Troax Group AB (publ)

Good day and welcome to today's presentation towards Group AB First Quoted Report 2024. Throughout today's recorded presentation, all participants will be in a listen-only mode. Later, we will conduct a question and answer session. If you wish to reduce several questions, you may press star 1 on your telephone keypad at any time during the call. And at this time, I'd like to hand the call over to Mr. Thomas Whitstrand. Please go ahead, sir.

Thank you very much. Thank you for all for listening in. I will, for those who have been with me before, follow more or less the usual presentation mode, meaning that you can find what we call a report of the quarter one development. You will find it then on the Truax homepage, truax.com. And you will find it under investor. And under investor, you will find, if you scroll down a little bit, the first quarter presentation, which we this time call highlights for 2024. So I will roughly follow this presentation mode, but I don't think that you will have any problem to follow what I say, in any case, if you don't have access to this kind of presentation. I'll start direct by saying then that most of you probably have know a little bit about TROAC so I'll just very briefly summarize and that We are working in three different segments. Machine guarding is 65% something. We have what we call warehouse partitioning, which is 74% or something similar, and then property protection, which is the smallest one, and especially strong, I would say, in the northern part of Europe, which is 12% of our turnover, all related into 2023 figures. Then I will also refer to what we call automated warehouse, which actually is a hybrid between machine guarding and the warehouse part, where we use the automated solutions mainly for machine guarding. But of course, since it's been installed in warehouses, it's sort of something mixed in between those. And with most of you also have heard me say now a couple of times, automated warehouse have had a quite significant impact on our figures because during the COVID time, it went up significantly. And then, of course, when these big international customers realized that we as a customer are not buying so much through the e-commerce that they thought, then, of course, they postponed or in some cases even canceled them. I will come back to this, but this was the history. We're also then trying to introduce something new a little bit with Introvax that's what we call active safety, and that's where we then more actively prevent accidents. I mean, we are – I think we can be proud to say then that we are quite good in supplying very good solutions then for physical safety for people in in manufacturing or, you know, wherever they are. But now we are, partly, introducing some complement to this, which we call active safety, where we are then coming with solutions and which, as the name implies, we then more actively help the worker or the person or visitor or whoever it is who goes, for instance, to warehouse and will then have a safe environment and not being in a hazardous area where, for instance, a forklift truck could by accident hit the person. I jump a little further into the presentation and talk very briefly about the year in brief. So we have approximately 80% is a little bit more. It's actually in the more, let's say, developed countries where, of course, where we report mainly Europe is the big one where we have, for instance, and, of course, Germany and Italy were very strong consumer markets for us. We have the U.K., who is complementing this in a good way, 9 percent, and the Nordics with 16 percent, even if we see from quarter four, including now also quarter one in 24, that of course the billing market, where the Nordics is quite dependent on, is then substantially reducing. I will come back to this. North America also has been reducing in practice and because of this automatic warehouse, but nevertheless, we think we have a good position for future growth. So in percentages, there was 17 percent, which was the same as last year. And then we have the growth potential more long-term, which we call new markets, which of course includes the Asia Pacific markets and India and a few other countries. which is now 423, we've been growing from 68%. So we have roughly the split up from the geographical area. I'll jump to the next slide for those who are into this, because this is just a financial figure for 23, and we already talked about that last time, where we ended with 264 million in turnover and approximately 20% in operating margin, or 19.6 to be exact. So I go to what we call the financial targets and make a summary of that for the first quarter. First quarter is actually manifested or you can say that when we talk about the first quarter, there's not really much that has happened from a market point of view. It's a similar market compared with quarter four, meaning it's a little bit weaker, but still a good market, I would say, for most of our and most of our regions, so it's a rather stable development, I would say. Nevertheless, because we have some delay from this automated warehouse invoicing that we had last year, we have a reduction organic growth. of 6%, whereas we have, including the acquisition of Garantel that we did first of December last year, and we actually have an increase then, but organically, we have seen a slight decrease of the demand during the