TietoEVRY Oyj

Good morning and welcome to Tietoevery's second quarter earnings webcast. My name is Tommi Järvenpää, the head of Tietoevery's investor relations. This morning, we will go through our earnings development and outlook in the second quarter. With me here today are our president and CEO Kimmo Alkio and CFO Tomi Hyryläinen, who will next go through the highlights and results of the quarter. Kimmo, please go ahead.

Very well. Thank you very much, Tommy, for the introduction and a warm welcome to everybody again to a very interesting second quarter performance for Tieto Every. Second quarter performance characterized what we call as a steady performance in a mixed market. Overall, quite a healthy overall performance in light of the market dynamics. The main factors being organic growth of 1% driven by especially our software businesses, improved profitability of 11%. supported especially by the development of Tieto every tech services and very interestingly importantly strong customer wins and order intake with a book to build of 1.3 and we today confirm our earlier communication from July 1st, that the strategic review of Teato Everytech services is progressing, active sales process ongoing. We do not plan to provide any new information on the topic today. Naturally questions can be, as always, asked. From a market standpoint, I think it's fair in light of the softer geopolitical kind of economic environment and geopolitical instability. Good to confirm our perspective on the market dynamics. Softer IT services market, we also expect to continue. In the second half, I believe the peer group sees exactly the same signals. We also believe that the software market and our software businesses have the opportunity to continue to operate in a more stable manner. Customer attention in light of the softer economic environment, customer attention continues to a large degree on resilience, kind of reallocating investments into shorter ROI kind of periods. and to a degree impact the digital engineering centric investments, which were also slightly connected to the aggregate of software IT services market as a whole. So we believe that the customer perspective on resilience is very similar, has been very similar in the second quarter as it was in the first quarter. We anticipate this agenda to continue. We recognize the instability of the geopolitical environment. These are reflected upon also in our market estimates, and we confirm the high degree of importance into future technologies, very specifically AI, GenAI, cloud adoption, cloud modernization. These are top of the agenda for businesses, and these are the drivers that will continue to generate good opportunities for our industry and for Tieto Every as we think of the mid-term to long-term market dynamics. We would also like to confirm to the audience, especially to the audience that may not follow us on a monthly or quarterly basis, that we continue to be in the midst of a significant multi-year strategic transformation. For a long, long time, Tietoevery operated as an integrated IT services company. We shifted to a mode of concentrating and betting on specialized end-to-end businesses. This took place in early 2022. We are advancing in businesses becoming more independent, and our future positioning identity to be in the software and digital engineering category and practically today, as I'm sure recognised, we have three good software businesses in the company. We have care, banking and industry, and we have one business in the digital engineering category, Create, with an opportunity to continue its international path forward. The main objective, naturally, with our specialisation-based strategy, is to drive for higher expansion and value creation, aiming for each business to be in the world class category in performance terms, and with this foundation driving significant opportunities for shareholder value appreciation. Here, I would like to maybe second time mention, which I did already in the opening, that the tech services strategic review continues to progress. There is an active sales process ongoing, and we would be providing further updates latest by our Q3 report, which would be on the 24th of October. In terms of our customer dynamics and competitiveness in the second quarter, we have a very interesting and a healthy mix of customer wins, significant wins visible in the case of our banking software business, significant wins visible in tech services, and significant wins visible in our care business. Maybe if I were to highlight one, I would like to highlight the Tieto Every Care win. a real door opener in the Swedish market with Karolinska University Hospital and us being well competitive with our Life Care Open platform, enabling significant improvement in patient data and care processes, more efficient overall operations for the hospital in question. So this is in the path of our international expansion. for our care business and as mentioned significant win in Sweden. Furthermore, I would like to also confirm our commitment to our sustainability agenda and the sustainability pledge, which was announced earlier in the year. A couple of interesting developments during the second quarter. We were recognized as one of Europe's climate leaders for 2024 by Financial Times. and one of the world's most sustainable companies as identified by Time magazine. So important recognitions. And naturally, we also want to confirm our attention and commitment to diversity and inclusion. And here we are also and have been naturally participating in the respective events all across the Nordic countries. So, sustainability pledge continues high on the agenda. Then we move into the very interesting part, naturally, from a performance standpoint, summarising earlier mentioned 1% growth, reported at 3%, adjusted EBITDA at 11% compared to 10.5% a year ago, healthy cash flow from operations of 68 million and the growth in the order backlog itself by 2%. So overall, what we call steady performance in a mixed market. And to be clear, naturally, our longer-term ambition is to be a company with significantly higher growth. I believe we are all in the industry impacted by somewhat softer market dynamics. In the case of Tieto Every Create, I'd like to confirm that the new operating model was implemented as of 1st of May, enabling the businesses to drive for global scale, have access to global resources, quite a significant operational change for our our create business. In the first quarter, pardon me, in the second quarter, we did experience mixed revenue development with actually growth in Finland and international, including the United States. And our primary challenge in the second quarter has been in Sweden. In light of the volume development, capacity adjustments have been initiated. And as commented, further productivity improvements and efficiency drive is being derived from the new operating model. Naturally, we need a lot more attention on the SG&A level, given that the market dynamics are a bit challenging for the digital engineering type of business. I would like to also confirm, and as we should be expecting in digital engineering, acceleration of AI-centric projects well underway. maybe as a sample, the AI-driven network automation in telecom. We have significant history, naturally, in telecom-centric R&D and software development. And to confirm, we did announce the appointment of Cosimo de Carlo during the second quarter as the new managing director, effective as of 1st of September. and to confirm the profitability level for the second quarter, 11.4%. And with this profitability level, naturally, we have needed to be driving further efficiency programs. In the case of banking, really strong order intake as one factor. We did see the 5% growth and quite well across the portfolio of banking growth contribution by cards. financial crime prevention, credit solutions, and wealth management solutions. During the quarter, I want to expand a bit on the strong order book number of significant contracts. They have been, to a large extent, renewals. It is also expanding the collaboration with existing customers from a solution scope. and the significant order books very specifically in the core banking area Norway that we call banking as a service. And to confirm, it is a record high order backlog we currently have for banking. I'd also like to confirm that profitability level only at 9.9% level profitability has been impacted by higher technology costs and increased depreciation of capitalized R&D by approximately 2 million level. And we're glad to come back and reflect on banking development further in the Q&A. Then we go into Tieto Every Care, as earlier briefly reflected upon landmark win in Sweden with Life Care Open Platform, organic growth only 1% while returning to slight growth. Growth continues to be impacted by the significant health and social care reform by the government of Finland. And we, as highlighted here, we anticipate the impact to be somewhat lower in the second half of the year. A number of important wins that business has actually had in the past quarter, so we do see the longer-term perspective for the care business attractive. I'd like to also confirm that we are making conscious investments in sales capacity and life care localization, specifically for Norway, and this has led into a profitability level of 26%. We tend to be surfing between 28 and 30%. And that would be the norm we believe in. Activity around AI-driven software, actually one of the highest in Tieto Every. We have a number of solution deployments taking place also in the category of GenAI. These have been co-created with customers, and we anticipate these in the future to be integrated into our more standard product features. Very important work happened in the last six to nine month timeframe regarding AI and GenAI for care. Industry, second quarter consistent healthy performance. We have a portfolio of solution areas within industry. Largest proportion is the data platform, good growth in data platforms itself. And we are also highlighting a new release of case management. We call it the public 360 solution suite with embedded AI functionality, also contributing to a significant customer win in Norway. Profitability fairly healthy at 15.1% level. Then, furthermore, and very interestingly, development of theater and tech services, profitability improvement continues, and good to see a solid order intake level for the second quarter. This business does get partially impacted by the market dynamics. Anything to do with time and material, short cycle projects tend to be impacted. While I'd like to highlight good development in cloud platforms and security growing 17%, data and application services, we could say, growing only by one percentage point. We think there are much more significant opportunities in the future. Traditional infrastructure declining 5%. Quite often, it's been declining 7% to 9% level. End-user services tends to be quite volatile. Lower margin business, second quarter, negative 16%. Mentioned already, the solid order intake is an important factor, and very importantly in this business, driving efficiency, very strong core structure management, and increase in the profitability level to 7.7% level for the second quarter. At this point, I'll hand it over to Tomi.

