further audio questions, so I now turn back to management to take over.

Yeah, we had one question also from the webcast, and I will read it out for Roland here. What is the short-term and long-term business plan for Group SCS in the UK that we have acquired? And I guess by that, isn't it good also to tell a little bit more what they are doing also?

Yes, of course. That's a very specific question, though. Thank you very much, Anders. So Group SCS is an acquisition that we did in the UK. They are specialized in smoke extract ventilation. and here also pressurization systems. This is, of course, something that is, especially in UK markets, a really growing application following the tragic appearances in Greenfield Tower that I assume that most of us know of. By that, in the aftermath of that, there is a change of legislation or demands on the market in UK when it comes to existing multifamily houses. which will develop the market rather possibly go on ahead. And that for us is, of course, something that we want to be part of as we also, in the system at group, we do produce a lot of the components that you need for a complete set of these systems. When it comes to group SCS, what we value quite a lot is, of course, their local knowledge, but also their technical component knowledge in the application, but also integration with the whole systems. And we see that we can develop the company in a much, much better style on the whole UK, but also take advantage of the knowledge in the rest of the system group as we have this pressurization systems, not only in UK, but for all Europe, but also Middle East. And that is maybe, I think, a little bit the biggest output for GroupSCS versus integration locally, development locally, and then taking knowledge and application knowledge and some of the products, even on an international level. That is the plan that we are installing and integrating the company to. I hope it answers the question. As it is read up from the queue, I don't see if it is positive in terms of if it really answers the question of religion, but I hope so.

Okay. If we don't have any more questions, I guess we're going to... All right. Okay. I guess we conclude the phone call then, and we wish you welcome to call in on 4th of June for our Q4 report. Hope to see you then again, and we are, of course, available to answer any questions you might have. Thank you very much, ladies and gentlemen, and hope to hear and see you soon again.

Take care. Thank you very much. Thank you.