first quarter. And obviously, we continue to have a target on the profitability side, which is 20% or more. So when we then look at the EBITDA, It's actually a little lower this quarter, and normally first quarter is a little bit lower, but this quarter it's been influenced by a few one-off items or one-time issues. That sometimes happens, but it's not so that we have this kind of cost every quarter. I wouldn't call it extraordinary cost because we do this kind of, let's say, restructuring or changes from time to time. But nevertheless, it's important for you to understand that what we show here, which is actually rounded off down to 16%, which was in reality 15 and a half, was more, I would say, 17% or actually a little bit higher than 17% if you exclude this kind of one-time cost that I'm going to share with you in a minute or two. So I'm coming back to that. On the capital structure, despite the purchase that we did or the acquisition on 1st of December, it's quite good. We are still in relationship by the net debt to EBITDA. We are in .9 or far below our target level, so we're in quite good situation. And regarding dividend, as you probably know, perhaps already, We've had the annual meeting today and the assembly and the general assembly accepted the proposal. So this 54% that was proposed from the board has been accepted. So this will be paid out now in the beginning of May for those who are shareholders, I think, on Wednesday of this week. That's the date where it's being based upon. So if I try to summarize the first quarter, you will have, for those of you who are following this presentation, you have a summary of that presentation called summary first quarter. I think we can say then that it's been characterized by a continuation of a little bit activity, especially from the automated warehouse customers, but also in the billing market that started to go down in the fourth quarter last year. and now during the first quarter have, so to speak, have the same development. And as you know, the billing market for new billing in the Nordic area is very weak, and every statistic is pointing in the wrong direction, so to speak. So even if, of course, we are trying to continue to increase our market share also in this area, I think we're expecting them to have a rather weak development in this in this market towards the end of the year. I think at least for 24 we're going to see a continuation of this low activity level here. Now, having said this, it was so that the quarter actually started, I would say, a little bit weak by January and February, where March was starting better and gradually improving. And we have seen certain, let's say, highlights which are positive in the quarter, meaning Some customers were starting to request codes for big projects, which was not so, we didn't have so many of those requests, let's say, during January and February. So, whether this is a more positive trend, we have to evaluate, and my successor, Martin Huston, will have to comment on this when possible. when we present the second quarter, but at least towards the end of the first quarter, it looked a little bit more positive, at least compared to the beginning of the quarter. Generally speaking, we think that the market is going to continue to have stable activity levels, with the exception that I already described. We've seen a reasonable development except in the Nordic area, and a continued lack also the automotive sector in North America. The automotive sector in North America seems to have postponed a number of big projects, especially within the electrical car field investment part. So we were told in quarter four, which was already then rather weak for North America, that this was going to start up again, this investment we mean in quarter one, but we haven't seen this actually. Now the information is that they inform us that this will be starting up again during the summer. And this could very well be true. But I've got feelings, of course, that all these projects are being a little bit delayed. So I wouldn't be surprised if there are a little bit further delays maybe before the orders come to us. But that they will come to us, I'm convinced of it. But you could argue a little bit about when they will come. So we're not terribly worried about the development point of view, even if, of course, 2024 will not be from an order point of view, I think it's fantastic. We're going to see price has been continuing to be stable, so no real deviation there. And as I said, and already in the introduction, we've seen a lower EBITDA in quarter one, 24, partly because of volume situation is as we've also made aware. It was done, of course, below. It was quarter one last year. And in general, there was a little bit weak volume development, especially in America and the Polish manufacturing units. But for the other ones, it was quite okay. So it's not – I wouldn't say that it has a major influence, even if, of course, it is reducing the coverage of fixed costs. But during the first quarter, we have had a few, what I call, one-off costs or one-frame costs. And the main one is that we have closed, which has been planned for a long time, we have closed the remaining acquired manufacturing unit in Poland. We bought two a couple of years ago when we bought the company . One was closed very quickly after the acquisition, and the last one is now closed here. in actually March, and we