Thank you, Kimmo, and good morning, everyone. Main highlights for the quarter are obviously that we returned to growth as we expected. We also delivered improved profitability compared to prior year. Other highlights of the quarter were our strong order intake with 1.3 book to bill and healthy operating cashflow of 68 million in a seasonally weak cashflow quarter. On one-time items, strategic review-related costs incurred year-to-date amount to 0.4% of revenues. Going forward, strategic review one-time items relate only to the ongoing tech services sales process. On the other one-time items, we increase our estimate for the full year from 1% to approximately 1.5% of revenues. This increase is driven by the additional efficiency programs launched in Q2 to address the current market environment. If we include the estimated capital gain from the sale of Bypass AS, which was signed on June 27th, the estimated full-year OTIs is around 1.3%. Q2 taxes have been booked using the estimated effective tax rate for the full year of 23.1%. As mentioned, we delivered healthy operating cash flow of 68 million. Our cash flow was supported by stable networking capital as the seasonal working capital headwinds were offset by a decrease in accounts receivable balance. To remind everyone, the negative impact from accounts receivable due to the quarter ending on a weekend is still with us in Q2, but not anymore in Q3 closing, so it will give a nice tailwind into Q3 cash flows. Despite the healthy cash flows in Q2, our interest-bearing net debt increased slightly quarter over quarter due to the dividend of 87 million paid in April. As a result, our net debt debit DA remained at 2.2. On personnel side, rolling 12-month attrition continued to decrease, being 9% at the end of Q2. However, quarterly attritions have remained stable for the past two quarters. Our net personnel was also quite stable, with a small decrease compared to Q1. During Q2, as mentioned, we initiated efficiency measures across the company to address the market environment. The more significant measures were initiated in tech services and in CREATE. In CREATE, the 400 roles being impacted include both capacity reductions due to market and non-billable SG&A roles from the implementation of the renewed operating model. We keep our estimate of the group level salary inflation for the year at 4.5% compared to 5% in 2023. Next, I'll give you an update on financial impact of the ransomware attack. There are three categories of costs, out of which two are substantially complete. Those two are the compensation for services not rendered, including SLA credits. And the second component is the cost to restore the services. We do not expect further cost in these categories, and all costs are fully booked as of Q2. Third category of potential costs are claims for damages from our customers. We have received certain claims for damages which are being currently evaluated. Our assessment of the maximum aggregate contractual limit of liability for direct damages is below 10 million euros. We have cybersecurity insurance in place that includes the scope of these cost elements. Good to note that we expect the resolution of customer claims and subsequent conclusion with the insurance provider to take several quarters. Next, I'll summarize the performance drivers for next quarter. On growth drivers, we expect continued soft economic environment to impact demand in create and tech services. We expect continued good momentum in banking and industry. Care growth is expected to accelerate while the demand continues to be impacted by the healthcare reform in Finland. On profit drivers, the initiated efficiency measures are expected to begin contributing already to Q3 profits. Q3 is also seasonally stronger due to the vacation period. On other drivers, FX impact is expected to be positive of 9 million on revenue, and working day impact will be positive due to 1.5 more working days. However, the actual impact from the working days will be reduced due to the vacation period. Then to Q3, profitability outlook for business. Tieto Every Create and Care are expected to be at or below of prior year level. Industry is expected to be at prior year level and banking and tech services are expected to be at or above prior year profit levels. Back to you, Kimmo.