have taken on some cost for that. Those connected with the actual physical move from the old factory to the new one that we've had now for a couple of years outside of Poland. So the cost for moving is, of course, then included in the result as a negative item. We also have made some depreciation of machinery that was not fully depreciated, which we of course will not then move to the new unit. And then we have, of course, some redundancy costs for the people who are the 25 people that we may have left now as per 1st of April. On top of this, we've had also some startup costs with our new manufacturing unit in China. I wouldn't exaggerate those figures because these are normal figures, but of course, on the top of it, it costs 300,000 euros extra. In the result account, during the quarter, when you start up these activities, because we still have part of them during the quarter, two manufacturing units, now the old one is closed, so we shouldn't have any costs from that. of the first of April, but as I said, during the first quarter, we've had a little bit of a double cost for that. So if you then exclude these one-off costs, and this is just a hypothetical issue, obviously, but just for your understanding, and especially if you are following the company, I would say if you exclude these kind of one-off costs, we will end up somewhere between 17 and 17 and a half percent which is more in line with what we should be, even if it's still a little bit on the low side. And the difference then around this off totally to where we should have been on the normal circumstances is that we still have, as I said already, a little bit lower volume than especially in the American and Polish units. And then coupled with that, we also in Europe have solved in the first quarter quite good volumes to the automotive industry, and in that industry we have slightly lower margin. Nothing wrong with that, but it has a little bit of a negative impact, of course, on the margin side. So otherwise, it's been rather stable and not anything, you know, which is worth mentioning. If you look specifically on the gross margin, it looks on the paper, it does not reach the target level, as I said before, if you then exclude the acquisition of Garantel, which gives, when you consolidate the activities then from this more, let's call it low margin product that Garantel is producing and selling, we get a negative impact of somewhere between one and one and a half percent and on the consolidated gross margin. So if you exclude that, already there, we are on the same level as last year, hypothetically, I mean. And then on top of that, I've already said that we've had this one, of course, which, of course, also has mainly an effect on the egress margin. On the sales side, I've already commented on what was negative, but I can say also, something that was more positive. We've had quite a good development in new markets, especially the Asia Pacific. We have shown good development during Q1 for many years. As you know, we've been there, and we've been trying step by step to grow our business, and at least now for the first quarter, it was quite okay and much better than before. Very stable, I would say, also in continental Europe, despite the fact that it We chose some, you know, more or less a similar figure than last year, but I would say that bearing in mind that the demand probably is a little bit weak, generally speaking, I would say then that this is what we've done with orders, and so I think the continent of Europe is quite okay. So because the EBITDA was lower, of course, you get an adjusted variance per share, which, unfortunately, is a bit lower, and that's something for us then, of course, to come back to and try to compensate for the rest of the year. On the working capital, it's on a similar level to last year. We have before reduced inventory, so this port has not been a big influence. There are still a few things to be done, but I will say that, generally speaking, working capital is quite okay. And the newly acquired company, Garantel, they'll continue with a decent development. And the result, which we are not specifically showing, but I can at least say then that It's according to expectation and follows then what more or less our ideas were that we could do in the beginning. Alright, so I go very briefly and talk a little bit about the next page, about the figures. I won't go through that in any details, but you see that with the acquisition of Garantel, we have higher intake and sales, but as I said, if you exclude that and just take the organic growth, unfortunately, it's on the negative side. The gross margin, as I said, looks a little bit lower this quarter compared to last year, but if you just exclude the Garantel, then we will come very similar to last year. And then, of course, these margins are negatively influenced by the one, of course, that I've already described. And this, of course, goes through every day and, of course, further down the result account. So it's fairly easy, I would say, to understand the results for the first three months. If you look at the regional development, I've already commented, which for you all follows. This presentation is on the next page. I would say then that the continent of Europe have done quite a decent job. We are in line, I would say, with our expectation. Nordic is going down quite substantially because of the mainly of the billing sector, and you can see then that the orders is going down lower than the sales, which means then that we are expecting then on the sales side to get a little bit lower term, I would say, during the rest of the year. UK is doing quite okay, as you see on the other side, so very positive there. North America lowering orders. Again, automator error. Sorry to repeat myself, but it is the main effect. Otherwise, North America is doing quite okay, even if, as I said, also the automotive have been rather weak here during the first quarter. And then new markets, which is done substantially better in percentages, but you see also that the absolute figures are not that high, so it unfortunately doesn't have that big of an influence on the social vision. So if I try to conclude before we move into some final words and you get the opportunity to ask questions, I would say that it's been a rather stable development, despite that the market has been demoralizing. We've received several important orders in all segments, even on the billing side. even if the total figure, of course, in this quarter is what I would say on the lower side. The low results reported is reflecting both a little bit of low utilization of our manufacturing units and one, of course, connected with mainly the underclosure of this unit in Poland, which I have been trying to describe to you. There are no major changes in demand, I would say, during first quarter, even if you remember I said then that we started the quarter with a little bit lower activity, and it improved in the north. Let's see now during quarter two when it will go. But again, to build the market, we do see that it will not improve short-term. And then the question is when the automotive segment in North America will get started. probably will be either during Q1 or Q3. Whereas the automated warehouse, as we have communicated before, will not get started earliest during the end of the year, probably during Q1, I would say, of next year. It's more realistic as I see today. And we can tell is following the that we did, so we're quite happy with development so far. Jumping down to the more overall issues, we still have on the next page a summary of the growth factors, and you've heard this before, so I will not bore you with going through this again, but it's still based on that we have an increased industrial automation and robotization, and this is continuing, also in bad times, so I don't think we are very afraid of seeing any of course it will go a bit up and down with the financial development generally in the world. We have also the growth in e-commerce, which I said at the moment is quite quiet, but it will get started probably let's say during Q1 next year. The onshoring of manufacturing, many people are talking about that. We see some signs of it, but I don't think that we should be let's say, too concerned about this, neither positive nor negative, because we do see that some customers are expanding the facilities than, for instance, in Europe or in North America, where it before was in Asia or Asia Pacific. But, of course, for us, being in the just parts of the world, it doesn't matter so much if, you know, if the customer makes an investment in China or in North America, as long as they make the investment, because that's the key, of course. So for us, it might be a little bit better, of course, to make it in North America, because we have that . But I would say, in principle, it doesn't have this huge impact on us as a company. On the next page, you have the summary of the production units, and there are some smaller changes here. We have, in China, an increase from a little bit below 100,000 meters per year or 100,000 panels to at least 300,000. We think that mathematically we have low capacity utilization, but this is of course based on what we long-term or preferably medium-term expect to see in a good volume . And then of course we have The acquired guarantor, which is on the right side here, which is placed in the cities, not far away from Hillerstroke or Värnamo. And there we have a lot of capacity balls for shells and for anti-collapse. And we think that the capacity utilization given take a little bit could be around 60, maybe a little bit higher. Let's see about that when things are stabilized a little bit more. I don't want to bore you too much because I think you heard most of it. You know that we are working and we're trying to increase the recyclable steel. We're trying to reduce them, of course, the CO2 impact. We're trying to do investment to do it based on the environmental evaluation, et cetera, et cetera. And we will start now with reporting in accordance with CSRD. including 2024 and the report in the next year and the report. The other things here you can read for yourselves. So with this I would just summarize and say from our point of view, first quarter was not really an extraordinary quarter, a little bit weak in Iran, but it was a stable development. So don't get a little bit too hung up on that the result was a little bit lower because a lot of it was coming from this one of items. Even of course there are some Sometimes the switch is also working against an improved result, but this is the way it always is. It's not changed there. So with this, I'd like to end my presentation and give the words to you because I'm sure you have a number of questions now connected with this. So please go ahead.