Thank you, Tomi. And then closing commentary from our side. on the way forward. Four main factors, if I may. First of all, the active strategic transformation absolutely continues towards software and digital engineering-centric future and identity as the primary foundation for continued performance improvement. Second factor, naturally in this market environment, we also need to keep high focus on resilience and cost efficiency. And to confirm, we naturally will be aiming to be concluding the tech services strategic review and further information then in due time. And very important to continue to be at the forefront of delivering value from AI and being the partner of choice for our customers, both in consulting terms and how AI, GenAI is integrated into our own products and services. So this would conclude the views from Tomi and myself, and maybe time to go to Q&A.

Thank you, Kimmo and Tomi. We are now ready for the questions.

If you wish to ask a question, please dial pound key 5 on your telephone keypad to enter the queue. If you wish to withdraw your question, please dial pound key 6 on your telephone keypad. The next question comes from Christopher Bjornsson from DNB Markets. Please go ahead.

Good morning, guys. Thanks for taking my question. So my question is on the banking business. So I think you said back in from April 23 that there was a 1.5 percentage point headwind to the profitability margin there due to the legal separation of the banking business. And now you're kind of not divesting that business after all. I would guess that you'll be able to regain that margin So when you guide for the margin in banking to be up or at least flat to above the level of last year in Q3, is that because of that margin coming back or is there anything else?

Thank you for your question. Absolutely a really good one. So all the independence-related costs we are naturally going through as we speak. We are and we will be optimizing those costs, of course, in the context of keeping our banking within the Tieto Every group. Now the Q3 guidance and the profit improvement has many drivers. You know that seasonally, of course, H2 is much stronger in the software businesses, including Q3. Then additional profit drivers naturally are the bus side and the technology improvement. They're driving profitability and other drivers as well. So from this independence, that's not the main driver.

Okay, thanks. I'll jump in the back of the line.

The next question comes from Mark Hyatt from Morgan Stanley. Please go ahead.

Hi, Kimo and Tommy, and thanks for having me on, and congrats on the result. I've got two questions, please. The first one is just on your confidence around the four-year guidance. Can you help us understand what some of the drivers of growth coming in at the upper end of the range? Kind of what do you need to see happen in the broader markets to get towards that upper end? And then on the flip side, what would a scenario look like if growth would come out at the lower end of the range? What does that look like in the second half? And then secondly, just on AI, You obviously talk about AI-enabled products on the software side. Can you talk a little bit about what you're investing in in AI across the portfolio? Any specific examples that you could pull out would be helpful. And then will this new operating model in the restructuring program provide an opportunity to step up hiring in this important area? Thanks very much.

So thank you for the questions. If I first address the growth guidance-related question, as you read our guidance for the full year from the report, we commented that the upper end of the guidance range would need a recovery from the market to reach those. If and when the market does not recover during the year, we will be looking at the lower ends of the range of our guidance of zero to three. Now, as of today, we are indicating that the market, there is no clear sign of market recovery for the remaining of the year.

Okay, and if I continue on the AI side, I'll try to be prompt on a big topic. So each of our businesses are working on two categories. One is around how to advance the competitiveness of our products and services through co-creation with customers. AI, gen AI functionality into products and services. Let me give a couple of quick samples. Then I'll talk about the productivity side in half a minute. So as an example, in banking side, financial crime prevention, we've been working on AI-centric capabilities for several years, starting to extend these towards Gen AI. I commented briefly Public 360 AI functionality in the most recent product release. And we have a number of initiatives already being at least on proof of concept stage with our life care solutions suite within the hospital information system side. So the point being that we are looking on a monthly basis, what type of pilots, how much we're advancing, how many customers. And naturally, this is being done systemically like every one of us should be doing to actually start to seek for the implications on potential order intake and revenues, although it's still, I claim, relatively early stage for significant volume. Second factor, each piece is looking into the productivity improvements, how to increase efficiency. Let me give you a couple of samples, naturally around continuous services, meaning tech services, with the type of an install base we have, the significant footprint in server storage networks. Automation in any type of a false prediction is something we've done for many, many years, implemented already AIOps, and then extending over time towards the potential benefits of GenAI. Productivity improvement in software development, we have a couple of businesses aiming to confirm a certain degree of productivity improvement by the end of the year. So, here's my short reflection. Very important to actually be on the leading edge, top of the wave on AI, both in terms of value to clients, co-creation, innovation, and then the productivity improvement side. The third point, if I understood correctly, you probably referred to the operating model change. You were commenting the restructuring needs and how will that kind of move forward. So efficiency improvement, if your point was around the create business, it's a very important one in terms of the software market, volatility of the top line, and naturally we are looking into not just kind of a capacity optimization, it's the capability mix of future-centric technologies and legacy technologies, if we believe lower demand, we are doing our part naturally not to cut future revenue streams while actually driving the optimization of efficiency very much short term. It's a big implementation. I think we'll see good benefit of the one create global operating model. It'll take a few quarters to fully execute.

The next question comes from Sami Sakamis from Danske Bank. Please go ahead.

Hi, I have four questions. We will take this one by one. Firstly, on the overall trading conditions, are you seeing any signs of improvement at any of the segments, or should we read that, for example, that create situation has become even more challenging during the second quarter?

So, thank you, Sami, for that consideration. So, no, we have not seen improvement in the second quarter. This would be my data set. I believe we hear the same data set from the peer group as well. So, that would be the consideration. And specifically in the digital engineering category, in the industry, there are reflections that in certain markets there can even be overcapacity. I think these are factors why the growth potential in digital engineering short term is indeed very limited.

Okay, thanks. And the second question would be on restructuring costs that you're raising from 1% of sales to 1.5% of sales. Can you be a bit more specific on what additional measures you're planning to implement and how will they impact segment level performance during the rest of the year?

Yes, so these measures, as I mentioned, the primary ones create, of course, the largest one impacting 400 roles. That's driving the restructuring cost and naturally supporting the profitability for the second half. This will be executed during Q2 and Q3, the create. Then we have programs in banking, industry and care as well, smaller ones, which we don't sort of openly quote the sizes, but they are providing profitability, stability in those businesses as well. And we, as you know, we continue to work on the efficiency in all of our businesses.