Thank you, Thomas. Ladies and gentlemen, as a reminder, if you wish to ask a question, please signal the pressing star 1. Now our first question comes from Gustav Bernblatt from Nordea. Please go ahead.

Yes, good afternoon, Thomas. It's good to hear from Nordea. Hi. Just in terms of the gross margin, I mean, you were probably very clear here, but just to clarify, was Garantel alone impacting the gross margin negatively by 1 to 1.5 percentage points? Yeah, okay. And then if we adjust also for the one-off costs, I mean, you write in the report that you would be at the financial target. Do you refer to 39 to 40% then, or?

You could say that, yes, correct, yeah.

Yeah, okay, perfect.

That's clear. And regarding EBITDA, just to be very clear, we were probably not exactly the 18.7 that we had last year, or the 20% that we have as a target, because firstly, the first quarter is normally a little bit weaker quarter, and secondly, then, as I said, we had a little bit too low capacity utilization during first quarter to reach our targets.

Maybe just on the beta margin to also get that clear, you comment on higher normal cost of sales, partly due to marketing then. Is it possible to quantify these at all or?

Yeah, what you can get from me is a little bit saying that if you look at the higher cost of sales, a big part of that, of course, comes from the consolation of Garantel, but then also we've done our own increases, which maybe you could say was a little bit on the aggressive side from a customer interview in the first quarter, and you can calculate that to be in the range of half a million or something like this.

Okay, perfect. So when you adjust or reach the 17% adjusted EBITDA margin, does this include the adjustments for the higher cost of sales or?

No, when I say 17 or something like this, this includes then this kind of sales cost that we had during first quarter. So I have not excluded any cost.

that's clear that's clear thanks and then I mean looking at sort of you comment a bit on seeing some signs of demand from nearshoring in q4 primarily machine guarding are you still seeing this or is this oh we are seeing this what I said before is I want to turn down the expectation as Jonathan because

wherever we deliver it doesn't make a big difference for us. But yes, we see some development in this area, both in Europe and in North America.

That's great. And then just the last one here. It seems like the year-over-year price level still remains unchanged for you, but We have seen some signs from early Q1 reports of price decreases from companies here. Would you say that you still expect to have lower prices or have to lower prices somewhat to your customers going forward? Or what do you fear?

This is very sensitive. I've seen some customers, I'm sure, are listening in to this call. But I can say like this, that during Q1, we have not reduced prices. Of course, you will have some negotiations with companies. of course, you end up with hopefully something which is accepted from most parties. But we are not expecting any major price reductions or general reductions. We do what we know today.

That's very clear. Thank you very much. That's all for me. And also good luck out there.

Thank you very much.

Our next question comes from Daniel Lindquist from Danske Bank. Please go ahead. Hi, Daniel.

Hi, Thomas. So just starting off, many of the questions around the gross margin and extra costs and so on were answered. But on the guarantor side, now reading the report, it seems like Q2 should seasonally be their strongest quarter. Is that right? Because I think the order intake is much shorter than for the for the rest of the business, so they could basically have order intake for yet two months after this that could still be delivered in Q2. Is that right?

You're probably right. I haven't dug into the figures from the order book so much for Garantel this time, but in principle, you're right. They have a short order book, and normally they have a rather short lead time between they get the orders and they send it out. So, yes, you're probably right, Damien.

And Q2, in a normal year, is the season's strongest quarter.

Yes, normally Q2 is quite strong. Correct.

Cool. So then, I mean, I just want to thank you for this time, Thomas. I mean, you've been a role model in so many ways, and it's always been evident that you genuinely enjoy your work, and that has made us enjoy our work as well, and I think many with me have felt personally recognized when dealing with you and also learned a lot, especially when it comes to your proficiency in making the most of the market-leading position you have. And also, I think, a role model when it comes to guiding investors, no matter what knowledge level or experience you have with your company. So you will be dearly missed, but it seems like you have a good successor in Trace, and I'm happy that we'll meet again soon in other instances. So thank you so much, Thomas, and all the best of luck in the future.

Thank you very much, Danny. Very nice words. It was too nice, but nevertheless, I will remember it for the years to come. Thank you, Danny.

Okay, perfect. Thanks. Thank you. As a reminder, to ask a question, please signal by pressing star 1. Our next question comes from Anna Binstrom from Carnegie. Please go ahead.

Hi, Thomas. It's Anna from Carnegie.

Yeah.

Hi, Anna. Hi. So firstly, I wish to ask you on some details on the Polish cost savings and the Chinese expansion and sort of what kind of cost savings are expected. And I mean, you mentioned that the people are going home on 1st of April. So should we see some positive cost effects already in Q2 or are there some balancing things? So maybe we should see first in Q3 and so on.

Yeah, you should see some cost savings already in Q2 because the 25 people that we have laid off, we have in principle paid now the redundancy and their salary. I mean, they had a normal salary or wages during the first quarter, which in principle should disappear now for Q2 if we don't get new. very high orders, which demands more extra people. So if you calculate for yourself that 25 people times what the average cost in Poland is, which is of course lower than Europe, but nevertheless not that low anymore, you will get some sort of cost savings that you can use for your own sake, so to speak. And you also have, of course, also some other reductions of cost, meaning then that you have less energy because now we're producing one place and the machines will run in a more efficient way. You have less cost for them. But I don't want to go out with you because it's on a consolidated basis. It's not that high figure, but in principle that will, of course, also help, which is needed as we have seen that NACOM is badly hurt by this reduction in volumes from the automated warehouse. So this reduction of 25 people was very clear. It was needed to reduce the costing in that unit.

Okay, and looking on the cash flow, there's some increasing working capital. Could you maybe give us some details on this?

I mean, working capital, I can say if I start from the other angle, from the cash flow, normally we have a little bit lower cash flow, weak cash flow in quarter one, but this year we've also, if you read everything in detail, you will find that we have paid two million for our own shares, so we have We have bought back roughly in value to medium, which of course influence our cash flow. So that has a certain influence, of course, indirectly on the working capital. Otherwise, I would say that we have the receivables is under control. In general, also inventories under control. But by the end of the first quarter, we have really, I would say, too high inventory on the working progress, where customers then are, or either installing our stuff where we're helping them, where we then have to wait until it's finished until we can invoice. Or in some cases, as you know, so we have ourselves then been maybe a little bit too flexible in, let's say, ordering too early. So we have a little bit to do there, but we're not talking about big money here.

Okay. And today I asked you If you have any sort of guidance on the new construction exposure in Garantell?

Sorry, I didn't catch that. New construction of?

Yes, basically property protection, sort of, you know, that aspect of it.

Yeah. Also, Garantel is hit a little bit by, of course, the billing market, albeit in lesser extent than the Trovaks Nordic areas because Trovaks Nordic is quite heavy or have a good market share in that area. Garantel has a lower market share, and there's also other type of products which for the first quarter haven't had the most, let's call it stable developments. So you would on the total for Guarantel, you don't see these kind of negative figures as you see for PROAC. But in principle, they get influenced in the same way. It's just that they have a little bit different PROAC mix and a different dependence on building sector. So you don't see it in the same way.

Okay. And one of my last questions then. You had the Easter in Q1. Could we sort of expect that the sales and ordering take was slightly affected in a negative way from Easter being in Q1?

Sorry. I'm sorry. I hear you very well. Could you repeat your question?

We had Easter in Q1 in 2020. Could we expect that we had a negative effect on sales and orders from the Easter effect?

That's a very good question, and I quite understand it. I would say that yes. You have lower invoicing days in March this year compared to last year. It's obviously a hazard, in fact. I would say, though, on the order side, you shouldn't see it to have that effect, because I do believe that the customers will put in orders even if they go on Easter to have a vacation. But on invoicing, yes, it has a certain effect. That is correct. But not so much on orders, I would say, Anna.

Okay, great. Then I just want to join in with Daniel and wish you good luck and say thank you for this year.

Thank you and I appreciate that. Looking forward to see you all again.

Thank you. And it seems there are currently no further questions at this time. Please, I'd like to hand the call back over to Thomas with Strand. Apologies, we have a pop-up question from Johan Skoglund from DNB Markets. Please go ahead.

Okay.

Hello. Hello. So just a question on Garantel with that coming into the group. So just so we understand, what are the steps here to increase the margin? Is it automation, sales volumes, decreasing overhead, or any other factors?

No. Garantel is by definition a little bit lower margin than the rest of the Troyes group. So it has a similar margin. structure than NATO, which we bought a number of years ago because these products are more competitive from a cost point of view compared with competitors. And so it's not so that I think that we just by coming in here can raise prices. We don't have those ideas because we are, as you know, a long-term partner to our customers. But so it's more, to answer your question, it's more about raising the volumes, which I think is quite possible to do in Guarantel, but it will take a bit, you know, step by step, so you shouldn't expect any short major improvements from a gross margin point of view, but I think over time there are quite possibilities to see some improvements in margin, and of course also in results, but it will be step by step.