OK, but the additional restructuring measures are related to CREAT.

Create and the, as I mentioned, tech services and industry care and banking. So we have small programs in all of our businesses, the largest one being Create.

Okay. And then thirdly, I think you missed your own margin expectations for banking and care. Could you be a bit more specific on what surprised you on the downside during the second quarter?

So maybe I'll comment briefly to the banking side. So a couple of factors, I would maybe address the consideration, if I may, from a slightly different angle, I'll try to answer as always. A couple of factors behind the kind of somewhat lower profitability level. We are in the midst of driving the recovery of the core banking business, which is one of six businesses inside banking. This is often referred to as the banking as a service. There's a very significant modernization program underway. A very large proportion of the record or the backlog positively does relate to the core banking Norway. So, that modernization will gain further speed. As a factor, it will be, over time, a direct contributor to profit improvement. Second factor, which Tomi briefly touched upon some minutes ago, during the strategic review process and creating the path to independence, naturally, a somewhat higher cost structure was established, and optimization of this is underway. And third factor I would like to highlight, that for some time, we are running with exceptionally high technology costs on the legacy environment of banking. These are some of the factors behind, and as briefly mentioned, we do anticipate profit improvement throughout second half. Then maybe I briefly comment on the care side, and I hope I touched on it also earlier and as always openly. So driving, we are investing the growth potential, so very specifically in sales capacity and localization of life care for the Norwegian market. And this type of intermittent 26% level to us as management is not a concern. We believe we'll be bouncing back where the traditional trajectory has been.

Okay, thanks. And finally, On the ransomware attack, you estimate maximum liabilities of up to 10 million euros. If and when you will be able to book this, will this be booked as normal expenses or as one of expenses?

So this reference, thank you for the question, and likely extremely important to clarify. So this claim for damages, they are typically being then booked against revenue if and when booked. As that 10 million, this is when we go through all of our contracts, and the liability caps in the contract and aggregate all of these contracts what relate to this incident, that aggregates up to 10 million. That's the maximum amount if we are deemed to have breached the contract. So, it's not said that that will be the number at all. And that's why we commented that all of this will be going through with us, with the customers, and then subsequently being discussed with the insurance provider, and only then the net impact for us will be known.

Okay. Thank you. No further questions.

The next question comes from Felix Henriksen from Nordea. Please go ahead.

Thanks for taking my question. I have a couple. I'll take them at the same time if I may. Firstly, you've now specified in your one-time cost item guidance that this excludes potential capital gains. So should we read this as improved feasibility into the potential tech services divestment on your behalf? And secondly, on your deleveraging plans, your net debt to EBTA is still above your targeted range, whereas in conjunction with the main-to-main acquisition last year, I recommended that you should be within the target already in 2024. So, did you provide an update? What has, you know, gone against your expectations, and what will sort of change going forward for you to be able to deleverage from here on towards your target range? Thank you.

First of all, we are not speculating on tech services sale with our one-time item guidance. And so this excluding capital gains, including capital gains comment was purely to talk about the bypass, which we have already signed, where the closing is expected to happen in Q3. So that was purely for that purpose. Then in terms of the net debt debit DA and the leverage, naturally, this is driven by the profit and the cash generation of the company, and we are now, as in Q2, improving the working capital levels, delivering improved reported profitability as well, and we intend to continue on this path, and we will be likely, at year end, meeting our our this guidance of below to this is sort of a firm belief.

Okay, thank you. That's very quick.

The next question comes from Aditya Buddha, Varapu from Bank of America. Please go ahead.

Tommy, thanks for taking my questions. A few for me. So firstly, on the new operating model in CREAT. You said that it would take several quarters to be implemented. Could you just talk about what you see in terms of any potential disruption in the ability to sign new customers with new contracts in the short term, but more over the mid to long term, what are the benefits you expect from that? Second, on care, given you don't have the, or you have a lower impact from the social care reform in Finland in the second half, how should we think about the benefit from that, or at least the benefit to the growth in the second half and maybe into next year? And then finally, also on care, this is a business where you've been investing over the last few years. So do you think there's more investment to be done as you look over the midterm, especially given the scope for implementing more AI into those products?