Great, and I realize you answered my second question there as well, so thank you so much, and good luck.

Thank you. Thank you.

Thank you. We have a few more questions now in the queue, and the next one comes from Zeno and Galen from SHB. Please go ahead.

Thank you, and thanks for taking our questions. Just to be clear on the one, so we then can expect some cost savings ahead, but just to make sure that have all the costs, so to say, been taken in this quarter, or should we expect anything in Q2? Yes.

You mean from the disclosure in Poland?

Yeah.

Now we've taken all the costs that we know about at least in quarter one. That's the whole setup. We don't want to have any costs going forward. So what we know today, we've taken all the costs in Q1.

Perfect. And just with regards to automated warehouse, it's out now that maybe 2025 is more likely. realistic to get orders done in late 24. But have you heard any, has the tone of your customers changed in any material way due to higher interest rates and such?

Yeah, I think in general you're right that I think especially the beginning of the year when I said there was a little bit low activity, I think that had a major effect coming from this with interest rates and people were waiting to get some signals that the interest rates were going down. Now, even if this is a little bit speculation from my side, this is the message we get then from our customers. So I think that when that now, which looks at least probable that it will start to decrease sometime during this year, that will have a healthy effect on these kind of huge investments that we're talking about in automated warehouse. But how in practice this will influence when they put order to us is difficult to assess. So I do believe that what they've been telling us is more or less true, even if I'm a little bit cynical about when the orders will come, because I calculate it will take a bit longer time. But in the meantime, I do see also that some of the integrators that are working with these kind of big international players, they don't have a lot of work. So there are not so many projects out there. So I think these kind of customers primarily, even if, of course, we also feel it, but these kind of customers will have a difficult period during 2014 until the new project will be started, regardless if that is towards the end of this year or beginning of next year.

Okay, thank you. Those were my questions. And applause to you, Thomas, and your team for what you've built during your tenure as CEO. Best wishes ahead.

Thank you very much. Appreciate that.

And we have a follow-up question from Daniel Lindquist from Danske Bank. Please go ahead.

Yeah, hi Thomas. Just want to make the most of the opportunity to have you still on these kind of conferences. So, I mean, now I was hoping for something visionary in the report, but then as soon as I read it, I realized you were too much of a gentleman to put any heat on marketing for the future. But if you just look back from when you started out, now you have a very much broader offering and many interesting names. So, Should we still read the 8-10% as a normalized year in a normalized economy for the future as well, or has anything changed in that sense?

I understand your question, Daniel. It's a good question, which I will refrain from answering with an exact percentage, obviously. But I can say like this, that during many years we've had, or as an average we've had this, in some cases higher percentages in organic growth. There's nothing in the circumstances creating, let's say, a good business atmosphere for us that we can utilize both with the market going forward and we take a market share. There's nothing which has negative influences so far as I can judge. So the circumstances that we've been working with before are still there, even, of course, right now, we have general economic condition. But over a business cycle, there should be the possibilities to continue to grow. I don't want to specific percentage.

Perfect. That's all for me. Thank you so much, Thomas.

Thank you, Daniel.

And it appears this was the last question today. With this, I'd like to hand it back over to Thomas. for any additional remarks. Over to you, sir.

In that case, I'd just like to thank you very much. You have given me many nice words, which, of course, I appreciate. But as you said, it's a very good teamwork here from the people. And these people will remain here also when I leave, and I will still be in the board and see if I can do some use, continue for the group. And I believe I've got a very good successor here, Martin Nistrom, who will Hopefully then come with a little bit new ideas and new ways of approaching things. So hopefully then you will be able to ask him in August what kind of ideas he has and what kind of impression he has over the future. But until then, I would like to thank you very much for listening to me and also your interest in Truvax. And I hope that that will continue. And I wish you all the best. Thank you very much. Bye-bye.

Thank you. This concludes today's conference call. Thank you for your participation ladies and gentlemen. You may now disconnect.