Okay, thank you. So maybe I'll comment first the CREATE side. I wanted to mention earlier, as always openly, we went live early May, and when we talk about an organization of approximately 10,000 people, it has been a swift implementation. When we talk about organization of this size, there are likely some degree of impact on productivity short term. I think we are getting going really fast. Let me give you a couple of examples. If we think about traditional country-based organization, figuring out any which one of the Nordic markets, and there used to be access only to local consulting resources, not access to nearly 10,000 people across all of our delivery operations in the world, we can actually increase the the capabilities, the offering, the activity level towards customers. That's the main intent. We get higher activity level. We expect to be winning more footprint, aiming to actually find better expansion potential, growth potential, and the scale factor being made of three components. Global delivery capacity, we have specified solution practices we call chapters on the specific domains where we have significant expertise in whether we think about telecom side, whether we think of automotive side, and actually you have a few horizontals where you have to have repeatable capabilities and repeatable assets as an example around design. data and AI, and of course, the cloud-native applications development, just to name a few examples. These are background factors that I wanted to comment that it is being implemented, and for it to demonstrate the full productivity, it's fair to anticipate it'll take a few quarters. We have early samples in few markets where the pipeline has increased already, While I do not wish to be overly positive until we see the kind of the bits coming through and also looking for signals of hopefully some improvement in the economic environment. So those will be open considerations on the factors behind our expectations and belief in the one create opportunities that as we drive forward.

And on care and the Finnish healthcare reform, so care, H2, we are expecting the growth to accelerate. One of the underlying factors is the healthcare reform, where these tenders have moved forward, and there's less impact from that going forward. Now, this will likely impact the first part of 25 still, and then gradually go fully away.

Then on the investment level, in terms of care, we believe that these investment levels we have been running with for care, we think the levels are more or less appropriate where we stand today, at least with the current strategy. Over time, we may consider more aggressive international expansion. That time would not be yet.

Understood. Thank you.

The next question comes from Christopher Bjornsson from DNB Markets. Please go ahead.

Yeah, just a quick additional question for me on CapEx. It seems CapEx is quite significantly both intangibles and intangibles. So maybe you could help us understand what is driving that, maybe what's an easy comparable and how I should think about that going forward.

Yeah. Thank you for the question. CAPEX is roughly at the levels now, same as Q1. We are driving a bit higher CAPEX in tech services due to the data center consolidation program which we are running and those investments. In Q1, there was an additional one-ish million slightly higher in investments into facilities as well. We have been relocating in some of our main sites. And then on the capitalized R&D on our software, that has been remaining relatively stable.

Yeah, thank you. And then just a quick follow-up. You've seen some of your peers starting their investments in building out infrastructure to handle some of these new AI workloads. Is this something you're seeing thus far, or is that something that could, you know, be in need of more investment in the future?

So in terms of the full AI agenda and collaboration also with, as we do very closely with the public cloud providers, so we are evaluating these opportunities. I would say currently that whether we think about the training of large language models and what type of a supercomputer capacity, a public cloud capacity is required, and where might one do SLM, the small language model optimizations, I think that the market is up for grabs, and even the architectures by the leading Gen AI architects, that what would be the most powerful ways of addressing these kind of learning environments. I think that would be too early to currently hypothesize.

Okay, thank you.

The next question comes from Joko Terveinen from SEB. Please go ahead.

Good morning, Joko, here from SEB. Just one on CREATE and the demand momentum over there. What kind of drivers or leading indicator signals you are looking in order to understand the change in the market dynamics with this segment? So basically asking just what would... what would need to happen in the world in order to see their growth rates returning to historical levels.

Thank you. So, if I may, I would put this in two dimensions. First is the dimension, naturally, of demand, kind of a no-brainer, that how do we read the signals of the customers' considerations, that which areas are they investing into, to what degree are customers potentially optimizing existing business processes, how much is going into kind of a new type of a territory area, creating totally new type of services, even thinking about new type of brands, to what extent you take certain aggressive proof of concepts in the category of AI and Gen-AI being embedded to your core products. So it has to do a lot with the investment appetite of customers betting for growth. And my humble opinion that looking at all the different industries, different regions, the soft economic environment does currently encourage customers to pay attention much more, relatively speaking, to resilience than to innovation so this would be if i may one dimension reading these signals now the other dimension would be very tactical proof points what do we see at the pipeline level bid level pricing level utilization levels and the like so at the end it is a naturally a combination of these type of factors okay thank you very much all my other questions have already been answered so

Thank you.

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

As it seems, there are no further questions at this point. I would like to thank everyone and hand over back to Kimmo for final remarks.

Thank you very much for joining us today. Again, a very interesting and exciting agenda. Looking forward to coming back to everybody as we make progress with our both strategic and operational agenda. Thank you for joining.